About This Report
About Kaizhong
Precision
ESG Management
Governance
Innovation and
Operations
Environment
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
01About This Report
About Kaizhong
Precision
ESG Management
Governance
Innovation and
Operations
Environment
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
02About This Report
About This Report
About Kaizhong Introduction Sources
Precision
This Report is the 2025 Environmental Social and Governance (ESG) Report The information disclosed in this Report is sourced from the Company's internal
published by Shenzhen Kaizhong Precision Technology Co. Ltd. (hereinafter documents 2025 financial report and authentic records from actual operations.referred to as "Kaizhong Precision" the "Company" or "we"). It discloses the
ESG Management The financial data in this Report is presented in RMB. In case of any discrepancy Company's practices and performance in environmental social and corporate with the Company's annual financial report the annual financial report shall prevail.governance responsibility areas to all stakeholders.Governance Preparation Basis How to Obtain This Report
This Report is prepared with reference to the Global Reporting Initiative (GRI) This Report is available in both Simplified Chinese and English. In case of any
Innovation and Standards the Guidance on Social Responsibility Reporting by the China National discrepancy between the two versions the Simplified Chinese version shall
Operations Institute of Standardization the Self-Regulatory Guidance No. 1 for Listed Companies prevail. The electronic version of this Report can be viewed and downloaded
on the Shenzhen Stock Exchange - Normative Operations of Main Board Listed from the Company's official website (http://www.kaizhong.com) or from the
Companies Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Shenzhen Stock Exchange website (http://www.szse.cn) and CNINFO website
Environment Stock Exchange - Preparation of Sustainability Report and Self-Regulatory Guidelines (http://www.cninfo.com.cn).No. 17 for Companies Listed on Shenzhen Stock Exchange - Sustainability Report
(For Trial Implementation) issued by Shenzhen Stock Exchange and is benchmarked
against the United Nations Sustainable Development Goals (SDGs). Contact Information
Society
Reporting Scope If you have any suggestions regarding this Report please contact the
Company through the following channels:
Key Performance
Data Sheet Organization: Shenzhen Kaizhong Precision Technology Co. Ltd. and its Address: No. 1 Guihua 4th Road Longtian Neighborhood
subsidiaries and branches. Pingshan District Shenzhen Guangdong Province China
Reporting period: January 1 2025 to December 31 2025. To enhance comparability Tel:0755-86264859
Indexes and forward-looking relevance certain content may be traced back to previous years or
may reference the latest publicly disclosed information as of the report's publication date. Fax: 0755-85242355
Release cycle: This is an annual report. Email:ESG@kaizhong.com
Reader Feedback
03About Kaizhong Precision
About This Report Company Profile The Company has established multiple sales offices R&D centers and production bases in Shenzhen Guangdong Shanghai Changsha Hong Kong and Taiwan in China as well as in Germany and Japan.By achieving localized R&D and production operations the Company continuously enhances its service
About Kaizhong Shenzhen Kaizhong Precision Technology Co. Ltd. (hereinafter capabilities for core customers.Precision referred to as "Kaizhong Precision" stock code: 002823)
is a national high-tech enterprise focusing on the research
and development design manufacturing and sales of
ESG Management core precision components. The Company is committed to Germany
providing customers with integrated solutions for core precision
components. Deeply cultivating key sectors such as new Changsha
energy and intelligent driving automotive electronics thermal Shanghai HeyuanJapan
Governance management communications and consumer electronics Dongguan HuizhouShenzhen Taiwan
the Company specializes in the custom development of Hong Kong
connectors commutators and other precision components with
Innovation and high technical requirements. Its products are widely applied
Operations in new energy vehicles and intelligent driving aerospace
communications consumer electronics health and medical Sales and R&D Centers Production Bases
care smart home and office and intelligent equipment. Countries Where Major Customers Are Located
Environment Positioning itself in the mid-to-high-end market the Company
deeply serves numerous leading downstream customers
including globally renowned clients such as Daimler Toyota
Bosch Denso ZF Mahle Valeo Mabuchi Continental Corporate Culture
Society BorgWarner and Ebersp?cher，as well as top-tier domesticnew energy vehicle and power battery enterprises.Key Performance The Company continues to advance R&D and innovation
Data Sheet possessing in-house capabilities for the R&D design and
manufacturing of precision stamping and bending dies plastic Kaizhong vision Kaizhong mission Kaizhong values Corporate spirit
injection molds automated precision machining production
Indexes lines and automated inspection equipment with independent To become an Continuously create value for Integrity-based Prudence
intellectual property rights establishing a complete industrial outstanding customers Customer first Agility
chain capable of delivering integrated solutions for high- enterprise with global Provide good returns for investors
competitiveness Realize employee growth and value Goal-oriented Innovation
Reader Feedback end components to global customers. Relying on advanced
manufacturing technologies and superior product quality the To create a better Achieve harmonious coexistence Mutual growth Excellence
Company persists in continuous innovation and has garnered work and life and development with society
extensive recognition from customers. 04Sustainability Performance and Honors
About This Report Economic performance Governance Performance
About Kaizhong Operating revenue:RMB2928.35mn Percentage of female directors: 44.44% Proportion of female senior executives: 20%
Precision
Net profit attributable to shareholders of the listed
company: RMB233.60mn Proportion of independent directors:33.33% Board member attendance rate: 100%
ESG Management
Social Performance Environmental Performance
Governance
Percentage of female employees:34.11%
Total environmental investment per million in Total hazardous waste generated per million in
Average salary per employee: RMB 201.2k revenue:30% revenue:0.12 tonnes per million
Innovation and
Operations Revenue per employee: RMB812.75k Total greenhouse gas emissions (Scope 1 & 2) per Total non-hazardous waste generated per million in
Number of employees in hardship assisted per million million in revenue:31.64Tonnes of CO2 equivalent/
0.0041 revenue:0.84 tonnes per millionRMB 1 million
Environment
Ratio of work safety investment to operating Total energy consumption per million in revenue: Total waste recycled per million in revenue:
revenue:0.15% 4.12tonnes of standard coal equivalent 0.46 tonnes per million
Society Average safety training hours per employee:
2.65 hours Innovation & Operations
Occupational disease incidence rate:0%
Key Performance
Data Sheet
Workdays lost due to work-related injuries per million
in revenue:0.05 Days/RMB 1 million Supplier localization rate: 77.44% Proportion of R&D personnel to total
employees:9.35%
Indexes Number of work-related fatalities per 100 million: 0
Local procurement rate:93.29%
Work-related injury rate (employees):0.19% Number of authorized and valid patents held: 271
Reader Feedback Lost time injury frequency rate (employees):0.95 Proportion of R&D investment to operating revenue
times/million hours (per ten thousand): 2.81% Number of valid patents per million in revenue:0.09
05About This Report
High-Tech Enterprise Guangdong Province Innovative Certificate of Intelligent Manufacturing
Certificate Enterprise Capability Maturity Assessment (Level 3)
About Kaizhong
Precision
Top 20 Listed Companies in
the Greater Bay Area for Green
Governance 2025
ESG Management
National-Level Green China Patent Excellence Enterprise with Law-Abiding and
Governance Factory Award Honest Labor Practices
Innovation and
Operations
Environment Outstanding Supplier in China's New Shenzhen Famous Brand Manufacturing Single Champion Outstanding Supporting Award for
Energy Vehicle Industry Certificate of Honor Product the Motor Industry
Society
Research and Technology Centers Academician and Expert Workstations Innovation Practice Bases
Machinery Industry Micro & Special Motor Guangdong Provincial Academician and Postdoctoral Innovation Practice Base
Key Performance
Data Sheet Commutator Engineering Research Center Expert Enterprise Workstation Application Demonstration Base and Industry-
Guangdong Provincial Micro & Special Motor Academia-Research Base of the National Key
Commutator Engineering Technology Research Center Laboratory of Molds
Indexes Guangdong Provincial Engineering Technology Beijing Research Institute of Mechanical and
Research Center Electrical Technology - Micro-forming Technology
Experimental Base
Shenzhen Enterprise Technology Center
Reader Feedback Huazhong University of Science and Technology
Heyuan Municipal Engineering Technology Center Mold Experimental Base
0601
ESG Management
ESG management is the strategic cornerstone for Kaizhong Precision
to achieve sustainable high-quality development. The Company has
always embedded the concept of sustainable development into its
business management and strategic decision-making. Led by the Board
of Directors the Company has established a sustainable development
management structure with clear responsibilities and systematic
operations. Through well-defined management policies and procedural
workflows the Company continuously promotes ESG capacity building
at all levels and integrates material topics into the entire value chain of
strategic planning and business operations. Relying on regular internal
and external communication and performance evaluations this system is
dedicated to systematically managing relevant issues and continuously
improving governance effectiveness laying a solid foundation for the
Company's long-term and steady development.Sustainable Development Materiality Analysis
Management
Stakeholder Engagement Responding to SDG goalsSustainable Development ESG governance structure
Management Table note: The Company's ESG Structure
About This Report
Sustainable development 01 Board of Directors
About Kaizhong management policy As the leading and decision-making body for ESG work it is responsible for determining the Precision Company's ESG development direction and goals reviewing and approving major matters such as the
ESG Management Company's ESG governance structure and key policies and reviewing the Company's ESG report;
Sustainable Development The Board of Directors of Kaizhong Precision continuously monitors
Management global ESG development trends and changes in the macroeconomic
Stakeholder Engagement environment integrating ESG management into the corporate
Materiality Analysis 02 Strategy Committee of the Board of Directors
Responding to SDG goals strategy to ensure that the ESG development management policy
is highly consistent with the Company's long-term development
Governance direction. Under the supervision and guidance of the Board the As the research and guidance body for ESG work it is responsible for studying major matters
Company has established a regular assessment mechanism for such as ESG strategic planning and goals and the construction of the ESG management system
ESG risks and opportunities incorporating sustainable development and providing recommendations. It also supervises and inspects the implementation of ESG work
into strategic decision-making and business operations to promote and reviews and submits the Company's ESG-related reports to the Board of Directors;
the steady enhancement of long-term corporate value. At the same
Innovation and
Operations time by linking executive assessment to key ESG performance
indicators the Company clarifies the responsibilities and obligations 03 ESG Working Group of the Strategy Committee of the Board of Directors
of senior management in ESG management thereby driving the
effective implementation of ESG goals.Environment Composed of senior management heads of relevant functional departments and relevant
Furthermore through continuous communication with internal and persons in charge of subsidiaries this group is responsible for implementing the Company's ESG
external stakeholders combined with corporate strategic planning development strategy and goals organizing and arranging the implementation of ESG work by
operational realities and feedback from all parties the Company various executive units understanding the demands opinions and suggestions of stakeholders
Society systematically identifies risks and opportunities in the ESG field and analyzing material topics carrying out the information collection preparation and disclosure of the
dynamically adjusts its management strategies to ensure that ESG ESG report and summarizing problems and achievements in ESG work. It also provides feedback
concepts and practices remain in sync with the times. on ESG work and makes recommendations to the Strategy Committee of the Board of Directors;
Key Performance
Data Sheet
Sustainable development 04 ESG Executive Units composed of various departments and subsidiaries of the Company
management system
Indexes Assume primary responsibility within their respective areas of duty responsible for implementing ESG
work tasks in accordance with the Company's overall plan and regularly reporting on their execution.Kaizhong Precision has formulated the ESG Management System
and established a four-tier ESG governance structure with a
Reader Feedback complete framework and clear responsibilities ensuring systematic In addition the Company has established mechanisms for internal control evaluation information
leadership effective decision-making and comprehensive execution communication and external expert support to ensure the continuous improvement of ESG management and
of related work. its deep integration with the Company's overall strategy and operational decision-making.
08ESG training Case: Conducting specialized ESG training to solidify the foundation
for compliance management and sustainable development
The Company provides diverse ESG learning resources and systematic training for
personnel at all levels and in different functions continuously enhancing the overall
About This Report organizational capability to deepen the ESG culture and build a sustainable long- In 2025 focusing on the needs of corporate sustainable development and
compliance management Kaizhong Precision invited external ESG experts to
term competitive advantage. conduct specialized ESG training for the Company's management. The training
focused on interpreting new domestic and international ESG regulatory rules
About Kaizhong
Precision The Company's ESG knowledge training system key updates to policies and industry implementation standards. It systematically
covered fundamental topics such as core ESG knowledge environmental
ESG Management control social responsibility and corporate governance. The training combined
Sustainable Development
Management For decision-making level thematic lectures key point summaries and practical explanations to help
Stakeholder Engagement management and employees fully grasp ESG management requirements and
Materiality Analysis
The Company regularly organizes specialized training and seminars focusing the latest regulatory norms. This effectively enhanced their ESG awareness Responding to SDG goals
on domestic and international ESG policy trends double materiality issues and compliance capabilities promoting the deep integration of ESG concepts
into the Company's daily business management and solidifying the intellectual
Governance and strategic planning aiming to enhance the top-level design and decision- and capacity foundation for the steady advancement of the ESG system and
making capabilities of the Board of Directors and senior management in the the achievement of sustainable development.ESG field
Innovation and
Operations
Integrating ESG Management into Business Management
For management and core personnel and Decision-Making
Environment
The Company conducts customized and operational ESG-specific training The Company integrates ESG management into its strategic and daily operational
covering key areas such as ESG concepts management systems industry decision-making. For major investment projects the Board of Directors and
practices and performance management. This training is dedicated to management consider social benefits and ESG risk assessment as key bases Society
strengthening the core team's capabilities in strategic execution risk for their decisions. At the same time the Company requires the investment team
identification and collaborative management to integrate ESG factors when conducting financial forecasts comprehensively
adjusting model variables to achieve responsible and sustainable investment
Key Performance decisions.Data Sheet
For all employees
Indexes
The Company disseminates basic ESG knowledge and core environmental
social and governance topics through standardized courses knowledge
sharing and internal communications. This promotes the integration of
Reader Feedback sustainable development concepts into daily work and culture fostering an
ESG learning atmosphere with full employee participation
09Stakeholder Engagement
About This Report Based on its business attributes and value chain characteristics the Company has systematically identified six core stakeholder groups. The Company is committed to
continuously listening to the ESG-related expectations and concerns of all parties through diverse and regular communication mechanisms and incorporating their feedback
into management improvements and strategy formulation. To ensure effective communication and closed-loop management the Company has established feedback and
About Kaizhong
Precision grievance mechanisms including a dedicated ESG consultation email and phone line to promptly respond to opinions or complaints from all parties. It has also set up
investigation and remediation procedures to continuously enhance its ESG governance level and the credibility of its sustainable development.ESG Management
Sustainable Development
Management
Stakeholder Engagement
Materiality Analysis
Responding to SDG goals
Shareholders Customers Employees Partners Government
Governance and investors and regulatory
Community and
departments the public
Innovation and
Operations
ESG management Product and service quality Protection of Integrity and Lawful and Achieved Community
Corporate governance Innovation-driven employee rights cooperation operations communication and
Environment Information disclosure quality development Occupational health Transparent Tax payment in accordance
participation
Supply chain security and safety procurement with the law Rural revitalizationRisk management and
control Digital and intelligent Vocational training Win-win Responding to national Community public
Investor returns empowerment
and development development strategies welfare contributions
Information security and Compensation and Serving regional development Emissions and waste Society Innovation-driven
development privacy protection
welfare benefits Green and low-carbon management
Anti-bribery and anti- Anti-bribery and anti-
development
corruption corruption Anti-monopoly and fair
competition
Key Performance
Data Sheet
Shareholders' Meeting Customer satisfaction Employee satisfaction Daily business Daily communication and Community engagement
Earnings call surveys surveys communication reporting activities
Information disclosure Technical exchange Employee grievance Industry exchange Project approvals Public welfare projects and
Indexes conferences and joint channels conferences Government supervision and volunteer activitiesInvestor development
communication events Regular training Supplier audits inspections Environmental information
Audits and site visits Employee visits and training disclosureInvestor hotline/email/ Submission of statistical
Hudongyi Customer service representative meetings Business reports Media interviews and
Reader Feedback training and daily Corporate culture and negotiations public events
communication team-building activities
10
Communication Stakeholder Stakeholder
methods expectations categoriesMateriality Analysis
About This Report Materiality analysis is a crucial step in Kaizhong Precision's ESG management aiming to systematically identify the environmental social and governance issues most relevant to the
Company's operations and development. The Company references major domestic and international sustainability standards combined with industry characteristics and business realities
to conduct a "double materiality" assessment of these issues. On one hand it analyzes the potential impact of each issue on the Company's financial performance over different periods.About Kaizhong On the other hand it evaluates the actual and potential impact of the Company's performance on these issues on the environment and society. This process helps the Company to precisely
Precision focus its resources set management priorities and closely align its ESG strategy with stakeholder expectations and long-term value creation. The specific analysis process is as follows:
ESG Management
Sustainable Development The Company's Materiality Analysis Process
Management
Stakeholder Engagement
Materiality Analysis
Responding to SDG goals The Company uses the 21 fundamental issues set out in the Shenzhen Stock Exchange's Guidelines as a framework to
systematically scan for issues incorporating its own business characteristics value chain impacts and changes in the internal and
Governance external environment during the year. Through in-depth benchmarking against the disclosure practices of leading industry peers
Issue identification and and the focus areas of major ESG rating agencies the Company identified and added several key industry and company-specific
peer benchmarking issues expanding the initial issue pool to 28 items and laying the foundation for a comprehensive assessment.Innovation and
Operations
The Company systematically collected the concerns and feedback of six core stakeholder groups on various ESG issues through
diverse channels such as shareholders' meetings supplier audits employee surveys and community forums. This process
Environment Stakeholder communication focused on understanding the qualitative and preliminary judgments of all parties regarding the impact of these issues providing a
and expectation gathering direct basis for subsequent quantitative assessments.Society
Impact Materiality Assessment: Internal and external stakeholders were invited to assess the actual and potential impacts of the
Company's operations on the economy environment and society from the two dimensions of "severity of impact" and "likelihood of occurrence."
Key Performance Financial Materiality Assessment: External shareholders and the Company's management were organized to assess the potential
Data Sheet Double materiality impact of each issue on the Company's financial performance in the short medium and long term from the two dimensions of
quantitative assessment "degree of financial impact" and "likelihood of occurrence."
Indexes
The Company consolidated the results of the double materiality assessment and reviewed them against established thresholds
to finalize a list of material topics requiring priority attention. These were then visualized in a "Double Materiality Matrix" which
Reader Feedback Issue review and matrix clearly defines the management priority of each issue and provides clear guidance for strategic focus and resource allocation.construction
11List of material topics 10
9
915
2
1711
12
About This Report 8 18 23
Environmental dimension 5 27
7125
1 Environmental compliance 5 Pollutant emission 6 194
About Kaizhong management management 6 10 3
Precision 22
2 Addressing climate change 6 Waste management 16 24
ESG Management 5
3 Energy use and management 7 Circular economy
Sustainable Development 26
Management 4 Water resource utilization 8 Biodiversity conservation 4 13
Stakeholder Engagement
Materiality Analysis 3 28
Responding to SDG goals 7
14
220
Governance Social dimension 8
121
9 Product and service safety 15 Data security and customer
and quality privacy protection
Innovation and
Operations 10 Controversial sourcing 16 Employee employment 低 1 2 3 4 5 6 7 8 9 10
11 Supply chain security 17 Protection of employee rights Financial materiality
Environment 12 Innovation-driven 18 Employee career development With both financial and impact materiality With financial materiality but not impact
development and training materiality
13 Digital and intelligent 19 Occupational health and safety With impact materiality but not financial Without financial or impact materiality
development materiality
Society 20 Social contribution
14 Fair treatment of SMEs
21 Rural revitalization
Key Performance
Data Sheet
Governance dimension
22 Corporate governance 26 Stakeholder engagement
Indexes
23 Anti-bribery and anti- 27 Compliance and risk
corruption management
Reader Feedback 24 Due diligence 28 Anti-unfair competition
25 ESG management
12
Impact materialityResponding to SDGs
About This Report
Kaizhong Precision integrates the UN Sustainable Development Goals (SDGs) into its corporate strategy and daily operations systematically planning and advancing related actions centered on
highly material topics. The Company is committed to aligning its development path with the global sustainable development agenda making continuous contributions in the environmental social
and governance domains through technological innovation Achieved operations supply chain collaboration and community co-construction.About Kaizhong
Precision
ESG Management
Sustainable Development The Company continuously builds and optimizes its ESG governance system promoting board diversity and
Management
Stakeholder Engagement enhancing professional capabilities. At the same time it strengthens compliance operations and internal control
Materiality Analysis development maintains a zero-tolerance policy toward corruption and bribery and has established a whistleblower
Responding to SDG goals protection mechanism. Furthermore the Company actively engages in transparent information disclosure and
Corporate regular investor communications comprehensively protecting information security and data privacy to consolidate a Governance governance foundation for steady honest and responsible development.Innovation and The Company adheres to innovation-driven development increasing R&D investment to promote technological
Operations
advancement and product excellence. It has established and improved a full-chain quality management system
implemented product testing and after-sales services and fostered a quality-oriented culture. At the customer and
Innovation and supply chain levels the Company extends responsible practices to all links of the value chain through systematic Environment operations customer relationship management satisfaction surveys and environmental and social assessments of suppliers.The Company will improve its environmental management system continuously invest in environmental protection
Society funds and promote green packaging and technological upgrades for energy conservation and consumption reduction.It systematically manages resources and emissions by building a water recycling system strictly treating the three
types of waste and setting carbon intensity targets. Benchmarking against the goal of becoming a national-level
Key Performance green factory the Company is committed to reducing its environmental footprint throughout the entire life cycle and
Data Sheet Environment promoting the green transformation of the industrial chain.Indexes The Company is dedicated to promoting high-quality employment adhering to equal employment practices and
protecting the legitimate rights of its employees. It comprehensively empowers employee growth and ensures smooth
communication by providing a competitive compensation system comprehensive training and career development
Reader Feedback channels and establishing a workers' congress and grievance mechanisms. At the same time the Company actively Society participates in charitable activities and community co-construction to give back to society.
1302
Governance
Kaizhong Precision has always regarded standardized governance
as the core cornerstone of sustainable development establishing a
comprehensive governance system that covers corporate governance
compliance and risk management anti-bribery and anti-corruption
and anti-unfair competition. Adhering to laws regulations and the
Articles of Association the Company optimizes its governance
structure improves its systems and processes and strengthens risk
control. Upholding the principles of "fairness justice and openness"
and "zero tolerance" it fortifies the bottom line of Achieved operations
maintains market order and investor rights and empowers steady
corporate operations and long-term value creation through scientific
governance.Corporate governance Anti-bribery and anti-corruption
Compliance and risk management Anti-unfair competition
SDG alignmentsCorporate Governance
About This Report Corporate governance is the fundamental guarantee for the long-term steady development of an enterprise. Kaizhong Precision strictly complies with laws and regulations
such as the Company Law of the People's Republic of China and the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange as well as the requirements
of its Articles of Association. The Company continuously improves its governance structure clarifies the boundaries of powers and responsibilities and check-and-balance
About Kaizhong mechanisms focuses on the effectiveness and diversity of the Board of Directors and strengthens investor relations management and shareholder return mechanisms.Precision Through standardized operations and scientific decision-making it effectively safeguards the legitimate rights of all shareholders and the Company.ESG Management Governance structure
Governance The Company has established a tiered governance structure of "Shareholders' Meeting—Board of Directors—Senior Management" forming a check-and-balance mechanism
Corporate Governance with clear powers and responsibilities close coordination and efficient operation.Compliance and Risk
Management
Anti-Bribery and Anti-
Corruption
Anti-Unfair Competition Shareholders' Meeting
Innovation and As the Company's organ of power it exercises its authority in accordance
Operations
Shareholders' with the law to approve business policies and investment plans review
Meeting profit distribution plans and amend the Articles of Association thereby
safeguarding shareholder rights.Environment
Board of Directors
Audit Committee As the decision-making body it is responsible to the Shareholders'
Society Meeting and exercises its authority to decide on business plans and
Board of investment proposals review financial budgets and final accounts and
Directors appoint and remove senior management personnel ensuring scientific
Strategic Committee and efficient governance.Key Performance
Data Sheet Supervision and Management
Remuneration and
Appraisal Committee The Company promptly amended its Articles of Association in accordance
Indexes with the new Company Law and the Guidelines on the Bylaws of Listed
Supervision and Companies. The powers and duties of the Board of Supervisors are now
Management exercised by the Audit Committee of the Board of Directors and the Rules Nomination Committee of Procedure for the Board of Supervisors have been correspondingly
Reader Feedback abolished achieving full alignment of the governance structure with new
regulatory requirements.
15Board of Directors
The Company adheres to standardized operations and scientific decision-making as its core principles. Through a sound governance mechanism diverse professional
About This Report configurations and continuous capacity building it fully ensures the effectiveness professionalism and diversity of the Board of Directors.About Kaizhong
Precision
ESG Management
Governance
Corporate Governance Improving Governance Mechanisms to Multi-Dimensional Composition to Solid Professional Configuration to
Compliance and Risk Ensure Decision-Making Effectiveness Enrich Decision-Making Perspectives Enhance Decision-Making Expertise
Management
Anti-Bribery and Anti-
Corruption Clear Responsibilities：
Anti-Unfair Competition The Board of Directors has four specialized Gender Diversity： Professional Capabilities：
committees: Strategy Audit Nomination and The Board of Directors consists of 9 members Members of the Board of Directors possess
Innovation and Remuneration and Appraisal. Each has established
Operations including 4 female directors accounting for comprehensive professional knowledge and clear rules of procedure to provide professional 44.44% fully reflecting the concepts of gender
support for the Board's decisions forming a closed- skills. The specialized committees provide equality and diverse inclusion.loop operational mechanism of "authorization by pro fess iona l op in ions in areas such as
Environment the Shareholders' Meeting—decision-making by Diverse Expertise： compensation and assessment nomination and
the Board of Directors—support from specialized
Members' professional backgrounds cover appointment and audit supervision assisting the committees—execution by Senior Management."
multiple fields such as industrial operations Board in making prudent decisions.System Updates： cutting-edge technology legal compliance and
Society In 2025 the Company amended core systems financial auditing. This diversity of perspectives Regular Training：
such as the Articles of Association the Rules of provides a wealth of wisdom for the Company's The Company organizes regular specialized training
Procedure for the Board of Directors and the major decisions on innovative development and sessions for the Board of Directorscovering topics
Detailed Rules for the Implementation of the Audit international expansion. such as laws and regulations regulatory cases
Key Performance Committee of the Board of Directors in accordance investor demands and strategic benchmarking
Data Sheet with new regulatory requirements ensuring that its Selection and Appointment Mechanism： against peers. This continuously enhances
governance rules are updated in sync with laws and The Nomination Committee extensively searches the directors' sensitivity to compliance and the
regulations.for suitable candidates both internally and in the forward-looking nature of their decision-making.Performance Evaluation：
Indexes talent market through standardized selection The Shareholders' Meeting reviews the Annual procedures ensuring the continuous optimization
Work Report of the Board of Directors each year. of the Board's structure.Independent directors provide an annual statement
Reader Feedback of duties and self-assess their independence. The
Board of Directors regularly conducts independence
assessments effectively leveraging their roles in
independent supervision and professional oversight.
16Key Performance Information disclosure and investor rights protection
The Company strictly adheres to legal and regulatory requirements improves The Board of Directors consists of Key Performance
About This Report its information disclosure and investor relations management systems and
9 directors ensures that information is transmitted truthfully accurately completely and in a timely manner effectively protecting the legitimate rights of investors especially
3 small and medium-sized investors.About Kaizhong including independent directorsPrecision System Guarantees: The Company has formulated the Information Disclosure
accounting for 33.33% of the Board Management System Investor Relations Management System and Internal ESG Management Reporting System for Major Information to clarify information disclosure
1 procedures responsible parties and confidentiality requirements.employee representative directorGovernance System Building: The Company has established an investor communication
Corporate Governance
Compliance and Risk 4 female directors system featuring "routine response + in-depth interaction + reverse Management empowerment." Through channels such as the official website investor hotline
Anti-Bribery and Anti- inquiry email and the SZSE's Hudongyi platform the Company provides high-
Corruption
Anti-Unfair Competition accounting for 44.44% of the Board quality services to investors. The Company received a Grade A rating for its
Innovation and Communication and Interaction: The Company regularly organizes various
information disclosure work
Operations Percentage of Independent Directors investor relations activities listens attentively to investors' opinions and for the 2024-2025 period from
in Specialized Committees of Kaizhong the Shenzhen Stock Exchangesuggestions and incorporates market concerns into the Company's strategic
Precision's Board of Directors planning and operational optimization. This approach promotes the evolution of
Environment investor relations from "information disclosure" to "value co-creation."
Strategic Audit
Committee Committee Investor returns
Society
The Company has a strong commitment to shareholder returns balancing Key Performance
4 directors in total with 3 directors in total with the short-term and long-term interests of shareholders. The Company has
independent directors independent directors established a scientific sustainable and stable shareholder return mechanism
Key Performance accounting for 25% accounting for 67%
Data Sheet to effectively safeguard the legitimate rights of public investors. 2025
Mechanism Guarantees: In strict accordance with the Articles of Association
Remune- The Company's total
Nomination ration and and relevant regulatory requirements of the China Securities Regulatory
Indexes Committee Appraisal Commission the Company has formulated the Shareholder Return Plan for the cash dividends for the
Committee Next Three Years (2026–2028) to enhance the transparency and operability of year amounted to RMB
its profit distribution policy.million.Reader Feedback 3 directors in total with 3 directors in total with 110Value Sharing: The Company strengthens the foundation for cash dividends
independent directors independent directors through stable operations and high-quality development continuously creating
accounting for 67% accounting for 67% long-term value for shareholders.
17Compliance and Risk Management
About This Report Compliance and risk management are key pillars for a
company's stable and long-term development. Kaizhong
Precision has built a full-process control system based Governance
on a foundation of policies enabled by tools and guided
About Kaizhong
Precision by culture. Through systematic risk identification and Kaizhong Precision has established a Risk Management Committee to coordinate and supervise risk
dynamic response mechanisms the Company ensures control efforts. A system of policies has been built around the core documents of the Internal Control
the steady achievement of its strategic objectives. Management System Risk and Opportunity Management and Emergency Response and Preparedness.ESG Management The Company has established a collaborative governance structure with "three lines of defense" and
developed a risk indicator monitoring platform covering areas such as customers supply chain legal
Governance Key Performance affairs and EHS (Environment Health and Safety). Through internal audits internal control evaluations
Corporate Governance and defect rectification the Company ensures the effective operation of its internal control system and
Compliance and Risk promotes a culture of compliance and risk control that permeates the entire organization.Management
Anti-Bribery and Anti-
Corruption Business Units
Anti-Unfair Competition The Company had 0 major risk incidents.Product lines and business units as accountable owners of risk embed
Innovation and
Operations First line of internal controls into day-to-day operations and proactively identify and
defense manage business risks.Environment
Management
Society The Risk Management Committee establishes risk strategies while
Second line platform departments provide expert support—coordinating the
of defense development of internal control culture and risk monitoring.Key Performance
Data Sheet
Oversight
Indexes The Audit Department independently assesses the effectiveness of the
Third line of first two lines of defense and reports directly to the Board of Directors
defense which retains ultimate oversight responsibility for the risk management.Reader Feedback
18Strategy
Kaizhong Precision deeply integrates risk management into its strategic planning focusing on key risks and Compliance and risk control
About This Report potential opportunities during the strategy implementation process. For different types of risks the Company
systematically analyzes their impact on business operations and financial performance and formulates targeted measures
response strategies. By dynamically tracking changes in risks and continuously optimizing control measures the Case: Building a regularized internal control
Company achieves an organic integration of risk prevention and opportunity seizure providing a solid guarantee evaluation system to strengthen the long-term
About Kaizhong
Precision for the smooth advancement of the Company's business plans and investment programs.defense line for Achieved operations and risk
management
The Company has identified the following risks and opportunities related to "Compliance and Risk Management": In 2025 the Company established and improved
ESG Management a fu l l -cycle fu l l -coverage internal contro l
management system. Through a combination of
Risk Risk description Financial impact Management measures quarterly special audits and annual comprehensive Governance internal audits of subsidiaries the Company
Corporate Governance
Policy and Continuous upgrading of policies Dynamically track policy directions systematically identifies internal control risks. Compliance and Risk
Management industry and compliance standards in Increased and integrate ESG concepts into Additionally the Company prepares an annual
Anti-Bribery and Anti- operating costs Internal Control Evaluation Report to continuously compliance risks downstream industries business
Corruption optimize management processes and execution
Anti-Unfair Competition standards. This series of measures has effectively
Cross-border A high proportion of overseas Increased strengthened the Company's full-chain compliance
Innovation and business revenue requires adaptation to the compliance Establish cross-border compliance capabi l i t ies laying a sol id internal control Operations
compliance risks regulations of multiple countries. costs processes. foundation for sustainable development.Environment Inherent risks in The internal control system needs Potential Conduct regular internal control
internal control dynamic adjustment with the increase in evaluations and build a multi-level Case: Conducting compliance and risk control training to solidify the foundation for
execution business environment operational costs internal control management system compliance and risk control among mid- to
senior-level management and strengthen the
corporate standardized management system
Society
Opportunities Opportunity description Financial impact Management measures From October to November 2025 the Company
conducted specialized training for all mid- to senior-
Key Performance Cross-border Growth in overseas market Increase level management personnel on the development
Data Sheet compliance demand; compliance system overseas revenue
Deepen cooperation with
international clients and strategically and application of risk control matrices. The empowers and stabilize training focused on risk identification in business
overseas enhances competitive cross-border deploy overseas R&D production processes and the implementation of control
expansion advantage earnings supply and sales bases measures effectively enhancing the management
Indexes team's risk prevention and control awareness. It
promoted the establishment of a standardized and
Policy compliance The Company's advanced Reduce tax costs Apply for tax incentives in manufacturing and new and improve accordance with regulations and systematic risk management and control system to seize industry
Reader Feedback dividends energy sectors receive operational focus on deploying in policy-
laying a solid compliance management foundation
for the Company's sustainable operations.national policy support efficiency supported sectors
19Impact risk and
opportunity management Anti-Bribery and Anti-Corruption
About This Report Kaizhong Precision has established a systematic Kaizhong Precision adheres to a "zero-tolerance" principle management mechanism centered on the Risk and for commercial bribery and corruption. With the Audit Key Performance
Opportunity Management procedure document
and using the risk control matrix as a key tool. This Department as the core management body the Company
About Kaizhong mechanism covers the complete closed loop of
has built a comprehensive compliance management and
Precision "identification - assessment - response - monitoring control system featuring complete policies a closed- The Company had no incidents of
- review" enabling quantitative management and loop supervision mechanism and cultural integration. commercial bribery or corruption.dynamic optimization of risks. The Company is fully committed to fostering an upright
ESG Management
Indicators and targets internal and external business environment to ensure the Company's Achieved and stable operations.Governance
Corporate Governance Compliance management training
Compliance and Risk coverage rate: 100% Anti-Commercial Bribery and Anti-Corruption System
Management
Anti-Bribery and Anti- Progress in 2025 Achievement status for
Corruption the reporting period The Company has established a comprehensive integrity governance system formulating documents such as the
Anti-Unfair Competition Code of Business Ethics and Conduct Anti-Fraud and Whistleblowing Management System and Anti-Corruption
100% Achieved and Anti-Bribery Management Regulations. These form a policy barrier covering both internal operations
Innovation and
Operations and external partnerships clearly defining prohibited behaviors investigation procedures accountability and
Compliance knowledge assessment whistleblower protection mechanisms. This delineates an integrity red line across all business scenarios and
pass rate for key positions: 100% extends management requirements to suppliers standardizing the integrity and compliance conduct of partners.Environment Progress in 2025 Achievement status for The Company has built three lines of defense: "prevention - supervision - accountability." The Audit Department
the reporting period as the core management body coordinates the implementation of policies risk monitoring and incident
100% investigation for anti-commercial bribery and anti-corruption efforts. Through regular internal control evaluations Achieved and special audits the Company achieves closed-loop control of integrity risks.
Society
Key Performance
Prevention Line Supervision Line Accountability Line
Key Performance
Data Sheet 3Times
Number of training sessions on internal Annual internal control Special audits track the Strict accountability is
control compliance and risk management evaluations systematically progress of risk rectification enforced for confirmed acts
Indexes identify integrity risk points and in-depth monitoring is of fraud and bribery creating 100% and anti-fraud requirements implemented in key areas. a powerful deterrent.are embedded into business
Coverage rate of training in internal control processes.Reader Feedback compliance and risk management
20Collaborative Internal and External Integrity Management and Control
Building an anti-commercial bribery
Signed the Employee Anti-Bribery Commitment Letter
About This Report and anti-corruption culture
Employees achieving a 100% signing rate and clarifying employees'
obligations for integrity in their work. The Company focuses on anti-commercial bribery and anti-
corruption efforts by building a three-tiered empowerment system
About Kaizhong
Precision covering senior management key personnel and all employees. Through diversified training and regular awareness campaigns the
Signed the Supplier Integrity Cooperation Commitment Company promotes the integration of integrity principles into the
ESG Management Business Letter with suppliers and distributors incorporating mindset and actions of its workforce.partners integrity requirements into partner admission and ongoing Comprehensive Training Coverage: The Company achieves a
Governance management. 100% training coverage rate for directors senior management
Corporate Governance and all employees. Through formats such as online courses
Compliance and Risk specialized training sessions and risk seminars the Company
Management
Anti-Bribery and Anti- The Company has set up multiple reporting channels including email and telephone to systematically conducts interpretations of laws and regulations
Corruption encourage all stakeholders to report any behavior that violates business ethics or harms the identification of red-line behaviors analysis of typical cases and
Anti-Unfair Competition Company's interests. The Company has also established a comprehensive whistleblower instruction on using reporting channels.protection mechanism strictly keeping whistleblowers' information confidential and
Innovation and Regular Awareness Campaigns: The Company regularly publishes
Operations protecting their legal rights in accordance with the law. Additionally the Company has set up articles promoting integrity through platforms such as Kaige
corresponding incentives to reward valid reports that are verified. magazine internal emails and bulletin boards. Guided by the
Accessible Reporting Channels and Comprehensive Rights Protection core principle that "integrity and self-discipline are the lifeline of a
Environment professional career" the Company deepens cultural penetration through case warnings and slogan promotions.Reporting by phone: 0755-66852689 ext. 6353
Reporting by email: audit@kaizhong.com
Society
Diversified
reporting In-person reporting: Audit Department Office Shenzhen
channels Pingshan Headquarters
Key Performance
Data Sheet
Confidentiality Management: The Company strictly enforces the
confidentiality system for whistleblower information prohibiting disclosure
unless necessary. When disclosure is required the whistleblower's written
Indexes consent must be obtained. Retaliation against whistleblowers acting in
good faith is strictly prohibited and any such cases once verified will be
Whistleblower handled seriously in accordance with regulations.protection
mechanism Reporting Incentives: In accordance with the Anti-Fraud and Reader Feedback
Whistleblowing Management System whistleblowers who provide valid
leads will be rewarded accordingly to encourage compliance supervision.
21Case: Conducting specialized anti-fraud and anti-commercial bribery training to fortify the
integrity and compliance defense line for all employees Anti-Unfair
In December 2025 the Company's Audit Department led a specialized training on anti-fraud and
About This Report anti-commercial bribery covering all employees. The training conducted in a hybrid online and Competition
offline format explained laws and regulations integrity standards and typical cases and included
a company-wide assessment to reinforce learning outcomes. This training effectively enhanced Upholding the core value of "Integrity First" Kaizhong
employees' risk awareness and prevention capabilities promoting the integration of integrity and Precision strictly complies with the Anti-Unfair Competition
About Kaizhong
Precision compliance into daily operations and strengthening the foundation for the Company's sustainable Law of the People's Republic of China the Anti-Monopoly
development. Law of the People's Republic of China and other relevant
laws and regulations. The Company has established a
ESG Management comprehensive management mechanism that "defines
boundaries through systems explicitly prohibits certain
Governance behaviors ensures supervision and reporting and imposes
Corporate Governance accountability" resolutely safeguarding fair market order
Compliance and Risk and the Company's legitimate rights.Management
Anti-Bribery and Anti-
Corruption Key Performance
Anti-Unfair Competition
Innovation and
Operations The Company has not been involved in any
incidents related to unfair competition and has
On-Site at the Specialized Training on Anti-Fraud and Anti-Commercial Bribery not faced any litigation concerning unfair
Environment competition.Key Performance
Society Anti-unfair competition
mechanism
0Times 100% The Company has formulated the Code of Business Ethics
Key Performance
Data Sheet Number of reported anti-corruption incidents which explicitly prohibits unfair competitive practices such Signing rate of employee anti-bribery as monopolies bribery and fraud as well as the illegal
commitments acquisition of trade secrets. The Company adheres to
100 100 the operational bottom line of not damaging the business Indexes % % reputation of others and not misleading the public. At the
same time the Company extends compliance requirements
Coverage rate of employees receiving anti- Coverage rate of directors receiving to its suppliers eliminating anti-competitive behaviors
bribery and anti-corruption training anti-corruption training
Reader Feedback to achieve full coverage across all internal and external
business scenarios.
22Unfair Competitive Practices Explicitly Prohibited by the Company Anti-unfair competition controls
The Company has established a closed-loop compliance risk control mechanism
About This Report Information leakage for anti-unfair competition covering "pre-emptive prevention in-process control
and post-event improvement." Through policy dissemination risk screening
Disclosing sensitive data tocompetitors such as the Company's incident investigation and corrective action tracking the Company systematically
About Kaizhong core financial information or business information of its partners. implements compliance requirements and effectively mitigates competition risks.Precision
Case: Conducting specialized training on trade secret protection to
ESG Management strengthen the compliance defense line against unfair competition
Intelligence gathering In October 2025 focusing on preventing and controlling unfair competition Governance
risks Kaizhong Precision held a specialized lecture on protecting trade secrets
Corporate Governance
Compliance and Risk Obtaining competitors'business intelligence through improper for employees in key positions across various product lines and business
Management
means such as theft intrusion bribery or coercion. divisions. The training systematically covered five core topics: the importance Anti-Bribery and Anti-
Corruption definition and protection methods of trade secrets the legal consequences
Anti-Unfair Competition of infringement and procedures for handling leaks. This effectively enhanced
employees' risk awareness and prevention capabilities providing a solid
Innovation and
Operations guarantee for the Company to build a fair and Achieved business environment.Reputation slander
Environment Maliciously slandering orspreading rumors aboutcompetitors to
damage theirmarket image and businessreputation.Society
Monopolistic collaboration
Participating in the signingand execution of monopolistic
Key Performance agreements to collaboratively restrict market competition.Data Sheet
Indexes Abuse of dominantposition
Abusing a dominant marketbosition to engage in a seriesof
exclusive or discriminatorythatousiness practicesviolate
Reader Feedback
egulations. On-Site at the Specialized Training on Trade Secret Protection
2303
Innovation and
Operations
Innovation and operations are the core drivers and cornerstones
of value for Kaizhong Precision's sustainable development. Led
by innovative R&D and supported by operational excellence the
Company has systematically built a comprehensive management
system covering product quality supply chain security digital and
intelligent transformation and data privacy protection. By deeply
integrating advanced manufacturing technologies with digital methods
the Company continuously optimizes quality throughout the product
lifecycle creates a secure resilient and responsible supply chain
ecosystem and extends its innovative momentum to customer privacy
and data security. The Company is committed to providing customers
with more reliable and intelligent products and services driving the
enterprise toward an efficient intelligent and sustainable future.Product and service safety and Digital and intelligent
quality development
Supply chain security Data security and customer
privacy protection
Innovation-driven development
SDG alignmentsProduct and Service Safety and Quality
About This Report Kaizhong Precision strictly complies with national laws and regulations and
regards the safety and quality of its products and services as the lifeline of System Guarantees
the enterprise. The Company has established comprehensive ISO 9001 and
IATF 16949 quality management systems covering the entire process from
About Kaizhong The Company has formulated a comprehensive set of policy documents
Precision R&D and procurement to production and customer service. Through strict including the System Management Manual Control of Nonconforming
process controls and a multi-layered audit mechanism the Company ensures Products Internal Audit Control and After-Sales Problem Analysis and Claims.ESG Management high-standard product delivery and continuously creates reliable value for its The Company conducts annual internal audits of the quality management
customers. system to evaluate its conformity suitability and effectiveness.Governance Governance
The Company has established a governance system with clear responsibilities
Innovation and
Operations that covers the entire process. The Quality Management Committee led by the Quality System Certifications
Product and Service General Manager serves as the central decision-making body coordinating
Safety and Quality major quality decisions formulating quality policies and annual targets and
Supply Chain Security
Innovation-Driven reviewing supplier admissions customer quality agreements and the handling As of the end of the reporting period all of the Company's production
Development of major quality incidents. The Quality Management Department as the
Digital and Intelligent executive body embeds quality control into the entire value chain from R&D entities have obtained quality management system certifications such as
Development
design and verification procurement management and production process ISO 9001 and IATF 16949 with 100% of their business scope certified. Data Security and
Customer Privacy monitoring to customer delivery confirmation and after-sales service.Protection
Environment
The Company's Quality Management Department structure
Society
General
Manager
Key Performance
Data Sheet
Quality Management
Committee
Indexes
Quality Management
Department IATF 16949 Quality Management ISO 9001 Quality Management
Reader Feedback System Certificate System Certificate
25Strategy
Kaizhong Precision strictly adheres to the Product Quality Law of the Kaizhong Precision has identified the following risks and opportunities related to "Product and
People's Republic of China with systematic policy development at its core. Service Safety and Quality":
About This Report The Company continuously improves its modern quality management
system from three dimensions: quality assurance cultivation of a company-
Risk Risk description Financial wide quality culture and closed-loop handling of quality feedback. Based impact Management measures
on its established quality management system the Company has created a
About Kaizhong standardized system of quality control policies and procedural documents
Precision Under a globalized Strictly manage supplier quality covering the entire product lifecycle (including design procurement Risk of Supply supply chain layout it is production inspection and delivery and after-sales). By setting clear necessary to ensure the Increased
systems advance quality
Chain control through access audits
ESG Management performance indicators for each key stage and implementing systematic Quality stable quality of upstream
operating and dynamic management and
monitoring the Company ensures that quality objectives are implemented Resilience raw materials and
costs achieve full-process traceability
and continuously optimized at every level. components of materials
Governance
A mechanism for rapid Customer Establish a rapid response
Design Product Process Define Quality Risk of identification and closed- churn legal mechanism for customer
Innovation and Design and After-Sales demands and use after-sales data
Operations Stage Development Requirements Quality
loop resolution needs litigation to drive front-end optimization
Product and Service Upgrades to be established for reputational customer feedback damage forming a closed loop for quality
Safety and Quality improvement
Supply Chain Security
Innovation-Driven
Development Procurement Incoming Inspection Incoming Material Opportunity Financial
Digital and Intelligent
Development Stage and Testing Inspection
Opportunities description impact Management measures
Data Security and
Customer Privacy Opportunity Build a transparent and
Protection for Market Excellent and stable
Increased
product quality is key pricing power
reliable quality information
Differentiation to building a core customer loyalty
communication mechanism
and Brand Value and market and establish strict finished Environment
Production In-Process Inspection Enhancement brand moat share product quality standards to Process Control
Stage and Testing fully meet customer needs
Society
Excellent quality Stable long-
Opportunity allows for deep term orders Precisely meet customer
for Customer integration into the increased quality demands and deepen
Key Performance Finished Product Strategic R&D and supply collaborative cooperative trust through
Data Sheet Inspection Final Inspection Inspection and Collaboration chain systems of core
projects and efficient responses and
and Delivery and Testing customers R&D synergy regular communicationRelease benefits
Proactive quality
Indexes Opportunity for control and refined Implement a quality cost
Operational management can Operational cost management system to achieve a win-win outcome
After-Sales Customer Complaint Complaint and Optimization and optimize operational optimization
Cost Savings costs throughout the of quality improvement and Stage and Return Handling Return Handling entire chain cost optimization
Reader Feedback
Product Lifecycle Quality Control Process Identification and Response to Risks in Product and Service Safety and Quality
26Impact risk and opportunity management
Kaizhong Precision uses the monthly QCDS (Quality Cost Delivery Service) Product quality assurance
About This Report performance evaluations from core customers as its primary management tool.Combined with annual customer satisfaction surveys the Company systematically Kaizhong Precision has established a systematic quality assurance mechanism
identifies and monitors risks and opportunities related to product and service quality. that covers the entire product lifecycle. Through a dual-drive approach of
By regularly receiving customer scorecards and standardized questionnaires the institutionalized audits and refined process controls the Company ensures the
About Kaizhong
Precision Company can comprehensively identify operational weaknesses and gain insight into continuous reliability of product quality.areas for improvement based on customer expectations. Kaizhong Precision's product quality assurance measures
ESG Management
Indicators and targets The Company has bu i l t a qua l i t y aud i t mechanism covering all aspects of production
Governance and operation. By combining routine inspections
In 2025 the Company continued to advance its quality control and improvement Establish a multi-layered with assessments of key focus areas the
efforts meeting all quality indicators and targets. hierarchical quality audit Company continuously identifies potential quality
Innovation and mechanism
Operations risks and drives management improvements.Product and Service Progress Achievement status for
Safety and Quality Target in 2025 the reporting period
Supply Chain Security
Innovation-Driven Focusing on core manufacturing processes the
Development Customer complaint handling rate of 100% 100% Achieved Company enhances the stability of production
Digital and Intelligent
Development processes and the consistency of product quality Strengthen systematic
Data Security and Number of customer complaints per 0.079 Achieved quality control in key through the synergistic efforts of institutional
Customer Privacy million shipments <0.3 production stages constraints and process management.Protection
Product recall rate of 0 0 Achieved
Environment
The Company implements unified control of
Society nonconforming products for raw materials
Key Performance Implement closed- production processes and finished product delivery.loop management of This ensures that quality issues are addressed
nonconforming products
throughout the entire and feedback is provided in a timely and effective Key Performance
Data Sheet process manner preventing the recurrence of risks.
0.079Times 0Times 100% 90%
Indexes PPM (Parts Per Million Number of ustomer issue Customer By applying information technology and automation
the Company enhances the transparency and
defects) product recalls resolution rate satisfaction Promote digital and traceability of its production processes reducing
automated empowerment
of manufacturing the impact of human factors on product quality from Reader Feedback processes the source.
27Quality Feedback and Closed-Loop Handling
The Company has established a comprehensive quality handling mechanism that Case:Specialized training on APQP and VDA series to strengthen
covers the entire process of "feedback—analysis—action—improvement." This quality planning and audit capabilities
About This Report ensures a systematic and timely response and closed-loop management for all types
of quality feedback including customer complaints after-sales issues and product In December 2025 the Company
returns. The Company follows the 8D problem-solving methodology from receiving organized a series of specialized
About Kaizhong
Precision the problem and analyzing the root cause to implementing and standardizing
training sessions on APQP
corrective actions. This ensures that every complaint is systematically resolved and (Advanced Product Quality
Planning) and VDA 6.3 (Process
forms a closed loop for improvement continuously enhancing customer satisfaction.ESG Management Audit) covering employees from
Kaizhong Precision Customer Complaint Handling Proces production technology and
quality departments across its
Governance
lnitial confirmation Root cause investigation Develop & verify permanent product lines/business divisions.& analysis & interim containment corrective actions The training conducted in a
hybrid online and offline format Quality Series Specialized TrainingInnovation and
Operations Receive complaint and conduct Investigate root cause and take Develop and verify permanent initial confirmation and analysis interim containment actions corrective actions systematically explained front-end quality planning methods for product
Product and Service
Safety and Quality development and the core requirements of process audits. This effectively
Supply Chain Security enhanced the team's capabilities in systematic quality planning and risk
Innovation-Driven Within Within
Development Within 5 identification representing a significant practice for the Company in 24 hours 24 hours working
Digital and Intelligent days implementing the "prevention first" quality policy and building a long-term
Development quality control mechanism.Data Security and Process Within 14 Within 10
Customer Privacy end working days working days
Protection
Environment Hazardous Substance Management
Archive lessons Internal review & customer Implement actions &
learned confirmation for closure monitor effectiveness The Company fulfills its responsibility for environmental protection and pollution Society
Archive lessons learned Conduct internal review Implement actions and monitor prevention by strictly adhering to domestic and international regulations on
for future reference and obtain customer effectiveness including document
confirmation for closure standardization and horizontal deployment hazardous substance control including the EU's Restriction of Hazardous
Key Performance Substances (RoHS) Directive the Registration Evaluation Authorisation and
Data Sheet Quality Culture Development Restriction of Chemicals (REACH) Regulation and China's Administrative
Measures on the Restriction of the Use of Hazardous Substances in Electrical
The Company adheres to the quality policy of "full participation prevention first and Electronic Products. The Company has formulated the Standard for the
continuous improvement and long-term stable satisfaction of customer needs" and
Indexes Control of Restricted Substances to implement closed-loop management
continuously promotes the development of a quality culture. During the reporting throughout the entire process from the entry of raw materials and the production
period the Company conducted a total of 196 specialized quality training sessions process to the shipment of finished products ensuring that its products meet
with a total training duration of approximately 980 hours. The comprehensive system
Reader Feedback the requirements for restricted substances and continuously improving its coverage included professional content such as the five core tools (APQP FMEA environmental quality. The Company also requires suppliers to provide third-
etc.) and VDA 6.3 process audits effectively enhancing the prevention awareness party compliance testing reports annually to ensure compliance throughout the
and improvement capabilities of all staff. entire supply chain. 28Supply Chain Security
About This Report Kaizhong Precision regards supply chain management as a key cornerstone of its sustainable development. Adhering to the principle of "integrity-based cooperation
and mutual benefit" the Company is committed to building transparent fair and collaborative partnerships. Through a systematic management framework and close
communication mechanisms the Company works with its partners to promote quality improvement technological synergy and green operations. Together they are building
About Kaizhong a secure reliable and sustainable supply chain ecosystem contributing to the overall value creation and resilience enhancement of the industrial chain.Precision
ESG Management
Governance
Governance
Kaizhong Precision has established a policy framework centered on the Supplier
Innovation and Management Process and the Supplier Management Manual to systematically Supply Chain Management Structure
Operations
regulate supplier development evaluation and ongoing management. The
Product and Service
Safety and Quality Company also strengthens business continuity assurance through mechanisms Strategic Procurement
Supply Chain Security such as the Emergency Plan Work Instruction and the Supplier Supply Risk Department
Innovation-Driven
Development Management Plan to ensure the stable operation of its supply chain system. General Procurement
Digital and Intelligent Manager Management Operations CenterDevelopment
Data Security and In terms of management structure the Company implements a hierarchical control Committee
Customer Privacy system: the Procurement Committee led by the General Manager is responsible
Protection Business Linesfor overseeing supply chain strategy and major resource allocation; the Strategic
Environment Procurement Department leads supplier development and strategic procurement;
the Operations Center coordinates delivery and inventory optimization; and the
business lines handle execution and provide feedback on site-specific issues.Society
This forms a three-tiered control structure of "strategy - coordination - execution"
ensuring the stable operation of the supply chain system.Key Performance
Data Sheet
Indexes
Reader Feedback
29Strategy
Kaizhong Precision considers the supply chain a critical value chain for achieving sustainable
development. The Company systematically conducts supply chain risk identification and response Impact risk and
About This Report continuously improves its full-cycle supplier management mechanism and deeply integrates the
concept of responsible operation into supplier cooperation and collaborative improvement processes. opportunity management
The Company has formulated policies such as the Supplier Supply Risk Management Plan to
About Kaizhong systematically identify and proactively manage supplier performance risks minimizing their potential
Based on the Supplier Supply Risk Management
Precision impact on the Company and its customers. Kaizhong Precision has identified the following risks and Plan Kaizhong Precision has established a supply
opportunities related to "supply chain security": chain risk identification and response mechanism.ESG Management The Company's Strategic Procurement Management
Risk Risk description Financial impact Management measures Department tracks the external environment supplier
Closely monitor market price operations and market dynamics assesses and
Governance Drastic exchange rate trends establish safety stock ranks risk probability and impact and forms a risk
Economy and fluctuations soaring Increased raw material
and implement hedging level list. For key risks the Company sets up cross-
Market commodity prices sudden costs
Innovation and mechanisms such as price departmental response teams to formulate and
Operations changes in market demand linkage track prevention and control measures. Through
Product and Service
Safety and Quality Shortage or interruption Production shutdown Core materials require developing alternative suppliers maintaining safety
Supply Chain Security
Innovation-Driven Supply Chain of upstream raw material losses increased raw multiple backups and safety stock and establishing regional supply chain
Development Delivery Risk supply leading to material costs risk of stock with emergency layouts the Company transforms risk control into
Digital and Intelligent production stagnation order default escalation plans in place opportunities for enhancing supply chain resilience
Development
Data Security and and collaborative development.Customer Privacy Suppliers changing Standardize supplier change
Protection Material Quality processes or materials Increased quality costs processes strengthening
Issue Risk without approval affecting reputational damage process approval and risk
Environment product consistency traceability
Society Opportunities Opportunity description Financial impact Management measures
Systematic risk
Reduce losses Build a closed-loop risk
Key Performance Opportunity identification and response
Data Sheet from sudden supply management system to Enhance mechanisms transform
disruptions optimize and promote regional
Supply Chain passive emergency
procurement costs and diversification for key
Resilience response into proactive
enhance customer trust materials
Indexes prevention
Deepen strategic Reduce total supply
Promote the transformation
Opportunity for cooperation in risk chain costs improve new
of suppliers into value co-
Collaborative response and jointly product development
Reader Feedback creation partners to achieve Development improve technology and efficiency and establish
deep collaboration
quality long-term advantages
30Indicators and targets
The Company has established an ESG due diligence
and tiered audit mechanism covering the entire
Promote the transformation of suppliers into value co-creation partners to achieve deep collaboration admission process to preemptively mitigate EHS
About This Report risks achieving closed-loop sustainable supply chain
management from sourcing to warehousing.Target Progress Achievement status for in 2025 the reporting period
About Kaizhong
Precision 100% of new suppliers are screened using social and
environmental responsibility standards 100% Achieved
Full-Process Due Diligence and Auditing
100% of suppliers undergo social and environmental
ESG Management responsibility impact assessments 100% Achieved Needs analysis
100% signing rate for the Supplier Integrity Cooperation and sourcing
Governance Commitment Letter and Confidentiality Agreement
100% Achieved
Qualification
Innovation and Admission evaluation and due diligence
and compliance
investigation
Operations
Product and Service The Company has established a scientific admission mechanism for new suppliers adhering to principles such
Safety and Quality as quality system requirements industry preference supply chain security categorized development and On-site audit of
Supply Chain Security
Innovation-Driven comprehensive evaluation. Suppliers are classified into four categories (A B C and D) based on the impact of potential suppliers
Development their materials on product quality with differentiated admission requirements.Digital and Intelligent Sample and
Development During the admission process the Company systematically conducts ESG due diligence giving priority
Data Security and trial production
Customer Privacy to suppliers certified under management systems such as IATF 16949 ISO 9001 and ISO 14001. This verification
Protection preemptively mitigates environmental health and safety and compliance risks ensuring that newly introduced
partners are aligned with the Company's long-term development strategy.Environment Multi-level approval
Management System Certification Requirements for Suppliers for admission
Society ISO 9001 IATF 16949 ISO 14001 and customer-specific requirements
Key Performance Key Performance
Data Sheet
A- and B-class suppliers C-class suppliers
Indexes
Priority shall be given to suppliers certified under IATF
16949 and ISO 14001. Where customers have specific Priority shall be given to suppliers certified
77.44%93.29%
requirements for the supply chain management system under ISO 9001. Supplier
Reader Feedback Local procurement those requirements must be adhered to. localization rate ratio
31Performance management and exit mechanism
The Company implements dynamic performance management for suppliers based on the QCDS (Quality Cost
Delivery Service) evaluation system. Through monthly quantitative assessments suppliers are managed by Case: Specialized ESG training for suppliers
About This Report grade: Grade A suppliers engage in deep cooperation are prioritized for order shares and receive increased
procurement volumes; Grade B suppliers maintain cooperation with set improvement targets; Grade C suppliers
are given a deadline for rectification and face reduced shares; Grade D suppliers have their cooperation In December 2025 the Company updated the
suspended or face exit procedures. Supplier Management Manual to elaborate on About Kaizhong
Precision ESG-related matters and conducted specialized
Furthermore the Company conducts annual EHS-specific audits for high-environmental-risk suppliers and training for several key suppliers based on the
has established a three-level early warning mechanism. It intervenes in cases of significant quality hazards latest management requirements. The training
ESG Management environmental violations or persistent non-compliance to continuously optimize the supply chain structure. systematically explained ESG definitions
requirements and practical pathways. All
participating suppliers pledged to strictly adhere
Governance Multi-dimensional Elimination and exit to the relevant regulations and committed to
QCDS evaluation of underperformers promoting stable sustainable and mutual
Innovation and
Operations Dynamic development.performance
Product and Service Tiered and differentiated management Escalated risk management Safety and Quality application
Supply Chain Security and control
Innovation-Driven
Development
Digital and Intelligent
Development While ensuring that basic access and performance requirements are met the Company will further promote the
Data Security and development of a sustainable supply chain and continuously enhance the social and environmental management
Customer Privacy
Protection capabilities of its suppliers through methods such as audits and training.Environment Sustainable Supply Chain Development
Society The Company systematically promotes sustainable supply chain development committed to building a secure
Achieved efficient and resilient supply ecosystem. Key initiatives include:
Key Performance
Data Sheet
Supplier training Localization and Compliance Social synergy governance responsibility
Indexes Conduct specialized Increase the local Promote the signing of Conduct annual
training on ESG procurement ratio the Supplier Integrity assessments of the
requirements to enhance supply Cooperation Commitment social and environmental
compliance guidelines resilience Letter Confidentiality responsibility impacts of
Reader Feedback etc. Agreement and Supplier qualified suppliers
Code of Conduct
32Key Performance
Indicator Unit 2025 data
About This Report
Number of supplier ESG training sessions conducted by the Company Times 3
Percentage of suppliers who received ESG training from the Company % 100
About Kaizhong
Precision
Percentage of suppliers who have signed the Supplier Code of Conduct % 85
ESG Management Percentage of suppliers identified with significant actual and potential negative
environmental impacts % 0
Governance
Conflict Minerals Management
Innovation and
Operations Kaizhong Precision strictly manages the risks of conflict mineral procurement in its supply chain and adheres to its
Product and Service commitment to responsible sourcing. To implement its zero-tolerance policy on conflict minerals the Company has
Safety and Quality established an annual investigation mechanism ensuring that 100% of customer requirements are communicated
Supply Chain Security to suppliers and that due diligence is conducted. The Company traces the smelting sources of metals such as
Innovation-Driven
Development tin tantalum tungsten gold and cobalt to ensure that its procurement does not involve conflict regions or human
Digital and Intelligent rights violations. Concurrently the Company's global operations strictly comply with the laws and regulations of
Development all countries. Through internal controls and codes of conduct the Company ensures that its international trade is
Data Security and
Customer Privacy conducted legally and with integrity thereby safeguarding its global reputation for compliance. During the reporting
Protection period the Company found no instances of conflict mineral use by its supply chain enterprises.Environment Key Performance
Society
100%0
Key Performance
Data Sheet Coverage rate of suppliers who have Number of suppliers whose partnerships were
completed conflict minerals due diligence terminated due to controversial sourcing issues
Indexes 0
Number of major disputes related to
Reader Feedback procurement activities
33Innovation-Driven Development
Kaizhong Precision continues its development strategy with technology as the core driving force fostering a vibrant R&D environment and a fair incentive mechanism. The
About This Report Company has established a three-tiered innovation management system of "decision-making coordination and execution" supported by relevant policies covering the entire
lifecycle of scientific research technology transfer intellectual property and talent incentives. Guided by customer needs and market trends the Company deepens industry-
academia-research collaboration attracts and nurtures R&D talent and maintains high R&D investment. Through standardized management and practical innovation the
About Kaizhong
Precision Company aligns technological breakthroughs with business value develops new quality productive forces consolidates its advantages in proprietary intellectual property and
continuously creates value for its customers.ESG Management Governance
Governance Building upon its improved technological innovation framework Kaizhong Precision
has upgraded its R&D and innovation management system. Coordinated by the
Innovation and Engineering Technology Research Institute and the Germany R&D Center as core
Operations hubs this system synergizes with domestic and international R&D centers and
Product and Service other innovation platforms to integrate R&D resources and information. Supported Board of Directors
Safety and Quality
Supply Chain Security by core policies such as the Management Measures for Scientific Research
Innovation-Driven Projects it forms a closed-loop management process covering "project initiation
Development - execution - acceptance - commercialization - intellectual property protection."
Digital and Intelligent
Development The system focuses on core areas like materials technology and automation
Data Security and equipment while also balancing talent incentives and the implementation of Senior Management
Customer Privacy
Protection research outcomes thereby ensuring the advancement of R&D innovation and
promoting breakthroughs in core technologies.Engineering Technology Germany R&D
Environment Research Institute Center
Additionally the Company has established a comprehensive Commutator Engineering New Materials
tiered management system for innovation-driven implementation.Society Technology Center
Engineering
The Board of Directors is responsible for steering strategic Connector Engineering Technology Center
direction and risk control approving innovation strategies and Technology Center
Key Performance major investments and evaluating innovation performance. Senior
Data Sheet Management is responsible for coordinating resources promoting
collaboration and monitoring processes; formulating innovation
priority matrices; establishing cross-functional project teams; and
improving innovation incentive mechanisms. The Engineering
Indexes Technology Research Institute is responsible for execution. With
multiple specialized technology centers and research laboratories Engineering Computer-Aided
under it the Institute coordinates project initiation implementation Technology Materials Technology Laboratory Standards Engineering
and result archiving. It works with various business departments Research LabReader Feedback Research Lab Research Lab Research Lab
to ensure the orderly progress of R&D and innovation in products
materials processes and validation. Structure of the Engineering Technology Research Institute
34The Company has established a standardized management system for laboratory The Company has established a full-chain R&D and innovation assurance system
testing and calibration ensuring comprehensive product inspections that cover covering innovation project management technology transfer talent development
core dimensions such as appearance and performance. The laboratory is outfitted and intellectual property management:
with advanced instrumentation for precision measurement reliability testing
About This Report material analysis and environmental testing. It possesses in-house calibration Innovation project management:
capabilities for length electrical and mechanical measurement devices. Accredited Standardize the entire R&D process through policies clarify
by the China National Accreditation Service for Conformity Assessment (CNAS) roles and responsibilities and support the development of
the laboratory ensures its test results are internationally recognized. Furthermore
About Kaizhong talent pipelines
Precision the laboratory consistently participates in measurement audits and proficiency
testing programs to guarantee the accuracy and credibility of its data.Technology transfer:
ESG Management
Promote the evaluation and mass production of scientific
and technological achievements to realize their value.Governance
Talent development assurance:
Innovation and
Operations Build diverse career advancement channels and enhance
Product and Service R&D capabilities through industry-academia-research
Safety and Quality
Supply Chain Security collaboration and internal training.Innovation-Driven
Development
Digital and Intelligent Intellectual property management
Development
Data Security and
Customer Privacy CNAS-certified laboratory's test results are internationally recognized Embed IP protection into the entire R&D process clarify
Protection ownership support the development of technical standards
and comprehensively protect the rights of core technologies
Environment while promoting efficient innovation.Society Key Performance
Key Performance
Data Sheet The Company has a total of 337 R&D personnel
accounting for 9.35% of all employees
Indexes
R&D investment amounted to RMB 82.24 mn
Reader Feedback Participation in measurement audit and proficiency verification accounting for 2.81% of the total audited operating revenue for the year
and the certificates obtained
35Strategy
In response to the national "15th Five-Year Plan" The Company has identified the following risks and opportunities related to "Innovation-Driven Development":
About This Report Kaizhong Precision has deeply integrated the national
strategies of scientific and technological self-reliance
and building a manufacturing powerhouse into its Risk Risk description Financial impact Management measures
About Kaizhong R&D and innovation. The Company has constructed
Precision a tripartite innovation strategy system of "independent Risk of identifying Failure to gain timely
innovation R&D - emerging industry development - market and insights into market and Decline in market Improve the market foresight
ESG Management green transition empowerment." The Company focuses technology
industry dynamics resulting share affecting mechanism and product
on achieving independent control over key core opportunities in missed new market revenue growth. management system
technologies. Leveraging its advantages in vertical opportunities.Governance integration across the entire industry chain it has
established an innovation chain that connects "basic Insufficient internal technical
research - technological breakthroughs - technology Risk of technology development capabilities Low return on R&D Strengthen internal
Innovation and transfer - industrial application" supporting the implementation making it difficult to translate investment leading to and external technical Operations
Company's sustainable development in the high-end and market demand into a decline in product collaboration to accelerate Product and Service
Safety and Quality precision manufacturing sector. Seizing opportunities commercialization competitive products or competitiveness capability building
Supply Chain Security
Innovation-Driven in emerging industries such as AI and the low-altitude
solutions.Development economy the Company is accelerating R&D and
Intellectual Infringement of others' Legal litigation and Establish a protection Digital and Intelligent market expansion for related new products while
Development Property and intellectual property rights or compensation costs system for trade secrets and Data Security and making forward-looking layouts for future industries
Compliance Risks leakage of own trade secrets loss of competitive intellectual property and Customer Privacy like intelligent robotics. The Company supports the
Protection advantage conduct specialized trainingachievement of national "dual carbon" goals through
Environment breakthroughs in green and low-carbon technologies
embedding concepts of energy conservation emission
reduction clean production and the circular economy Opportunities Opportunity description Financial impact Management measures
Society throughout the entire product R&D lifecycle. This
creates a sustainable development pattern where Opportunity for Respond to global Develop high-value-
technological breakthroughs market expansion and Green Innovation environmental trends added product lines Formulate and execute a
Key Performance ecological benefits synergistically reinforce one another. and Market through the R&D of green to increase gross green R&D strategy
Data Sheet
Expansion and low-carbon technologies profit margin
Opportunity
Indexes to Enhance Achieve data-driven
Competitiveness decision-making and Improve production intelligent manufacturing efficiency and reduce Implement an overall digital through Digital through digital and intelligent operating costs strategy
Reader Feedback and Intelligent
Transformation transformation
36Impact risk and opportunity Highlights of R&D and Innovation Efforts
management
Case: Collaborating with the Materials Research Institute of the Chinese University of Hong Kong to develop
About This Report Kaizhong Precision identifies and assesses risks and core polymer material modification technologies empowering product upgrades and market expansion
opportunities related to R&D and innovation through
systematic processes and dynamic management Kaizhong Precision has collaborated with the Shenzhen Institute for Advanced Polymer Materials of The
methods. The Company continuously monitors Chinese University of Hong Kong to develop polymer material modification technologies. This initiative
About Kaizhong
Precision identified risks and opportunities through mechanisms
covers formulations and production processes for key insulation materials effectively resolving technical
such as performance assessments dynamic tracking bottlenecks. The technology has been applied to insulated wires for high-frequency transformers serving
and closed-loop management. multiple market sectors including consumer electronics new energy and data communications providing
ESG Management robust support for product competitiveness and business expansion.Indicators and targets
Governance Kaizhong Precision formulates its R&D strategic Case: Collaborating with Huazhong University of Science and Technology to develop material preparation technology
goals in short- medium- and long-term phases for SiC semiconductor power modules and completing reliability assessments under extreme environments
Innovation and to ensure that its innovation direction is aligned
Operations with market trends and technological evolution. Relying on its industry-academia-research collaborative innovation mechanism Kaizhong Precision has
Product and Service
Safety and Quality In the field of green development the Company conducted in-depth cooperation with Huazhong University of Science and Technology focusing on the
Supply Chain Security will prioritize the development and market launch R&D of core packaging materials for third-generation semiconductor SiC power modules. SiC power
Innovation-Driven of green products gradually ensuring that its modules are key control devices in fields such as wind and solar power generation smart grids high-
Development
Digital and Intelligent core product lines fully comply with international speed rail traction and new energy vehicle drive control; therefore performance improvements place
Development green standards building a global low-carbon higher demands on the heat dissipation capability and reliability of packaging substrates. Through joint
Data Security and
Customer Privacy R&D network and ultimately creating an industry- research the two parties successfully developed a new preparation technology for high-performance
Protection benchmark green manufacturing plant. copper-clad substrates which effectively optimizes the bonding quality and thermal conductivity of the
packaging interface and has passed rigorous environmental reliability verification.Environment
Progress in Achievement
Indicator
2025 status for 2025
Society
Case: Co-developing core components for high- and low-voltage switch units in electric vehicles with clients
1 0 0 % g r e e n
Key Performance product ratio in 100% Achieved
Data Sheet Serving as the energy transmission interface for EV battery packs high- and low-voltage switch units rely R&D on the reliability of their connection and disconnection mechanisms to ensure vehicle safety. Responding
to specific customer needs and leveraging full-process CAE simulation capabilities Kaizhong Precision
engaged in deep collaboration to tackle challenges surrounding the unit's main components. This
Indexes joint initiative encompassed material selection structural optimization and manufacturing process
development. Consequently the Company established a domestically leading automated production
line that ensures the stable mass production of ultra-large insert-molded parts successfully meeting the
Reader Feedback rigorous delivery standards of top-tier industry clients.
37Intellectual property protection
Adhering to the principle of "Leveraging Intellectual Property to Drive
Innovation and Enhance Global Competitiveness" Kaizhong Precision Case: Conducting specialized intellectual property training to build a strong protective barrier
complies with the Intellectual Property Law of the People's Republic for R&D and innovation
About This Report of China the Patent Law of the People's Republic of China and other
regulations continuously improving and optimizing its intellectual In June 2025 Kaizhong Precis ion
property management system. In 2025 the Company implemented conducted specia l ized in te l lectual
About Kaizhong policies such as the Intellectual Property Management System Manual to
Precision property training for the R&D Department. systematically manage the maintenance implementation licensing and Using a hybrid "offline + online" format
transfer of intellectual property. The Company strengthens the protection
ESG Management of its own intellectual property and values the protection of others'
the training systematically explained
intellectual property and trade secrets promoting the development of patent searching and infringement risk
an innovative industry ecosystem and supporting sustainable innovation prevention and included simulation
Governance and competitiveness enhancement through responsible practices. exercises. This effectively enhanced
The Company has obtained intellectual property management system all employees' awareness of patent
certification and the certificate is currently valid. protection and risk control capabilities
Innovation and
Operations building a strong protective net for R&D
Product and Service The Company's Intellectual Property Management System and innovation achievements. Intellectual Property Training
Safety and Quality Certificate and patent certificates
Supply Chain Security
Innovation-Driven
Development
Digital and Intelligent
Development
Data Security and Key Performance
Customer Privacy
Protection
Environment As of the end of 2025
Society the Company held 271 authorized and valid patents
Key Performance including 86 invention patents
Data Sheet
177 utility model patents and 8 international patents
Indexes
The Company also held 14 software copyrights
Reader Feedback The Company has conducted a total of 5 internal training sessions related to intellectual property.
38Digital and Intelligent Case: Building an MOM digital and intelligent management system to empower quality and efficiency
improvements throughout the entire production process
Development In 2025 focusing on the needs for lean manufacturing quality traceability and delivery agility Kaizhong
About This Report
With the core objectives of "data-driven decision-making Precision advanced the construction of a Manufacturing Operations Management (MOM) system in
intell igent-led manufacturing and ecosystem-wide phase. Led by the IT department the project was jointly implemented with production quality and
collaboration for mutual success" Kaizhong Precision is external technical service providers. The system integrates IoT technology for equipment and connects
About Kaizhong building a digital and intelligent transformation path focused with existing systems such as ERP and PLM to build a digital management system covering the entire Precision
on "data-driven operations intelligent manufacturing and process from order to delivery. This digital and intelligent initiative makes the entire production process
ecosystem collaboration." The Company is concentrating transparent and controllable enhancing quality traceability and delivery response speed and injecting
ESG Management
on the digital and intelligent upgrading of the entire precision momentum into the global expansion and flexible manufacturing of the Company's new energy vehicle
manufacturing process to enhance lean production quality precision components business.Governance traceability and delivery agility thereby strengthening its core
competitiveness in the global precision manufacturing field.Innovation and
Operations
Product and Service
Safety and Quality Supplier Raw Material Material
Supply Chain Security Warehousing warehouse
Innovation-Driven Material
Development handling
Digital and Intelligent
Development
Data Security and
Customer Privacy
Protection
Environment
The Company obtained the Certificate of Intelligent
Manufacturing Capability Maturity (Level 3) Production
Society establishing a digital and intelligent management process
baseline that meets industry standards Customers Finished goods Finished Product
warehouse Handling
Key Performance
Data Sheet Key Performance Overall planning scheme for the Manufacturing Operations Management (MOM) system
To ensure the efficient application of the Manufacturing Operations Management (MOM) system the
In 2025 Company provides supporting specialized training at different levels and for various categories of
Indexes employees. On the one hand the Company explains the strategic value and data-driven decision-
the Company's investment in digi tal and
10 making logic to the management team. On the other hand it offers hands-on training for workshop team intelligent transformation reached RMB leaders and process technicians on modules such as work order execution and quality traceability.
Additionally the Company has established a "Digital Benchmark Production Line" as a practical training
Reader Feedback million focusing on upgrading core production
systems and implementing new technologies. site. Using a combined approach of "theory + simulation + practice" the Company has conducted over
20 specialized training sessions.
39Data Security and Customer Privacy Protection
About This Report Kaizhong Precision has established a comprehensive data security and customer privacy protection management system featuring "hierarchical architecture control + closed-
loop institutional processes + technological tool support + emergency drill guarantees." Centered on ISO 27001 and TISAX standards this system covers the entire data
lifecycle and all aspects of customer privacy protection. Through standardized policies meticulous controls and regular drills the Company aims to achieve its management
About Kaizhong goals of "zero data security incidents and zero customer privacy leaks" ensuring the security and compliance of both the Company's and its customers' data assets.Precision
ESG Management Data security and privacy protection management system
Governance The data security and customer privacy protection management architecture of Kaizhong Precision is led by the Information Security Management Committee headed by the
General Manager which serves as the top-level decision-making and coordination body. The Information Management Department acts as the lead executive department
collaborating with the Information Security System Team the Information Security Implementation Team and other departments such as Human Resources and Marketing.Innovation and
Operations This forms a three-tiered collaborative mechanism of "decision-making - management - execution." The Company has also formulated core management policies including
Product and Service the Information Security Management Manual and has obtained ISO 27001:2022 Information Security Management System and TISAX certifications. This ensures Achieved
Safety and Quality
Supply Chain Security control across all scenarios and processes with certification covering the entire business scope of the Company and establishing a security control baseline that meets
Innovation-Driven international standards.Development
Digital and Intelligent
Development
Data Security and
Customer Privacy
Protection
Environment
General
Society Manager
Key Performance Information Security
Data Sheet Management Committee
Indexes Information Management
Department
Information Security
Reader Feedback Management Architecture Information Security Management Architecture
40The Company implements a triple- The Company collects only necessary
backup strategy (local off-site and information during collaborations and
offline) for system data and shared drive clearly identifies core assets.files establishing secure shared drives
About This Report to ensure storage safety. Backup and Data
Recovery Minimization
Terminal documents are encrypted
About Kaizhong Mutual privacy protection obligations
Precision during transfer with approval required are def ined in conf ident ial i ty and for external distribution or decryption. cooperation agreements.Core data is protected throughout
ESG Management i ts l i fecycle using nat ional-grade Data Multi-Scenario cryptographic products. Encryption Emergency Drills
Governance Following the principle of least privilege Data Security Customer Control: Privacy Upon termination of cooperation data is data access requires approval and
Full-Lifecycle Protection: returned or destroyed as required with authentication with key operations proof of destruction provided.Innovation and logged for traceability. Unauthorized Protection Balancing
Operations access attempts trigger data masking. access Compliance and Responsibility Post-Termination Product and Service Control Handling
Safety and Quality
Supply Chain Security The Company deploys firewalls and anti-
Innovation-Driven
malware software with updated virus Constraints are placed on employees Development
Digital and Intelligent definitions. Core network equipment is
and authorized representatives strictly
configured with dual-unit hot standby. prohibiting unauthorized access to or Development
New systems undergo vulnerability disclosure of customer data.Data Security and
Customer Privacy scanning penetration testing and code Technical Personnel
Protection audits before going live. Protection Management
Environment
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
41Data security and privacy protection initiatives in 2025
Multi-Scenario Emergency Drills Case: Conducting multi-scenario data security emergency drills to strengthen the
About This Report barrier for data security and customer privacy protection
In 2025 the Company conducted a total of 3 information security emergency In 2025 focusing on the core needs of data security and customer privacy
drills which verified the feasibility of its emergency plans and the response protection Kaizhong Precision organized multi-scenario emergency drills for IT
About Kaizhong operations and maintenance personnel and related positions. In June a power
Precision capabilities of its team. outage drill was conducted in the data center simulating emergency system
shutdowns and data recovery operations. In August emergency drills for virus
ESG Management outbreaks and cyberattacks were organized involving practical operations such
Company-Wide Security Training as network isolation virus scanning and removal and system recovery thereby
strengthening the response process for sudden security incidents. This series
Governance
In 2025 the Company conducted specialized training on customer of drills covered key data security risk scenarios effectively enhancing the emergency response and collaborative handling capabilities of the O&M team.information security and privacy protection via an online platform covering
Innovation and These efforts have fortified the security defense line for the entire data lifecycle
Operations all employees. The employee training coverage rate was 100% enhancing safeguarding the Company's core data and customer privacy and providing
Product and Service employees' understanding and execution of data security policies and support for business continuity.Safety and Quality privacy protection requirements.Supply Chain Security
Innovation-Driven
Development
Digital and Intelligent
Development Data Security Audits Key Performance
Data Security and
Customer Privacy
Protection In 2025 the Company conducted 3 information security audits finding no As of the end of 2025
Environment major compliance risks. These audits led to 3 optimizations in permission
configurations and 1 improvement in backup procedures. 100% 100% 100%
Society
Completion rate of Success rate of backup Information security
Related Party Privacy Protection important data backup data recovery tests training completion rate
Key Performance
Data Sheet
In col laborat ions wi th suppl iers and customers the Company 0 0
comprehensively signs agreements containing privacy protection clauses
that clearly define data usage boundaries and security obligations. In 2025
Indexes Number of major Number of information
there were no data leakage incidents involving related parties achieving a information security leakage incidents
100% cooperation compliance rate. incidents
Reader Feedback
4204
Environment
Facing severe global environmental challenges Kaizhong Precision
responds to the national "Dual Carbon" strategy by integrating
sustainable development into its corporate core. With the vision
of "building a green global supply chain to create a better home"
and adhering to the policy of "green manufacturing" the Company
promotes green transformation and efficient resource utilization
through measures such as improving its environmental management
system. The Company commits to reaching peak carbon emissions
before 2025 and achieving carbon neutrality before 2050. It will
work with all parties to contribute to the green development and
ecological protection of the industry fulfill its corporate environmental
responsibilities and jointly build a green future.Environmental compliance Pollutant emission
management management
Addressing climate change Waste management
Energy use and management Circular economy
Water resource utilization Biodiversity conservation
SDG alignmentsEHS Governance
Structure Environmental Compliance
About This Report Management
Kaizhong Precision considers Environment Health and
Safety (EHS) management as the cornerstone of i ts Kaizhong Precision complies with the Environmental Protection Law of the People's Republic
sustainable operations and high-quality development. The of China and other relevant laws regulations and local administrative rules where it operates.About Kaizhong
Precision Company has established a governance structure with the The Company has established a systematic environmental management system with clear
Risk Management Committee led by the General Manager responsibilities linked to performance and has formulated environmental management policies
and the EHS Department at its core covering the entire procedures and documents to monitor environmental factors. Adhering to the core principles of
ESG Management organization to coordinate ESG issues such as environmental "clear responsibility prevention first and continuous improvement" the Company has built an
compliance management and climate change response. environmental governance system with full employee participation and comprehensive coverage. By
Through a cross-departmental responsibility system heads of implementing a regional management system the Company delegates and solidifies environmental
Governance various business divisions operational units and subsidiaries responsibilities to each department and business unit creating a closed-loop accountability
drive implementation forming a collaborative and efficient mechanism. At the same time the Company embeds environmental requirements into the entire
Innovation and management network. Furthermore through systematic audits production and operation process promoting the transformation of environmental awareness into
Operations and a continuous improvement mechanism the Company action. This approach integrates environmental management with daily operations enhancing its
regularly assesses risk control and the effectiveness of its capabilities for green and low-carbon development.Environment
actions promoting the enhancement of the risk management
Environmental Compliance system to ensure the Company 's long- term stab le System certification
Management
Addressing Climate Change development and the achievement of its strategic goals. Kaizhong Precision actively promotes and conducts external third-
Energy Use and Management Kaizhong Precision EHS
Water Resource Utilization party system certifications and reviews. The Company strictly Management Architecture
Pollutant Emission adheres to audit regulations undergoing annual surveillance audits
Management by external third parties to ensure the continued effective operation
Waste Management
General Manager of its management systems. Recertification audits are conducted Circular Economy
Biodiversity Conservation every three years to meet the latest requirements of certification
standards. Additionally the Company conducts an internal system
audit annually to perform a comprehensive self-assessment of its
management systems. For any non-conformities identified effective
Society corrective measures are formulated and implemented to ensure
Risk Management all issues are thoroughly resolved thereby further enhancing the
Key Performance Committee scientific and standardized nature of the Company's management
Data Sheet systems. As of the end of the reporting period all major production ISO 14001 Certificate
plants of Kaizhong Precision have been certified under the ISO
14001:2015 Environmental Management System.
Indexes
Reader Feedback EHS department
44Environmental honors and titles Environmental emergency management
Kaizhong Precision aligns closely with the national "Dual Carbon" strategy To respond to potential environmental emergencies Kaizhong Precision has
benchmarking against green factory standards to build a system that integrates established a comprehensive and standardized environmental emergency
About This Report a low-carbon circular economy with intelligent manufacturing. The Company management system. The Company has formulated an Emergency Response
continuously advances green transformation to comprehensively enhance its level Plan for Environmental Emergencies for risk scenarios such as leaks fires and
of green development and environmental competitiveness. excessive emissions which clarifies the emergency organizational structure and
About Kaizhong response procedures to guide incident handling. At the same time the Company
Precision regularly promotes emergency preparedness by organizing at least one full-
Provincial-Level process drill annually to strengthen collaborative response effectiveness and
"Environmentally
ESG Management Trustworthy Enterprise" employee awareness. It also maintains an adequate stock of emergency supplies
and equipment to ensure a rapid response and control the spread of pollution
during emergencies safeguarding both the ecological environment and the
Governance Municipal-Level Company's operational security.National-Level "Cleaner Production
Innovation and "Green Factory" Demonstration Unit" Case: Participation in external environmental protection training on corporate
Operations environmental emergency response
Environment Environmental risk identification and control In November 2025 Kaizhong Precision participated in a specialized training session on corporate environmental emergency response organized by the
Environmental Compliance
Management Kaizhong Precision has established and implemented the Procedure for Shenzhen Municipal Ecology and Environment Bureau. By systematically
Addressing Climate Change Environmental Factor Identification and Evaluation. Led by the EHS Management studying major domestic and international environmental accident cases
Energy Use and Management Committee all departments are organized annually to comprehensively identify the Company gained a deeper understanding of the severe consequences
Water Resource Utilization and systematically evaluate EHS risks and environmental factors. The evaluation and profound lessons learned from incidents such as chemical leaks fires
Pollutant Emission covers multiple dimensions including air emissions and water pollution and uses explosions and cross-border pollution which were caused by a lack of
Management emergency systems slow response and management loopholes. This
Waste Management quantitative scoring to determine significant risks ensuring precise identification
Circular Economy and effective control. The Company integrates internal and external information training further enhanced the Company's awareness of the systematic and
Biodiversity Conservation sources to ensure a comprehensive and objective evaluation. For significant risks hidden nature of environmental risks and prompted a review and improvement
specialized control plans are developed and a dynamic update mechanism is of its internal environmental emergency response plans.established to enhance the adaptability and foresight of risk management thereby
achieving a closed-loop improvement of environmental performance.Society
Conduct initial Conduct initial
Determine evaluation evaluation
Establish
Key Performance scope of internal of external identification and
Data Sheet environmental environmental factors evaluation teamfactors
Indexes Update Manage and Conduct
management of control significant
identification and environmental identification and
Reader Feedback evaluation factors evaluation On-Site Photo of the Specialized Training on Corporate
Environmental Emergency Response
Environmental Factor Identification and Evaluation Process
45Addressing Climate
Target 2025 Achievements
About This Report Change
The Company did NOT receive any In response to the national "Dual Carbon" strategy Kaizhong Precision
The Company has set a target major administrative penalties or face integrates climate change response into its corporate governance and
About Kaizhong
Precision of 0 environmental violation criminal prosecution from ecological long-term development strategy. By establishing a management system
and environmental authorities due to setting emission reduction targets and implementing energy conservation incidents
ESG Management environmental incidents. and emission reduction projects the Company is reducing its carbon
footprint enhancing climate resilience and promoting green and sustainable
development to achieve a 50% reduction in carbon emissions by 2030
Governance and 100% carbon neutrality by 2050. Furthermore the Company has
Key Performance incorporated greenhouse gas management into its core climate governance
Innovation and agenda. Benchmarking against ISO 14064-1:2018 it has established a
Operations Indicator Unit 2025 data climate change management system issued relevant manuals and supporting
Environment procedural documents and built a full-chain management mechanism. For Total investment in environmental protection RMB 10000 878.48 emissions inventory the Company implements quantitative management
Environmental Compliance
Management covering all three scopes identifying and calculating both direct and indirect
Addressing Climate Change Ratio of environmental protection investment % 30 carbon emissions and has established a data screening mechanism. Relying on
Energy Use and Management to operating revenue (per million) this management system the Company ensures that carbon data is authentic
Water Resource Utilization
Pollutant Emission reliable and traceable supporting the setting of carbon targets and accelerating
Management Number of non-Achieved pollutant discharge incidents Cases 0 the transition of climate action from compliance to value creation.Waste Management
Circular Economy
Biodiversity Conservation Number of environmental management
training sessions conducted Times 12 Strategy
Kaizhong Precision is progressively establishing and refining a climate risk
Society Total duration of environmental management Hours 24 management system that covers the entire value chain. The Company training systematically identifies climate-related risks and opportunities at every stage
from raw material procurement to product delivery. It integrates the sustainable
Key Performance
Data Sheet Number of participants in environmental Person-times 120 development of key stakeholders into its management strategy to enhance social management training responsibility and sustainable value. The Company will continue to focus on key
issues assess potential financial impacts and develop cost-effective response
Indexes Number of environmental emergency risk
drills conducted Sessions 10 plans to secure a leading position in the low-carbon transition.Reader Feedback Kaizhong Precision has identified the following risks and opportunities related to Number of participants in environmental
emergency risk drills Person-times 150 "Climate Change Response":
46Risk Risk description Financial impact Management measures Impact risk and opportunity
The Company's main operating management
locations are in coastal areas Reduced Formulate natural disaster
About This Report Extreme making them susceptible to production emergency plans and conduct
typhoons and heavy rainfall which capacity leading regular drills; transfer a portion Climate change materiality assessment
weather risks could lead to damage to plants to a decrease in of losses through commercial Guided by its development mission and vision and
and equipment and pose a threat revenue insurance.to personnel safety. considering internal and external resources policies and About Kaizhong
Precision market conditions Kaizhong Precision has mapped out its
Continuously track policy industrial value chain. The Company is positioned in the
Increased developments promote energy
ESG Management Policy risk
Increasingly stringent global
carbon emission control policies. compliance conservation and emission
middle of the value chain transforming upstream materials
costs reduction and increase the and components into competitive products through its own
proportion of clean energy. R&D production and technological innovation.Governance Reduced
Consumer focus on low-carbon demand for Conduct an organization-level Assessment method for climate-Related
Market risk standards driving the supply chain products and carbon inventory set emission
Innovation and toward a green transition. services leading reduction targets and implement impacts risks and opportunities
Operations to a decrease in specific measures.revenue Impact assessment
Environment The transition to low- Strengthen talent development and retention increase
Environmental Compliance carbon technologies requires
Technology risks continuous R&D investment and Increased R&D investment in low-carbon The Company strictly follows the ISO Management
Addressing Climate Change technological iteration involves
costs technology R&D and optimize
uncertainty. production processes to reduce
14064-1 standard and local guidelines in
Energy Use and Management energy consumption. Shenzhen to quantify and assess the impact
Water Resource Utilization
Disclose progress in climate of direct and indirect carbon emissions from Pollutant Emission
Reputational Increasing attention from investors Management and stakeholders on climate Impact on risk management and establish its operational activities through annual
Waste Management risk action. financing costs and monitor the achievement of greenhouse gas inventories.Circular Economy emission reduction targets.Biodiversity Conservation
Opportunities Opportunity description Financial impact Management measures Risk and opportunity identification
Society Under the "Dual Carbon" strategy Increased Leverage green factories to build
Opportunity for the demand for new energy
green market vehicles and green manufacturing
operating a green product system partner The Company employs a method that
is growing and a low-carbon revenue and with leading new energy vehicle
Key Performance expansion product gross companies and expand into the combines qualitative analysis with industry transition can expand access to
Data Sheet high-end customers and markets. profit margin low-carbon sector. assessment. By monitoring policy dynamics
analyzing customer needs evaluating
Increase the proportion of green
Indexes Substituting with clean energy electricity and promote energy- supply chain conditions and studying local
Opportunity for implementing energy efficiency saving technological upgrades; climate characteristics it regularly identifies
operational cost upgrades and recycling resources Reduced operating costs optimize energy management and updates climate-related risks physical
Reader Feedback optimization can reduce energy costs and and establish a full-process
improve resource efficiency. energy consumption control risks and potential opportunities.mechanism.
47Monitoring mechanism for climate-related issues Conducting climate change scenario analysis
Kaizhong Precision has established a regular and procedural monitoring mechanism To actively respond to the national "Dual Carbon" goals and meet policy requirements
to continuously track climate issues. With the "Greenhouse Gas Management Team" customer demands and industry development trends Kaizhong Precision after
About This Report at its core and the Environmental Protection Department as the executive hub the assessment selected the Beyond 2°C Scenario (B2DS) proposed by the International
Company has formed a stable organizational guarantee. A closed-loop monitoring and Energy Agency (IEA) for its climate scenario analysis. This scenario integrates multiple
management system has also been established to ensure the Company can respond risk dimensions including extreme weather events policy changes and market
About Kaizhong promptly to internal and external changes and steadily advance its low-carbon transition. fluctuations to effectively assess the Company's climate resilience.Precision
ESG Management Routine Each department collects monthly/annual activity data on
Tighter
The Company faces stricter environmental policies
Data energy consumption materials transportation etc. according
environmental
policies and and regulations which will drive adjustments in its
Collection to their responsibilities. regulations operational strategies and cost management.Governance
Innovation and
Operations
At the beginning of each year systematically account for the Market The Company plans to reduce potential compliance
Environment Annual previous year's greenhouse gas emissions and prepare an condition risks by proactively planning and investing in energy-
Quantitative
Environmental Compliance inventory report. fluctuations saving and emission-reduction technologies.Management Inventory
Addressing Climate Change
Energy Use and Management
Water Resource Utilization
Unpredictability The Company will increase R&D efforts promote Pollutant Emission Conduct independent internal audits of the inventory process
Management Internal of technological process innovation and develop more efficient
Waste Management Quality data and reports. development thermal management solutions to meet market and Circular Economy
Biodiversity Conservation Verification environmental demands.Strategic The Company will assess and continuously
Society Compare key indicators such as total emissions and carbon
Performance transition for optimize supply chain sustainability adopting more intensity against baseline year data and established emission
Comparison corporate environmentally friendly materials and methods in raw
Key Performance reduction targets to assess annual performance.and Analysis revenue growth material procurement and product manufacturing.Data Sheet
Indexes Incorporate climate performance risk identification Carbon emission The Company will closely monitor climate change-
Management and emission reduction progress into the Company's levels of new related risks and formulate risk management
Reader Feedback Review and management review to guide and adjust the climate strategy businesses measures.Iteration targets and action plans for the following year.
48Indicators and targets
Kaizhong Precision integrates into the national "Dual Carbon" strategic framework demonstrating its firm commitment to the 3060 goals through practical actions. By
About This Report continuously increasing resource investment and implementing systematic emission reduction actions the Company has translated its environmental responsibilities into
quantifiable performance results—as of 2025 the carbon emission intensity per unit of value added has decreased by 12.69% year-on-year laying a solid foundation for its
medium- and long-term "Dual Carbon" targets. Looking ahead the Company will continue to follow its "Carbon Neutrality Roadmap" driving the low-carbon transition forward
About Kaizhong with phased milestones and steadily advancing toward a net-zero future.Precision
ESG Management Carbon neutrality roadmap
Governance
Innovation and Short-term goal 2025 Science-based carbon target 2030 Long-term carbon goal 2050
Operations
Environment Reducing carbon intensity by 50% Achieving 100% carbon neutrality
Environmental Compliance
Management Reducing carbon intensity Clean energy usage ratio of 50% Reducing absolute scope 1 and 2 carbon Addressing Climate Change
Energy Use and Management by12.69% year-on-year
emissions by 50%
Water Resource Utilization Helping suppliers save 3 Achieving carbon neutrality before 2050
Pollutant Emission
Management million kWh of energy
Waste Management
Circular Economy
Biodiversity Conservation
Improving energy Optimizing energy Assisting suppliers in Promoting low-carbon Implementing green
efficiency structure emission reduction design operations
Society
Heat recovery and reuse Purchasing green Implementing supplier Recyclable product Advocating green
from equipment electricity energy-saving projects packaging design commuting
Key Performance
Data Sheet Replacement and energy- Raising energy efficiency Reducing energy
saving retrofitting of high- standards for equipment consumption in supply chain Sorting recycling and Implementing cleaner
energy-consumption transportation reuse of solid waste production
Indexes equipment Developing green energy Product carbon Low-energy consumption Planning green
Establishing a digital energy sources such as photovoltaic footprint process design factories
and wind power
Reader Feedback management platform
49
Phased goals Key strategiesKey Performance Greenhouse gas emission reduction measures
Scope 1 greenhouse Tonnes of CO equivalent Kaizhong Precision reshapes its organizational behavior through green operations creating a low-2
About This Report gas emissions carbon ecosystem that covers work methods lifestyles and production models. The Company has
190.48 issued an energy conservation and carbon reduction initiative to all employees weaving specific
179.00
6.03% actions such as energy-saving electricity use paperless offices green commuting resource
About Kaizhong recycling and intelligent manufacturing efficiency improvements into the fabric of daily operations.Precision From desks to production lines from commutes to community homes a green mindset is becoming
2024 2025 a shared identity for Kaizhong's people. This is both a proactive response to the national strategy for
ESG Management energy conservation and emission reduction and an intrinsic driver for the Company's journey toward
Scope 2 greenhouse Tonnes of CO2 equivalent a sustainable future.gas emissions
Governance 107005.45
92478.99 Case: Replacing traditional fossil fuels with clean energy to implement low-carbon practices
Innovation and 13.58%
Operations In 2025 the Company steadfastly implemented its green and low-carbon development strategy making
the application of clean energy a core measure to optimize its energy structure and reduce carbon
Environment emissions continuously increasing the proportion of green electricity in its production and operational
Environmental Compliance energy consumption. During the reporting period the Company's green electricity consumption reached
Management 2024 2025 13.769 million kWh. Through the low-carbon practice of replacing traditional fossil fuels with clean energy
Addressing Climate Change
Energy Use and Management Total greenhouse gas the Company achieved a cumulative carbon emission reduction of 13065.4 tCO2e effectively reducing
Water Resource Utilization emissions (Scope 1 + Tonnes of CO2 equivalent the carbon footprint of its production and operations.Pollutant Emission Scope 2)
Management 107195.93
Waste Management 92657.99
Circular Economy 13.56% Case: Active participation in training on carbon market policy interpretation and trading capability
Biodiversity Conservation enhancement
To enhance its capacity to participate in the carbon market Kaizhong Precision attended the 2025
Society capacity-building training session for key emitting entities in June 2025 organized by Shenzhen Green
2024 2025 Exchange. This training focused on interpreting Shenzhen's carbon emission rights trading policies
Greenhouse gas tCO e / RMB 10000 of practical skills for the carbon market and guidance for annual compliance work aiming to help key Key Performance 2
Data Sheet emission intensity industrial value added emitting entities deeply understand policy requirements master trading processes and successfully
fulfill their emission reduction responsibilities. Through this systematic learning the Company has further
0.911 clarified its primary responsibilities and action paths within the carbon market laying a solid foundation
Indexes 0.795
12.69% for active participation in carbon emission rights trading and optimizing internal carbon management
processes in the future.Reader Feedback
20242025
50Energy Use and Management Low-Carbon Living
Kaizhong Precision places energy management at the core of its production Green Commuting: Implement the "3-5-10 Commuting Plan" (walking for 3
About This Report operations and strategic development establishing a systematic company-wide energy km cycling for 5 km taking public transportation for 10 km and driving for
governance system. Benchmarking against the ISO 50001:2018 Energy Management distances over 10 km) encourage walking cycling and public transport
System standard the Company has formulated institutional documents such as the and drive one less day per week.About Kaizhong
Precision Energy Management Manual which clarify its energy policy responsibilities and
operational standards embedding energy management goals into the entire production Energy Conservation and Emission Reduction Behaviors: Advocate for
and operational process and strategic decision-making. To ensure the efficient taking the stairs sorting and recycling waste and conserving resources
ESG Management operation of this system the Company has established an Energy Conservation (water paper electricity) to cultivate environmental protection habits.and Consumption Reduction Leading Group composed of members from the EHS
Governance Management Committee and the Equipment and Power Department under the EHS
Department. This group drives the shift from passive cost control in energy conservation Low-Carbon Office
and carbon reduction to proactive value creation achieving synergistic environmental
Innovation and
Operations and economic benefits. This effort lays a solid energy management foundation for the
Company's low-carbon transition and high-quality development.Environment Energy-Saving Electricity Use: Use energy-saving light fixtures and promote
Energy-Saving Targets the use of strong natural light for illumination; strictly require that electrical Environmental Compliance
Management appliances be turned off when leaving the office and set reasonable
Addressing Climate Change computer screensaver times; regulate the use of air conditioning and
Energy Use and Management Reduce annual energy consumption by 3% (baseline Unit: per suspend its use on specific days.Water Resource Utilization RMB million of industrial added value)
Pollutant Emission Paperless Office: Promote paperless communication and document
Management
Waste Management The Company actively responds to the processing (using the OA e-office platform and video conferencing) save
Circular Economy national "dual control" policy and carries out printing paper and advocate for double-sided printing.Biodiversity Conservation energy conservation and emission reduction
work in conjunction with its main business
comprehens ive ly imp lement ing green
operation strategies. The Company has issued Low-Carbon Manufacturing
Society an energy conservation and emission reduction
initiative to all employees implementing Resource Management: Promptly identify and address leaks spills
Key Performance measures such as energy-saving electricity and drips to reduce energy waste.Data Sheet use paperless offices green commuting
resource management optimization and Production Efficiency: Ensure machinery is turned off when not
production efficiency improvements. At the in use and non-essential power sources are shut down; improve
Indexes same time the Company has formulated production quality and efficiency to save energy.the Regulations on Energy Conservation
and Emission Reduction Management to Energy-Saving Improvements: Encourage suggestions for energy-
Reader Feedback ISO 50001 Energy Management further utilize energy effectively and rationally saving equipment and improvements to enhance the Company's
System Certificate improve energy efficiency control costs and operational efficiency.achieve the Company's dual control targets.
51Key Performance Water Resource Utilization
Indicator Unit 2025 data
About This Report Total energy consumption Tonnes of standard coal equivalent 12063.76 To actively address the global challenge of water scarcity and promote sustainable
corporate development Kaizhong Precision has always regarded water as a
precious strategic resource and is committed to building a comprehensive and
Total energy consumption Tonnes of standard coal equivalent/ 4.12 efficient water resource management system. The Company strictly complies with
About Kaizhong per million in revenue RMB 1 million laws and regulations such as the Water Law of the People's Republic of China and
Precision the Regulations on Water Conservation. Adhering to the management principles
Direct energy consumption Tonnes of standard coal equivalent 86.04 of "total volume control efficiency first recycling and reuse and individual
ESG Management accountability" the Company has formulated and implemented the Water Resource
Management System integrating the concepts of water resource protection and
Including: Diesel Tonnes of standard coal equivalent 57.78 efficient utilization into every aspect of its strategic decision-making and daily
Governance operations.Including: Gasoline Tonnes of standard coal equivalent 28.26
Water conservation target
Innovation and
Operations Indirect energy consumption Tonnes of standard coal equivalent 11977.73
Environment
Including: Electricity Tonnes of standard coal equivalent 11977.73
Environmental Compliance Annual reduction of5% (Unit: per RMB million of industrial added value)
Management
Addressing Climate Change
Energy Use and Management
Water Resource Utilization
Pollutant Emission
Management
Waste Management
Circular Economy
Biodiversity Conservation
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
52Through strict compliance management of water withdrawal a quota control Water Conservation and Recycling Management Measures
system and a refined metering and monitoring network of "one meter per
household one meter per machine" Kaizhong Precision achieves precise tracking
and dynamic management of water flow and consumption throughout the entire Water-saving fixtures are used in office areas and
About This Report plant area laying a solid foundation for continuous improvement in water use Water- dormitories. Water-efficient processes and equipment
efficiency. saving are prioritized in production. The technical department
facilities regularly assesses and promotes water-saving retrofits for
Water Withdrawal and Use Management Measures
About Kaizhong older equipment.Precision
ESG Management Achieved water withdrawal strictly adhering to
legal red lines A production wastewater treatment and reuse system has
been established with treated water used for workshop
Governance All water withdrawals are legally licensed and strictly Recycling
adhere to permit requirements; and reuse cleaning and landscape irrigation. Rainwater is collected
for plant greening and road sweeping to reduce fresh
Unlicensed or excessive water withdrawal is strictly
Innovation and water consumption.Operations prohibited to ensure full operational compliance.Environment
Environmental Compliance Planned management implementing precise control
Management The technical department conducts weekly inspections of
Addressing Climate Change Annual departmental and monthly water use plans Leakage the water supply network and water-using equipment uses
Energy Use and Management are developed based on the production plan for the prevention professional methods to detect leaks and repairs them
Water Resource Utilization following year; and control within 24 hours. All departments are required to report any
Pollutant Emission
Management discovered leaks immediately.Total water consumption and conservation targets
Waste Management
Circular Economy are clearly defined to achieve refined goal-oriented
Biodiversity Conservation management.Key Performance
Indicator Unit 2025 data
Society
Quota control promoting water conservation and
efficiency Total water consumption Tonnes 138858
Key Performance Water consumption quotas for major products and
Data Sheet processes are established with reference to national
and industry standards; Recycled water volume Tonnes 41199.30
Indexes Workshop water use is strictly controlled within
quotas with any excess requiring analysis and
Reader Feedback corrective action forming a closed management loop. Water recycling rate % 30
53Pollutant Emission Special Management Measures for Pollutants
Management Air pollution prevention and control
About This Report In accordance with national laws and regulations such as the Environmental Protection Establish an inventory management system for all exhaust emission sources and adopt
Law of the People's Republic of China and the Regulations on the Administration of differentiated treatment processes for different types of exhaust gas generally using a combined model of "pretreatment + main treatment + end-of-pipe treatment";
Pollutant Discharge Permits and based on its own production and operational realities
Kaizhong Precision has formulated the Pollutant Emission Management System and has Process exhaust gases from organized emissions are strictly treated using high-
About Kaizhong established and continuously improved a pollutant emission management system covering
Precision efficiency processes such as adsorption and combustion. All exhaust emissions comply the entire process. The Company implements a coordinated strategy of source reduction with national and local standards with some factories implementing stricter "special
process control and end-of-pipe treatment for waste gas wastewater solid waste and noise emission limits";
ESG Management to ensure that environmental impact is minimized and resource utilization is maximized. Strictly control the unorganized escape of dust and volatile organic compounds
(VOCs) through measures such as sealed storage of raw materials optimization of
Furthermore with environmental compliance as the baseline for its survival and transportation links and treatment of fugitive emissions;
Governance development the Company has built a four-in-one environmental governance system encompassing "monitoring - record-keeping - permitting - emergency response." This Establish operational records for all pollution control facilities which are regularly maintained to prevent unauthorized shutdowns.system is founded on a five-dimensional monitoring network to establish a solid data
Innovation and foundation a dual-track record-keeping system to solidify full-process traceability a
Operations pollutant discharge permit system to define compliance boundaries and a tiered emergency Water pollution
response mechanism to secure the risk bottom line. This forms a closed-loop environmental prevention and control
Environment management cycle covering "prevention - control - improvement - emergency response" Strictly implement "separation of rainwater and sewage and separation of clean and
Environmental Compliance driving the transformation of pollution prevention from passive compliance to proactive polluted water." All production bases nationwide have established wastewater treatment
Management governance and from experience-based management to data-driven management. systems with treatment processes combining physical chemical biochemical and
Addressing Climate Change membrane technologies based on water quality and local environmental requirements;
Energy Use and Management Five-dimensional monitoring Dual-track record-keeping
Water Resource Utilization Production wastewater is treated to meet discharge standards or is reused as reclaimed
Pollutant Emission A five-dimensional self-monitoring A comprehensat ing on a water after deep treatment. Some factories have achieved "zero discharge" increasing
Management system of "location - indicator - dual-track basis of "primarily the water recycling rate;
Waste Management frequency -method - responsibility" electronic with paper forbuilt
Circular Economy has been established covering operbackup."Retention periods Domestic sewage is pretreated before being discharged into the municipal pipe network;
Biodiversity Conservation all media includingwaste gas are set by category to meet storage tanks pipelines and sewage pools on the plant site are equipped with anti-
wastewater and noise. Monitoring is regulatory and trace abil i ty seepage and emergency collection facilities to prevent leakage risks.conducted with Achievedequipment requirements.ensuring data is traceable and publicly
Society disclosed in accordancewith the law. Pollutant Noise pollution
Emission prevention and control
Key Performance Management
Data Sheet Tiered emergency response System Permit compliance
Prioritize the use of low-noise equipment and install soundproof covers and shock-
absorbing bases for high-noise sources to reduce noise at the source and equipment
A tiered emergency response The Company strictly implements level;
mechanism has been established. the pollutant discharge permit
Indexes In the event ofan incident a systemcompleting permit applications Reasonably plan production operation times to avoid high-noise operations at night;
"notification - reporting - disposal" renewals and modifications in
process is activated. Drillsand accordance with the law to ensure that Regularly commission third-party monitoring of noise at the plant boundary to ensure
Reader Feedback reviews enhance risk prevention all discharge activities are lawful and compliance with the Emission Standard for Industrial Enterprises Noise at Boundary.and control capabilities. Achieved throughout the entire process.
54Case: Wastewater pipe leakage emergency response drill Waste Management
In 2025 to test and enhance its practical response capabilities for environmental Adhering to the principles of "reduction resource recovery and harmless treatment"
About This Report emergencies Kaizhong Precision organized a special emergency drill for a Kaizhong Precision complies with the Law of the People's Republic of China on the "wastewater pipe leak in Production Department." The drill simulated a scenario where
a workshop wastewater pipe was damaged. The emergency response team quickly Prevention and Control of Environmental Pollution by Solid Waste and other laws and
initiated the response according to the plan and efficiently completed a series of regulations. The Company has formulated policies such as the Waste Management
About Kaizhong actions including cutting off the leakage source containing the pollution conducting
Regulations and has established and optimized a full-lifecycle waste management
Precision environmental monitoring and repairing the pipeline successfully preventing the system. The Company is building a scientific efficient and sustainable waste treatment
pollutants from escaping. This drill effectively verified the operability of the Company's system to enhance its treatment capacity and management level reduce the impact of
emergency plan strengthened the collaborative response capabilities of multiple waste promote green and low-carbon production and lifestyles contribute to ecological
ESG Management departments and reflected the Company's management philosophy of "combining and environmental protection and sustainable development and achieve standardized
peacetime preparedness with wartime response and being well-prepared" in refined and green management throughout the entire treatment process.environmental risk control.Governance Waste Management System
Innovation and Case: Conducting specialized hands-on training for wastewater treatment to General industrial solid waste
Operations strengthen guarantees for Achieved waste disposal
Environment In 2025 to enhance the level of refined environmental management and the Sorted disposal: Subdivide categories such as scrap metal and waste plastics
Environmental Compliance practical skills of frontline employees in waste and wastewater treatment Kaizhong
prioritize recycling and reuse and commission Achieved units to dispose of
Precision's Bao'an Branch conducted specialized on-site training and hands-on drills materials with no recycling value; establish storage/transfer ledgers and retain Management
Addressing Climate Change focused on the wastewater treatment system. The training based on the Wastewater them for no less than 5 years.Energy Use and Management Treatment System Operation Manual systematically explained the process flows of
Water Resource Utilization the three wastewater treatment units. Through on-site demonstrations and one-on- Full-process control: Regularly update and file the solid waste inventory sort
Pollutant Emission one practical guidance it helped employees master skills in operational inspections and collect at the source store in a standardized manner commission qualified
Management and troubleshooting and strengthened their professional knowledge of safe chemical suppliers for disposal conduct annual spot checks on the final disposal end
Waste Management preparation. This training clarified job responsibilities and effectively enhanced and track the destination through manifests GPS etc. to prevent illegal
Circular Economy
Biodiversity Conservation the environmental safety awareness and emergency response capabilities of all
dumping and secondary pollution.employees providing both personnel and technical guarantees for the stable and
Achieved operation of the Company's wastewater treatment system and the standard-
Achieved discharge of pollutants. Hazardous waste
Society
Sorted storage and transfer: Store in dedicated warehouses with partitioned and
Key Performance Key Performance sorted areas handle transfers through electronic manifests on the regulatory
Data Sheet platform and commission qualified units for disposal to achieve full-process
traceability.Indexes 78170 Tonnes 291496.41Ten thousand Emergency management: Establish management ledgers and have them regularly checked by the EHS department and strictly control the collection/
cubic meters storage/transfer processes; formulate and drill emergency plans and in the
Reader Feedback Total amount of event of an accident activate the plan notify affected parties and report to the
wastewater discharge Total exhaust gas emissions environmental protection department.
55The Company organizes at least one hazardous waste leakage emergency drill
annually to enhance employees' emergency response and handling capabilities
and maintains records and summary evaluations of the drills. At the same time Key Performance
the Company's regulatory departments include standardized hazardous waste
About This Report
management in their annual training plans regularly training relevant employees
on laws and regulations operating procedures and safety awareness to ensure
that management requirements are deeply ingrained. 2461Tonnes 356Tonnes
About Kaizhong
Precision Total non-hazardous waste Total hazardous waste
Case: 2025 hazardous chemical leakage and fire emergency drill
ESG Management
Tonnes %
To strengthen its emergency response capabilities for hazardous chemical 1361 48.33
Governance accidents Kaizhong Precision organized a joint emergency drill for a sulfuric Total waste recycled Percentage of waste recycled
acid leak and an alcohol fire in 2025. The drill simulated the neutralization
Innovation and containment and cleanup procedures for a sulfuric acid leak as well as
Operations initial firefighting operations for an alcohol fire covering key aspects such 100% 100%
as alarm response personal protection leak control and firefighting. This
Environment multi-departmental collaborative drill effectively tested the applicability of Coverage rate of industrial solid Compliance rate of
Environmental Compliance the emergency plan enhanced employees' practical response skills for
Management waste sorting and recycling hazardous waste sorting hazardous chemical incidents and identified areas for control improvement in
Addressing Climate Change storage and transfer
Energy Use and Management scenarios involving large-scale leaks and fire escalation further solidifying the
Water Resource Utilization Company's production safety defenses.Pollutant Emission
Management
Waste Management
Circular Economy
Biodiversity Conservation
Society
Key Performance
Data Sheet
Indexes
Emergency Drill for Responding to a Sulfuric Acid Leak and an Alcohol Fire
Reader Feedback
56Circular Economy Biodiversity Conservation
In practicing the principles of a circular economy and promoting the The Company integrates biodiversity conservation into its corporate environmental
About This Report green transformation of its production system Kaizhong Precision is responsibility strategy systematically managing its impacts on ecosystems across daily
not only committed to the resource recovery of end-of-pipe waste but operations supply chain management and long-term investments. During the project
also proactively integrates circular economy thinking into the source planning and feasibility assessment phases the Company proactively identifies and avoids
About Kaizhong
Precision innovation of product design and production processes. Through ecologically sensitive areas strictly adhering to the regulatory requirements of ecological
continuous material substitution and process optimization the Company protection red lines environmental quality baselines resource utilization ceilings and the
fundamentally reduces the use of hazardous substances and enhances negative list for environmental access. Throughout the construction and operational phases
ESG Management
the environmental friendliness and resource recycling potential of its the Company minimizes disturbances to surrounding habitats and species through measures
products throughout their lifecycle. such as intensive land use pollutant control and facility greening. Furthermore the
Governance Company has incorporated biodiversity compliance requirements into supplier qualification
and performance evaluation systems driving the entire upstream and downstream value
Innovation and chain to jointly fulfill ecological responsibilities.Operations In production process management
Environment The Company proactively replaces high- Key Performance
risk chemicals with low-risk environmentally
Environmental Compliance
Management friendly alternatives. Citric acid is used
Addressing Climate Change instead of traditional sulfuric acid for cleaning During the reporting period the Company's production operations products and
Energy Use and Management and treatment significantly reducing the
Water Resource Utilization services did NOT have a significant impact on biodiversity.Pollutant Emission environmental and safety risks associated with
Management the storage use and subsequent disposal of
Waste Management strong acids.Circular Economy
Biodiversity Conservation
In product design and material selection
Society
The Company actively explores and applies
innovative materials such as using polymer
Key Performance plastic blades instead of traditional metal
Data Sheet magnetic yokes in some components. This
move not only reduces product weight and
Indexes optimizes performance but also significantly
improves the material's recyclability and
Reader Feedback environmental compatibility in final disposal.
5705
Society
Kaizhong Precision upholds a "people-oriented" philosophy
integrating employee well-being and social responsibility into its long-
term development logic. The Company is committed to creating a
fair respectful and inclusive work environment safeguarding the
legitimate rights and interests of its employees improving its talent
acquisition and development mechanisms and fostering a strong
sense of belonging and organizational cohesion. With occupational
health and safety as its bottom line the Company protects the lives
and health of its employees and ensures operational stability. It also
continuously engages in social contribution and rural revitalization
initiatives responding to community and public concerns and driving
the parallel advancement of corporate growth and social value.Protection of employee rights Occupational health and safety
Employee compensation and Social contribution
benefits
Rural revitalization
Employee career development
and training
Employee care
SDG alignmentsProtection of Employee Rights The Company prohibits the hiring of employees under the age of 16 and strictly verifies the age of all applicants to ensure no child
or juvenile workers are employed. If child labor is discovered
Kaizhong Precision adheres to legally Achieved employment and a "zero tolerance for Prohibition the Company immediately ceases their work in accordance with
About This Report infringement" bottom line. The Company integrates the protection of employee rights of child labor labor laws sends them for a medical examination at a specialized
into its systems and management by following domestic regulations incorporating institution returns them to their guardians promptly and assists
overseas requirements and drawing on international initiatives. To improve its labor rights them in continuing their compulsory education.management mechanism the Company has formulated and implemented policies such
About Kaizhong
Precision as the Employee Handbook which covers aspects like equal employment ensuring that The Company signs labor contracts with employees in accordance
employee grievances are handled in a documented and traceable manner. The Company with the law clearly defining the terms of employment. It strictly
fosters an inclusive diverse and equal work environment and improves mechanisms
ESG Management prohibits collecting deposits from employees in any form and does centered on "equal employment and a diverse workforce." Opposition not hold destroy hide or confiscate their documents except as
Talent acquisition is guided by job requirements and follows the principles of openness to forced required by law. If any instance of forced labor is discovered the
Governance transparency and merit-based competition. The Company standardizes selection labor
Company promptly investigates holds the responsible parties
accountable and provides reasonable assistance to the affected
processes to ensure information is authentic and processes are traceable promoting a individuals such as legal aid financial compensation and
Innovation and diverse workforce structure. At the same time it emphasizes a combination of internal
Operations psychological counseling.and external talent allocation to build a sustainable talent supply system. To implement
equal employment the Company prohibits unfair treatment such as discrimination and
Environment harassment through its policies enhancing fairness optimizing codes of conduct and
The Company has established a labor union to ensure that
rights protection mechanisms ensuring accessible complaint channels and strengthening Freedom of employees can exercise their right to organize in an environment
protection for special groups. This improves employees' sense of belonging and cohesion association free from violence pressure fear intimidation and threats. For
Society achieving stable and integrated development of a diverse team. and matters involving the vital interests of employees such as wages Protection of Employee benefits occupational safety and health and social insurance
Rights Measures for Protecting Labor Rights collective the Company supports listening to employees' opinions through
Employee Compensation and bargaining
Benefits The Company does not interfere with employees' freedom of belief. democratic forms like the workers' congress and union meetings
Employee Career It does not discriminate against employees in hiring compensation and cares about and values their reasonable demands.Development and Training training opportunities promotion dismissal or retirement based on
Employee Care
Occupational Health and Anti- ethnicity race nationality religious belief gender or other factors. Job assignment and transfer for female employees: The Company
Safety discrimination In the event of a discrimination incident or upon receiving a related prohibits arbitrarily assigning female employees to unsuitable positions.Social Contribution complaint the Company promptly investigates and provides If a position becomes unsuitable due to production changes a timely
Rural Revitalization reasonable assistance to the affected individuals such as legal aid transfer will be arranged. Female employees may apply for a transfer
financial compensation and psychological counseling. for health reasons with a doctor's certificate.Key Performance Protection
Data Sheet All forms of harassment including psychological sexual and of female Labor protection during pregnancy: Pregnant employees are prohibited
verbal are prohibited. Employees are encouraged to report from working overtime. From the seventh month of pregnancy they employees'
potential and actual incidents of harassment or abuse to their are not assigned to night shifts and are provided with rest time. Their rights
Indexes company's HR & Administration department or their department working hours and tasks are monitored regularly.Anti-
harassment head. In the event of an incident or upon receiving a complaint Maternity and nursing leave: The Company ensures female employees'
the Company promptly investigates and provides reasonable
Reader Feedback rights to prenatal check-up leave nursing leave and parental leave in assistance to the affected individuals such as legal aid financial accordance with the law. During the nursing period female employees
compensation and psychological counseling. are not assigned to work overtime or on night shifts.
593603 Employee satisfactionTotal number of employees Persons
Kaizhong Precision regards its employees as core stakeholders in the
organization's development and values their requests and experiences. The
About This Report Company conducts annual all-staff satisfaction surveys to collect feedback on
Unit：Persons Unit：Persons key dimensions such as the work environment career development paths team collaboration effectiveness and the competitiveness of compensation and
370 benefits. It has established a tiered and categorized issue response mechanism About Kaizhong
Precision to ensure that requests are directed to the responsible departments. This system
1229 mandates time-bound closed-loop implementation of improvement measures
2374 3233 and targeted feedback on rectification results. This approach transforms value ESG Management By gender By region from "voices being heard" to "problems being solved" continuously enhancing
the employee experience and organizational commitment.Governance Employee satisfaction
Innovation and
Operations Male Mainland China
91.78%94.18%
Female Other countries and regions 85.25%
Environment
Key Performance
Society
Protection of Employee Indicator Unit 2025 data
Rights
Employee Compensation and Employees with disabilities hired Persons 8
Benefits
Employee Career Employees from ethnic minorities Persons 452 2023 2024 2025
Development and Training
Employee Care Veteran employees % 25
Occupational Health and
Safety
Social Contribution Percentage of female employees % 34.11
Rural Revitalization
Employee turnover rate % 9.96
Key Performance Workers' congress meetings throughout the year Times 5
Data Sheet
Labor contract signing rate % 100
Indexes Social insurance coverage rate % 100
Reader Feedback No incidents involving infringement of the freedom of association and collective
bargaining rights forced labor illegal servitude employment of child labor or any
type of discrimination or harassment were found.
60Employee Compensation and Benefits
About This Report Kaizhong Precision is committed to centering its efforts on employee well-being and long-term talent development.The Company has built a compensation management system and an employee benefits framework that are both
externally competitive and internally equitable. Through performance incentives medium- and long-term employee
About Kaizhong stock ownership and diverse welfare services it addresses the multi-level needs of its employees. This ensures that
Precision employees receive more comprehensive support and care at the Company enhancing their sense of belonging and
cohesion and stabilizing its core talent team. By continuously reviewing and optimizing its incentive and benefits
ESG Management strategies the Company maintains its attractiveness to talent and its market competitiveness.Governance Employee compensation and performance
Kaizhong Precision continuously improves its compensation and incentive systems such as the Compensation
Innovation and
Operations and Benefits Management System and the Performance Management System. The Employee Handbook clearly
outlines the performance-oriented principles using performance results in key areas like bonus distribution. This
strengthens the role of the compensation system in driving strategic goals and supporting key positions fostering a
Environment positive cycle. Additionally the Company strictly adheres to the Performance Management System to improve the
entire process for employee performance feedback and appeals. After performance appraisal results are issued the
Society employee's direct supervisor conducts a one-on-one performance feedback meeting to explain the results and their
Protection of Employee
Rights basis listen to the employee's opinions and clarify subsequent improvement plans and resource support thereby
Employee Compensation and aligning organizational goals with individual development.Benefits
Employee Career
Development and Training Performance Appeal Process
Employee Care
Occupational Health and
Safety STEP 01 STEP 02 STEP 03 STEP 04
Social Contribution
Rural Revitalization
Prioritize communication If no agreement is The Human Resources
and coordination with the reachedsubmi t a Department in conjunction
For major appeals the
Key Performance appraiser's supervisor written appeal to the wi th the Performance
matter must be reported
Data Sheet Management Committee to the General Manager Human Resources
Department conducts an investigation for approval before a
and provides feedback final decision is issued
Indexes on the outcome within the
specified time limit
Reader Feedback
61Equity incentives and employee stock Employee benefits
ownership plans
Kaizhong Precision is deeply concerned with employee benefits and well-being.About This Report Kaizhong Precision uses a systematic performance management system to link Guided by the Welfare Management System the Company has established a
medium- to long-term and daily incentives applying organizational and individual benefits management framework covering all full-time employees. This framework
performance results to incentive distributions such as annual bonuses salary emphasizes the legality compliance differentiation and accessibility of benefits
About Kaizhong adjustments and performance awards. At the same time to improve the benefit-sharing while standardizing the composition and applicability of benefits. This approach
Precision mechanism between laborers and owners and align the interests of the Company ensures that welfare resources more accurately match the multi-level needs of
shareholders and employees the Company has launched a stock option incentive employees continuously enhancing their sense of belonging and team stability.ESG Management plan and an employee stock ownership plan. These initiatives aim to motivate and
retain core talent stimulate their enthusiasm and creativity build a human resources Statutory benefits Statutory benefits
Governance advantage and ensure the achievement of long-term strategic goals. Includes pension insurance Includes off-site accommodation
Case: Implementing a stock option incentive plan to align core talent with medical insurance work-related subsidies meal allowances
Innovation and performance goals injury insurance unemployment annual physical examinations
Operations insurance maternity insurance and special care during
In September 2025 Kaizhong Precision launched the 2025 Stock Option Incentive and a housing provident fund. The major holidays.Company's
Environment Plan covering certain senior and core management personnel. By implementing Employee
compensation securitization reforms the plan links company-level performance Benefits
Society targets with individual performance results. This long-term incentive strengthens Special benefits System
Protection of Employee the stability of key talent and aligns their objectives with the Company's business Flexible benefits
Rights Inc ludes comprehensive goals thereby boosting momentum for sustained growth. Includes commercial insurance
Employee Compensation and benef i t support covering
Benefits family life transportation t ra in ing fami ly care and
Employee Career
Development and Training and communication.educational support.Employee Care Case: Implementing an employee stock ownership plan to enhance key talent
Occupational Health and retention and long-term incentives
Safety
Social Contribution In May 2025 Kaizhong Precision launched the 2025 Employee Stock Ownership
Rural Revitalization Plan with 160 outstanding employees participating. This plan improves the Key Performance
corporate governance mechanism and enhances the Company's long-term
Key Performance effective incentive and constraint mechanisms and compensation system. It fully
Data Sheet mobilizes the enthusiasm and creativity of employees attracting and retaining
outstanding management talent and business backbones which is conducive Employee benefits coverage rate: 100%
Indexes to the Company's future performance improvement and high-quality sustainable
development.Reader Feedback
62Employee Career Development and Training
About This Report Kaizhong Precision adheres to a strategic focus on employee career development and training. The Company has systematically built an employee development support
system that balances institutional guarantees with capability enhancement. This system more closely aligns individual employee development with the Company's operational
needs continuously improving team stability and professionalism and creating an internal driving force that supports the Company's continuous innovation and stable
About Kaizhong operation.Precision
ESG Management Talent development management system
Supported by policy frameworks such as the Kaizhong Corporate Culture Outline Kaizhong Precision has established an employee development management framework
Governance covering training knowledge inheritance and career paths. By standardizing processes integrating dual-track growth paths and reinforcing the application of performance
results the Company enhances the clarity and predictability of employee growth paths thereby strengthening its talent pipeline and organizational capabilities. The Company
Innovation and
Operations treats talent development as a key lever for organizational capability building integrating it into this process. It uses dual-track paths and competency standards to guide
growth and promotion complemented by mechanisms like needs identification to solidify its knowledge inheritance and internal cultivation capabilities. This approach shifts
talent development from a "project-based" model to one that is "long-term and systematic" providing sustained support for key positions and core competency building.Environment
Society
Protection of Employee
Rights
Employee Compensation and
Benefits Differentiated Leadership development and
Employee Career
Development and Training development by stage high-potential pipeline
Employee Care
Occupational Health and New employees: Cultural integration; Junior level: Team management; personal
Safety foundational skills
Social Contribution effectiveness
Rural Revitalization Growth stage: Professional deepening; Mid-level: Cross-departmental collaboration;
independent contribution Talent Development business management
Key Performance
Data Sheet Maturity stage: Domain expertise; management Mechanism Senior level: Strategic planning; organizational
capabilities development
Indexes Late career stage: Experience inheritance; High-potential program: Job rotation; special
organizational empowerment assignments; executive coaching
Reader Feedback
63Employee promotion Employee training
Kaizhong Precision promotes employees based on competence and actual Kaizhong Precision prioritizes talent development by establishing a closed-loop training
performance establishing a fair and impartial internal career development channel. and development system that encompasses "stratified training process evaluation result
About This Report The Company has standardized the promotion process to broaden employees' application and continuous improvement." Leveraging both internal and external training
growth opportunities thereby motivating and retaining core talent. It has established resources the Company offers a wide range of training programs for all employees. These
a job-grade system covering management professional and operational tracks programs cover areas such as onboarding and integration job-specific skills professional
About Kaizhong
Precision supporting employee development within or across tracks based on their abilities. series management capabilities professional ethics and legal compliance. This approach
The Company conducts four-dimensional tiered reviews based on job qualifications ensures that employee skill enhancement is effectively aligned with their career development
with mechanisms in place to ensure fairness. The results are linked to promotions paths continuously strengthening the organization's talent pipeline and core competencies.ESG Management and compensation creating a closed-loop management system.Leadership enhancement training
Governance
Case: Conducting external training on business acumen and strategic decision-
M17 Management expert M15 Advanced manager making to enhance the management capabilities of mid- to senior-level leaders
Innovation and
Operations M16 Senior manager M14 Intermediate manager In November 2025 Kaizhong Precision organized a two-day specialized
external training session on "Business Acumen and Strategic Decision-Making"
Environment for its mid- to senior-level business managers. The course focused on key areas
such as expanding business perspectives strategic analysis methods and
Society P16 Expert P13 Intermediate pathways for decision implementation. Through systematic learning the training
Protection of Employee strengthened the management team's business mindset and scientific decision-
Rights P15 Senior P12 Junior staff
Employee Compensation and making capabilities. This further enhances the executability of strategic planning
Benefits P14 Advanced and the efficiency of operational management providing talent and capability
Employee Career support for the Company's high-quality development.Development and Training
Employee Care
Occupational Health and
Safety 014 Senior technician 012 Intermediate skilled worker
Social Contribution
Rural Revitalization 013 Technician 011 Junior skilled worker/
operator
012 Senior skilled worker
Key Performance
Data Sheet
Additionally the Company encourages employees to pursue higher education
Indexes incorporating it into the career development support framework. By offering education
allowances and subsidies it lowers the barrier for employees to advance their education
and enhances their sense of achievement aligning their capabilities with job development
Reader Feedback
needs. This approach strengthens the Company's ability to attract and retain high-caliber On-site at the Business Acumen and Strategic Decision-Making training
talent thereby boosting its overall talent competitiveness.
64
Management Professional Operational
track track trackProfessional skills training
Case: Conducting CAD&CAE application training to enhance engineering Case: Conducting training on the TRIZ theory of inventive problem solving to
About This Report collaboration and simulation capabilities enhance technical problem-tackling and problem-solving capabilities
In September 2025 Kaizhong Precision conducted CAD&CAE software In December 2025 Kaizhong Precision organized external training for R&D personnel
application training for production management personnel from on the theme of technological innovation. The training covered the innovation
About Kaizhong departments such as commutators and connectors. The training covered
Precision methodology system an overview of TRIZ the DTRIZ problem-solving path and an introductions to mainstream CAD/CAE tools key points of internal
CAE application and a detailed explanation of the full-process CAE explanation of related tools complemented by hands-on exercises for key tools. By
simulation capabilities. By integrating software operation with practical introducing structured analysis and innovative tools into R&D workflows this initiative ESG Management
engineering scenarios the training enhanced participants' understanding helps R&D personnel enhance their abilities to break down complex problems generate
of the synergy between design process and manufacturing as well as solutions and validate them thereby further supporting improvements in technical
Governance their ability to use these tools. This provides methodological support for problem-tackling efficiency and the quality of innovation output.product design optimization and manufacturing capability enhancement.Innovation and
Operations
Environment
Society
Protection of Employee
Rights
Employee Compensation and
Benefits
Employee Career
Development and Training
Employee Care
Occupational Health and
Safety On-site at the CAD&CAE software application training On-site at the TRIZ innovative methods practice training
Social Contribution
Rural Revitalization
Key Performance Key Performance
Data Sheet
Indexes The Company conducted a total of 580 with a total duration of an average satisfaction rate of
Reader Feedback online and offline employee training sessions 19458 hours 94.18%
65Employee Care
About This Report Kaizhong Precision consistently integrates employee care into its daily management and corporate culture. The Company continuously organizes a variety of employee activities focused
on physical and mental health team integration holiday celebrations and community engagement. These activities provide richer opportunities for communication and interaction foster
cross-departmental collaboration enhance employees' sense of belonging and cultivate a positive harmonious and inclusive work atmosphere.About Kaizhong
Precision
Employee activities
ESG Management
Case: Organizing fun-themed activities for the Mid-Autumn Festival to Case: Operating sports club communities to promote inter-departmental team exchange
Governance enhance employees' sense of belonging and collaboration
Innovation and In 2025 the Company planned special activities for the Mid-Autumn In 2025 the Company established badminton and football clubs as regular employee
Operations Festival combining interactive games with on-site participation and holiday community programs holding weekly activities. Employees are encouraged to participate
gifts. It set up fun challenges and interactive sessions in common areas voluntarily based on their interests and form teams freely. Through a model of "fixed
Environment allowing employees to experience a stronger sense of festive ritual through frequency + stable organization" these sports activities have become a platform for cross-
collaboration and communication. This also provided an opportunity for departmental communication. On one hand they help new employees integrate into teams
Society employees from different positions and shifts to connect in a relaxed more quickly; on the other they foster tacit understanding and trust through long-term
Protection of Employee setting continuously enhancing team warmth and cohesion. interaction providing "soft support" for daily collaboration and communication efficiency.Rights
Employee Compensation and
Benefits
Employee Career
Development and Training
Employee Care
Occupational Health and
Safety
Social Contribution
Rural Revitalization
Key Performance
Data Sheet
Indexes
Reader Feedback On-site at the Company's Mid-Autumn Festival activity challenges On-Site at the Football (Left) and Badminton (Right) Club Activities
66Case: Opening a cultural and activity room to support employees' fitness at any time Occupational Health and Safety
In 2025 the Company opened a cultural and activity room free of charge to all Kaizhong Precision regards occupational health and safety as a fundamental
About This Report employees 24 hours a day. It is equipped with basic fitness facilities such as baseline and a core capability for high-quality development. The Company
treadmills and stationary bikes meeting the "drop-in-and-work-out" needs of adheres to the principles of prioritizing employee life and health focusing on risk
employees on different shifts before or after work. By embedding a fitness space prevention and ensuring accountability. Through institutionalized governance and
About Kaizhong into employees' daily routines the Company lowers the barrier to exercise helps routine operations it translates safety requirements into executable behaviors and
Precision employees develop more consistent health habits and to some extent alleviates capabilities at the frontline. A closed-loop management system drives continuous
the effects of prolonged sitting and fatigue. This ensures that health support is improvement which not only protects the occupational health and safety of its
ESG Management "accessible usable and sustainable" in practice. employees but also enhances the stability and resilience of its production and
operations providing a guarantee for long-term sustainable development.Governance Governance
Kaizhong Precision complies with the Law of the
Innovation and People's Republic of China on the Prevention and
Operations Control of Occupational Diseases the Work Safety Law
of the People's Republic of China and other laws and
regulations. The Company also adheres to occupational
Environment health and safety standards and regulations in its
overseas operating locations and references industry
Society association requirements to establish an occupational
Protection of Employee Photos of the Company's Activity Room Space and Equipment health and safety governance system centered on
Rights policies organization and responsibility. The Company
Employee Compensation and has formulated a series of policy systems including
Benefits Assistance for employees in hardship the Occupational Health Management System and the Employee Career Work Safety Target Management System to solidify
Development and Training
Kaizhong Precision has established an Employee Mutual Aid Foundation to provide target requirements procedural norms and supervision Employee Care and assessment ensuring that risks are identifiable
Occupational Health and financial assistance to members and their families facing medical difficulties or significant The Company and Its measures are implementable and responsibilities are
Safety losses due to natural disasters or emergencies. The foundation helps recipient families Subsidiaries Are All Certified
Social Contribution traceable. For the specific governance structure please Under the ISO 45001:2018
Rural Revitalization alleviate temporary financial pressures supplements the employee welfare system and refer to the EHS governance structure in Chapter IV Occupational Health and Safety
enhances employees' sense of gain and team cohesion. "Environment" of this Report. Management System
Key Performance
Data Sheet Key Performance Key Performance
Indexes The Company provided assistance to 12 employees in hardship
The Company had no major work safety accidents.Reader Feedback with 0.0041 employees assisted per million in revenue
67Strategy Impact risk and opportunity
management
The Company adopts an overall strategy of "prevention first proactive risk management and accountability at every
About This Report post" elevating occupational health and safety management from isolated controls to a systemic capability that supports Kaizhong Precision regards occupational health and
business continuity. In 2025 considering the characteristics of multi-campus operations and overseas compliance safety as a fundamental capability to ensure employee
requirements the Company established a routine risk and opportunity identification framework through mechanisms well-being and business continuity. Following a closed-
About Kaizhong
Precision such as three-level work safety standardization specialized inspections of key facilities and monthly investigations. This loop logic of "risk prevention - process monitoring -
ensures that management decisions are based on verifiable identification results allowing for precise resource allocation emergency response - review and improvement"
and enhancing both delivery stability and long-term resilience. the Company implements the policy of "safety first
ESG Management prevention foremost and comprehensive governance."
Kaizhong Precision has identified the following risks and opportunities related to "Occupational Health and Safety": It comprehensively implements daily prevention and
Governance control emergency management safety culture and
Financial psychological support to form executable collaborative Risk Risk description Management measures
Innovation and impact and traceable management arrangements. This
Operations approach continuously reduces exposure to accidents
Production Safety Typical accident types such Increased Formulate emergency plans strengthen and occupational health risks while transforming "safer
Accident Risks as fires electric shocks and operating safety training and drills and normalize work methods a more stable workforce and higher Environment mechanical injuries costs hazard identification and rectification operational resilience" into opportunities for improving
organizational efficiency and long-term competitiveness.Society
Protection of Employee Occupational Inadequate control of hazardous Increased Identify and control occupational hazards
Rights Health Exposure factors such as dust noise and compliance conduct regular monitoring and public
Employee Compensation and Risks chemicals costs disclosure and implement full-lifecycle
Benefits health examinations
Employee Career
Development and Training
Employee Care
Occupational Health and Opportunities Opportunity description Financial Management measures
Safety impact
Social Contribution Reduce costs
Rural Revitalization Business Comprehensive emergency associated with Establish a tiered response mechanism
Continuity plans reduce shutdown shutdowns and validate its effectiveness through
Key Performance Opportunities losses from accident impacts and secondary regular drills
Data Sheet disposal
Reduce
Indexes
Preventive Closed-loop management absenteeism Conduct evaluations and occupational
Management of hazardous factors and work-related health examinations and strengthen
Opportunities reduces the probability of injury expenses protective optimization and on-site Reader Feedback occupational health damage and improve per improvements
capita efficiency
68Indicators and targets
Key Performance
About This Report Quantitative indicator disclosure
item Unit 2025 data
Investment in work safety RMB 10000 448.88
About Kaizhong
Precision Target Progress in 2025
Investment in work safety liability
Six "Zeros" insurance RMB 10000 12
ESG Management
Zero fatalities and serious injuries (including Ratio of work safety investment to % 0.15
traffic liability) accidents operating revenue
Governance
Zero major fire (or explosion) accidents Number of work safety emergency drills Times 48
Achieved
Innovation and Zero major equipment accidents Cumulative number of participants in
Operations emergency drills Person-times 12603
Zero major liability accidents
Coverage ratio of work safety liability
%100
Environment Zero major environmental pollution incidents insurance
Zero incidence rate of occupational diseases Cumulative number of safety risk
Society Times 92among employees inspections
Protection of Employee
Rights Safety risk inspection coverage rate % 100
Employee Compensation and
Benefits Number of occupational health and safety
Employee Career Times 320
Development and Training trainings
Employee Care Occupational health and safety training
Occupational Health and
Safety coverage rate
%100
Social Contribution Target Progress in 2025
Rural Revitalization ccupational disease incidence rate % 0
Four "100%s"
100% rate of employee safety production Number of workdays lost due to work-
Key Performance related injuries Days 135
Data Sheet education and training
100% coverage rate of work-related injury Workdays lost due to work-related injuries Days/RMB 1
insurance and work safety liability insurance Achieved per million in revenue million
0.05
Indexes
100% coverage rate of occupational
disease physical examinations Work-related injury rate % 0.19
Reader Feedback 100% coverage rate of occupational health Lost time injury frequency rate Incidents/million
and safety training hours (LTIFR)
0.95
69Occupational health and work safety emergency plans
Kaizhong Precision considers the development of emergency plans a key barrier in occupational health and safety risk management. The Company has formulated the Emergency
About This Report Plan for Production Safety Accidents and the Emergency Response and Handling Mechanism for Safety Accidents with the goal of achieving "rapid response coordinated handling and
minimized losses" during emergencies. These plans integrate the protection of employees' lives and health with the assurance of business continuity into a single mechanism. Through
process-based tiered and traceable management arrangements the Company ensures that the plans are "usable responsive effective and reviewable" continuously enhancing its
About Kaizhong
Precision accident prevention and emergency response capabilities.ESG Management The Company's Emergency Response and Support for Work Safety Accidents
Governance Emergency Response Emergency Support
Innovation and
Operations Level III (Department-Level): Initial response by the Communication and Information Guarantees: Broadcasting systems internal
accident department or team with emergency support telephones and mobile phones are used by zone; command center and team members
from other departments. are on 24/7; the logistics support team is responsible for maintaining broadcasting and
Environment office telephone systems.Level II (Company-Level): Activated by the General
Society Commander/Deputy General Commander uniformly Emergency Teams and External Linkage: Teams cover emergency rescue security
Protection of Employee mobilizing company emergency resources for response. and evacuation medical aid communications and logistical support; external forces
Rights
Employee Compensation and such as 110/119/120 are engaged when necessary.Benefits Level I (Community-Level): Activated and directed by
Employee Career the local sub-district office and government emergency Materials Equipment and Neighborhood Collaboration: The Company is equipped
Development and Training management departments coordinat ing socia l with emergency supplies that can be deployed as needed; an emergency linkage
Employee Care
Occupational Health and emergency resources for reinforcement. mechanism has been established with neighboring enterprises to strengthen mutual
Safety resource assistance.Social Contribution Escalation Principle: When a lower level cannot control
Rural Revitalization the situation the response level is escalated sequentially Financial Guarantees: Special funds for emergency rescue are legally guaranteed
from III to II to I. for material procurement team training and drills emergency response expenses and
Key Performance rescue rewards.Data Sheet Early Warning/Information Reporting Chain: First
Discoverer On-Duty Manager General (Deputy) Other Guarantees + Institutionalized Operation: Transportation support security
Indexes Emergency Commander Relevant Government medical aid and rapid external firefighting reinforcement; implementation of a 24-hour
Departments. In emergencies reporting can bypass duty system annual training inspection and maintenance and regular meetings and
levels. drills (comprehensive/specialized at least once a year on-site response plans at least
Reader Feedback once every six months).
70Safety culture and mental health development Case: Training mental health first aiders to establish a peer support network
Kaizhong Precision uses safety culture development as a driver integrating employee work
safety awareness and mental health care into its daily management system. In 2025 the In April 2025 guided by a mental health management approach of "prevention first early
About This Report Company continued its themed event mechanisms such as Safety Month and Fire Safety identification and timely support" Kaizhong Precision selected and trained a group of
Month and strengthened occupational health compliance training and the mental health volunteer employees from various departments to serve as "Mental Health First Aiders."
support system. These efforts promote the transformation of safety standards into frontline After receiving basic training these individuals can provide initial listening and support
About Kaizhong to colleagues experiencing psychological distress in their daily work much like physical
Precision capabilities and extend health care to both physical and mental well-being fostering an
atmosphere where employees "know the risks can respond to emergencies and have first aid and guide them to seek more professional help when necessary. By building an
support." This reduces safety and health risks and enhances team stability and operational accessible peer support system within the organization the Company further enhances
ESG Management resilience. Additionally the Company strictly complies with regulations such as the Design its employee care system reduces the hidden risks of mental stress issues and promotes
Health Standard for Industrial Enterprises and the Administrative Provisions on Occupational the development of a more stable and resilient work atmosphere.Governance Health at Workplaces and regularly provides training on relevant knowledge and skills for
first-aid personnel safety managers and other staff.Innovation and Case: Conducting "safety awareness month" training to enhance
Operations emergency response capabilities
In June 2025 Kaizhong Precision launched a Safety Awareness Month campaign themed
Environment "Everyone Talks About Safety Everyone Knows Emergency Response." Department
heads and employees participated in safety training that focused on strengthening risk
Society identification hazard prevention and key aspects of emergency response. Through
Protection of Employee promotion to encourage learning and training to drive application this initiative embedded
Rights
Employee Compensation and safety awareness and emergency response capabilities into daily work reinforced the
Benefits Company's primary responsibility for work safety and continuously ensured the safety of
Employee Career employees and the stability of production.Development and Training On-Site at the Employee Mental Health Training
Employee Care
Occupational Health and
Safety
Social Contribution Key Performance
Rural Revitalization
Key Performance
Data Sheet As of the end of 2025
Indexes the Company had 40 45 personnel holding safety
Red Cross first-aiders management certificates
Reader Feedback
On-site at the Safety Awareness Month training
71Social Contribution Rural Revitalization
Kaizhong Precision actively fulfills its corporate social responsibility by integrating it into its business development. The Kaizhong Precision upholds a rural revitalization philosophy
About This Report
Company continuously engages in public welfare and charitable activities giving back to society through actions focused on of "pragmatic participation and long-term mutual benefit."
promoting rural employment assisting vulnerable groups making charitable donations and providing educational support and The Company considers rural revitalization a key direction
care. At the same time the Company practices environmental protection and low-carbon concepts promoting the extension of for its social responsibility and regional co-development.About Kaizhong
Precision green awareness into the community. It is committed to consistently enhancing the stability and impact of its social contributions Adhering to a needs-oriented approach it focuses on the
contributing to the construction of a harmonious society. foundational conditions for industrial development and
shortcomings in public well-being prioritizing investments
ESG Management
Case: Launching a "June 1st" love and education support program to bolster campus learning in projects with long-term benefits. Through a model of
"small precise investments + project-based management"
Governance the Company collaboratively promotes infrastructure
In June 2025 in Pingshan District Shenzhen the improvement production stability and income-generating
Company donated learning materials to the Pingshan
Innovation and capacity fostering co-development and mutual benefit
Operations Foreign Language Wenyuan School and conducted a visit. between the Company and rural areas.The event focused on supporting students' learning and
growth conveying the warmth of public welfare through Case: Kaizhong Precision's Heyuan base: Driving
Environment material aid and on-site interaction to help improve campus rural labor employment through industrial upgrading
learning conditions and create a caring atmosphere. The
Society school presented a plaque to the Company in thanks In active response to the rural revitalization strategy
Protection of Employee
Rights acknowledging the social value of its corporate public Kaizhong Precision invested in the construction
Employee Compensation and welfare actions. The Company Receives a Thank-You Plaque of an intelligent manufacturing industrial base for
Benefits From Pingshan Foreign Language Wenyuan
School in Pingshan District Shenzhen new energy vehicle components and an intelligent Employee Career
Development and Training manufacturing project for "precision connectors
Employee Care + high-performance functional materials" in the
Occupational Health and Jiangdong New Area of Heyuan in 2017 and 2025
Safety
Social Contribution Case: Donating to poverty alleviation and aid funds to solidify the foundation of public well-being and respectively. The establishment of these industries
Rural Revitalization common prosperity has powerfully driven local industrial upgrading and
effectively boosted regional employment. As of the
Key Performance During the 2025 Guangdong Poverty Alleviation Day event Kaizhong Precision donated funds to the Sanhe Sub-district end of the reporting period the Heyuan base had
Data Sheet
Office through the Huizhou Charity Federation. The donation was specifically designated to support the "Hundred cumulatively employed 477 local laborers creating
Thousand Ten Thousand Project" and other public welfare initiatives. This action leveraged a standardized charitable stable job opportunities for the rural workforce through
Indexes platform to connect with grassroots needs directing funds toward community livelihood and addressing shortcomings tangible actions. This has injected new momentum
in public services. It collaboratively enhanced the capabilities of social assistance and grassroots governance support into the regional economy and vividly demonstrates
the Company's proactive role in contributing to rural
Reader Feedback contributing to the steady advancement of work related to rural revitalization and common prosperity. revitalization.
72Key Performance Indicator Unit 2024 2025
Percentage of independent
About This Report Governance dimension directors on the Remuneration % 66.67 66.67
and Appraisal Committee
Percentage of independent
Indicator Unit 2024 2025 directors on the Nomination % 66.67 66.67
About Kaizhong Committee
Precision Operating revenue RMB 10000 304960.76 292835.38 Percentage of independent
Net profit attributable to directors on the Strategy % 25 25
shareholders of the listed RMB 10000 17011.08 23359.85 Committee
ESG Management company Coverage rate of directors % 100 100
Accounts payable RMB 10000 27961.39 24103.53 receiving anti-corruption training
Governance Ratio of accounts payable to total
Number of reported anti-
assets % 7.85 6.65 corruption incidents
Times 0 0
Coverage rate of employees
Total cash dividends RMB 10000 10830 11000 receiving anti-bribery and anti- % 100 100
Innovation and Percentage of female directors % 44.44 44.44 corruption training
Operations
Signing rate of employee anti-
Percentage of female senior bribery commitments % 100 100
executives % 20.00 20.00
Number of training sessions on
Environment Percentage of independent internal control compliance and Times 3 3
directors % 33.33 33.33 risk management
Percentage of independent Coverage rate of training in
directors with a tenure exceeding % 0.00 0.00
Society internal control compliance and % 100 1006 years risk management
Percentage of independent Information security training
directors with a tenure exceeding % 0.00 0.00
Key Performance completion rate
%100100
9 years
Data Sheet Number of major information
Percentage of independent Cases 0 0
security incidents
directors serving on the boards of % 0.00 0.00
more than 3 listed companies (%) Standard deviation of the age
Indexes of directors supervisors and Years 8.7 8.7Percentage of independent
directors on the Audit Committee % 66.67 66.67
senior management
Board member attendance rate % 100 100
Whether the convener of the
Reader Feedback Number of directors who Audit Committee is an accounting / Yes Yes attended less than 75% of Persons 0 0
professional meetings
73Environment dimension
Indicator Unit 2024 2025 Indicator Unit 2024 2025
About This Report
Environmental Tonnes of CO
protection RMB 10000 999.11 878.48 Scope 2 greenhouse gas emissions
2107005.4592478.99
equivalent
investment
About Kaizhong Ratio of total
Precision Total greenhouse gas emissions
Tonnes of CO2 107195.93 92657.99
environmental equivalent
protection % 33 30 Total greenhouse gas emissions Tonnes of CO2 investment to per million in revenue (Scope 1 and equivalent/ 35.15 31.64
ESG Management operating revenue Scope 2) (tonnes of CO2 equivalent) RMB 1 million
(per million)
Diesel Liters 47606.29 47205.11 Total water consumption Tonnes 175836.00 138858.00
Governance Gasoline Liters 14692.37 25952.67 Water recycling rate % 24 30
Purchased
electricity kWh 112968623.90 111228147.60
Recycled water volume Tonnes 41659.00 41199.30
Innovation and
Operations Total energy Tonnes of standard
consumption coal equivalent 13958.52 12063.76
Total amount of wastewater discharge Tonnes 100819.00 78170.00
Total exhaust gas emissions Ten thousand Total energy Tonnes of standard cubic meters 255053.06 291496.41
Environment consumption per coal equivalent/ 4.58 4.12
million in revenue RMB 1 million Total production waste Tonnes 2747.00 2817.00
Direct energy Tonnes of standard 74.68 86.04 Total non-hazardous waste Tonnes 2390.00 2461.00
Society consumption coal equivalent
Total non-hazardous waste generated Tonnes/RMB 1
Including: Diesel Tonnes of standard 58.84 57.78 per million in revenue million
0.780.84
coal equivalent
Key Performance
Data Sheet Including: Tonnes of standard
Gasoline coal equivalent 15.84 28.26
Total non-hazardous waste recycled Tonnes 1490.00 1361.00
Indirect energy Tonnes of standard Total hazardous waste Tonnes 357.00 356.00
Indexes consumption coal equivalent
13883.8411977.73
Including: Tonnes of standard Total hazardous waste generated per Tonnes/RMB 1 0.12 0.12
Electricity coal equivalent 13883.84 11977.73 million in revenue million
Reader Feedback Scope 1 Tonnes of CO2 Total hazardous waste landfilled Tonnes 357.00 356.00greenhouse gas 190.48 179.00
emissions equivalent
74Indicator Unit 2024 2025 Innovation and operations dimension
Total waste recycled Tonnes 1490.00 1361.00
About This Report Indicator Unit 2024 2025
Total waste recycled per million in Tonnes/RMB 1
revenue million 0.49 0.46 Customer satisfaction % 98.50 90.00
About Kaizhong Percentage of waste recycled % 54.24 48.33 Customer complaint handling rate % 100 100
Precision
Coverage rate of industrial solid PPM (Parts Per Million defects) Times 0.080 0.079
waste sorting and recycling (New) % 100 100
Product recalls Times 0 0
ESG Management Compliance rate of hazardous waste
sorting collection storage and % 100 100 Number of quality and safety training Times 80 196
transfer (New) sessions
Governance Number of environmental Total duration of quality and safety training Hours 300 980
management training sessions Times 10 12
conducted Supplier localization rate % 77.30 77.44
Innovation and Total duration of environmental Local procurement ratio % 93.25 93.29
Operations management training Hours 20 24
Number of supplier ESG training sessions Times 2 3
Number of participants in
environmental management training Person-times 100 120 Percentage of suppliers who received ESG Environment training % 100 100
Number of environmental emergency
risk drills conducted Sessions 8 10 Percentage of suppliers who have signed
Society the Supplier Code of Conduct
%7685
Number of participants in
environmental emergency risk drills Person-times 120 150
Key Performance Number of non-Achieved pollutant
Data Sheet discharge incidents Cases 0 0
Indexes
Reader Feedback
75Indicator Unit 2024 2025 Indicator Unit 2024 2025
R&D personnel Persons 363 337
Signing rate for the Supplier Integrity
About This Report Cooperation Commitment Letter and % 100 100 Proportion of R&D personnel to total
Confidentiality Agreement employees % 9.86 9.35
Number of authorized and valid
About Kaizhong Percentage of suppliers with contracts
Precision patents held
Cases 240 271
including environmental and labor % 100 100
requirement clauses Including: Invention patents Cases 68 86
ESG Management Percentage of new suppliers screened Including: Utility model patents Cases 168 177
using social and environmental % 100 100
responsibility standards Including: International patents Cases 4 8
Governance
Percentage of suppliers who have Number of valid patents per million in Cases/RMB 1 0.08 0.09
undergone social and environmental % 100 100 revenue million
responsibility impact assessments Number of software copyrights Cases 10 14
Innovation and
Operations
Percentage of suppliers identified with Internal training on intellectual
property Sessions 5 5significant actual and potential negative % 0 0
environmental impacts
Environment
Coverage rate of suppliers who have Society dimension
completed conflict minerals due % / 100
diligence
Society Indicator Unit 2024 2025
Number of suppliers whose
partnerships were terminated due to Counts / 0 Total number of employees Persons 3682 3603
Key Performance controversial sourcing issues Male Persons 2365 2374
Data Sheet
Number of major disputes related to Female Persons 1317 1229
procurement activities Cases / 0 Mainland China Persons 3272 3233
Indexes R&D investment RMB 10000 7606.42 8224.10 Other countries and regions Persons 410 370
Proportion of R&D investment to Number of ethnic minority
operating revenue % 2.49 2.81 employees
Persons 462 452
Reader Feedback
76Indicator Unit 2024 2025 Indicator Unit 2024 2025
Number of employees with disabilities Persons 9 8 Investment in work safety liability RMB 10000 12 12
insurance
About This Report Number of veterans recruited Persons 2 25 Ratio of work safety investment to
%0.040.15
Total employee turnover rate % 6.28 9.96 operating revenue
Coverage ratio of work safety liability
About Kaizhong Labor contract signing rate % 100 100 % 100 100
Precision insurance
Social insurance coverage rate % 100 100 Investment amount for work-related
RMB 10000 70.7 80.64
injury insurance
Total number of training courses
ESG Management conducted Times 344 580 Number of occupational health and Times 205 320
safety trainings
Total duration of employee training Hours 11074 19458 Cumulative occupational health and
Governance Hours 2496 4200Average training satisfaction rate % 90.02 97.00 safety training hours
Average safety training hours per
Employee satisfaction % 91.78 94.18 Hours 1.85 2.65person
Innovation and Number of employee representative Occupational health and safety
Operations % 100 100assemblies held Times 4 5 training coverage rate
Cumulative number of safety risk
Percentage of female employees % 35.16 34.11 Times 85 92inspections
Environment
Average salary per employee RMB 10000 20.62 20.12 Safety risk inspection coverage rate % 100 100
Revenue per employee RMB 10000 82.82 81.28 Occupational disease incidence rate % 0 0
Society
Number of workdays lost due to
Number of employees in hardship Persons 12 12 Days 155 135assisted work-related injuries
Key Performance Workdays lost due to work-related Days/RMB 1
Data Sheet Number of employees in hardship Persons/RMB 1 million 0.05 0.05injuries per million in revenue
assisted per million in revenue million 0.0039 0.0041
Number of work-related fatalities Persons/RMB 0 0
Investment in work safety RMB 10000 108.45 448.88 per 100 million in revenue 100 million
Indexes Work-related injury rate
Number of work safety emergency % 0.21 0.19
drills Times 35 48 (employees)（LTIRF）
Reader Feedback Cumulative number of participants in ost time injury frequency rate
emergency drills Person-times 10864 12603
Incidents/million 1.08 0.95
(employees) hours (LTIFR)
77Index of Indicators
About This Report Chapter Corresponding SZSE Guidelines GRI index Chapter Corresponding SZSE Guidelines section clauses section clauses GRI index
About This Report / 2-2、2-3 Supply chain security Article 45 308-1、414-1
About Kaizhong
Precision About Kaizhong
General Precision
/ 2-1、2-6 Innovation Digital and intelligent
and development
//
ESG management Article 52 Article 53 2-12、2-13、2-14、 operations2-29、3-1、3-2 Data security and ESG Management customer privacy Article 48 418-1
Corporate governance / 2-9、405-1 protection
Governance Compliance and risk Protection of employee
2-7、401-1、General management
Article 52 2-27
rights Article 50 405-1、406-1、408-1、409-1
Anti-bribery and anti-
corruption Article 55 205-2 Employee
Innovation and compensation and Article 50 401-2Anti-unfair competition Article 56 206-1
Operations benefits
Environmental Employee career
compliance Article 33 / development and Article 50 404-1、404-2
management Society trainingEnvironment
Addressing climate Employee care Article 50 Article 53 2-30、401-2
change Article 24 Article 27
201-2、305-1、
403-1、403-2、Society Environ- Energy use and
Occupational health
management Article 20 Article 35 302-1、302-4 and safety
Article 50 403-3、403-5、
ment 403-6、403-9
Pollutant emissions and 303-5、306-3、 Social contribution Article 40 203-1、413-1
Key Performance Article 31 Article 33
Data Sheet waste disposal 306-4
Rural revitalization Article 39 203-1、413-1
Circular economy Article 37 /
Appendix I: Key
Biodiversity / /
Indexes Performanceconservati / 304-2on
Innovation Innovation-driven Article 42 203-2 Appendix
Appendix II: Index of
development Indicators
Article 57 /
and
Reader Feedback
operations Product and service
quality and safety Article 47 416-1
Appendix III: Reader
Feedback / /
78Reader Feedback
About This Report
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About Kaizhong sustainability reporting we sincerely invite you to assist us by completing the following feedback form. We welcome your valuable input.Precision
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