Beijing Oriental Yuhong Waterproof Technology : Oriental Yuhong 2023 Sustainability Report

Oriental Yuhong

Sustainability Report

About this Report

This report is the 16th sustainability report issued by Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (reports issued in 2021 and earlier were known as social responsibility reports). This report provides a panorama of the Company's efforts in fulfilling its social responsibility and advancing sustainable development.

Scope of the Report

This report focuses on Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (hereinafter "Oriental Yuhong", "the Company" or "the Group"), including Oriental Yuhong and its majority-owned subsidiaries, except for organisations specified otherwise.

Reporting Period

This report is published annually covering the period from 1 January 2023 to 31 December 2023. To ensure the continuity and clarity of disclosure, some of the content may go beyond the scope listed above.

Reporting Reference

This report is compiled in accordance with relevant requirements of the Self-regulatoryGuidelines No. 1 for Companies Listed on Shenzhen Stock Exchange --Standardised Operation of Companies Listed on the Main Board, along with a wide array of references, such as the United Stations Sustainable Development Goals (UN SDGs), the ISO 26000: 2010 - Guidance on Social Responsibility released by the International Organisation for Standardisation, the Global Reporting Initiative (GRI) Standards for Sustainability Reporting (GRI-Standards).

Data Source and Currency Unit

The financial data presented herein are sourced from the Company's annual reports, while other data are obtained from the Company's internal statistics and relevant documents. Unless otherwise specified, all monetary figures mentioned herein are in RMB. In case of any inconsistency between the data for the Reporting Period and those in reports for previous years due to adjustments to the statistical scope and methods for certain content, data in this report shall prevail.

Reporting Commitment

The Company's Board of Directors undertakes that this report is free of any false or misleading information and is responsible for the authenticity, accuracy and integrity of its contents.

Report Availability

This report is published in both simplified Chinese and English. In case of any discrepancy between the two versions, the simplified Chinese version shall prevail. You can access and download this report from Oriental Yuhong's official website at http://www.yuhong.com.cn.

Contact Information

Beijing Oriental Yuhong Waterproof Technology Co., Ltd.

Address: Courtyard 19, 9th Kechuang Street, Economic-technological Development Area, Beijing

E-mail: [e-mail]

About this Report	01
Letter from the Chairman	04
About Us	06
Company Profile	06
Business Distribution	08
Corporate Culture	10
Awards and Honours	11

Corporate Governance	12
Board Diversity	12
Anti-corruption	12
Risk Management	13
Anti-unfair Competition	13

Sustainable Development Management	14
Mechanism for Sustainable Development	14
Progress in Sustainable Development	15
Materiality Assessment	18
Communication and Engagement of Stakeholders	19
Rating and Recognition of Sustainable Development	20

Enhance Building Quality and	22
Safeguard Beautiful Dwellings
Comprehensive Protection of Building Safety	24
Whole-Process Quality Control	26
Whole-processHigh-Quality Services	28

Technology Drives Change, and	30
Innovation Leads Development
Enhance Technological Innovation Capability	32
Develop Green and Healthy Products	37
Digital and Intelligent Transformation	39

Protect the Ecological Environment	40
and Build a Beautiful Home
Tackle Climate Change	42
Green Production and Operations	44
Environmental Protection	48

Safeguard Rights and Interests of the	50
Employees and Support Talent Development
Equal and Standardised Employment	52
Health and Safety
54
Training and Development
56
Employee Care and Support
60

Foster Mutual Benefits and Sharing and	62
Promote Co-creation and Win-win
Supply Chain Cooperation	64
Partnership for a Bright Future	65
Industry Talent Development	66
Community Development Support	68

Appendix: GRI Content Index

70

Letter from the Chairman

Li Weiguo

Chairman of Oriental Yuhong

Oriental Yuhong began its journey in the realm of construction and building materials in Hunan Province, China. From the picturesque province to bustling Beijing, then onwards to the global stage, we have braved currents and storms, tackling daunting challenges with unwavering determination. Throughout our journey for over two decades, we have stayed true to our mission of "to creat a sustainable and safe environment for human society".

Positioned as an enterprise dedicated to enhancing processes, we have been holding high the banner of craftsmanship in the commercial arena, refusing to produce anything below the standards. We uphold humility and simplicity, striving to create a safe living environment amidst grit and grime. Guided by the corporate values of "genuineness, excellence, elegance" and the ethos of innate goodness, we pursue operating management on the principle of business altruism. We foster partnerships based on humility, equality, and consultation, in a bid to share success and co-build a brighter future. We have been anchored in our "platform plus creator" operational and management model for years. Leveraging the strengths of our platform that integrates products, technologies, and services, we have offered an open platform to bold doers so that they can share resources, engage in joint ventures, and embrace diverse perspectives. Our ultimate goal is to ignite inner drive and foster collaboration to the utmost, thereby encouraging the pursuit of progress and goodness. This can empower doers with a sense of responsibility to chart their own path in both their career and future. Currently, our "platform plus creator" model is gaining momentum nationwide, thanks to its proven effectiveness and remarkable results.

In the face of an ever-changing and competitive market environment, we remain committed to innovation, continuously sharpening our capabilities to respond to changes. We spark internal innovation vitality, continuing to develop and introduce core technologies. We have formed a robust cycle between technological innovation and market demands to ensure thorough implementation of our innovations, thereby facilitating the achievement of the Company's sustainable development, along with its strategic goals. To deliver low- carbon and environmentally friendly solutions, enhance efficiency through innovation, and carry out digital and intelligent upgrading, we have vertically integrated new technologies, processes and materials by relying on our robust industrial foundation, talent strengths, and technological innovation resources. Horizontally, we are advancing intelligent manufacturing, energy conservation and emission reduction, and lean management, making every effort to promote the establishment of a research and production system and empower the Company's high-quality growth.

Amid the global tackle climate change, we have redoubled our efforts to deepen the low-carbon feature of our products, in addition to maintaining their existing environmentally friendly and health-oriented features. We have developed a wide array of low-carbon products, service systems, and construction equipment, such as biobased waterproof coating product, the Hong Sheng PV Roofing System and the EDEE Industrial Prefabricated Roofing System. They have not only provided buildings with fundamental protection but have also met customer demands for low-carbon and healthy building materials. This demonstrates our commitment to supporting the low-carbon cause of the construction industry using our professional strengths.

Throughout our winding journey, we have always held profound reverence for nature and deep appreciation for the resources it has endowed. We have also championed the responsible use of these gifts. We emphasise resource sustainability and the protection of biodiversity and nature and have proactively promoted green lifestyles, objecting to any concept or practice that may endanger the environment or go against humanity and the law. We have acted in an eco-friendly manner in both production and life, thereby fostering a harmonious relationship and sustainability regarding humanity, buildings and nature.

As business organisations, enterprises exist to meet social and environmental needs. Anchoring "sustainable operations", Oriental Yuhong has tirelessly refined our corporate values over the long term to reinforce our cornerstone. More than simply meeting customer and market demands, we aspire to create better-than- expected long-term value for customers, the market, and society in economic, social and environmental domains.

Throughout human history, social evolution has been marked by a tapestry of intertwined dynamics and conflicts. From the "agrarian society" to the "industrial civilisation", and then onwards to the "modern civilisation", seismic shifts and leaps have grown out of the crucible of adversity. The building waterproofing industry is in the throes of transformation, presenting both challenges and opportunities. It is also an opportune moment for upgrading and restructuring. In this context, we are poised to seize the change for growth with courage and resilience.

We will continue to uphold the philosophy of craftsmanship and stay true to our original aspiration. We will act on diligence and humility, delivering our commitments through thick and thin. The obstacles to achieving advancements in core technologies, sustainable development, and societal transformation, as well as striving for an improved quality of life for all, are more formidable than ever. This necessitates us to have the courage to ride the waves and confront adversity with bravery, exhibiting the perseverance of "withstanding a thousand tests and hardships, yet remaining unyielding," to accomplish noteworthy accomplishments befitting our era and carry out our duties with honour. With unwavering dedication, we march boldly towards our vision of "to be the most valuable global enterprise in the construction materials industry".

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About Us

The Company Profile

Beijing Oriental Yuhong Waterproof Technology Co., Ltd., established in 1995 and headquartered in Beijing, China, was publicly listed on the Shenzhen Stock Exchange in 2008 (stock code: 002271). The Company primarily engages in the research and development, production, sale, and construction of modern waterproofing building materials. It continually extends its reach across both upstream and downstream sectors and related industries, gradually evolving into a diversified provider of building materials system services, encompassing building waterproofing, civil construction materials, mortar and powder, building coatings, energy-saving insulation, adhesives, pipe industry, building renovation, new energy, nonwoven fabrics, specialty films, and emulsions.

The Company operates over 60 production, research and development, and logistics bases nationwide and has more than ten major sub-brands, covering insulation and energy-saving product systems, Tiandingfeng nonwoven fabrics product systems, DAW building coatings product systems, Vasa product systems, and BiAn construction powder material product systems. Its high-quality products and professional system services are extensively applied in various domains such as residential construction, high-speed railways, subways and urban rail, highways and urban roads and bridges, airports, and water conservancy facilities. The Company provides comprehensive, high-quality system solutions to tens of thousands of significant infrastructure, industrial, and civil and commercial construction projects. These include iconic Chinese constructions like the Great Hall of the People and the Bird's Nest, Beijing Olympic venues, as well as major national infrastructure projects such as the Beijing-ShanghaiHigh-Speed Railway and Beijing Subway, and internationally renowned projects under the "Belt and Road" initiative, thereby crafting a "professional calling card" for China's building materials system services industry with its high-quality and efficient products and services.

In 2023, the Company was ranked among the Fortune China Top 500 Listed Companies, the Top 100 Global Building Materials Listed Companies in Comprehensive Strength, and the Top 100 Listed Companies in China by ESG standards.

RMB	51,174	million RMB		32,823	million RMB	2,953	million
	Total assets		Operating revenue	Total profit
	12,736	RMB	5.57	million		RMB	81	million
	Employee			Donations		Investment in environmental protection

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Business Distribution

Beijing

Shanghai

Hong Kong

Malaysia

Singapore

Indonesia

Jilin

Canada	Xinjiang				Liaoning
		Inner Mongolia	Hebei
The USA	Gansu		Shanxi	Shandong
		Shaanxi	Henan		Jiangsu
			Hubei	Anhui	Shanghai
	Sichuan	Chongqing			Zhejiang
			Hunan	Jangxi
		Guizhou		Fujian
Headquarters
R&D Centre	Yunnan	Guangxi	Guangdong

Production,R&D,and logistics bases
Overseas companies	Hainan

lin

For over two decades, Oriental Yuhong has provided high-quality system solutions for tens of thousands of significant infrastructure, industrial buildings, and civil and commercial construction projects.

The Company pursues high-quality, robust development and has established over 60 production, research and development, and logistics bases globally. Its products are exported to more than 130 countries and regions including Germany, Brazil, Australia, the United States, Canada, Russia, Japan, Singapore, and South Korea.

60+	200+	130+
production, R&D, and	advanced	countries/regions where
logistics bases	production lines	products are distributed

Annual Design Capacity

About 1.3

billion square meters

waterproof sheet materials

Over 8.5 million cubic meters

heat preservation materials

Approximately

4.1 million tonnes

waterproof coatings

Nearly 0.7 million tonnes

building coatings

About over 11 million tons

mortar and powder

About 0.25 million tons

nonwoven fabrics

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Corporate Culture

The survival and growth of the Company are not only due to the opportunities presented by societal changes but are also a testament to the entire workforce's commitment to the corporate culture, respect for market principles, and reverence for customer value. Building on the lessons learned from past development, in 2016 the Company published the Basic Rules of Oriental Yuhong, which outlines the fundamental principles of operation and establishes a cultural value system. These rules serve as a guide for the Company's future development and represent a fundamental commitment to stakeholders such as society, customers, employees, shareholders, suppliers, and partners.

Awards and Honours

Ranked 399th in the "Fortune China 500"

Fortune (Chinese Edition) and China

International Capital Corporation Limited

Top 100 Global Building Materials Listed Companies in Comprehensive Strength (46th)

Recognised in the "Top 100 Building Material Enterprises Management" and "Top 500 Building Material Enterprises Strength" rankings

China Building Materials Enterprise Management Association

Leading Enterprise in Annual Services for a Better Life

Company Purpose

Mission

Vision

Value

Company Belief

Company Spirit

Guiding Ideology

Create value for nation, society, customers, employees and shareholders

To create sustainable and safe environment for human society

To be the most valuable global enterprise in the construction materials industry

Genuineness, excellence, elegance

Development keeps us company and one favarable turn deserves another

Where there is a will, there is a way; strive for excellence, keep moving forward

Return for nation, service to people

China Building Materials Federation (CBMF)

Ranked 2nd in the 2023 China Brand Evaluation Press Conference in the construction materials sector

Xinhua News Agency, China Council for Brand Development, China Appraisal Society, etc.

Received the "Quanjing Investor Relations Gold Award" as an "Outstanding IR Company" in the 2022 national awards

Shenzhen panorama Network Co., Ltd.

Named the "2023 IDC China Future Digital Industry Leader"

International Data Corporation (IDC)

Selected for the "Top 500 Private Enterprises in China in 2023" list

The Economic Observer

Selected for the "Brand Value Leaders" list and recognised as an "Outstanding Contribution Brand Unit"

The China Council for Brand Development

Awarded the "20th People's Artisan Award for Artisan Brand"

People's Daily online

Topped the list as the "2023 Preferred Supplier of Real Estate Development Enterprises (National Brand) - Waterproofing Materials Category"

2023 Real Estate Enterprise Brand Value Evaluation Results Announcement and China Real Estate Brand Development Summit

Brands like Oriental Yuhong, Wonewsun, Yuhong Xingfa, Vasa, and Building Renovation were among the top ten in the lists for waterproofing

Company is a form of organisation in human commercial activity. Oriental Yuhong consistently maintains humility in serving humanity and a profound respect for the environment. The Company pursues commercial civilisation and embraces human civilisation; thus, it rejects all environmentally harmful, inhumane, and unlawful ideas and practices.

- From Article 2, Chapter 1 General Rules of the Basic Rules of Oriental Yuhong

Selected for the "Top 500 Private Manufacturing Enterprises in China in 2023" list

All-China Federation of Industry and Commerce

Selected among the "Top Ten Chinese Building Waterproofing Technology In n ov atio n Enterprises" list

4th Building Waterproofing Technology Innovation Conference

materials, insulation materials, building sealants, tile adhesives, and engineering services

8th State-owned and State-controlled Real Estate Supply Chain Summit

Outstanding Contributor in the

Gypsum Industry

13th China Building Materials Federation

(CBMF) Gypsum Building Materials Branch

Annual Meeting

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Corporate Governance

Board Diversity

Oriental Yuhong strictly adheres to laws and regulations such as the Company Law and Securities Law, as well as related provisions issued by the China Securities Regulatory Commission and the Shenzhen Stock Exchange, to construct and continuously improve our corporate governance system, thereby enhancing governance operations.

In the selection process of directors, the Company rigorously follows the stipulated legal and regulatory requirements, executes the director election procedures, and ensures that the number and composition of the Board of Directors members meet relevant criteria; we value various diversity factors, including but not limited to gender, race, age, cultural background, educational background, and industry experience, to appoint suitable candidates scientifically and reasonably. The Company's Board of Directors consists of 12 directors, including four independent directors and four female directors, each accounting for 33% of the total Board members.

The current directors of the Company possess profound professional backgrounds in the industry or extensive corporate management experience. Leveraging the diversity in skills, experience, and perspectives, all directors fully utilize their wisdom and expertise, diligently fulfilling their duties, enhancing the efficiency of the board's operations, maintaining a high standard of corporate governance, and protecting the legal rights and interests of the Company and all shareholders.

For detailed information on corporate governance, please refer to the "Corporate Governance" section of the 2023 Annual Report of Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (SZ002271).

Anti-corruption

The Company has established an independent Audit and Oversight Department, which operates under the leadership of the Group's Board of Directors to carry out anti-corruption efforts. It operates under the business guidance and supervision of the Group Audit Committee. In accordance with relevant laws and regulations, the Company has established and perfected an anti-corruption framework. This includes the formulation and issuance of the Oriental Yuhong Audit and Supervision Management Regulations, which specify the duties of the audit and supervision bodies, the scope, authority and basis for audits, and the procedures and processes of work, thus standardising internal management and supervisory audit activities. Additionally, the Oriental Yuhong Whistleblowing Management Measures have been published, clarifying the responsibilities, scope of acceptance, and methods of whistleblowing, as well as incentives and confidentiality for whistleblowers. These measures also set forth clear protections for whistleblowers and providers of crucial tips, encouraging broad participation from employees and partners in the management of the Company and the timely reporting of illegal and non-compliant activities. Annually, the Company drafts an audit plan at the beginning of the year and implements it throughout the year, covering all business units of the Company.

In 2023, the Company continued to strengthen the construction of a culture of integrity, creating an ethical and clean work environment internally through anti-corruption training, institutional cultural dissemination, and integrity monitoring, thus deepening employees' awareness of anti-corruption and promoting the healthy development of the Company. Over 1,200 individuals received training throughout the year.

Each unit of the Company, based on its own business characteristics, conducts various anti-corruption activities. The Yueyang factory of the Company, aligning with the spirit of the Company's anti-corruption and integrity-promotion documents, has actively carried out the creation of an integrity-based enterprise, integrating a culture of integrity into workshops, teams, and positions. Following the requirements to "cultivate integrity in practice, perfect integrity systems, build platforms for integrity culture, and strengthen the supervision of integrity practices," the factory has developed a plan for building an integrity-based enterprise and has mobilised all staff to actively participate, fostering an atmosphere of integrity in practice and honest business operations. Through the dissemination of policies and monthly internal control meetings for learning and discussion, the awareness and mindset of integrity among employees are enhanced.

With outstanding achievements in integrity training and the construction of monitoring systems, in 2023, Oriental Yuhong was elected as a "Permanent Director Unit of the China Enterprise Anti-fraud Alliance". The Company commits to adhering to the Anti-fraud Alliance Convention, collaborating with alliance members to carry out anti-corruption initiatives and building a more transparent business environment.

Risk Management

The Company upholds the principle of "prioritising risk control and stable operation", identifies and strictly controls risks in various business operations and management activities, enhances the level of risk management, and improves operational quality. The Company has established the Oriental Yuhong Risk Control System and supporting detailed rules, implementing the bottom-line control principle, setting risk control baseline standards for various tasks, clarifying specific risk control systems and implementation measures, and establishing a top-down risk control system framework and corresponding procedural standards through proactive risk control, continuous process control, and accountability mechanisms.

Enhancing risk management mechanisms: Centring on the Oriental Yuhong Risk Control System and its detailed rules, focusing on core operational risks, implementing list management and closed-loop management; refining credit policies and project management systems, continuously monitoring project performance, improving cash flow, and ensuring financial security; optimising contract management, strengthening process control, and enhancing receivables work.

Achieving closed-loop risk report management: The Company has established smooth channels for risk information reporting and a rapid response workflow, forming a closed-loop management of "risk identification - risk publicising - tiered control - information reporting", effectively controlling environmental and social risks.

Establishing a digital risk management platform: Implementing online management of sales operations, linked with risk control, and establishing an integrated business execution process from contract review, contract receivables, to litigation cases.Key business steps such as contract review and signing incorporate risk control measures to enhance the quality of contract signings; based on contract execution, integrating with marketing and engineering platforms to obtain real-time data on deliveries and receivables, and reinforcing risk alerts and control through built-inred-line rules.

Anti-unfair Competition

The Company strictly adheres to relevant laws and regulations, including the Anti-unfairCompetition Law, advocating for free and fair competition, respecting the market, and resolutely opposing any form of unfair competition. Oriental Yuhong, as a renowned brand in the waterproof building materials industry, has faced issues where numerous unscrupulous businesses have manufactured and sold counterfeit products and services under the Oriental Yuhong brand, seeking illicit profits and disrupting market order. The Company has established a "Brand Rights Protection Department" that provides consumers and clients with anti- counterfeiting query methods through a hotline, WeChat account, and an online presence on our official website. The department analyses information received and takes targeted action to gather evidence, assisting law enforcement agencies in targeted crackdowns, and striving to purify the market environment. In 2023, the Company assisted law enforcement agencies in shutting down 31 counterfeit production dens, seising 65 pieces of counterfeiting equipment, and confiscating over 20,000 square metres of counterfeit rolls, more than 6,000 buckets of paint, and over 200,000 counterfeit qualification labels and anti-forgery codes. In total, more than 100 vendors selling fake goods and infringing stores were investigated.

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Sustainable Development Management

Oriental Yuhong fully understands the interconnection between its business operations and the sustainable development of human society, as well as meeting people's demands for a better life. Embracing the corporate mission of "to creat a sustainable and safe environment for human society," its core waterproofing business ensures both the structural integrity and longevity of buildings. The Company offers a range of integrated building material services that elevate the comfort and standards of human habitats. With a commitment to product excellence as a premise of management, the Company carries out R&D on the development of solutions that synergize energy efficiency, environmental stewardship, and health considerations. Additionally, the Company steadfastly upholds collaborative engagement and mutual sharing with stakeholders, including employees, shareholders, partners, and suppliers, united in the pursuit of sustainable development.

Mechanism for Sustainable Development

The Company's Board of Directors attaches high importance on sustainable development and has established a Sustainable Development Strategy Committee to comprehensively manage works related to sustainable development. The Committee, consisting of directors and senior management personnel, leverages their collective expertise to cultivate an internal framework conducive to sustainable development. This includes institutional systems and cultural environments. The Committee integrates crucial elements into the Company's strategies, operational management, and business processes, synergising external resources to optimize the long-term management of economic, environmental, human, and social capital, and continuously enhance the level of sustainable development management.

The Sustainable Development Office, acting as the secretariat of the Sustainable Development Strategic Committee, coordinates environmental and social-related initiatives across units as required by the Committee, while providing relevant professional support. The functional departments and business units serve as the backbone of the company's sustainable development efforts. They deeply integrate social responsibility and sustainable development principles into corporate operations and implement practices that are beneficial to both the company and the environment, which fosters mutual and sustainable growth and continuously elevates the company's standards for sustainable development.

The organisational structure chart for Oriental Yuhong's sustainable development

Board of Directors

Sustainable Development

Strategy Committee

	Functional	Sustainable Development Office	Business units
	departments	(Secretariat institution)

Progress in Sustainable Development

The Basic Rules of Oriental Yuhong regards "perpetual commitment to sustainable operations as a fundamental premise", thus explicitly defining the vital role of sustainable development in corporate management. The Company has long upheld the corporate tenet of "create value for nation, society, customers, employees and shareholders", fostering an ethos of openness, inclusivity, and collaborative creation and sharing. Leveraging its accumulated experience and strengths in the field of building materials, Oriental Yuhong strives for co-creation, sharing, and mutual prosperity with stakeholders, aiming to achieve common sustainable development goals. In the face of global challenges such as climate change and resource scarcity, the pursuit of economic, social, and environmental sustainability has become a global consensus.

The Company integrates the United Nations Sustainable Development Goals (UN SDGs) into its business operations, incorporating sustainability principles into its management processes in accordance with standards and guidelines such as the ISO 26000 Guidance on Social Responsibility (2010) by the International Organisation for Standardisation, which focuses on "quality management, green innovation, environmental protection, employee development, and cooperation and win-win results". By addressing concerns of internal and external stakeholders and identifying and prioritising key sustainability issues and implementing accountability measures internally, Oriental Yuhong gradually advances its sustainability agenda.

Safeguard the Beautiful Dwelling Environment

Visions and Goals of the

Sustainable Development

Internal management optimisation

International development

Promotion of competitiveness

Quality management

Green innovation

Environmental

Employee

Win-win cooperation

Working sectors

protection

Development

Business ethics

R&D on

Respond to climate

Equal and standardised

Supplier cooperation

Compliance Management

environmentally

change

employment

Industrial talent

Intelligent manufacturing

friendly and healthy

Energy conservation

Rights and interests

cultivation

Quality control

products

and emission reduction

of the employees

Co-creation of partner

Material issues

Green transportation

Intellectual property

Circular economy

protection

value

and logistics to protect

protection

Biodiversity

Training and

Supporting community

customers' rights and

Leading industry

conservation

development

development

interests

development

Employee care

Scientific planning

Integration into business

Identify key points

Under continuous

Communication with

advancement

stakeholders

Management

Strategic guidance

System Construction

Capacity building

Performance integration

Consistent

optimisation

guarantees

The overall roadmap for Oriental Yuhong's sustainable development efforts

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Major Progress in Sustainable Development

Quality Managemen

Green Innovation

Environmental Protection

Employee Development

Win-win Cooperation

·Over 80,000 new distribution outlets have been established, providing timely supply of products and services, which ensures "300-kilometer radius coverage within 24 hours".

·With a 24-hour service hotline, the Company provides approximately 250,000 times of consultation services annually, promptly responding to customer needs and offering efficient and convenient service experiences.

·The annual customer satisfaction score is 93

·Keeping pace with market demands, the Company has launched over 500 new products and systems successively, continuously meeting the diversified and quality-oriented needs of the market and customers.

·Five new intelligent equipment models are introduced annually, facilitating the intelligent industrial transformation and upgrading.

·The Company's products have obtained approximately 600 certificates and labels environmental and health testing from

authoritative institutions.

total of 213 valid patents are made throughout the year, showcasing the Company's strong core capabilities for high- quality development.

·By replacing wooden pallets with leased shared pallets, over 590,000 shared pallets have been used, saving 11,900 tonnes of wood.

· P h o t o v o l t a i c p r o j e c t s h a v e b e e n implemented in 23 production factories, which utilizes 42 million kWh of green electricity annually, saving 23,700 tonnes of CO2e .

·An investment in environmental protection of RMB81 million is made annually, primarily allocated towards waste management, air and water pollution control, noise reduction, and energy-saving renovation projects.

·Six national green factories have been constructed.

·The training system has been improved, featuring optimized training methods and content. The efficiency of the online learning platform has been enhanced, leading to an improved learning experience for employees. On average, each employee undergoes 60 hours of training annually, with a training participation rate of 96%.

·An investment of RMB45 . 77 million is made annually in safety production, comprehensively ensuring employee health and safety, with no major safety incidents occurring throughout the year.

·The Company continuously improves the employee welfare system, with employees being regarded as family members and cared for with a heart of compassion. Four major welfare and caring systems are established, including benefits such as living and assistance, health and safety, holiday and care, and team building and vacations.

·The 17th Oriental Cultural and Arts Festival was held with the theme "Surpassing Oneself, Challenging the Impossible", featuring basketball, table tennis, badminton, football, competitions, employees and

·The "Yuhong Craftsman" platform APP focuses on construction teams and craftsmen as the main service providers, addressing the industrial difficulties in finding projects and finding people, with a user base of 336,500.

·Yuhong Vocational School aims to promote employment and entrepreneurship by training 70,000 technical talents annually, thereby injecting talent into the high-quality development of the industry.

·The membership system "Honggehui" p r o v i d e s a l e a r n i n g a n d e x c h a n g e platform for professionals in the building Waterproofing industry. With a net increase of over 810,000 followers annually, it contributes to the transformation of industry workers from "workers" to "craftsmen".

·For 11 consecutive years, the Company has hosted the "Yuhong Cup · Craftsmanship" National Building Waterproofing Vocational Skills Competition. For two consecutive years, it has organized the National Prefabricated Building Industry Vocational Skills Competition. These events serve to nurture and select high-level technical talents, providing significant impetus for the high-quality development of the industry.

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