CONTENTS

About This Report 01 Appendices 149

Message from our Chairman 03 Outlook 149

About STL 05 Honors in 2025 149

Company Profile 05 Index of Reporting Guidelines 151

Honours and Awards 07 ESG Performance Indicators 159

Sustainability Governance 09

01020304

Steady Operations New Quality-Driven Leading with Carbon Peaking People-Oriented for a

Building a Foundation for Forging the Core of and Carbon Neutrality Shared

Growth Brand Strength Charting a Green Path Harmonious Future

Efficient Corporate Governance 27 R&D and Technological Innovation 53 Focusing on Low-Carbon Strategies 83 Safeguarding Employee Rights and Benefits 119

Strengthening Compliance Operations 39 Product Quality and Safety 65 Addressing Climate Change 93 Growing Together with Employees 128

Adherence to Business Ethics 41 High-Quality Customer Service 70 Strengthening Environmental Management 100 Robust Safety Practices 132

Information Security and Privacy Protection 47 Advancing Responsible Procurement 72 Ecological Co-building 116 Chemicals Management 138

Promoting Industry Development 77 Fulfilling Corporate Social Responsibility 143Satellite Chemical 2025 Environmental Social and Governance Report

About This Report Confirmation This Report was confirmed by management and approved for release by the Board of

and Approval Directors on March 23 2026.Description of This report is the sixth annual Environmental Social and Governance (ESG) report (hereinafter referred The financial data in this report are derived from the annual report while other information

the Report to as "this Report") of Satellite Chemical Co. Ltd. This Report provides a true and objective account of

Disclaimer

and data are sourced from the Company's internal statistical reports or documents. All

the sustainability activities undertaken by Satellite Chemical Co. Ltd. in 2025 with a focus on disclosing monetary amounts are denominated in RMB.information related to the Company's performance in social environmental and governance aspects.This Report includes forward-looking statements which are statements other than

The reporting period for this report is from January 1 2025 to December 31 2025 (hereinafter the statements of historical fact that describe the Company's expectations or anticipations of Report Scope

"reporting period"). While some information may pertain to periods outside this timeframe this is an future business activities events or developments that may or are expected to occur. Due

annual report. Unless otherwise specified the scope of this report covers Satellite Chemical Co. Ltd. and to various variable factors future actual results or development trends may differ materially

its subsidiaries consistent with the scope of the consolidated financial statements. from these forward-looking statements.This Report is available in both Simplified Chinese and English. In case of any discrepancy

Basis of This Report has been prepared in accordance with the Shenzhen Stock Exchange Self-Regulatory Access and Feedback in interpretation between the two versions the Simplified Chinese version shall prevail.Guideline No. 1 for Listed Companies — Standard Operation of Main Board Listed Companies (2025

Preparation We highly value the opinions of all parties and welcome readers to contact us through the Revision) the Shenzhen Stock Exchange Self-Regulatory Guide No. 1 for Listed Companies — Business following channels. Your feedback will help us improve our ESG performance.Handling (2026 Revision) the Shenzhen Stock Exchange Self-Regulatory Guideline No. 17 for Listed

Companies — Sustainability Reporting (for Trial Implementation) and the Shenzhen Stock Exchange Self-

Regulatory Guide No. 3 for Listed Companies — Preparation of Sustainability Reports. It also references

the Corporate Sustainability Disclosure Standards — Basic Standard (for Trial Implementation) and the

Corporate Sustainability Disclosure Standard No. 1 — Climate ( for Trial Implementation) issued by the Telephone (86) 573-8222 9096

Ministry of Finance the Sustainability Reporting Standards (GRI Standards) from the Global Reporting

Initiative (GRI) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information

and IFRS S2 Climate-related Disclosures issued by the International Sustainability Standards Board

(ISSB) the United Nations Sustainable Development Goals (UN SDGs) the Recommendations of the

Task Force on Climate-related Financial Disclosures issued by the Task Force on Climate-related Financial E-mail esg@weixing.com.cn

Disclosures (TCFD) the Morgan Stanley Capital International (MSCI) ESG rating methodology for the

Commodity and Diversified Chemicals industry the ISO 26000:2010 Guidance on Social Responsibility

international standard from the International Organization for Standardization (ISO) and the Guideline

on Corporate Sustainability Reporting in China (CASS-ESG 6.0). Official Website https://www.stl-chem.com

Description of For ease of expression and reading "the Company" "Satellite" "Satellite Chemical" "STL" and "we" in this

Designations Report all refer to Satellite Chemical Co. Ltd. and its subsidiaries. Other definitions are as follows: Address 196 Fusheng Road Nanhu District Jiaxing

City Zhejiang Province China

Satellite Technology refers to Zhejiang Satellite New Material Technology Co. Ltd.Satellite Energy refers to Zhejiang Satellite Energy Co. Ltd.Lianyungang Petrochemical refers to Lianyungang Petrochemical Co. Ltd.Jiahong New Materials refers to Jiangsu Jiahong New Material Co. Ltd.Satellite Global refers to Satellite Global Chemical (Shanghai) Co. Ltd.Satellite Industrial refers to Zhejiang Satellite Chemical Industry Co. Ltd.Satellite USA refers to Satellite Chemical USA Corp.Jiaxing Base refers to the Company's production facilities in Jiaxing Science City.Pinghu Base refers to the Company's production facilities in Dushan Port Pinghu.Lianyungang Base refers to the Company's production facilities in the Xuwei New Area Lianyungang.

01 0022Satellite Chemical 2025 Environmental Social and Governance Report

Message from our Chairman

Driving Excellence and Strength Through Innovation Unyielding Commitment: Creating a Better Life Through

Social Responsibility

We have systematically built an industrial development and We have always cherished a patriotic sentiment of "serving

innovation ecosystem centered on "Technology Leadership" During the nation through industry" and adhere to the development

the 14th Five-Year Plan period our cumulative investment in philosophy of "joint construction joint creation and shared

innovation exceeded RMB 10 billion creating a high-level global benefits" allowing more people to share in the fruits of our

science and technology innovation platform and forming a complete corporate development. We consistently create tax revenue for

innovation chain from basic research to technological innovation the region profits for investors and income for our employees.Yang Weidong and results commercialization. We are accelerating the integration We regard the sustainable development of the enterprise as and innovation of industry academia research and application our greatest social responsibility providing stable employment

Chairman of continuously deepening synergistic cooperation with renowned and tax contributions to the local area. Adhering to a "people-

Satellite Chemical universities and research institutes such as Zhejiang University and oriented" approach we have implemented a business partners

Tongji University thereby promoting the circulation and aggregation program to provide a positive environment for employee growth

of innovation resources and fostering the continuous emergence and development with our average employee compensation

of high-level innovations. We are accelerating breakthroughs and consistently ranking at the top of the industry. We participate in

technological iterations in the field of advanced new materials public welfare and charitable causes to the best of our ability.focusing on overcoming key technical challenges and "bottleneck" Leveraging our Satellite charitable foundation we play a role

technologies. We have achieved key breakthroughs in critical in coordinating resources across various fields including ethnic

technologies such as catalysts polyolefins and functional chemicals unity rural revitalization educational and teaching donations

and are promoting the industrial application of products like high- medical aid and volunteer assistance effectively conveying the

end Super Absorbent Polymer (SAP) Polyolefin Elastomer (POE) Company's values and developmental warmth.and environmentally friendly functional materials. This provides our

global customers with more competitive technologies and solutions

In 2025 faced with a complex development landscape and the profound restructuring of global industrial and supply chains Satellite Chemical maintained continuously enhancing our industry voice and influence.a high degree of strategic resolve adhering to long-termism and persisting in doing what is difficult but right. We actively promoted the "expansion

strengthening and optimization" of our integrated green light-hydrocarbon industry. By targeting the development directions of "intelligence greening

and integration" we accelerated the development of new productive forces. This approach enabled us to effectively navigate international trade disputes

and industrial cycle fluctuations achieve a value chain upgrade and ensure the Company's sustained healthy and high-quality development. Embracing a Green Path: Painting an Ecological Future with

Low-Carbon Practices

We are actively forging a new development path that is "green low- The journey ahead is long but the wind is in our sails as we

carbon intensive and efficient." In active response to the "carbon embark once more on our great mission. In 2026 Satellite

peaking and carbon neutrality" strategy and implementation of Chemical will continue to carry the mission of "Chemicals Make

Building a Solid Foundation Through Meticulous Governance Compliance and Transparency related actions we have built an integrated light-hydrocarbon a Better Life." We will remain rooted in green development

industrial cluster empowering lean management with digitalization and strive for new frontiers bolstering our resilience to

We continue to deepen the construction of a governance structure with clear rights and responsibilities and efficient operations perfecting and reshaping our manufacturing system with green and low-carbon navigate economic cycles with a more solid technological

our decision-making execution and supervision mechanisms. We have strengthened risk identification and internal control management principles. We have deepened the practice of our unique "4R" low- foundation more robust operational quality and a more open

integrating the principles of integrity compliance and self-discipline into all aspects of operational management to effectively protect the carbon development model continuously improving the application cooperative stance. We will join hands with stakeholders to

legitimate rights and interests of investors and all parties. Centered on our overarching strategy of "leading in management" we continuously of our carbon emissions management platform. We manufacture explore the path of sustainable development for the chemical

enhance our global operational and resource allocation capabilities deeply embedding ESG risk management into the Company's strategic green products from clean raw materials such as ethane and industry contributing a more definitive force to the renewal

decision-making processes to promote the synergistic improvement of governance capabilities and sustainability performance. In 2025 we propane advance green production through the application of and upgrading of China's chemical sector and the sustainable

achieved the highest AA rating in the China Listed Companies ESG Index ranked second in the Top 100 Zhejiang Listed Companies for ESG clean technologies and energy-saving renovations and create development of its economy and society thereby co-creating a

Performance and were selected for lists such as Leading Enterprises in New Productive Forces Outstanding ESG Listed Companies Sci-Tech "waste-free enterprises" through comprehensive resource recycling greener smarter and better future.Innovation Pioneer Award and Environmentally Friendly Pioneer Enterprises setting a new benchmark for high-quality development in China's achieving green management throughout the entire operational

chemical industry. lifecycle. All of the Company's environmental discharge indicators

were controlled within annual targets and the compliance rate for

solid and hazardous waste disposal remained at 100% achieving a

harmonious coexistence of economic and ecological benefits.

03 04Satellite Chemical 2025 Environmental Social and Governance Report

About STL Corporate Culture

Company Profile Dedicated to becoming a world-leading

Chemicals Make a Better Life Corporate Mission Corporate Vision technology enterpr ise in advanced

chemical materials

About the Company

Customer-Centric Perseverance Pragmatic committed and results-

and Hard Work Continuous Core Values Corporate Spirit oriented; work for the company with

Founded in 1992 Satellite Chemical Co. Ltd. was listed on the Shenzhen Stock Exchange in December 2011 (stock code: 002648). The Improvement passion and love

Company possesses a domestically leading light hydrocarbon integrated industrial chain has established an independent and controllable

global supply chain for light hydrocarbons and utilizes green processes to produce functional chemicals advanced polymer materials and

new energy materials. It also promotes the comprehensive utilization of carbon dioxide and hydrogen energy. Its products are applied in

sectors crucial to the national economy and public welfare including aerospace automotive electronics and semiconductors healthcare

nutrition and personal care sports and fitness construction engineering and the ecological environment. This aligns with the national Satellite Chemical has cultivated a corporate culture centered on the concept of "He" (Harmony/Cooperation). It is customer-centric persistent

direction of developing lighter raw materials in the petrochemical industry and contributes to achieving the nation's carbon peaking and in hard work and committed to self-critique pursuing its corporate vision with a shared purpose and collective effort. Under the principles

carbon neutrality goals. The Company continuously advances its "4R" green development philosophy and has been honored as a National of "leading management" and "leading technology" the Company strives for product excellence and brand prominence aiming to become

Green Supply Chain Management Enterprise a National Manufacturing Champion Example Enterprise a National Green Factory and an an enterprise respected by society and a source of pride for its employees. It is dedicated to becoming a world-class technology company in

"Energy Efficiency Forerunner" in key national industries. chemical new materials and ranking among the top global chemical companies.Satellite Chemical continuously strives to meet people's aspirations for a happy and beautiful life. It consistently generates tax revenue for the

Business Layout regional economy creates profits for investors and increases income for employees thereby promoting High-quality development of society

and the economy and achieving shared prosperity. The Company is dedicated to building a team of " Ten-Attribute" Satellite cadres who

possess cultural conviction integrity and self-discipline team awareness strategic vision efficient execution sense of responsibility resilience

continuous learning and innovation sincere communication and professional competence.Satellite Chemical has developed two integrated industrial chains C2 and C3 with green and low-carbon raw materials at their core. It focuses

on a product portfolio represented by polyethylene polypropylene polyolefin elastomers superabsorbent polymers acrylic acid and esters

and hydrogen peroxide forming sectors such as functional chemicals new energy materials and advanced polymer materials. In the C2 field

the Company has established a comprehensive development matrix for downstream ethylene oxide chemicals achieving a production capacity

of 1.82 million tons of ethylene glycol 500000 tons of polyether macromonomers and surfactants 200000 tons of ethanolamine and 150000

tons of carbonates. The actual production of ethanolamine and polyether macromonomers ranks first and second in China respectively

with a steadily increasing market share. In the C3 field the Company has built the largest production capacity for acrylic acid and esters in

China and the second largest globally. The Pinghu Base's 800000 tons per year polyol project has enabled the high-value-added utilization

of downstream propylene forming a closed-loop industrial chain with acrylic acid and further consolidating its leading market position.Through continuous efforts to supplement extend and strengthen its industrial chains the Company has built an industry-leading integrated

industrial chain achieving full-link synergy from precise upstream raw material control and lean midstream production to deep downstream

market penetration. Additionally the Company has established an overseas business segment to accelerate its Globalization layout. Currently

the export volumes of products such as acrylic acid and esters polyether macromonomers ethanolamine and SAP are among the highest in

China with business covering more than 160 countries and regions worldwide.The Company has now formed a strategic layout of one headquarters and three major bases building a sustainable

development ecosystem through upstream and downstream industrial chain linkage.Jiaxing Base Pinghu Base Lianyungang Base

Creating a high-value-added Building a C3 integrated Developing a new materials

industrial park for advanced industrial chain with propane as industrial chain with diversified

polymer materials the raw material raw materials

05 0066Satellite Chemical 2025 Environmental Social and Governance Report

Honours and Awards

ESG Leadership

Selected for the "2024-2025 Forbes China Top 100 in the 3rd Guoxin Cup * ESG

Sustainable Development Industrial Enterprises" List Golden Bull Awards

Forbes China China Securities Journal

Industry Leadership

2025 Outstanding Board Practice Cases for 16th China Listed Companies Investor Relations Selected for the Top 100 Listed Companies ESG List "Best Practice Case for Sustainability"

Listed Companies Pegasus Award

Securities Times China Association for Public Companies

China Association for Public Companies Securities Times

2024 Golden Bull Most Investment-Worthy Award Top 100 Main Board Listed Companies in the 19th "New Fortune Best ESG Disclosure Award" "ESG New Benchmark Enterprise Award"

China Listed Company Value Awards

China Securities Journal New Fortune Securities Star

Securities Times

Honour Award 2025 Outstanding Responsible

2025 "Top 50 Global Chemical Brands by ESG Outstanding Listed Company Award Enterprise

Brand Value"

Organizing Committee of the 4th International

Organizing Committee of the 8th Social

Brand Finance (UK) Green and Zero-Carbon Festival Responsibility Conference

Awarded second place in the "2025 Top 100

Zhejiang Listed Companies for ESG Performance" "Zero-Carbon Earth * Anchor Award"

Zhejiang Corporate Social Responsibility Yangtze River Delta International Green

Promotion Association and China Chengxin Green Development Alliance

Finance

Innovation Leadership

2025 "Jiangsu Provincial Advanced Intelligent

Selected for the List of Top Ten Provincial-Level

Factory" Recognition List

Digital Society Typical Scenario Projects in Jiangsu

iangsu Provincial Department of Industry and

Jiangsu Provincial Data Bureau

Information Technology

Selected for the "Zhejiang Provincial Artificial Leading Enterprise in New Productive Forces

Intelligence Application Scenarios List"

14th Finance and Economics Summit and 2025 Wind ESG Rating: AAA (First in the industry)

Zhejiang Provincial Department of Economy New Productive Forces Entrepreneurs Conference

and Information Technology

1Ranking information as of December 31 2025.

07 08Satellite Chemical 2025 Environmental Social and Governance Report

Sustainability Management System

Sustainability Governance

ESG Strategic Policy

Satellite Chemical is committed to the organic integration of ESG strategy into business operations and has established an ESG governance

structure led by the Board of Directors and implemented through multi-level coordination. By continuously improving stakeholder Satellite Chemical upholds its corporate mission of "Chemicals Make a Better Life" and establishes its core ESG vision of "Chemistry Empowers

engagement mechanisms and strengthening the identification and assessment of material topics the Company anchors its core focus on a Green and Sustainable Better Future". Aligned with the United Nations Sustainable Development Goals (SDGs) the Company has formulated

sustainable development and steadily promotes sustainable value creation and high-quality development. an ESG strategic framework featuring "Robust Governance New Quality-Driven Progress People-Centric Win-Win Collaboration and

Ecological Leadership" forming a closed-loop ESG management system covering the full process from top-level design to value realization.The Company deeply integrates ESG concepts into its dual-drive strategy of "Management Leadership and Technology Leadership".Leveraging technological innovation and full value chain collaboration Satellite Chemical is leading the transformation of the advanced

chemical materials industry toward a safer greener and more mutually beneficial future continuously delivering long-term shared value for

shareholders employees society and the environment.Chemicals Make a Better Life

Strategic

Mission Technology Leadership Drives Innovation Joint Efforts Create Diversified Value and Chemistry Empowers a Green and Sustainable Better Future

and Vision

Robust Governance New Quality-Driven Progress People-Centric Win-Win Collaboration Ecological Leadership

Core

Improve corporate governance and risk prevention Based on the "Technology Leadership" strategy build a

Guidelines capabilities abide by business ethics deepen the multi-level R&D platform strengthen talent team building Standardize employee employment attach importance to employee Take low-carbon development as the core strategy expand the

"Management Leadership" strategy and comprehensively advance key core technology research improve digital rights and interests build a platform for employees to realize self- R&D and application layout of clean technologies improve energy

empower the company's sustainable development with manufacturing level and strive to achieve scientific and worth and career development actively carry out various public efficiency collaboratively promote pollution reduction and carbon

ESG concepts. technological self-reliance and self-improvement in the welfare activities contribute to social co-construction and jointly reduction build a low-carbon value chain and enhance the

field of new chemical materials. build the "Satellite Dream" with one heart. company's climate resilience.Pollutant Emissions and Waste Management

Product Safety and Quality

Corporate Governance and Risk Management Chemical Safety Management Climate Change Response

Sustainable Supply Chain Management

Business Ethics Employee Rights and Interests Clean Technology Development

Customer Relationship Management

Key Issues Sustainable Operations Occupational Health and Safety Circular Economy Innovation and R&D

Privacy and Information Security Employee Training and Development Water Resource Management

Digital Transformation

Rural Revitalization and Community Public Welfare Environmental Compliance Management

Industry Development Promotion Energy Management

Ecosystem and Biodiversity Conservation

Excellent products drive low-carbon products with green

Modernize corporate governance capabilities and processes;

Strategic Achieve the common development of individuals and the company Promote the green and low-carbon development of the olefin standards Outstanding brand ensure reliable quality with digital and and the common development of the company and society industry establish a decarbonized supply chain and lead the

Objectives Optimize investor relations management market value intelligent production. industry to move towards high-end and green development

management and shareholder returns Build a sustainable development ecosystem through the

linkage of upstream and downstream industrial chains

Cornerstones Corporate Vision Culture and Values Digital Transformation Stakeholder Engagement "4R" Green and Low-Carbon Industrial Model

ESG Strategy Model

09 10Satellite Chemical 2025 Environmental Social and Governance Report

ESG Governance Structure ESG Risk and Opportunity Management

The Company has established a four-tier top-down ESG governance structure overseen and coordinated by the Board of Directors The Company actively implements international and national standards and establishes a key sustainability indicator system tailored to its

comprising the Board of Directors the Strategy and ESG Committee the ESG Management Leadership Team and the ESG Working Group. business operations and industry characteristics forming a closed-loop management mechanism of "Identification–Assessment–Control–

As the highest decision-making body the Board of Directors delegates authority to the Strategy and ESG Committee to supervise and Improvement". The Company continuously advances digitalization optimizes processes for data collection integration and analysis and

manage ESG governance affairs. The ESG Management Leadership Team consists of directors or responsible persons from all centers bases improves the accuracy timeliness and traceability of ESG data thereby enhancing management transparency and decision-support

subsidiaries and business divisions and is responsible for formulating annual ESG plans and objectives. The ESG Working Group comprises capabilities. It sets phased quantitative targets around material topics and continuously improves performance through dynamic monitoring

liaisons recommended by each center base subsidiary and business division and is responsible for fully following up on and implementing and corrective actions. By strengthening ESG accountabilities and cross-departmental collaboration the Company promotes the deep

the Company's various ESG initiatives to strengthen the implementation and execution of the sustainability management system. integration of strategic objectives and operational management continuously enhances governance effectiveness core competitiveness and

risk resilience and advances the sustainable development of the Company and society as a whole.The Company systematically identifies and assesses ESG risks and opportunities in daily operations and integrates relevant topics into its

business decision-making and performance appraisal systems. Meanwhile it embeds ESG factors into investment decisions analyzes and

Decides on and reviews the Company's sustainability strategy and goals dynamically adjusts key variables optimizes investment models and capital allocation structures and enhances long-term value creation

capabilities.Oversees and reviews ESG reports and related information disclosures

Overall Decision- ESG Management Coverage Areas

Making Level

Approves the Company's ESG reports and related information disclosures

Board of Improve the corporate governance structure treat shareholders and creditors equally

Protection of Shareholder

Directors strengthen the foundation of financial stability and enhance the transparency of

Confirms the Company's ESG-related risks and their materiality and Creditor Rights

information disclosure.Participates in developing the Company's ESG strategy Protection of Employee Abide by labor laws and regulations safeguard employees' health and safety and improve

Rights the compensation benefits and career development system.Identifies and assesses significant ESG risks and opportunities

Management and

Approves major investments and expense budgets for ESG matters

Oversight Level Protection of Customers

Adhere to ethical business operations enhance product quality and service standards

Strategy and ESG Suppliers and Partners' Formulates an ESG goal evaluation system and build a green low-carbon integrity-compliant supply ecosystem.Committee Rights

Reviews the Company's ESG report and provides recommendations

Advance the carbon peaking and carbon neutrality goals promote green production and

Environmental Protection

resource conservation and strengthen environmental management (including strategies

Implements committee resolutions formulate annual ESG goals and and Sustainability

and performance in energy use water resource management waste management etc.).indicator breakdown plans establish a regular tracking mechanism

and report to the committee

Actively fulfill corporate social responsibility engage in public welfare undertakings fulfill

Organizes ESG risk identification and assessment and establishes an Planning and Public Relations and

Steering Level corporate citizenship responsibilities and promote social prosperity and sustainable early warning mechanism Social Welfare

ESG Management development.Leading Group Coordinates financial human and technical resources for ESG projects

Reviews the Company's ESG report and provides recommendations The Company incorporates ESG indicators into the performance appraisal system for senior management covering key areas including but

not limited to work safety (e.g. number of safety incidents and safety penalty events) environmental protection and energy conservation (e.g.greenhouse gas emissions pollutant emissions energy efficiency management and environmental penalties) and labor rights protection.The Company assigns weights to each indicator determines performance ratings based on appraisal scores and ultimately calculates

Coordinates and promotes the implementation of company-wide ESG

performance-based compensation in accordance with such scores and ratings. The results of ESG performance appraisals are linked to the

work

compensation of senior managers directly responsible for ESG matters. For those who fail to meet appraisal targets the Company deducts

Coordination and

Manages ESG risks during daily operations points in the relevant assessment items with a maximum deduction of 35% of the total performance appraisal score. In addition a "one-vote Implementation veto" system is applied to zero-tolerance incidents to strengthen the implementation of ESG governance.Level

ESG Working Group Prepares the ESG report

During the reporting period the Company conducted three dedicated ESG training and awareness sessions to advance the integration

Completes other ESG-related matters

of ESG principles into strategic decision-making and business operations driving the transition from "conceptual alignment" to "practical

implementation."

11 12Satellite Chemical 2025 Environmental Social and Governance Report

ESG Goals and Achievements Associated Achievement

Issue SDG Goals ESG Goals 2025 Progress and Actions Status

First-pass quality rate for All production bases and business divisions met the

Associated Achievement

Issue intermediate products ≥98.5% relevant standards.SDG Goals ESG Goals 2025 Progress and Actions Status

100% ex-factory product All production bases and business divisions met the

Completion rate of system

formulation and revision plans Completion rate of system formulation and revision plans

Product Safety qualification rate relevant standards.reached 93.1%. and Qualityreaches ≥80% 100% customer complaint resolution The response rate for customer complaints is 100%

rate and the closure rate is 100%.During the reporting period the Company continuously

Enhance the quality of information enhanced the quality of its information disclosure and Zero major or above-level quality received an A rating in the 2024–2025 Information incidents No such incidents occurred during the year.disclosure Disclosure Assessment from the Shenzhen Stock

Exchange (SZSE).Zero environmental incidents No environmental incidents occurred during the year.In 2025 the Company formulated the Market Value

Corporate Management System to further standardize market

value management protect the legitimate rights and Total pollutant emissions controlled All production bases and business divisions met the Governance

Optimize investor relations interests of investors—especially small and medium- within the approved quota relevant standards.and Risk

Management management market value sized investors—and enhance the Company's investment

management and shareholder value. Environmental Zero abnormal shutdowns of All production bases and business divisions met the

returns The Company conducts annual training for directors and Compliance environmental protection facilities relevant standards.senior management to strengthen their awareness of Management

information disclosure responsibilities fully safeguarding 100% environmental monitoring All production bases and business divisions met the

investors" right to equal access to Company information. compliance rate relevant standards.Zero major information system

failure incidents Zero major information system failure incidents. 100% compliance rate for solid

waste (including hazardous waste) All production bases and business divisions met the

disposal relevant standards.Zero customer data leakage

incidents Zero customer data leakage incidents.Reduce freshwater use intensity by

100% of suppliers sign the Letter of 100% of suppliers signed the Letter of Responsibility for over 30% by 2027 based on 2024 Freshwater use intensity has been reduced by over 21%

Responsibility for Integrity Practice Integrity Practice. levels

The Company is not involved in any The Company was not involved in any anti-corruption- Reduce wastewater pollutant

anti-corruption-related litigation related litigation. (including COD and ammonia

nitrogen) emission intensity by 18% Wastewater pollutant (including COD and ammonia

by 2027 using 2024 as the baseline nitrogen) emission intensity has been reduced by 15%.100% integrity training coverage for

all employees (including outsourced 100% integrity training coverage for all employees year

staff part-time staff interns and (including outsourced staff part-time staff interns and

Business other employment types) other employment types). 100% particulate matter

Ethics concentration compliance rate Compliance confirmed through monthly testing.More than 2 company-level integrity

training sessions 100% VOCs concentration

More than 8 integrity training Company-level: 2 sessions compliance rate Compliance confirmed through monthly testing.sessions organized by the Audit and Audit and Supervision Department: 10 sessions

Supervision Department Over 150 integrity awareness sessions integrated into Pollutant

More than 3 integrity training routine training by all centers bases subsidiaries Emissions Reduce waste gas pollutant

sessions organized independently business divisions and their secondary departments. and Waste (including VOCs NOx SO?) emission Waste gas pollutant (including VOCs NOx SO?)

by each center base subsidiary and Management intensity by 20% by 2027 using emission intensity has been reduced by 17%.business division 2024 as the baseline year

Plan to file 223 patent applications A total of 170 invention patent applications were filed Reduce hazardous waste generation

in 2025 including 160 invention (106% of target) and 99 utility model patent applications intensity by over 18% by 2027 using Hazardous waste generation intensity has been

patents and 63 utility model patents were filed (157% of target). 2024 as the baseline year reduced by 14%.Continuously increase R&D

investment aiming to exceed RMB Reduce solid waste discharge to

10 billion in R&D investment within R&D investment in 2025 was RMB 1.656 billion a year-

Innovation the environment by over 50000 5 years and achieve breakthroughs on-year increase of 3.59%.and R&D tons by 2030 through in-house

Solid waste discharge to the environment has been

in "bottleneck" new material comprehensive utilization capacity reduced by over 40800 tons.technologies using 2024 as the baseline year

Continuously attract and cultivate

high-level innovative talents aiming Reduce solid waste generation

to expand the R&D team to 2000 The number of R&D personnel reached 1283. intensity by over 8% by 2027 using Solid waste generation intensity has been reduced by 6%.people within 5 years 2024 as the baseline year

13 14Satellite Chemical 2025 Environmental Social and Governance Report

Associated Achievement Communication

Issue ESG Goals 2025 Progress and Actions Stakeholders Key Topics Topics of Concern Satellite Chemical's ResponseSDG Goals Status Methods/Frequency

Achieve a cumulative CO? emission Sustained Performance GrowthStable Long-Term Development

reduction of over 2 million tons by Using 2020 as the baseline year cumulative CO? emission Shareholders' Meetings (Annual/

Ad Hoc) Outlook Transparent and Accurate 2030 using 2020 as the baseline reduction reached 1058654 tons.Shareholders Corporate Governance and Risk Investor Roadshows (Ad Hoc)

Protection of Shareholder Information Disclosure

Climate year Management Hotline (Real-time) Interests Enhanced Performance and and

Change Investors Sustainable Operations Corporate Disclosures (Periodic

Standardized Corporate Profitability

Business Ethics / On Demand) Governance Diversified Investor Communication

Response Earnings Calls (Periodic) Robust Information Disclosure ChannelsAdvanced key initiatives centered on the "4R" principles: Effective Investor Optimized ESG Performance

Commit to achieving value chain CO? capture and reuse full-chain hydrogen energy layout Email (Real-time) Communication

carbon neutrality by 2050 energy-saving technical transformations and green Improved ESG Performance

process technologies.Climate Change Response

Energy Management

Environmental Compliance

Management Compliance with National Laws Compliance with Laws and

Pollutant Emissions and Waste and Regulations Regulations

Government Management Information Disclosure (Periodic

Ethical and Law-AbidingOperations Tax Payment in Accordance with Water Resource Management / On Demand)） Law

Energy Reduce product unit energy and Actual decrease of 9.5%. Regulatory Chemical Safety Management News Reports (Ad Hoc)

Promoting Economic

Management consumption by 8% in 2025 Ecosystem and Biodiversity Company Website (Ad Hoc) Development

Required Information Disclosure

Authorities Promoting Local Economic GrowthConservation Regular Communication (Periodic) Focus on Environmental Management Support for Local EmploymentSustainable Operations Cooperation with Regulatory

Corporate Governance and Risk Acceptance of Supervision and Evaluation InspectionsManagement

Business Ethics

Occupational Health and Safety

100% of managers and operators

involved with hazardous chemicals Organized 8 hazardous chemical safety training sessions Product Safety and Quality

participate in hazardous chemical with 100% participation from relevant staff. Innovation and R&D Hotline (Real-time) Guaranteed Product and

Customer Relationship WeChat Official Account (Ad Hoc) Service Qualitysafety training Customer Visits (Ad Hoc) Green Product R&D Ensuring Product Quality

Customers ManagementDigital Transformation Customer Complaints (Real- Responsiveness to Customer

Improving Service Quality

Enhancing After-sales Service

Clean Technology Development time) Needs Innovative Service Initiatives

Strengthen safety management in A daily inspection system is strictly implemented with Privacy and Information Security

Email (Real-time) Protecting Customer Rights

hazardous chemical storage areas workshop management personnel conducting inspections

Business Ethics Satisfaction Surveys (Annual) and Interests

achieving regular risk inspections on a daily basis hazardous chemicals authorities Chemical

and full coverage of major hazard conducting special inspections on a weekly basis and Safety

source assessments over 20 safety inspections being carried out for major Management Employee Representative hazard sources involving hazardous chemicals. Meetings (Annual / On Demand)

Employee Activities (Ad Hoc) Improved Remuneration and

Employee Engagement Survey

(Biennial) Favorable Working

Benefits System

Environment Strengthened Employee Promote the development of 9 categories of products have obtained ZDHC Employee Rights and Interests Employee Suggestion Box product environmental and Occupational Health and Safety (Real-time) Employee Growth and

Representative Congress System

Development Providing Career Development

safety certification systems to certification ensuring environmental and health safety. Employees Employee Training and Chairman's Mailbox Sound Communication Paths

enhance product compliance with Seven products have passed testing and certification Development (Real-time) Mechanisms Diversified Employee Training

environmental health and safety for hazardous factors such as VOCs and heavy metals

Privacy and Information Security Employee Forums (Ad Hoc) Remuneration and Benefits Programs

(EHS) standards conducted by external institutions including SGS.

Employee One-on-One Talks

(Ad Hoc) Protection

Enriching Employee Activities

Creating a Healthy and Safe

Employee Supervision and Working Environment

Suggestion Hotline (Real-time)

Bulletin Boards (Ad Hoc)

Achieved Ongoing

Strictly Fulfilling Contracts and

Long-Term Stable Cooperation Agreements

Adhering to Business Ethics Open and Transparent Tendering

Sustainable Supply Chain Supplier Conferences (Annual) Open Fair and Equitable Process

Management Hotline (Real-time) Procurement Adhering to Open and Transparent

Partners Clean Technology Development Routine Visits (Ad Hoc) Mutual Benefit and Win-Win Business Principles

and Industry Promoting Industry Company Website (Ad Hoc) Development Actively Promoting Environmental

Associations Development WeChat Official Account (Ad Hoc) Fostering Industry Protection Cooperation

Stakeholder Communication Business Ethics Integrity Reporting Hotline Development Continuously Expanding Sustainable Operations (Real-time) Promoting Sustainable Cooperation Models

Development of the Supply Participating in Association

Chain Activities

Sharing Industry Experience

Satellite Chemical attaches great importance to communication with its stakeholders and has established a multi-channel engagement

mechanism to identify and address the opinions and demands of various parties. To ensure efficient and transparent information disclosure Rural Revitalization and Responsible Operations

Community Welfare Public Welfare Activities (Ad Hoc) Jointly Building a Civilized Actively Engaging in Public Welfare

the Company fully communicates its core corporate values through a variety of channels including hosting performance briefings conducting Promoting Industry Media Coverage (Real-time) Community InitiativesSupporting Public Welfare Implementing Assistance Projects

earnings interpretation conference calls receiving investor visits and research responding to questions on Hudongyi participating in The Public Development Public Open Days (Ad Hoc)Business Ethics WeChat Official Account (Real- Initiatives Supporting Community

strategy conferences and conducting institutional reverse roadshows. Through employee symposiums staff congresses the Chairman's and Media Corporate Governance and Risk time) Environmental Protection DevelopmentInformation Transparency Advocating for Green Development

Mailbox and employee supervision and suggestion hotlines the Company extensively solicits internal feedback and suggestions to ensure Management Hotline (Real-time)

Sustainable Operations Company Website (Real-time) Open Communication Maintaining Good Relations with

the implementation of democratic management. In addition the Company deeply focuses on key issues of concern to all stakeholders Risk Management Maintaining Good Media the MediaRelations

continuously strengthens management practices and is committed to creating sustainable value.

15 16Satellite Chemical 2025 Environmental Social and Governance Report

Dual Materiality Issue Assessment Results of Material Issue Identification

The Company assesses the impacts risks and opportunities of each issue from the perspectives of "impact materiality" and "financial

materiality" and has analyzed and identified 7 high dual-materiality issues 12 medium dual-materiality issues and 4 low dual-materiality

issues.Satellite Chemical identifies and analyzes material issues at least annually monitoring changes and trends in industry policies as well as the

internal and external environment. From the dual dimensions of "financial materiality" and "impact materiality" the Company invites internal Satellite Chemical 2025 ESG Dual Materiality Matrix

and external stakeholders to conduct topic assessments through online questionnaires to define priorities for its sustainability initiatives

effectively address the expectations and concerns of various stakeholders and continuously enhance its ESG management capabilities.Pollutant Emissions and Chemical Safety Management

Occupational Health and Safety Waste Management

Analysis of Basic Information Product Safety and Quality

Innovation and R&D

Customer Relationship Management Climate Change Response

The Company comprehensively reviews its business activities and commercial relationships and conducts an integrated assessment

of external factors including domestic and international laws and regulations industry trends and relevant standards and initiatives. Environmental Compliance Management

It identifies key stakeholders and their expectations and demands and clarifies the objectives and scope of the research. Privacy and Information Security Sustainable Operations Corporate Governance and Risk

Management

Employee Rights and Interests Business Ethics

Water Resource Circular Economy Sustainable Supply Chain

Management Management

Clean Technology Environmental

Employee Training and Development Energy ManagementDevelopment Issues

Digital Transformation

Establishment of the Material Issues Pool Ecosystem and Biodiversity Conservation

Industry Development Promotion Social Issues

In compliance with the requirements of the Shenzhen Stock Exchange Self-Regulatory Guideline No. 17 for Listed Companies –

Sustainability Reporting (for Trial Implementation) and based on its business development strategy and corporate characteristics Rural Revitalization and Community Public Welfare

the Company has developed a material issues library through a comprehensive analysis of corporate strategic plans regulatory and

disclosure requirements international initiatives supply chain criteria MSCI and Wind ESG ratings and other factors identifying 23 Governance

material ESG issues closely relevant to the Company. Issues

Financial Materiality

Stakeholder Engagement

High Dual-Materiality Issues Medium Dual-Materiality Issues Low Dual-Materiality Issues

The Company establishes transmission pathways for "impact materiality" and "financial materiality" develops an online questionnaire Pollutant Emissions and Waste

for the assessment of material ESG issues evaluates the actual or potential impacts of such issues on the economy society and the Innovation and R&D Management Industry Development Promotion

environment analyzes the financial materiality of ESG issues based on the severity and likelihood of risks and opportunities and Product Safety and Quality Sustainable Operations Ecosystem and Biodiversity

gathers stakeholder feedback on the Company's ESG management. Chemical Safety Management Energy Management Conservation

Environmental Compliance Circular Economy Privacy and Information Security

Management Water Resource Management Rural Revitalization and Community

Climate Change Response Clean Technology Development Public Welfare

Business Ethics Customer Relationship

Corporate Governance and Risk Management

Management Digital Transformation

Sustainable Supply Chain

Disclosure and Review of the Materiality Matrix

Management

Employee Rights and Interests

The Company statistically analyzes the scores of each issue and develops a materiality matrix across the two dimensions of "impact Occupational Health and Safety

materiality" and "financial materiality". The matrix is reviewed and approved by the Board of Directors to confirm the key disclosure Employee Training and

items of the report. Development

1718

Impact MaterialitySatellite Chemical 2025 Environmental Social and Governance Report

Identification of Material Issue Impacts and Dependencies Material Risk Factor Opportunity Impacted Impacted Financial

Impact Assessment

Issue Factor Stage Entity Impact Mid- to

Response

Indicators Short-term Long-term

Subsection

Increasingly stringent

Tightening water water resource

Improving water

Material Financial Impact Assessment resource supplies constraints and Risk Factor Opportunity Impacted Impacted Impact Mid- to Response resource utilization Fluctuations in Issue Factor Stage Entity Indicators Short-term Long-term Subsection

rising water emission standards

efficiency through water supply

prices or stricter necessitate

water-saving or rising water

Water water abstraction Production continuous Strengthening

renovations and Corporate Operating prices lead

Tightening Resource and discharge and investment in water Environmental

Strengthened water recycling Operations Costs to increased

carbon emission Launching low- Management requirements will Manufacturing conservation and Management

May cause carbon regulations can reduce water operating costs increase investment recycling capabilities

constraints and carbon products and consumption or production

production and emission in water intake to control costs and

an increase improving the carbon costs and enhance restrictions.Production and stoppages and reduction treatment and secure project and

in extreme management system Corporate Operating production stability.Addressing Manufacturing delivery delays requirements Addressing compliance. production capacity

weather events can secure green Operations Revenue

Climate Raw Material leading to higher will increase Climate layouts.could adversely orders and financing Customers Operating

Change and Energy production and compliance and Change Improper

affect the stable support thereby Suppliers Costs

Procurement repair costs low-carbon management

operation of increasing revenue Improving the

and resulting in investment of the storage

facilities and the scale and brand safety management

revenue loss. leading to a rise in transportation or

security of the premium. system Stricter regulations

operating costs. use of hazardous Safety incidents strengthening and higher safety

Supply Chain. chemicals may lead can lead to

process controls Production standards increase

to safety incidents Corporate Operational production

Chemical and enhancing and compliance

production Operations Costs disruptions Chemicals

Safety employee training Manufacturing investments while

Promoting energy- suspensions for Regulation Administrative compensation ManagementManagement can reduce the Social an improved safety

saving renovations Fluctuations rectification and and Society Penalties expenses and incidence of Reputation level helps enhance

and optimizing in electricity/ administrative reputational

Continuously rising accidents minimize operational stability penalties as damage.energy use to gas prices or losses and ensure and customer trust.Fluctuations in energy efficiency well as increased

enhance energy Production and restrictions stable production

energy prices Production thresholds compensation

efficiency per unit Manufacturing on electricity/ Focusing on operations.Energy or supply Corporate Costs necessitate and compliance

of output value can Raw Material gas supply will Low-Carbon

Management constraints will Operations Operating ongoing expenditures.secure subsidies and Energy increase operating Strategies

drive up energy Costs investment in Policies and

for energy- Procurement costs and affect

expenditures. renovations to Investment in customer

saving technical production Introducing

stabilize costs. upgrading clean requirements

modifications tax volumes and advanced low-technologies is continuously raise

carbon processes

incentives and green delivery stability. substantial; if the Increased the threshold for

and energy-saving

financing support. technological route investment in energy efficiency technologies Production

is chosen improperly technological requiring enterprises

Clean enhances resource and Customers R&D Expenses Focusing on

or commercialization transformation to make ongoing

Stricter emission Technology utilization efficiency Manufacturing Corporate Production Low-Carbon progress falls short impacts investments

Exceeding Development reduces unit energy Product R&D Operations Costs Strategies

standards or Proactively of expectations current capital to maintain

Implementing emission consumption and and Design

non-compliant deploying it could lead to expenditure and technological

source reduction standards or emission levels

disposal could environmental increased capital cash flow. leadership thereby

of emissions and intensified and strengthens

Pollution lead to fines Production and Corporate Operating protection expenditure improving cost

resource utilization environmental Strengthening product and pressure on structures and

Emissions production Manufacturing Operations Costs technologies can competitiveness.of by-products can inspections Environmental investment returns. securing market

and Waste restrictions for Social Regulatory Administrative reduce long-

improve resource could trigger Management access.Management rectification Reputation and Social Penalties term compliance

efficiency and recover rectification

and increased costs and enhance If project

the value of by- expenses and

environmental project approval construction and By strengthening

products. production

protection efficiency. operation impact

restrictions. ecological risk

investments. the surrounding Environmental As ecological identification and

ecological inspections protection

environment it implementing or complaints requirements

By developing may trigger stricter

ecological

Production may lead to become more

Rising Ecosystem environmental restoration and Corporate Operational recyclable products Proactive

Increased R&D and increased stringent the

requirements for and increasing the deployment will and impact assessment green construction Operations Costs Ecological Co-

investment and Manufacturing rectification level of ecological

recycling and utilization rate of lead to order Biodiversity constraints and practices Regulation Administrative construction

Product Design Corporate certification Social expenses management will

recycled content recycled resources R&D Expenses growth and Strengthening Protection rectification compliance risks and Society Penalties

Circular and R&D Operations costs introduce Reputation and affect affect project

may affect order we can meet Net Operating premium pricing Environmental requirements are reduced project

Economy Production and Customers uncertainty

acquisition and customers" green Profit power whereas Management leading to increased

construction implementation

approval efficiency

Manufacturing into the

increase R&D demands enhancing lagging behind environmental or operational and long-term

commercialization is improved and the

and compliance product added will weaken management progress. compliance costs.process. corporate image is

investments. value and market competitiveness. investments and

competitiveness. affecting project

enhanced.progress.

19 20Satellite Chemical 2025 Environmental Social and Governance Report

Material Financial Impact AssessmentRisk Factor Opportunity Impacted Impacted Mid- to Response Material Risk Factor

Opportunity Impacted Impacted Financial Impact AssessmentMid- to Response Issue Factor Stage Entity Impact Impact Indicators Short-term Long-term

Subsection Issue Factor Stage Entity SubsectionIndicators Short-term Long-term

Inadequate Data integration Continuously Advancing the

and intelligent

management rising digitalization of System

The investment in applications

or untimely Improving the compliance production the construction digital transformation is continuously

monitoring can environmental Intensified requirements supply chain and and migration substantial and cross- unlock potential

trigger fines management system regulatory mean that management can introduce system collaboration is for cost reduction

improve equipment Production and Corporate implementation

production and online monitoring Corporate Operational inspections may the level of complex; if progress falls Operating and efficiency Technological

Environmental Production Strengthening Digital operating efficiency Manufacturing Operations fees and

suspensions for capabilities enhances Operations Costs lead to increased environmental short of expectations Costs improvement Innovation

Compliance and Environmental Transformation and response speed Supply Chain Suppliers integration costs

rectification compliance efficiency Regulation Administrative rectification management or system stability is R&D Expenses enhancing asset and R&D

Management Manufacturing Management reduce energy Management Customers which can have

and increased reduces the risk and Society Penalties expenses and will affect inadequate it may lead utilization and consumption waste a temporary

compliance of violations and to increased investment management affect production operational and labor costs and impact on

and limited efficiency precision thereby

investments decreases subsequent schedules. costs project enhance the quality production

gains. strengthening

impacting rectification costs. approvals and of business decision- efficiency. operational

operational production making. resilience.stability. capacity layout.Establishing

supplier admission

Rising customer Fluctuations and evaluation The supplier

Product quality quality in raw material

Improving quality mechanisms structure Fluctuations in prices and

or compliance thresholds and promoting and the

management and the Customer Quality anomalies upstream raw material logistical

issues can lead necessitate transparency degree of risk

full-process traceability Service and lead to rework supply supplier ESG disruptions lead

to claims returns continuous and collaborative diversification

system can reduce Quality Operating scraps claims non-compliance Corporate Operating to increased

and customer Corporate investment in Product Sustainable management can Raw Material determine Advancing

Product Safety defect rates and after- Brand Revenue and delivery or transportation Operations Costs procurement

attrition posing Supply Chain enhance supply and Energy supply Responsible Operations system and Quality and disruptions may lead Suppliers Operating costs and

and Quality sales costs facilitate Reputation Operational delays increasing Management stability and optimize Procurement resilience and Procurement

litigation risks Customers capability Safety to supply interruptions Customers Revenue unstable

customer certification Production Costs related costs and procurement costs; cost levels

and reputational development to delivery delays increased deliveries

and long-term orders and impacting current at the same time it which are key

damage thereby enhance market procurement costs and affecting

and enhance brand Manufacturing revenue. makes it easier to to ensuring

affecting revenue access and reputational risks. production

premium. meet customer audit business schedules and

stability. stabilize market requirements thereby continuity.final delivery.share. strengthening order

stability.High R&D R&D capabilities The stability of

investment long determine Improving employment

return cycles product Inadequate or compensation and the level

unevenly implemented benefits social

deviations in structure Employee of protection

Increased R&D compensation security and

technological upgrades turnover or will continue

Continuously expenses and benefits and labor labor protection

roadmaps and customer labor disputes to affect

developing high-value- R&D investment in protections may lead mechanisms Production and Safeguarding

Innovation and a slower- Corporate access while Technological Employee Corporate can increase organizational

added and low-carbon Product R&D Expenses testing and to employee turnover enhances employee Manufacturing Operating Employee

Research and than-expected Operations the conversion Innovation Rights and Operations replacement efficiency and labor disputes and stability and Social Costs Rights and

products can increase and Design Operating validation Interests Employees costs and affect employment

Development conversion of Customers of research and R&D decreased production satisfaction Reputation Benefits

product premiums and Revenue impact current production risks; sound

results may lead to outcomes efficiency thereby ensuring stable

market share. costs and profit capacity management

increased expenses will generate increasing recruitment production line

performance. efficiency. can reduce

and pressure new revenue and compliance operations and disputes and

expenditures. high-quality

on investment and enhance long-term labor

deliveries.returns impacting profitability costs.profitability. resilience.Inadequate As safety

occupational health Improving the standards and

Higher

protection or safety management regulations

Insufficient Fluctuations in requirements for Accidents insufficient safety system and become

delivery customer demand customer access will lead to

Deepening synergistic management may risk prevention increasingly

stability or or an increase in and stable production

collaboration with core lead to risks of work- mechanisms and stringent interruptions

technical service Customer complaints can cooperation related injuries and strengthening Production and Operating continuous

customers through joint Operating Occupational Corporate increased

Customer responsiveness Service and lead to volatility mean that High-Quality occupational diseases training and on- Manufacturing Costs investment in Robust Safety

R&D and customized Revenue Health and Operations emergency

Relationship may trigger order Quality Customers in sales revenue relationship Customer resulting in production site control can Social Administrative prevention and Practices

services can enhance Operating Safety Employees response and

Management fluctuations Brand and payment management Service suspensions for reduce accident Reputation Penalties management

bargaining power Costs compensation

price pressure Reputation collection cycles capabilities will rectification rates and losses can reduce the expenditures

and long-term order compensation ensure production risk of major

and extended as well as rising affect order and will affect

stability. expenses continuity and accidents and

payment after-sales and stability price deliveries.administrative enhance employee stabilize long-

collection cycles. service costs. levels and penalties and stability. term operating

market share. reputational damage. costs.

21 22Satellite Chemical 2025 Environmental Social and Governance Report

Material Risk Factor Opportunity Impacted Impacted

Financial Impact Assessment

Mid- to Response Material Risk Factor

Opportunity

Impact Impacted Impacted

Financial Impact Assessment Response

Issue Factor Stage Entity Impact Mid- to Indicators Short-term

Factor

Long-term Subsection Issue Stage Entity Indicators Short-term Long-term

Subsection

The talent

Establishing a Strengthen the

An incomplete training pipeline and Incidents of Non-

tiered training and Increased compliance and anti-

system or skills skill levels will improper conduct compliance

skills certification investment in fraud system enhance

development that fails determine such as bribery incidents lead A sound ethical

system and training and off- internal control audits

to keep pace with job production fraud or conflicts to increased and internal

strengthening the-job personnel and whistleblower Operational Corporate

requirements can lead line efficiency of interest may expenses for control system

Employee the development Production Corporate development Growing protection Management Operations Administrative Adhering

to operational errors Operating and quality Business trigger regulatory investigations helps stabilize

Training and of key positions and Operations affect scheduling Together with mechanisms improve Raw Material Suppliers Penalties to Business

quality fluctuations Costs stability; a well- Ethics penalties and cooperation reduce

Development and versatile Manufacturing Employees putting short- Employees business transparency and Energy Regulators Brand Value Ethics

and decreased developed litigation-related rectifications legal risks and

talent supports term pressure and compliance Procurement and Society

efficiency increasing system can compensation and may affect maintain brand

technological on efficiency management and

the risks of rework reduce turnover and significant orders and value.upgrades and but reducing build trust with

losses and employee and enhance reputational cooperative

production capacity operational errors. customers and

turnover. organizational damage. relationships.expansion. partners.resilience.An imperfect

As compliance governance

Improving the

Improper requirements structure or Improving governance

information security Risk exposure Risk management

management of Security incidents and the threat inadequate risk mechanisms and a

management or internal capabilities

production control lead to system landscape identification and comprehensive risk

system and control determine a

systems supply downtime continuously response may management system

tiered protection Production deficiencies company's ability to Efficient

chain data or and increased evolve lead to significant enhances decision- Corporate Brand Value

mechanisms and and Corporate Administrative Information Corporate trigger withstand cyclical Corporate

Privacy and customer information emergency sustained operational making quality and Operations Operating

strengthening data Manufacturing Operations Penalties Security Governance Operational increased and unexpected Governance

Information may lead to risks response investment in fluctuations execution efficiency Regulators Costs

governance and Customer Customers Financial and Privacy and Risk Management rectification events while sound Strengthening

Security of data breaches expenditures protection and compliance reduces losses and Society Market

access control Service and Suppliers Losses Protection Management and compliance governance can Compliant

cyberattacks and affecting delivery governance can incidents and from unexpected Investors Financing

ensures business Quality expenditures reduce major losses Operations

business interruptions schedules and the reduce the risk investment events optimizes

continuity and and affect and stabilize long-

resulting in regulatory timing of revenue of significant decision-making resource allocation

enhances the trust the pace of term business

penalties and recognition. losses and errors thereby and strengthens

of customers and operations. performance.customer attrition. stabilize magnifying losses operational resilience.partners

operating costs. and increasing

management costs.Carrying out

public welfare

Good Rising

projects focused on

A mismatch community sustainability

industrial support

between investment Increased relations help requirements and Sustainability

employment Integrating

direction and actual investment in reduce social rapidly changing Increased capabilities will

promotion and sustainability goals

needs or non- public welfare risks and external evaluation investment affect financing

Rural community co- into business decisions

standardized project and associated communication Fulfilling and disclosure in system conditions and

Revitalization construction Operating and performance Corporate Brand Value

management can Social Regulation management barriers Corporate standards may development the stability

and improves Costs management can Operations Operating

lead to low resource Reputation and Society costs necessitate enhancing Social Sustainable lead to increased Operational and data of customer Sustainability

Community community Brand Value improve resource Regulators Costs

utilization efficiency strengthened project Responsibility Operations management costs Management disclosure leads cooperation; Governance

Welfare relations supports allocation efficiency and Society Market

and reputational communication implementation limited financing to a rise in related mature

a stable operating reduce long-term Investors Financing

disputes increasing and information efficiency and and customer management and management can

environment for operational risks

management and disclosure. the value of cooperation and communication reduce risks and

projects and and support steady

communication costs. the corporate reputational risks costs. enhance long-term

enhances corporate business growth.reputation. if strategies and operational quality.image and social execution are

recognition. inadequate.Actively

participating Industry

The rapid iteration of

in standards influence and

industry standards Participation in

development technological

and technological associations

technology leadership

roadmaps coupled standards

alliances and will affect the

with insufficient development

industry academia acquisition of

participation or and collaborative

and research Industry collaborative

Promoting misjudgment can projects leads Promoting

collaboration can Product R&D Partners R&D Expenses resources

Industry lead to missed to increased Industry

enhance industry and Design Corporate Brand Value and market

Development opportunities in investment in Development

influence and Operations opportunities;

rule-making and research and

voice promote the a proactive

collaboration management the

commercialization strategy helps

resulting in low effects of which

of technological to establish

investment efficiency require time to

achievements and brand and

and an adverse validate.drive the expansion technological

competitive position.of business advantages.opportunities.

23 24Satellite Chemical 2025 Environmental Social and Governance Report

01

Steady Operations

Building a Foundation

for Growth UN SDGs

STL considers efficient governance and compliant operations as the cornerstone of its steady growth. By continuously improving its

governance structure with clear responsibilities and coordinated operations building a standardized and transparent business

decision-making mechanism strengthening full-process risk management and internal controls adhering to business ethics and

reinforcing information security barriers the Company effectively safeguards the legitimate rights and interests of all stakeholders

injecting strong internal momentum into its high-quality development.

25 26Satellite Chemical 2025 Environmental Social and Governance Report

Efficient Corporate Governance

Governance System All members of the Audit Committee are independent directors of the Company responsible for reviewing the Company's financial information and its disclosure as well as supervising and evaluating internal and external audit work and internal controls. The Remuneration and Appraisal

Committee is responsible for formulating remuneration policies and appraisal standards for directors and senior management and conducting

appraisals as well as formulating and reviewing remuneration decision-making mechanisms decision-making processes and arrangements

for payment suspension and clawback. The Nomination Committee is responsible for formulating selection criteria and procedures for

Governance Policies directors and senior management and selecting and reviewing candidates and their qualifications. The Strategy and ESG Committee is a

special working body established by the Board of Directors in accordance with relevant resolutions responsible for researching the Company's

long-term development strategy major investment decisions and ESG matters and providing recommendations to the Board of Directors.The Company strictly abides by laws and regulations such as the Company Law of the People's Republic of China (hereinafter referred to

as the Company Law) the Securities Law of the People's Republic of China the Code of Corporate Governance for Listed Companies the

Administrative Measures for the Information Disclosure of Listed Companies and the Self-Regulatory Guidelines for Listed Companies on the

Shenzhen Stock Exchange No. 1 - Standardized Operation of Main Board Listed Companies. The Company continuously optimizes its corporate

General

governance system and discloses company information truthfully accurately and completely. During the reporting period the Company Meeting of

continued to enhance the quality of its information disclosure and received an A rating in the 2024-2025 information disclosure assessment Shareholders

from the Shenzhen Stock Exchange.The Company has formulated and revised a series of internal systems including the Articles of Association of Satellite Chemical Co. Ltd.Board of Directors

(hereinafter referred to as the "Articles of Association") the Rules of Procedure for the Shareholders' General Meeting the Rules of Procedure

for the Board of Directors and the working rules for each special committee of the Board of Directors to continuously improve its corporate

governance system. The Company's Decision-Making System for Related Party Transactions clarifies the approval procedures and information

disclosure requirements for related party transactions to ensure the compliance fairness and authenticity of transaction prices and prevent Remuneration and Strategy and

tunneling. In 2025 the Company formulated and disclosed the Market Value Management System to further regulate its market value Audit Committee Appraisal Committee Nomination Committee ESG Committee

management effectively protect the legitimate rights and interests of the Company's investors especially small and medium-sized investors

and enhance the Company's investment value.Board of Directors Diversification

Board of Directors Governance Structure

The Company continuously improves its Board of Directors governance structure striving to build a board that is diverse independent and

In active response to the requirements of the new Company Law the Company's supervisory functions are exercised by the Audit Committee of professional while meeting various business needs. We nominate and elect directors in accordance with the selection procedures stipulated

the Board of Directors forming a governance structure composed of the Shareholders' General Meeting the Board of Directors and its special in the Articles of Association giving full consideration to factors such as gender age cultural background educational experience and

committees and senior management. As the Company's highest authority and ultimate decision-making body the Shareholders' General professional expertise during the selection process. As of the end of the reporting period the Board of Directors comprised 9 members

Meeting is responsible for reviewing key matters such as major business decisions capital changes and formulation or revision of internal including 3 executive directors 4 independent non-executive directors (accounting for 44.44%) and 1 employee representative director.systems ensuring the Company's stable operation and protecting the rights and interests of all shareholders. The Board of Directors serves The board includes 6 members from the 1960s generation 2 from the 1970s and 1 from the 1980s creating a diverse age structure that

as the Company's business decision-making and leadership body. It is responsible for convening the Shareholders' General Meeting reporting blends rich experience and perspectives injecting vitality into the team. We value the leadership of women and the Board includes 2 female

to it executing its resolutions and exercising core management powers such as making business and investment decisions appointing senior directors (accounting for 22.22%) continuously promoting the board's independence and diversification. The independent directors possess

management and formulating basic management systems and is directly accountable to the Shareholders' General Meeting. The Board of diverse professional backgrounds and extensive industry experience covering multiple fields such as finance law chemicals and ESG. They

Directors has established the Audit Committee the Remuneration and Appraisal Committee the Nomination Committee and the Strategy and provide professional opinions and independent judgments on major decisions ensuring the scientific and transparent nature of the Company's

ESG Committee. Each committee collaborates according to its respective duties providing professional support and advice for the Board of decision-making. The Company conducts annual performance evaluations of its board members to ensure the board's effective operation

Directors' decisions to ensure its effective operation and fully safeguard shareholder interests. safeguarding the Company's standardized operations and sustainability.

27 28Satellite Chemical 2025 Environmental Social and Governance Report

Composition of STL's Directors and Senior Management for the 2025 Fiscal Year

Remuneration Nomination Strategy and

Name Gender Position Age Academic Background Audit Key Performanceand Appraisal

and Industry Experience Committee Committee Committee ESG Committee

Yang Chairman and Corporate During the reporting period

Weidong Male President 57 management and the / / Member Convenerchemical industry

The standard deviation of age for the Board of Female directors account for female executives account for

Directors and senior management is

Corporate

Ma Guolin Male Vice Chairman 61 management and the / / / Member 7.91 22.22 % 16.67 %

chemical industry

Independent directors account for

Vice Chairman

Yang Female and Employee

Corporate

Yuying Representative 64 management and the / Member / / 44.44 % of the Board of Directors.Director chemical industry

Independent directors account for 66.66% of the Nomination Committee 100% of the Audit Committee and

Zhu Male Director and Vice

Corporate

60 management and the / / / Member 60% of the Remuneration and Appraisal Committee.Xiaodong President chemical industry

The Board of Directors has 2 independent non-executive directors with expertise in risk management; the Audit

Corporate

Gao Jun Male Director and Vice 56 management and the / Member / / Committee has 1 accounting expert.President chemical industry

Wu Yi Female Independent

Risk management

Director 40 financial management Convener Member / Memberand ESG Risk Management Framework

STL has established a risk management and internal control system with clear responsibilities and standardized operations to continuously

Guo Independent The chemical industry enhance its risk prevention and control capabilities. The Board of Directors as the highest decision-making body for risk management

Baitao Male Director 52 and the intellectual Member / Member /property (IP) field coordinates the development of the Company's risk management and internal control system sets the development direction and formulates

strategic plans. The Office of the President is responsible for tracking and supervising the implementation of various systems overseeing

the execution of key decisions to ensure their effective execution. At the operational level various business departments risk management

functional departments and the Audit and Supervision Department collaborate to identify and respond to risks formulating and implementing

Feng Male Independent Lianfang Director 62 Chemical Industry / Convener / Member control measures for significant risks.Concurrently the Company has established a "three lines of defense" mechanism for risk management comprising business departments risk

Tong Male Independent 53 Legal Industry and

management functional departments and the Audit and Supervision Department to promote the effective operation of risk management and

Jianhua Director Risk Management Member Member Convener / internal control mitigate operational risks and ensure the Company's steady growth.Shen Corporate

Xiaowei Male

Vice President

Board Secretary 43 Management and / / / /Chemical Industry

Corporate

Li Jun Female Vice President

Management

CFO 53 Financial Management / / / /and Risk

Management

Corporate

Ma Tujun Male Vice President 41 Management and / / / /

Chemical Industry

29 30Satellite Chemical 2025 Environmental Social and Governance Report

How can we establish a framework of How can we achieve a system where "processes

Assess and identify key and difficult points in business operations. "benchmarking against excellence and govern affairs and regulations govern people" to

First Line of Defense optimizing improvements" to address address the breadth of management

Optimize operational standards and process specifications forming draft management regulations the height of management

Business or requirements for system development.Departments 01 02

Submit documents to the Corporate Management Department for preparation and review.Five Key

Corporate Management Department: Coordinates and manages the approval authorities of various Management

Second line of defense management levels promotes requirements in accordance with the institutional framework How can we achieve "goal alignment Questions How can we create an ecosystem

organizes guides and empowers the development of systems and processes in various professional and execution implementation" to 05 03 of "sincere communication and

Risk Management fields reviews institutional documents submitted by business departments and tracks the address the strength of management efficient collaboration" to address the

Departments implementation of all systems. effectiveness of management

(Including the

Corporate Management Finance Center: Reviews and controls the financial risks of business activities.Department Finance 04

Center Legal and Legal and Compliance Department: Improves the legal risk management and control system and

Compliance Department identifies and reviews compliance risks related to funds and regulations. How can we balance "efficiency first

Production Safety and while considering risks" to address the

Environmental Protection Production Safety and Environmental Protection Center: Verifies the implementation of risk control

Center etc.) precision of managementmeasures in safety and environmental aspects by business departments.Annually evaluates and updates the internal control risk control matrix and integrity risk assessment. Transformation in Ideology and Concept Transformation in Organizational Structure

Achieve leadership in ideology and Adhere to the flat management reform

Communicates with relevant business departments and promptly follows up on control weaknesses

establish systematic thinking. 01 02 approach of "small headquarters large

Third line of defense or non-compliance issues identified during reviews. industries."

Conducts audits on business activities where results do not meet expectations. Four Key

Audit and Management

Supervision Assesses the execution and deficiencies of existing systems and business processes and provides Transformations

Department reasonable suggestions for the Company to revise systems and processes.Transformation in Management Approach Transformation in Assessment Orientation

Evaluates the performance of the Company's middle and senior management personnel. Accelerate the institutionalization 04 03 Strengthen incentives competition standardization and process-oriented and elimination mechanisms to

development to ensure "inspection with enhance departments' enthusiasm for

clear criteria and assessment with data." "problem-solving and value creation."

The "three lines of defense" in risk management

Senior Executive Compensation Management

Governance Strategy

STL incorporates ESG factors into the performance evaluation system for senior management with assessment dimensions covering key

areas such as safe production energy conservation environmental protection and labor rights protection. For details please refer to the

"Sustainability Governance" section.Management Leadership Plan

In terms of remuneration constraint mechanisms the Company has formulated the Remuneration Management System for Directors and Senior

Management which covers the determination mechanism for total wage budgets remuneration structures and standards disbursement

Based on the "Management Leadership" Overall Plan STL organizes its centers bases branches (subsidiaries) and business divisions to focus procedures adjustments and suspension and clawback arrangements. By regularly evaluating the duty fulfillment and performance of

on addressing the "Five Key Management Questions" and implementing the "Four Transformations" steadfastly advancing the "Management directors and senior management the Company has established differentiated penalty standards for violations to ensure the alignment of

Leadership" No. 1 Development Project to further promote the establishment of a management system characterized by an advanced rights responsibilities and interests thereby guiding management decisions to consistently adhere to long-term interests and compliance.corporate culture streamlined organizational structure clear processes well-developed regulations refined management and efficient Furthermore the Company strictly adheres to governance procedures whereby remuneration plans for all directors including executive

operations. directors must be submitted to the General Meeting of Shareholders for deliberation and approval before implementation.

31 32Satellite Chemical 2025 Environmental Social and Governance Report

Governance Impact and Risk Management

Joint and Co-

Leading Management Practices building in The Company continuously strengthens the standardized construction of grassroots Party organizations and

Party Building: establishes a regular mechanism for organizational activities.Each Party branch holds a "Party Day" activity every month the Company's Party committee holds a general

STL adheres to the goal of "Management Leadership" by optimizing and innovating its institutional framework and improving rules and meeting of Party members every quarter and a joint meeting of the Party labor union youth league and

regulations concerning work processes decision-making mechanisms and financial management. This has established a decision-making women's federation is held every six months with meeting attendance rates all exceeding 80%.execution and supervision system with clear responsibilities and mutual checks and balances promoting the modernization and enhancement Conducted 7 joint-building activities with units such as Jiaxing Customs and the Jiaxing Children's Welfare

of corporate governance capabilities and standards. In 2025 the Company practiced its "Management Leadership" strategy and continued Institute continuously enhancing the synergistic effects of Party-building work.to advance institutional development issuing a total of 94 policies including 26 new ones and 68 revised ones covering nearly all business

areas.Enhancing Management Stature Expanding Management Scope

Benchmarking against advanced practices for To achieve a state of "processes govern affairs and regulations

optimization and improvement the President govern people" the Company following the basic approach of

led a team to visit and learn from leading "draft review learn implement assess" has continuously advanced Strengthening Ideological The Company has always prioritized ideological and political construction

management enterprises drawing on their institutional development and refined the 12418 system (1 Foundations： continuously deepening theoretical education.experience to launch the "Human Resource framework 2 levels 4 major systems 18 institutional categories). Organized over 90 special study and training sessions throughout the year on topics such as the spirit of the Central

System Optimization Project" which primarily In 2025 the Company improved its systems based on actual Committee's Eight-Point Decision the spirit of the Fourth Plenary Session of the 20th CPC Central Committee and the spirit

includes four aspects: performance incentives business needs emphasizing management objectives principles of the symposium on private enterprises.organizational leadership process systems and responsibility allocation and execution standards while optimizing

talent development. approval processes to increase efficiency. Regularly conducted integrity education activities organizing over 15 themed events throughout the year including integrity

education a 20-year retrospective of the "Red Boat Spirit" and a 20-year retrospective of the "Two Mountains Theory."

Additionally 3 special warning education sessions on integrity were held to strengthen the self-discipline and integrity

awareness of Party members and cadres.Improving Management Effectiveness Enhancing Management Precision and Intensity

Organized Party members to visit red education bases such as the Integrity Education Hall Yucun Village in Huzhou and the

Continuously fostering an ecosystem of "sincere To achieve a balance of "efficiency first while considering Menglianggu Campaign Memorial Hall for on-site learning and exchange further strengthening their sense of responsibility

communication and efficient collaboration" guided by the risks" and to coordinate "goal alignment and execution and mission."Three-Degree Working Method" the Company enhances implementation" business departments completed the

management effectiveness by organizing activities such initial construction of a "watch trends make decisions

as cultural dissemination and experience sharing through prevent risks" model which is being continuously

communication mechanisms like joint meetings and optimized and improved. The director and manager levels

consultation sessions. In 2025 the Company issued the have completed the coordination of their work blueprints

Management Measures for Sinking Services which clarifies breaking down key annual tasks into monthly plans with

the frequency content and requirements for these services clear timelines and deliverables. These plans are approved

Empowering

further improving cross-departmental communication and by their direct supervisors to build consensus on work

Development

collaboration efficiency to solve management issues. objectives and promote the execution of key tasks.through Party The Company adheres to the deep integration of Party building with business development transforming

Building： Party-building advantages into momentum for growth.Launched the "Party Member Achievement Competition" project covering more than 600 Party members

across the entire chain of R&D production and sales. Through a "Party Member Scorecard" multi-

dimensional evaluation and incentives are carried out to fully mobilize the enthusiasm of Party members in

Strengthening Party Building all positions.Launched the special initiative "Caring for People's Livelihoods and Public Opinion Focusing on Grassroots

The Company continuously improves its Party-building organizational structure and operational system. As of the end of the reporting period Dynamics" establishing a grid-based contact mechanism to achieve full coverage of employee care

the Company had one secondary Party committee one general Party branch and a total of 16 Party branches with the addition of two new and promote closed-loop problem solving. The performance of grid coordinators is incorporated into

branches: the Treasury Party Branch and the STL Charitable Foundation Party Branch. The total number of Party members reached 652 a year- performance management to continuously enhance the effectiveness of grassroots governance.on-year increase of 9.76% providing a solid talent foundation and organizational guarantee for Party-building to lead corporate development.

33 34Satellite Chemical 2025 Environmental Social and Governance Report

Risk Identification and Rectification Checklist

Investor Relations Management

Risk Type Policies and Systems Response Measures

STL is committed to enhancing the operational performance and investment appeal of the listed company. It has assembled an investor

relations team with extensive experience in the capital markets and has formulated policies such as the Investor Relations Management System 1.Comprehensively conduct integrity publicity and training covering all employees in every center

laying a solid foundation for standardized and professional investor relations work. The Company conducts annual training for directors and base subsidiary (or branch) and business division.senior management to continuously strengthen their awareness of information disclosure responsibilities fully safeguarding investors' rights Integrity Management System 2.Identify and assess integrity risk points.to equal access to company information. Whistleblowing Management Measures 3.Announce the standards for integrity red-line behaviors optimize the system and process

framework and continuously improve integrity risk control measures.Integrity Risk Management Measures for the Three

The Company has established an open fair and transparent investor communication mechanism. Through various channels such as telephone Integrity Gifts 4.Conduct project audits based on annual group-wide significant integrity risk areas and ensure

fax email the Easy IR (Hudongyi) platform WeChat official account earnings briefings on-site visits and the "Investor Relations" section of remediation and closure of identified issues.Anti-corruption and Anti-commercial

its official website the Company maintains regular communication with investors. This helps investors stay informed about the Company's 5.Encourage employees and partners to report corruption leads.Bribery Management System

operating conditions effectively responds to their concerns and continuously communicates the Company's value to the market. At the 6.Adhere to the principle of punishing all corruption; employees found to have engaged in corrupt

same time the Company actively implements the relevant requirements of the China Securities Regulatory Commission and Shenzhen Stock behavior will be penalized according to the severity of the offense.Exchange by formulating the Future Three-Year Shareholder Return Plan establishing a continuous stable and scientific dividend mechanism

to share the fruits of the Company's development with all shareholders.

1. Employ encryption technology for both data at rest and data in transit.

2. Implement strict access control policies adhering to the principle of least privilege.

Risk Management Process 3. Establish a comprehensive data backup strategy.Information Security Management Measures 4. Deploy network security devices and software such as firewalls and intrusion detection systems to

Information prevent external network attacks or intrusions.Security Risk Information System Emergency Management The Company continuously improves its risk management process constantly strengthening its capabilities in risk identification assessment 5. Regularly organize employee participation in data security awareness training.Measures

and response. This promotes the standardized and effective operation of the risk management system providing a guarantee for the 6. Provide emergency response training to relevant personnel and conduct regular emergency drills.Company's stable operations. 7. Deploy data monitoring tools for real-time monitoring of activities such as data access

transmission and usage.

8. Establish comprehensive audit and logging systems.

Collecting initial 1.Comprehensively standardize all aspects of the procurement process building a solid foundation for risk

risk management Procurement Management Regulations prevention at the institutional level.information 2. Standardize the preparation submission approval and modification processes for procurement demand

Procurement Procurement Demand Management MeasuresSupervision and plans to ensure material supply while effectively avoiding inventory backlog. Conducting risk

improvement of risk Risk Supplier Management Measures 3. Comprehensively standardize supplier admission selection performance evaluation and exit assessment mechanisms.management

Procurement Contract Management Measures 4. Strengthen procurement contract management by standardizing the entire process including contract

drafting review signing execution and dispute resolution.Risk Management Process 1.Implement decisions on the Company's major operational and investment projects.Proposing and 2.From project decision-making to the formulation of specific implementation plans ensure adequate

Formulating risk External Management System for Major Operational funding and the smooth progression of projects.implementing

risk management management Investment

3.Strengthen supervision over the execution of investment projects through internal audits and project

and Investment Decisions settlement reviews.and Guarantee

solutions strategies 4.Continuously monitor the financial and operational status of the guaranteed parties to promptly identify

Risk External Guarantee Management System and respond to potential risks.

5.Ensure that the guaranteed parties fulfill their debt obligations on time and take remedial measures

when necessary to reduce the Company's losses.Sales Credit Management Measures 1.Establish an organizational model of mutual supervision through the division of business responsibilities.

2.Manage behavior and mitigate risks through systems governing customer credit pricing contract

Risk Identification and Control Pricing Management Measures strategies planning and supervision.Sales Risk Measures for Contract Strategy Formulation 3.Mitigate contractual risks through the standardization of contract templates.and Contract Execution Management 4.Control risks through a hierarchical and tiered approval process.The Company has established risk control strategies that cover the entire business process enhancing its overall risk prevention capabilities.

5.Establish daily and weekly business reviews and functional anomaly reviews to promptly identify and

The Company has developed a risk identification and rectification checklist covering key areas such as integrity information security raw Sales Contract Management Measures

control risks.material procurement external investments and product sales. It continuously optimizes management measures to enhance the effectiveness

of risk control.

35 36Satellite Chemical 2025 Environmental Social and Governance Report

In 2025 the Company organized all departments to conduct risk identification and assessment identifying pain points difficulties and

bottlenecks in their work. A cumulative total of over 1000 significant risk items were sorted out and targeted control measures were

developed and optimized with the President's Office responsible for tracking and evaluating rectification. Concurrently the Audit and Key Performance

Supervision Department carried out a special risk assessment focusing on identifying and evaluating over 230 internal control risk points and

over 120 integrity risks verifying the controllability of each risk through sample testing.During the reporting period Convened 2 shareholders' meetings

STL has primarily identified the following risks in its operational management process and has taken measures for effective risk prevention and

control:

Convened 6 Board of Directors meetings with a 100 % attendance rate for board members and deliberated on

Optimize credit control systems and customer evaluation models implement process management 28 proposalsCredit Risk

and use credit insurance to transfer partial risks thereby enhancing financial security.The number of directors attending no less than 75% of meetings was 9 accounting for 100 %

Improve foreign exchange hedging operations use foreign exchange derivative hedging strategies

Exchange Rate Risk and establish a dynamic monitoring mechanism with dedicated personnel responsible for analyzing

foreign exchange trends. Convened 1 Strategy and ESG Committee meeting 1 Nomination Committee meeting 5 Audit Committee meetings

and 1 Remuneration and Appraisal Committee meeting

Construct a tax risk management system encompassing compliance transfer pricing tax planning

and internal controls comprehensively managing tax risks through policy interpretation internal self-

Tax Risk

inspections responses to external audits and support from the tax management committee and third-

party institutions. A total of 94 policies were issued including 26 new policies and 68 revised policies

Operational Risk Mitigate transaction asset decision-making and investment risks through contract reviews asset Convened 1 external risk management audit and 48 internal audits; 31 internal special audits (including departure

inventories price monitoring and investment project evaluations.audits) were carried out resulting in over 110 audit findings

Implement segregation of duties conduct regular inventories and establish scientific authorization

Financial Asset

Security Risk and approval processes while enhancing the security of financial assets through information

technology to reduce risks. Organized 96 compliance and risk control training sessions with approximately 2400 No overdue payments to

small and medium-sized

employees participating for a total training duration of approximately 1200 hours enterprises occurred

Indicators and Targets

Goals 2025 Achievement Status

Honors and Awards

Achieved a completion rate of over 80% for the 93.1% completion rate for the annual policy formulation

China Association for Public Securities Times 16th Tianma policy formulation and revision plan and revision plan

Companies 2025 Excellent China Securities Journal 2024 Award for Investor Relations

Practice Case for Listed Company Golden Bull Award for Most Management of Chinese Listed

Boards of Directors Valuable Investment

Continuously improved information disclosure quality

Companies Improved the quality of information disclosure receiving an "A" rating in the SZSE 2024-2025 Information

Disclosure Assessment

Formulated the Market Value Management Policy to

standardize market value management protecting the legal

Securities Times 16th Award for

China Securities Journal 2024 Securities Times 19th Sunshine Optimized investor relations management market rights of all investors particularly minority shareholders

Outstanding Board Secretary in

Golden Bull Award for Board Board Secretary of Listed value management and shareholder returns and enhancing investment value. Annual training is

Listed Company Investor Relations

Secretary Companies provided to directors and senior management to ensure

Management

equitable access to information for all investors

37 38Satellite Chemical 2025 Environmental Social and Governance Report

Strengthening Compliance Operations

Legal Compliance Assurance Internal Control System

To ensure robust operations in legal compliance STL has formulated internal policies such as the Regulations on Legal Affairs Management STL has established a comprehensive internal control system. By implementing systems such as the Internal Audit Management System

the Administrative Measures for Legal Review the Administrative Measures for Dispute Resolution the Administrative Measures for Legal the Internal Control Testing Manual and the Risk Control Matrix the Company integrates the five key elements of control environment risk

Consultation and the Administrative Measures for the Management of External Lawyers to standardize legal management processes and assessment control activities information and communication and internal supervision throughout its entire operational process to ensure

strengthen legal risk prevention and control. To continuously enhance employees' compliance awareness the Company regularly conducts asset security and operational compliance. The Audit and Supervision Department formulates and implements the annual internal control

specialized legal training covering areas such as export credit insurance practices the application of the CISG and integrity education. In 2025 audit plan based on the Company's strategic planning and regulatory dynamics and assesses the execution of internal controls across

the Company completed company-wide training and examinations for five key compliance policies ensuring effective policy implementation various business lines. For issues identified during audits the Audit and Supervision Department communicates directly with the relevant

and adherence. departments requiring them to implement corrective actions and subsequently tracking and verifying the results. Additionally the Company

prepares a quarterly internal control audit work report which is submitted to the Board of Directors' office for filing and review and reports

regularly to the Board's Audit Committee. In the annual evaluation of the effectiveness of internal controls the Board of Directors incorporates

sustainability responsibilities into the assessment scope systematically identifying risks proposing response measures and optimizing

Case Study Legal Compliance Training governance effectiveness.In 2025 the Company conducted internal control audits every quarter covering over 67% of its entities which account for more than 86% of

In May 2025 STL organized a specialized training session at its headquarters on "International Trade Risk Mitigation Under English the Company's total assets. The audit results did not identify any material or significant deficiencies. Concurrently the Company carried out

Contract Law" which was delivered by an external professional lawyer to the Company's foreign trade personnel and members of 31 special audits (including departure audits) 17 internal control compliance inspections and 5 complaint investigations raising over 110

the Legal and Compliance Department. By analyzing the core content of UK contract law and classic judicial cases the training audit issues with a rectification rate of approximately 90% resulting in direct loss recovery of about RMB 4 million. If the Audit and Supervision

delved into the calculation of damages for breach of contract in commodity trading contract dispute resolution and risk response Department discovers major issues during an audit it has the authority to adjust audit objectives or expand the audit scope and submit

strategies in uncertain environments such as trade sanctions. This effectively enhanced the ability of relevant business personnel to handling recommendations to the Board of Directors.identify and control legal risks in international trade providing support for the Company's steady advancement of its international

operations.Tax Compliance

STL actively fulfills its tax obligations considering tax payment in accordance with the law as a vital component of standardized corporate

operations. The Company continuously improves the standardization and accuracy of its tax information disclosure and contributes positively

to regional economic development through stable operations.The Company strictly adheres to national tax laws and regulations declaring and paying various taxes such as value-added tax corporate

income tax and consumption tax in accordance with the law. It has established a comprehensive tax management system ensuring the

compliance and accuracy of tax policy implementation and mitigating Tax Risk through methods like internal self-inspections and professional

consulting. In its overseas operations in locations such as Hong Kong (China) Singapore and the United States the Company strictly complies

with local tax laws regulations and transfer pricing rules. This ensures that profit distribution is consistent with value creation refrains from

shifting profits to low-tax jurisdictions and abides by the spirit of the law and principles of tax fairness.

39 40Satellite Chemical 2025 Environmental Social and Governance Report

Adherence to Business Ethics

Governance Impact and Risk Management

The Audit Committee serves as the highest governing body for business ethics responsible for oversight and periodic review of policies Whistleblowing Appeals and Handling

matters and risks related to business ethics and anti-corruption. It directs an annual audit of business ethics risks covering all operating

locations and all business segments. The Integrity Management Task Force is responsible for conducting integrity education and awareness

campaigns supervising inspecting and assessing integrity work handling reports of corrupt behavior and reporting to the Audit Committee.The Audit and Supervision Department is the department specifically responsible for conducting anti-corruption investigations assisting STL severely punishes any behavior that violates its code of business ethics. The Company has formulated and implements the Whistleblowing

the Audit Committee and the Integrity Management Task Force in implementing related work. It conducts an identification and assessment and Complaint Management Measures to standardize reporting channels and procedures. It has established multiple reporting channels

of integrity risk points in key business activities at least once a year and provides a quarterly summary report on integrity work to the head including letters telephone calls emails in-person reports and designated representative reports and supports both named and anonymous

of the Integrity Management Task Force. Each center base subsidiary/branch and business division inspects and identifies key integrity risk reporting to encourage employees suppliers users and other stakeholders to supervise all types of unethical behavior. For overseas suppliers

points quarterly. The person in charge of each unit is the primary person responsible for integrity building within that unit fulfilling a "dual the Company provides an English version of the appeal mechanism to ensure the effective transmission of relevant information. The Company

responsibility" by promoting integrity awareness implementing integrity work and reporting on integrity work to the head of the Integrity adheres to a fact-based approach promptly initiating standardized investigations and holding individuals strictly accountable upon receiving

Management Task Force every six months. If any corruption issues are discovered they must be reported to the Integrity Management Task credible leads ensuring that cases are handled efficiently and brought to a close. To protect the fundamental rights of whistleblowers

Force and assistance must be provided in the investigation work. the Company's policies explicitly require that the personal information of the whistleblower and the content of the report be kept strictly

confidential to the extent permitted by law and strictly prohibit any form of retaliation against them. During the reporting period STL had no

instances of corruption-related litigation.Strategy Whistleblowing Hotline Whistleblowing Email Whistleblowing Address

0573-82058220 18667358580 Compliance@weixing.com.cn Integrity Management Task Force STL No.

STL upholds a code of conduct based on "integrity transparency fairness and probity." The Company strictly complies with laws and 196 Fuqiang Road Nanhu District Jiaxing

regulations such as the Supervision Law of the People's Republic of China the Anti-Unfair Competition Law of the People's Republic of City Zhejiang Province China.China and the Anti-Money Laundering Law of the People's Republic of China. It has formulated and continuously optimizes internal systems

including the Integrity Management System the Whistleblowing and Complaint Management Measures the Anti-Corruption and Anti-Bribery

Management System and the Gift-taking Management Measures to foster a culture of professional integrity and maintains a "zero tolerance"

policy towards corruption. The Audit and Supervision Department If the investigation confirms the report's

Whistleblowing Handling Process organizes personnel to conduct a lawful content corresponding penalties will be

Anti-Corruption and Anti-Bribery Policies investigation based on the report's content imposed according to regulations based

which must be completed within 30 working on the severity of the circumstances.Integrity Management System days with a written investigation report Severe cases will be transferred to

issued. judicial authorities for handling.

01 Report Acceptance 02 Investigation 03 Cooperation Requirement 04 Outcome 05 Appeal Process

Whistleblowing and Complaint Management Measures

Anti-Corruption and Anti-Bribery Management System

The Company's Integrity During evidence collection relevant departments If the whistleblower or the accused objects to the

Management Task Force gives must provide unconditional and active handling decision they must file an appeal with

priority to handling named reports cooperation. The individuals under investigation the Integrity Management Task Force within 10

Gift-taking Management Measures

and anonymous reports supported must provide factual testimony and maintain days of receiving notification of the investigation

by sufficient factual evidence. strict confidentiality regarding the investigation. results and provide supporting evidence.

41 42Satellite Chemical 2025 Environmental Social and Governance Report

Measures to Prevent and Correct Retaliation In 2025 the Company organized 10 integrity awareness training sessions covering 490 people primarily including sales staff procurement

staff engineering management personnel Human Resources Center staff warehouse management personnel and administrative staff.Concurrently before major holidays integrity reminders were sent out to reinforce employees' awareness of celebrating holidays with integrity.The whistleblowing website and hotline do not require whistleblowers to provide identifying information.Four specialized training sessions on "Ethical Engineering Two specialized integrity and compliance training sessions for

During the investigation of reported incidents the Company's communication with the whistleblower is conducted Construction" were conducted for the engineering management marketing activities were conducted for all sales personnel

privately and the whistleblower's personal information and all materials provided are kept strictly confidential; teams and construction units of Satellite Technology the Future of business units such as Satellite Industrial and Satellite

unless necessary for the investigation investigators are prohibited from disclosing this information to any other R&D Center the Jiaxing Base and the Lianyungang Base. These Global. These sessions focused on analyzing the harms of

irrelevant personnel. sessions provided in-depth analysis of risk points and control corruption and clarifying professional red lines with a total of

requirements in project construction with a total of approximately approximately 240 participants reinforcing the anti-corruption

After the investigation is concluded the Company will determine whether the whistleblower has experienced any

150 participants thereby strengthening the compliance consensus defense at the market end.

form of retaliation; if any case of retaliation against a whistleblower is verified the Company will handle the involved

in the infrastructure field.personnel in accordance with the law.Three training sessions on the themes of "Ethical Procurement" and A signing event for the Integrity Commitment Letter was held

Furthermore the Company enhances its supervision and accountability mechanisms holding individuals strictly accountable for dereliction "Everyone is Responsible for Integrity Building" were organized for for managers at the supervisor level and above with over 1200

of duty or actions causing economic loss according to a tiered system; simultaneously upholding the principles of fairness justice equality personnel from the procurement center Pinghu Base warehousing participants. Concurrently integrity reminders were sent to

and transparency it guarantees every employee's right to supervise and report on management the disciplinary committee and the Audit and quality inspection and administration. These sessions covered all employees at key times to foster a festive atmosphere and

Supervision Department. approximately 100 people ensuring integrity and stability in corporate culture of integrity and uprightness.supply chain management and back-office support functions.Anti-unfair Competition

Two integrity-themed training sessions were conducted for all Party members with over 1000 participants. In conjunction with Party

Day themed activities a visit was made to the Xiuzhou Integrity Education Center for a cautionary education event to further solidify

ideological foundations and strengthen disciplinary awareness.In terms of managing risks related to unfair competition the Company regulates employee conduct in market competition by improving

internal systems and supervisory mechanisms explicitly prohibiting and strictly investigating all types of non-compliant competitive behavior.The Company adheres to source governance strengthening fair competition awareness among all staff through compliance training. In daily

operations the Company continuously monitors the competitive environment identifies risks in a timely manner through market research and

competitor analysis and simultaneously enhances the protection of intellectual property (IP) such as trademarks and patents to solidify its

Integrity Awareness Training Activities

competitive advantage. In response to actions that infringe upon the Company's rights and interests the Company takes legal measures to

protect its rights and ensure fair participation in market competition. In 2025 the Company was not involved in any litigation related to unfair

competition or antitrust issues.Business Ethics Audit

To effectively identify and control integrity risks STL regularly conducts anti-corruption audits across its centers production bases branches

subsidiaries and business divisions. These audits cover 100% of the Company's operating locations. The scope of the audits includes all major

business departments such as procurement sales logistics warehousing quality inspection and engineering construction with all business

operations audited at least once every three years. In 2025 the Company conducted a total of 11 business ethics audits primarily covering

business segments like sales procurement engineering quality inspection and warehousing with no major corruption incidents discovered. A

total of 128 integrity risk points were assessed and inspections targeting these points revealed no significant corruption issues.Integrity Culture Development

The Company has established a comprehensive business ethics training system conducting diverse training and awareness programs for all

personnel including the Board of Directors senior management and the entire workforce (encompassing full-time part-time outsourced

and intern staff). The Company ensures that every employee undergoes integrity training at least twice annually. By integrating integrity

education into the annual training plan and implementing measures such as the "First Lesson on Integrity" for new hires specialized training

for key risk departments and company-level integrity education activities the Company promotes full coverage of integrity education for all

employees and key personnel strengthening their awareness of professional integrity and risk prevention capabilities to foster a positive and

upright development environment. Additionally the Company requires personnel in key positions and critical roles to sign a Due Diligence and

Integrity Commitment Letter annually and all suppliers are required to sign the Integrity Commitment Letter.

43 44Satellite Chemical 2025 Environmental Social and Governance Report

Indicators and Targets

Case Study Integrity and Compliance Training

In July 2025 during its semi-annual business operations summary meeting STL conducted an integrity and compliance Indicators 2025

training session themed "strengthening Integrity and Compliance Awareness Sounding the Alarm and Fortifying Defenses."

The attendees included over 1000 personnel at the supervisor level and above from various centers bases subsidiaries and

business divisions. The training was led by the Company's Vice President who systematically analyzed the legal characteristics Anti-corruption-related audit projects 31 items

of typical duty-related crimes such as embezzlement and bribery. Through an in-depth analysis of seven typical integrity cases

within the industry a strong warning was issued. Employees were also required to strictly adhere to the Company's Integrity

Total hours of business ethics training conducted 100 hours

Management System and the "Five Red Lines of Employee Integrity." Through this special presentation the Company clearly

established a high-pressure stance of zero tolerance for any behavior that crosses these red lines requiring management

personnel to strengthen their compliance mindset and ensure integrity and stability throughout all of the Company's business Total number of business ethics training sessions conducted 162 sessions

operations.Number of directors participating in business ethics training 9 persons

Percentage of directors participating in business ethics training 100%

Number of management personnel (supervisor level and above) participating

Approximately 1150 persons

in business ethics-related training

Percentage of management participating in business ethics-related training 100%

Total number of employees participating in business ethics-related training 4811 persons

Percentage of employees participating in business ethics-related training 100%

Goals 2025 Achievement Status

100% of suppliers signed the Integrity Commitment Letter Achieved

The Company was not involved in any anti-corruption

Case Study Antitrust and Fair Competition Training Achievedrelated litigation.Integrity training achieved 100% coverage of the entire

workforce (encompassing full-time part-time outsourced Achieved

In 2025 STL conducted a specialized training session on the Corporate Trade Secret Protection for and intern staff).managers at the manager level and above deeply integrating the concepts of antitrust and fair

competition into the management system. The training adopted a closed-loop model of "lecture +

Q&A + assessment" focusing on an in-depth analysis from an antitrust law perspective of the legal ≥2 company-level integrity training sessions 2 sessions

consequences of abusing intellectual property to exclude or restrict competition guiding managers

to consciously avoid unfair competitive practices. To ensure the implementation of compliance the

Company required the heads of all departments to cascade fair competition requirements down to ≥8 integrity training sessions by the Audit and Supervision 10 sessions

the grassroots level and tested managers' grasp of fair competition policies through a post-training Department

examination. This training promoted the enhancement of the Company's internal control mechanisms

for "antitrust and fair competition" preventing operational compliance risks at the source and helping Integrity awareness sessions integrated into routine training

to create a fair and transparent market environment. ≥3 integrity training sessions self-organized by each and internal departmental meetings by various centers

center production base branch subsidiary and business

production bases branches subsidiaries and business units

Mid-Autumn Festival and National Day division (including their sub-departments) totaled an estimated

Integrity Reminder Push Notification 150+ sessions.

45 46Satellite Chemical 2025 Environmental Social and Governance Report

employs VDI virtual desktop management for key departments to ensure that important data is not stored locally continuously enhancing the

security protection level for sensitive data.The Company places great importance on information security risk management systematically advancing risk prevention and control work

Information Security and Privacy Protection across risk identification protection and monitoring to ensure the safe and stable operation of its information systems.Risk Identification

Governance

Using professional vulnerability scanning tools to conduct comprehensive scans of network systems to promptly

STL strictly abides by laws and regulations such as the Cybersecurity Law of the People's Republic of China and has formulated and improved identify security vulnerabilities in operating systems databases and application software.systems including the Information Security Management Measures the Information Management Regulations the Information Project

Construction Management Measures the Information System Emergency Management Measures the Information Equipment Configuration Regularly conducting information security risk assessments to identify and analyze risks for key business systems and

and Use Management Measures and the Computer Network Management Measures. These define information privacy protection policies and important information assets.supplier information security management requirements standardize the information handling and security responsibilities of employees and

partners and achieve full-process control over key areas such as terminals systems data operations and maintenance networks and server

rooms to effectively prevent information security risks. The Company has also established a compliance system for trade secret protection

formulating policy documents such as the Trade Secret Protection Management System and the Departure Management Measures which

clarify the scope and control measures for information confidentiality and standardize the declassification procedures for employees in

confidential positions upon their departure thereby effectively protecting the Company's innovative achievements and sensitive information.Risk Prevention Measures

To ensure business continuity and the security of information assets STL adheres to the principles of prevention first and comprehensive

governance building a comprehensive information security management system from both personnel management and technical protection

aspects. The Company implements a leadership responsibility mechanism for information security where the Information Center coordinates

the planning construction supervision and management of the Company's information security. The heads of each department are

Deploying an intrusion prevention system (NIPS) at the network egress to identify and block attack traffic in real-time

responsible for implementing the information security management duties within their respective departments ensuring the effective

preventing malicious intrusions.execution of all security measures.Deploying firewalls at the core external network egress to implement strict access control policies reduce network

exposure risks and ensure internal network security.Impact and Risk Management Deploying network behavior management devices to control and audit employee internet access preventing

information leakage and improper operations.Continuously updating the virus definitions of security software to enhance the system's defense capabilities against

STL adheres to data management principles that prioritize both compliance and security. During data collection the Company follows the new security threats.principles of legality propriety and necessity clearly informing data subjects of the purpose scope and method of use for the data collection

and proceeds only after obtaining their authorized consent to avoid excessive collection. In terms of data use and management the Company

has established strict access control and audit mechanisms granting tiered authorization based on job responsibilities and conducting

regular data access audits to ensure the entire data usage process is traceable and accountable. During the reporting period the Company

signed confidentiality agreements with all employees clarifying their responsibilities and obligations for data protection and continuously

strengthening data security and privacy protection. Monitoring and Early Warning

For the protection of employee and customer privacy information the Company has constructed a comprehensive information security system

covering internal management external constraints and technical safeguards. The Company treats customer information as a critical trade

secret implementing tiered access control based on internal policies. Access is restricted to the Supply Chain Management Department

product managers and senior personnel with clearly defined information processing environments to prevent disclosure risks from Utilizing a situational awareness system for real-time monitoring and analysis of network-wide traffic to dynamically

unauthorized access. In external business dealings the Company incorporates confidentiality obligations into sales contracts strictly defining identify and provide timely warnings of cybersecurity threats ensuring rapid discovery and handling of security

the boundaries for partners' use of trade secrets business plans and financial information and prohibiting unauthorized third-party disclosure incidents.or use for non-contractual purposes. At the technical protection level the Company has fully deployed endpoint antivirus and desktop

management systems implementing full-process control over data flow through technical means such as disabling USB storage restricting

screenshots setting desktop watermarks implementing card-swipe auditing for printing and file encryption. Additionally the Company

47 48Satellite Chemical 2025 Environmental Social and Governance Report

Informatization Development

The Company continues to advance its digital and intelligent transformation. Focusing on key business areas such as production operations

procurement management equipment management and environmental control the Company accelerates the application of information

systems and independent software development to enhance operational efficiency and intelligent management. During the reporting

period the Company's APS Advanced Planning and Scheduling platform was piloted at Satellite Technology and was successfully selected

as one of the first batch of AI demonstration scenarios in Zhejiang Province. The e-commerce procurement platform the "Five-in-One"

environmental management system and the equipment health records system were successively launched promoting the optimization

of production planning collaborative procurement and digital control of environmental protection and equipment. Concurrently the

Company independently developed an OKR system a performance management system and a CRM process optimization system achieving

improvements in management efficiency and cost savings. On the strength of its digital transformation achievements the Company has been

honored as a Zhejiang Province Future Factory Cultivation Unit a Zhejiang Province 5G Fully Connected Factory one of the first batch of AI

Security Attack Monitoring and Early Warning Platform Demonstration Scenarios in Zhejiang Province and an Advanced Intelligent Factory in Jiangsu Province.Emergency Response and Drills

Indicators and Targets

The Company has formulated the Measures for the Emergency Management of Information Systems and established an information system

emergency response team to create a standardized emergency response mechanism for data security incidents. In the event of an information

security incident such as a data breach the Company immediately activates the emergency plan takes technical measures to prevent the risk

from spreading conducts a technical diagnosis of the security incident to determine the cause of the leak formulates targeted solutions and

system recovery plans promptly repairs security vulnerabilities and restores the operation of relevant systems to minimize the impact of the

security incident and ensure the security of information systems and data. The Company organizes information security attack and defense Goals 2025 Achievement Status

drills annually simulating real attack scenarios to test the effectiveness of its security protection system and enhance employees' security

awareness and emergency response capabilities.Zero major information system failure incidents Achieved

Information Security Culture Development

Zero customer information leakage incidents Achieved

The Company continuously strengthens its information security training to enhance the data security awareness and risk prevention

capabilities of its employees suppliers and partners thereby building an information security defense line for all personnel.Case Study Information Security Training

Indicators 2025

In 2025 the Company conducted its annual information security

training under the theme "Robust Safety Practices Safeguarding

Data Assets." The training targeted 16 key users from various Number of information security system audits 1

departments across the group lasting one hour. It combined

"theoretical explanations + case studies" to focus on topics

such as identifying and preventing phishing and ransomware Losses from violations of laws and regulations concerning the protection of

managing account and office equipment security data 0customer rights and interests

classification and grading and emergency response procedures.The session reinforced risk prevention and control awareness by

reviewing typical cases. This training was also synchronized with Number of participants in trade secret protection compliance training 4811

the 2025 National Cybersecurity Week activities during which

information security tips were disseminated to all employees

to promote company-wide coverage of information security

concepts. Percentage of employees who have signed confidentiality agreements 100%

49 50Satellite Chemical 2025 Environmental Social and Governance Report

02

New Quality-Driven

Forging the Core of

Brand Strength UN SDGs

Technological innovation is the core element in developing new quality productive forces. Satellite Chemical has established a

multi-level R&D organization and platform layout. Leveraging the development of digital and intelligent manufacturing systems the

Company focuses on low-carbon chemistry and new energy materials accelerating breakthroughs in key core technologies and

driving the transformation of scientific research achievements into large-scale industrial applications. This enables the Company to

deliver green solutions to global customers and advance higher-quality more resilient sustainable development in the field of new

chemical materials.

51 52Satellite Chemical 2025 Environmental Social and Governance Report

R&D and Technological Innovation

Governance Strategy

The Company has established a full-chain technological innovation governance structure covering "technology R&D achievement

transformation and industrial application". It relies on multiple provincial and municipal R&D platforms including the Zhejiang Provincial Satellite Chemical fully embraces an innovation-driven development philosophy building core innovation capabilities through "Technology

Enterprise Technology Center Jiaxing Key Laboratory of High-End Vinyl New Materials and a national-level postdoctoral research station Leadership" and "management leadership." The Company accelerates the development of new quality productive forces empowers industrial

as well as product quality testing laboratories. It has also co-built applied technology research centers with downstream customers forming upgrading and drives the rapid transformation of innovation capability into competitive strength.a multi-level cross-business collaborative innovation system. In 2025 the main structure of the Satellite Future R&D Center was successfully

capped. As the Company's core R&D platform it will gather more than 2000 R&D personnel upon completion and host international joint

laboratories and corporate research institutes significantly enhancing independent innovation capabilities and establishing a core research

base and talent hub.Technology Leadership: Building a Systematic Innovation System

Define the connotation and criteria of Technology Leadership technological breakthroughs and

technological progress.Clarify the strategic direction and objectives of technological innovation to facilitate the deep

integration of the innovation chain and the industrial chain.Focus on the strategic layout of high-end materials and breakthroughs in key technologies

and strengthen internal organizational coordination and the transformation of technological

achievements.Management Leadership: Creating an Efficient R&D Process

Formulate systems including the Design and Development Control Procedure the R&D Project Management

Topping-out Ceremony for the Satellite Future R&D Center (West Zone) Project

Measures and the Scientific Research Archives Management Measures to provide clear norms and basis for

R&D activities.In terms of R&D talent management the Company has put in place a clear R&D organization and professional rank system implementing

the Detailed Rules for the Implementation of Professional Rank Assessment Standards for R&D Personnel. By integrating talent attraction

and development and combining internal training with guidance from external experts the Company continuously strengthens its pool Establish a scientific and efficient whole-process R&D management model operation mechanism and

of innovative talent. Each base and business division has established project mechanisms and incentive programs focused on R&D project incentive mechanism for core links such as design and development project management and achievement

approval technical breakthroughs and cost optimization. Key indicators such as R&D project initiation and patent achievements are transformation.incorporated into performance appraisal and diversified innovation incentives are provided including bonuses for production efficiency

improvement and cost reduction. These measures drive the effective translation of R&D investment into technological breakthroughs and

industrial value safeguarding the Company's core competitiveness in new chemical materials.

53 54Satellite Chemical 2025 Environmental Social and Governance Report

Product R&D Directions

High-Performance and

Functional Consumer Core Objective:Guided by consumption upgrades we develop high-performance multi-functional and

Chemicals Innovation environmentally friendly core materials for end-consumer products.Centered on the development theme of "high-end green and intelligent" the Company will focus its future research and industrialization

efforts on key strategic and cutting-edge new materials including catalysts new energy materials high-performance polymer materials and

functional chemicals. The Company is committed to breaking through core technological bottlenecks and expanding its portfolio of high- Innovation in high-performance and functional SAP: We are dedicated to developing next-

value-added products. generation SAP products that are ultra-dry highly water-retentive biodegradable antibacterial and

odor-controlling while also expanding their applications into emerging fields like agriculture and

cosmetics. By independently developing key additives (such as anti-yellowing agents) we enhance the

High-end Advancement overall performance of our products.of the Industrial Chain Core Objective: To break through key catalyst technologies achieve deep extension and high-value

and Independence in utilization of C2 and C3 industry chains and solve the bottleneck problem of high-end materials. Eco-friendly chemical solutions: We fully promote the application of water-based low-formaldehyde/

Core Technologies formaldehyde-free technologies in areas such as furniture coatings textile auxiliaries label adhesives

and inks. We develop low-odor low-VOCs/SVOCs product series to support the green upgrading of

Independent development of high-end catalysts: We continue to invest in the R&D and industrialization downstream industries.of catalysts for producing higher alpha-olefins (1-butene/1-hexene/1-octene) from ethylene POE

catalysts neopentyl glycol hydrogenation catalysts acrylic acid catalysts polyol catalysts and

ethylenediamine catalysts breaking our reliance on imports and enhancing the competitiveness of the Digital Transformation Strategy

entire industry chain.High-value extension of the C2/C3 industry chain: We are deeply engaged in process breakthroughs and product

development for metallocene polyolefins (mPE) polyolefin elastomers (POE) and polyalphaolefins (PAO) Guided by its "He" (Harmony) culture and aiming to become a leader in digital transformation within the chemical products industry Satellite

promoting their application in high-end fields such as new energy and automobiles. Concurrently we Chemical is steadily advancing its "Dual Five Program" while building a comprehensive digital platform covering upstream and downstream

are extending downstream into specialty chemical areas like functional acrylic monomers and electronic- sectors to sustainably drive high-quality business growth through digitalization. The Company focuses on enhancing five core capabilities:

grade wet chemicals. data operations organization security and innovation. It has developed a comprehensive digital system spanning ten major application

areas including business-finance integration collaborative office systems process efficiency digital factories data centers and the industrial

internet.Green Low-Carbon

and Resource Recycling Core Objective: To develop green processes promote the efficient utilization of by-products and carbon Management Leadership

Technologies cycling and reduce the environmental impact of the entire industry chain. and Technology Leadership

Green processes and the Circular Economy: We focus on developing technologies for the chemical

recycling of waste plastics into olefins exploring carbon capture utilization and storage (CCUS)

pathways and promoting the low-carbon transformation of the industry. We continuously optimize Group Marketing Group Procurement Group Intelligent

production processes and promote formaldehyde-free low-emission green chemical synthesis Platform Platfomm Manufacturing Platfom

technologies.High-value utilization of by-product resources: We systematically promote the comprehensive

utilization of hydrogen by-produced from ethane cracking to expand the hydrogen energy industry Group Financial Group HR Group OA Group R&D Group Safety Platform Platfomm Platform Platform Platform

chain. We research the use of by-product carbon dioxide to produce high-value chemicals and explore

innovative resource utilization pathways such as preparing data center coolants from alpha-olefin by-

products. Group Operations & Big Data Control Platform

New Energy Materials

and Functional Core Objective: To enter the new energy sector and extend chemicals into downstream high-value- Operations Management System Manufacturing Management System

Chemicals Extension added fields. Customer Relations Management System/ Safety Management System/

SupplierRelations Management System Procurement Production Intelligent System

Management System/Financial Management System Sales Logistics and Warehousing

New energy materials development: We focus on developing key materials for hydrogen fuel cells and Human Resources Management System/Collaborative Management System

Office System

are expanding R&D into areas such as lithium-ion battery electrolyte solvents and specialized materials Quality Management System/R&D Management SystemDecision-Making Support System

for energy storage batteries.High-performance and specialty materials: Targeting high-end demands in sectors like offshore wind The Company's Business Platform

power and electronics/electrical we develop products such as special anti-corrosion coatings high-

performance engineering plastics and specialty surfactants. IT Infrastructure Platform

55 56Satellite Chemical 2025 Environmental Social and Governance Report

The Company systematically advances digital planning and transformation across core areas including safety production project construction

and operation management. It has delivered high-quality supporting information system construction for the Satellite Energy Phase III project

fully rolled out the safety production information platform and integrated and upgraded the LIMS systems at the Pinghu Base Jiaxing Base The Company continuously enhances its intellectual property management system by formulating policies

and relevant business divisions. These efforts have achieved information system coverage and integrated support across all business scenarios including the Corporate Patent Management System and the Information Confidentiality Management

laying a solid foundation for further in-depth digital transformation. System. It places the full IP lifecycle—from acquisition maintenance and evaluation to transfer and risk

management—under standardized and stringent control. Through diversified IP training covering patent

mining and drafting patent search interpretation of IP compliance requirements and IP protection the

By strengthening digital capabilities the Company continuously improves operational efficiency risk prevention and control and refined

Company strengthens IP awareness across all employees and improves the standardization of patent

management providing strong support for sustainable development and intrinsic safety.management. During the reporting period the Company obtained certification under the GB/T 29490-2023

IP compliance management system and experienced no material IP infringement or disputes.Intellectual Property Compliance

Planning Stage 2025-2026 2027-2028 Management System Certification

Digitalization - Operational Digitalization Intelligence – Intelligent Decision-Making

Strategic Decision- Intelligent business analysis and corporate

Production and procurement data analysis.Making performance analysis.Green Product R&D

Implement comprehensive budget

management enhance digital financial control Develop cost-benefit analysis models and Satellite Chemical deeply integrates green and low-carbon concepts into the entire product R&D and design process. By optimizing materials

Corporate Control

and analysis and develop a unified e-commerce enable intelligent approval. processes and designs the Company continuously reduces environmental impact and advances sustainability throughout the product

platform for procurement. lifecycle.Replace existing systems with an independently

developed MES platform and integrate Develop digital twin factories establish RBI and Strategic Anchoring: Prioritize sectors aligned with national carbon peaking and

carbon neutrality goals and the Company's green and low-carbon industrial chain

Business Execution and upgrade the Group's safety production RCM equipment analysis models and enable Strategic strategy focusing on new energy materials comprehensive hydrogen energy

information supervision platform the multi-scenario AI model applications. Preliminary Alignment and utilization high-value CO? conversion and other areas.Lianyungang Base LIMS system among others. Screening Compliance Technology Pathway Assessment: Attach equal importance to technological leadership

Access and intrinsic safety conduct comprehensive environmental compliance and carbon

Optimize the contract management system footprint assessments and ensure energy consumption and emission indicators are

Data center equipment upgrade and

Support and Assurance and develop a unified platform for the Group's substantially better than national standards.retrofitting.administrative archives and portals.Use of Low-Carbon Feedstocks: Replace traditional petrochemical routes with low-

carbon feedstocks such as ethane and propane.Full-Chain

Green Practices Resource-based Utilization of By-products: Integrate resource recycling schemes at Mid-term the initial design stage promoting high-value utilization of by-product hydrogen CO?

Design and Process capture and conversion and chemical recycling of waste plastics.Risk & Opportunity Management Innovation Process Innovation: Continuously lower energy consumption through technologies

including cryogenic cold energy recovery and steam cascade utilization.In R&D and innovation Satellite Chemical strictly manages potential risks including technology leakage R&D bottlenecks market competition

and intellectual property (IP) disputes. It embeds principles of tech ethics throughout the entire R&D process and turns cutting-edge Closed-Loop Focus on Green Demand: Focus on developing high-value-added materials that serve

practices such as green transition smart factory development and innovative AI applications into definitive growth opportunities. The Resource green industries such as new energy and aseptic packaging including photovoltaic-

Company solidifies its technological leadership into sustainable industrial chain competitiveness and actively shapes the digital and green grade POE battery-grade carbonates and high-end polyolefins.End-of-Life Utilization and

future of the high-end chemical manufacturing sector. Cycling Collaborative Supply Chain Collaboration: Extend product life cycle assessment to the supply chain

Emission implement green partner certification and drive collaborative emission reduction

Reduction across upstream and downstream sectors.Intellectual Property Protection

Leveraging the low-carbon advantages of light hydrocarbon feedstocks the Company has established an R&D system covering "green

feedstocks green processes and green products" to continuously promote the large-scale application and industrial deployment of green

R&D information confidentiality is a core prerequisite for protecting innovation achievements. Satellite Chemical has established a comprehensive chemicals. The Company has increased R&D investment in green chemicals focusing on key new energy materials such as lithium-ion battery

R&D information confidentiality management system and issued the Measures for the Administration of R&D Information Confidentiality as a code binders battery-grade carbonates and POE and is committed to enhancing battery performance from the material side. In the field of waste

of conduct for personnel with access to confidential information. It strengthens information control across the full R&D cycle effectively guarding recycling it focuses on CO? resource utilization hydrogen-rich by-product utilization and harmless treatment of waste catalysts to build a

against the illegal theft use and disclosure of R&D information and strengthening protection for its innovative achievements. closed loop for industrial by-products achieving simultaneous improvement of both environmental and economic benefits.

57 58Satellite Chemical 2025 Environmental Social and Governance Report

Green Benefits and

R&D Dimensions Specific Directions Technological Highlights and Products Case Study Low-Value Olefin By-products Empowering the Green Upgrade of Data Centers

Application Areas

Efficient

Utilization of Light Utilizing light hydrocarbons such as ethane and Reducing the carbon footprint and Amid the global surge in computing power demand data centers are confronted with increasingly acute challenges related

Hydrocarbon propane as core feedstocks to reduce carbon building a green industrial chain. to energy consumption and heat dissipation. Satellite Chemical has established an efficient value-added conversion route for

Feedstocks emissions at the source. low-value mixed olefins and developed a green technology to produce high-performance immersion coolant for data centers

using α-olefin by-products. This technology can lower data center Power Usage Effectiveness (PUE) to 1.02–1.09 and reduce

cooling system energy consumption by 40%–80% resulting in a significant reduction in overall energy use and carbon emissions.Efficient Utilization Directly using high-purity hydrogen by-produced Solving challenges in the storage

Green Feedstocks of Hydrogen-Rich from light hydrocarbon cracking in downstream and transportation of green

Through joint research with universities the project converts industrial by-products into high-value-added green products. It has

and Resource Resources production processes to achieve circular utilization of hydrogen to support the hydrogen

been successfully selected into Zhejiang Province's 2026 "Jianbing Lingyan" (Pioneer & Leading Goose) Science and Technology

Utilization hydrogen. economy. Program delivering a replicable green solution for the low-carbon transition of computing infrastructure.Carbon Dioxide Realizing resource utilization of industrial CO? Promoting Carbon Capture and

Resource emissions through processes including the production Utilization (CCU) and serving as a key

Utilization of ethylene carbonate via ethylene oxide coupling raw material for battery electrolyte with CO?. solvents.

5G Factory Construction

Technological

Breakthroughs for Optimizing the POE production process to reduce

Serving as a core material for

feedstock and energy consumption and enhance photovoltaic encapsulant films Energy Efficiency

Optimization product performance.(indirectly applied in the battery Satellite Chemical is actively advancing the construction of future-ready factories. By aligning the needs of the chemical industry with

upstream). 5G capabilities the company deploys 5G modules terminals gateways and other devices and deeply integrates technologies including

edge computing big data artificial intelligence and VR/AR. It also connects software and control systems such as SAP CRM MES and

the Five-in-One Platform to build a fully connected 5G+Industrial Internet factory and business system tailored for the chemical industry.The project encompasses 20 application scenarios such as 5G-enabled precise dynamic operations predictive equipment maintenance

Independently developing high-performance precise distribution scheduling and production energy efficiency management. It achieves the full integration of functions covering safety

catalysts including neopentyl glycol hydrogenation environmental protection emergency rescue energy efficiency analysis logistics tracking and public services thereby improving the

Green Processes Development of catalysts (excellent activity) new high-efficiency Applied in processes related to enterprise's overall operational efficiency and leading the intelligent transformation and digital evolution of the chemical industry.and Technological High-Efficiency ethyleneamine catalysts (internationally leading battery materials to improve

Innovation Catalysts performance) α-olefin catalysts and 1-butene reaction efficiency.catalysts to promote domestic substitution of key

materials and advance green process upgrading.Harmless Developing harmless treatment technology for Achieving hazardous waste

Treatment of waste ethylene polymerization catalysts to convert reduction and harmless treatment

Hazardous Waste hazardous substances into landfillable solids. in the production process.Strategic Layout Developing photovoltaic-grade POE and high-

of High-End end polyolefin materials to increase the domestic Applied in the photovoltaic and

Polyolefin Products substitution rate of new energy materials. new energy industries.Eco-Friendly Developing formaldehyde-free zero-pollution

Functional reducing agents high-performance anti-yellowing Reducing emissions of hazardous

Green Product Chemicals agents and other products to reduce risks in product substances.R&D application and emissions.Independently developing lithium-ion battery binders

New Energy with low expansion rate and high adhesion as well as

Materials battery-grade DMC as electrolyte solvent to improve Serving as a core material for

Innovation the cycle life and energy density of silicon-based lithium-ion/silicon-based batteries.batteries.

59 60Satellite Chemical 2025 Environmental Social and Governance Report

Satellite Chemical is actively exploring a new "AI + Chemicals" model and has developed an "AI-Powered Flexible Smart Manufacturing Model

for High-End New Materials". This model deeply integrates AI large-scale optimization algorithms data-driven deep learning models and real-

Deploying IoT APC APS and AI technologies to streamline production and management processes

time intelligent scheduling technologies to enable intelligent optimization and real-time scheduling of production plans. It effectively reduces

achieve digitalization and transparency across the production process and boost operational efficiency

Driving the Smart inventory and market risks improves resource utilization efficiency and productivity and advances flexible manufacturing across multi-product and product quality.Development scenarios.of Chemical

Production The project has implemented a 5G network environment and developed application scenarios including

remote control safety early warning intelligent inspection environmental monitoring and data By integrating AI into core processes including HSE management process control equipment maintenance and production scheduling the

collection providing robust support for smart manufacturing. Company has achieved multi-dimensional improvements in safety environmental performance and operational efficiency providing intelligent

impetus for sustainable development.AI + HSE (Five-in-One Governance): Using AI visual recognition and AI + APC (Advanced Process Control): Leveraging real-

Leveraging AI inspection to accelerate fault diagnosis and enable predictive maintenance through risk prediction models the system identifies personnel violations and time data and intelligent control algorithms to optimize

data analytics removing potential safety hazards in real time ensuring uninterrupted production and equipment hazards and issues real-time alerts reducing the safety process parameters for key units such as reactors and

advancing chemical production toward unmanned networked intelligent and collaborative operations. incident rate by more than 30% and improving compliance inspection distillation columns boosting product yield and lowering

Enhancing corporate capabilities in digital design intelligent production green manufacturing safety efficiency by 50% while significantly cutting incident response costs specific energy consumption.Leading Intelligent

Upgrading management and digital governance while driving model innovation in personalized customization

and compliance risks.and Digital networked collaboration and service extension to improve overall corporate performance and

Transformation competitiveness. AI + EAM (Enterprise Asset Management): Applying predictive AI + APS (Advanced Planning and Scheduling): Integrating

maintenance models to monitor equipment operating conditions multi-dimensional data including market demand raw

Built on the Xingyun Industrial Internet Platform collecting and analyzing full-stack heterogeneous minimizing unplanned downtime and reducing maintenance costs. material supply and capacity constraints to enable

digital data to develop a smart brain for the C3 industrial chain with end-to-end online visibility intelligently optimized production scheduling effectively

full-process sensing and comprehensive intelligence. shortening order lead times increasing inventory turnover

and strengthening supply chain resilience and agility.Collecting organizing and analyzing data on operations production equipment quality inspection and

Case Study Two Factories Recognized as "Jiangsu Provincial Advanced Smart Factories" for 2025

supply chain in the chemical sector to develop vertical industrial datasets covering multiple sub-sectors

Empowering the

Upstream and and application scenarios.Downstream In June 2025 in response to Jiangsu Province's 14th Five-Year Plan for the Development of Smart Manufacturing Lianyungang

Industrial Chain Leveraging geographical advantages to establish a chemical industry supply chain management Petrochemical and Jiahong New Materials—subsidiaries of Satellite Chemical—systematically advanced the construction of

platform integrating procurement production and sales linking more than 2000 upstream and intelligent chemical plants and were recognized as "Jiangsu Advanced Smart Factories". By deepening IT/OT convergence the

downstream enterprises to enhance industrial chain synergy and efficiency. Company established an "Enterprise Brain" covering all elements of 4M1E (man machine material method and environment) and

achieved system integration and data connectivity by leveraging next-generation information technologies including 5G AI and the

Internet of Things. This effort has not only significantly boosted production efficiency and product quality but also enabled real-time

monitoring and optimization of energy consumption and emissions through innovative 5G applications in explosion-proof areas. It

has vigorously advanced the transformation of production toward safe green and intelligent operations setting a benchmark for the

Progress in Digital Transformation and AI Applications digital transformation of the chemical industry.Enhanced Production Efficiency Strengthened Green & Low-Carbon Production

Refining the management of equipment performance

Reducing emissions of waste gas wastewater and solid

and production processes optimizing capital expenditure

waste through digital monitoring and control improving

on equipment and capacity utilization strengthening

energy efficiency cutting industrial water consumption

centralized plant control and effectively reducing product

and significantly minimizing resource waste.costs operating expenses and quality-related costs.Improved Supply Chain Agility Reduced Safety Incident Risks

Achieving second-scale response speed for on-site safety

Lowering excess inventory shortening lead times and management with 85% recognition accuracy enhancing

reducing design iteration cycles. real-time hazard detection capabilities and reducing

hazard incidence by 50–80%.Smart AI Vehicle Loading and Unloading System

61 62Satellite Chemical 2025 Environmental Social and Governance Report

Indicators and Targets Indicator Unit 2025 2024 2023

R&D Team and Investment

In 2025 guided by its overall development strategy Satellite Chemical set objectives for R&D and innovation. After fully considering the Number of R&D Personnel Persons 1283 1275 1271

resource strengths and business characteristics of its production bases and business divisions the Company refined and decomposed its

overall goals into detailed targets for each entity and implemented targeted measures. As a result it achieved remarkable progress in patent

Bachelor's Degree Persons 1022 1020 1151

applications and R&D investment.Master's Degree or Above Persons 261 255 120

Goal Category Goals 2025 Achievement Status R&D Expenditure RMB 100 million 16.56 17.51 16.26

In 2025 the Company filed 170 invention patent applications R&D Investment as a Percentage of Core % 3.59 3.84 3.92

representing a 106% completion rate and 99 utility model patent Business Revenue

R&D Patent Planned to file 223 patents in 2025 including 160 applications representing a 157% completion rate.R&D Patents

Applications invention patents and 63 utility model patents. Compared with 2024 invention patent applications increased by 26.87%

and utility model patent applications by 26.64% reflecting steady Invention Patent Applications Filed in the

progress in high-quality patent filings. Items 170 148 40 Reporting Period

Invention Patents Granted in the Reporting

Items 41 36 29

Sustainably increase R&D investment to reach an Period

R&D aggregate RMB 10 billion within five years and In 2025 R&D investment amounted to RMB 1.656 bill ion

Investment achieve breakthroughs in key bottleneck new accounting for 3.59% of operating revenue. Cumulative Valid Invention Patents Items 170 134 100

material technologies.Utility Model Patent Applications Filed in the

Items 99 117 35

Reporting Period

Continuously recruit and develop high-caliber

R&D The R&D team comprised 1283 members including 1022 with Utility Model Patents Granted in the

innovative professionals to expand the R&D team Items 95 85 67

Personnel bachelor's degrees and 261 with master's degrees or higher. Reporting Period

to 2000 members within five years.Cumulative Valid Utility Model Patents Items 385 304 220

Cumulative Valid Patents Items 555 438 320

Software Copyrights Granted in the

Items 2 15 2

Reporting Period

Cumulative Valid Software Copyrights Items 41 39 24

Intellectual Property Protection Training

Number of Training Sessions Held Sessions 13 9 /

Number of Employees Participating in

Persons 218 80 /

Training

Total Training Hours Completed Hours 28 36 /

As of the end of the reporting period 7 subsidiaries of Satellite Chemical have been certified as National High-Tech Enterprises 3 have been

recognized as provincial-level Specialized Refined Differential and Innovative (SRDI) SMEs and 1 has been recognized as a national-level

SRDI SME.

63 64Satellite Chemical 2025 Environmental Social and Governance Report

Product Quality and Safety

Governance Quality Management System Development

In 2025

Satellite Chemical has implemented stringent quality control processes and

Satellite Chemical has established a comprehensive and robust quality and safety management system and upholds stringent standards continuous improvement measures to meet customer expectations and the Company recorded no product

for product quality and safety across all production bases and business divisions. Guided by the principle of "unified leadership hierarchical adhere to international standards. The Company has actively promoted quality quality-related violations or

governance and accountability by division" each base and division has developed a full-scope management structure tailored to its operating management system certification. During the reporting period the GB/T 19001- penalties.conditions with well-defined responsibilities and clear accountability to individuals. 2016 / ISO 9001:2015 Quality Management System certification covered 100% of

its operating sites.Level Position Responsibility

Decision-Making Level General Manager and Responsible for formulating quality and safety strategies and annual objectives Management Representative securing resource allocation and overseeing policy implementation.Quality and Safety Director

Management Level and Production Technology

Responsible for overseeing daily system operation document control and

& Quality Department measure implementation ensuring full policy execution.Quality and Safety Responsible for on-site operational execution ensuring the entire production

Execution Level Officers and Employees process fully complies with quality standards.Safety Management Structure

Certificate of Quality Management System

The Company has established supervision inspection and assessment procedures featuring "daily oversight weekly inspections and monthly

reviews" and put in place systems for daily quality and safety reports professional inspection bulletins and statistical analysis. It also conducts

semi-annual and annual quality and safety competitions. Through performance assessment the Company promotes continuous improvement

of product quality and encourages all employees to strengthen quality awareness and execution.Strategy Risk & Opportunity Management

Satellite Chemical strictly complies with laws and regulations including the Product Quality Law of the People's Republic of China and the

Standardization Law of the People's Republic of China and has issued internal documents such as the Quality Management System Accident Quality Management Processes

Management System Detailed Rules for Analysis Frequency Management and Detailed Rules for the Management of Raw and Auxiliary

Materials. During the reporting period the Company focused on refining and enhancing its dedicated quality functions and expanding the

scope of quality management translating compliance requirements into an executable traceable and measurable management mechanism. Satellite Chemical has established comprehensive quality management processes covering key stages across the full product lifecycle—from

By establishing a quality risk control list annual quality objectives and supervision and inspection plans while continuously optimizing sourcing raw and auxiliary materials to final after-sales support—ensuring high-quality products and services.assessment and inspection standards the Company systematically implements quality management covering the entire product life cycle.

65 66Satellite Chemical 2025 Environmental Social and Governance Report

Non-Conforming Product Control

Implement a supplier qualification and incoming inspection system to ensure the quality of raw and

auxiliary materials at the source.Quality Satellite Chemical imposes stringent controls over non-conforming products to guarantee product quality. For non-conforming raw and

Develop trial protocols for replaced or newly introduced raw and auxiliary materials to evaluate their Assurance auxiliary materials the Company conducts reviews and adopts measures including concession acceptance returns or replacements with

quality. for Raw and return as the priority option in principle to control quality risks at the source. For non-conforming intermediate products during production

Auxiliary

Inbound materials are stored in designated zones with proper labeling and record-keeping. The "first- Materials the Company promptly identifies root causes implements corrective actions and develops preventive measures to eliminate hidden dangers.in first-out" principle is applied with regular inspections to prevent deterioration. Non-conforming or For final non-conforming products strict measures such as rework downgrading or scrapping are applied. Such products are not permitted

deteriorated materials are segregated and clearly labeled to maintain full traceability. to leave the production facilities and are fully processed on-site effectively preventing their release into the market and protecting product

quality and brand reputation.Key Performance

During the reporting period

Conduct rigorous quality acceptance and oversight for packaging operations and application

Packaging processes and inspect packaging materials to ensure compliance with specifications. the Company experienced no product recalls related to potential safety hazards or quality defects.Materials

Management Perform full-process acceptance of packaging operations; any identified issues will result in

immediate suspension isolation and notification.Detection Capability Improvement

To ensure the sustained reliability and continuous improvement of its laboratory testing capabilities the Company systematically participates

in external proficiency testing measurement audits and inter-laboratory comparisons supplemented by internal quality supervision and

Decompose annual quality objectives define key control points and monitor and inspect control measures to continuously enhance the standardization and accuracy of its testing system. All of the Company's sites have established

intermediate production processes. and improved laboratory quality management and assurance systems in accordance with the accreditation criteria of CNAS (China National

Conduct production in strict adherence to operating procedures complete quality records and Production Accreditation Service for Conformity Assessment). Equipped with advanced testing instruments all inspectors have received professional

implement performance assessments. Process training and qualification assessments and are fully competent to test the Company's entire product portfolio.Management

Perform product inspections in accordance with standards; non-conforming products are

prevented from entering the next process and disposed of based on evaluation results. During the reporting period annual surveillance audits for the "Jiangsu Premium Brand" were conducted for TPEG HPEG and industrial-grade

propylene oxide products. All products successfully passed the assessments and the "Jiangsu Premium Brand" certification remains valid.Lianyungang Base Boasts CNAS-accredited testing capabilities covering 16 test items with a total of 119 test parameters.Conformity inspections are carried out in line with product standards with strict

Finished implementation of the "Five No-Release" rules while overseeing packaging and storage.Product Release Pinghu Base Boasts CNAS-accredited testing capabilities covering 15 test items with a total of 60 test parameters.Management Collect market feedback to drive continuous product quality improvement and enhance

customer satisfaction.Jiaxing Base Boasts CNAS-accredited testing capabilities covering 5 test items with a total of 26 test parameters.Quality Culture Development

Conduct re-testing and indicator comparison for abnormal feedback identify root causes and

issue dedicated investigation reports. After-Sales

Quality

Management Satellite Chemical advances quality culture development to comprehensively elevate its quality management standards through continuous

For key customers align requirements in advance and execute relevant technical agreements improvement and innovation. The Company systematically implements quality management measures across all production bases and

to minimize subsequent issues. business divisions strengthening employee quality awareness and risk control capabilities company-wide. Through "Quality Month"

initiatives—including quality knowledge competitions professional training engineering quality evaluations and themed essay contests—

the Company effectively enhances employee engagement and operational proficiency in quality management. Emphasizing internal-external

collaboration and benchmarking leadership the Company actively participates in external training and provincial standard digital management

Quality Management Processes evaluations and has received government recognition for its quality credit and product certifications.

67 68Satellite Chemical 2025 Environmental Social and Governance Report

High-Quality Customer Service

Case Study Organizing Quality Management Training to Empower Quality Control Capability Enhancement

In September 2025 the Company organized specialized training and workshops focused on elevating core quality management

capabilities. Participants engaged in in-depth discussions on how to more effectively integrate the quality management system

into daily operations and conducted site visits to digital workshops and laboratories with a focus on exploring digital applications

and capability development in critical scenarios such as hazardous chemical management and tank truck standardization. The

Satellite Chemical strictly complies with relevant laws and regulations such as the Law of the People's Republic of China on the Protection of

meeting emphasized leveraging internal digital transformation as a core driver centering on key topics including efficient closed-

Consumer Rights and Interests the Civil Code of the People's Republic of China and the Advertising Law of the People's Republic of China. Based

loop resolution of internal customer complaints product compliance control and export quality management to advance quality

on the Regulations on the Management of Applied Technical Services in the Marketing Center the Company has formulated internal documents

management from compliance to excellence and deliver actionable methodologies and practical references.including the Measures for the Management of Sales Contracts the Guidance Manual for Customer Reception Etiquette the Detailed Rules

for the Implementation of Customer Relationship Maintenance the Measures for the Management of Customer Complaints the Measures for

Logistics Management the Regulations on Brand Promotion Management and the Customer Care Manual to provide comprehensive standards

and guidance for the development of the Company's service system.The Company continuously standardizes its customer service contract signing logistics services and payment settlement processes while

Indicators and Targets improving its customer service management mechanism and iteratively optimizing its service system. In terms of product quality standards the Company has evolved from following international and industry standards to developing its own corporate standards precisely meeting

customer needs with high-quality products. In addition the Company has been refining its service protocols by compiling service script

manuals and delivering targeted training effectively enhancing the service capabilities of its sales staff to deliver a higher-quality and more

professional customer experience.All production bases and business divisions of Satellite Chemical develop comprehensive annual quality management objectives spanning

multiple dimensions including products raw and auxiliary materials customer requirements laboratory analysis COA (Certificate of Analysis)

production scheduling and metrology. The achievement of these quality objectives is statistically analyzed on a monthly basis to produce

quality monthly reports ensuring the orderly advancement of quality management initiatives.Digital Marketing Management

Goals 2025 Achievement Status

Guided by the core customer-centric philosophy Satellite Chemical uses digital transformation to drive business standardization and capability

improvement. In 2025 the Company continued to advance digital marketing reform based on its CRM system upgraded its marketing

First-pass yield of intermediate products ≥98.5% Achieved decision-making cockpit and focused on building visual dashboards for real-time monitoring and early warning of core indicators including

sales progress and operational plans. These efforts have streamlined manual data analysis reduced cross-departmental collaboration costs

and facilitated the transformation of marketing from extensive operation to refined and precise operation.Finished product release pass rate: 100% Achieved

Zero major or above-grade quality incidents No such incidents occurred during the year Order Enable end-to-end digital management from order creation to delivery and improve management efficiency

Management through visual monitoring.Logistics Support logistics optimization advance logistics visualization and enhance logistics efficiency and service

Optimization quality.Product Quality and Safety Training Performance Customer Deepen customer tiered and categorized management and personalized services through real-time updates of

Management customer historical order data and information.Pricing Obtain pricing data via the system and apply it to product pricing and contract order execution to ensure

Indicator Unit 2025 2024 2023 Control effective implementation of pricing strategies.Implemented a change approval process for abnormal contract execution and optimized the contract signing

Number of Training Sessions Held Sessions 70 59 39 Contract

workflow enabling contract generation within 30 minutes of instruction receipt to accelerate business

Management

response.Number of Employee Training Attendances Attendances 5332 1964 1715

Travel and

Leverage a business trip planning comparison and aggregation system to optimize travel routes and enable

Expense

Total Training Hours Completed Hours 118 96.5 69.5 targeted customer visits improving efficiency and reducing travel expenses.Management

69 70Satellite Chemical 2025 Environmental Social and Governance Report

Smooth Communication with Customers

Advancing Responsible Procurement

The Company maintains efficient communication with customers at all times and establishes a full-process closed-loop service system through

diversified channels and differentiated management ensuring prompt and precise responses to market needs and customer concerns.A daily communication mechanism is in place Sustainable Supply Chain Management System

to enable the raw materials and sales teams to

capture market trends in real time. Leveraging

A closed-loop customer key industry events including the OPIS Global Satellite Chemical has established a series of management systems including the Measures for Supplier Management Procurement Management

feedback management system LPG Conference APPEC Singapore Petroleum Regulations Supplier Performance Appraisal Management System the Measures for Supplier On-site Inspection Management and the Logistics

has been implemented to Week and various exhibitions coupled with Management Measures. It exercises standardized end-to-end management covering supplier qualification selection performance evaluation

identify pain points through on-site visits the Company deepens insights and delisting while integrating sustainability into every link of the supply chain.high-frequency online into global customer needs establishes

communication and in-depth rapid response channels shortens solution

offline interviews. Customer implementation cycles and strengthens

suggestions are collected customer relationships.monthly and shared with the Supplier Admission

R&D and production teams

to drive iterative upgrades

of products and services

The Company has optimized the Satellite Chemical implements refined control over the supplier qualification process at the admission stage requiring suppliers to comply with

and continuously enhance

"Account Manager–Solution Manager– all provisions of the Supplier / Contractor Code of Conduct.customer value.Pre-sales Delivery Manager" iron triangle service

model to deliver comprehensive In the supplier selection process the Company comprehensively evaluates indicators related to suppliers' products and operation—including

technical support covering product core products production capacity technical level and quality assurance capability—as well as their ESG performance. Priority is given to

After- Sales training application guidance and suppliers certified with quality management system environmental management system and occupational health and safety management

sales Execution customized solutions. It adopts system. The legal department participates in the qualification approval process conducting compliance reviews focusing on supplier

differentiated visit frequencies based qualifications litigation risks and negative public opinion concerning environmental and social responsibility. The Company applies a one-vote

on customer tiers and uses video veto system to suppliers with major compliance risks or historical problems in safety and environmental protection rejecting their qualification

conferences for critical matters to applications. After passing the preliminary qualification review a supplier certification team jointly formed by the procurement quality and

improve collaboration efficiency and user departments conducts a joint review to decide whether to launch sample testing and on-site inspection procedures.ensure seamless business continuity.Supplier Due Diligence and Tiered Management

The Company conducts an annual customer satisfaction survey using a standardized questionnaire with a multi-dimensional evaluation

covering 25 indicators including product quality pricing integrity delivery efficiency and after-sales professionalism. Statistical analysis Satellite Chemical has implemented a scientific supplier performance evaluation system and tiered management mechanism. A cross-

shows that Satellite Chemical achieved a customer satisfaction rate of 98% exceeding its annual target of 95%. Based on the survey results departmental supplier certification team carries out regular comprehensive audits of suppliers each year and conducts on-site audits of key

the Company issues a customer satisfaction report identifies recommendations for recurring issues and common improvement areas and suppliers. For non-conformities identified in audits the Company requires suppliers to provide timely feedback and implement corrective

incorporates them into the monthly work plans of responsible departments to ensure continuous optimization of products and services. actions to drive continuous improvement. Evaluation results are directly linked to supplier qualification order allocation and commercial terms.Suppliers with poor environmental performance will be restricted in bidding contract renewal and other procedures. The Company has set

For customer complaint management the Company strictly adheres to the Measures for Customer Complaint Management Detailed Rules for up a supplier elimination mechanism that clearly defines three non-compliant statuses—frozen suspended and blacklisted—and their lifting

Customer Relationship Maintenance and standard complaint handling processes. A customer complaint log is maintained to track resolution conditions. Suppliers with major quality issues substandard daily performance or failed annual assessments are eliminated with specific

progress and enhance cross-departmental coordination. Through core procedures including situation verification timely feedback internal reasons communicated to them.investigation responsibility confirmation and solution development the Company ensures that ordinary complaints are resolved within one

month except for complex or disputed cases realizing a timely closed-loop response to customer demands. Supplier appraisal covers such dimensions as business performance and market share operation and financial status management systems

quality assurance capabilities R&D and equipment capacity ESG management level and environmental certifications such as Green Factory.In 2025 the Company achieved a 100% customer complaint response rate and 100% closure rate. In response to issues identified in The Company implements tiered management based on evaluation results. During the reporting period a new SABC supplier grading system

complaints such as quality packaging and product performance variability the Company has introduced a CAPA (Corrective and Preventive was introduced. Suppliers that fail to meet admission requirements but are necessary for business are classified as exception suppliers and

Action) mechanism. Improvement proposals are integrated into monthly work plans to drive comprehensive optimization of processes policies subject to case-by-case approval. Enhanced process supervision is applied to control risks optimize resource allocation and safeguard the

and systems ensuring continuous attention to and resolution of customer concerns. security and stability of the supply chain.

71 72Satellite Chemical 2025 Environmental Social and Governance Report

In 2025 the Company conducted on-site audits of 55 suppliers in total produced 97 on-site inspection and communication reports and

identified 155 issues all of which have been fully rectified. Through a stringent annual performance evaluation mechanism the Company Digital Supplier Management

phased out 94 suppliers in total including those disqualified due to failed on-site audits and those that failed to meet standards in the annual

performance review.To enhance supply chain management and procurement efficiency Satellite Chemical has built an SRM smart procurement and supplier

management platform to establish a full lifecycle management system for suppliers. By enabling data connectivity across business processes

the Company has fully digitalized the end-to-end procurement process mitigating operational risks arising from information asymmetry. The

Supplier CSR Management performance management module supports cross-departmental performance evaluation and visualized procurement reports and process

traceability further improve procurement transparency.During the reporting period the Company optimized its SRM system to achieve end-to-end integration covering supplier qualification

The Company has established the Supplier/Contractor Code of Conduct which centers on three core pillars: green and low-carbon sourcing contracting invoicing and settlement. By integrating with corporate information inquiry systems the embedded risk alerts at key

development safety and environmental protection and integrity and compliance defining the fundamental ESG behavioral standards for its nodes enable proactive identification of compliance risks. Using internal procurement data the system conducts comprehensive analysis on

partners. dimensions including ownership structure geographic distribution and industry concentration to identify potential concentration and regional

risks. With early warning mechanisms and dashboards it supports data-driven procurement decisions strengthening the systematicity and

forward-looking capabilities of supply chain risk management. While meeting business and compliance requirements the Company prioritizes

local suppliers to enhance supply chain resilience and stability. Leveraging the SRM system and its proprietary e-commerce platform

Prevent the cross-stage transfer of environmental impacts across product design manufacturing delivery use and disposal. the Company has improved end-to-end procurement efficiency expanded e-commerce procurement coverage streamlined OA approval

workflows and launched an idle materials sharing platform which effectively reduces inventory levels and enables flexible resource utilization.Promote energy-efficient and eco-friendly technologies enhance resource utilization efficiency and reduce discharge of

wastewater waste gas and industrial waste residue.Minimize adverse impacts on biodiversity climate change and ecosystems.Key Performance

Ensure workp lace fac i l i t ie s comply w i th safety In 2025 The Company's e-commerce platform has listed 60 framework agreements and 7071 framework items.environmental and health standards.Environment

Strictly prohibit the use of forced labor and child labor and A total of 15196 idle material listings were posted with 617 transfers of shared materials completed

safeguard employees' the legitimate rights and interests.cumulatively.Provide a workplace free from discrimination harassment

Social and inhumane treatment.Maintain accessible whistleblowing channels and prohibit

retaliation against whistleblowers.Comply with national labor laws and regulations governing

Governance minimum wage and working hours.Sunshine Supply Chain

Uphold ethical business practices and prohibit all forms of bribery corruption and money laundering.Strictly prohibit offering cash gifts securities physical goods or providing benefits via kickbacks

lotteries or other means to the Company's personnel. Satellite Chemical attaches great importance to integrity and compliance in the supply chain. The Company has established management

systems including the Measures for Supplier Management signed Letter of Responsibility for Integrity Practice with suppliers and held

Prevent personal relationships from interfering with business decisions and uphold a fair trading supplier code of conduct briefings to emphasize its integrity and anti-corruption policies and communicate the fundamental principles of

environment. "transparent procurement" to all suppliers. Through integrity surveys and monitoring assessments the Company continuously strengthens

oversight of anti-corruption and anti-bribery compliance among its business partners.Protect trade secrets data and intellectual property rights and prevent abuse and unauthorized

disclosure. In 2025 the signing rate of the Letter of Responsibility for Integrity Practice reached 100% among suppliers. The Company conducted a

Establish a compliance management system and adopt tiered measures for handling contract dedicated integrity and compliance survey covering approximately 2600 cooperative suppliers. Over 99% of suppliers confirmed a clear

breaches. understanding of the Company's integrity policies and 100% of suppliers reported that no improper benefits had been solicited by the

Company's personnel nor had any improper benefits been offered proactively to the Company's personnel.

73 74Satellite Chemical 2025 Environmental Social and Governance Report

Green Supply Chain Supplier Communication and Empowerment

Satellite Chemical places strong emphasis on carbon dioxide management across its supply chain and has actively rolled out a "Supplier The Company has established a multi-level multilingual supplier communication and whistleblower system launching diverse channels

Carbon Dioxide Management" program to strengthen oversight of suppliers' sustainable production enhance transparency in raw material including email WeChat and video conferencing to enable efficient business alignment and regular engagement with suppliers.procurement and carbon emissions and enable the timely identification and management of sustainability risks in the supply chain.Local Language Grievance Local Language Grievance

Mechanism Mechanism Confidentiality Requirement Anonymous Reporting Option

In the procurement phase In the logistics phase In the product phase The reporting and The Company explicitly The Company requires The official website's

grievance portal on commits in its policies that all grievance- reporting channel

the official website is to prohibit any form of related information be supports anonymous

retaliation or adverse

the Company explicitly the Company promotes a "green the Company leverages eco- available in both Chinese kept strictly confidential submissions.action against supply

incorporates carbon emission vessel selection" mechanism design methodologies and data and English ensuring and processed only Complainants may

chain workers who file

factors into its decision-making prioritizing dual-fuel compatible analysis to identify high-carbon that employees of by authorized staff to choose not to provide

grievances protecting

framework prioritizing low- vessels ships equipped with segments. It collaborates with overseas suppliers may safeguard the privacy of identifying information

their right to raise

carbon eco-friendly suppliers and desulfurization towers and suppliers to implement green file grievances in their supply chain workers. and their identity will be

concerns.products. newly built vessels that meet the material substitutions and local language. system-protected.latest emission standards of the process optimizations driving

International Maritime Organization emission reductions from the

(IMO). Its self-operated terminals source.also implement a synchronized

vessel optimization strategy.Simultaneously the Company continuously promotes the iterative optimization

of the SRM system and advances the digitalization of the supply chain in

tandem with overseas projects further improving the efficiency of cross-border

Key Performance supply chain communication and management.In terms of supplier empowerment Satellite Chemical upholds the strategic

In 2025 the Company fully leverages the dual advantages of its ethane carrier fleet significantly reducing carbon philosophy of growing together with key suppliers and enhances the overall

quality and efficiency of the supply chain through training and communication.emissions compared to traditional oil products by utilizing the fuel properties of ethane with annual CO?

The Company regularly sends technical and quality control personnel to supplier

reductions exceeding 19000 metric tons. Vessels equipped with scrubbers achieved a 515.68-metric- sites to provide targeted guidance and training on production management

98.8 quality control and supply security helping suppliers optimize production ton reduction in sulfur oxides (SOx) representing an emission reduction efficiency of %. processes and enhance delivery stability. By fostering long-term partnerships

the Company holds occasional seminars and technical exchange forums to

Satellite Chemical Supplier/Contractor Code of Conduct Training

share advanced industry experience with suppliers build joint capabilities

and promote collaboration between upstream and downstream supply chain

partners.Concurrently the Company fully collaborates with customers to advance the development of a green supply chain. In response to carbon

reduction targets set by key customers Satellite Chemical has established a dedicated working mechanism sharing its "4R" carbon reduction During the reporting period the Company launched a targeted supplier empowerment program to systematically interpret the 2025 Supplier/

model with customers and continuously conducting technical alignments on carbon accounting methodologies and emission reduction Contractor Code of Conduct and ESG management requirements. The program helped suppliers understand the implementation approaches

pathways. To enhance the overall low-carbon capacity of the supply chain the Company organizes specialized carbon reduction training for for key topics including emissions reduction labor rights and integrity compliance comprehensively improving ESG performance across the

suppliers and partners disseminating accounting tools and decarbonization technologies to drive the entire value chain's transition toward supply chain. A total of 1942 suppliers participated covering approximately two-thirds of all qualified suppliers in the year. Through ongoing

low-carbon operations. empowerment the Company is working with supply chain partners to build a more resilient and responsible sustainable value chain.

75 76Satellite Chemical 2025 Environmental Social and Governance Report

Promoting Industry Development

The Company has jointly conducted a series of key technological research projects with universities and research institutes completing

Development of Industry Standards initiatives including the "Annual Production of 30000 tons of Superabsorbent Polymers (SAP)" "Development of High-Pressure Dry-Feel

Absorbent Resin via Slow Polymerization" and "Development of Low-Residual Monomer Sodium Polyacrylate Superabsorbent Resin and Its

Application in Hygiene Materials" with successful achievement transformation and industrial application.The Company actively participates in the development of national and industry standards leading or contributing to the formulation of

numerous national industry and association standards. These include national standards for industrial acrylic acid and its esters and

superabsorbent polymers (SAP) for diapers and sanitary napkins; association standards for refined industrial acrylic acid by-product

hydrogen from propane dehydrogenation and disposable antibacterial hygiene products; as well as the industry standard for composite Hosted the Nanhu District University-Institute-Enterprise Matchmaking Conference to promote deep industry-

Case Study

absorbent cores for disposable paper hygiene products enhancing the Company's industry standing and influence. In addition the Company academia-research collaboration

participated in drafting the Guidelines for ESG Disclosure of Petrochemical Enterprises and Specification for ESG Disclosure Evaluation of

Petrochemical Enterprises helping to standardize ESG disclosure practices across the industry. Through engagement in standard development In May 2025 Satellite Chemical hosted the Nanhu District University-Industry-Enterprise New Materials Industry Matchmaking

across multiple sectors Satellite Chemical leads industrial upgrading with high standards and continuously empowers industry development. Conference which brought together government university and enterprise representatives from China and South Korea to focus

on cutting-edge research and industrial transformation of functional hybrid materials. The Company formally signed a framework

agreement on industry-university-research cooperation with the Emerging Industry Research Institute of Shanghai University

(Zhejiang-Jiaxing) agreeing to conduct in-depth collaboration in joint technological research shared research platforms and joint

cultivation of high-end talents. By integrating international research resources and industrialization capabilities the Company has

Key Performance established an integrated industry-university-research-application collaboration mechanism to accelerate the development of high-

level innovation platforms providing substantial support for industrial momentum development and technological breakthroughs in

the regional new materials sector.As of the end of the reporting period

The Company has participated in the formulation of 11 national standards 19 industry standards and 1 group standard.Industry Cooperation and Exchange

As a leading player in China's light hydrocarbon industry Satellite Chemical has actively engaged in building the industry ecosystem with an

open and collaborative mindset. The Company has participated in the International Nonwovens Exhibition International Tissue & Nonwovens

Technology Exhibition and other events to fully showcase its self-developed advanced products and technical solutions while sharing

practical experience in green processes and product innovation at various seminars and industry forums. The Company also continues to

deepen strategic cooperation with industrial chain partners advancing the in-depth integration of innovation and industrial chains through

Industry Collaboration and Mutual Progress major project implementation and joint technological research to jointly explore a path of high-quality and sustainable development for the chemical industry.Industry-Academia-Research Collaboration

Satellite Chemical has deepened the integration of industry academia research and application. It has established cooperation platforms

including joint laboratories innovation consortia and academician and postdoctoral workstations with Zhejiang University Tongji University

Fudan University East China University of Science and Technology Shanghai University and other institutions. These efforts cultivate high-

quality technical R&D talents and build a full-chain collaborative innovation system covering basic research technological innovation

achievement transformation and industrial development.

77 78Satellite Chemical 2025 Environmental Social and Governance Report

Case Study High Absorbency Resin Shines at the 32nd International Household Paper Technology Exhibition Case Study Satellite Chemical's High-Performance Catalytic New Materials Project Settles in Nanhu District

In April 2025 Satellite Chemical showcased its full portfolio of superabsorbent In June 2025 Satellite Chemical's High-Performance Catalytic New Materials Project was officially signed and settled in Nanhu

polymer (SAP) products at the 32nd CIDPEX International Tissue & Nonwovens District Jiaxing. As a key project under the "Leading Listed Companies Rooted in Jiaxing" initiative the project focuses on the

Technology Exhibition highlighting its technological prowess and service independent R&D and manufacturing of high-end products. Leveraging Satellite Chemical's proprietary core technologies

capabilities under the theme "Extraordinary Absorption Exceptional Protection". it will build an industry-research integration platform incorporating R&D pilot trials and production. By fostering the cluster

development of the catalytic new materials industry the project will effectively accelerate the translation of scientific research

achievements strengthen the Company's independent supply capacity in high-end segments of the industrial chain and enhance

The Company launched for the first time the CR635 series SAP designed

industrial added value. It will also inject strong impetus into the high-quality transformation and scaled growth of the regional

specifically for premium hygiene products. By incorporating a number of

new materials industry.independently developed odor control and antibacterial technologies the series

delivers outstanding absorbency while revolutionizing the user experience of

hygiene products. Live product demonstrations garnered strong attention and

recognition from customers in attendance. In addition the Company's application

service experts delivered a keynote speech at the Hygiene Products Session

analyzing the functional requirements of light incontinence products for SAP

materials—such as thin profile odor control and skin friendliness—from a global

perspective and in line with industry trends. They shared Satellite Chemical's

The 32nd International Household Paper

innovative solutions and best practices striving to achieve accurate matching

Technology Exhibition

between products and end-use scenarios.Keynote speech at the FOCUS International Forum

79 80Satellite Chemical 2025 Environmental Social and Governance Report

03

Leading with Carbon

Peaking and Carbon

Neutrality

Charting a Green Path

UN SDGs

Satellite Chemical integrates the concept of green and low-carbon development throughout the entire process of production and

operation. In response to the national "carbon peaking and carbon neutrality" strategy the Company continuously promotes the

application of clean technologies and the optimization of energy efficiency. Through measures such as deploying clean energy

upgrading processes and controlling pollutants the Company effectively reduces carbon emissions and its environmental footprint

fostering coordinated development between production activities and ecological protection and building a solid green foundation

for the enterprise's sustainable growth.

81 82Satellite Chemical 2025 Environmental Social and Governance Report

Focusing on Low-Carbon Strategies

Focusing on Low-Carbon Strategies

Strategic Directions for Clean Technologies

Clean Technology Opportunities Leveraging the resource advantage of high-purity hydrogen gas produced as a by-

product from its integrated light hydrocarbon facilities the Company is systematically

developing the entire hydrogen energy chain including production storage

transportation and application. This initiative aims to transform hydrogen from a by-

Full-Chain Utilization of

The Company considers the research development and application of clean technologies as one of its core development strategies. Guided product into a dual-purpose resource serving as both a clean energy source and an

Hydrogen Energy

by the "4R" principles—Carbon Reduction (Reduce) Carbon Capture (Capture) Carbon Recycle (Recycle) and Carbon Replacement (Replace)— industrial raw material. Through large-scale supply and comprehensive utilization it

it integrates green and low-carbon concepts throughout the entire process of technology R&D process optimization and industrial layout contributes to the low-carbon transformation of the regional energy structure and

driving its main business towards low-carbon high-efficiency and resource-recycling operations. provides a foundational support for the stable application of hydrogen energy in the

industrial sector.The Company closely aligns with national industrial policies and industry development trends. In conjunction with the key development Focusing on its main business of new chemical materials the Company has

directions for the "15th Five-Year Plan" period proposed by the New Chemical Materials Committee of the China Petroleum and Chemical identified green processes as a key direction for technological breakthroughs.Industry Federation it systematically conducts industry trend research and specialized analysis culminating in the Research Report on the Through catalyst innovation process optimization and process reconfiguration it

Development of the New Chemical Materials Industry. This report provides forward-looking guidance for industrial layout and investment Strategic aims to reduce energy consumption and emission levels per unit of product. The

Green Processes and

decisions in fields related to clean technologies ensuring that technology development remains highly consistent with strategic goals. Directions key focus is on achieving breakthroughs in critical technologies such as the green

Advanced Materials

process for producing POE thereby meeting the demand for high-performance

materials from downstream industries like photovoltaics and new energy vehicles

while also enhancing the environmental friendliness of materials throughout their

entire life cycle.Strategic Directions for Clean Technologies Guided by the principles of "reduction resource utilization and harmlessness"

the Company systematically promotes research into waste resource recycling

technologies. It focuses on evaluating and reserving relatively mature technological

Circular Utilization of

Strategic Core An investment and R&D strategy for clean technologies centered on the "4R" principles paths such as Pyrolysis and physical separation gradually shifting from end-of-pipe

Waste Resources

disposal of production waste and by-products to resource utilization. This approach

reduces the generation of hazardous waste and extends the value of the industrial

Align with national industrial policies and industry trends guiding the layout of clean technologies chain.Strategic Guidance

during the "15th Five-Year Plan" period based on the results of specialized research

Based on the dual characteristics of carbon dioxide emissions and

R&D Goals

raw material demand in chemical production processes the Company

prioritizes a technological path that combines carbon capture with

high-value-added utilization. By fully tapping the potential of existing

Carbon Capture and

Strategic Directions facilities carbon dioxide is transformed from an emission source into a The Company has clearly identified clean technologies as a key direction for R&D investment. In the next five

Resource Utilization

production factor reducing reliance on fossil-based raw materials. This

years it plans to invest over RMB 10 billion in R&D with more than 40% (over RMB 4 billion) allocated to approach not only lowers carbon emission intensity but also enhances

resource utilization efficiency promoting the synergistic achievement R&D related to green low-carbon and clean technologies.of emission reduction targets and economic benefits.

83 84Satellite Chemical 2025 Environmental Social and Governance Report

Key Performance Clean Technology

Specific Technologies and Practices Application Scenarios and Effectiveness

Category

Phasing out old process equipment

In 2025 The technical modification project for 90000 tonnes/year of acrylic

217 introducing extraction and stripping the Company obtained a total of patents related to clean technologies Green acid and 100000 tonnes/year of refined acid at the Jiaxing Base saved towers and adopting new extraction

39.10 Processes 16487.4 tonnes of standard coal annually and realized greener more technologies for a green low-carbon accounting for % of total patent applications. intelligent production and improved plant efficiency.

and intelligent upgrade.Establishing an integrated R&D The Company's 500-600 tonne/year polyethylene elastomer industrial

and production platform focusing pilot plant was approved this year aiming to accumulate experience

on the research development and in industrial production and provide high-performance low-carbon

Green New Materials

industrialization of catalysts for key materials for fields such as photovoltaic modules power batteries and

materials such as α-olefins and POE new energy vehicles thereby supporting the development of the battery

(polyolefin elastomers). and new energy industry chain.Clean Technology Achievements

The Lianyungang Base utilized over 2800 tonnes of styrene tar and over

Promoting energy-saving renovations

7300 tonnes of heavy alcohols throughout the year reducing hazardous

Circular Utilization of production facilities and the

Guided by its strategy the Company continuously embeds clean technologies into its production operations energy utilization and product waste generation achieving resource utilization of waste materials and resource utilization of by-products.development processes. Through engineering implementation and industrial application it has formed replicable and scalable models for lowering the environmental load.clean technology application constantly expanding the practical scenarios for these technologies.Clean Technology

Specific Technologies and Practices Application Scenarios and Effectiveness

Category

The Company also actively conducts product carbon

footprint assessments. It has selected 11 products

including acrylic acid ethylene oxide and superabsorbent

The Lianyungang Base has a 300000 tonnes/year carbon dioxide polymers to undergo dual domestic and international ISO

Utilizing existing battery-grade recovery unit and a supporting 150000 tonnes/year carbonates 14067:2018 product carbon footprint certification. The

carbonate production units to production unit which utilizes the recovered carbon dioxide from the

Carbon Capture and lifecycle stage covers a "cradle-to-gate" system boundary

capture carbon dioxide generated production process as a raw material for resource utilization; in 2025 a

Reuse encompassing the lifecycle from natural resource

during the production process and cumulative total of 56400 tonnes of carbon dioxide was recovered and extraction to the product manufacturing stage.reuse it as a chemical raw material. the related carbonate products are primarily used in new energy fields

such as electronic materials and lithium batteries. Carbon Footprint Verification Statement (Selected)

Utilizing high-purity hydrogen

gas produced as a by-product

from integrated light hydrocarbon The Lianyungang Base has two hydrogen purification units with an Efficient Energy Utilization

Comprehensive facilities to develop the entire annual purification capacity of approximately 110000 tonnes and a filling

Utilization of chain of production storage capacity of 300000 standard cubic meters/day; the Pinghu Base sold

Hydrogen Energy transportation and application hydrogen to surrounding industrial customers promoting the low-carbon

serving industrial hydrogen transformation of regional energy.needs and the low-carbon Energy Management System

transformation of regional energy.Satellite Chemical strictly adheres to relevant national laws and regulations such as the Energy Conservation Law of the People's Republic of

China the Electric Power Law of the People's Republic of China and the Administrative Measures for Energy Standardization. The Company

Introducing steam from the

continuously advances the systematic and refined development of its energy management system. Within the framework of the Energy

Clean Energy "Heqi-1" project at the Tianwan Reducing fossil energy consumption at the Lianyungang Base and

Management System formulated by the headquarters each site and business unit develops and refines supporting policies like the Detailed

Utilization Nuclear Power Plant to replace a decreasing carbon emissions in the industrial park. Rules for Energy Conservation and Carbon Reduction Management and the Implementation Rules for Energy Management tailored to their

portion of fossil energy.specific production characteristics and energy consumption structures. This extends energy management requirements to grassroots levels

and key processes enhancing managerial standardization and operational feasibility.

85 86Satellite Chemical 2025 Environmental Social and Governance Report

The Company has fully integrated energy management into its ESG governance system. The management team oversees goal setting and Energy-Saving Technical Upgrades and Management Practices

supervision while relevant functional departments are responsible for policy implementation process control and continuous improvement.Through regular internal and third-party external audits of the energy management system we comprehensively review energy usage

and management processes identify potential energy-saving areas and drive improvements. By 2025 the Company's ISO 50001 energy

management system certification will cover 100% of its operating sites. Category Specific Measures Results Achieved Relevant Base

Oxidation tower efficiency increased

Efficiency improvement modification for reducing oxygen demand and saving

the HP unit's oxidation tower. approximately 1.6 million kWh of

electricity per year.Optimization of the separation Steam consumption reduced by

process for refined acid residual approximately 100000 tonnes per

liquid. year. Pinghu Base

Process and Equipment

Optimization Energy-saving modification of

circulating water cooling fans In the second half of 2025 the

introducing permanent magnet electricity saving effect from fan

couplings to replace old variable operation has reached 4.5%.frequency drives for load regulation.Energy Management System Certification Circulating water pumps were Annual electricity savings of

retrofitted with high-efficiency approximately 10 million kWh

Lianyungang Base

energy-saving impellers and pump optimized feed water pressure and

frequency control was optimized. improved heat exchange efficiency.An online energy management system Achieved real-time monitoring of

Driving Energy Conservation and Emission Reduction and energy efficiency monitoring energy consumption and energy Information-Based Lianyungang Base/

guide production through energy flow efficiency analysis optimizing

Management Jiaxing Base

diagrams report analysis and real-time operations for different time periods

To enhance energy management the Company proactively identifies energy-related risks and opportunities. Based on actual operational data monitoring. and equipment operating modes.conditions we continuously refine our response strategies and management measures to ensure that energy utilization is efficient safe and

low-carbon. Saved 2.6607 million kWh of Optimization and modification of

Utility System electricity per year equivalent

heat tracing systems refrigeration

Optimization to 1884 tonnes of standard coal

systems and chilled water systems.equivalent per year.Risk/Opportunity Type Specific Description Response Strategy Staggered electricity consumption Optimized peak-hour energy use Jiaxing Base

coordination of equipment operation to reduce energy costs; on-site

As the number of energy consumers in the Utilizing an online energy management system to monitor and maintenance optimization of inspections identified and rectified

surrounding area increases the regional energy the real-time status of key energy sources we identify production plans and on-site energy 46 gas leak points achieving a 100%

Energy Supply

load rises potentially affecting continuous abnormalities in advance and optimize energy use in consumption inspections. correction rate.Limitation Risk Production Scheduling

production and the stable operation of critical conjunction with production plans and maintenance and Operations

equipment. schedules to ensure continuous production. Year-on-year external steam supply Management increased by 2% steam power

Steam balance and hydrogen output generation supplied to the grid

Pinghu Base

We regularly identify and assess energy-related legal optimization. increased by 3.4% a new hydrogen

Stricter "dual control" policies on energy

and policy requirements and establish a systematic customer was added and external

Legal and Regulatory consumption power restriction policies and

management framework to ensure that energy use and sales volume increased by 0.8%.Compliance Risk equipment energy efficiency standards may

equipment configuration comply with all applicable laws

lead to administrative penalties if not met.and regulations.Our sites have surplus energy sources such We explore energy co-supply models with industrial parks

Surplus Energy as low-pressure steam and hydrogen which and neighboring enterprises to achieve efficient utilization Key Performance

Utilization Opportunity have the potential for external supply or of surplus energy thereby improving resource efficiency

internal reuse. and economic benefits.In 2025

Customers have increasing requirements for By optimizing processes implementing energy-saving

the Company's investment in energy-saving retrofits exceeded RMB 45 million.the energy consumption and carbon emission technical upgrades and refining production flows we

Market Opportunity

performance of products making low-carbon reduce product energy consumption and carbon emissions

products a competitive market advantage. enhancing product market adaptability and competitiveness.

87 88Satellite Chemical 2025 Environmental Social and Governance Report

Accelerating the Clean Energy Layout The Company has broken down its annual energy targets into daily management and monitoring mechanisms and regularly tracks energy

consumption and efficiency changes. The energy consumption over the past three years is shown in the table below:

The Company continuously strengthens its application of clean energy steadily increasing the proportion of renewable energy use by

developing its own photovoltaic projects purchasing green electricity and green certificates and reducing its reliance on fossil fuels thereby

Indicator Unit 2025 2024 2023

ensuring the stability of energy supply while promoting a transition towards cleaner low-carbon energy utilization and laying the foundation

for the Company's medium- and long-term emission reduction targets.Total Energy Consumption tce 1808504.88 1678655.06 1574108.91

Energy Consumption tce per 10000

1233.041363.001450.76

Rooftop Photovoltaic Power Generation Green Electricity Procurement Intensity tonne products

Direct Energy Consumption

Satellite Technology utilized approximately In 2025 the Company purchased green power certificates corresponding

22000 square meters of idle roof space to to 15.5 million kWh of electricity through the electricity trading center.

install photovoltaic panels aiming to achieve Gasoline Liters 512519.20 598995.39 546684.92

approximately 1.9 million kWh of photovoltaic

power generation in 2025.Diesel Liters 235513.38 297574.26 283915.29

The Lianyungang Base plans to utilize factory Natural Gas Cubic meters 229181328.49 277614769.39 279519427.80

roofs for the installation of photovoltaic facilities.The project is currently in construction and is

Ethane Tonnes 103815.79 63151.18 38684.77

expected to generate approximately 10 million

kWh of clean electricity annually to replace a

portion of conventional electricity consumption. Indirect Energy Consumption

Green Power Certificates (Selected) Purchased General

MWh 6422823.75 5276353.19 5046442.25

Electricity

Key Performance Purchased Steam GJ 15928775.96 13559044.66 13299954.16

Clean Energy Consumption

In 2025

the Company cumulatively purchased 12450 MWh of new energy electricity Purchased new energy

MWh 12450.00 765023.99 517585.28

electricity

The rooftop photovoltaic power stations generated a cumulative total of

1804.8 Photovoltaic installed MW 1.6 1.6 1.6 MWh of electricity. capacity

Photovoltaic power

MWh 1804.79 1772.91 1887.40

generation

Trading volume of green 10000

1.5540

electricity certificates certificates

Energy Management Goals and Performance

The Company has established the following energy management goals:

Energy Management Goals 2025 Progress

Reduce energy consumption per unit of

Actual reduction of 9.5%

product by 8% in 2025

89 90Satellite Chemical 2025 Environmental Social and Governance Report

Green Value Chain Management

Low-carbon Office and Operations

The Company continuously promotes the green and low-carbon transformation of its value chain implementing energy-saving and carbon-

reduction practices in areas such as logistics and raw material procurement to enhance overall operational sustainability.Green Office Initiatives

Green Logistics Management

Satellite Chemical integrates green and low-carbon concepts into daily office management continuously promoting various green office

initiatives to enhance operational efficiency and resource utilization.In 2025 the utilization rate of recycled material pallets will be further increased with some factories (such as

Satellite Technology) having already achieved nearly full coverage.Green Office Promoted the construction of automated warehouses to save land area and improve logistics efficiency.Initiatives Achieved Results

The environmental standard requirements for transport vehicles have been raised to National IV and above

Implemented a LIMS system with automatic integration of laboratory instruments enabling automated encouraging the transport fleet to adopt more environmentally friendly and energy-efficient vehicles.data collection reducing manual entry and improving efficiency.Paperless and Prioritized the use of vessels compatible with clean energy fuels for transportation to reduce fossil fuel consumption.Digital Office Internal notices meeting materials and institutional documents are distributed electronically and non-

essential meetings are conducted via video conference.Printers are set to double-sided printing by default increasing office efficiency and reducing paper

consumption. Low-Carbon Raw Material

Procurement

Optimized polypropylene woven bags and FFS heavy-duty film bags by reducing their weight and thickness.The comprehensive replacement of highly toxic polymerization inhibitors with green and environmentally friendly

Air conditioning temperature is controlled during summer and winter and "Friendly Reminders for

alternatives has extended equipment operating cycles improved stability and optimized environmental indicators

Green Temperature Control and Energy Saving" signs are posted to guide employees to voluntarily

Energy reducing hazardous waste generation and wastewater treatment costs.comply with energy conservation regulations for air conditioning.Conservation and

Management Bio-based ethanol is used as the ethanol raw material for ethyl acrylate enhancing the low-carbon attributes of the

Induction lighting is used in office corridors and stairwells to reduce electricity consumption and

raw material.improve energy efficiency.Material A circular use mechanism for office furniture and supplies has been established where old furniture is

Recycling and centrally stored and redeployed to achieve efficient resource recycling.Reuse

To enhance employees' awareness of green and low-carbon principles and their ability to practice energy conservation the Company regularly

organizes specialized training and promotional activities. During the Energy Saving Promotion Week in June 2025 the Jiaxing base conducted

training on green technology and advanced low-carbon technology demonstration projects explaining energy-saving management methods

green processes and low-carbon practical experiences to employees. This helps them better understand energy optimization and low-

carbon operations thereby improving their energy-saving awareness and practical skills and providing talent and knowledge support for the

Company's low-carbon development goals.

91 92Satellite Chemical 2025 Environmental Social and Governance Report

Addressing Climate Change

Governance For the transition risk analysis our assessment is based on the NGFS Net Zero 2050 scenario and the NGFS Nationally Determined

Contributions scenario.Satellite Chemical has deeply integrated climate change issues into the Company's ESG management system ensuring the orderly progression

of all stages from climate strategy formulation to concrete implementation. The Company has established a comprehensive hierarchical Transition Risks

governance structure. The Board of Directors as the highest decision-making body for climate-related matters is fully responsible for

reviewing climate change strategies setting goals and making major investment decisions ensuring that climate actions are aligned with

the Company's long-term development plans. The Strategy and ESG Committee systematically guides the identification assessment and NGFS - Nationally Determined Contributions

management processes for climate-related risks and opportunities and reviews and promotes the formulation and updating of response Scenario Name NGFS - Net Zero 2050 Scenario Scenario

strategies and management policies. Each site and business unit is responsible for the implementation and performance tracking of specific

action plans thereby guaranteeing the steady achievement of the Company's strategic goals.This scenario assumes that through stringent climate

This scenario assumes that the climate commitments

policies and innovative technologies the global

made by governments worldwide in their Nationally

temperature increase will be limited to within 1.5°C.Determined Contributions (NDCs) at the beginning

Strategy Scenario Description By around 2050 global net zero CO2 emissions will be of 2021 will continue throughout the 21st century achieved with jurisdictions such as Europe the United

leading to a slow decline in greenhouse gas

States and Japan achieving net zero greenhouse gas

emissions.emissions.Satellite Chemical regards climate resilience as crucial to its long-term competitiveness enhancing its management foresight through

scientific and systematic scenario analysis. By referencing authoritative international climate scenarios and integrating its own production and

operational characteristics the Company comprehensively identifies potential physical risks transition risks and transition opportunities to Estimated End-of-

strengthen its adaptability and resilience under various climate change scenarios. 1.4℃ 2.3℃Century Temperature

For physical risk analysis the Company has selected scenarios from the internationally recognized Intergovernmental Panel on Climate Change

(IPCC) for its assessment and analysis.Analysis Boundary Covers Satellite Chemical and its subsidiaries focusing only on the Company's own production and operations.Physical Risks

Scenario Name SSP2-4.5 SSP5-8.5

Based on the above scenarios and in conjunction with the Company's strategic goals and business plans Satellite Chemical has clearly

This scenario is based on the socioeconomic defined the time horizons for climate impacts and systematically identified the potential risks and opportunities the Company may face in the

This scenario illustrates a pathway where the global

pathway SSP5 in which the global economy short medium and long term ensuring that its climate strategy is highly aligned with its overall business planning.temperature rises by 2-3°C with carbon dioxide (CO2)

experiences rapid growth and long-term reliance

emissions beginning to decline around 2045 and

on fossil fuels with weak emissions reduction

Scenario Description reaching half of the 2050 levels by 2100. The model

policies leading to continuously rising emissions.assumes uneven development and income growth

By 2100 the projected temperature increase

among countries and that while they work collectively

is expected to exceed 4°C accompanied by Short-term (2025-2026) Medium-term (2027-2030) Long-term (2031-2050)

toward sustainable development goals progress is slow.significant climate risks.Estimated End-of-

2.1-3.5℃ > 4℃ Aligned with the Company's annual Aligned with the timeframe for Aligned with the timeframe for

Century Temperature

ESG goal review cycle. the Company's carbon reduction the Company's goal of achieving

targets. value chain carbon neutrality.Analysis Boundary Covers Satellite Chemical and its subsidiaries focusing only on the Company's own production and operations.

93 94Satellite Chemical 2025 Environmental Social and Governance Report

Physical Risk Inventory

Climate Risks and Opportunities

Risk Type Impacted Potential Risk Impacts Risk Response Measures Risk Risk Impact

Areas Severity Period

Acute Risks

Climate Risk and Opportunity Management Strong winds and heavy rain may cause Collaborate with meteorological

temporary disruptions to coastal and departments to enhance weather warning

offshore logistics channels affecting tracking and formulate and regularly drill

the transportation of raw materials and extreme weather emergency response

The Company has established and continuously improves its processes for identifying assessing and monitoring climate-related impacts Product products. mechanisms.risks and opportunities. Based on a scenario analysis framework we have identified the primary risks and opportunities that may affect our Production Increased risk of damage to Strengthen wind and flood protection

business operations and financial performance across different time horizons and have formulated targeted response strategies. Tropical Short-term and infrastructure such as power and at plant sites and reinforce critical High

Cyclones Medium-term

Operations communication facilities at plant sites infrastructure.Supply Chain affecting the stability of production Enhance the flexibility of raw material and

Determine management priorities based on the operations. finished product inventory management

results of risk and opportunity assessments

Increased difficulty in plant safety set reasonable safety stock levels for the

management and personnel dispatching typhoon season and improve supply

Develop targeted mitigation adaptation and under extreme weather conditions. chain resilience.response strategies

Intense short-term rainfall may cause

Continuously improve the plant's

water accumulation at plant sites

drainage flood prevention and rainwater

affecting the safety of production units

and wastewater diversion system.Risk and Opportunity Performance Response Strategy Product electrical systems and storage facilities.Identification Monitoring and Implement waterproofing and Development Feedback Production Insufficient drainage capacity may lead Extreme moisture-proofing upgrades for key Short-term

and to equipment shutdowns and extended High

Precipitation equipment and storage facilities. Medium-term

Operations maintenance cycles.Supply Chain Strengthen inspections and production Poses higher requirements for

scheduling management during the

Regularly identify risks and opportunities Track progress and performance through the storage transportation and rainy season to reduce the risk of

based on scenario analysis data management platforms and regular operation of hazardous chemicals and sudden production halts.reporting environmental protection facilities.Develop an inventory of physical risks Promote energy-saving retrofits and

transition risks and opportunities Regularly evaluate management progress High-temperature environments may intelligent operational monitoring for

and effectiveness and make timely updates affect the safe and stable operation equipment to enhance operational

of high-temperature high-pressure

safety.Climate Change Management Process Product chemical units.Optimize production scheduling and

Extreme High Production Increased energy consumption Medium-term

protective measures for high-temperature Medium

Temperatures and for cooling ventilation and safe Long-term

work to ensure employee health.Operations operations drives up operating costs.Strengthen energy efficiency

Increased health and safety risks

management to reduce additional

for employees working in high

energy consumption during periods of

temperatures.high temperature.Chronic Risks

Prolonged high-humidity environments

Strengthen anti-corrosion and

may accelerate equipment corrosion

moisture-proof design requirements

and aging increasing maintenance

in equipment selection.Product frequency and costs.Trend of Increase the frequency of equipment

Production Potential impact on the operational Medium-term

Increasing inspections to identify potential Medium

and stability of precision instruments and Long-term

Humidity safety hazards in advance.Operation electronic control systems.Promote facility life-cycle

Increased complexity in safety

management to reduce long-term

production and environmental

operational risks.management.

95 96Satellite Chemical 2025 Environmental Social and Governance Report

Transition Risk Inventory Transition Opportunity Inventory

Impacted

Risk Type Business Potential Impact of Risk Risk Mitigation Measures Risk Risk Time Opportunity Potential Impact Response Measures Opportunity

Segments Severity Horizon Type Time Horizon

The national carbon emissions trading In line with the development direction for

Continuously advance green processes At the national and industry levels the green market has been launched and new materials under the 15th Five-Year

and energy efficiency improvement and low-carbon transition is continuously being strictly enforces a carbon allowances Plan we conducted specialized industry

projects to reduce carbon emissions per advanced. The New Chemical Materials Committee system with high-emission industries Policy research and completed the Research Report Medium-term

unit of product. of the China Petroleum and Chemical Industry potentially being mandatorily included Opportunities on the Development of the New Chemical Long-term

Product Federation has specified that the focus during the increasing carbon compliance pressure. Establish a carbon emissions monitoring Materials Industry which provides guidance

Production 15th Five-Year Plan period will be on developing

The continuous advancement of and management system to identify for the Company's medium- to long-term

Regulatory and Medium-term high-performance green new chemical materials.carbon peaking and carbon neutrality compliance risks in advance. High industrial layout and investment decisions.Risk Operation Long-term

policies has led to increasingly

Supply Proactively identify policy risks and

stringent requirements for carbon

Chain dynamically adjust operational and

Promote the use of lighter raw materials

emissions energy efficiency and investment plans to ensure compliance. energy-saving retrofits for equipment and

environmental compliance. Green processes and low-carbon technologies the resource utilization of by-products to Actively explore pathways for carbon have high technical barriers which helps to

Adjustments in energy and raw reduce process emissions.dioxide utilization to enhance policy create competitive advantages.material structures may drive up adaptation capabilities. Technological Strategically file for patents and protect Medium-term

compliance and retrofitting costs. Clean technologies can be extended to diverse Opportunities intellectual property (IP) related to core Long-term

product lines. processes key technologies and clean

Increase R&D investment to strengthen Technological accumulation helps to improve

technologies; participate in industry

resource output efficiency per unit. technical exchanges and standard technological reserves in green and discussions to enhance our technological

The iteration speed of low-carbon decarbonization technologies. influence.processes new materials and new Deepen industry academia and

Product energy technologies is accelerating. research collaboration to accelerate We are committed to developing catalysts

R&D

If the R&D or industrialization of key the commercialization of technological for the green production of POE and

Technological Product Short-term

technologies lags it could weaken cost achievements. High advancing the industrialization process of

Risk Production Medium-term The demand for high-performance new

and performance advantages. Improve the intellectual property (IP) POE to meet the growing demand in fields and materials from markets such as new energy Short-term

Operation Improper selection of technological management system to enhance Market

such as photovoltaics and new energy

vehicles and photovoltaics is growing rapidly.routes may lead to reduced efficiency protection for core processes and Opportunities vehicles.Medium-term

Customers' reliance on material suppliers with Long-term

of resource investment. technological achievements reducing the Establish a market intelligence tracking strong technical backgrounds is increasing.risks of technological substitution and mechanism for key industries to

infringement. dynamically adjust the pace of product

development.Downstream customer demand

Optimize the product structure to develop

Product for green raw materials biomass functional chemicals and new materials

R&D materials and low-carbon products is with prominent low-carbon attributes.Product continuously rising. Climate-related Financial Impact

Strengthen collaborative development Short-term

Production Market competition is intensifying

Market Risk with downstream customers to enhance High Medium-term

and increasing the risk of product

product customization capabilities. Long-term Satellite Chemical systematically manages climate-related financial risks and actively seizes the development opportunities brought by the

Operation homogenization.Continuously track industry trends and low-carbon transition through green financing precision investment and transparent management tailored to its own business layout and Supply Insufficient adjustment of the product stage of development.Chain proactively position the Company in structure may affect market share and

emerging application areas.profitability.In terms of accessing green capital the Company continuously explores diversified paths for green financing and financial cooperation. During

the reporting period the Company signed a strategic Memorandum of Understanding with Standard Chartered Bank (China) Limited to

ESG information disclosure establish a comprehensive cooperative relationship in areas including cross-border settlement trade finance exchange rate risk management

requirements are increasing and and sustainable finance. Leveraging Standard Chartered's global financial network and its professional expertise in sustainable finance this

Product Improve the climate governance and ESG stakeholders are paying close collaboration provides long-term stable financial support for the Company's global supply chain construction overseas business expansion

Production management framework to enhance the attention to corporate climate action and the advancement of its green and low-carbon development strategy.Reputational and transparency of information disclosure. performance. Medium Long-term

Risk Operation Strengthen communication with investors

Insufficient execution of climate In the process of compiling and summarizing climate-related financial investments the Company will refer to the Catalogue of Projects Supply and customers to systematically showcase

strategy and inadequate information Supported by Green Finance (2025 Edition) published and implemented in 2025 by national financial regulatory authorities the People's Chain achievements in low-carbon practices.disclosure may impact the corporate Bank of China and the China Securities Regulatory Commission along with its associated project identification and information disclosure

brand image. requirements. Based on this the Company classifies eligible capital investments and operating expenditures to establish a statistical

framework for climate-related financial outlays.

97 98Satellite Chemical 2025 Environmental Social and Governance Report

Indicators and Targets Strengthening Environmental Management

Satellite Chemical has established clear phased carbon reduction targets based on its operational status which serve as a crucial foundation

for the Company's climate strategy. To support the effective implementation of these carbon targets and enhance carbon management

efficiency and decision-making capabilities the Company has independently developed a carbon emissions management platform to Environmental Management System

centralize digitize and intelligently manage carbon data. The platform covers the Company's Scope 1 and Scope 2 carbon emissions with

plans to gradually expand to Scope 3 supporting end-to-end management processes including data collection parameter setting analysis

calculation and visualization. Since 2025 the platform has been operational and is undergoing continuous functional enhancements providing

stable and traceable data support for the implementation of the Company's climate strategy strengthening scientific decision-making and Governance

performance management capabilities and continuously empowering its green and low-carbon transformation.To ensure the effective implementation and advancement of environmental management the Company has established a hierarchical

management system with clear responsibilities and top-down coordination. The environmental management structure is led by the Company's

Carbon Reduction Goals 2025 Progress Strategy and ESG Committee as the highest governing body with the Safety and Environmental Committee overseeing all environmental

management matters. The primary heads of each site and business unit are designated as the first persons responsible for environmental

protection. By clearly defining the responsibilities at different management levels the Company enhances coordination across decision-

making execution and supervision. Concurrently the Company continuously strengthens its environmental protection accountability system

Achieve a cumulative reduction of over 2 million As of the current date a cumulative reduction of by integrating environmental management goals into its performance appraisal framework specifying the duties of managers and positions

tonnes of carbon dioxide by 2030 using 2020 as 1058654 tonnes of carbon emissions has been at all levels regarding resource utilization pollution prevention and environmental risk control and reinforcing process control over key

the baseline year achieved using 2020 as the baseline year. environmental management aspects.Advancing key initiatives centered on the "4R"

Achieve full value chain carbon neutrality by 2050 principles including carbon dioxide capture and

reuse full-chain hydrogen energy deployment Honors and Awards

energy-saving technological transformations and

green process technologies.During the reporting period

Jiahong New Materials was awarded the title of "Provincial-Level Green Factory" while Satellite Energy

Satellite Chemical Greenhouse Gas Emissions was recognized as a "National Green Factory".Indicator Unit 2025 2024 2023

Total Greenhouse Gas

tonnes of CO2 equivalent 6705043 5709616 5853177

Emissions

Direct emissions (Scope 1) tonnes of CO2 equivalent 3167380 2580541 1432410

Indirect emissions (Scope 2) tonnes of CO2 equivalent 3537663 3129075 4420767

Greenhouse Gas Emissions tonnes of CO2 equivalent/

0.4570.4640.627

Intensity tonnes of product

99 100Satellite Chemical 2025 Environmental Social and Governance Report

Strategy

Satellite Chemical strictly adheres to environmental laws and regulations such as the Environmental Protection Law of the People's Republic

of China the Environmental Impact Assessment Law of the People's Republic of China the Law on the Prevention and Control of Atmospheric

Pollution of the People's Republic of China the Law on the Prevention and Control of Water Pollution of the People's Republic of China the

Law on the Prevention and Control of Environmental Pollution by Solid Waste of the People's Republic of China and the Law on the Prevention

and Control of Soil Pollution of the People's Republic of China. The Company implements local environmental control policies and technical

standards in its operational areas and benchmarks against industry standards to systematically manage pollutant emissions and environmental

risks ensuring that all environmental management requirements are comprehensively and effectively implemented.The Company continuously promotes the systematic and refined development of its environmental management system. In 2025 the

Company conducted a comprehensive review and update of its existing environmental protection management regulations. Each base

improved the content and implementation rules of systems such as the Environmental Protection Responsibility System and the Regulations

on the Management of Environmental Facilities further refining environmental management requirements and systematically reviewing and

optimizing key processes. Environmental Management System Certification

Environmental Impact and Risk Management

Satellite Chemical has established an environmental risk management system that covers Environmental Emergency Management

Key Performance

the entire process of project construction facility operation and daily operations. Risk

control requirements are integrated into management aspects such as engineering

construction facility operation and daily supervision forming a risk management model The Company continuously improves its emergency management system for sudden environmental incidents updating emergency plans

centered on prevention and dynamic control. During the reporting period in conjunction with new construction and expansion projects and regularly conducting comprehensive and specialized drills as required by

the plans. These drills cover production storage transportation and key process stages testing emergency procedures facility operations

and personnel response capabilities. Throughout the year the drills covered various typical accident scenarios effectively enhancing the

The Company regularly conducts environmental risk identification systematically all of the Company's sites and emergency response skills of all personnel. In 2025 The Company did not experience any major sudden environmental incidents or receive any

reviewing environmental factors such as waste gas wastewater solid waste and noise business units completed internal administrative penalties.in conjunction with production processes material characteristics pollution discharge and external environmental

points and discharge permit requirements and updates the list of environmental factors management audits achieving

accordingly. Based on risk identification the Company organizes on-site inspections to

investigate and address potential hazards focusing on key areas such as the operation of a 100% rectification rate for Case Study Construction and Practice of Emergency Management for Sudden Environmental Incidents at the Jiaxing Base

pollution control facilities management of discharge processes and storage of hazardous environmental hazards.waste. Any identified issues are recorded and tracked for rectification through an

information system and the rectification status is incorporated into routine management In 2025 the Jiaxing Base completed a comprehensive revision and

and supervision to ensure timely elimination of hazards. Furthermore the Company filing of its Emergency Plan for Sudden Environmental Incidents for new

has established a monitoring mechanism for major pollutant emissions managing the and technologically upgraded projects a revision which integrated

discharge of key pollutants and the operational status of environmental protection project process flows key equipment and regional environmental

facilities through a combination of online monitoring systems and third-party testing risks; added identification of environmental risk sources unique to new

agencies to ensure that environmental management data is authentic accurate and projects potential failure scenarios for key equipment and surrounding

traceable. environmentally sensitive targets; highlighted the types storage

volumes and distribution of flammable explosive toxic harmful

and corrosive substances; conducted scenario analyses for abnormal

To verify the effectiveness of its environmental management operations the Company conducts annual internal and external environmental operating conditions leaks fires and explosions; and re-evaluated the

audits covering all business activities and engages third-party organizations to complete system re-certification every three years. Issues environmental risk levels for the entire site and key units by considering

identified during audits are addressed through corrective action plans with closed-loop management to ensure that all measures are sensitive targets within a 100-kilometer radius including residential

effectively implemented. areas schools hospitals drinking water source protection zones nature

reserves and important water bodies.Based on the revised plan the base organized two comprehensive and

two specialized emergency drills involving management operators

and emergency response teams which focused on testing the plan's

relevance operability and inter-departmental coordination efficiency to

On-site Emergency Drill for Liquid Caustic Soda Spill

further enhance the base's overall emergency management capabilities.

101 102Satellite Chemical 2025 Environmental Social and Governance Report

Environmental Capacity Building

Indicator Unit 2025 2024 2023

Satellite Chemical conducts systematic environmental protection training and awareness campaigns covering key areas such as the

management of waste gas wastewater and solid waste; environmental risk identification and control; and carbon emissions management ISO 14001 Certification % of operating sites 100 100 100

to strengthen employees' compliance awareness and practical skills. For new employees The Company incorporates environmental concepts

regulations and basic requirements into mandatory onboarding courses to ensure environmental awareness is established from the outset.Total investment in

Additionally by organizing World Environment Day themed activities The Company encourages employees to propose suggestions for energy

environmental governance RMB 10000 29988 130957 170465

saving consumption reduction and enhancing quality and efficiency based on their production experience and it reviews implements and

funds

rewards outstanding proposals to promote the genuine integration of environmental actions into daily operations.Time invested in

environmental Hours 52560 61320 74400

Case Study Environmental Training and Capacity Building at the Jiaxing Base

governance

In 2025 Satellite Chemical's Jiaxing Base established a regular hierarchical employee training system centered on core

environmental topics such as VOCs control wastewater discharge management hazardous waste management and Carbon Hours of environmental Hours 22421 2544 6504

Reduction. By designing customized courses for employees at different positions and levels the base held a total of 52 training protection training

sessions throughout the year covering 2692 participants from production technical and EHS departments. Through awareness

campaigns and practical drills the training integrated environmental concepts into daily production enhanced the environmental Number of environmental

awareness of all staff and promoted the effective implementation of management measures. protection training Sessions 231 356 499

sessions

Number of participants in

environmental protection Person-times 31832 17792 45548

training

Environmental Penalty

Incidents 0 0 0

Incidents

On-site Training at the Wastewater Treatment Plant

Amount of Environmental

Yuan 0 0 0

Penalties

Environmental Management Goals and Performance

Satellite Chemical formulates and implements annual environmental management goals based on its actual production and operational

conditions; each base advances the implementation of these goals according to unified requirements and through regular assessments and Water Resource Management

reviews promptly optimizes management measures to ensure the stable operation of its environmental management work.The Company's 2025 environmental management goals and performance are as follows:

Water Resource Management System

Number of environmental accidents (incidents) is 0 Zero environmental accidents throughout the year

Satellite Chemical continuously improves its water resource management strictly adheres to the Water Law of the People's Republic of China

Total pollutant emissions controlled within the and relevant discharge standards and incorporates advanced international practices by formulating internal regulations and operating Full compliance across all bases and business units

approved total limits procedures such as the Water Quality Management System Circulating Water Management Regulations Detailed Rules for the Implementation

of Water Conservation and Wastewater Management System to ensure that water resource management and wastewater treatment are

Zero abnormal shutdowns of environmental protection systematized and streamlined.Full compliance across all bases and business units

facilities

The Chairman coordinates the Company's water resource management strategy while the Strategy and ESG Committee is responsible

100% compliance rate for environmental monitoring Full compliance across all bases and business units for overseeing key indicators identifying water risks and potential opportunities and promoting the implementation of the overall water

management strategy. Each base and business unit has established a "Leading Group for Water Conservation Management" based on its

100% compliance rate for solid waste (including actual operational conditions where the General Manager is directly responsible for water-related decisions and the planning of water

Full compliance across all bases and business units

hazardous waste) disposal conservation and wastewater treatment projects ensuring the effective implementation of all measures and their alignment with the

enterprise's annual goals.

103 104Satellite Chemical 2025 Environmental Social and Governance Report

Water Resource Risk Assessment and Response

Measure Type Specific Water Conservation Measures Water Conservation Effect Relevant Base

The Company regularly conducts water use risk assessments for all its operating sites. During the reporting period a systematic assessment

of the Company's water risks was carried out using the Aqueduct Water Risk Atlas developed by the World Resources Institute (WRI) and We regularly conduct water balance This ensures that water usage at each stage

testing and annual water usage audits to complies with relevant standards and provides Lianyungang

the results indicated that the Company's operating regions including Jiangsu and Zhejiang face high or extremely high baseline water systematically review all water consumption data support for the formulation of water Base

stress. While the Company has not yet encountered difficulties in water withdrawal it has established a management plan for regular Water links and product water quotas. conservation projects and goals.monitoring and measurement of water risks to proactively address potential water resource risks continuously tracking water usage and Management

water resource indicators at its operating sites. Furthermore the Company places great importance on its relationship with water resources Assessment and Collaborated with local water authorities and The diagnostic results confirmed that water

in the communities where it operates actively safeguarding regional water security through standardized water management and water Monitoring scientific research institutions to conduct water

conservation initiatives. conservation diagnostic services professionally

conservation management measures were

assessing the water use structure and operating effectively further strengthening the

Pinghu Base

management level. foundation for water risk management.The Company continuously promotes water conservation measures at all its operational and production bases including optimizing water-

efficient processes recycling circulating water and utilizing alternative water sources such as reclaimed water and rainwater. Through Established a regularized water

conservation management mechanism

technological transformation process optimization and management synergy the Company enhances its overall water use efficiency and Building a Water continuously conducted investigations and This improves the water efficiency of production

sustainable water consumption levels while ensuring stable production operations. Concurrently the Company focuses on the water efficiency Conservation rectifications of running emitting dripping operations prevents unnecessary water loss and Lianyungang

of the upstream and downstream segments of its industrial chain guiding suppliers and customers to strengthen their water management Culture and leaking issues and carried out water promotes the long-term effective operation of Basewater conservation measures.and reduce unnecessary water consumption through technical exchanges and product application guidance. conservation education and publicity for

employees.Highlights of Water Conservation Measures and Their Effectiveness

Measure Type Specific Water Conservation Measures Water Conservation Effect Relevant Base

By signing municipal reclaimed water A total of over 2700000 m3 of municipal Case Study Water Conservation Management Practices at the Lianyungang Base

supply agreements with local governments reclaimed water was purchased saving

compliant reclaimed water is introduced into approximately 135000 m3 of industrial water Pinghu Base

the production system to replace a portion of and effectively alleviating regional water

industrial fresh water intake. withdrawal pressure. In 2025 the Lianyungang Base systematically integrated water

conservation requirements into daily production operations

A collaborative mechanism was established continuously identifying and optimizing high-water-consumption

with a third-party water services company

Alternative Water to centrally treat wastewater and effluent The annual reuse of reclaimed water exceeded

links through a regularized management mechanism. Each quarter

Lianyungang

Sources generated during the production process 5.5 million tonnes significantly reducing the

the base conducts a review of its production operations and water

Base

for reuse as make-up water in the demand for fresh water replenishment. use performance implementing water-saving improvement measures

circulating water system. in sync with operational adjustments and technological optimizations.Concurrently by placing water conservation signs in office areas and

Promoted the construction of rainwater The project has entered the continuous conducting water-saving publicity and training the base strengthens

harvesting storage and reuse projects implementation phase and is expected Jiaxing Base employees' understanding of and participation in water management integrating rainwater into the plant's water to provide the Company with a stable requirements promoting the continuous implementation of the water

system as an unconventional water source. supplementary water source.conservation philosophy in production management. On-site at a regular water conservation meeting at the

Lianyungang Base

Wastewater from the PPAE unit's maintenance

is directed to the CSG unit replacing industrial Annual savings of industrial water and

water for semi-coke pulping and achieving wastewater discharge amounted to

synergistic water use between units. approximately 40000 tonnes.Water Conservation Case Study Construction of Industrial Wastewater Recycling System at Satellite Energy

Projects Wastewater from Satellite Energy Phase

Pinghu Base

III is prioritized for internal reuse after The annual reduction in dilution water usage at

being treated to meet standards and it the PPAE wastewater station was approximately Satellite Energy actively implements water conservation management

is introduced into the old plant's PPAE 480000 tonnes which also saved on chemical by adopting measures such as hierarchical water use the introduction

wastewater station as dilution water and a consumption. of water-saving technologies and wastewater resource recovery

nitrogen source. gradually establishing a comprehensive water recycling system.Constructed and operated an in-plant To date 21 circulating water concentrate reuse units have been

wastewater reuse facility to deeply treat installed with a total treatment capacity of approximately 2000

production wastewater for reuse in the Annual wastewater reuse reached 2878792

Lianyungang

m3/h. Wastewater is recycled through methods including gray

circulating water system and production tonnes. Base water reuse for washing alkaline-containing wastewater reuse in

Water Resource units. the syngas unit and ammonia recovery from the ammonia-steam

Reuse

Recycled treated and reused drainage from system. In addition reclaimed water is used to partially replace

the circulating water system prioritizing The annual volume of recycled and treated water industrial water effectively reducing fresh water consumption and

its use in evaporative cooling systems and was 11931 tonnes of which approximately 70% Jiaxing Base lowering wastewater discharge. The reuse rate of industrial water

related production units to reduce the was used in the evaporative cooling system. has now exceeded 98%. Schematic of Satellite Energy's Wastewater Recycling Network

demand for fresh water makeup.

105 106Satellite Chemical 2025 Environmental Social and Governance Report

Wastewater Discharge Management Water Resource Management Goals 2025 Progress

Satellite Chemical adheres to the goal of "zero direct discharge of wastewater" and continuously strengthens water pollution prevention and Reduce fresh water use intensity by over 30% Fresh water use intensity has been reduced by 21%

control implementing strict management throughout the entire process from wastewater generation to collection treatment and discharge. by 2027 based on the 2024 level. with 2024 as the baseline year.By optimizing production processes and procedures the Company effectively reduces the concentration of pollutants in wastewater and

continuously monitors key indicators to ensure stable and compliant discharges thereby comprehensively managing risks to the aquatic

environment.Reduce the discharge intensity of wastewater

pollutants (including COD and ammonia The discharge intensity of wastewater pollutants

Satellite Chemical's Full-Process Wastewater Management Measures nitrogen) by over 18% by 2027 with 2024 as (including COD and ammonia nitrogen) has been

the baseline year. reduced by 15% with 2024 as the baseline year.Management Stage Key Measures

Key Performance Indicators for Water Resource Management

Reduce the generation of various types of wastewater through the optimization of process parameters while

Generation

monitoring key water quality indicators in real time to ensure wastewater discharge is controllable.Indicator Unit 2025 2024 2023

Collect process wastewater oily wastewater saline wastewater clean wastewater initial rainwater and domestic

Collection sewage separately and channel them into a unified pipe network for centralized management at wastewater Water Resource Use

treatment facilities.Employ combined processes such as biological treatment catalytic oxidation membrane filtration and physical- Total water consumption Million tonnes 960.55 741.60 566.74

Treatment chemical treatment to provide targeted treatment based on different wastewater pollutants achieving compliant

discharge and wastewater reduction. Million

Water use intensity tonnes/10000 0.65 0.60 0.50

tonne products

Continuously monitor indicators such as COD ammonia nitrogen and total nitrogen in treated wastewater to

Discharge

ensure discharges comply with national and local standards and to control risks to the aquatic environment.Freshwater consumption Million tonnes 29.08 30.96 33.64

Other water consumption Million tonnes 7.68 7.85 6.18

Case Study Equipment Optimization at Jiaxing Base Enhances Wastewater Reduction and Separation Efficiency

Total volume of recycled and

Million tonnes 923.79 702.79 526.92

reused water

In 2025 the Jiaxing Base optimized its process units and equipment. By replacing heat exchangers and adjusting process parameters Percentage of recycled and

%96.1794.7692.97

steam consumption was reduced by 500 kg/h and wastewater COD levels decreased by 15.84%. These improvements effectively reused water

enhanced production separation efficiency while lowering the pollutant load of wastewater achieving an efficient balance between

wastewater reduction and stable production and providing technical support for the Company's ongoing green operations.Alternative water usage Million tonnes 2.79 1.87 0.50

Alternative water usage ratio % 8.56 5.53 1.36

Total water withdrawal in areas

Water Resource Management Goals and Progress with high or extremely high Million tonnes 32.65 33.86 36.74

baseline water stress

Satellite Chemical has established clear water resource management goals committing to improving water use efficiency and controlling Percentage of water withdrawal

the discharge of wastewater pollutants. Each base and business division regularly monitors and analyzes the achievement of these goals in areas with high or extremely % 100 100 100

continuously promoting the optimization of management performance to ensure a balance between environmental compliance and high baseline water stress

sustainable water use while safeguarding stable production.

107 108Satellite Chemical 2025 Environmental Social and Governance Report

Key Performance Indicators for Water Resource Management Waste Gas Treatment Measures

Indicator Unit 2025 2024 2023 Major Waste Gas Production Stage Waste Gas Treatment Measures

Pollutants

Wastewater Discharge Reaction and Catalytic combustion (RCO) thermal incineration SNCR/SCR denitrification

Polymerization Section alkaline spraying activated carbon adsorption etc.Total industrial wastewater

Tonnes 12930530.46 13116771.18 14627048.12

discharge Drying and Granulation

Bag dust collectors cyclone separators secondary tail gas dust removal etc.Section

Chemical Oxygen Demand (COD) Tonnes 2797.66 2765.37 2355.96

Storage Tank and Filling Activated carbon adsorption honeycomb carbon adsorption high-altitude

V O C s N O x S O 2 Stage discharge etc.particulate matter

Ammonia Nitrogen Tonnes 32.04 31.52 26.85

odorous gases SCR denitrification alkaline solution spraying wet electrostatic precipitation

Boilers and Gas Turbines

waste heat recovery etc.Total Organic Carbon (TOC) Tonnes 989.97 198.29 103.40

Waste Liquid Combined measures including secondary alkaline washing water washing

Chemical Oxygen Demand (COD) Incineration filtration RTO and catalytic reactor treatmentTonnes/10000

emissions per 10000 tonnes of 1.907 2.245 2.077

product tonnes Wastewater Treatment Adoption of combined measures such as alkaline spraying water washing

Station biological trickling filters and activated carbon adsorption

Ammonia nitrogen emissions per Tonnes/10000

0.0220.0260.024

10000 tonnes of product tonnes

Total Organic Carbon (TOC) Waste Gas Treatment Optimization MeasuresTonnes/10000

emissions per 10000 tonnes of 0.675 0.161 0.096

product tonnes Waste Gas Emission

Treatment Optimization Specific Measures Relevant Base

Dedicated to cleaner raw materials from the source using imported clean

ethane to produce ethylene which features a short process flow high

Source Reduction Lianyungang Base

conversion rate and few by-products effectively reducing waste gas

Waste Gas Emission Management generation.Modified the original 8 sets of tail gas catalytic oxidation systems by adding

catalysts and optimizing the process achieving significant VOCs emission

reductions.Pinghu Base

Waste Gas Management and Treatment Process

Modified the boilers to ensure stable NOx emissions below 50 mg/m3.Process Optimization

In accordance with the Emission Standard of Air Pollutants for Boilers

Satellite Chemical actively promotes waste gas emission reduction and treatment. Each base has formulated and implemented internal

(DB331415-2025) upgraded the burners of the biogas boilers effectively

regulations such as the Detailed Rules for the Implementation of Waste Gas Emission Management and the Waste Gas Management

reducing the concentration of nitrogen oxide emissions and achieving Jiaxing Base

Regulations to promote the standardization and compliance of waste gas treatment measures. The Company effectively controls waste gas

compliant emissions with a measured average of 25 mg/m3 of nitrogen oxides

at each production stage by optimizing production processes and equipping them with efficient waste gas treatment facilities. Concurrently

in the boiler flue gas.leveraging online monitoring systems and regular third-party testing the Company maintains real-time oversight of emission status ensures

the safe and stable operation of its facilities and guarantees that production operations and environmental protection advance in tandem.Conduct regular specialized inspections for fugitive emissions spills and

leaks to promptly identify and repair potential sources of waste gas leakage.Deployed VOCs infrared monitoring systems and drone patrols covering key

production and storage areas as well as remote high-altitude facilities to Jiaxing Base / Lianyungang

Routine Monitoring

achieve continuous monitoring of fugitive Volatile Organic Compounds and Base

methane.Completed LDAR monitoring and re-testing to ensure that equipment waste

gas leakage points are promptly detected and repaired.

110099 110Satellite Chemical 2025 Environmental Social and Governance Report

Air Emissions Goals and Progress Waste Discharge Management

Satellite Chemical closely monitors the primary air pollutants emitted during its production processes sets clear emission control indicators

and management goals and continuously tracks the implementation effectiveness and performance of reduction measures through regular Waste Management Process

assessments.Satellite Chemical adheres to the principles of "reduction resource utilization and harmlessness." By defining clear classification standards

Air Emissions Management Goals 2025 Progress and operational requirements the Company integrates waste management throughout all aspects of daily production and operations.This approach promotes the source reduction and resource utilization of all types of solid waste as a priority while implementing strict

harmlessness management for non-utilizable waste. Concurrently The Company relies on its solid waste supervision platform to conduct full-

100% compliance rate for particulate matter Achieved process information-based management and dynamic tracking of Hazardous waste. This continually strengthens the compliance control and

emission concentration.traceability of the disposal process ensuring the safe standardized and controlled operation of the solid waste management system.

100% compliance rate for VOCs emission Achieved

concentration.General Solid Waste Hazardous Waste

Reduce the emission intensity of air pollutants Reduced the emission intensity of air pollutants

(including VOCs NOx and SO2) by 20% by 2027 (including VOCs NOx and SO2) by 17% using 2024 Chemical packaging waste activated carbon oils and

using 2024 as the baseline year. as the baseline year. General industrial solid waste domestic waste organic residues sludge and waste liquids etc.Collected and sorted by nature with designated

temporary storage areas for General solid waste In accordance with Hazardous waste management

standardized labeling and management to prevent requirements dedicated temporary hazardous waste Storage

rain exposure and scattering. warehouses are established for sorted zoned and Key Performance in Air Emissions Management Method sealed storage with anti-seepage and anti-loss

Sorted disposal in office and living areas with management and relevant ledgers are maintained.dedicated waste containers.Indicator Unit 2025 2024 2023

Entrusted to qualified transportation and disposal

Transportation units with standardized handover records.The hazardous waste manifest system is implemented

Total Air Emissions Cubic meters 35414818405 34746113764 15006541886 with compliant transportation entrusted to specialized

Method Domestic waste is collected and transported by qualified units.municipal sanitation services or contracted units.Volatile Organic Compounds (VOCs) Tonnes 240.78 310.38 278.85

Primarily resource utilization with non-utilizable

Disposal Waste liquids are incinerated and residues are landfilled

portions landfilled or incinerated in accordance with

Method or disposed of harmlessly in accordance with the law.Nitrogen Oxides (NOx) Tonnes 807.23 758.17 312.71 the law.Sulfur Dioxide (SO2) Tonnes 85.41 81.92 42.07

Particulate Matter (PM) Tonnes 55.13 53.06 38.21

Volatile Organic Compounds

Tonnes / 10000

(VOCs) emissions per 10000 0.164 0.252 0.257

tonnes

tonnes of product

Nitrogen Oxides (NOx) emissions Tonnes / 10000 0.550 0.616 0.554

per 10000 tonnes of product tonnes

Sulfur Dioxide (SO2) emissions Tonnes / 10000 0.058 0.067 0.106

per 10000 tonnes of product tonnes

Particulate matter (PM) emissions Tonnes / 10000

0.0380.0430.054

per 10000 tonnes of product tonnes

111 112Satellite Chemical 2025 Environmental Social and Governance Report

Waste and Recycling Waste Management Key Performance

Indicator Unit 2025 2024 2023

The Company continuously promotes the reduction and resource utilization of solid waste constantly lowering waste generation intensity and

improving resource utilization efficiency.Hazardous Waste Generated Tonnes 127617.25 125125.82 139198.83

Waste Management Specific Measures and Achievements

Optimization Measures

Comprehensive Utilization of

Tonnes 117529.55 108998.82 139198.83

At the Jiaxing Base through a technical upgrade of the filter press system at the wastewater Hazardous Waste

treatment station the amount of chemical agents added was reduced which effectively lowered

Source Reduction

sludge generation while ensuring treatment effectiveness resulting in a reduction of 1066.36 tonnes Comprehensive Utilization Rate

in 2025 compared to 2024. % 92 87 100of Hazardous Waste

Some Hazardous waste is collected sorted and handed over to qualified units for cleaning refining

and resource treatment to be recycled into packaging materials industrial oils chemical raw Non-hazardous Waste Generated Tonnes 80131.29 61105.38 7650.10

materials or alternative fuels thereby achieving the reduction and resource utilization of Hazardous

waste.Resource Utilization Comprehensive Utilization of

Tonnes 80131.29 61105.38 7650.10

Non-hazardous Waste

General industrial solid waste is recycled repaired and reused with metal plastic and paper waste

recovered as recycled raw materials. Wooden pallets are reused or recycled and waste alumina is sold

as a raw material for industrial production such as ceramics. Comprehensive Utilization Rate % 100 100 100

of Non-hazardous Waste

Total Solid Waste Generated Tonnes 207748.54 186231.20 146848.93

Waste Discharge Goals and Progress

Solid Waste Generated per Unit Tonnes/10000

141.64151.21147.66

Satellite Chemical systematically formulates solid waste reduction and resource utilization goals based on the characteristics of its production of Product tonnes

processes and compliance requirements. Through continuous tracking and evaluation it steadily enhances its waste management standards

and resource utilization efficiency.Waste Management Goals 2025 Progress

Soil and Noise Pollution Control

100% compliance rate for solid waste disposal Achieved

With 2024 as the baseline year hazardous Soil Pollutant Management and Processes

Reduced hazardous waste generation

waste generation intensity will decrease by

intensity by 14%

over 18% by 2027

In accordance with relevant regulations such as the Guidelines for Soil Pollution Hazard Investigation for Key Regulated Entities (Trial) and

With 2024 as the baseline year the in-house the Technical Guidelines for Self-Monitoring of Soil and Groundwater for Industrial Enterprises and in conjunction with the requirements of

comprehensive utilization capacity for solid

Reduced the environmental discharge of solid its pollutant discharge permit and project environmental impact assessments Satellite Chemical has established a soil and groundwater

waste will reduce the amount of solid waste

waste by over 40800 tonnes environmental management mechanism covering identification investigation and monitoring and conducts regular hazard investigations and

discharged into the environment by at least self-monitoring to dynamically grasp the status of environmental risks.

50000 tonnes by 2030

The Company identifies risks of chemical and heavy metal contamination in key areas such as production unit zones tank farms hazardous

With 2024 as the baseline year the solid chemical warehouses and wastewater treatment areas establishing a prevention and control system that covers source control standardized

With 2024 as the baseline year the solid waste

waste generation intensity will decrease by storage and process supervision. Concurrently by implementing daily inspection requirements and conducting regular monitoring and

generation intensity has been reduced by 6%.over 8% by 2027 effectiveness evaluations we continuously verify the validity of our management measures reduce the risk of pollutant leakage into soil and

groundwater and maintain environmental safety and stability at our plant sites.

113 114Satellite Chemical 2025 Environmental Social and Governance Report

Soil and Groundwater Pollution Prevention and Control Measures Noise Management Measures

Management Stage Key Measures Management Stage Key Measures

Prioritizing the selection of low-noise equipment and implementing vibration-isolating foundation

Prioritizing the use of low-toxicity low-hazard and low-environmental-risk materials during the Source Control

designs and process optimizations for high-noise equipment to reduce operational noise levels.selection stage of raw and auxiliary materials.Source Prevention

Conducting periodic inspections and maintenance on key facilities such as storage tanks pipelines

and reactors to reduce the risk of leaks and pollutant generation at the source. Applying sound-absorbing and sound-insulating treatments to workshops and buildings that are

Transmission Control noise sources and installing acoustic panels silencers soundproof enclosures and acoustic barriers

to effectively mitigate noise transmission and its impact at the plant boundary.Storing hazardous chemicals and materials containing heavy metals in centralized impermeable Installing a soundproof cover on the steam vent pipeline of the Acrylic Acid Phase IV project and

and hardened areas equipped with dikes diversion channels and leak collection systems while

Standardized Storage Key Retrofits constructing a sound-insulated building equipped with silencers in the chiller area to improve the

implementing zoned anti-seepage management to prevent pollutants from penetrating soil and acoustic environment for both operations and the surrounding area.groundwater.Rationally scheduling high-noise operations to reduce their occurrence at night thereby minimizing

Operational Management

the impact of noise on the surrounding environment.Establishing a daily inspection mechanism to strengthen the management of the operational status

Process Control of production unit zones tank farms and wastewater treatment facilities and promptly addressing

abnormalities to reduce the risk of pollution spreading. Conducting regular noise monitoring at the plant boundary to ensure that results consistently meet Monitoring and Evaluation

compliance standards.Building a monitoring network that covers key areas as well as upstream and downstream of

groundwater flow and conducting soil and groundwater sampling monitoring and hazard

investigation as planned.Formulating emergency response plans for soil and groundwater pollution and equipping emergency

Monitoring and Evaluation

supplies to ensure that sudden leakage incidents can be handled swiftly and effectively to prevent Ecological Co-building

the spread of contamination.Commissioning third parties to conduct soil and groundwater testing and formulate assessment

reports. Satellite Chemical values the potential impact of its operations on natural resources and biodiversity striving to minimize it and actively

participating in public welfare projects for biodiversity conservation to fulfill its corporate social responsibility. From the project site selection

and construction phases The Company adheres to the principle of ecological avoidance strictly complying with control requirements such

as the national ecological protection red lines and overall land use plans to ensure that no projects are located in ecologically sensitive

areas. During production and operation The Company continuously improves its ecological protection and restoration mechanisms adopts

mitigation measures for environmental impact throughout the entire process regularly assesses biodiversity-related risks and consistently

enhances its ecological management standards.Noise Management System and Procedures

Case Study Implementing Ecological Compensation to Safeguard the Regional Environment

Satellite Chemical has established a comprehensive noise management system covering all operational stages tailored to the functional

layout of its plant sites and the characteristics of its production processes. Through classified control and end-to-end supervision we ensure During the construction of the supporting dike project in the Xuwei Port Area the Lianyungang base adhered to the principle of

that boundary noise levels consistently meet the limits and requirements stipulated in standards such as the Emission Standard for Industrial "equal emphasis on development and protection" systematically implementing ecological protection and restoration measures

Enterprises Noise at Boundary (GB 12348-2008) and the Environmental Quality Standard for Noise (GB 3096-2008) effectively reducing to promote the coordinated development of the project and the regional ecosystem. A special fund for ecological compensation

interference with the surrounding environment. was established with a clear commitment of RMB 1.1697 million allocated for ecological restoration and compensation ensuring

the effective fulfillment of environmental responsibilities. Throughout the project's implementation measures such as controlling

The Company's noise primarily originates from the operation of production equipment utility facilities and logistics activities within the plant the excavation scope of the foundation trench and installing silt curtains were adopted to minimize disturbance to the seabed

including operational sounds from equipment like boilers fans pumps and compressors high-pressure steam or gas discharge sounds environment. Efforts were also made to avoid construction during the spawning and breeding seasons of major commercial

and noise from transportation loading/unloading and periodic construction. By systematically identifying noise sources and implementing fish species to reduce the impact on the marine ecosystem thereby earnestly promoting the coordinated integration of project

targeted prevention and control measures The Company continuously enhances the overall effectiveness of its noise management improving development and ecological protection.the systematicity and efficacy of its noise control efforts.

115 116Satellite Chemical 2025 Environmental Social and Governance Report

04

People-Oriented for a

Shared

Harmonious Future

UN SDGs

Satellite Chemical adheres to a people-oriented strategy continuously improving its employee rights protection and career develop-

ment systems. We strictly implement production safety responsibilities create a safe standardized and stable work environment

promote the full lifecycle management of chemicals and progressively phase out high-risk chemicals while exploring green alterna-

tives. At the same time the Company integrates its corporate development with social value injecting warmth into society through

ongoing public welfare activities.

117 118Satellite Chemical 2025 Environmental Social and Governance Report

Safeguarding Employee Rights and Benefits

Satellite Chemical places great importance on fair employment and compliant labor management. We have established a robust system to

protect employee rights and interests and foster a warm workplace atmosphere through comprehensive welfare programs and employee

activities. This enhances employee cohesion and organizational vitality providing a solid talent foundation for the steady growth of the

enterprise.Diverse and Equal Employment

Anti-Discrimination and Equal Rights Diverse Recruitment Channels

Satellite Chemical fully respects the human rights concepts and principles of the Universal Declaration of Human Rights and strictly abides by Satellite Chemical upholds the philosophy of "valuing ability over academic qualifications and contribution over seniority". We continuously

the relevant laws and regulations of its domestic and overseas operating locations including the Labor Law of the People's Republic of China expand diverse recruitment channels and enhance our talent acquisition mechanism which combines external recruitment internal selection

and the Labor Contract Law of the People's Republic of China. We adhere to lawful and compliant employment practices explicitly prohibiting and campus reserves to build a long-term stable and competitive talent pipeline. We strengthen our talent supply and key position reserves

child labor and any form of forced labor harassment or abuse to safeguard the legitimate rights and interests of our employees. The Company by collaborating with major recruitment platforms and improving our recruitment mechanisms for critical roles.rigorously verifies the age of candidates through methods such as identity document checks to prevent the inadvertent hiring of child labor.When engaging contractors we also verify the age compliance of their employees to ensure adherence to relevant legal and regulatory

requirements.The Company implements the principle of equal employment. In our recruitment and employment practices we use a standardized recruitment

process that focuses on the candidate's abilities experience and suitability for the position. This provides fair and transparent competitive

opportunities for job seekers of different genders ages geographical locations and cultural backgrounds (including ethnicity religious beliefs

etc.) avoiding any form of discrimination and dedicating ourselves to creating an inclusive and diverse workplace environment.Social Recruitment

Labor and Human Rights Risk Assessment

Strengthen the introduction and reserves Improve diversified recruitment channels

of key talent and referral mechanisms

Satellite Chemical places high importance on labor and human rights risk management having established a regular assessment mechanism

to conduct labor and human rights risk assessments for all employees every six months. During the assessment process the Company uses a Establish channels for introducing overseas Actively participate in offline talent

combination of methods including reviews of systems and documents occupational health and safety inspections and stakeholder surveys experts and continue to attract high- exchange fairs and online recruitment

to systematically identify risk factors that could affect labor rights and human rights. The scope of the assessment covers the working level overseas returnees; set up dedicated events and continuously optimize

environment labor intensity compensation and benefits career development and community relations. By considering the impact of risks positions for high-end talent acquisition the layout of high-quality external

on business operations employee well-being corporate reputation and compliance management we determine risk priorities formulate targeting and recruiting outstanding recruitment channels; simultaneously

improvement plans promote the implementation of relevant measures continuously track progress and regularly evaluate the effectiveness management talent from mid-to-high- develop proprietary channels such as the

of implementation forming a closed-loop management system to reduce the probability and potential impact of risks. end and benchmark enterprises in the "Satellite Recruitment Mini Program" and

industry to support key position capability recruitment public accounts and revitalize

building and the organization's long-term talent resources through internal and

During the reporting period in response to identified key risks the Company optimized the rules for renewing labor contracts and development needs. external referral incentive mechanisms to

standardized the management requirements for overtime re-employment of retirees and annual leave continuously enhancing the stimulate the enthusiasm of talent officers

standardization and consistency of our employment management. Additionally we maintain standardized records of the entire assessment for making recommendations.process and communicate with stakeholders such as employees customers suppliers and the community. Through training and exchange we

raise risk awareness and prevention capabilities continuously advancing the protection of human rights and labor rights.

119 120Satellite Chemical 2025 Environmental Social and Governance Report

Campus Recruitment The Company regularly conducts diversity training to enhance employees' understanding of diversity and inclusion through systematic

education and guidance. This further strengthens their awareness of inclusivity and respect promoting the continuous optimization and

We have established a long-term campus talent reserve system deepened systematic university-enterprise cooperation and enhanced development of our corporate culture. Concurrently the Company has established robust internal recruitment and transfer mechanisms

the Company's employer influence among university students. During the reporting period we recruited more than 100 outstanding adhering to the "internal priority" principle. We maintain a dynamic internal talent pool to support employee mobility and development across

recent graduates from partner universities and participating institutions from our open days injecting new vitality into our talent pipeline departments and business units continuously improving the transparency and standardization of internal selection processes to ensure

construction. fair and open access to job opportunities and support employees' ongoing capability enhancement. During the reporting period multiple

employees achieved transfers or promotions through internal selection gaining broader career development opportunities.Full-cycle campus recruitment and development model Campus recruitment IP and employer brand 2025 Employer Honors and Awards

communication matrix

Targeting student groups at different academic

levels we continuously promote campus talent Through activit ies such as f i lming career

acquisition and young talent reserves through experience promotional videos and holding

a var iety of methods inc luding prac t ica l corporate open days combined with interactive

opportunities campus ambassador programs formats like site visits executive exchanges and

scholarship establishments and support for alumni sharing we enhance students' awareness

campus brand activities. and recognition of the Company and its positions.Diversified recruitment process University-enterprise collaborative education 51job 2025 National "Top Employer" Liepin 2025 Award for Excellence in Human Zhaopin Limited 2025 China's Best

and front-loaded development Resources Contribution Employer Nomination Award

We comprehensively utilize both online and offline

recruitment channels and introduce professional We co-establish custom-designed programs

support such as third-party RPO services to such as "order classes" with partner universities

expand the reach and organizational efficiency of jointly develop training plans integrate corporate

campus recruitment ensuring that the recruitment courses and practical sessions into the teaching

process is conducted in a standardized and orderly system and promote the effective alignment of

manner. talent development with job requirements. Protection of Employee Rights and Interests

Remuneration Management

Digitalized Recruitment

Satellite Chemical has established a scientific and comprehensive remuneration and incentive system. Guided by the principles of "pay for

position" and "equal pay for equal work" we have formulated and continuously refined management systems such as the Remuneration

Satellite Chemical is advancing the digital and intelligent upgrade of its recruitment process. Leveraging our recruitment management system Management Measures and the Performance Management Measures creating a standardized and executable remuneration and performance

and data-driven operational capabilities we integrate key stages such as job posting resume screening interview assessment and hiring and management mechanism. We offer market-competitive fixed salaries complemented by a comprehensive performance appraisal system

onboarding promoting a more standardized efficient and traceable recruitment management. and have established a multi-layered incentive plan covering short- medium- and long-term horizons to continuously stimulate employee

potential and value creation. During the reporting period the Company updated several policy documents to enhance the standardization and

consistency of remuneration and performance management. Concurrently we promoted the management of job responsibility checklists to

achieve "visualization of value creation and clarification of work responsibilities" laying a solid foundation for performance management and

Standardized selection Digitalized process Refined channel Online outreach Employer brand

management strengthening capability development.We optimize the We have introduced and We dynamically We conduct live- We enhance our Guaranteed Remuneration Short-term Incentives

campus recruitment continuously optimize evaluate and streamed recruitment employer brand

selection matrix a cloud recruitment optimize recruitment and online presence on major Based on stable security we provide fixed salaries that Centered on performance orientation we offer awards

and improve the system enabling one-click channels to improve presentations through recruitment platforms are above the market average to ensure employees for cost reduction and efficiency improvement

standardized notifications for candidates the suitability and platforms such as and professional receive stable and decent income guarantees. optimization and improvement awards premium

interview evaluation and interviewers and full- return on investment WeChat Channels communities. By Satellite sharing and excess sales bonuses.system forming process data recording of our channel and Tencent Meeting showcasing the Chemical

uniform interview and analysis. This supports portfolio enhancing expanding our Company's development Medium-term Incentives Remuneration Long-term Incentives

standards and review and strategy the quality and reach and improving and cultural atmosphere Structure

question lists to optimization thereby matching degree of communication we increase our visibility Focusing on key talent we achieve deep engagement With the goal of co-creating value we facilitate benefit

enhance the scientific improving recruitment talent acquisition for efficiency and and appeal among through mechanisms such as restricted stock plans sharing through our business partners" shareholding

rigor and efficiency of operational efficiency. key positions. candidate application target talent groups. and virtual equity. mechanism.talent selection. convenience.

121 122Satellite Chemical 2025 Environmental Social and Governance Report

Additionally we actively assist employees in applying for government awards for high-end talent with an expected total of RMB 9.95 million

to be received for the year a year-on-year increase of 19%. Through special incentives like the "Eagle Program" and "Elite Program" we have Grievance Handling Process and Closed-Loop Management

awarded over RMB 70 million in total allowing employees to share in the Company's development achievements.Acceptance and Upon receiving a grievance management or designated personnel register and conduct

Registration

Democratic Communication a preliminary review of the submitted materials.Satellite Chemical values employee awareness and participation. We have established a multi-level communication mechanism covering

information disclosure daily communication and democratic consultation to ensure employees are kept informed of company developments.Through platforms like the Employee Representative Meetings we promote democratic management and provide smooth channels for Grievances are categorized based on their nature and severity. General issues are

Tiered Handling

employees to express their opinions and participate in consultations. handled by company management while complex issues are led by a grievance

management team.Satellite Chemical Employee Communication Mechanisms

Result Feedback The outcome of the handling process is promptly communicated to the employee with

Employee Representative Information Disclosure and an explanation of the decision.Meetings Mechanism Democratic Supervision

We have established a supervision mechanism and set

We hold Employee Representative Meetings annually to up factory affairs notice boards to promptly disclose

conduct collective negotiations and deliberate on matters information such as matters reviewed by the Board of If an employee remains dissatisfied with the outcome they may apply for further

directly related to the vital interests of employees. Directors and the implementation status of proposals Review Mechanism communication or appeal to a higher-level department which will then review and

from the Employee Representative Meetings. handle the case.Daily Communication Regularized Feedback

Channels Collection Mechanism

We carry out specialized initiatives to "care for the well-

We synchronize company updates and collect employee being and opinions of the people and pay attention to Satisfied Not

feedback through regular meetings and online instant grassroots dynamics". Through a grid-based management or Not Satisfied

communication channels. system covering all employees we gather suggestions and

promote the closed-loop resolution of issues.Review:

Graded Feedback:

Reception Higher-Level

Processing Notify Result

Review

Specialized Communication Mechanisms

We conduct one-on-one communication through methods such as exit interviews to analyze employee feedback and

formulate recommendations for improvement.Employee Satisfaction Survey

The Company has established formal grievance channels and a standardized grievance handling mechanism. We regularly evaluate and

optimize the operation of this mechanism following a closed-loop process of "acceptance - tiered handling - feedback on results - review"

to ensure that employee concerns are addressed promptly and properly. At the same time we strengthen the promotion of the grievance Satellite Chemical conducts a satisfaction survey covering all employees twice a year. The survey focuses on dimensions such as corporate

system through internal training and informational materials to increase employee awareness of the channels procedures and responsibilities culture departmental management job fit team collaboration personal growth logistical support and safety assurance to broadly

thereby enhancing the system's accessibility. Throughout the grievance handling process we strictly enforce confidentiality requirements understand employees" key concerns and needs for improvement. Based on the results we formulate targeted special plans to enhance

control the scope of information access and explicitly prohibit any undue influence on employees who file grievances effectively safeguarding employee satisfaction. The Human Resources Center is responsible for tracking the implementation progress and effectiveness of various

their legitimate rights and interests. improvement measures and regularly reports the progress to management to drive continuous improvement.

123 124Satellite Chemical 2025 Environmental Social and Governance Report

Employee Care and Welfare Rights and Benefits for Female Employees

Satellite Chemical is committed to the rights and welfare of female employees implementing relevant leave arrangements and special

Satellite Chemical has established a comprehensive employee welfare and care system continuously addressing the physical and mental needs

protections during the three key periods of pregnancy childbirth and lactation in accordance with laws and regulations. The Company

of all employees through health protection lifestyle support holiday care and family support to create a warm and caring work environment.provides eligible female employees with a one-hour daily nursing break and has established "nursing rooms" to offer convenient support for

During the reporting period the Company organized festive events for holidays such as Children's Day and National Day to enrich employees'

breastfeeding employees. Concurrently the Company upholds the principle of equal opportunity ensuring female employees have the same

cultural lives. It also launched health care initiatives such as special traditional Chinese medicine consultations and in-depth interpretations of

opportunities in training promotion and career development. During the reporting period we conducted care activities for International

medical check-up reports to further enhance employees' health management and sense of well-being.Women's Day on March 8 which included lectures on women's health themed sessions on mental well-being and various handicraft cultural

experiences demonstrating our continuous focus on the physical and mental health and special needs of our female employees.Satellite Chemical Employee Benefits System

Health Protection and Rights Support

Medical benefits Health and wellness Leave benefits

We contribute to the five social We provide occupational health check- We implement statutory public

insurances and one housing fund in ups safety allowances healthcare holidays and paid leave arrangements

accordance with the law and provide subsidies and high-temperature including special leave such as annual

supplementary commercial insurance subsidies and are equipped with fitness leave marriage leave care leave

based on job categories. centers and other sports facilities. maternity leave paternity leave and

breastfeeding leave.Work Convenience and Housing Support Headquarters holds a "Healthy Her Future" Lianyungang Base organizes a mental

lecture on women's health health lecture and handicraft salon

Working hours management Work support Housing support

We advocate for the efficient completion We provide free shuttle bus services We provide support measures

of work tasks within standard working and offer night shift subsidies meal such as rental subsidies interest-

hours and have implemented flexible allowances and full attendance free housing loans and employee

work and remote office arrangements bonuses. dormitories.for some support positions and specific

project-based work to enhance the

flexibility of work schedules.Holiday Care and Team Cohesion

Pinghu Base conducts a moxa Jiaxing area holds a silk scarf

Holiday care Team integration Hardship assistance hammer handicraft workshop water-marbling art event

We organize festive activities and We organize employee tours and For employees and their families

distribute holiday allowances festival team-building activities to enhance facing difficulties we promptly

gifts and birthday gifts as part of team cohesion and cultural identity. offer condolences and financial aid

our employee benefits. conveying the organization's care Assistance for Employees

and support. in Difficulty Key Performance

Capability Enhancement and Family Support

The Company addresses the needs of employees During the reporting period，in difficulty and their families by establishing

Learning and development Family visit support Family support the Company extended condolences and support to 21 employees an employee hardship fund. This fund provides

and family members in difficulty distributing subsidies totaling

We provide learning subsidies for We offer subsidies for employees We provide condolence payments timely financial assistance and care to employees

academic advancement and skills working away from their hometowns to employees' parents and offer and their dependents who are ill disabled or RMB 247500. Additionally we assisted 20 employees in

training. to visit their families and ensure that educational support for their children facing emergencies. We also actively coordinate

resources to assist with their children's education applying for subsidies from higher-level labor unions resulting in the overseas employees assigned to work in such as scholarships and grants.China receive their home-leave benefits. and in recent years we have received numerous disbursement of RMB 122600 in support funds.thank-you letters from recipient employees.

125 126Satellite Chemical 2025 Environmental Social and Governance Report

Employee Activities

Satellite Chemical places great importance on employee care and cultural life. Focusing on the physical and mental well-being team cohesion

and learning and growth of our employees we have established comprehensive facilities such as an employee service center a staff library Growing Together with Employees

a gymnasium and tennis courts. We also organize a variety of employee activities including sports events health lectures book seminars

birthday parties and themed holiday events. Furthermore we have set up clubs for badminton basketball and football holding internal

friendly matches to enrich the cultural lives of our employees and enhance their sense of cohesion and belonging. During the reporting

period the Company organized a series of activities including fitness-for-all events reading seminars and parent-child interactions. Following Employee training and development are the driving force behind a company's sustainable growth. Guided by our "He" culture Satellite

some of these events we conducted satisfaction surveys to promptly gather employee feedback and optimize the content and format of our Chemical has established fair and transparent career development pathways supporting employees in enhancing their capabilities and

activities continuously improving the participant experience and overall effectiveness. achieving professional growth thereby fostering mutual advancement for both our employees and the enterprise.Employee Training

In accordance with policies such as the Training Management Measures Satellite Chemical has built an employee development system

Organizing fitness activities such as badminton and football covering different levels and job families supporting continuous learning and lifelong growth for its staff. During the reporting period the

Company continued to enhance its training management system by revising the Training Management Measures and developing new policies

including the Benchmarking and Learning Management Measures and the Implementation Rules for Postgraduate Training providing an

institutional guarantee for the standardized and systematic execution of training initiatives.New Employee Training

Satellite Chemical has formulated the Special Implementation Rules for the Development of University Graduates and the Special

Implementation Rules for the Development of Newly Hired Experienced Staff to establish a systematic onboarding and training system for

new employees particularly recent university graduates. The Company organizes induction training through programs like the "Xingchen

Training Camp" employing diverse methods such as centralized lectures team-building exercises case studies and role-playing to help new

A series of parent-child activities for Children's Day employees systematically learn about the corporate culture job-specific skills and professional conduct. During the reporting period the

Company developed personalized growth plans for each "Xingchen" trainee. This support facilitates their transition from initial onboarding to

For Satellite USA the Company's overseas operating site the Company also actively encourages employees to participate in a variety of independently shouldering job responsibilities injecting new vitality into the Group's talent pipeline.cultural and sports activities and proactively integrate into the local community culture. As a supporter and participant in local chamber of

commerce and community activities Satellite USA actively assists with and participates in the organization and implementation of various

cultural and sporting events. In addition to sports activities such as table tennis the Company also organizes employees to take part in

activities featuring traditional Chinese cultural elements such as dragon boat racing. These activities not only enrich employees' lives outside

of work but also enable Chinese employees overseas to experience a sense of familiarity with and identification with Chinese culture while

living abroad further strengthening their sense of belonging and team cohesion. At the same time these activities provide a vivid platform

for local communities and international friends to learn about fine traditional Chinese culture promoting cultural exchange and closer ties

between the people of China and other countries.On-site photo of the inaugural "CGCC Cup" table tennis friendship

Satellite USA participates in a fun dragon boat race tournament for member companies hosted by the China General

Chamber of Commerce–Houston (CGCC-Houston) Xingchen Training Camp for the Class of 2025

127 128Satellite Chemical 2025 Environmental Social and Governance Report

Professional Skills Training

Satellite Chemical has established a multi-faceted platform for skills

enhancement promoting the improvement of frontline employees' skill

levels through an online learning platform upgrades to simulation training

systems job skill competitions and the "Excellent Team" selection program.Concurrently we continuously optimize the training curriculum and

evaluation mechanism for engineers and have produced a status report

on site engineers providing a basis for future targeted development and On-site photos from specialized training sessions on topics such as "Organization and Cadre Management" "Process Transformation" and

capability enhancement. During the reporting period the Company co- "Performance and Compensation Management"

organized the chemical analysis competition a district-level vocational

skills contest for employees hosted by the Nanhu District General Labor

Union and achieved outstanding results with an employee from the Winning an award in the chemical analysis category of the 2025

Satellite Technology Business Unit winning first prize. Nanhu District Employee Vocational Skills Competition Building a Digital Learning Enriching the Pool of Supporting Academic

Ecosystem Trainers and Qualification

Furthermore to address issues such as insufficient strategic support and Enhancement Programs

delayed business response from administrative departments due to a lack The Company operates and optimizes the We emphasize internal knowledge generation We offer all employees a comprehensive

of specialized chemical knowledge we have implemented specialized "Satellite Business School" an online learning and exper ience shar ing promot ing tuition reimbursement mechanism for

training in this area. Through systematic courses and assessments we aim platform that provides employees with a an internal instructor mechanism that pursuing higher academic degrees

to enhance the business understanding and collaborative empowerment flexible efficient and self-directed path for encourages senior managers technical and professional qualifications. Upon

capabilities of these departments thereby supporting the Company's learning and growth. The platform integrates experts and high-performing employees to graduation and obtaining the relevant

Specialized Empowerment Training Program

refined management and value creation. course resources for both professional skills and distill their practical experience into course qualifications or certificates employees on Chemical Industry Knowledge

general professional competencies. In addition content making training more relevant to can apply for reimbursement according

to job-specific courses it systematically covers business scenarios. At the same time we to company policy. During the reporting

training in general skills such as marketing collaborate with industry experts scholars period over 300 employees participated

communication and expression and business and professional training institutions to in academic advancement programs.negotiation helping employees enhance their introduce customized courses and cutting- There were 3270 instances of employees

workplace competitiveness and business edge external knowledge enhancing the obtaining professional qualifications and

Leadership Training adaptability. Currently the platform features 136 professionalism and forward-looking nature the Company fully reimbursed the eligible

language courses 76 office software courses of our training. During the reporting period certification fees with total reimbursements

36 presentation skills courses 16 business we organized the compilation and publication amounting to RMB 1.106 million.

negotiation courses 43 interpersonal skills of six marketing know-how handbooks

Satellite Chemical implements stratified and categorized leadership development programs for managers at different levels. Through a courses and 40 efficiency improvement courses including the Sales Transformation Handbook

combined approach of "benchmarking and learning + seminars and exchanges + specialized empowerment" we continuously enhance effectively supporting the implementation of and the International Business Transformation

managers' strategic vision organizational coordination and performance capabilities to better support the Company's operational and various talent development projects. During Handbook to codify and standardize excellent Key Performance

development needs. the reporting period we developed a total business practices and methodologies. This

of 73 internal video courses and online provides effective support for new employees

learning reached 25321 participant-sessions to quickly get up to speed and for enhancing In 2025

continuously enhancing the supply of employee overall team capabilities.Senior Management Middle Management skills and the effectiveness of organizational the Company organized

Engage in benchmarking studies by Foster improvements in management talent development.a total of 4527

visiting leading enterprises to learn thinking and broaden business perspectives

from advanced industry management through activities such as book seminars training sessions covering

Case Study Deepening the "Golden Blue-Collar" Skills Enhancement Initiative to practices. and themed sharing sessions. Support Employees in Obtaining Vocational Skill Level Certificates 134362 participants.The average training

As a pilot enterprise for vocational skill level assessment Satellite Chemical actively duration per person was

First-line Management Reserve Cadre Pipeline implements Zhejiang Province's "Golden Blue-Collar" vocational skills enhancement 61 hours with a total

Select high-potential young cadres for the initiative. We organized a three-month vocational skill level assessment for chemical training investment of RMB

Conduct specialized empowerment "Assistant System" development program laboratory technicians in the Jiaxing area. Following review by the human resources and

training to strengthen foundational enhancing their comprehensive qualities and social security department 26 employees passed the assessment with 16 obtaining 2.387million.management sk i l l s and on-s i te management abilities through systematic senior worker certificates and 10 obtaining intermediate worker certificates.performance capabilities. training and practical experience.

129 130Satellite Chemical 2025 Environmental Social and Governance Report

Employee Development Lower than Expectations (L) Meeting Expectations (M) Higher than Expectations (H)

Very High Potential (VH) Developing (10%) Future Star (10%) Star Talent (10%)

Employee Promotion and Development High Potential (H) To Be Observed (10%) Core Employee (25%) Expert for the Job (10%)

Satellite Chemical has established a scientific and standardized mechanism for employee promotion and development formulating policies Steady (S) Low-Performing Employee (5%) Qualified Employee (10%) High-Performing Employee (10%)

such as the Talent Review Management Measures the Employee Rank Assessment Management Measures and the Cadre Management

Measures. These policies clearly define the rules for talent identification rank assessment and promotion selection ensuring that standards

are open and transparent and that processes are standardized and executable. The Company has constructed a career development system

with parallel tracks for management professional and technical roles complemented by internal recruitment and transfer mechanisms to Excellent employee on both fronts Core talent priority for Competency or Not competent

promote fair and open job opportunities and the efficient flow of talent. priority for employee development employee development potential needs personnel

with additional incentives and included in the cadre to be improved adjustment

resources included in the cadre pipeline required

pipeline

Multiple Career Development Pathways

Simultaneously the Company has established a performance communication and feedback mechanism providing timely encouragement

guidance and coaching for improvement through regular performance interviews and results feedback and has set up formal appeal channels

Management track Supervisor Manager Director Executive

to protect employees' right to know their performance results and voice reasonable concerns.Professional track Staff Junior Intermediate Senior Expert Chief Expert Chief Scientist

Technical track Junior Worker Intermediate Worker Senior Worker Technician Senior Technician

Robust Safety Practices

Regarding internal selection and transfers all internal vacancies are publicly announced through the Company's internal portal and employees

can apply independently based on their personal development plans. The selection process includes qualification reviews and interview

assessments to ensure openness and fairness. During transfers the original department and the human resources team collaborate to With the goal of ensuring safe and stable operations Satellite Chemical integrates safety management throughout the entire process of

provide guidance and support helping employees adapt smoothly to their new roles. In the next 3-5 years we plan to continuously increase production and operations accelerating the application of digital and intelligent methods in safety management. The Company promotes the

the internal supply ratio for key positions with approximately 70% of key management positions to be filled by internal talent who meet job systematic operation and closed-loop management of its safety framework by strengthening risk identification process control emergency

competency requirements further strengthening our talent echelon development and succession capabilities. response and capacity building continuously reinforcing its line of defense for work safety.Employee Assessment and Feedback

To build a scientific and efficient talent development system Satellite Chemical conducts cadre selection and employee rank assessments Work Safety Management

annually in accordance with regulations such as the Cadre Management Measures and the Employee Rank Assessment Management Measures

precisely identifying and cultivating a reserve cadre echelon and regularly conducting Talent Development Reviews (TDR).The TDR uses a "Competency-Potential" nine-box matrix for talent positioning: competency is evaluated based on the standards of the current The Company strictly adheres to laws and regulations such as the Work Safety Law of the People's Republic of China and the Occupational

position classified as Higher than Expectations (H) Meets Expectations (M) or Lower than Expectations (L) through methods like qualification Disease Prevention Law of the People's Republic of China. Based on external regulatory requirements and policy guidance combined

assessments; potential is evaluated against future development requirements Lower than as Very High Potential (VH) High Potential (H) or with the production and operational status and risk challenges of each base and business division we formulate and continuously revise

Steady (S) based on general cadre standards combined with interviews and research providing a basis for talent echelon construction and internal occupational health and safety policies and management systems clarifying assessment and incentive mechanisms to strengthen

differentiated training. accountability and enhance safety management effectiveness.

131 132Satellite Chemical 2025 Environmental Social and Governance Report

Safety Management System Work-Related Injury Management Process

Strengthening pre-incident prevention to reduce the risk of work-related injuries

Satellite Chemical's headquarters and its subsidiaries have all established a Work Safety Committee creating a safety management structure led

by the primary responsible person with departmental collaboration and dedicated professional support. The Company's Chairman serves as the

Director of the Work Safety Committee at headquarters while at subsidiaries the principal person in charge serves as the Director of the Work Safety

Provide employees with necessary personal protective equipment based on job-specific risks and

Committee. A Deputy Director position has also been established and an office under the committee is responsible for the daily coordination and

conduct regular inspections and training to ensure standardized wearing and correct use.promotion of the committee's work. Department heads serve as members covering key areas related to work safety. Additionally full-time safety

management personnel are assigned to handle specific safety tasks and registered safety engineers with professional safety engineering knowledge Continuously improve the working environment through measures such as optimizing process flows

and skills provide expert support for safety management. improving lighting conditions and setting up safety warning signs while standardizing employee

safety behavior and operational requirements through safety education and daily reminders.The Work Safety Committee is responsible for formulating and organizing the implementation of work safety rules and regulations in accordance

with relevant laws and policies planning safety technology measures and approving the annual work safety plan. It also coordinates the safety work

of various departments to ensure all safety requirements are fully implemented. The committee meets monthly to analyze and assess work safety

dynamics identify weaknesses in safety management propose improvement measures and urge responsible departments to implement corrective Standardizing incident response to ensure employees receive timely medical treatment

actions promptly forming a closed-loop management system. The Company's ISO 45001 Occupational Health and Safety Management System

has achieved 100% coverage at all operating sites and undergoes annual internal and external audits to continuously verify the conformity and

Prioritize employee health and safety by promptly arranging for injured employees to be sent for

effectiveness of the management system's operation.medical treatment ensuring they receive necessary medical support.Strictly handle work-related injury declarations in accordance with relevant national laws and

Digitalization Empowers HSE Management regulations and implement statutory benefits to effectively protect the legitimate rights and interests

of employees.Against the backdrop of accelerated application of artificial

Ensuring follow-up management to drive continuous improvement

intelligence technology Satellite Chemical independently

developed and launched a "Five-in-One" intelligent safety

management and control platform. Focusing on "AI + Safety" the

Strengthen the management of the medical treatment period for work-related injuries arranging for

platform integrates key aspects such as risk identification on-

appropriate personnel to follow up and provide care ensuring employees receive necessary support

site control process management and emergency response

AI+Safe Loading and Unloading AI+Personnel Attire AI+Personnel Behavior during their recovery.into a unified digital management system. This has improved the of Hazardous Chemicals Management Management

work safety response speed to the second level increased risk Organize investigations and cause analyses of work-related accidents systematically review the

identification accuracy to over 85% and reduced the incidence causes identify areas for management improvement and refine relevant management measures

of accidents and hazards by up to more than 80%. The platform based on case reviews and lessons learned.has also launched a digital management module for occupational AI+Area Risk Management AI+Smoke Risk Management AI+Hot Work Risk Management

health sampling which dynamically manages occupational health

(declarations testing physical examinations) occupational Application of "AI + Safety" in Various Fields

hygiene management files training for responsible persons Case Study Automation Upgrade Safeguards Employees' Occupational Health and Safety

personal protective equipment configuration and on-site warning

sign settings. This enables more efficient and timely detection of Satellite Technology carried out a targeted initiative to address the fall-from-height risks and

potential health risks and the implementation of corresponding efficiency bottlenecks associated with traditional tarpaulin covering operations in the finished

preventive measures. goods warehouse. The OSBL Management Department together with the ES Management

Department independently designed and installed an automated tarpaulin covering device

The Company sets annual work safety goals covering key indicators such as zero major accidents compliance rates for work safety transforming the previous operating mode that required drivers to work at a height of four meters

standardization system construction and compliance rates for process alarm handling and special equipment management. In 2025 the into a ground-level operation and eliminating safety hazards at the source. Following the upgrade

Company successfully achieved all its work safety goals resulting in zero major or more severe safety accidents. the time required for each tarpaulin covering operation was reduced to approximately 30 minutes

efficiency increased by more than 50% occupancy time in the shipping area was significantly

reduced and overall shipping efficiency improved by approximately 20%. While effectively Automated Tarpaulin Covering Device

reducing operational risks the upgrade also made the operating process more efficient and

Occupational Health Management orderly further strengthening the protection of employees' occupational health and safety.Work-Related Injuries Management

Occupational Disease Prevention

To standardize the management process for work-related accidents and reduce their occurrence Satellite Chemical has established a work-

related injury management mechanism that covers pre-incident prevention in-incident response and post-incident management. Through Satellite Chemical places a high value on employee occupational health management implementing internal occupational health management

improving systems strengthening protection and standardizing procedures we effectively safeguard the life health and legitimate rights of systems and carrying out various measures for occupational disease prevention and monitoring to safeguard employees' occupational health

our employees. rights.

133 134Satellite Chemical 2025 Environmental Social and Governance Report

Occupational Health Management Measures For key supervised hazardous chemical processes key supervised hazardous chemicals and major hazard source areas the Company on

the basis of daily inspections commissions professional design units to conduct HAZOP (Hazard and Operability) analysis to systematically

identify potential risks in process systems. Concurrently it reviews existing HAZOP analysis reports to ensure that the recommended measures

are effectively implemented and remain applicable.● Source prevention and technology application: In the process of production and technological transformation we Handling and Management of Safety Incidents

prioritize the adoption of new technologies and processes that are beneficial to occupational disease prevention

and worker health protection. We promote automation mechanization and enclosure in production processes to

To mitigate the impact of accidents on personnel and production operations Satellite Chemical has established and continuously improves

reduce occupational health risks at the source.its safety incident emergency management system. It formulates and dynamically updates incident emergency plans clarifying requirements

● Labor and on-site protection: We provide employees with personal protective equipment that meets job for accident information reporting on-site response and emergency response to ensure that the emergency mechanism can be activated

requirements and ensure its standardized wearing and use. Concurrently we implement engineering control promptly after an accident occurs. At the same time the Company has established collaborative mechanisms with surrounding medical

measures based on actual site conditions adopting corresponding protection and control methods for work institutions to ensure that injured employees receive timely and professional medical treatment. During the reporting period the Company

environments with hazards such as high temperatures dust and noise. further established an emergency response checklist detailing the division of labor and responsibilities for each emergency team member to

enhance the organization and coordination of emergency response.● Occupational hazard monitoring: We organize annual testing for occupational disease hazard factors to

continuously monitor the situation in the workplace. For key risk factors like SAP inhalable dust we conduct

regular sample testing and entrust third-party professional institutions for analysis. Emergency Response Process

● Occupational health examinations: We organize annual occupational health examinations for all employees to

continuously monitor their health status and effectively manage their health. After an incident occurs on-site personnel promptly report the incident information to the Company's General Manager and HSE Management

Department according to the prescribed procedures. Relevant departments immediately take emergency measures organize rescue efforts

● Occupational health assessment: We conduct a comprehensive assessment of the current occupational health and prevent the incident from escalating. The Company implements graded reporting and handling based on the severity of the incident.situation once every three years to systematically evaluate the implementation of the occupational health Except for minor incidents that can be reported within 24 hours all other levels of incidents must be reported immediately to the Company's

management system and control measures. President or the Production Safety and Environmental Protection Center. Upon receiving the report relevant management personnel promptly

● IT-based management construction: We have launched a digital management platform for occupational health rush to the scene to conduct command and coordination ensuring the incident is effectively controlled.sampling to conduct unified and dynamic management of occupational health declarations testing physical

examinations training for responsible persons the "Three Simultaneities" for construction projects personal

protective equipment configuration on-site warning sign settings and occupational health management files. Emergency Safety Drills

● Publicity training and capacity building: We emphasize occupational health training and conduct publicity

through company-wide training sessions Work Safety Month activities and other events. Using diverse Satellite Chemical organizes various types of emergency drills annually covering all employees or relevant production departments based on

educational formats we aim to enhance employees' awareness of and participation in occupational health. the drill's theme. The content of the drills includes typical scenarios such as explosions falls from height material leaks burns and poisoning

mechanical injuries and natural disasters. All drills are conducted according to established plans and procedures simulating the entire process

of an emergency event and its response. The Company also periodically organizes "double-blind drills" to further test the applicability of

emergency plans and the effectiveness of its emergency response capabilities.In 2025 all occupational health management measures were carried out in an orderly manner as planned: the Company conducted an

assessment of its current occupational health status and an annual test for occupational disease hazard factors with all test results meeting

relevant national standards. All relevant employees completed the required occupational health training and occupational health examinations. Case Study Emergency Drill for the "10·19" Safety Awareness Day

There were no cases of occupational disease and the annual occupational health management goals were achieved.To strengthen emergency response capabilities for major risks the Company organized

an integrated drill for the "10·19" Safety Awareness Day with the Lianyungang

base serving as the main venue and for the first time coordinating the professional

Safety Hazard Prevention firefighting forces of the Pinghu Jiaxing and Lianyungang bases as well as the

business divisions. The drill simulated a complex emergency scenario in which

a material leak in the tank farm of a major hazard installation caused personnel

Safety Inspections suffocation and a fire comprehensively testing response procedures including hazard Comprehensive Fire Emergency Drill at the detection information reporting emergency activation personnel evacuation and Lianyungang Base

joint rescue. Firefighting forces from each base were mixed into coordinated teams for

Satellite Chemical strengthens its safety risk prevention and management systematically conducting risk identification in key areas such as joint operations while the command system operated efficiently fully demonstrating

production units loading/unloading zones and storage areas to identify potential safety risks and formulates graded and classified control the professionalism and coordination capabilities of the emergency response teams.measures based on risk levels. The Company also formulates and implements daily safety inspection plans which include weekly inspections At the same time the Company also organized professional teams from each base to

led by management regular professional inspections plant-level inspections workshop-level inspections and team-level inspections. It also carry out experience-sharing sessions exchanging practices in safety management

organizes special inspections as needed based on production realities and changing risks forming a normalized mechanism for identifying and unit operation. Through the combination of "exchange + drill" the Company

hidden dangers. During the reporting period the work of identifying hidden dangers proceeded in an orderly manner corrective measures further enhanced its overall safety management capabilities. Fire Drill Site

were implemented on schedule and the on-time closure rate for hazard rectification reached 100%.

135 136Satellite Chemical 2025 Environmental Social and Governance Report

Work Safety Training

Satellite Chemical formulates and implements a work safety training plan building a multi-layered and categorized safety training system

that covers all employees. Through regular training it enhances employees' safety awareness and job performance capabilities. Concurrently Chemicals Management

the Company organizes specialized safety training for high-risk positions to strengthen risk prevention and control capabilities in key roles.Three-level safety education is provided to all new employees upon entry with no less than 72 hours of instruction to ensure that they fully

understand the Company's safety rules regulations and operational requirements for their positions before assuming their duties.Chemicals management is a key aspect of fulfilling corporate safety and environmental responsibilities. Satellite Chemical comprehensively

promotes the safety risk assessment and management of chemicals strictly implements controls on restricted substances and advocates

Satellite Chemical's Three-Tier Safety Training System

for closed-loop management throughout the chemical lifecycle. Actively responding to international trends in chemical phase-out and

substitution the Company prioritizes the selection of green and safe alternative materials leading the industry toward safer and more

Plant-level training Workshop-level training Team-level training environmentally friendly chemical solutions.Organized and implemented Organized monthly by each Organized by each team based on its

uniformly according to the annual workshop and covering all workshop annual training plan and weak points

training plan this training focuses on employees the training content in its own job safety management.national and local work safety laws is based on the annual workshop These trainings are conducted no

and regulations the Company's safety training plan and focuses on less than twice a month to ensure

management systems occupational workshop-specific safety risk points every team member is covered.health and labor protection seasonal safe operation requirements and Governance

safety precautions and hazardous relevant content from the Company's

chemical management. safety management manual.Satellite Chemical has established a chemicals management system led and coordinated by the headquarters with specific implementation

carried out by each base and business division. The headquarters' Production Safety and Environmental Protection Center formulates internal

policies and supervises their execution through internal audits and compliance reviews. Each base and business division implements full-

Key Performance process control and emergency management for the use storage transportation and disposal of chemicals in accordance with unified

requirements ensuring operational safety. For key chemicals such as precursor chemicals and hazardous explosives precursors special

management is implemented with strict enforcement of personnel qualification requirements to ensure the entire management process is

During the reporting period compliant and controllable.compliance rate of all-employee safety training hours was100%

Strategy

At the same time the Company organizes emergency response capability assessments and skill competitions including projects such as

wearing self-contained breathing apparatus and light chemical protective suits extinguishing oil drum fires and performing CPR. This

approach of promoting learning through competition enhances employees' emergency response skills. Satellite Chemical has clarified the headquarters' policy of "strategic leadership and overall control" requiring each base and business division

to "execute on the front line and ensure safety". It has established a supervision inspection and information reporting mechanism to conduct

regular checks and track issues related to chemicals management forming a closed loop for rectification. The Company also conducts

comprehensive evaluations of each unit's chemicals management performance in areas such as compliance management operational safety

Contractor HSE Management and management effectiveness. The assessment results serve as a key basis for incentives constraints and continuous improvement driving

the ongoing enhancement of the Company's chemicals management standards.The Company has formulated and implemented the Contractor HSE Management Rules and the Supplier/Contractor Code of Conduct. These

documents specify standardized management requirements for the entire process including contractor admission selection employment

pre-commencement preparations on-site work management and performance assessment effectively reducing risks to personnel

equipment and the environment.Impact and Risk Management

We strictly regulate contractor HSE management requiring them to possess legal qualifications and ensuring that their personnel complete

safety training pass health examinations and hold valid certifications before starting work. A Work Safety Management Agreement must be

signed before operations begin and contractors are subject to the Company's supervision throughout the entire process strictly adhering

to work permit requirements operating procedures and the use of personal protective equipment. We dynamically manage contractor Satellite Chemical formulates and executes an annual plan for chemical safety risk assessment each year. It conducts comprehensive surveys

HSE performance through methods such as regular communication and coordination cross-inspections and quantitative assessments. and hazard identification assessments for all types of chemicals involved in its production and operation processes including raw and

The assessment results serve as an important basis for the annual evaluation and cooperative management of contractors. Outstanding auxiliary materials additives laboratory analysis reagents and products. Based on the physicochemical properties hazard characteristics

contractors are incentivized while those who violate management requirements are penalized in accordance with laws and regulations. Severe and regulatory attributes of the chemicals it establishes a chemical registration ledger and commissions third-party institutions to conduct

violations may lead to inclusion in the restricted or terminated list. chemical safety risk assessments providing a basis for classified management and risk control of chemicals.

137 138Satellite Chemical 2025 Environmental Social and Governance Report

Restricted Substances Management Chemicals Lifecycle Management

The Company tracks domestic and international regulatory developments We strictly adhere to the requirements of relevant laws and regulations such as the Regulations on the Control of Dangerous Chemicals

through monthly regulatory identification and bi-weekly policy briefings. to implement full life-cycle management over the production storage use transportation and disposal of hazardous chemicals. This

It strictly adheres to domestic regulations including the Work Safety Law standardizes our production and operational practices ensuring that the entire management process for hazardous chemicals related

of the People's Republic of China Regulations on the Safe Management of products and waste management complies with regulatory requirements. Concurrently the Company continuously explores viable paths for

Hazardous Chemicals Regulations on the Management of Precursor Chemicals reducing and substituting hazardous chemicals progressively mitigating potential risks to employee occupational health downstream usage

and Administrative Measures for the Public Security of Hazardous Explosives safety and the environment.Precursors as well as international standards and customer requirements such

as the REACH regulation POPs control regulations CLP regulation California

Proposition 65 the Rotterdam Convention (PIC) the US EPA's list of hazardous

substances the EU's SVHC list of substances of very high concern and the ZDHC

Manufacturing Restricted Substances List (MRSL) v3.1. Based on these the We conduct safety assessments for all chemicals involved focusing on their physicochemical

Company systematically identifies and assesses risks for all chemicals involved properties hazard characteristics and health and environmental impacts. By integrating green Research and

in its materials and the entire production process to ensure full compliance and chemistry principles we avoid the use of prohibited substances from the design source and Development Stage

continuously improve its safety management standards. concurrently implement safety control requirements based on the potential routes and degrees of

exposure during experimentation.All chemical categories production and import quantities and other relevant

information have been registered in systems such as the Comprehensive Service We procure chemicals from legally qualified suppliers and complete chemical registration and safety

System for Hazardous Chemicals Registration the Management Service Platform

Procurement Stage information verification prior to purchase to ensure legal sourcing complete information and the

for Precursor Chemicals and Satellite Chemical's internal chemical registration availability of all relevant Safety Data Sheets (SDS) and safety labels.forms. Concurrently the product names corresponding regulatory requirements

and uses for all chemicals and substances of concern have been publicly

disclosed to ensure full coverage transparency and management standardization Based on the differences in chemical types properties and quantities we implement categorized

by not using any banned or restricted substances thereby safeguarding the management for storage areas equipping them with necessary safety facilities for ventilation

Company's ability to control chemical safety risks. Storage Stage fire prevention explosion protection and leak prevention. We strengthen the control over key

and special chemicals through measures such as a two-person double-lock system and regular

Based on the List of Restricted and Banned Chemical Substances regular surveys inspections.are conducted on the usage production and storage of all identified substances

to ensure that the entire lifecycle of chemicals—including procurement

transportation storage use and disposal—is strictly managed. In addition the We promote automated and enclosed operations enhance the monitoring of key parameters and

Production Stage

Company employs a transparent mechanism to provide end-users and other adopt targeted technical measures for high-risk chemicals prone to polymerization or excessive

stakeholders with information on all chemicals involved in its products through temperatures to reduce operational risks.Safety Data Sheets and SDS technical specifications. This information includes the

hazards of the chemicals and precautions for safe handling ensuring compliance We implement standardized management for chemical loading and unloading operations specifying

with external regulatory requirements. Loading and requirements for vehicles personnel and operating conditions. Through an information system we

Unloading Stage inspect and record the pre-loading in-loading and post-loading stages to ensure the entire process

is controlled.We strictly enforce operating procedures and labor protection requirements and through

Usage Stage continuous training we enhance employees' awareness and operational capabilities regarding

chemical hazard characteristics and emergency response measures.Key Performance

We provide customers with complete SDS and safety labels transmitting all product and chemical

Sales Stage component information risk warnings and safe usage instructions via paper or digital formats to

support safe and compliant use by our customers.During the reporting period

no banned substances were used in any of the Company's products including both existing and

In accordance with relevant regulatory requirements we implement classified management for

newly developed products.Disposal Stage waste entrusting qualified units for its disposal. We maintain proper ledger records and traceability

to prevent any adverse impact on the environment.

139 140Satellite Chemical 2025 Environmental Social and Governance Report

Chemicals Phase-out and Replacement Metrics and Targets

Satellite Chemical strengthens chemical control from the source systematically managing the phase-out and replacement of chemicals with Satellite Chemical regularly assesses the chemical management performance and target achievement of each base and business division

a forward-looking perspective. In accordance with national and local regulations such as the Catalogue of Obsolete Hazardous Chemical linking the assessment results to employee performance evaluations rewards and penalties to incentivize active participation in chemical

Safety Production Processes Technologies and Equipment (First Batch) and combined with internal hazard assessments we have established management.and continuously update the Chemicals Phase-out List. Furthermore the Company is actively exploring the chemical replacement process

considering alternatives with safer chemicals and planning for the future elimination of all chemicals of concern. We are actively exploring the

Chemical Positive List In 2025 the Company continued to strengthen its chemical compliance management by establishing and timely updating the

List of Restricted

use of safe chemicals biological agents or green raw materials and have compiled a based on the U.S. Environmental

and Prohibited Chemical Substances

Safer Chemical Ingredients List which already clearly specifies 125 restricted and prohibited substances. At the same time we are Protection Agency's to promote its application in our business processes.introducing digital risk control methods regularly conducting inspections training and emergency drills steadily advancing research into the

reduction and substitution of hazardous chemicals and continuously enhancing our level of chemical risk management and control.Key Performance

Goals 2025 Progress

During the reporting period

100% participation of management and Organized 8 safety training sessions related to hazardous chemicals with a

the Company continuously reduced the environmental and health risks of its chemicals and products through process operational personnel related to hazardous 100% participation rate among employees in relevant positions.optimization and technological innovation driving the industrial chain's upgrade towards a green and safe direction: chemicals in safety training.Phasing out the use of NPEO/NPEs (alkylphenol polyoxyethylene ethers) and replacing them with fatty alcohol-based Regular safety inspections of hazardous

surfactants. chemical storage areas (daily checks by

workshop managers weekly checks by Conducted over 20 safety inspections of major hazardous chemical hazard

Implementing formaldehyde-free improvements in products by replacing formaldehyde-containing raw materials with the hazardous chemicals management sources.green and environmentally friendly alternatives thereby achieving zero formaldehyde in the product. department).Independently developing a new production process to replace the precursor and carcinogenic substance toluene with

green chemicals reducing annual toluene consumption by 474 tons. As the boiling point of the green chemicals is much 9 major product categories completed ZDHC certification ensuring the

higher than that of toluene this solves the problem of toluene's high volatility and significantly reduces environmental environmental and health safety of the products.Advancing product environmental

and occupational health and safety risks caused by material leakage.and safety certifications. 7 products passed testing and certification for hazardous factors such as

VOCs and heavy metals by external organizations like SGS.

141 142Satellite Chemical 2025 Environmental Social and Governance Report

Fulfilling Corporate Social Responsibility

Satellite Chemical carries out diverse public welfare activities focusing on vulnerable social groups and the needs of grassroots communities.Through volunteer services donations of funds and goods co-creation of public welfare projects and building the "Mother Yang Charity

Initiative" brand we actively support rural revitalization and the development of surrounding communities. We promote the regular and

precise implementation of our philanthropic practices to continuously create warm value for society.Rural Revitalization Educational Support

Satellite Chemical actively responds to the call of the rural revitalization strategy continuously Satellite Chemical continuously focuses on educational development and the healthy growth of minors supporting their positive development

exploring diverse and sustainable assistance models to make support efforts more precise and through student financial aid after-school care programs mental health support and care for children with special needs. The Company

long-lasting. Through the continuous operation of the Company's internal Common Prosperity continues to implement "The Way to Fish" Education Program building a "1+4" system guaranteed by "aid for students in need donations

Workshops and Common Prosperity Workspaces in 2025 we provided 978 stable jobs for for school facilities incentives for outstanding students and rewards for key teachers" to promote shared prosperity in western China's

disadvantaged groups and the local labor force in areas such as Yunnan Guizhou Sichuan education. In 2025 we donated school uniforms to two schools in Ruoergai Aba Prefecture Sichuan benefiting over a thousand teachers and

Gansu and Ningxia. We also provided complementary skills training and career development students. Concurrently we provided over RMB 450000 in scholarships to more than one hundred students from economically disadvantaged

support to enhance their employability and overall qualifications and have currently employed families in over ten provinces including Xinjiang Shandong and Zhejiang continuously delivering educational care and growth support.over 1000 people.Satellite USA also actively participated in the "Back-to-School Assistance" program initiated by local charitable organizations. In July 2025 the

The Company actively assists farmers in selling surplus agricultural products. In August Company raised USD 933 through voluntary employee donations matched by the Company which was used to purchase school supplies for

2025 after learning that farmers in Daqiao Town were facing sales difficulties the Company underprivileged local students for the new semester thereby supporting the healthy growth and educational development of minors through

launched a farmer support initiative by setting up a "charity grape sales booth" in the cafeteria concrete action.to provide a convenient sales channel for their grapes. To bring together broader support

the Company actively served as a bridge mobilizing caring businesses and individuals from The Company actively participates in community education services by running the "Mother Yang's 4:30 PM Classroom" in the Tianming

across the community to participate in the purchase of "Charity Grapes". At the same time we Community. This program provides after-school care and companionship for students during the gap between the end of the school day and

carried out heat-relief visits at locations such as the Jiagong Station delivering fresh grapes when their parents finish work. Through homework assistance interest-based activities and safety education we alleviate family caregiving

to new-form workers who remained on duty during the hot weather. Through cafeteria charity pressures and ensure the after-school safety of minors. Additionally we have established the "Caring for the Next Generation Workshop" to

sales and community purchases nearly 50000 jin of grapes were sold generating more than Charity purchase event for "Common focus on children's growth and development through fun activities and educational guidance. We have also collaborated with units such as

RMB 150000 in additional income. The Company also actively participates in aid projects Prosperity Eggs" the Nanhu District Working Committee for the Care of the Next Generation to launch the "Blue-Green Mentorship Joint Education Initiative"

initiated by village committees. For families in Jinzhang Village facing difficulties due to illness promoting one-on-one pairings between outstanding retired teachers and young teachers. This builds a collaborative "Working Committee +

disability or other factors that impede travel and lead to unsold produce we formed a special Enterprise + School" co-education mechanism forming a multi-party network of care and educational support for minors."Farmer Assistance Team" to purchase eggs directly from their homes and organized a charity

purchase event in the employee cafeteria helping these families broaden their sales channels

and secure a stable income.Volunteer Activities

Satellite Chemical has always upheld the volunteer spirit of "dedication friendship

mutual assistance and progress" actively encouraging employees to engage in volunteer

services give back to society through practical actions and spread positive corporate

energy. To better organize employee volunteers the Company has established three

specialized volunteer service teams: the Satellite Chemical Party Member Volunteer "Innocent hearts explore science warmth accompanies

School supplies purchased for underprivileged students

Service Team the Satellite Chemical Charity Haircut Volunteer Service Team and the growth" Children's Day Event

Satellite Chemical Small Appliance Repair Volunteer Service Team. Volunteers go into Charity haircut activity

communities nursing homes and other locations to provide free haircut services for the

elderly disabled and other groups as well as free small appliance repair for community In terms of supporting the mental health of minors the Company donated RMB 70000 to the Nanhu District Mental Health Education and

residents effectively addressing the practical needs of the public. At the same time Counselling Center for Minors to support the development of regional mental health education resources and enhance service capabilities.we have conducted multiple volunteer visits and care activities for groups such as The Company also donated RMB 200000 to the Jiaxing Charity Federation to jointly establish the "Satellite Chemical Mother Yang Love

nursing homes fire departments and retired military personnel continuously expanding Farm · Xinghe Fuyuan" which offers agricultural practice and educational activities such as planting harvesting and psychological healing

the reach of our volunteer services. During the reporting period employees actively for children from the municipal children's welfare institution and other children in need thereby integrating labor education with nature

participated in volunteer activities with a total service time exceeding 1800 hours. Visiting a nursing home experiences to promote their physical and mental well-being.

143 144Satellite Chemical 2025 Environmental Social and Governance Report

Medical Assistance

Satellite Chemical continuously focuses on public health needs actively carrying out medical assistance and emergency rescue support to

help enhance the level of public health security in the community.Case Study First Aid Capability Building and Health Science Popularization

In May 2025 the Satellite Charitable Foundation in conjunction with

the Mother Yang Charity Initiative and organizations such as the Nanhu

District Red Cross Society co-hosted the "Caring Escort Life Without

Borders" Red Cross Day themed event. The event equipped 21 community

"Love Stations" with standardized first aid kits and medical supplies

comprehensively upgrading the pharmaceutical provisions of the "Mother

Yang Love Stations" to offer more timely and convenient health security for

residents and new-format industry workers. Simultaneously professional

trainers were invited to conduct first aid skills training for community staff

and residents focusing on practical demonstrations and drills for key

procedures such as cardiopulmonary resuscitation (CPR) wound dressing The "Caring Escort Life Without Borders" Red

and airway obstruction management thereby enhancing the public's Cross Day themed event

Opening ceremony of the "Satellite Chemical Mother Yang Love Farm · Xinghe Fuyuan" emergency response capabilities. Educational materials like the Family First

Aid Manual and Illustrated Guide to Emergency Care were also distributed

to promote the popularization of first aid knowledge.Additionally the Company has long been dedicated to the development of students from special groups establishing "Satellite Classes" in

collaboration with schools to provide more targeted educational support for autistic children. The Company also addresses the needs of their

families by inviting professional teachers to conduct parent guidance sessions and regularly organizing volunteer activities facilitating the

integration and growth of children with special needs through continuous companionship and diverse support.Hardship Assistance

Satellite Chemical extends its care from within the Company to the broader

society consistently focusing on the needs of vulnerable groups and sudden

emergencies. The Company provides comfort and assistance to groups such as

persons with disabilities elderly individuals facing special hardships families

in difficulty and households impoverished due to illness emphasizing mental

and emotional support in addition to material aid. The Company continuously

expands the identification and coverage of its support for disadvantaged

groups reaching deeper into grassroots communities and extending its

outreach. During the Lantern Festival activities were conducted including

visiting 24 families who have lost their only child and delivering warmth to 19 Preparing a heart-warming New Year's Eve dinner and cultural

communities offering holiday blessings to special groups and local residents performances for bereaved elderly parents along with distributing

benefiting over 3000 people and bringing warmth and care to more people comfort items such as quilts four-piece bedding sets and pillows.in need. At the same time we actively respond to relief needs arising from

sudden disasters like earthquakes and fires promptly extending a helping

hand to convey corporate warmth and social concern. During the reporting

The Autism Awareness Day themed event period the Company donated RMB 1 million to the earthquake-stricken area

of Dingri County Shigatse City Tibet Autonomous Region and RMB 200000

to the fire-affected area of Wang Fuk Court Tai Po New Territories Hong

Kong to support emergency relief and post-disaster recovery efforts for the

affected populations. Launching a special "Assisting and Supporting the Disabled" initiative.

145 146Satellite Chemical 2025 Environmental Social and Governance Report

Key Performance

In 2025 the Company

held 71 volunteer service activities donated funds and materials valued at RMB 3.75 million

benefited over 120000 people

The Jiaxing Satellite Charitable Foundation was awarded the title of a 3A-rated social organization in Jiaxing City

Conducting activities in over 20 villages and communities such as delivering iced drinks and watermelons in the

summer to relieve the heat and providing soy milk and bread in the winter for warmth bringing convenience and care

to frontline workers in new-format industries outdoor laborers and the general public. Cultural exchange

During its overseas operations Satellite USA actively participated in local chamber of commerce affairs and various cultural exchange

activities continuously promoting interaction and cooperation between the Company and local communities. During the reporting period

the Company was elected as an executive vice chair unit of the China General Chamber of Commerce–Houston fully leveraging its role as a

Co-creating a Civilized Society bridge and link to promote exchanges and cooperation among member companies. At the same time the Company actively assisted with and participated in a variety of community cultural exchange and festival activities covering multiple forms such as arts events and sports-themed

activities. Through these diverse platforms it further promoted cultural exchange between China and other countries and strengthened

interaction and ties between the Company and the local community.Satellite Chemical actively fulfils its social responsibilities by organizing volunteer teams to regularly conduct civility-promoting activities such

as "Yielding at Crosswalks" and "Civilization Guides" advocating for courteous conduct co-creating a better environment and contributing

to the enhancement of urban civility. The Company continuously deepens the brand building of the Mother Yang Charity Initiative. Through Case Study Supporting the "Water Cube Cup" singing competition and helping build a bridge for cultural exchange

the "Mother Yang Love Station" project it provides convenient and inclusive services such as drinking water rest areas emergency assistance

educational support and home visits to families in need for workers in new-format industries like food delivery and courier services as well

as for community residents. The Mother Yang Charity Initiative has become a highly influential charitable brand in the region with its heart- In May 2025 Satellite USA supported the Houston division of the 15th "Cultural China

warming deeds frequently reported by national media outlets such as People's Daily Online and Xuexi Qiangguo. As a "Charity Partner" the · Water Cube Cup" Chinese Song Contest with Company representatives attending

Company donates supplies like refrigerators and blood pressure monitors and regularly replenishes consumables such as mineral water and the event and serving as award presenters. The event provided a platform for overseas

medicines providing strong support for the daily operations of the stations. Currently the number of stations is steadily increasing and their Chinese communities and Chinese-language music enthusiasts to showcase their

coverage is gradually expanding. During the reporting period the project successfully expanded beyond Nanhu District replicating its model talents and engage with one another. Through its support for the competition and

in cities like Pinghu Lianyungang and Xiuzhou District adding 24 new station locations. on-site exchanges Satellite USA took concrete actions to promote cultural exchange

between China and the United States while also helping build a bridge between the

two cultures for local music lovers.Case Study Satellite Chemical Featured at the 2025 People's Enterprise Social Responsibility Forum Sharing CSR Practices and Company representatives presenting Receiving an "Action Case" Award

awards to the competition winners

On November 1 2025 Yang Yuying Party Secretary and Vice

Chairman of Satellite Chemical was invited to attend the Case Study Partnering with the Houston Rockets to host a Lunar New Year theme night

2025 People's Enterprise Social Responsibility Forum themed

"Jointly Building the Road of Responsibility Co-painting

a New Future" where she as one of seven representative

In January 2025 Satellite USA partnered with the Houston Rockets to host the

corporate guests shared the Company's practices and

"Satellite Chemical 2025 Lunar New Year Theme Night" combining a basketball game

reflections on fulfilling its responsibilities. A related case from

with a display of Spring Festival culture to create a festive Lunar New Year atmosphere

Satellite Chemical was honored with the forum's "Action Case"

for the local community. Through festive decorations and activities featuring traditional

award.Chinese cultural elements such as custom Year of the Snake folding fans the event

allowed attendees to experience the excitement of sports while also gaining a deeper

understanding of the cultural significance of the Chinese Lunar New Year.Yang Yuying Party Secretary and Vice Chairman of

Satellite Chemical presenting at the event

On-site photo of the Lunar New Year theme night

147 148Satellite Chemical 2025 Environmental Social and Governance Report

Appendices Awards and Honors Level Awarding Body

Innovation Leadership

Provincial Jiangsu Provincial Department of Industry and

2025 Jiangsu Provincial Advanced Smart Factory

Outlook Recognition Information Technology

Top 10 Typical Digital Society Scenarios Project in Jiangsu Provincial

Jiangsu Provincial Data Bureau

Province in 2024 Recognition

5 New Technologies Listed in the Jiangsu Provincial

When the wind is fair and the time is right one must ride the waves and forge ahead. In 2026 from the new starting point of the 15th Five- Provincial Jiangsu Provincial Department of Industry and Catalogue of New Technologies and New Products for Key

Year Plan Satellite Chemical will remain steadfast in its long-term strategic direction unleashing new kinetic energy through innovation and Recognition Information TechnologyPromotion and Application

cultivating new advantages in green and low-carbon development. Focusing on our core track of high-end new chemical materials we will

continue to advance key technological breakthroughs and optimize our industrial structure. We will actively seize the structural opportunities 2024 Zhejiang Provincial Artificial Intelligence Application Provincial Zhejiang Provincial Department of Economy and

Scenarios Recognition Information Technology

presented by the carbon peaking and carbon neutrality goals accelerating the leap from technological accumulation to industrial application

and large-scale development. We will maintain our forward-looking analysis of industry trends balance stable operations with transformation Leading Enterprise in New Productive Forces at the 14th

and upgrading and leverage our role as an industry chain leader to improve upstream and downstream industrial collaboration mechanisms. Finance Summit and the 2025 New Productive Forces List Organizing Committee of the Finance Summit

We aim to shape a green low-carbon intelligent and efficient industrial ecosystem and promote the implementation of the "output growth Entrepreneurs Conference

with zero land use capacity expansion with increased efficiency" model while deepening regional collaboration and expanding our global

presence with a more open stance. Concurrently we will empower management upgrades and operational efficiency through digitalization ESG Leadership

rally the collective strength of our partners extend the "Satellite warmth" through symbiosis among employees communities and the industry

and steadily advance towards becoming a world-class technology company in new chemical materials. Best Practice Case for Sustainable Development of Listed List China Association for Public Companies

Companies

New Fortune Best ESG Disclosure Award List New Fortune

Ranked 2nd among the Top 100 Zhejiang Listed Companies Zhejiang Corporate Social Responsibility Promotion

Ranking

for ESG Performance with the highest rating of AA Association China Chengxin Green Finance

Honors in 2025

Forbes China Sustainable Development Industrial Enterprise List Forbes China

Top 100 of the 3rd Guoxin Cup - ESG Golden Bull Award Ranking China Securities Journal

Awards and Honors Level Awarding Body

Top 100 Listed Companies for ESG Ranking Securities Times

Governance and Industry Leadership

ESG New Benchmark Enterprise Award List Securities Star

2025 Outstanding Board Practice Cases for Listed Companies List China Association for Public Companies Outstanding ESG Listed Company Award at the 4th Organizing Committee of the 4th International List

International Green and Zero-Carbon Festival Green and Zero-Carbon Festival

16th China Listed Companies Investor Relations Pegasus Ranked 29th among the Top 100 Zhejiang Listed Companies Zhejiang Corporate Social Responsibility Promotion

List Securities Times Ranking

Award for Social Responsibility Performance Association China Chengxin Green Finance

Aona Award for Annual Outstanding Enterprise in Organizing Committee of the 8th Social

List

2024 Golden Bull Most Investment-Worthy Award Ranking China Securities Journal Responsibility Responsibility Conference

Yangtze River Delta International Green

Development Alliance in collaboration with the

19th Top 100 Most Valuable Main Board Listed Companies Ranking Securities Times United Nations Sustainable Development Goals

Zero-Carbon Earth - Anchor Award List

Global Partnership Project Working Committee

Energy Foundation and multiple domestic and

1st in Annual Net Profit among Listed Private Enterprises in international authoritative institutions

Ranking Tonghuashun

Zhejiang Province

Cailian Press Zhiyuan Award - Environmentally Friendly (E)

List Cailian Press

Pioneer Enterprise Award

2025 "Top 50 Global Chemical Brands by Brand Value" Ranking Brand Finance

ESG Model Enterprise: Sci-Tech Innovation Pioneer Award List Guancha.cn

149 150Satellite Chemical 2025 Environmental Social and Governance Report

Index of Reporting Guidelines Topic Standard Disclosure Relevant Chapter

Sustainability Management

2-22 Statement on sustainable development strategy

System

Index of GRI Indicators

2-23 Policy commitments /

Topic Standard Disclosure Relevant Chapter 2-24 Embedding policy commitments /

2-1 Organizational details About STL 2-25 Processes to remediate negative impacts Efficient Corporate Governance

GRI 2: General

2-2 Entities included in the organization's sustainability reporting About This Report 2-26 Mechanisms for seeking advice and raising concerns Stakeholder CommunicationDisclosures

Enhancing Operational

2-3 Reporting period frequency and contact point About This Report 2-27 Compliance with laws and regulations Compliance

2-4 Restatements of information / 2-28 Membership of associations Promoting Industry Development

2-5 External assurance Not applicable 2-29 Approach to stakeholder engagement Stakeholder Communication

Safeguarding Employee Rights

2-6 Activities value chain and other business relationships Stakeholder Communication 2-30 Collective bargaining agreements and Benefits

People-Oriented for a Shared

2-7 Employees 3-1 Process for determining material issues Dual Materiality Issue Assessment

Harmonious Future

People-Oriented for a Shared

2-8 Workers who are not employees GRI 3: Material Topics 3-2 List of material issues Dual Materiality Issue Assessment

Harmonious Future

2-9 Governance structure and composition Efficient Corporate Governance 3-3 Management of material issues Dual Materiality Issue Assessment

2-10 Nomination and selection of the highest governance body Efficient Corporate Governance 201-1 Direct economic value generated and distributed About STL

GRI 2: General 201-2 Financial implications and other risks and opportunities due to

2-11 Chair of the highest governance body Efficient Corporate Governance Addressing Climate Change

Disclosures GRI 201: Economic climate change

2-12 Role of the highest governance body in overseeing the management Performance Safeguarding Employee Rights

Efficient Corporate Governance 201-3 Defined benefit plan obligations and other retirement plans

of impacts and Benefits

2-13 Delegation of responsibility for managing impacts Efficient Corporate Governance 201-4 Financial assistance received from government /

Sustainability Management 202-1 Ratios of standard entry level wage by gender to local minimum Safeguarding Employee Rights

2-14 Role of the highest governance body in sustainability reporting

System GRI 202: Market wage and Benefits

Presence 202-2 Proportion of senior management hired from the local Safeguarding Employee Rights

2-15 Conflicts of interest Stakeholder Communication community and Benefits

Fulfilling Corporate Social

2-16 Communication of critical concerns Stakeholder Communication 203-1 Infrastructure investments and services supported

GRI 203: Indirect Responsibility

Sustainability Management Economic Impacts Fulfilling Corporate Social

2-17 Collective knowledge of the highest governance body 203-2 Significant indirect economic impacts

System Responsibility

GRI 204: Procurement Advancing Responsible

2-18 Performance evaluation of the highest governance body Efficient Corporate Governance 204-1 Proportion of spending on local suppliersPractices Procurement

Safeguarding Employee Rights

2-19 Remuneration policies 205-1 Operations assessed for risks related to corruption Adherence to Business Ethics

and Benefits

Safeguarding Employee Rights 205-2 Communication and training about anti-corruption policies and

2-20 Process for determining remuneration GRI 205: Anti-corruption Adherence to Business Ethics

and Benefits procedures

Safeguarding Employee Rights

2-21 Annual total compensation ratio 205-3 Confirmed incidents of corruption and actions taken Adherence to Business Ethics

and Benefits

151 152Satellite Chemical 2025 Environmental Social and Governance Report

Topic Standard Disclosure Relevant Chapter Topic Standard Disclosure Relevant Chapter

GRI 206: Anti-competitive 206-1 Legal actions for anti-competitive behavior anti-trust and

Adherence to Business Ethics

Behavior monopoly practices 305-1 Direct (Scope 1) greenhouse gas emissions Addressing Climate Change

Strengthening Compliant

207-1 Approach to tax

Operations 305-2 Energy indirect (Scope 2) greenhouse gas emissions Addressing Climate Change

Strengthening Compliant

207-2 Tax governance control and risk management

Operations 305-3 Other indirect (Scope 3) greenhouse gas emissions /

GRI 207: Tax

207-3 Stakeholder engagement and management of concerns related

Stakeholder Communication

to tax GRI 305: Emissions 305-4 Greenhouse gas emissions intensity Addressing Climate Change

207-4 Country-by-country reporting /

305-5 Reduction of greenhouse gas emissions Addressing Climate Change

301-1 Materials used by weight or volume /

305-6 Emissions of ozone-depleting substances (ODS) /

Strengthening Environmental

GRI 301: Materials 301-2 Recycled input materials used

Management 305-7 Nitrogen oxides (NOx) sulfur oxides (SOx) and other significant air Strengthening Environmental

emissions Management

Strengthening Environmental

301-3 Reclaimed products and their packaging materials

Management Strengthening Environmental 306-1 Waste generation and significant waste-related impacts

Management

Focusing on Low-Carbon

302-1 Energy consumption within the organization

Strategies Strengthening Environmental

306-2 Management of significant waste-related impacts

Management

Focusing on Low-Carbon

302-2 Energy consumption outside of the organization

Strategies Strengthening Environmental

GRI 306: Waste 306-3 Waste generated

Management

Focusing on Low-Carbon

GRI 302: Energy 302-3 Energy intensity

Strategies Strengthening Environmental

306-4 Waste diverted from disposal

Focusing on Low-Carbon Management

302-4 Reduction of energy consumption

Strategies Strengthening Environmental

306-5 Waste directed to disposal

Focusing on Low-Carbon Management

302-5 Reduction in energy requirements of products and services

Strategies

Advancing Responsible

GRI 308: Supplier 308-1 New suppliers that were screened using environmental criteriaStrengthening Environmental Procurement

303-1 Interactions with water as a shared resource

Management Environmental

Assessment 308-2 Negative environmental impacts in the supply chain and actions Advancing Responsible

Strengthening Environmental taken Procurement

303-2 Management of water discharge-related impacts

Management

Safeguarding Employee Rights

GRI 303: Water and Strengthening Environmental 401-1 New employee hires and employee turnover

303-3 Water withdrawal and Benefits

Effluents Management

401-2 Benefits provided to full-time employees that are not provided Safeguarding Employee Rights

Strengthening Environmental GRI 401: Employment

303-4 Water discharge to temporary or part-time employees and Benefits

Management

Safeguarding Employee Rights

Strengthening Environmental 401-3 Parental Leave

303-5 Water consumption and Benefits

Management

GRI 402: Labor/ Safeguarding Employee Rights

304-1 Operational sites owned leased managed in or adjacent to 402-1 Minimum notice periods regarding operational changesManagement Relations and Benefits

protected areas and areas of high biodiversity value outside protected Ecological Co-building

areas

403-1 Occupational health and safety management system Robust Safety Practices

304-2 Significant impacts of activities products and services on

Ecological Co-building

biodiversity

GRI 304: Biodiversity 403-2 Hazard identification risk assessment and incident investigation Robust Safety Practices

GRI 403: Occupational

304-3 Habitats protected or restored Ecological Co-building Health and Safety

403-3 Occupational health services Robust Safety Practices

304-4 IUCN Red List species and national conservation list species with

Ecological Co-building

habitats in areas affected by operations 403-4 Worker participation consultation and communication on Robust Safety Practices

occupational health and safety

153 154Satellite Chemical 2025 Environmental Social and Governance Report

Topic Standard Disclosure Relevant Chapter Topic Standard Disclosure Relevant Chapter

403-5 Worker training on occupational health and safety Robust Safety Practices GRI 409: Forced or 409-1 Operations and suppliers at significant risk for incidents of forced or Safeguarding Employee Rights and

Compulsory Labor compulsory labor Benefits

403-6 Promotion of worker health Robust Safety Practices GRI 410: Security 410-1 Security personnel trained in human rights policies or Robust Safety Practices

Practices procedures

403-7 Prevention and mitigation of occupational health and safety impacts GRI 411: Rights of

Robust Safety Practices

directly linked by business relationships 411-1 Incidents of violations involving rights of indigenous peoples /Indigenous Peoples

GRI 403: Occupational Health

and Safety

403-8 Workers covered by an occupational health and safety 413-1 Operations with local community engagement impact Fulfilling Corporate Social

Robust Safety Practices

management system assessments and development programs Responsibility

GRI 413: Local

Communities

413-2 Operations with significant actual and potential negative Fulfilling Corporate Social

403-9 Work-related injuries Robust Safety Practices

impacts on local communities Responsibility

403-10 Work-related ill health Robust Safety Practices 414-1 New suppliers that were screened using social criteria Advancing Responsible Procurement

GRI 414: Supplier Social

Assessment

Growing Together with

404-1 Average hours of training per year per employee 414-2 Negative social impacts in the supply chain and actions taken Advancing Responsible Procurement

Employees

GRI 404: Training and 404-2 Programs for upgrading employee skills and transition Growing Together with

GRI 415: Public Policy 415-1 Political contributions /

Education assistance programs Employees

404-3 Percentage of employees receiving regular performance and Growing Together with 416-1 Assessment of the health and safety impacts of product and Product Quality and Safety High-

career development reviews Employees service categories Quality Customer Service

GRI 416: Customer

Health and Safety

Safeguarding Employee Rights 416-2 Incidents of non-compliance concerning the health and safety Product Quality and Safety High-

405-1 Diversity of governance bodies and employees

and Benefits impacts of products and services Quality Customer Service

GRI 405: Diversity and Equal

Opportunity

Safeguarding Employee Rights 417-1 Requirements for product and service information and Product Quality and Safety High-

405-2 Ratio of basic salary and remuneration of women to men

and Benefits labeling Quality Customer Service

GRI 406: Non- Safeguarding Employee Rights GRI 417: Marketing and 417-2 Incidents of non-compliance concerning product and service Product Quality and Safety High-

406-1 Incidents of discrimination and corrective actions taken

discrimination and Benefits Labeling information and labeling Quality Customer Service

GRI 407: Freedom of

407-1 Operations and suppliers where the right to freedom of association and 417-3 Incidents of non-compliance concerning marketing

Association and Collective / High-Quality Customer Service

collective bargaining may be at risk communications

Bargaining

408-1 Operations and suppliers at significant risk for incidents of child Safeguarding Employee Rights GRI 418: Customer 418-1 Substantiated complaints concerning breaches of customer Information Security and Privacy

GRI 408: Child Labor

labor and Benefits Privacy privacy and losses of customer data Protection

155 156Satellite Chemical 2025 Environmental Social and Governance Report

SZSE Indicator Index ISSB S2 Recommended Disclosure Index

Corresponding Chapter in This Report

Disclosure Requirement (If a relevant issue is not disclosed a full explanation shall be provided Recommended Disclosure Content Relevant Chapter

in accordance with Article 7 of the Guidelines)

Addressing Climate Change Addressing Climate Change Disclose the governance body (which may include the Board of Directors a committee or an Sustainability

equivalent body responsible for governance) or individual responsible for overseeing climate-

Management System

related risks and opportunities.Pollutant Emissions Strengthening Environmental Management Governance

Disclose management's role in the governance processes controls and procedures used to Sustainability

Waste Management Strengthening Environmental Management monitor manage and oversee climate-related risks and opportunities. Management System

Ecosystem and Biodiversity Protection Ecological Co-building Disclose the climate-related risks and opportunities that could reasonably be expected to affect Addressing Climate

the entity's prospects. Change

Environmental Compliance Management Strengthening Environmental Management

Disclose the current and anticipated effects of climate-related risks and opportunities on Addressing Climate

Energy Use Focusing on Low-Carbon Strategies the entity's business model and value chain. Change

Water Resource Use Strengthening Environmental Management

Disclose the effects of climate-related risks and opportunities on the entity's strategy and Addressing Climate

decision-making including information about its climate-related transition plan. Change

Circular Economy Strengthening Environmental Management Strategy

Disclose the effects of climate-related risks and opportunities on the entity's financial

Rural Revitalization Fulfilling Corporate Social Responsibility position financial performance and cash flows for the reporting period and the anticipated

Addressing Climate

effects on its financial position financial performance and cash flows over the short

Change

medium and long term considering how climate-related risks and opportunities are

Social Contributions Fulfilling Corporate Social Responsibility

incorporated into its financial planning.Innovation-Driven R&D and Technological Innovation Considering the climate-related risks and opportunities the entity has identified disclose

Addressing Climate

the resilience of the entity's strategy and its business model to climate-related changes

Change

Technological Ethics R&D and Technological Innovation developments and uncertainties.Supply Chain Security Advancing Responsible Procurement Disclose the entity's processes and related policies for identifying assessing prioritizing Addressing Climate

and monitoring climate-related risks. Change

Equal Treatment of Small and Medium-sized Enterprises Advancing Responsible Procurement

Disclose the entity's processes for identifying assessing prioritizing and monitoring climate-

Addressing Climate

Product and Service Safety and Quality Product Quality and Safety High-Quality Customer Service Risk related opportunities including whether and how the entity uses climate-related scenario Change

Management analysis to inform its identification of climate-related opportunities.Data Security and Customer Privacy Protection Information Security and Privacy Protection

Disclose the extent to which and how the processes for identifying assessing prioritizing

Addressing Climate

and monitoring climate-related risks and opportunities are integrated into and inform the

Employees People-Oriented for a Shared Harmonious Future Changeentity's overall risk management process.Due Diligence Strengthening Compliant Operations

Disclose information relevant to the cross-industry metric categories. /

Stakeholder Communication Stakeholder Communication

Disclose industry-based metrics associated with its particular business models activities or

/

Metrics and other common features that characterize participation in an industry.Anti-Commercial Bribery and Anti-Corruption Adhering to Business Ethics

Targets

Anti-Unfair Competition Adhering to Business Ethics Disclose the targets set by the entity to mitigate or adapt to climate-related risks or take advantage of

Addressing Climate

climate-related opportunities and any targets it is required to meet by law or regulation including the

Change

metrics used by the governance body or management to measure progress towards these targets.Voluntarily Disclosed Topics Dual Materiality Issue Assessment

157 158Satellite Chemical 2025 Environmental Social and Governance Report

Social Performance1

ESG Performance Indicators

Indicator Unit 2025 2024 2023

Governance Performance

Employee Employment

Indicator Unit 2025 2024 2023 Total Number of Employees Persons 4811 5057 4688

Economic Indicators Number of Employees by Gender

Operating Revenue RMB 100 million 460.68 456.48 414.87 Male Persons 4069 4221 3881

Year-on-Year Growth in Operating Revenue % 0.92 10.03 12.00 Female Persons 742 836 807

Total Profit RMB 100 million 60.66 70.18 53.68 Headcount by Age Group

Net Profit Attributable to Shareholders of the

RMB 100 million 53.11 60.72 47.89

Listed Company 30 Years and Under Persons 1932 2190 1825

Total Assets RMB 100 million 695.65 683.05 645.82

30-50 Years (Inclusive) Persons 2557 2531 2482

Net Assets Attributable to the Parent

RMB 100 million 335.54 302.86 254.65

Company Over 50 Years Persons 322 336 381

Corporate Governance

Headcount by Rank

Shareholders' Meetings Held Times 2 2 5

General Employees Persons 4598 4835 4491

Board of Directors Meetings Held Times 6 8 8

Middle Management Persons 173 184 164

Business Ethics Training

Senior Management Persons 40 38 33

Total Training Hours Hours 100 120 /

Total Number of Training Sessions Sessions 162 160 / Number of Employees with Disabilities Persons 27 25 24

Number of Directors Trained Persons 9 9 / Number of Employees from Ethnic Minorities Persons 158 195 113

Percentage of Directors Trained % 100 100 / Employment Contract Signing Rate % 100 100 100

Number of Management Personnel Trained Persons about 1150 about 1200 / Social Insurance Coverage Rate % 100 100 100

Percentage of Management Staff Trained % 100 100 / Employee Training and Development

Total Number of Employees Trained Persons 4811 5057 /

Employee Training Coverage Rate % 100 100 100

Percentage of Employees Trained % 100 100 /

Total Number of Employees Trained Persons 4811 5057 4688

Audit Activities

Number of Employees Trained by Gender

Special Audit Projects Conducted Times 31 33 25

Number of Male Employees Trained Persons 4069 4221 3881

Anti-Corruption Related Audit Projects Items 31 30 /

Number of Female Employees Trained Persons 742 836 807

Number of Business Ethics Related Audits Times 11 12 7

Business Ethics Audit Coverage Rate % 67 67 67

1The Company continues to improve its social data statistical system and in 2025 retrospectively adjusted certain historical data.

159 160Satellite Chemical 2025 Environmental Social and Governance Report

Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023

Number of Employees Trained by Rank Product Responsibility

Number of General Staff Trained Persons 4598 4835 4491

Number of Product Recalls Times 0 0 0

Number of Mid-level Management Trained Persons 173 184 164

Value of Recalled Products RMB 10000 0 0 0

Number of Senior Management Trained Persons 40 38 33

Total Training Attendances Attendances 143432 239014 198618 Product Recovery Percentage % 0 0 0

Total Training Hours Hours 294569 436544 456659

Number of Simulated Product Recall Drills Times 0 0 0

Average Training Hours per Person Hours/Person 61 86 97

Patent Applications Items 269 273 83

Total Investment in Employee Training RMB 10000 238.7 422.1 285.3

Percentage of Employees Receiving Regular

% 100 100 100 Patents Granted Items 136 135 98

Performance and Career Development Reviews

Investment in Supporting Employees’

RMB 10000 7.1 10.7 14.0 Customer Satisfaction % 98 100 100

Educational Advancement

Employee Health and Safety Product Quality and Safety Training

Occupational health check-up rate % 100 100 100 Actual Number of Training Sessions Held Times 70 59 39

Occupational Disease Incidence Rate % 0 0 0

Actual Number of Employees Participations

Person-times 5332 1964 1715

Number of Work-Related Fatalities Persons 0 0 0 in Training

Number of Lost Workdays Due to Work-

Days 0 0 0 Total Actual Hours of Training Participation Hours 118.0 96.5 69.5

Related Injuries

Per million 2

Lost-Time Injury Frequency Rate (LTIFR) 0 0 0 Supply Chain Management

working hours

Coverage Rate of Employee Occupational

% 100 100 100 Total Number of Suppliers Companies 3771 3242 2748

Disease Health Check-Ups

Total Investment in Occupational Health and

RMB 10000 256.63 357.05 213.06

Safety Suppliers in the North China Region Companies 251 208 184

Investment Amount in Work-Related Injury

RMB 10000 322.48 343.74 270.02

Insurance Suppliers in the East China region Companies 3042 2625 2238

Work-Related Injury Insurance Coverage Rate % 100 100 100

Investment Amount in Work Safety Insurance RMB 10000 157.94 139.61 107.64 Suppliers in the South China region Companies 92 73 51

Work Safety Insurance Coverage Rate % 100 100 100 Suppliers in the Central China region Companies 126 96 76

Number of Emergency Drills Times 748 948 816

Suppliers in the Southwest China region Companies 43 35 23

Number of Participants in Emergency Drills Persons 20716 17527 13811

Number of Occupational Health and Safety

Times 574 628 343 Suppliers in the Northwest China region Companies 37 32 24

Training Sessions

Number of Employees Participations in

Person-times 34578 34848 25649 Suppliers in the Northeast China region Companies 103 88 76

Occupational Health and Safety

Total Hours of Occupational Health and

Hours 57338 58700 55622 Suppliers in Hong Kong Macao and Taiwan Companies 13 15 12

Safety Training

161 162Satellite Chemical 2025 Environmental Social and Governance Report

Indicator Unit 2025 2024 2023 Indicator Unit 2025 2024 2023

Supply Chain Management2 Social Welfare

Total Number of Suppliers Outside of China Companies 64 70 64

Total Community Welfare Investment RMB 10000 375.11 4223.58 /

Number of Suppliers with Contracts Containing

Clauses on Environmental Labor and Human Companies 3320 2833 2362 Number of Individuals Assisted Through Person-

120000+10000+/

Rights Requirements Social Welfare Initiatives times

Percentage of Suppliers with Contracts

Containing Clauses on Environmental Labor % 88.04 87.38 85.95 Community Welfare Investment by Area

and Human Rights Requirements

Number of Suppliers Who Have Signed Investment in Health RMB 10000 28.44 202.91 /

Companies 3753 3221 2713

Integrity Agreements

Percentage of Suppliers Who Have Signed Investment in Education RMB 10000 56.09 74.10 /

%99.5299.3598.73

Integrity Agreements

Investment in Industrial Support RMB 10000 10 / /

Number of New Suppliers Companies 623 578 143

Investment in Disaster Relief RMB 10000 120 20.00 /

Number of New Suppliers Screened Using Social

Companies 495 433 89

Standards

Investment in Rural Revitalization RMB 10000 20 35.67 /

Number of New Suppliers Screened Using

Companies 583 516 121

Environmental Standards

Investment in Other Areas (Hardship

Number of Supplier Training Sessions RMB 10000 140.58 3890.90 /

Sessions 1 1 1 Assistance Charitable Donations etc.)

Conducted

Breakdown by Investment Type

Number of Suppliers Participating in Training Companies 2723 2249 236

Percentage of Suppliers Participating in Amount of Cash Donations RMB 10000 329.5 3977.53 /

%72.2169.378.59

Training

Value of In-kind Donations RMB 10000 45.61 246.05 /

Number of Audited Suppliers Companies 232 149 125

Number of Volunteer Service Activities Held Sessions 71 53 /

Percentage of Suppliers Covered by Audit % 6.15 4.60 4.55

Number of Participants Participations in

Number of Suppliers Required to Implement Person-times 5600 660 /

Companies 55 33 32 Volunteer Activities

Corrective Actions

Cumulative Number of Blood Donors Since

Person-times 1614 1495 1304

2012

Cumulative Blood Donation Volume Since

Milliliter 516250 477600 412300

2012

2Due to the migration of the supplier management system this year the statistical methodology changed and the 2023 and 2024 data were adjusted.

163 164Satellite Chemical 2025 Environmental Social and Governance Report

Environmental Performance3

Indicator Unit 2025 2024 2023

Indicator Unit 2025 2024 2023

Indirect energy

Environmental Compliance Management

Purchased General Electricity MWh 6422823.75 5276353.19 5046442.25

Total Investment in Environmental

RMB 10000 29988 130957 170465

Governance Purchased Steam GJ 15928775.96 13559044.66 13299954.16

Time Invested in Environmental Governance Hours 52560 61320 74400

Renewable Energy

Number of Participants Participations in

Person-times 31832 17792 45548

Environmental Protection Training Purchased New Energy Power MWh 12450.00 765023.99 517585.28

Environmental Monitoring Sessions

Times 96 84 116

Conducted Photovoltaic Installed Capacity MW 1.6 1.6 1.6

Pollutant Emission Management Photovoltaic Power Generation MWh 1804.79 1772.91 1887.40

Total Solid Waste Generated 10000 metric tons 20.77 18.62 14.69

Photovoltaic Power for Self-use MWh 1804.79 1772.91 1887.40

Metric tons / 10000

Solid Waste Generation Intensity 141.64 151.21 147.66

metric tons

Metric tons of

Hazardous Waste Generated 10000 metric tons 12.76 12.51 13.92 Renewable Energy Consumption 1751.91 94239.34 63843.19standard coal

Non-hazardous Waste Generated 10000 metric tons 8.01 6.11 0.77

Ten thousand

Green Electricity Certificate Trading Volume 1.55 4 0

Total Waste Recycled and Reused 10000 metric tons 19.77 17.01 14.68 units

Nitrogen Oxides (NO ) Emissions per 10000 Metric tons / 10000 Greenhouse Gas Emissionsx 0.550 0.616 0.554

Metric Tons of Product metric tons

Metric tons of CO2

Sulfur Dioxide (SO?) Emissions per 10000 Metric Metric tons / 10000 Total Greenhouse Gas Emissions (Scope 1 + Scope 2) 6705043 5709616 5853177

0.058 0.067 0.106 equivalent

Tons of Product metric tons

Greenhouse Gas Emissions Intensity (Scope 1 + Metric tons of CO2

Volatile Organic Compounds (VOCs) Metric tons / 10000 0.457 0.464 0.627

0.164 0.252 0.257 Scope 2) equivalent/metric tons

Emissions per 10000 Metric Tons of Product metric tons

Metric tons of CO2

Particulate Matter (PM) Emissions per 10000 Metric tons / 10000 Total Greenhouse Gas Emissions (Scope 1) 3167380 2580541 1432410

0.038 0.043 0.054 equivalent

Metric Tons of Product metric tons

Metric tons of CO2

Total Wastewater Discharge Metric tons 12930530.46 13116771.18 14627048.12 Greenhouse Gas Emissions (Scope 2) Total 3537663 3129075 4420767equivalent

Chemical Oxygen Demand (COD) Emissions Metric tons /10000

1.9072.2452.077

per 10000 Metric Tons of product metric tons Resource Use Management

Ammonia Nitrogen Emissions per 10000 Metric tons /10000 Million metric

0.022 0.026 0.024 Total Water Consumption 960.55 741.60 566.74

Metric Tons of product metric tons tons

Million

Total Organic Carbon (TOC) Emissions per 10000 Metric tons /10000 Water Consumption Intensity 0.65 0.60 0.50

0.675 0.161 0.096 tons/10000 tons

Metric Tons of Product metric tons

Million metric

Energy Use Management Freshwater Consumption 29.08 30.96 33.64tons

Metric tons of

Total Comprehensive Energy Consumption 1808504.88 1678655.06 1574108.91 Million metric

standard coal Total Recycled and Reused Water 923.79 702.79 526.92tons

Metric tons of

Comprehensive Energy Consumption Intensity standard coal / 1233.04 1363.00 1450.76 Percentage of Recycled and Reused Water % 96.17 94.76 92.97

10000 metric tons

Million metric

Direct Energy Water Withdrawal 32.65 33.86 36.74tons

Gasoline Liters 512519.20 598995.39 546684.92 Million metric Municipal Water Withdrawal (Tap Water) 29.08 30.69 33.74

tons

Diesel Liters 235513.38 297574.26 283915.29

Hundred million Water Withdrawal (from Rivers Lakes Natural Million metric

Natural gas 2.29 2.78 2.80 0.86 0.93 0.75

cubic meters Ponds etc.) tons

Ethane Metric tons 103815.79 63151.18 38684.77 Million metric

Other Water Withdrawal Sources 2.71 2.24 2.25

tons

3To improve the accuracy and reliability of environmental data the Company continues to refine its environmental data statistical system and in 2025 retrospectively Ten thousand Reduction in Wastewater Discharge 462.08 281.87 41.49

adjusted certain historical estimates based on measured data. metric tons

165166