Suofeiya Home Collection Co. Ltd

Environmental Social and

Governance Report (2023)Table of Contents

目录21--------------

Prudent Corporate

Governance 29

Social Responsibility ·

Governance Structure and Systems · Protection of Rights and

Internal Control · Interests of Shareholders

and Creditors

33 · Protection of Rights and Interests of -------itors

· Information Disclosure

Commitment to High · Investor Relations Management

· Stockholder ReturnsQuality and Better Service

Enhanced Product Quality ·

Enhanced Product Innovation · 45

More Attentive Service ·

Win-Win Cooperation and

51 Common Development -------------- · Supplier Seement

· Efficient Operations and Cost Optimization

Growing Together

· Advantages of Nationwide Supply Chain Layout

with Suofeiya · Sustainable Development of the Supply Chain

Instructions on Report Preparation 02 Compliance in Employment ·

Harmonious and Equal Employment Relationships

ESG Governance Framework 03 and Occupational Health Protection ·

Competitive Incentive System ·

ESG Key Performance 04 Sustainable Talent Supply Chain · 57

ESG Key Issues Analysis 05 Employee Care · Commitment to Public Welfare

for a Harmonious Society

Stakeholder Communication 06 61 -------------- · Sublic

Case 1: China Charity Federation X Suofeiya Children’s Book House 07 Health Undertakings

· Support Public Benefit Activities and

Case 2: Providing More Reliable Products for Consumers 11 Environmental Protection and

Low-Carbon Management Develop Social Welfare

About Suofeiya 13 · Provide Assistance in Basic Education Development .Lead the Industry Development With

· Assit Qinghai Disaster Area in Times of Difficulty

17 Environmentally Friendly Products2023 Milestones · Build Harmonious and Loving Communities Together

Build Green Plant System

Adherence to Party Building 19 Improve Green Management

Enhanced Energy Management

Honors of 2023 73 Green Manufacturing

Green Logistics

--------------

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--------------INSTRUCTIONS ON Report OverviewThis Ltd.(hereinafter referred to as "the Company" or "Suofeiya"). It is the 7th report issued by the Company aimed at

REPORT PREPARATION strengthening communication and connection with various stakeholders.This Report objectively and truthfully reflects the Company's practices in corporate governance employee

rights operational development stakeholder communication environmental protection public welfare and

charity in 2023. It discloses the Company's philosophy actions and achievements in fulfilling economic

environmental safety and social responsibilities.Compilation Basis

Chinese national standard – the Guidance on Social Responsibility (GB/T36000-2015)

Chinese Academy of Social Sciences (CASS) - the Guidelines on Corporate Social Responsibility Reporting

for Chinese Enterprises – Basic Framework (CASS-ESG 5.0)

Global Sustainability Standards Board – the GRI Sustainability Reporting Standards (GRI Standards)

The No. 1 Guidelines on Self-Regulation of Listed Companies of Shenzhen Stock Exchange - Standardized

Operation of Listed Companies on the Main Board

The No. 1 Guidelines on Self-Regulation of Listed Companies of Shenzhen Stock Exchange - Business

Handling

Time frame

This is an annual report covering the period from January 1 2023 to December 31 2023. Some content may

appropriately reference previous years.Data Sources

The financial data in the Report is sourced from Suofeiya’s audited annual report for the year 2023. Other

data is compiled from its internal statistics. Unless otherwise specified the currency type and amounts

mentioned in the Report are in RMB. The Company assures that the content of this Report does not contain

any false records misleading statements or significant omissions.Report Access

This Report is available in both Chinese and English versions and may be downloaded at the official website

of Suofeiya Home Collection Co. Ltd. (www.sfygroup.com) or the China Securities Regulatory Commission's

website (www.cninfo.com.cn).Report Feedback and Contact Information

Contact Address: No. 2 Xianning Road Guo Village Yongning Subdistrict Zengcheng

District Guangzhou City Guangdong Province China

Contact Number: (+86) 20-87533019

Email: ningji@suofeiya.com.cn

Official Website: www.sfygroup.com

01 02Environmental Social and Governance Report l ESG

ESG Governance Framework ESG Key Performance

Category Indicator Unit 2021 2022 2023

Against the backdrop of rapid changes in both the social and business environments Suofeiya has always believed that establishing and Ten Thousand Operating Revenue 1040709.49 1122254.14 1166564.64RMB

enhancing Environmental Social and Governance (ESG) systems is beneficial for driving sustainable development. We have estab- Ten Thousand

Net Profit 12257.55 106430.37 126127.78

lished a sustainable development organizational structure covering the entire Company and formed the ESG Committee responsible for RMB

Economic Hundred Million

ESG projects and related performance assessments as well as regular reports to the Board of Directors. Within the Company various Total Tax Paid 8.97 8.56 9.29

Performance RMB

functional departments have set up ESG Execution Teams to ensure coordination and integration of efforts from top to bottom. Ten Thousand Total Cash Dividends (Tax Included) 54448.60 63523.37 95170.27

RMB

Cash Dividends per 10 Shares RMB 6.00 7.00 10.00

The Board of Directors regularly listens to the ESG Committee's annual work reports to ensure the achievement of Compliance Rate of Exhaust EmissionsThe Board of % 100 100 100

Directors Suofeiya's sustainable development goals.Compliance Rate of Solid Waste Treatment % 100 100 100

Environmental Efficiency of Dust Removal + RTO Exhaust

The ESG Committee composed of senior leaders including the general manager and vice general manager is % Above 90 Above 90 Above 90

Performance Treatment System

responsible for managing the Company's sustainable development affairs related to the environment society and

The ESG Compliance Rate of Noise Emissions % 100 100 100

Committee governance. It also focuses on preventing associated risks. Report regularly to the Board of Directors on the

Tons

progress of ESG work. Reduction in Carbon Dioxide Emissions 9942 10231 12169

Total Number of Employees People 14486 14906 14400

The ESG Execution Teams comprised of various functional departments within the Company report to the ESG

The ESG Percentage of Female Employees %Committee on the Company's affairs related to the environment society and governance. They provide the neces- 27.38 27.67 27.59

Execution 社会绩效

Teams sary information for decision-making offer guidance to the functional departments and support the execution of Employee Training Coverage Rate % 100 100 100

sustainable development strategies and decisions.Public Welfare Expenditures RMB 611400.75 1088940.65 1487475.85

03 04Environmental Social and Governance Report l ESG

ESG Key Issues Analysis Stakeholder Communication

To further enhance the effectiveness and scientific nature of ESG management and to more Environmental The healthy development and achievements of the Company are inseparable from the support of stakeholders such as

accurately respond to stakeholder demands the Company has conducted ESG key issues the government and regulatory agencies shareholders and investors employees customers suppliers and communi-

analysis based on the substantive issue analysis method provided by the Global Reporting 1 Carbon emissions ties. The Company adheres to principles of transparency and equality placing great importance on communication and

Initiative (GRI). We carried out this analysis through steps such as sustainable development cooperation with stakeholders. Throughout the reporting period we continuously improved our stakeholder communica-

2 Climate change

background analysis stakeholder identification issue identification and research. Through tion mechanisms and engaged in diverse communication activities to understand and respond to the expectations and

Recycling

these steps we identified a total of 23 key ESG issues including 7 environmental aspects 11 3 demands of stakeholders in a timely manner.social aspects and 5 governance aspects. 4 Waste management

5 Water resource utilization

Based on the dimensions of "importance of economic environmental and social impacts" and

6 Green operations Stakeholders Focus Areas Communication Channels

"impact on stakeholder assessment and decision-making" we rated the importance of these

23 issues. This process resulted in an ESG Key Issues Matrix which serves as the main basis 7 Green products Compliance Operations Daily reporting information submission

Government and

for reviewing the Company's ESG performance over the year.Regulatory Agencies Tax Compliance Accepting supervision and assessment

Society Employment Promotion Regular reporting recruitment

8 Supply chain social responsibility Sustainable Operations General Meeting of Shareholderss

management Shareholders and

Compliance Governance Information disclosure

9 Employee’s health and safety Investors

10 Employee training and development Risk Prevention Investor hotline interactive platforms

online and offline communication

11 Compensation and benefits

Compliance Employment Staff representative meetings

12 Diversity and equal opportunities

16

13 Information security and privacy

Compensation and Benefits Employee conferences

对 protection

Employees

利 1 14 Technological innovation Safety in Production Employee training2

益 7 15 Customer experience

相 8 Career Development Training enterprise culture activities

关 2120 16 Product quality and safety

方 Protection of Customer Rights Information confidentiality after-sales

评 17 Intellectual property management service mechanism估14159

和 18 Industry development promotion Customers High-Quality Products Design quality and technology iteration决13

策 4 3 Professional Services Satisfaction surveys（CSI/DSI）的影

Governance Transparent Procurement Supply chain management system响

5 12 Cost reduction and efficiency improvementSuppliers Win-Win Cooperation

19 Corporate governance joint research and development

22

18 6 19 20 Business ethics and morals Industry Ecology Supplier conferences

1110

17 21 Legal compliance Community and Non- Participation in Community Development Fulfilling social responsibilities

22 Shareholders' rights Governmental

Organizations Active Engagement in Public Welfare Participating in public welfare activities

23 Anti-corruption

经济、环境和社会影响的重要性

05 06Environmental Social and Governance Report l 专题1

Case 1

China Charity Federation X Suofeiya

Children’s

河北赞皇·张楞乡中心小学

Book House 商洛市山阳县西照川镇石佛寺九年制学校

Strong youth will lead to a strong China. Following the

Plan for Implementing the National Youth Student泗水县泗张镇南陈小学

Reading Campaign issued by eight national depart-

ments including the Ministry of Education and the北京

Publicity Department of the Communist Party of China

in 2023 Suofeiya Children’s Book House officiallycommenced to contribute to the campaign of “pro- 河北省山西省

moting national reading and building a nation of avid山东省readers”. The initiative saw Suofeiya stepping into

various regions across China including Wuhan in 甘肃省陕西省

Hubei Haikou in Hainan Liuzhou in Guangxi Liang-河南省六安市金寨县希望小学

shan Prefecture in Sichuan Shangluo in Shaanxi

Jining in Shandong and Taiyuan in Shanxi. Suofeiya 安徽省

ventured into remote and mountainous areas towns 湖北省四川省

and rural areas bringing a ray of hope to thousands of 凉山州喜德县李子乡新田小学

children - a gift of newly established reading rooms and

a plethora of books.贵州省江西省

What has the Children’s Book House

brought to the rural children 广西壮族自治区 武汉市新洲区辛冲街中心小学广东省

Massive Collection of High-Quality Books

With a maximum collection of over ten thousand volumes

Environmentally Friendly and Safe Environment 海南省

Kang-Chun grade (ENF) boards for health Child-friendly 柳州市三江县独峒镇唐朝小学

design to prevent bumps and injuries

Innocent and Childlike Atmosphere

Nature-inspired color schemes Bright and harmonious color palettes

Comfortable Space 海口市龙华区新坡中心小学

Ample reading seats Immersive reading spaces凭祥市友谊镇中心小学

审图号：GS（2019）1823号

07 08Environmental Social and Governance Report l 专题1

Currently over a dozen Children’s Book Houses have been established and put into use

across various regions nationwide. It is expected to establish over thirty Children’s Book

Houses in Beijing Hangzhou Shanghai Wuhan Shenzhen Changsha Harbin Guiyang

Zunyi Baoding Huizhou Chengde Zhaoqing Lu'an Puyang Yichang Huangshi

Xinxiang and more. The program of Suofeiya Children’s Book House not only provides

children with an environmentally friendly safe and comfortable reading environment but

also aims to sow the seeds of reading and love in their hearts. In the future more cities will

have Children’s Book Houses. By focusing on the future of education in rural areas

contributing to rural revitalization and continuing to deliver sustainable corporate values to

society Suofeiya remains steadfast in its commitment.The Company has been well aware of a lack of reading resources among rural children in current China.According to the 2022 Survey Report on Reading Conditions of Rural Primary Schools in China the average

extracurricular reading volume per capita for rural primary school students is 3.27 books less than one-third of

the national average for primary school students. Moreover it is recognized that reading spaces need to meet

requirements for comfortable environments environmentally friendly materials natural and harmonious

designs and durable quality.Suofeiya takes proactive action by mobilizing its nationwide dealer resources and leveraging the “HappyHomes” Village and Community Mutual Aid Project initiated by the China Charity Federation to establish the

Children’s Book House public welfare initiative. This initiative jointly launched by Suofeiya Home Collection

the China Charity Federation and Suofeiya dealers across the country aims to build public reading rooms in

rural schools. It provides high-quality reading resources to help rural children cultivate reading habits enhance

their cultural literacy and stimulate intrinsic learning motivation.

09 10Environmental Social and Governance Report l 专题2

Case 2

Providing More

Reliable Products

for Consumers

—— Joint Innovation with Suppliers for You and Your Home

As household products serve as items closest to the lives of ordinary people and enter countless By extending supplier social responsibility management and empowering assistance the

households their environmental friendliness and adaptability must closely follow the changing demands Company has developed new technologies and products to provide the maximum

of consumers in different eras. Building trustworthy and user-friendly products for ordinary people tests protection for customers and consumer rights. To address the common issue of swelling

the utmost in research and development innovation and product capabilities. During the reporting in panel furniture the Company made a pioneering attempt in the industry to collaborate

period Suofeiya's product development team deeply simulated consumer life scenarios and innovated with suppliers in developing PUR anti-mold glue which has been successfully promoted

and upgraded products through technological empowerment. They released a market-leading innova- and applied. This anti-mold glue not only possesses all the performance characteristics

tion targeting five major household life pain points: marks caused by oil-based pens unintentional of ordinary PUR glue but also meets the "Grade 0" standard for mold resistance.scratches on door panels in daily use fingerprints left by sweat stains discoloration and aging due to

prolonged use and oil stains commonly encountered on sideboards. Collaborating with EB coating and The Company has always adhered to the strategy of "leading through technological

EB curing equipment suppliers the Company repeatedly adjusted the EB coating formula ratio electron innovation" consistently taking the lead in product development intelligent manufactur-

beam energy electron beam intensity and curing agent dosage to obtain the optimal solution. Com- ing and digital transformation within the industry. With continued investment in R&D

pared to traditional baking paint/UV technology the curing degree reaches 100% achieving the best Suofeiya takes quality optimization and cutting-edge technology research as its core

levels of coating density UV blocking and film hardness. The combination of EB curing technology with competitive strengths and always keeps customer needs in mind to deliver innovative

existing melamine board products not only retains the rich decorative effects but also upgrades the solutions that exceed expectations.tactile sensation. Being resistant to graffiti scratch fingerprint yellowing and oil this product provides

consumers with a higher-quality home experience.

11 12Environmental Social and Governance Report l 关于索菲亚

Company Overview

Suofeiya Home Collection Co. Ltd. was founded in 2003 and has been deeply involved in the

Chinese home furnishing market for over two decades. As one of the pioneers in introducing

the concept of "customized closets" in China Suofeiya successfully brought customized

closets to the market and gained recognition from Chinese consumers with its innovative

ABOUT product concept combining tailored customized closets and sliding doors for closets. Suofeiya is committed to providing consumers with comprehensive customized home furnishing solutions engaging in the design development production and sales of

whole-house furniture including closets cabinets doors and windows wall panels flooring

SUOFEIYA household goods appliances and sanitary ware. In 2011 Suofeiya was successfully listed on the Shenzhen Stock Exchange becoming the first A-share listed company in the indus-try (Stock Code: 002572).Business Philosophy

Customer Experience

Corporate Culture

Mission Iron Triangle of

Decorating Homes Easily with Technology and Creativity Integrating Beauty Personalized Customizatio Professional &

of the World into New Life Customization Efficient

Vision

Providing Customers with a Good Experience through Personalized Design

and Efficient Operation and Becoming a Trustworthy World-leading Home Brand Matrix

Furnishing Company

Since the establishment the Company has been actively creating and introducing excellent

Core Value

products and brands to bring better home decoration experience to consumers and

Customer Foremost Innovation and Sharing Professional and Efficient

Honest and Progressive customize a better life together. Currently responding to the demand for whole-house

customization the Company has established a brand matrix covering the entire market

including “Suofeiya” targeting the mid- and high-end market “Milanla” targeting the

mass market and “Schmidt” and “Huahe” targeting the niche market. The four major

brands complement each other forming a complemental product R&D and supply system

covering the complete range of closets cabinet and doors matching various styles such as

wall boards sanitary ware floor household supplies and appliances. They can serve

customers in all fields including online and offline retail whole-house installation engineer-

ing projects and overseas markets thus achieving all-round development of the channels.

13 14Environmental Social and Governance Report l 关于索菲亚

Production Base Layout

The Company owns eight production bases in China and has pioneered the investment and construction of advanced Industry 4.0 work-

shops in Asia in the industry. This has significantly shortened the product delivery cycle with the average delivery cycle from factories to

distributors remaining at 7 to 12 days for many years breaking through the capacity bottlenecks commonly faced in the customization

industry. The accuracy and repair rate has achieved industry-leading levels providing supply chain guarantees for front-end sales while

reducing operating costs for both factories and distributors. With globally leading intelligent manufacturing the average efficiency

exceeds that of German intelligent production lines by 125%. The entire process is automated with no manual handling of the compo-

nents and each piece of board has a unique identity card for traceability. The accuracy of robot component sorting is close to 100%.Zengcheng Guangdong-South China Production Center

Customized wardrobes and supporting customized furniture

products customized cabinets wooden flooring supporting 黑龙江齐齐哈尔

hardware and bulk business.Huanggang Hubei-Central China Production Center

Customized wardrobes and supporting customized furniture

products and customized cabinets.河北廊坊

Jiashan Zhejiang-East China Production Center

Customized closets and supporting customized furniture products河南兰考

Chengdu Sichuan- Western China Production Center

Customized closets and supporting customized furniture products.浙江嘉善四川成都湖北黄冈浙江金华

Langfang Hebei -North China Production Center

Customized closets and supporting customized furniture products.Lankao Henan-Henan Suofeiya Home Collection Co. Ltd. 广东增城

Customized closets and supporting customized furniture products and bulk business.Qiqihar Heilongjiang-Suofeiya Huahe Door Co. Ltd.Customized wooden doors.Jinhua Zhejiang-Zhejiang Jinhua Production Base.审图号：GS（2019）1823号

15 16Environmental Social and Governance Report l 2023年度大事记

2023 MILESTONES

July

April Milanla successfully held the "Upgrade New Gener-

ation · 5A Hardcore Home Furnishing Conference" October

The launch ceremony of the "Happy Homes · driving the whole home customization industry

Suofeiya Children's Book House" project by the The final of the 9th Suofeiya Installation and Delivery Skills Competition towards a new future. Suofeiya Whole Home Bath-

February China Charity Federation took place at the was grandly held at the Suofeiya headquarters building an unparalleled room Strategy was heavily promoted officially

Suofeiya officially announced Ni Ni as its Xinzhou Primary School in Xinchong Street achievement of Suofeiya in terms of whole home delivery service.launching the "Suofeiya Bathroom" brand.global brand ambassador. Wuhan Hubei Province.September

March June The "Boost Consumer Confidence with High-quality Products

"Peak Discussion on Fusion and Coexistence" - Suofeiya Jointly Promote Green Development of Home Collection"

"All-round Home Furnishing for a New Life" - November

& TOP Custom Home Furnishing Strategic Private symposium hosted by the China Consumers Association was

Suofeiya's Whole Home Customization 3.0 Strat-

Advisory Board was grandly held marking the industry held at Suofeiya Home Collection's Guangzhou headquarters. Suofeiya deeply participated in the

egy was heavily promoted.integration trend and Suofeiya led the creation of a new The symposium was attended by relevant persons in charge drafting of the Custom Furniture -

industry ecosystem. Huahe Custom Home Furnishing of provincial and municipal consumer associations across the Specification for Installation Accep-

"High-end Full Case for Aesthetic Upgrade" brand strate- country. Suofeiya "Kang-Chun Whole Home" environmental tance (GB/T43003-2023) which has

gy conference was successfully held in Guangzhou. upgrade conference was held marking the industry's entry been officially released and will be

into the era of whole home environmental protection. implemented starting from April 1

2024.

17 18Environmental Social and Governance Report l 坚持党建强基

Since its establishment in 2014 the Company's organization of Communist Party of China (hereinafter referred to as the “Party”) has continu-

ADHERENCE TO ously grown its membership. To better leverage the role of the Party organization the Company has established 7 Party organizations in various

factories. Among them the headquarters in Zengcheng and the Huanggang branch factory have Party committees while the other 5 factories

PARTY BUILDING have Party branches. There is a total of 260 registered Party members.Since its establishment the Company's Party organization has consistently focused on the goal of "Powerful Party Building Prosperous Enter-

prise Development". It has expanded from achieving the "Bidirectional Integration" of Party building and enterprise development to fulfilling the

great mission of integrating social responsibility and development. In the current year the Company has been honored with awards such as the

"Guangzhou City 'Strong Party Organization with Excellent Performance'" and the "Five-Star Party Organization" in the Huanggang High-tech

Zone as well as recognition as an "Outstanding Party Member" in the Development Zone (Huimin Street). Guided by the exemplary leadership of

the Party organization the Company not only achieves healthy and stable development but also makes greater contributions to the society.

1 Enhance the Construction of Party 3 Adhere to the Vanguard Role of Organization Deepen the Integration Party Members Deepen the Inte-

of Party Building and Production gration of Party Building and Talent

Development

The Company's Party organization comprehensively implements

the responsibility system for Party building and adheres the leader- The Party committee and the Bureau The Party branch of Schmidt joins Suofeiya has established mechanisms such as the Party Member

of Human Resources and Social hand with the district marketship of the Party in various aspects of corporate governance. By Nanhu Theme Red Education "'Small Family and Big Family' Party Security jointly organized themed supervision bureau in the “Red Vanguard Posts Party Member Innovation and Research Groups Members Blood Donation "promoting the deep integration of Party building with production and Party day activities. Leadership Joint Construction” and Production Safety Party Member Vanguard Teams fully

Mechanism.operation the Party organization and management have achieved harnessing the exemplary role of Party members in their respective Uphold the Integration of Party

the goal of learning together and unifying the ideological essence positions. The Company's Party organization controls the "talent Building and Corporate Culture withwith the development principles of the Company. 2 Uphold the “Red Leadership Joint

4

entry gate" focusing on encouraging young ambitious and morally a Sense of Great LoveConstruction” Mechanism Deepen upright business talents to join the Party. In 2023 Suofeiya had a

In the year 2023 the Company convened a total of 54 meetings of the Integration of Party Building and total of 10 new Party members and 17 active applicants for Party The Company firmly inherits the red genes of the Party while

the Party committee (branch committees) and 16 Party member Social Responsibility membership who have played important exemplary roles in key integrating and practicing the corporate "family culture". By

congresses. Additionally 36 Party classes and member education project R&D and integrity promotion taking on more significant strengthening the role and responsibilities of Party members in the

training sessions were held along with 40 themed Party day events responsibilities in the Company's development. Through such a dual enterprise and society the individual integrates better into the

continuously enhancing the ideological qualities of existing PartyThe Company's Party committee actively establishes the “Red talent selection approach we effectively integrate Party building with collective expanding the happiness of the "enterprise family" to thecadres. Furthermore the Suofeiya Party organization focuses on talent development achieving mutual promotion between Company happiness of the society at large thereby deepening employees' Leadership Joint Construction” mechanism with Party organiza-

the training of Party members and Party workers implementing

tions from government agencies state-owned enterprises development and Party organization construction.identification with the corporate culture and the Party's sense of

customized training tailored to different levels and roles including great love.schools non-public enterprises etc. In the year 2023 a total of 27

Party members Party workers and Party organization leaders

co-building activities and Party-building visits and exchanges were In 2023 the Company's Party organization conducted a series of

holding management positions within the group and various

conducted. Actively organizing activities for the benefit of the people thematic learning and propaganda activities on "In-depth Study of Xi

centers. These efforts ensure that under the leadership of the Party

effectively solved 65 specific issues. Through this mechanism the Jinping Thought on Socialism with Chinese Characteristics for a

all Party members and cadres can grasp the Company's develop-

organizational advantages are transformed into development New Era" including organizing thematic organizational life meetings

ment direction and provide strong political guarantees and organi- patriotic base learning red tourism and fireside talks totaling 38

advantages not only promoting the complementary sharing of

zational support for the stable development of Party building work activities. These activities embodied the warmth and sunshine of the

resources between Party branches in different industries but also

and production operation. corporate "family culture". Meanwhile the Party's appeal was

contributing to the mutual assistance and mutual prosperity goals. demonstrated by fulfilling the Party's responsibilities through

The Company firmly inherits the red gene deeply implements the Party Vanguards Memorial Party Vanguards Visit the Masses with

Commemoration Event Gifts and Donations. activities such as fulfilling micro-wishes providing assistance to

mechanism integrates with social responsibility jointly promotes those in need and organizing blood donation events. Approximately

the development and progress of enterprises and society and 80 Party members and residents were supported and a total of

tirelessly strives to create a better life for humanity. nearly 35000 milliliters of blood were donated. This effort allows the

happiness of the enterprise to be extended to more people in

society as Suofeiya's Party members strive tirelessly to create a

better life for humanity.

19 20A PRUDENT CORPORATEGOVERNANCEEnvironmental Social and Governance Report l 稳健的公司治理

Social Responsibility 01 Shareholders and General Meeting of Shareholders

An effective corporate governance system is crucial to ensuring the healthy stable and sustainable development of an enterprise. Since The General Meeting of Shareholders composed of all shareholders is the highest authority of the

its listing in 2011 the Company has continuously improved its governance system standardized its operations and established a Company responsible for making decisions on major issues. The Company convenes and holds the

comprehensive multi-level management system in accordance with the Company's actual situation and regulatory requirements. This General Meeting of Shareholders in strict compliance with the requirements of relevant laws The company held

has promoted the continuous optimization of the Company's governance structure effectively safeguarding the rights and interests of regulations articles of association and rules of procedure such as the Securities Law of China the

general meetings

the Company and all shareholders. Company Law of China the Articles of Association and the Rules of Procedure for the General 3of shareholders

Meeting of Shareholders. The Company adopts a combination of on-site voting and online voting to

facilitate the participation of shareholders especially small and medium-sized shareholders in the

Governance Structure and Systems General Meeting of Shareholders treats all investors equally and effectively safeguards the rights

and interests of small and medium-sized shareholders.The Company adheres to the construction of a clear division of responsibilities mutual checks and balances and efficient operation of

the corporate governance system. In accordance with the relevant laws and regulations such as the Company Law the Securities Law 02 Directors and Board of Directors

and the requirements of the China Securities Regulatory Commission the Company has established a corporate governance structure

consisting of the General Meeting of Shareholders the Board of Directors the Board of Supervisors and the management. At the institu- The Board of Directors serves as the decision-making institution responsible to the General Meet-

tional level the group has formulated a series of normative documents such as the Rules of Procedure for the Board of Directors the ing of Shareholders. Currently the Board of Directors consists of five directors including three

Rules of Procedure for the Board of Supervisors the Work Regulations of the Audit Committee the Work Regulations of the Board independent directors each serving a term of three years. The composition of the Board of Directors

The company held a total of

Secretary the Information Disclosure Management System the Insider Registration System and the Internal Audit System continuously is reasonable and the qualifications selection procedures and composition of directors all comply

improving the Company's governance system. with relevant laws and regulations. The Company attaches importance to the diverse backgrounds 10 boardmeetings

and experiences of board members while ensuring that they possess the professional skills experi-

ence and diverse perspectives necessary for the business. Candidate selection is based on a

range of diversity factors including (but not limited to) age cultural and educational background

Shareholders’ Meeting

professional experience skills and years of service.Board of Supervisors All directors are able to conduct their work in accordance with the Rules of Procedure for the Board

Supervision Department

Board of Directors Audit Committee Audit Department of Directors and the Independent Director System attending board meetings on time with a 100%

Board of Directors Office attendance rate. They actively participate in the decision-making on major matters of the Company

and the review of important information disclosure. In 2023 the Company revised the Independent

General Manager General Manager’s Office

Director System and conducted dissemination and training sessions. Directors actively participated

in relevant training activities organized by regulatory authorities further enhancing their ability to

fulfill their duties as directors. No directors of the Company have been subjected to inspections

penalties public criticism or condemnation by regulatory authorities.

03 Supervisors and Board of Supervisors

The Company's Board of Supervisors consists of three members including one representative

employee supervisor and two representative stakeholder supervisors with a female representation

The Company held a total of

ratio of 1/3. The representative employee supervisor is elected through democratic elections among

supervisory

the Company's employees. The composition of the Board of Supervisors members is reasonable 8meetings

and their qualifications selection procedures and composition comply with relevant laws and

regulations.The Board of Supervisors has been working diligently and conscientiously with procedures such as

convening and voting in compliance with the Rules of Procedure of the Board of Supervisors and

other related regulations and has inspected and supervised Suofeiya's decision-making process

as well as the establishment and implementation of internal control systems to promote the

standardized operation of the Company in accordance with the law. The actual attendance rate of

the Board of Supervisors is 100%.

2324

Direct Retail Business Division.Guangzhou Suofeiya Investment Co. Ltd.Guangzhou Ningji Intelligent System Co. Ltd.Administration Center

Human Resources Center

Organization Department

Research Institute

Civil Construction Office

Brand Management Department

Media Department

New Retail Center

Financial Management Center

Supply Chain Center

Customer Service Center

Smart Home Technical R&D Center

Information and Digital Center

Design Center

Manufacturing Center

Quality Center

Furniture and Home Collection Business Division

Integrated to House Decoration Company Business Division

B2B Whole Seal Business Division

Huahe Retail Business Division

Milanla Retail Business Division

Schmidt Retail Business Division

Suofeiya Retail Business DivisionEnvironmental Social and Governance Report l 稳健的公司治理

04 During the reporting period the Audit Department continuously organized self-inspection work for Management

the eight major production bases nationwide involving 21 regulatory documents and setting up 425

inspection points. A total of 172 suggestions for system improvement were collected out of which

The daily operation activities of Suofeiya are performed by the senior management. As of the end of

44 were deemed effective. Over the course of three years of self-inspection work the factories

2023 Suofeiya has employed five senior management personnel. Management teams of Suofeiya

have developed a certain level of self-inspection capability and risk sensitivity achieving mutual

cover fields of marketing finance intelligent manufacturing etc. and have extensive industry back-

inspection of systems and execution status as well as enhancing self-correction capabilities.ground and professional management experience. These teams participated in establishing the

Company's Operations Management Committee to help Suofeiya seize market opportunities in

At the same time in each business unit training was conducted in six aspects including sales

practical operations and protecting the company's long-term sound development.business asset management project engineering procurement projects contract management

and quarterly self-inspection of audit internal controls. Throughout the year a total of nine special

training sessions were held with 347 participants.Internal Control

01 02 Build a corporate culture of integrity Improve efficient internal control system

In 2023 the Supervision Department regularly organized activities to promote a corporate culture

The Company has established a three-in-one risk control line consisting of the Audit Department

of honesty and integrity and carried out both online and offline events and training on positive

the Supervision Department and the Legal Affairs Department. In accordance with laws regula- The Audit Department

culture for the executives core members of various business units employees holding key

tions and guidelines such as the Company Law the Securities Law and the Corporate Gover-

nance Code for Listed Companies the Company has formulated multiple internal management positions and new recruits. Throughout the reporting period six large-scale integrity education

systems including the Articles of Association the Rules of Procedure for the General Meeting of training sessions and film viewing events were held under the theme of "Conscious Integrity Aspir-

The Supervision The Legal Affairs

Shareholders the Rules of Procedure for the Board of Directors the Rules of Procedure for the Department Department ing High" reaching thousands of participants. This initiative continuously strengthens the deter-

Board of Supervisors the Information Disclosure Management System and the Internal Audit rence against corruption strengthens the institutional framework against corruption and enhanc-

System. es the conscious resistance against corruption organically integrating and interconnecting various

measures to address both symptoms and root causes.During the reporting period the "three lines of defense" continuously empowered various business

units to strengthen the identification assessment management and continuous supervision and Moreover efforts were made to deepen the propaganda and education on integrity innovating

improvement of compliance risks ensuring the effectiveness of internal control and enhancing the methods such as conducting integrity lectures producing integrity-themed microfilms and

Company's level of operation management and risk prevention capabilities.disseminating typical case studies to spread the concept of integrity and guide employees in

fortifying their ideological defenses.In 2023 the Company's Audit Department conducted a comprehensive audit covering the Compa-

ny's financial expenditures and carried out special audits for 11 major business processes follow-

ing up on 48 audit rectification issues. The audit covered various subsidiaries and key business

control activities including fund activities procurement business asset management project 03 Enhance protection of intellectual property rights

engineering and contract management. The internal audit system was improved optimizing the

annual audit plan routine audits special audits and the audit results rectification process thereby The Company places great emphasis on the protection of intellectual property rights which has

promoting efficiency. The Audit Department participated in 43 OA adjustment projects during the been a longstanding responsibility for us. Protecting our proprietary intellectual property from

year achieving a speed increase rate of 95% in individual processes. Efforts were also made to infringement is crucial. To enhance brand construction and maintenance the Company rigorously

strengthen the rectification of audit issues achieving a timely rectification rate of 96%. Through manages intellectual property such as patents and trademarks through standardized manage-

system construction business departments were encouraged to implement audit rectifications by ment practices. We have established comprehensive management systems including the

improving systems.Intellectual Property Management System and the Intellectual Property Management Measures.During the reporting period the Audit Department collaborated with the IT Department to utilize the Additionally we continuously carry out actions to safeguard intellectual property rights ensuring

Company's big data analysis platform (BI) configured with Tableau Server data analysis applica- the lawful use of patents and trademarks effectively mitigating risks and maintaining our brand

tions to build a risk assessment model and create visual analysis dashboards. This enabled image. This fosters a culture of integrity in our operations and creates a favorable environment for

self-service analysis of global data in the risk assessment and pre-analysis stages and provided protecting intellectual property rights.real-time preview filtering and export of target data thereby improving quality and efficiency with

targeted actions.

25 26Environmental Social and Governance Report l 稳健的公司治理

During the reporting period the Company and its affiliates collectively held 1684 domestically Domesticallyapproved Suofeiya places particular emphasis on protecting consumer personal information strictly adhering to relevant laws and regulations such

approved registered trademarks. To date the "Suofeiya" brand has been protected as a registered trademarks as the Personal Information Protection Law of the People's Republic of China the Data Security Law of the People's Republic of China

well-known trademark 128 times. In terms of rights protection in 2023 the Company won the 1684 and the Cybersecurity Law of the People's Republic of China. We lawfully and compliantly collect and use personal information provided judgment in the case of trademark infringement and unfair competition disputes. This successful by consumers to the Company. We study and utilize data dynamic desensitization techniques and tools to desensitize customer-related

outcome effectively safeguarded the legitimate rights of consumers and the reputation of Suofeiya Protected as a well- information effectively preventing the leakage of customer information and avoiding potential losses. Proactively following guidelines

as a listed Company. The substantial compensation awarded in the case served as a deterrent to known trademark such as the Self-Assessment Guidelines for Illegal and Irregular Collection and Use of Personal Information by Apps and the Scope of

infringers setting a benchmark for active rights protection in the home furnishing industry and Necessary Personal Information for Common Types of Mobile Internet Applications we continuously update and improve the Privacy

promoting healthy competition within the sector. 128 Policy disclosed to consumers on official websites official apps and various social platform mini-programs involved in collecting user

privacy information in accordance with national laws and regulations. We have provided clear explanations of the types rules and

usage methods of the collected information.

04 Attach importance to business ethics

During the reporting period Suofeiya collaborated with multiple departments to assess and rectify the information system's internal

Following the China Enterprise Anti-Fraud Alliance in order to promote the normalization and control situation covering dimensions such as system changes and operation and maintenance control permission control physical

long-term governance of corruption prevention the Company has collaborated with its suppliers security and network security control. No major internal control deficiencies were found.to sign the Business Partner Integrity Commitment Agreement. This agreement serves as a set of 1300+

guidelines for both parties to adhere to in their business dealings and clearly outlines the mecha-

Over 1300 group-wide anti-fraud Over the years Suofeiya has continuously strengthened and improved information security management work with various tasks and

nisms for withdrawal and penalties for violations of the integrity commitment agreement. We have policies were disseminated. indicators incorporated into the management system. This ensures the smooth operation of the Company's various business and

also enhanced various regulations and systems such as the Reporting Reward Management management operations effectively guaranteeing the Company's rapid development and safe operation and fulfilling its due value.Measures of Suofeiya Home Collections Co. Ltd. the Whistleblower Protection Policy and the

establishment of integrity accounts. Additionally we have diversified our channels for reporting

complaints including email telephone WeChat and on-site reporting while ensuring full protec- 59

59 operational sites Security Management

tion for whistleblowers. underwent evaluations for

anti-corruption measures. Standards and Respon-

External Security Defense

During the reporting period the training conducted by the Supervision Department reached A F sibility System

Network access mechanisms antivi-

thousands of individuals. Serious violators were subject to the punishment of relevant depart- Emergency plans security checks

rus software firewalls virtual private

ments. A "zero-tolerance" approach was adopted towards behaviors that harm consumers and records security training networks bastion hosts vulnerability

security risk identification and

partners or the Company's interests. management.Internet behavior management.

05 Privacy and information security System Security Information Data Privacy

Construction B security E Management

Information security is a comprehensive system engineering effort. The Company's Information 0 incidentsInformation system management Data classification dynamic data

and Digital Center (IDC) has adopted a series of network security products and tailored a set of and network security mechanisms desensitization and development

secure and efficient network security solutions. This includes network access mechanisms antivi- permission control code encryption of market terminal tools to prevent

rus software firewalls dedicated lines virtual private networks (VPN) Internet behavior manage- protection system backups and data loss.system stability.ment devices file scanning monitoring bastion hosts system backups etc. We have established

a comprehensive information system management network security mechanism and permission

control management system strengthening data and information security from individual to overall Data Security Management C D Availability

levels. As the Company continues to grow and due to the needs of our business we have estab- Data backup and recovery regular Network redundancy network

lished branch offices/branches in different regions connecting them to form a vast Internet inspections and automated monitor- equipment and backbone line

network system which enhances efficiency and competitiveness. ing sensitive information encryption upgrades.storage secure data circulation

control and file security systems.

27 28PROTECTION OF RIGHTS AND

B INTERESTS OF SHAREHOLDERSAND CREDITORSEnvironmental Social and Governance Report l 股东与债权人权益保护

Protection of Rights and Interests of Investor Relations Management

Shareholders and Creditors The Company consistently prioritizes investor relations management striving to present itself as a truthful transparent and compliant

Suofeiya places great emphasis on safeguarding the legitimate rights and interests of listed Company. It actively establishes effective communication mechanisms with investors adhering to the Investor Relations Manage-

shareholders especially small and medium-sized shareholders. In accordance with ment System to fully safeguard investors' right to information understand market trends and perceive investor needs. The Company

the Company Law the Code of Governance on Listed Companies and the Guidelines provides investors with a rich and convenient communication channel through investor hotlines email investor relations interactive

for the Articles of Association of Listed Companies Suofeiya has formulated compre- platforms the official website's "Investor Zone" media interviews performance presentations offline surveys and other channels

hensive rules and systems related to corporate governance. It continuously promotes actively engaging in communication and interaction with investors fostering a positive relationship.and strengthens the construction of internal control management systems standard- At the same time it promptly feeds industry news and capital market concerns back to the management endeavoring to construct a

izes corporate operation and management and has established a relatively complete harmonious and interactive investor relationship.system of internal control management that effectively balances interests. Mecha-

nisms have been established to ensure fairness transparency and impartiality for

shareholders and creditors allowing them to fully enjoy the legitimate rights specified Interaction and Reply

by laws regulations and institutional rules. Timely updated the

Two-Way Communication

Daily Communication stockholder register tracked

and analyzed changes in

Suofeiya consistently improves the standardized operation of the General Meeting of Shareholders the Board of Directors the Board of The Company's executive

Organized and participated Regular Communication stockholder structure office regularly compiles

Supervisors and the management. It places full emphasis on and meticulously prepares for these meetings ensuring procedural in more than 300 sessions responded promptly to 53 industry news and capital

compliance. The Company respects and leverages the role of independent directors and special committees of the Board of Directors such as regular exchange Actively conducted annual inquiries on the interactive market dynamics feedback

special reception of performance presentations platform of Shenzhen Stock

to enhance the effectiveness and independence of board operations. By utilizing the corporate governance structure of the General sharing domestic and investors online exchange organized two sessions on Exchange actively answered international industry

Meeting of Shareholders the Board of Directors the Board of Supervisors and the management with mutual separation and balance meetings and offline strategy exchange with investors investor hotline calls and operating changes and

meetings of institutional promptly following the kept investors informed

each level performs its duties and responsibilities within its scope of authority ensuring the Company's standardized operation. Through investor concerns with the

shareholders. release of regular report about the Company's management. This feedback

various learning and training initiatives the Company continuously enhances the performance and self-discipline awareness of direc- performance and actively operations through new

loop ensures both investor

tors supervisors and senior executives thereby improving the scientific decision-making level of the Board of Directors and the participated in the annual media platforms such as advisory and informational

online collective reception WeChat public accounts and

management. rights are fully protected day for investors within the video platforms ensuring

facilitating a better integration

jurisdiction. smooth communication.of capital empowerment and

Information Disclosure substantive business

operations.In the year 2023 the Company disclosed a total of 76 announcement documents (each with an announcement number). The Company Stockholder Returns

attaches great importance to information disclosure work and strictly complies with the requirements of the Shenzhen Stock Exchange

Information Disclosure Guidelines and other regulations to fulfill its disclosure responsibilities. It ensures that the disclosed information is

Since its listing in 2011 Suofeiya has consistently prioritized stockholder returns to safeguard investor

true accurate and complete without any false records or misleading statements.interests. It has established a continuous and stable dividend policy and repurchase policy including

the "Long-Term Stockholder Return Plan" ensuring the sustainability and stability of profit distribution

The Company designates the following media for information disclosure: Securities Times China Securities Journal Securities Daily policies allowing shareholders to share in the Company's development achievements. When distrib-

Shanghai Securities News and cninfo website (cninfo.com.cn). The disclosed information includes regular reports and other ad-hoc uting profits by way of cash dividends the Company ensures no less than 20% of the distributable

announcements covering all significant matters of the Company. This enables investors to quickly understand the Company's develop- profits realized that year. From 2011 to 2022 the Company has cumulatively distributed cash Cash Dividends 2011-2022

ment status safeguarding their right to information. During the reporting period the Company issued a total of 76 announcements (each dividends (including share repurchases) totaling 4.082 billion yuan to all shareholders.with an announcement number) including 6 regular reports and 70 ad-hoc announcements. 40.82 million RMBWhile maintaining stable dividend payouts Suofeiya has also implemented a series of share repur-

chase programs. Since 2013 the Company has launched three phases of share repurchase plans

Throughout the reporting period the Company's information disclosure was rated as Grade A by continuously used for implementing the Company's equity incentive plans and employee shareholding

the Shenzhen Stock Exchange marking the tenth consecutive year of receiving this rating. plans aiming to maintain stable market value and protect the interests of all shareholders. Since its

Currently there are only 43 domestic main board listed companies that have received Grade A listing the Company has introduced one restricted stock incentive plan three employee shareholding

evaluations for ten consecutive years. As a listed company Suofeiya will continue to improve its plans and two dealer shareholding plans. This has established not only a stockholder structure that

quality of information disclosure and enhance operational standards to achieve high-quality aligns the interests of the management core staff and all shareholders but also an incentive mecha-

Image Source: Shenzhen Stock Exchange

development. nism that strikes a balance between short-term and long-term incentives and constraints.

31 32C COMMITMENT TO HIGHQUALITY AND BETTER SERVICEIn 2023 the Company's Party organization conducted a series of

thematic learning and propaganda activities on "In-depth Study of Xi

Jinping Thought on Socialism with Chinese Characteristics for a

New Era" including organizing thematic organizational life meetings

patriotic base learning red tourism and fireside talks totaling 38

activities. These activities embodied the warmth and sunshine of the

corporate "family culture". Meanwhile the Party's appeal was

demonstrated by fulfilling the Party's responsibilities through

activities such as fulfilling micro-wishes providing assistance to

those in need and organizing blood donation events. Approximately

80 Party members and residents were supported and a total of

nearly 35000 milliliters of blood were donated. This effort allows the

happiness of the enterprise to be extended to more people in

society as Suofeiya's Party members strive tirelessly to create a

better life for humanity.Environmental Social and Governance Report l 坚守品质 强化服务

1 Enhanced Product Quality Upgrade quality management mode

The Company places great emphasis on the environmental protection quality and service of its products adhering to the red line of

product quality and strictly implementing the "quality veto" system. To assist in advancing the Company's quality management to an

Product quality and R&D are the lifelines of an enterprise serving as the fundamental guarantee for customer and consumer rights. In

excellent level the Company has established the "QDS" Green Integrated Customized Quality Management Mode.response to the national call for high-quality development Suofeiya based on its overall strategy and corporate culture has clarified its

quality objectives quality strategy and quality policy taking into account the changing demands of the times and the internal and exter-

nal environment. Through intelligent manufacturing initiatives Suofeiya aims to ensure quality and safety across all scenarios meeting

the needs of users for a better life.Clarification of quality management strategy and development stage

Currently the Company's quality management is in

the stage of forging excellent quality management Creating green healthy and beautiful

homes for our customers

continuing to implement the quality strategy— Quality Objective Quality Strategy Quality Policy Full Value Chain

Quality Digitalization of Service System

focusing on the entire value chain process and Make Suofeiya the Through quality management Accumulate Q Management D Systems S Construction

chain

promoting digitization—to refine and improve benchmark for across the entire value chain Improve

quality in the digitization-driven initiatives and Innovate Research and Development

Digital R&D Dealer Service System

aiming to deliver more reliable and trustworthy furniture industry. the promotion of innovative service Quality Management

products and services to users. models aim to create green Manufacturing Quality Digital Manufacturing Consumer Service System

healthy and beautiful homes for Client requirement Management Customer satisfaction

customers. Supply Chain Quality

Digital Supply Chains

Management

Market Quality Management Digital Quality Assurance

OrganizationMechanismCultureTalent

Forging Excellent

Quality Management

Continuous Improvement of 2021-Present

Quality Management System

Quality Enhancement

Strategic Deployment · Marketing revenue exceeds 10

Q

2015-2020 Full Value Chain Quality Management ("End-to-End" Quality Management Mechanism)billion yuan.

Quality Management

2009-2014 · Awarded the Guangzhou Mayor's System Construction · Established Intelligent Manufacturing 4.0 Quality Award.

Research and Development Quality Management Supply Chain Quality Management

factories. · Received "National Green Plant"

2003-2008 · Became the industry's first listed Company. · Established Ningji Intelligent Systems recognition.· Established the Suofeiya Home Collection Establishing the Company's product development bridge through the adoption of Quality management of procurement logistics and supplier modules establish-

Co. Ltd. · Established IPD Research and

Research Institute. an Integrated Product Development (IPD) management model creating ing the Supplier Assessment Management System implementing centralized

· Established ISO9001 Quality Manage- · Established Intelligent Home Technology Development System.· Implemented ERP/SRM/PLM systems. end-to-end product development teams and establishing processes for procurement bidding multimodal transportation logistics models logistics

ment System. R&D Center. · Production base established in

· Production bases established in Chengdu planning product development product launch preparation and product release integration and joint development of new materials and processes with suppliers

· Became the industry's first to receive · Developed green environmental material Jinhua Zhejiang.Jiashan Langfang and Huanggang. phases to improve development accuracy and shorten development cycles. to tackle industry challenges.Ten Rings Certification. standards. · Obtained Energy Management

· Received CNAS accreditation.· Honored as the most influential building · Cabinet factory established and bases in System certification.· Awarded the "Zengcheng Government

materials brand in South China. Qiqihar and Lankao put into operation. · Received American Dual NAF Manufacturing Quality Management Market Quality Management

Quality Award".· Achieved Occupational Health Formaldehyde-Free Certification.· Obtained Measurement Management Combining the implementation of projects such as Industry 4.0 Total Quality Encompassing front-end marketing and back-end service quality management.Management System certification.System certification. Management (TQM) Total Productive Maintenance (TPM) Voice of Process Expanding brand influence in front-end marketing while improving service quality

· Obtained FSC Forest Certification.· Recognized as a "Guangdong Famous (VOP) 5S methodology Manufacturing Execution Systems (MES) Lean in the back-end conducting regular measurements of DSI (Dealer Satisfaction

· Recognized as a "High-tech Enterprise".Brand Product". Production and Advanced Planning and Scheduling (APS) to form a manage- Index) and CSI (Customer Satisfaction Index) and quarterly assessments to

ment model aimed at ensuring quality control and consistency throughout the continuously enhance market quality management.product manufacturing process.Construction and Steady Improvement Expansion and Excellence Forging

Development Period Period Breakthrough Period Period

35 36Environmental Social and Governance Report l 坚守品质 强化服务

D Digitalization of Systems

The Company establishes clear quality standards and requirements for supplier management including supplier admission

product categories key materials key processes sample testing and certification and incoming material inspection ensuring

clear and smooth communication of quality information among various organizations and achieving quality synergy. In supplier

Digital R&D Digital Manufacturing Increase in Pass management timely business communication with suppliers reduces lead times and ensures production readiness. The

Rate development of process quality inspection and laboratory inspection systems provides quality data assurance for manufactur-

The Product Lifecycle Management (PLM) system stores digitized technical The Advanced Planning and Scheduling (APS) is adopted for effective forecast- ing and after-sales quality. Quality inspection and automated testing equipment reduce the generation of defective products

process and basic data generated during the research and development ing and scheduling based on order requirements production capacity and and waste lowering the operating costs of manual inspection. Automated inspection equipment continuously and accurately

process achieving centralized and unified product databases. The DIY Home resources to automatically generate optimal production plans. The Warehouse detects abnormal boards helping to improve production efficiency and ensure product pass rate.system utilizes parametric modeling technology automatic splitting and other Management System (WMS) is developed to enhance warehouse management

technologies to integrate with production systems combining multiple systems and optimize warehouse management processes.such as management systems order systems and ERP systems to simplify the

design process.Digital Supply Chains Digital Quality Assurance 2 Enhanced Product Innovation

The ERP system manages supplier information input and management Applications such as machine vision and sensor technology are used to

procurement information input and management (including materials and prices) automatically collect process quality and laboratory inspection data. Aautomatic

purchase order input and management material reception and distribution. The detection and collection functions are developed in the Manufacturing Execution

Supplier Relationship Management (SRM) system manages supplier information System (MES) to provide reliable quality data for production processes and Uphold product R&D

order issuance and receipt and business communication. The Transportation after-sales quality. In the MES quality digitalization module quality data is

Management System (TMS) realizes the informatization and visualization of statistically analyzed from different dimensions to identify the root causes and

dealer ordering factory production and product delivery. trends of quality problems. It also tracks and records product quality information Suofeiya's years of dedication and leadership have transformed the industry from standardized product styles to diversified styles and

achieving full lifecycle traceability of products. from independent product displays to experiential showcases continually setting the industry standard for innovation and design.

2001 In 2001 Suofeiya introduced customized closets into China creating the era of China's customized S closets.Service System Construction

2003 In 2003 it first launched the iconic louvered door.

Dealer Service System (DSI) 2011 In 2011 Suofeiya taken the lead in launching the Haina Baichuan storage system .The DSI establishes a positive dealer relationship management for the Company through comparative ranking

incentive measures assessments and features such as point-based management. 2012 In 2012 the "Future Closet" from Suofeiya marked the beginning of intelligent customization in the

Chinese furniture industry.Consumer Service System (CSI)

2019 In 2019 Suofeiya proposed the concept of light luxury with the "Star" proposition guiding industry

The CSI provides consumers with customized home solutions and enhances their purchasing experience through design trends and development by focusing on various dimensions such as style material crafts-

initiatives like the "X Plan" and a 400 call system. manship and fashion elements in customized furniture.

2022 In 2022 Suofeiya launched new products such as the Carlo series Unbounded series Les series

and Bella series with the development of a staggering 2345 new items.Effectiveness of quality control

2023 In 2023 Suofeiya introduced EB technology applied to create the high-value and high-quality Azure series. The Flow series products incorporated micron-level powder coating technology

Through the construction of digital systems including Industry 4.0 EMS TPM 5S VOP etc production processes are achieving visual integration and a finish comparable to baked paint products.optimized production costs are reduced and production efficiency is enhanced. The Company has linked the entire production

Improvement in process digitally from WMS WCS MES ERP systems to PLC execution systems achieving a digital factory where boards are

Production Efficiency processed without touching the ground. Continuous upgrades to equipment in the cutting and edge sealing sections on the

foundation of the 4.0A intelligent factory have increased production efficiency. The Company has also developed the industry's

first domestically produced CNC equipment to improve accuracy and pass rates.To improve R&D efficiency the Company intervenes in quality control during the R&D phase to avoid delays and redundant

work reducing development cycles. The use of PLM systems manages the product development process documents and

Enhancement in

data reducing the time and cost of physical prototype production and testing. Early identification and resolution of issues

R&D Efficiency

improve R&D efficiency and quality shortening product development cycles and accelerating time to market. Over the past

three years the Company's R&D efficiency has increased by nearly 20% due to the construction of digital systems.v

37 38Environmental Social and Governance Report l 坚守品质 强化服务

Establish R&D system Innovation Platform

Talent is the primary driving force of development. As of December 2023 the company's R&D staff totaled 1380 accounting for 9.58% Innovation exchange

of the company's total headcount. Innovation in research and development is a key driver of sustainable development. Suofeiya has

consistently adhered to the "Development Led by Technology Innovation" strategy with R&D expenditure accounting for over 3% of 12 6 11 5 6 12

universities and national innovation trade associations/ standardization academic specialized

revenue in recent years. scientific research units alliances societies committees journals databases

Industry-Universi- Industry Standard Paper Information

To meet consumers' diversified demands for customized home products the Company has established a product development process ty-Research exchange formulation publication retrieval

Cooperation

that aligns with its corporate culture of "professionalism and efficiency". During the reporting period the Company introduced the IPD

product integrated development project improving the product development process. It conducted multi-functional concurrent develop-

In terms of collaborative innovation the Company has successively partnered with units such as the Wood Industry Research Institute

ment early intervention and cross-departmental team matrix operations to shorten the product development cycle. Additionally by

of the Chinese Academy of Forestry Nanjing Forestry University South China Agricultural University and Central South University of

establishing quality planning expert reviews and project technical review mechanisms the Company enhanced product quality

Forestry and Technology. Around areas including process technology quality improvement material research and advanced manufac-

reduced customer complaints resulting from R&D ultimately improving the efficiency quality and consumer experience of product

turing they have undertaken 36 industry-university-research cooperative innovation projects and achieved fruitful results. In 2023 as

development.the lead unit Suofeiya in collaboration with 10 other institutions successfully applied for and was approved to undertake the National

Key R&D Plan for the 14th Five Year Plan (2023YFD2201500) titled "Key Technologies for Intelligent Manufacturing of Wood Products

Based on Digital Collaboration". This project focuses on in-depth research on key technologies for intelligent manufacturing related to

Transformation of R&D achievements

wooden furniture wooden doors wooden flooring engineered wood products and plywood.Under the guidance of the "Development Led by Technology Innovation" strategy and in

response to consumers' pursuit of a better home living experience the Company contin- 125 11

Apply for patent protection Publication of

ues to conduct innovative research and development implementing the transformation of Establish innovation team

of technology academic papers

scientific and technological achievements and breaking through industry technical bottle-

In June 2011 the Company established the Research Institute the first specialized research institution in the wardrobe industry nation-

necks. During the reporting period the Company carried out researches on over a 59 2 wide. It has set up four branches in production bases across the country shouldering responsibilities such as product R&D process

hundred new products and new technology projects applied for patent protection for 125 Product Innovation & Science and technology

development quality control participation in industry standardization product testing material performance testing as well as external

Design Awards innovation awards.technologies participated in the formulation of 8 standards published 11 academic

technical cooperation exchange and talent training. It is an integral part of the Company's development strategy and a vital guarantee

papers and received 59 product innovation design awards and 2 science and technology 69 265 for continuously leading the industry. Currently the Research Institute has established six major laboratories forming a testing matrix

innovation awards. Invention patents Utility model patents characterized by "strong technical strength comprehensive testing services and professional testing personnel". The South China

Laboratory of Suofeiya in Guangzhou has obtained national CNAS accreditation becoming the industry's first nationally accredited

As of December 2023 the Company has obtained 665 valid patents including 69 invention 331 181 testing institution. The Company continuously innovates in various aspects such as new product development and design raw material

patents 265 utility model patents and 331 design patents. It has been granted 700 autho- Design patents Registration of

software copyrights quality and production process control ensuring that its products comply with the latest national safety and performance standards.rized patents registered 181 software copyrights published 106 papers and participated

Additionally the Company actively promotes the construction of various innovation platforms. Since its headquarters in Guangzhou

in the formulation of 64 national industry and group standards. It has accumulated 15

passed the national high-tech enterprise certification in 2009 currently five subsidiary companies have obtained high-tech enterprise

international leading or advanced technology identification achievements along with over

certification. In 2023 Suofeiya was recognized as a "National Industrial Design Center" by the Ministry of Industry and Information Tech-

300 honors including product innovation design awards and science and technology

nology.innovation awards recognized by authorities from various sectors.National Industrial

Design Center

National Service-oriented Provincial Intelligent

Award Certificates of Suofeiya Manufacturing Demonstra- Manufacturing Demonstra-

tion Enterprise tion Enterprise.Build innovation platform

National Green Plant Provincial Engineering Center

The Company places great importance on the development of talent and training. It has established external innovation resource Suofeiya

platforms with major universities and research institutions. It has jointly established the National Engineering Research Center of

National High-tech Provincial Enterprise

Low-Carbon Processing and Utilization of Forest Biomass with the Chinese Academy of Forestry. Additionally partnerships with Enterprise Technology Center

Nanjing Forestry University have established the Smart Manufacturing Industry College while collaborations with Central South Univer-

Well-known Trademark

sity of Forestry and Technology have established the Modern Bamboo Industry College. These initiatives aim to build a cooperative

mechanism between industry and academia to effectively align disciplinary innovation and industrial chains.

39 40During the reporting period the Audit Department collaborated with the IT Department to utilize the

Company's big data analysis platform (BI) configured with Tableau Server data analysis applica-

tions to build a risk assessment model and create visual analysis dashboards. This enabled

self-service analysis of global data in the risk assessment and pre-analysis stages and provided

real-time preview filtering and export of target data thereby improving quality and efficiency with

targeted actions.Environmental Social and Governance Report l 坚守品质 强化服务

3 More Attentive Service During the reporting period the Company in collaboration with the China Consumer For example in August Suofeiya introduced a traceability technology by embedding

Journal held a symposium titled "Boost Consumer Confidence with High-quality Prod- NFC chips in each plate. Consumers only need to use their smartphones to scan and

ucts Jointly Promote Green Development of Home Collection" at its headquarters in view detailed information about factory shipments thus preventing suppliers from

Sustainable development strategy with service Guangzhou in 2023. Representatives from consumer associations in Beijing Shanghai substituting shoddy products for superior ones. In addition to NFC chip traceability

Tianjin Guangdong Guangzhou Sichuan Hebei Hunan and other provinces and technology the Company has a comprehensive control system for the entire service

as the core competitiveness

cities as well as experts from the China National Forest Products Industry Association process. It categorizes dealers across the country into numerous groups and custom-

Adhering to the core value of "Customer Foremost Innovation and Sharing Professional and and the Wood Research Institute of the Chinese Academy of Forestry along with repre- ers evaluate sales design delivery installation and products. Evaluation data are

Efficient Honest and Progressive" the Company has proposed a development strategy with sentatives from the home furnishing industry participated in the symposium. Address- entered into the headquarters' system prompting dealers to proactively address

service as the core competitive advantage. Placing customers at the center the Company priori- ing various concerns of consumers such as product quality after-sales service green customers’ reasonable concerns.tizes customer service upholds customer and consumer rights continuously improves service and low-carbon initiatives health and safety and product traceability Suofeiya insists

quality enhances customer satisfaction and ultimately achieves mutual benefit and win-win on customer-centricity. Through a series of measures Suofeiya ensures the quality of

outcomes with customers. products and services.

20092019

The service standards were upgraded to "Suofeiya Super 6+1 Service" enhancing two-way communica-

As an industry leader Suofeiya pioneered the "Six-Virtue Services" tion and interaction with customers. Centered around the "Six-Virtue Services" guidelines the Company

focusing on six aspects of service to the utmost. ensured extreme satisfaction through outstanding service winning proactive recommendations from 2022

customers.To empower dealers comprehensively the Company provided over 200

01 02 service-related training sessions covering more than 1000 regions and

attracting over 80000 participants. The installation skills competition has been

Sincerity in Sales Concentration in Consideration in Sincerity in Sales Concentration in Consideration +1 held continuously for eight years to enhance service levels. Continuous Measurement Design Production Measurement Design in Production

improvement in online services (Internet service platforms service platform

06 06 mini-programs etc.) and the promotion of tiered and personalized services

Customer

were initiated with standardized processes and strict service indicators estab-Meticulousness Craftsmanship Empathy in Meticulousness Craftsmanship Empathy in recommendation

in Delivery in Installation After-sales in Delivery in Installation After-Sales lished to enhance customer satisfaction and trust.

2018 2023Responding to customers' demand for "one-stop whole-home service" the

Company upgraded its service to "full-chain delivery". Through IPD integrated

Establishing the Service Center to mark the industry's first complete service system. Using the Customer Service

development digital systems and competitive education its service efficiency

Index (CSI) and Dealer Service Index (DSI) as two major indicators Suofeiya leveraged its entire chain to provide

was comprehensively improved. The ninth National Installation Delivery Skills

excellent service.Competition was held with a total of 18 events and 1374 participants cultivating a

2020 "craftsman culture" among installation professionals. Six "Delivery Operation Customer Satisfaction Workshops: Creating Service Operation Officers in 3 days and 2 nights" and nine

Suofeiya launched a new service IP "French Cabinet Butler" which training sessions on "Conquering the Market with Sales Establishing Dominion

Counter Housekeeper On-time and

Score Rate Complete integrates services throughout the pre-sale during-sale and with Service" were organized for regional whole-home delivery covering over

Complaint Rate

Recception Rate after-sale phases providing more considerate and personalized 500 regions and involving over 3000 participants. The aim is to make service

Repeated Complaint services to meet consumer needs. Suofeiya Academy was estab- become Suofeiya's core competitiveness and provide professional caring and

Rate CSI DSI lished with five campuses to conduct systematic training courses warm services to consumers.Product Error

Rate boost service levels and efficiency in various regions.One-time Service

Complaint Rate Satisfaction

Special Deduction

Items

41 42Environmental Social and Governance Report l 坚守品质 强化服务

Enhance systematic digital and attentive services as the core competitiveness Digital

Leveraging the databases accumulated from CSI and DSI the Company has constructed a digital matrix service system called the "X

Plan + Service Procedure + Installation Procedure + One Customer One Group". This system encompasses the entire process from

"entering customer information placing orders delivery installation to after-sales service" and collects feedback from end-users

(customers distributors). Through the digitized system the entire process is monitored ensuring the authenticity and effectiveness of

the data while facilitating deposit self-correction and iteration.key service keywords for the

Company in 2023.

1V1 Butler Service Ubiquitous Intelligent

Robots

Systematic Digital Attentive

Enterprise WeChat

Human-Machine Big Data User Demand

Collaborative Forecasting

Operation

Attentive

Systematic

From the user's perspective Suofeiya continuously improves its service processes striving to provide customers and distributors with a

The Company's service system consists of three main dimensions - metric measurement digital supervision system construction and better service experience. This entails achieving a more transparent service process greater penetration of services upfront and a

business driving. Ensuring the authenticity and effectiveness of data the efficient operation of the entire service system is promoted by smoother service experience. The Company has transformed intangible services into tangible actionable service standards. For

setting standards advocacy supervision and execution. These three dimensions are like the bicycle's wheels and crossbar ensuring instance it has established service standards such as the 21 Installation Service Standards the 36 Closet Installation Acceptance Stan-

the integrity and stability of the system. dards and the 36 Cabinet Installation Delivery Standards making services more systematic. Implementing the IPD integrated develop-

ment strategy the Company anticipates service requirements in the product development phase absorbing customers' pain points such

as transportation packaging and installation early in the product development process thus integrating services throughout the product

development lifecycle. Through specific operational training it bridges critical nodes across the service chain significantly enhancing

regional operational service capabilities. The "Inspection Tour in Hundred Cities" covers 16 provinces and 82 regions driving on-site

learning in surrounding areas and enhancing the overall service capabilities of terminal stores.

43 44D WIN-WIN COOPERATION ANDCOMMON DEVELOPMENTEnvironmental Social and Governance Report l 合作共赢 共同发展

Supplier Selection and Management

To ensure the quality of raw materials and the efficiency of services Suofeiya rigorously establishes supplier admission and evaluation

systems. Comprehensive assessments are conducted from various aspects including products quality control services and manage-

ment systems adhering to the principles of fair competition. We optimize the criteria for selecting alternative suppliers and establish a

supplier assessment and management system. Continuously enhancing supplier social responsibility awareness we aim to elevate the

management capabilities of the supply chain and the iteration level of the industrial chain.Supplier Admission and Evaluation System

Supplier investigation/on-site Transition to "alternative Collection of potential

supplier information (admission) evaluation

suppliers"

on-site audits of supplier products potential suppliers meeting the standards

high-quality supplier resources are

quality control production capacity are transitioned to "alternative suppliers" in

included into the Company's ERP

management systems etc leading to the ERP system

system's "Potential Supplier Database"

the formation of a Supplier On-site

Review Report)

Efficient Operations and Cost Optimization

Efficient operations not only reflect Suofeiya's competitiveness but also ensure the provision of high-value products and services to

customers. The Company's supply chain while ensuring efficient delivery to customers places significant emphasis on improving

Transition to "qualified operational efficiency. Leveraging IT systems such as ERP BI MES and big data management tools operational metrics such as raw

suppliers" Product identification report

material readiness and inventory turnover have been notably improved. Efficiency in goal setting and project optimization has significant-

qualified product identification leads to comprehensive testing and evaluation of

transition to "qualified suppliers" where supplier samples based on processes and

contracts are signed confirming product product standards including physical and ly increased driving the continuous and efficient iteration of operational metrics.standards pricing cooperation models chemical properties functionality and

payment cycles etc. ensuring mutual product surface

interests The Company's supply chain and lean manufacturing departments actively explore the enhancement of sheet utilization rates. Combin-

ing big data on the dimensions of the Company's cabinet products collaborative research and development with upstream suppliers

focus on creating the most suitable customized surface panel sizes for the home furnishing industry. This initiative aims to increase the

Company's surface panel utilization reduce unnecessary raw material wastage through process optimization and scientifically promote

manufacturing cost optimization. Ultimately this enables the provision of high-value products to customers more effectively.Supplier performance

assessment (quality control) Transparent procurement

Order placement Advantages of Nationwide Supply Chain Layoutassessment of suppliers based on incorporating the Integrity Agreement into

factors such as on-time delivery contracts with suppliers and upholding a

sound business environment and mutual legal

placing orders according to plans with product quality service and

rights and interests with collaboration and

suppliers responsible for stock preparation pricing fostering deeper

supervision from the Audit Department

delivery payment and online security cooperation with high-quality To ensure the efficient delivery of customer orders Suofeiya has established a comprehensive industrial layout nationwide. Currently

inventory monitoring suppliers while addressing

Supervision Department and the supply

deficiencies through cooperation chain there are eight major manufacturing bases located in Guangzhou Langfang Jiashan Chengdu Huanggang Lankao Qiqihar and

improvement or elimination

Jinhua. Leveraging the advantages of this nationwide industrial layout the Company coordinates customer orders across the country

and matches them with the production capacity of each manufacturing base.Over the years the Company's manufacturing bases have collaborated closely with raw material suppliers progressing hand in hand

and fostering mutual development. This collaboration has effectively ensured the timely and complete delivery of customer orders and

maintained service quality.

47 48Environmental Social and Governance Report l 合作共赢 共同发展

Sustainable Development of the Supply Chain 03

In the procurement and supply chain management processes the Company adheres to principles of sustainable development and Collaborating with supply chain partners Suofeiya explores energy-saving and emission-

responsibility. Priority is given to selecting suppliers with a proven track record of environmental protection and social responsibility. reducing initiatives in supplier manufacturing zones aiming for low-carbon development.Attention is focused on the environmental performance of products and the traceability of raw materials. Through deep cooperation with core photovoltaic product suppliers the Company has spearheaded the establishment of

At the same time efforts are made to optimize transportation and storage methods during the material procurement process to reduce "low-carbon industrial parks" domestically. These parks integrate innovative technologies such as "green building" "smart

carbon emissions and resource consumption during transportation. Suofeiya also implements a green procurement policy encouraging energy" "industrial ecology" and "carbon asset management" forming a comprehensive management model for low-carbon

suppliers to provide environmentally friendly and sustainable products and services. industrial parks throughout their lifecycle. The ultimate vision is to achieve "zero impact on climate and zero fossil energy

consumption".In order to uphold responsible procurement practices and achieve the goal of sustainable development in the supply chain the Company

has undertaken various standardized and effective initiatives: In the future Suofeiya will leverage the experiences gained from these parks to

encourage more supplier partners to join in sustainable initiatives together and

01 continue to explore and promote low-carbon production methods in manufacturing zones and processes striving collectively to improve the human living environment.

Priority is given to selecting suppliers with a strong environmental and social responsibility

track record.Beyond considering product quality and price their social responsibility performance and practices are also crucial factors.Suppliers are required to provide traceability information for raw materials to ensure compliance and environmental friendliness 04

in sourcing.Suofeiya actively implements a green procurement policy

Example With over 90% of packaging materials being recyclable reusable or biodegradable. By establishing and enforcing environ-

Sheet material is one of the Company's main raw materials. In September 2020 the Company mentally friendly packaging standards suppliers are encouraged to prioritize the use of eco-friendly packaging materials and

obtained Forest Stewardship Council (FSC) certification from SGS (a Swiss multinational Com- reduce the use of disposable plastic packaging materials. This initiative aims to reduce consumption of natural resources

pany) ensuring that all purchased wood comes from forests managed with high quality and environmental pollution and energy consumption during the recycling and disposal processes.sustainable development practices. Additionally efforts are made to encourage suppliers to

strive for low-carbon environmentally friendly and sustainable development goals. Major sheet Example

material suppliers are partners certified by the FSC for forest management.In early 2023 the Company collaborated with suppliers to pioneer the removal of wooden packaging for cabinet countertops

replacing it with packaging-free or reusable and recyclable tur3nover steel frames. This initiative saves approximately 500m

3

of wood consumption annually. In the future the Company will continue to focus on using recyclable packaging materials and

02 methods for more materials.

Suofeiya focuses on the environmental performance of products and the traceability of

raw materials.It continuously collaborates with suppliers to develop environmentally friendly products such as water-based paint coatings

with low volatile organic compound (VOC) emissions and water-based edge-sealing cleaners. 05

Collaborating with suppliers to innovate products and reduce resource consumption

Example Suofeiya has initiated joint R&D with major suppliers to produce high-strength lightweight particleboard since 2022. This

particleboard with lower density and better resistance to deformation eliminates the need for the traditional aluminum straight-

During the reporting period the Company collaborated with suppliers to upgrade technology and established two furniture

eners commonly used in high-end doors. Thanks to the widespread adoption of this innovative product between 2022 and

product powder coating surface treatment production lines. These lines replaced 50% of the traditional painted door panels

2023 the Company has cumu3latively reduced consumption by approximately 15000m3 of wood resources about 1000 tons

with powder coating surface treatment resulting in a production process with zero VOC emissions and over a 50% reduction

of aluminum alloy materials and approximately 1000 tons of iron-zinc alloy materials.in carbon emissions.

49 50E GROWING TOGETHERWITH SUOFEIYAEnvironmental Social and Governance Report l 与索菲亚共同成长

Accident Insurance

01 Compliance in Employment Maternity Housing

Insurance Provident Fund

Suofeiya strictly adheres to relevant laws and regulations in the People's Republic of China such

as the Labor Law the Labor Contract Law the Regulations on the Implementation of the Labor Maternity Leave Work Injury Employee

Contract Law and the Social Security Law to legally safeguard the rights and interests of Factory Leave Lactation Leave Insurance Canteen

employees. It standardizes the labor contract system ensuring that labor contracts are signed

with employees in accordance with the law achieving a 100% signing rate. The procedures for Benefits

Unemployment Employee

signing and renewing labor contracts are standardized.Insurance Dormitories

Marriage Leave Paternity Leave

The employment of child labor is strictly prohibited and the Company continuously improves its Types of

labor employment management system. It adheres strictly to the requirements of the labor Leave

Medical Annual

security authority to regulate the order of labor employment and safeguard the legal rights and Insurance Travel

interests of both workers and the Company. Suofeiya rigorously complies with national regula-

Annual Leave Childcare Leave

tions on social insurance making full monthly contributions to social insurance and housing Pension Employee Physical

provident fund to ensure that employees receive relevant benefits promptly. Insurance Examination

02 Harmonious and Equal Employment Relationships and Occupational 03 Competitive Incentive System

Health Protection

Suofeiya has established a standardized yet flexible organizational structure and a diverse talent pool. Its employees include comprehensive management talents who have Suofeiya has formulated a Salary Management Method for employees establishing competitive

grown from the production line as well as professional talents with advanced management concepts. The Company is committed to building a healthy harmonious and equal salary standards and reasonable incentive mechanisms. While safeguarding employee rights it

employment system to meet the continuous high-speed development needs. fully mobilizes their enthusiasm and unleashes their potential further achieving talent strategic

Suofeiya firmly opposes discrimination based on gender region or religious belief. It strictly prohibits the employment of child labor and forced labor. It implements policies such objectives and maintaining the intrinsic drive for sustained organizational development. The

as equal pay for equal work between men and women and humane employment practices continuously enhancing employees' sense of happiness and satisfaction. Additionally Company clearly defines the direction of value distribution effectively combining individual

in accordance with laws and regulations such as the Occupational Disease Prevention and Control Law of the People's Republic of China and the Regulations on Occupational development with enterprise development and adheres to principles of value market perfor-

Health Supervision and Management in the Workplace Suofeiya entrusts qualified occupational health technical service organizations to identify workplace occupational mance and diversity.hazards. It also updates the standard for providing personal protective equipment to employees in a timely manner and establishes individual occupational health monitoring files

for employees.During the reporting period the total number of employees was 14400.Master's Degree and Above Responsibility

Bachelor's

Degree 31-40 30 and Below

0.82%

17.05%

34.94 % Female 27.59 %

Associate

22.56% Degree 47.65 % Male

High School 59.58% 14.68 % 72.41 % Delivery

and Below 41-50

2.72%

Above 51 Benefit

Education Structure Age Structure Gender Structure

53 54Environmental Social and Governance Report l 与索菲亚共同成长

04 Sustainable Talent Supply Chain 05 Employee Care

Suofeiya is committed to building a "sustainable talent supply chain" around its strategic and business development. As the organization- Suofeiya adheres to a people-oriented approach and continuously carries out cultural and sports activities to satisfy the spiritual and

al structure continues to expand and evolve the demands of employees at different ages and stages of development become more cultural needs of its employees to improve their quality of life.diverse. To better support strategic development the construction of a learning organization becomes increasingly important.The Company continuously establishes sound training management systems and formulates the Employee Training Management

Measures and the Internal Trainer Management Measures. Training is implemented based on the needs of personnel at various levels

forming a matrix of "talent development system + internal trainer system + business empowerment talent chain". During the reporting

period the Company's training system has evolved from the past decentralized training V1.0 and V2.0 to V3.0 which focusing on

Regular employee health check-ups are conducted with Every year Suofeiya holds various events to celebrate festivals

employees’ continuous development. In the future Suofeiya will continue to optimize its training system. hospitals and medical institutions invited to provide free medical such as the Spring Festival Dragon Boat Festival and Mid-Au-

consultations on-site. Expert professors are hired to provide tumn Festival as well as birthday parties for employees spring

employees with lectures on traditional Chinese medicine health and autumn outings. Additionally sports and cultural festivals

care common first aid knowledge stress relief techniques and union cultural and sports club activities Qixi (Chinese Valen-

Supporting strategic development

consolidating management foundations building a learning organization other health-related topics to enhance their health knowledge tine's Day) social events outdoor hiking activities and book

and awareness. Collaboration with local social service stations reading events are also organized. These activities aim to enrich

provides employees with psychological counseling services the cultural lives of employees and meet their growing spiritual

Team Management Internal

Development Workshop Center/Division Talent Development Map Certification focusing on promoting employees' mental well-being and and cultural needs.ensuring their physical and mental health.Whampoa/

Executives... Professional

in-house

Talent/ trainer

Senior (senior)

Manager

Premium/

Emerging

Manager Talent training system + Senior I

internal trainer system + nternal

business empowerment Trainer

Supervisor/

(Intermediate)

Reserve Base

General Literacy for Grassroots

Employees-Super Individuals School enrollment training Trainee

Think Speak Do it Work well Internal

clearly right Integration Turning Accelerate Advanceclearly together Trainer

(Junior)

Digital Learning Platform: External Learning Platform Leasing +

Internal ECS Learning Platform Construction

Education and Training Mechanism: Staff Training Management Measures + Suofeiya ensures the rights of its female employees with mater- Suofeiya places great importance on family culture. To assist

Internal Trainer Management Measures nity leave breastfeeding breaks etc and sets up lactation employees and their families in coping with sudden major

rooms in the workplace. Various recreational and sports illnesses the Company's founder established a charity fund

activities are organized specifically for female employees to which continuously contributed from corporate executives to

enrich their leisure time. Branch offices across different provide assistance to employees in need. Through hospitaliza-

locations organize activities such as Women's Day celebrations tion care and condolences secondary medical insurance

and health knowledge lectures for female employees. subsidies significant life events and other means the Company

offers care and support to its employees.

5556

Mentor System

Integrated to HouseDecoration

Company Business Division

Huahe Retail

Business Division

Milanla Retail

Business Division

Schmidt Retail

Business Division

B2B Whole Seal

Business Division

Emerging Managers

Suofeiya Retail Empowerment

Business Division

New Retail Center Product Manager Job

Competency Extraction

Information and

Digital Center

Team Management

Development Workshop

Research Institute

Customer service 5

Quality Center positions knowledge

base building

Customer Service

Center

Construction of training

system for first-line

Manufacturing Center team leaders

External learning Public lecture QualificationF COMMITMENT TO PUBLIC WELFAREFOR A HARMONIOUS SOCIETYEnvironmental Social and Governance Report l 坚持公益事业 同筑和谐社会

Support Public Benefit Activities

and Develop Social Welfare

Suofeiya actively promotes public welfare activities such as voluntary blood

donation serving as a backbone for saving lives and spreading love and

positive energy to society. Through practical actions the Company organizes

voluntary blood donation events encouraging employees to contribute active-

ly. The cumulative amount of blood donated by employees is close to 35000

milliliters.Furthermore Suofeiya collaborates with itree – a public welfare and environmental protection team - to hold

regular "Tree Planting and Loving Trees" events each year. These events involve organizing a series of tree

planting and afforestation activities tree planting knowledge competitions and botanical treasure hunts for Suofei-

ya employees and their families. Through these initiatives Suofeiya demonstrates its commitment to supporting

public interests and enhancing social welfare.Support Medical Institutions and Provide Assistance in Basic Education

Public Health Undertakings Development

As the proverb say "It takes ten years to grow trees but a hundred years to cultivate people." Suofeiya has long

In 2023 Suofeiya contributed to the advancement of public health by donat- been committed to supporting education at all stages from kindergarten to high school. Through charitable

ing to medical institutions. It collaborated with Fudan University's affiliated donations or support waivers the Company has provided assistance to numerous schools including prestigious

Pediatric Hospital to enhance the medical environment. Tailored products institutions like Pazhou Experimental School of Guangzhou Zhixin High School Licheng No.2 Middle School in

were provided for the play areas outpatient clinics and maternity rooms in Jinan as well as schools in remote areas of Guangxi and Yunnan provinces. This support has contributed to the

the Nephrology and Rheumatology departments. These products were construction of campus facilities ensuring a conducive learning environment for countless students.crafted using environmentally friendly ENF-grade materials and designed

with rounded edges for safety aiming to create an environmentally friendly In 2022 Suofeiya initiated the Children’s Book House charity project in collaboration with the China Charity

healthy and safe environment for patients. Federation and national distributors. This project aimed to create a conducive reading environment for children

in underdeveloped areas helping them enhance their learning and critical thinking skills while broadening their

Moreover the Company partnered with regional distributors to support

horizons. Tailored solutions were designed to be visually appealing child-friendly and user-friendly catering to

medical facility construction projects in various institutions including the

the age groups and habits of the children.Jiangsu Maternal and Child Health Hospital the Shenzhen Maternal and Assit Qinghai Disaster Area in Times of Difficulty

Child Health Hospital the Xiangyang Central Hospital in Hubei Province the

Pediatric Hematology Department of Wuhan Union Hospital the Nanjing At 23:59 on December 18 2023 a 6.2 magnitude earthquake struck Jishishan County Gansu Province with ripple

Children's Hospital and elderly care facilities. This commitment underscores effects felt in Qinghai Xinjiang and other regions stirring the hearts of people across the nation. Occurring during

Suofeiya's dedication to advancing public health initiatives. the harsh winter season and in high-altitude areas the affected regions faced the dual threat of disaster and severe

cold. Build Harmonious and Loving Communities

Responding promptly Suofeiya initiated emergency response measures and donated cold protection clothing to Together

the affected areas through the China Charity Federation contributing to frontline earthquake relief efforts.Suofeiya places great importance on the development of the national elderly care cause and actively assumes

corporate social responsibility. During important festivals such as the Mid-Autumn Festival and Chinese New

Year Suofeiya pays special attention to the living conditions of retired employees and the elderly in surrounding

communities who may be facing difficulties or loneliness. Suofeiya carefully prepare gifts and take action to show

its respect and care for the elderly.Sparing no effort in community service activities Suofeiya encourages and actively organizes employees to

participate in community service. Through various forms of volunteer activities and initiatives such as fuall wishes

for those in need Suofeiya contributes the development of the commlfilling smunity and the well-being of its

residents.

59 60G ENVIRONMENTAL PROTECTIONAND LOW-CARBON MANAGEMENT

61 62Environmental Social and Governance Report l 绿色环保 低碳管理

On June 29 2023 the State Council executive meeting reviewed and approved the Several Measures to Promote Home Consumption 2016

deploying relevant measures to boost household consumption. The home industry is an essential livelihood industry that satisfies the the formaldehyde-free Kang-Chun-Ban

people's need for a better life. In recent years the quality and efficiency of the home industry have steadily improved showing a trend of board was officially launched. 2022

green intelligent and integrated development.

2007 2020 it obtained the Certification of Child Safety Product and became an enterprise recognized by seven

To boost consumer confidence and pursue high-quality green development the home industry requires not only environmentally friend- Suofeiya's formaldehyde-free Kang-Chun-Ban

Suofeiya was among the earliest domestic and foreign authorities in the industry.ly and intelligent product offerings but also adaptable and diverse services to meet various scenarios. This will further stimulate and board added three international environmental in the industry to receive the Ten

protection certifications making Suofeiya become

Rings Certification.unleash consumption potential. the first enterprise in the industry to obtain the top

five international environmental protection

certifications.Lead the Industry Development With Environmentally

Friendly Products 2019 2023

Suofeiya prioritizes the environmental quality of its products striving to provide every consumer with a healthy and eco-friendly home 2015 Suofeiya's formaldehyde-free Suofeiya conducted a new environ-

Kang-Chun-Ban board 2021 mental upgrade for "Kang-Chun-Ban

living environment. Since obtaining the first-ever US EPA NAF formaldehyde-free certification in the industry in 2019 the Company has Suofeiya successfully developed the became the first in the industry Whole Home" and established the

stable-quality substrate formalde- two new national standards for

continuously refined its efforts and has successively obtained multiple authoritative recognitions worldwide. In 2022 Suofeiya Home to receive NAF Formaldehyde "Kang-Chun-Ban Whole Home" hyde-free Kang-Chun-Ban board artificial boards in which Suofeiya

Exemption Certification issued Environmental Alliance with upstream

Home participated in drafting were

Collection obtained the "Children's Product Certificate" and to date it has acquired as many as seven authoritative environmental certifi- and formulated product standards. by EPA of the US Environmen- and downstream suppliers. It set a

officially implemented on October

tal Protection Agency and higher threshold for whole-home

cations. 1st. Suofeiya Kang-Chun-Ban

passed a number of SGS product access based on environmen-

board was recommended by the

determinations in Switzerland. tal requirements far above the national

National Maternal and Infant

standards constructing a whole-home

Network.environmental ecosystem.Suofeiya has been recognized by seven domestic

and foreign authorities

· EPA NAF Formaldehyde -free Exemption Certification in the United States

· CARB NAF Formaldehyde -free Exemption Certification in the United States

·F★★★★ Certification in Japan

·SGS Determination in Switzerland

·FSC Forest Certification

·Recommended Products by the Green Channel for the Maternal and Infant Products in

National Maternal and Infant Network

· Certification of Child Safety Product

In the daily procurement and production processes the Company also adheres to stringent standards. Within laboratories accredited by

the National CNAS the Company conducts inspections on the boards in three major stages: initial inspection bulk sampling inspection

and routine sampling inspection. Each stage involves 12 testing processes ensuring environmental quality with a rigorous attitude.Additionally the Company insists on monthly submissions to third-party authoritative testing institutions and publicly discloses the test

results providing consumers with peace of mind and setting a positive example in the industry.Up to now Suofeiya has been adhering to rigorous environmental standards and providing

products and services to numerous institutions with stringent environmental quality

requirements including Shanghai Children's Medical Center Fudan Affiliated Children's

Hospital Jiangsu Maternal and Child Health Hospital Xiyun Postpartum Care Center

Babysky Postpartum Care Center Anru Xingyue Postpartum Care Center AMFA Baby

Center Weierkang Care Center Tianjin Nankai District First Kindergarten Changde Fuji

Primary School Liuye Lake School Wuyunduo Experimental Kindergarten Sino-Finnish

Forest Kindergarten Guangzhou Yingzhou Primary School Kunshan High-tech Zone

Elderly Care Service Center among others.

63 64Environmental Social and Governance Report l 绿色环保 低碳管理

Build Green Plant System Improve Green ManagementSuofeiya has been adhering to the production concept of “Manufacturing Green and Eco-friendly Home Products using Green and Creating an exemplary operational system for Environment Health andEco-friendly Production Methods” and is committed to addressing the green and environmental issues of general concerns in society. EHS Vision Safety (EHS) fostering a work environment and corporate culture that are

As a leading enterprise in the custom home industry the Company has been recognized eight times by the Ministry of Industry and safe healthy green and sustainable.Information Technology of China. Additionally the Company has increased its investment in AI technology research and development

EHS Objectives Zero major safety accidents zero major fire accidents and zero instances

advancing projects such as digital factories intelligent design and smart stores. This has enhanced efficiency and quality in product of regulatory non-compliance.design production management and customer service providing customers with modern green and intelligent one-stop home

solutions.Continuous optimization of environmental safety

2022 management system

2020 West China Production Base of Suofeiya and Suofeiya Home Collection (Chengdu)

Co. Ltd. were recognized the National Green Plants with the level of green In the fiscal year 2023 Suofeiya and its Environmental Safety Department continuously optimized and implemented a series of environ-

Suofeiya East China Production Base and Suofeiya Home manufacturing and the concept of sustainable development being recognized by the mental management systems such as the Group EHS Responsibility System the Administrative Measures for Environmental Protec-

Collection (Zhejiang) Co. Ltd. were recognized the National national authority which has realized a plant featuring intensive land use harmless

Green Plants making the Company the only one selected in raw materials clean production resourceful waste and low-carbon energy. tion and the Administrative Measures for Environmental Protection Information Reporting. Each plant increased the establishment of

the customized cabinet industry. independent environmental protection positions ensuring unified responsibilities and independent assessments of environmental safety.All factories firmly adhered to various environmental management systems and rigorously implemented the promotion of environmental

management systems.Regular environmental monitoring of wastewater exhaust gases noise and solid waste was

conducted along with self-monitoring of soil and groundwater with monitoring data actively

2021 2023 disclosed to the public. Since its listing the Company has successively obtained various environ-

The Guangzhou Headquarters –South China Production Suofeiya added another national honor by being given an Enterprise Green Code by mental protection-related certificates and titles such as the "Model Enterprise of Guangzhou City

Base was selected for the list of 2021 Green Manufacturing the Ministry of Industry and Information Technology of China. This recognition of Customization" "China Environmental Labelling Certificate and National Green Plant"

issued by the Ministry of Industry and Information Technol- signifies its achievement in intensive land use harmless raw materials clean

production resourceful waste and low-carbon energy. Suofeiya's green manufac- "Guangzhou Clean Production Enterprise" and "National Green Plant". During the reporting ogy.turing level and sustainable development concept have also been recognized by period the Company did not experience any environmental pollution incidents and did not receive

national authorities. Suofeiya Home Collection (Chengdu) Co. Ltd. for the third time

any administrative penalties due to environmental issues. A total of 25.28 million yuan was invest-

was recognized the National Green Plant by the Ministry of Industry and Information

Technology of China making it the absolute benchmark in the custom home ed in environmental protection and energy conservation during the reporting period.industry.Security management system and environmental

emergency management

All Suofeiya’s plants have adopted interlocking and interlinking fire Security control systems for

Security management which have fully improved the monitoring network system and further

secured the manufacturing processes. All companies in the Group have strictly complied with a

series of emergency management systems clarified emergency management principles emer-

gency management institutions operation mechanisms emergency security emergency plan

management etc. and organized at least seven comprehensive emergency plan drills and

special emergency plan drills on an annual basis so as to enhance the emergency response

capabilities of employees in handling emergencies. During the reporting period creative initiatives

such as "Environmental Day" were introduced to enhance employees' awareness of safety

management through activities focused on the theme of Environmental Day including family-ori-

ented events.The Company from time to time revises the Emergency Plan for Environmental Emergencies -

Air Pollution the Emergency Plan for Environmental Emergencies - Fire Accident the Emergen-

cy Response Plan for Sudden Environmental Incidents - Dust Explosion Pollution and the Emer-

gency Plan for Hazardous Waste Leakage; and regularly conducts drills summaries and reviews

of various emergency response plans.

65 66Environmental Social and Governance Report l 绿色环保 低碳管理

Compliance Rate of At the same time the Company is systematically advancing the "oil-to-electricity" conversion project and has been gradually replacing

Enhanced Energy Management Exhaust Emissions fuel-powered forklifts with electric ones since 2017 to reduce the use of fossil fuels and emission of atmospheric pollutants. During the

100% reporting period the substitution rate of electric forklifts reached 99.61%.

Suofeiya places great emphasis on the construction and operation of its energy management zero discharge

system implementing diverse energy-saving measures. It has introduced green environmen- of wastewater

0 Water resources and wastewater managementtal protection technologies such as water resource and wastewater treatment as well as waste

recycling and utilization. There's a comprehensive strengthening of energy management Compliance Rate of Solid Water resource management is also an important aspect of fulfilling corporate social responsibility.water resource and wastewater management and waste management to promote the green Waste Treatment The Company adheres to the principles of reduction recycling and harmless treatment to imple-

and healthy development of the supply chain. 100% ment the recycling and reuse of water resources. Investments have been made in constructing

systems for reusing production wastewater where wastewater from the terminal sewage

Compliance Rate of

Energy efficiency management Noise Emissions treatment station is treated again. After meeting reuse water standards it is reused for purposes

100% such as equipment cleaning in the factory reducing wastewater discharge. From 2021 to 2023 a In response to the national call for energy conservation and emission reduction Suofeiya is Total tap water savings

total of 26700 tons of tap water were saved. in 2023

actively developing itself into an energy-saving and environmentally friendly enterprise. It

strengthens energy conservation education and training for all employees actively conducts Suofeiya has innovatively adopted the UASB (Upflow Anaerobic Sludge Blanket) treatment 26700 tons

research and utilization of new technologies and processes for electricity conservation adjusts process. In this process "biological treatment" utilizes a combination of anaerobic and aerobic

and optimizes production processes. Special focus is given to improving technology in high-en- processes while "deep treatment" employs a sand filtration process. This approach reduces the Wastewater reuse

ergy-consuming sections. The adoption of CNC digital control systems facilitates quicker Chemical Oxygen Demand (COD) of wastewater and improves its renewability. After further

processing of production data enabling production forecasts and enhancing wood utilization 8283 tonsremoval of various pollutants through aerobic ponds the usage of tap water is reduced. During the

efficiency thus effectively reducing waste of timber resources. reporting period 8283 tons of production wastewater were reused.With advanced industrial technology and intelligent equipment as its foundation the Company is

developing new production processes while phasing out outdated and high-energy-consuming Waste management

technologies processes and equipment. It promotes green procurement and the reduction of

packaging materials through design aiming to enhance the efficiency of resource recycling. The Suofeiya exercises comprehensive supervision and controls throughout the production process

Company is advancing clean production and energy conservation efforts continuously promot- minimizing solid waste generation or emission from the source and ensuring final compliant

ing the comprehensive utilization of clean energy sources such as photovoltaic power and disposal. It establishes standardized waste management systems to ensure legality and compli-

natural gas. It is also systematically replacing fossil energy sources with alternatives like fuel cell ance in processes such as generation storage transfer and disposal. Standardized control and

forklifts contributing to global greenhouse gas reduction efforts. classification are implemented for various process steps to facilitate the comprehensive utilization Efficiency of Dust Removal + RTO

Exhaust Treatment System of waste with reuse value achieving the recycling and harmless disposal of waste.To further reduce factory exhaust emissions each production base of the Company responds to

During the reporting period for the edge sealing process in the cabinet workshop the Company required the adhesive supplier to

national regulations on controlling air pollution during heavy pollution weather and summer 90% 以上 change the packaging by lining the inner wall of the packaging iron barrel with a layer of tin film separating the solid resin hot melt adhe-ozone levels. They have upgraded exhaust treatment facilities or technologically renovated

sive from the iron barrel thereby reducing the generation of hazardous waste. The iron barrels can be recycled by waste recyclers

exhaust collection systems to improve the level of exhaust gas control. This includes the instal-

Providing green Reduction of carbon reducing the generation of hazardous waste in the cabinet workshop by over 90% annually.lation of new exhaust treatment systems using dust removal combined with RTO (Regenerative

electricity dioxide emissions

Thermal Oxidizer) s3ystems achieving an organi3c exhaust treatment efficiency of over 90%. million

kWh

Additionally low-nitrogen emission reduction work for boilers has been carried out with existing 1429 12169 tons Noise management

natural gas boilers being retrofitted. Nitrogen oxide emissions have decreased from 71 mg/m? Cumulative provision Standard coal of green electricity In accordance with the requirements of the Industrial Enterprise Boundary Environmental Noise

in 2022 to 21 mg/m? in 2023 representing a reduction of over 70%. savings 2017-2023

4575 7080 Emission Standards the Company thoroughly identifies the sources of noise and transmission tons kWh

Since 2017 the Company has vigorously promoted rooftop solar photovoltaic power generation paths studies various noise reduction solutions and implements sound insulation and shock

projects in factory buildings which have been fully utilized in five major production bases. absorption measures to block the transmission path of sound to reduce the impact of noise on

Suofeiya has constructed grid-connected distributed photovoltaic power generation systems human health and the surrounding environment during the production process.covering an area of approximately 337000 square meters with an installed capacity of about By introducing permanent magnet variable frequency energy-saving vacuum pump systems and intelligently regulating energy

32.22 megawatts-peak (Mwp). During the reporting period solar photovoltaic power generation consumption to stabilize negative pressure Suofeiya has resolved the adverse effects of negative pressure fluctuations and flow attenu-

projects have provided approximately 14.29 million kilowatt-hours of green electricity to the ation of old-fashioned vacuum pumps on production processes. In December 2023 the technology was first used in the 4.0E production

Company and the national grid resulting in a reduction of approximately 12169 tons of carbon line of the Jiashan production base in Zhejiang. After data testing compared with the old-fashioned rotary vane pump under the same

dioxide emissions equivalent to saving 4575 tons of standard coal. From 2017 to 2023 the power the flow rate increased by 1.8 times energy consumption decreased by 17.8% and the noise level decreased from 90dB to below

cumulative green electricity provided to the Company and the national grid has reached approxi- 80dB. The Company plans to complete comprehensive promotion in the first half of 2024 further contributing to green management and

mately 70.8 million kilowatt-hours. Going forward Suofeiya will continue to promote solar photo- environmental protection.voltaic power generation projects.

67 68Environmental Social and Governance Report l 绿色环保 低碳管理

Promote green office Green manufacturing also crucially relies on maintaining high-quality standards. The Company invests significant resources in Voice of

Process (VOP) management and has developed the Suofeiya VOP methodology which is based on process quality fundamentals such

Based on the concept of sustainable development Suofeiya actively promotes a culture of green office practices and encourages its as on-site inspections and real-time data. It connects factors like equipment personnel and materials and employs a 4H meeting

employees to enhance their sense of responsibility and environmental awareness. LED energy-saving lights are used in office areas to mechanism for rapid response and resolution. Furthermore after meetings extensive data analysis and resolution are conducted

promote energy-efficient lighting power saving water conservation and waste sorting. Paperless office practices are encouraged to on-site. Since its comprehensive implementation in 2023 the VOP methodology has achieved significant effectiveness.cultivate habits of low-carbon behavior among employees. Internal promotion of energy conservation and environmental protection is

intensified to create a favorable environment for green office practices and foster habits of green office and living among employees.Green Manufacturing

Driven by digitalization Suofeiya implements green and efficient production practices. With green energy factories as the foundation the

Company utilizes intelligent technologies such as smart production lines equipment and data-driven systems to construct efficient

precise large-scale and rapidly responsive C2M intelligent factories. This initiative aims to achieve the Company's operational goals of

resource management logistics and process refinement as well as scientific management.Since 2017 the Company has been continuously innovating in the field of Industry 4.0 production

lines integrating goals of green environmental protection and cost reduction. During the report-

ing period Suofeiya developed the first 5th generation "national production" equipment a 4.0

digital production line for panel furniture that is fully automated. This line is capable of simultane-

ously producing panels of various sizes and utilizes linked milling equipment to further improve

the utilization rate of materials. The investment and coverage of 4.0 production lines have

expanded resulting in better cost reduction and efficiency enhancement compared to traditional

VOP Process Management Market Services Cockpit

manual lines. This includes reduced manual handling and a significant increase in efficiency

compared to traditional manual lines due to the decreased need for manual replenishment.Intelligent Plant for Customized Home Furnishings

Intelligent Production

Central Control Room

Line

Intelligent Intelligent

Manufacturing Data-driven

System Processes

Production Line Real-time Order Panel

Control System

Traceability of raw materials Real-time process quality signage

Intelligent 3D Intelligent Intelligent Real-time Monitoring of

Design System Warehousing Data Production Status

and Collection and

Logistics Visualization

APS Advanced On-site Status Panel

Scheduling System

Intelligent Production Intelligent Board Pool Intelligent Finished Logistics Transport Gantry Planer

Line Equipment Product Pool Equipment

69 70Environmental Social and Governance Report l 绿色环保 低碳管理

Green Logistics In 2023 Suofeiya prioritized the promotion of integrated dry warehouse distribution. Leverag-

ing existing warehouse networks and logistics resources the Company completed the layout

of "six warehouses in five provinces" for integrated dry warehouse distribution. Some ware-

In the process of promoting the construction of a new development pattern and ensuring the security and stability of the global supply

house facilities used environmentally friendly building materials and water-saving and

chain achieving green development and the "dual carbon" goals are significant tasks for the economic and social development of China.energy-saving appliances strictly carried out dust and waste management and installed new

Traditional logistics methods in the custom home furnishing industry often involve long-distance transportation multiple transfers

energy charging and swapping facilities in the surrounding areas.inefficient loading and the use of high-energy vehicles which can have adverse environmental effects if not properly managed. In湖南长沙干仓配仓库

response to the national call for energy conservation and emission reduction Suofeiya has focused on green logistics continuously The integrated dry warehouse distribution model saved warehouse space and labor costs

optimized logistics networks innovated logistics modes promoted the use of energy-efficient vehicles and selected out high-quality achieving rapid collection distribution and sorting of goods. With the aid of advanced logistics

partners. These efforts aim to reduce carbon emissions save energy lower operating costs enhance customer satisfaction and brand technology and equipment such as information-based warehousing and intelligent informa-

recognition and positively impact society and the environment. tion sorting systems the efficiency and accuracy of warehouse operations and distribution

were enhanced contributing to the sustainable development of green logistics.Mainline integration and optimization of logistics networks and route planning浙江温州干仓配仓库

By leveraging the Company's nationwide transportation resources and collaborating with

upstream departments in the supply chain fixed shipping dates and routes have been

established for different distributors within the same region. Distributors can share

logistics resources and transportation networks to achieve batch transportation of goods

thereby improving transportation efficiency and reducing logistics costs. Additionally Six Dry Warehouses Distributed

intelligent algorithm programs are utilized to optimize transportation routes considering Integrated Road in Five Provinces

factors such as distance cargo demand and traffic conditions. This ensures that goods

reach their destination in the shortest time possible while minimizing carbon emissions

and resource consumption.Strengths of TMS

Optimization of Urban Distribution Vehicles

Suofeiya is actively promoting the use of new energy vehicles for urban distribution through

the adoption of the integrated warehouse distribution model and close collaboration with

distributors. Currently some distributors in provinces like Hunan and Beijing have begun

utilizing new energy vehicles for urban delivery.By closely collaborating with logistics companies the Company aims to increase the propor-

tion of new energy vehicles used thereby reducing emissions of tailpipe pollutants and carbon

Urban Distribution Vehicles in

during the transportation stage. This collaborative effort contributes to the advancement of Hunan Dry Warehouse

Logistics mode optimization and integrated dry green logistics.warehouse distribution

In the future Suofeiya will prioritize cooperation with logistics providers that align with green

Integrated dry warehouse distribution is a model that tightly integrates logistics goals to reduce the adverse environmental impact of transportation and minimize

logistics and warehousing. Through this model goods from distributors in the carbon emissions. Additionally ongoing collaboration with other companies in the industry for

same region are transported from the supplier to the Regional Distribution sharing logistics resources will further promote the development and innovation of green

Center (RDC) for centralized distribution thus improving logistics efficiency. logistics. Urban Distribution Vehicles in Beijing浙江干仓配推广

71 72Environmental Social and Governance Report l 荣誉2023

Brand Innovation

2023 Influential Brand Award - Suofeiya

of 2023 2023 Most Popular Product Award2023 China's Top 100 Customized Home Furnishing Brands

Excellent Innovative Brand Award for Infants and Children

2023 Consumer Favorite Custom Home Furnishing Brand

H ONORS

Public Welfare Society Governance Design

Certificate of Appreciation from the China Charity Federation for High-tech Enterprise Certificate (Suofeiya Home Collection Continuous "A" Grade Evaluation for Information Disclosure by German iF INDUSTRIE FORUM DESIGN (Mountain Star

Children’s Book House Chengdu) Shenzhen Stock Exchange for Ten Consecutive Years S-Series Moor)

2023 Listed Company ESG Innovative Practice Case (Children's National Industrial Design Center (issued by the Ministry of Investor Relations Gold Award - Outstanding IR Team 2023 A Design Award (Schmidt S-Series Triumph - Silver

Book House) Industry and Information Technology) Investor Relations Gold Award - Best Interaction with Small and Award Center Wood Veneer UV - Silver Award)

Chinese Business View Charity Brand 2023 One of the main units formulating the General Assessment Medium Investors 2023 MUSE DESIGN AWARDS (S-Series Triumph - Platinum

Principle for Sound Integral Customized Housing Product Best Practice Case Award for Board Office of Listed Companies Award S-Series Moor - Platinum Award Extension - Platinum

in 2023 Award)

China Listed Companies Investor Relations Pegasus Award

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