REPORT

Sustainability Report 2022

S U S TA I N A B I L I T Y

Huaqin Technology

Contents

04

09

15

About This Report01

Message fromthe Chairman

0227

Social Commitment andResponsibility
Promoting Social Equity

28

Public Welfare

30

About Huaqin
About Huaqin

05

Milestones

06

Corporate Culture062022 Data

07

Dual Carbon Strategy

34

2022 Industry Honors

08

Environmental Management Mechanism

34

Creating Environmentally Friendly Products

35Green Manufacturing for High-Quality
Development

37

Developing Green Logistics

42

Promoting Green Office Practices

42

33

Effective Governance for
Sustainable Development
Corporate Governance10

Sustainable Development
Management

14

43

Efficient Operations forLong-Term Development

Environmental Protection andGreen Leadership

People-Oriented Development
Employee Rights and Interests Protection

44

Technological Innovation

16

Talent Attraction and Development

45

Digital Management

17

Healthy Workplace and Care

47

Supply Chain Management20

Occupational Health and Safety

49

Business Automation

21

High Quality Strategy

22

Business Continuity Management

25

Appendix 1: GRI Index

51

Information Security Assurance

25

Appendix 2: Feedback57

About This Report

Overview

Reporting Scope

This report, the second annual sustainability report released

The report covers Huaqin Technology Co., Ltd. and its subsidiar-by Huaqin Technology Co., Ltd., presents our ideas, practices,

ies and affiliates, unless otherwise noted. References in thisand performance in sustainable development in an objective,

report to "Huaqin Technology", "Huaqin", "the Company", "we",transparent, and comprehensive manner.

"us", and "our" mean Huaqin Technology Co., Ltd.

We will continue to publish the report annually.

Reporting Period

Disclosure Principles

Unless otherwise specified, the report covers the period from

The report is prepared in accordance with the Global Reporting

January 1 to December 31, 2022.

Initiative (GRI) Standards: Core Option, as well as the relevant
regulations and guidelines of the Shanghai Stock Exchange. Any
matters not included in the report due to various objective
conditions will be disclosed in future reports.

Data Collection

How to Obtain

The information and data disclosed in this report areThis report is published only in electronic form to fulfill our

obtained from the official documents, statistical reports andcommitment to environmental protection. The electronic

financial reports of Huaqin Technology Co., Ltd. and its sub-version can be viewed or downloaded online at the official

sidiaries and affiliates.

website of Huaqin: https://www.huaqin.com.

Unless otherwise specified, all currency units in this report
are in USD.

Feedback
Thank you for reading this report. If you have any comments
or suggestions on this report, please contact:
Address: Building 1, No. 399 Keyuan Road, Pudong New
Area, Shanghai, China
Tel.: +86-021-80221108
Email: ir@huaqin.com

01

Message from the Chairman

2022 is an extraordinary year for Huaqin and most consumer electronics companies in
China. Faced with difficulties and challenges brought by external uncertainties, volatility,and declining global consumer demand, we adhered to sustainable development andpursued solid and steady progress with greater efficiency. While doing the right thing andchallenging ourselves, we maintained overall operating performance against the market
trend. Over the past year, we obtain $13.23 billion revenue, a year-on-year increase of
10.61%.

We are fully aware that ESG fulfillment on top of robust business operations is key tosustainable development. In 2022, Huaqin continued to focus on digital transformation andefficiency improvement. Through rapid iteration, we have realized improvements acrossthe board, including ISC and financial change, to enhance the efficiency of the whole value
chain. Meanwhile, we take on social responsibilities to establish a high-quality develop-

Vincent Qiu

ment model featuring green, low-carbon, and sustainable growth. We continue to create aFounder, Chairman and CEO of Huaqin Technology

dynamic and caring workplace for employee growth and development, also give back to
the community with practical actions. This is how we deliver on our corporate social
responsibility. We maintain comprehensive and sincere communication with stakeholders
in all ways to respond to their concerns and build strategic mutual trust. By combining
their concerns into corporate strategies and core business areas, we work with stakeholders to stimulate sustainable development in economy, industry, society, and environment.

A robust corporate governance model provides effective support for our long-term strategic development. Huaqin attaches great importance to corporate governance. We focus on
issues such as business ethics, integrity, compliance management, and sustainable development to continuously improve our management systems for internal control and compliance and sustainable development. Legal compliance is a must-have for our management
systems. In 2022,we established a comprehensive three-tier compliance management
system that integrates compliance requirements into business processes to protect thelegal rights and interests of the group, partners and employees. Under the leadership ofthe Board of Directors, we have formed an ESG management framework that covers
governance, management, and execution to facilitate effective ESG performance acrossthe board.

02

ESG performance depends on R&D investment and technological

Employees are key to our sustainable development. Huaqin

innovation. With the mission of improving people's communication

strives to create a workplace where employees have a high level

and life, Huaqin has developed industry-leading technologies andof happiness and a sense of fulfillment. We are always working toovercome technical challenges to create a "2+N+3" product portfo-

build an open and reliable platform where "the harder you work,lio, so that more can enjoy a better life brought by technology andthe happier you will be" and employees are provided with fair andinnovation. At Huaqin, R&D investment is a priority. Our R&D

equitable development opportunities. In 2022, Huaqin recruitedinvestment over the past year reached $720 million, a year-on-year

1,429 fresh graduates to build a sustainable talent pipeline so that

increase of 39.54%. In 2022, our Global R&D Headquarters in"first-class talents are arranged in emerging first-tier cities toShanghai also moved faster to develop the cutting-edge technolo-

serve major customers".

gy of innovative electronic products and deepen strategic cooperation with world-class technology companies. As a typical "chain

With relentless pursuit, we will usher in a bright future. At theleader" in the electronic information industry, Huaqin contributed

critical point of the fourth five-year period, Huaqin is celebrating

to the high-quality part development of the whole industry throughits 18th anniversary. We are more determined toward sustainable

technical support, strategic investment, and business develop-

and high-quality development and continue to ensure industry

ment, and assisted the smart hardware industry to improve key

dominance, technological strengths, and CSR contributions.

areas in the upstream sector.

Ultimately, we aspire to be a trustworthy company that createsvalue for the whole industry and society.

To establish a high-quality development model featuring green,
low-carbon, and sustainable growth, Huaqin takes on environmental responsibility actively. We invest in carbon reduction innovationand practices through managerial and technological measures to

Chairman's signature:ensure relevant goals are achieved. In 2022, Huaqin increased
efforts in lean production management, incorporating green
concepts into the entire life cycle of product development: including design, material procurement, production, use and recycling,
and using more environmentally friendly materials, durable
products, and sustainable packaging. Besides clean energy development and application, Huaqin also adopted managerial andtechnological measures to save energy and reduce emissions. In
2022, the two manufacturing centers in Nanchang and Dongguanalone reduced 11,507 tons of carbon emissions.

03About Huaqin
About Huaqin

05

Milestones

06

Corporate Culture062022 Data

072022 Industry Honors

08

04

About Huaqin
Founded in 2005 and headquartered in Shanghai, Huaqin Technology Co., Ltd. ("Huaqin") is a world-leading enterprise specializing in

Nanchang Manufacturing Center

Xi'an R&D Centersmart hardware products. With the mission to "Improve People's

Dongguan Manufacturing Center

Dongguan R&D Center

Communication and Life", Huaqin offers end-to-end product devel-

Guangdong Xiqin Precision Molds

opment, manufacturing, and operation of software, hardware, andDongguan Huayu Precision Molds

Nanchang R&D Center
Wuxi R&D Centersystems to global tech companies. Every year, hundreds of millions
of intelligent products from smartphones, tablets, laptops, andShanghai R&D Centersmart wearables to AIoT products, IDC products, and automotive
electronics are delivered to consumers worldwide in over 100

India DBG (JV)

countries and regions. Huaqin has a strong global R&D network,

India Jieqin Precision Molds (JV)with five R&D centers across China in Shanghai, Dongguan, Xi'an,
Nanchang, and Wuxi, as well as two domestic manufacturing

Vietnam DBG (JV)

centers in Nanchang and Dongguan and three overseas manufac-

India PTSN (JV)

turing bases in India, Indonesia, and Vietnam.

Positioned as an intelligent hardware platform driven by efficient operation, R&D, advanced设

manufacturing, and precision mechanical parts, Huaqin has horizontally expanded its productlines and developed a "2+N+3" business layout, which includes smartphones, laptops, consumer

a

uf
an 进

in terms of ODM/IDH shipment volume of smartphones, tablets, and laptops.

at

ec

M 先

m

a

Pr

io n

ch

精

M e 密结

electronics, data centers, automotive electronics, and software. The company ranks first globallyc
制 tu rin
g
造

高 er
效

发

Intelligent
HardwarePlatform

on

i

si

D

v
研 e

运

n
构 ic al
件

IP

De

ion
at 营

ent
pm
lo 计

Dig
ita
li
Op

n
tio
za

Au

to

LaptopBrandsInternet
Companies

Industry
Companies

Smartphone
BrandsAuto
Companies

Data Center

Automotive Electronics

Smart Home

Software

StylusKeyboard

POS
AR/VR
TabletHeadsetWatch

Smart Conference System

RouterDocking station

LaptopSmartphone

2+N+3
Global Intelligent Hardware Platform

While focusing on digitalization and automation, Huaqin revolves around the core strategy of "building an intelligent hardware platform"
to pursue innovation together with global tech companies and ecosystem partners. Huaqin has evolved into an intelligent hardware
manufacturer with strong R&D capabilities and global competitiveness. It has become a hardware player that excels in software, and has
established a large-scale business focused on.
05

Milestones

Mobile ODMIntelligent
HardwarePlatform

Mobile Devices
Domestic top-tier brand andoverseas regional brand2005-2009

A manufacturer with strong R&D capabilities,
a hardware player that excels in software,and a large-scale business of efficiency(IPD process for efficient decision-making)2010-20142015-20192020 —

Mobile IDHIntelligent Terminal ODM

PCBA Mode

Diverse intelligent products

Chinese emerging brandGlobal first-line consumer electronics brandCorporate
MissionImprove people's communication and life

ValuesCustomer Success
Adaptability to Changes
Integrity Cooperation
Commitment Passion

VisionTo be a leading provider ofintelligent products and services

052022 Data
Operating Performance

Operating Revenue$13.23Return on Net Assets

R&D Investment$720

23.35 %

billionIntellectual Property Licenses

Invention Patents

3917

900+

millionEnvironmental Performance
Environmental Protection
Investment

GHG Emission Intensity

Total GHG Emissions(Tons of CO2 Equivalent)(Tons of CO2 Equivalent / Million Operating Revenue)$4,636,700

160,215

1.73

Number of Energy Conservation andmission Reduction Projects

Total Water Consumption

50+

2,668,932

tonsSocial Performance

Number of Employees

Ratio of R&D Personnel

Employee Training Coverage

29,72741.40 %

100 %Total Employee Training Hours

Total Public Welfare Projects

Title Awarded for 6 Consecutive Years

28

Best Employer

117,732hours

07

2022 Industry Honors

CSR China Education Award

16th in 2022 Top 100

CSR CHINA TOP100 Rank

Electronics Enterprise57th in Top 500 Private

100th in Top 500

Manufacturing Enterprises

Private Enterprises in China

in China

National Model Enterprisefor Harmonious Labor Relations08

Effective
Governance for
Sustainable
Development
Corporate Governance10

Sustainable Development Management

14

PR
OF
ILE

09

Corporate Governance
Huaqin has established a legal and compliant institutional framework that satisfies the needs of actual operations and strictly following
the provisions of the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Code ofGovernance for Listed Companies, the Rules Governing the Listing of Stocks on Shanghai Stock Exchange, and other laws, regulations,and normative documents.

Governance Structure
Huaqin keeps optimizing the corporate governance structure and gives full play to the roles of the Shareholders' Meeting, the Board of
Directors, and the Supervisory Committee in making major decision, operations, management, and supervision to protect the legitimate
rights and interests of shareholders. In 2022, Huaqin conducted 2 Shareholders' Meetings, 4 Board of Directors meetings, and 3 Supervisory Committee meetings. The convening and voting procedures of all meetings conformed to the provisions of applicable laws andregulations and the Articles of Association, and all voting results were legitimate. These practices have established a strong foundation
for the company's standardized operations.
Shareholders' Meeting

Strategic Committee

Supervisory Committee

In 2022, Huaqin held

Remuneration and Evaluation Committee

Board of Directors

2

Shareholders'Meetings

4

Board of Directors
meetings

3

Supervisory
Committee
meetings

Nomination Committee

CEO

Functional Platforms
Marketing System
HR and Planning System
Process & IT System

Audit CommitteeIntelligent Hardware Business Groups

R&D Centers

MobileComputing

Data BusinessElectronics

Innovation

SoftwareBusiness

Business

Group

Business

Business

Testing

Group

Group

Automotive

Group

Group

Center

MBG

CBG

DBG

ABG

XBG

STC

TMT Committee
Hardware Committee
Software Committee

XLAB

Structure Committee
Financial System
Strategic Cooperation Department

Smart Manufacturing Center

Testing Committee
ID Committee

Shareholders' Meeting
Our shareholders consist of our founding members, China Mobile, Intel, Qualcomm, Northern Light Venture Capital, China Merchants
Securities Investment, and Zhangjiang Hi-Tech Park, all with a strong and prominent presence in the electronic information industry andstrategic investment. The Company regulates the convening, holding, and voting procedures of shareholders' meetings in strict accordance with the provisions of the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China,
the Articles of Association, the Rules of Procedure for Shareholders' Meetings, as well as other applicable laws and regulations, to protect
the legitimate rights and interests of minority shareholders. Furthermore, we engage lawyers to attend the shareholders' meetings andto issue legal opinions on relevant convening and voting procedures, fully respecting and safeguarding the legitimate rights and interestsof all shareholders.

Board of Directors
There are four special committees under the Board of Directors, namely the Strategic Committee, the Nomination Committee, the Remuneration and Evaluation Committee, and the Audit Committee. Each special committee performs its duties under the relevant laws andregulations, the Articles of Association, and its implementation rules. The Board of Directors comprises diverse high-end talents with richexperience and a good reputation in the industry and academia.
The Board of Directors comprises a total of 9 directors, including 3 independent directors. Among all directors, 78% are male and 22%
are female.

10Supervisory Committee
The Supervisory Committee is accountable to the Shareholders' Meeting, and the supervisors are elected and appointed in strict accordance with the selection and appointment procedures stipulated in the Company Law of the People's Republic of China, the Articles of
Association, and other laws and regulations. The Supervisory Committee has formulated the Rules of Procedure, which stipulates its
composition, functions, and powers, as well as the procedures for meeting convening and holding, proposal discussion, and voting. Allsupervisors are expected to independently and lawfully exercise their supervisory powers over corporate financial issues and the duty
performance of directors and senior managers. They operate under the principle of being responsible to all shareholders. The Supervisory
Committee has a total of 3 supervisors, including 1 employee supervisor.

Internal Control Management
Huaqin has formulated, under the Company Law, the Articles of Association, and relevant laws and regulations, a comprehensive internal
control system that effectively plays its role of control and prevention in all aspects of corporate management.

5.
Supervision

4.Information
Communication

5.1 Self-evaluation report oninternal control

5.2 Evaluation report on internal control activities

5.3 Internal audit report

5.4 Anti-fraud investigation

5.5 External audit report

5.6 Accountability andperformance evaluation

4.1 Information technology and data standards

3.Control Activities

4.2 Complaint and reporting

3.1 Empowerment and responsibility

3.2 Segregation of duties

3.3 Information security management

3.4 IT system audit

3.5 Proactive review of internal control

3.6 Risk acceptance process

3.7 Critical risk warning and emergency response mechanism

2.Risk Assessment

1.Internal Environment

3.8 Significant risk deviation report

2.1 Risk assessment criteria

2.2 Risk classification

2.4 Risk library

2.5 Risk heat map

2.3 Risk response strategies

1.1 Audit Committee andInternal Control Committee

1.2 Process GPO and process owner

1.3 Laws, regulations,and industry standards

1.4 System and process documentation

1.5 Human resource policies

1.6 Company culture

The internal control framework serves as a guideline that describes the internal control framework implemented in the Company, alongwith the objectives and significance of each element. Huaqin's internal control framework involves the internal environment, risk assessment, control activities, information communication, and internal supervision. It specifies the key tasks and responsible leaders for eachelement and integrates these elements into the management and business processes. Together with continuous assessment of theelement operation, it ensures that Huaqin can achieve its strategic objectives and business goals.
Huaqin focuses on internal control management through institutional improvement and enhanced internal management. In 2022, we havebuilt three lines of defense for internal control to inspect and supervise whether our business processes and systems are compliant.

Second Line of Defense

Third Line of Defense

Responsibilities

Audit Committee

Supervise the operation of internal control

Internal Control Committee

Organize internal control

Finance, Legal Affairs,
Information Security, HR, etc.

Internal
controlFirst Line of Defense

Responsible Department

ReformManagement
Department

System operation
platformBusiness
departments

System operation
platformBusiness
departments

In 2022, Huaqin prepared the annual
evaluation report for internal control
based on daily and special supervision toevaluate the effectiveness of internal
control as of December 31, 2022 (reporting base date), with a standard unquali-

Output internal control
compliance requirements

fied

audit

reportissuedby

Dahua

Certified Public Accountants.
Output internal control
compliance requirements

Quality Management Department

Inspect internal control operations
and review business self-inspection

Internal audit

Audit compliance in internal control

Supervision

Anti-fraud investigation

11

Business Ethics and Integrity
Huaqin puts business ethics and integrity at the core of its work and establishes a sound supervisory system. With the aim of cultivating
a compliant and honest ecosystem, Huaqin tolerates no corruption or bribery of any form. A working atmosphere that respects compliance and integrity is in place through such solid actions as establishing relevant systems and mechanisms, perfecting the supervisionsystem, and enhancing preventive education.

Develop
We have formulated and implemented the Huaqin Internal Control Management System, Huaqin Business Ethics Management System,
Huaqin Integrity Management System, and Huaqin Regulations on Handling and Managing Violations globally. A dedicated internal audit
and compliance team has been established to lead the anti-corruption and anti-fraud work, to be specific, advancing the development
and implementation of business ethics systems including anti-corruption and anti-bribery systems, conducting special audits on anti-corruption practices, and reporting to the Audit Committee of the Board of Directors.
We urge employees and suppliers to work and cooperate honestly and lawfully with a Letter of Commitment to Integrity signed by
employees holding key positions and a Letter of Commitment to Anti-Bribery signed by all suppliers.
In 2022, we clarified the responsibilities of business departments, internal control, internal audit and supervision — the three lines ofdefense in the internal control and compliance management system that supervise and support each other. Huaqin joined the Trust andIntegrity Enterprise Alliance and established the integrity blacklist with several renowned enterprises. We also worked with local judicial
authorities on the investigation of illegal incidents and the legal education of all employees. In 2022, Huaqin continued to strengthen its
internal audit and successfully completed a total of 32 audit projects in such fields as procurement, finance, and operations. The reportand complaint channel was improved and 26 complaint and report cases were handled. Corrections and reinforcements were executed
through analysis of the cases to address both symptoms and root causes.

Integrity Compliance Training and Promotion
To strengthen Huaqin's bottom line culture and enhance employees' awareness of integrity compliance, we have introduced a variety of
training sessions and promotion campaigns. These initiatives include introducing integrity compliance systems, on-site integrity compliance lectures, executive sharing on compliance, employee sharing on integrity compliance, integrity examination, regular integrity compliance week, conducting case briefings, bulletin boards, and emails. As a result, employees have greatly raised their awareness of integrity
compliance and self-discipline and a clean workplace has been shaped.
We have developed compliance promotion manuals andIn 2022, we organized 8 integrity compliance lecture and training

organized wide range of lectures and training sessions on

sessions and issued over 30 compliance briefings to explain relevant

compliance management systems, institutions, businessregulations and cases studies.

ethics, and information security throughout the group. As
a result, a culture of integrity and compliance has been
alive at Huaqin.

Huaqin Compliance Promotion ManualCompliance Training in Shanghai

Compliance Training in Dongguan

Compliance Training in Wuxi

Compliance Training in Nanchang12

Huaqin holds the Integrity Compliance Week every September, focusing on the "Work with Integrity". In the 2022 campaign broughtvarious activities in five locations including Shanghai, Nanchang, and Dongguan, in which more employees were exposed to the cultureof integrity and gained a deeper understanding of integrity.

Campaign in Dongguan

Campaign in ShanghaiCampaign in Wuxi

Campaign in Nanchang

Campaign in Xi'an

Email: report@huaqin.com

ReportA Violation

Tel.: 18516617679
Huaqin encourages all employees and partners to report faithfully on violations.
All reports and complaints will be handled in a timely manner and the personal
information of the whistleblowers will be kept strictly confidential. We disallow
any direct or indirect retaliation against the whistleblowers.

13

Sustainable Development Management
Sustainable Development Management Framework
Huaqin continues to pursue technological innovation andsustainable development to create value for the industry andBoard of Directors

society. We have formed the ESG management frameworkthat covers governance, management, and execution. The
ESG Committee was established in 2022, consisting of thechairman and senior management of functional committees

ESG Committee

including the Carbon Neutrality Committee, Human Resourc-

Secretariat

es Committee, Information Security Committee, and Public
Affairs Committee. The ESG Committee is accountable to theBoard of Directors and leads in ESG affair supervision and

ESG Execution Teammanagement across the Company. Regular meetings are heldby the ESG Committee to discuss and make decisions onsustainable development issues. Additionally, an ESG Execution Team has been formed to develop and implement
sustainable development plans for the Company and report toMembers from Human
Resources Department,
Administration Department,
Public Affairs Department,
and executive arms offunctional committees

the ESG Committee.

Stakeholder Engagement
Effective communication with stakeholders is critical to our sustainable development. Huaqin values the concerns and needs of stakeholders. We are committed to maintaining comprehensive and sincere communication with stakeholders through various channels. This
enables us to understand their concerns and build strategic mutual trust. By combining their concerns into corporate strategies and corebusiness areas, Huaqin collaborates with stakeholders to stimulate sustainable development in the economy, industry, society, andenvironment.
Stakeholders
Governmentand other
regulatory bodies

Concerns
Compliance withlaws and regulations

Economic growthCompliant andhonest operations

Sound operation andsustainable development

Tax compliance

Employment

Fulfilling tax obligations

Creating more jobs

Customers

Employees

Suppliers

Main Communication Channels
Relevant meetings

Policy consultation

Information reporting

Energy saving and emission reduction

Focusing on green operation

Supervision andinspection

Contribution to community development

Supporting and contributing to a better community

Occasional pro bono activities

Employment

Participating in pro
bono activities

Face-to-facecommunication

Communities

Shareholders
and investors

Our Response

Harmonious society

Business development

Legal operation

Protection of shareholders'
rights and interests

Organizing volunteer activities

Sound and sustainable
operations

Complying with laws
and regulations

Disclosing important information in a timely manner

Volunteer activities

Shareholders' Meeting

Regular reports

Face-to-face communication

Product development and technologicalinnovation

Investing continuously
in R&D and technology

Responding to customer
needs quickly

Meetings, face-to-face Customer
satisfaction survey
communication

Product security
and quality

Improving the quality
management system

Shaping a sound information
security system

Pre-sales
communication

Information security

After-sales
serviceOccupational health and safety

Establishing a soundhealth and safety system

Comprehensive careerdevelopment paths

Health andsafety training

Employee training andskill development

Remuneration
and benefits

Training sessions
at all levels

Competitive compensation
and benefits

Employees'
congress

Employee feedback
platforms

Career development

Long-term stable partnership

Introducing the supplierselection mechanism

Business ethics
and anti-corruption

Signing relevant suppliercode of conduct

Fair procurement

Conducting suppliertraining and audits

Annual supplierconference

Supplier training

On-site audit and communication

14

Efficient
Operations
for Long-Term
Development
Technological Innovation

16

Digital Management

17

Supply Chain Management

20

Business Automation

21

High Quality Strategy

22

Business Continuity Management

25

Information Security Assurance

25

15

Technological Innovation
Based on business and local conditions, Huaqin is committed to establishing a globally competitive R&D network and a multi-level R&D
system, It has built five major R&D centers across China in Shanghai, Dongguan, Nanchang, Xi'an, and Wuxi. These centers focus on the
research of smart hardware products as smartphones, tablets, laptops, smart wearables, data center products, and automotive electronics.

Shanghai R&D Center

New Shanghai Headquarters / Global R&D Center

Xi'an R&D Center

Dongguan R&D Center

Nanchang R&D Center

Wuxi R&D Center

Invest in superior R&D resources and advance intelligent manufacturing
through large-scale R&D projects
Huaqin prioritizes technological innovation and building of its R&D team building. With increased R&D investment, R&D innovation
platforms, and in-depth R&D projects, we encourage independent innovation, develop industry-leading technologies, and tackle thetechnological challenges faced by the industry.

Invest more in technological R&D and intellectual properties
Since its inception, Huaqin has been increasingly investing in technological innovation. In 2022, Huaqin spent $720 million in R&D,
marking a significant year-on-year growth of 39.54%, along with a pipeline of 12,308 R&D experts. Huaqin boasts a high-value portfolioof hundreds of patents to protect its technological innovations. Through years of efforts in improving the patent network and maximizing
its technological edges, Huaqin keeps cementing its smart hardware leadership.

As of the end of January 2023, Huaqin boasted
authorized intellectual
property rights

3,917

authorized patents

2,500

Nearlyinvention patents

900

Over

software copyrights

1,369

16

Build technological innovation platforms and explore technology frontiers
We built a technology center that serves as a platform for technological innovation. The TMT Committees apply advantages accumulated
in smartphone R&D, embedded software, and rapid productization over the years to such smart products as laptops, tablets, smart
wearables, AIoT products, data center products, and automotive electronics.
We established the Software Testing Center to make Huaqin competitive in software testing. On top of that, a comprehensive infrastructure
platform based on integrated development was built to meet the complex product needs of customers across different industries.
X-lab was established to attract more top talents and improve our innovation capability in acoustics, optics, thermal design, microwave, andbattery (new energy), enhancing our technology for productization and securing our industry leadership in cutting-edge technologies.

Expand technological R&D business worldwide
In 2022, Huaqin has been significant progress in establishing its global R&D headquarters. The project, once completed, will make fulluse of Shanghai's advantages in domestic and foreign talents and the integrated circuit industry, and focus on the cutting-edge technology of innovative electronic products. It will deepen strategic cooperation with world-class technology players and create a global
advanced technology innovation platform ready for the future. Meanwhile, the project will also focus on improving the comprehensive
capabilities of the headquarters and upgrading the 1+5+5 intelligent hardware ecosystem centered on Shanghai and reaching out to a
global scale. This strategic effort will strengthen the headquarters' resource allocation capacity in the global industrial chain.

Digital Management
To support the overall business strategy of "2+N+3" and achieve operational excellence, we set up a digitalization committee under thegeneral principle of "integrated design, central platform, and unified standard". The committee aims to improve management for digitaltransformation step by step and unify end-to-end core business processes, data standards, and systems by 2025. By doing so, Huaqin
aims to achieve efficient and transparent operations, consistent management, and effective risk control measures.

Organizational Structure of Digitalization Committee
The Digitalization Committee was established within the group to support the departments at all levels in setting goals and objectives
for digital transformation and putting them into practice under the general principles. The Digitalization Committee includes senior
managers from various functional areas, such as R&D, supply chain, marketing, finance, HR, investment, process, and IT systems.
Additionally, the committee also includes an office for the execution and coordination of transformation routines and the implementationof strategic objectives. The Digitalization Office operates on a weekly and monthly basis, holds special meetings for discussions as

17

Digitalization Committee

Digitalization Office

Project Teams
R&D

Supply Chain

Marketing

FinanceHR

Project Team

Project Team

Project Team

Project Team

Project Team

Investment& Assets
Project TeamIT
Project Team

Organizational Structure of Digitalization Committee

Digital Transformation Results
Huaqin aspires to achieve transparent operations,improved efficiency, reduced costs, and enhanced hap-

Transparent operations, improved efficiency, reduced costs,
and enhanced happinesspiness through digital transformation. From the beginning, Huaqin has outlined the general principles of "integrated design, central platform, and unified standard" tosteer digital transformation in R&D, operations, market-

Enhanced customer value
Robust operations & development
Responsible player

Visible operations & management
Controllable management process
Fewer accidents in management

Higher work efficiency
Self-value fulfillment
Enhanced happiness

Decision-Making Level

Management Level

Execution Level

Transparent operation

Visible processes

Reduced repetitive work

Reasonable decision-making

Smart warning

Improved efficiency

Model innovation

Ex ante forecast

Better ease of use

ing, manufacturing, HR, administration, and finance.
Remarkable results have been achieved.

R&D
To integrate R&D personnel and improve R&D efficiency,
Huaqin has gradually built an efficient and process-oriented IPD model since 2015. Under the model, an integrated team, including an operational director, marketing representatives, R&D representatives, procurement
representatives, manufacturing representatives, andquality representatives, is formed for each R&D project.
This approach raises the company-wide awareness ofwhole-process product development and integrates
internal resources to support customers in project
development. Furthermore, Huaqin can realize standardized, digital, and process-oriented R&D management. In

IPD Process

2022, Huaqin launched a new round of IPD iteration,with a focus on the business process, aiming to increase
overall R&D efficiency by 10%.

18

Operations
An operation middle platform was built to share data including customer demands and orders through EDI, enable seamless connection,and reduce manual operation and error rate. It also allows us to share data with upstream suppliers through the SRM platform, increasing
the efficiency of the whole supply chain. The internal departments are connected through the IBP platform for full coverage of the supply
chain. In a word, it provides efficient support for receiving customer orders and communicating purchase orders and forecasts.
In 2022, Huaqin invested heavily to reconstruct and build forward-looking supply chain processes and systems, which enhance synergy
and efficiency and refine management granularity. Significant improvement has been registered in key supply chain indicators in the pilot
project.
Over the next two years, we will further optimize our systems and processes to adapt to various businesses and level up operations
across the supply chain. We will advance the digitalization drive by the supply chain, aiming to provide customers with more efficient
services of better quality.

Marketing

Finance

By combining digital technology with traditional marketing

We have also reformed our financial systems (IFS) by review-

tools, we have reached customers through efficient and conve-

ing the financial process framework (FPF), building platforms

nient communication channels. We deliver a convenient service

for financial data management, developing and optimizing

experience to customers so they can access accurate andcore financial systems, and promoting data governance, totimely information in contract management, quotations, orderbuild a sound digital financial system.

processing, forecasting, expenses, or customer management. As
a result, our marketing and sales have become more precise
and efficient as our business decisions are now based on the
optimal utilization of data inside and outside the Company.

In 2022, the management of all our assets went digital,
which made the process real-time and well-targeted, andmanagement decision-making became more reasonable andaccurate. Reconciliation also became more accurate andfaster with the help of bots.

Manufacturing

HR & Administration

We have started systematic construction of the manufacturing

After institutional review, process development, and data

dashboard as part of a three-year plan covering data visualiza-

governance, Huaqin has made significant improvements intion, early warning, error proofing, and intelligent transforma-

key areas of HR and administration in DL recruitment, elec-tion. Our goal is to complete factory digitization in 2024. With

tronic signature, and HR self-service, satisfying tens of thou-core data visualization completed in 2021, 90% of data visual-sands of employees in scenarios like contract signing, elec-

ization will be accomplished by 2023 at the latest.

tronic signature, and one-stop HR services.

Data Quality
Data quality is the cornerstone of digital transformation. To ensure quality data and improve data management, we set up a specialized
department in 2021 for medium- and long-term data governance, targeting data quality, data standardization and consistency management, data sharing and integration, and data security and compliance.

19

Supply Chain Management
We are committed to building a transparent, secure, agile, cost-leading and sustainable supply chain system, while maintaining a win-win
partnership with our suppliers. We build an efficient operation process and a comprehensive digital and systematic IT system for effective
vertical resource integration to create a world-class supply chain system. We develop a team of differentiated suppliers, a global networkof strategic procurement, and a risk management mechanism to establish a competitive supply chain for our strategic goals.

Technology Procurement

Supplier HealthTechnological innovation
Joint planning, design, and development
Localization, standardization, andgeneralization

2-4 h supply circle
Environmental protection

Talent Pipeline
Fresh graduate cultivation and retention
New manager training and empowerment
Potential talent training and empowerment
Multiple locations

Tailored Green
Supply Chain

Supply Security
Demand management
Layered stock
Industry-finance integration

Fixed Asset Ecosystem

Digital Transformation

EAM
Centralized procurement
Self-developed procurement

Project-based implementation
Data quality assurance
System visualization

Construction of Supply Chain CSR Management System
Huaqin has established a supplier relationship management (SRM)

commitment will be banned from future cooperation. Suppliers insystem that spans the entire lifecycle from supplier introduction,

the Approved Vendor List (AVL) are subject to regular performanceon-site audit, and contract management to performance manage-assessments by multiple departments on costs, delivery, quality,

ment. To fulfill our corporate social responsibility and deliver on our

CSR fulfillment, and services. Based on the assessment results, wecommitment to sustainability, Huaqin has established a comprehen-

identify the continuous improvements to be made by suppliers

sive procurement CSR management system based on the United

based on the assessment results, and help suppliers improve their

Nations Guiding Principles on Business and Human Rights (UNGP),

awareness of social responsibilities and management capabilities.

the Organization for Economic Cooperation and Development (OECD)
Guidelines for Multinational Enterprises and the International Labour
Organization (ILO) Guidelines for Multinational Enterprises, as well as
the Responsible Business Alliance (RBA) Code of Conduct and the
Joint Audit Cooperation (JAC) Supply Chain Sustainability Guidelines.
We require that all suppliers sign and abide by the CSR system thatencompasses labor standards, safety and health, environmental
protection, business ethics, and management systems. Huaqin strives
to conduct sourcing and business on our products, employees, andsuppliers in a socially, environmentally, and ethically responsible
manner.

Huaqin is committed to never supporting or use utilizing conflictminerals including tin, tantalum, tungsten, gold, and cobalt fromunknown sources. We fully support the actions of the Responsible
Business Alliance (RBA) and the Global e-Sustainability Initiative(GeSI) against conflict minerals. We comply with the OECD
guidance on conflict minerals and the RBA program to conduct
responsible supply chain sourcing and facilitate Reasonable
Country of Origin Inquiry (RCOI) and Due Diligence (DD).
We encourage suppliers to define policies aimed at preventing andreduce any human rights and environmental risks that may be

Suppliers are subject to joint field audits by the R&D, procurement,

caused by minerals contained in their products. Suppliers are

and quality departments to evaluate their workplace environment andrequired to track the source of and conduct due diligence oncompliance with relevant environmental protection requirements. In

minerals in the purchased products. We share due diligence

addition, suppliers are required to hold certifications such as ISO9001

information with customers, and collaborate with both customers

and ISO14001. Huaqin incorporates the anti-commercial bribery

and suppliers to promote the sustainable development of mineralcommitment into the procurement framework agreement, and makes

supply chains.

integrity anon-negotiable principle. Any supplier found to violate this20

Business Automation and Lean Manufacturing
Dedicated to business automation, we have established the Automation Committee to promote automated intelligent manufacturing
across all categories, including mobile phones, tablets, laptops, and smart wearables. By 2025, our goal is to install 50,000 sets of equipment, with baseline automation rate improved to 70% and labor saved by 15,000 people, building an industry-leading intelligent equipment management ecosystem at the best efficiency.

Automation Committee Structure
The Automation Committee has been created to help all

Automation Committee

relevant manufacturing departments set and work toward
their individual goals that are aligned with the overall organizational automation goals. Comprised of senior executives

Automation Implementation Officefrom the Equipment Technology Department and various
manufacturing departments, the Committee has an office
to control the execution and coordination of automation

Project Management Teamroutines and the implementation of strategic objectives.
The Automation Committee is responsible for defining thecompany's course of automation and overall objectives. It

Product

Product Engineering

Manufacturing

Procurement

supports the Automation Implementation Office in setting

Department

Department

Center

Department

project objectives for each business segment, guides andmonitors implementation of objectives, providing guidancefor project improvements, and inspecting special improve-

Organizational Structure of the Automation Committee

ment results.

Achievements of Automation
In 2022, Huaqin invested in approximately 2,200 sets of automation equipment including FATP and SMT lines, which saved labor costs ofnearly 1,800 people. Huaqin supercharged the automation efforts at baseline in smartphones, tablets, smart bands, smart watches, TWS
earphones, and laptops. At the same time, we achieved technological breakthroughs in key FATP processes to ensure industry leadership.
The independent automation R&D team was expanded to cover the whole process , including design, assembly, operations and maintenance, renovation, and reuse. Equipment standardization was promoted to realize modularized physical design, generalized control
platforms, and integrated user interfaces. We also managed to shorten idle time to ensure high utilization and reliability of equipment byadopting relevant mechanisms, growing our talent pools, improving the automation introduction process, and identifying key risks. We
customized the EAM/TPM/Scada/Andon systems and established an equipment data acquisition warehouse to integrate real-time monitoring, instant alarming, intelligent prediction and analysis warning, and pulling features to ensure efficient equipment operation. Additionally,a DFA (design for assembly) middle platform was created, incorporating special DFA items, baselines, projects, and rules, to enableeffective collaboration between the manufacturing and R&D departments and improve the standardization of design and production.

Independent R&D TeamCapacity building
Design standardization
Asset activation capabilities

High Reliability
Equipment standardization
Shortened idle time

Low Equipment Failure Rate

Less Human
Effort and Higher
Efficiency
High Quality

Equipment condition monitoring
Intelligent equipment warning system

Efficient Collaboration
Creation of a DFA technology platform

21

High Quality Strategy
Huaqin has been adhering to the tenet of quality as lifeblood since its inception. A high-quality strategy has been developed at the grouplevel for long-term development. We continue to improve the quality control system covering R&D and design, material procurement,
manufacturing management, product flows, supply assurance, and after-sales services. Through these efforts, we have earned a reputation as a quality benchmark in the industry.

High-Quality Control Throughout the Lifecycle
Huaqin has built an integrated quality management and organization mechanism that spans the full product lifecycle and aims to cultivate
a diversity of quality talents, to facilitate its transformation into an agile organization. Based on the overall organizational structure andcorporate culture, we have continuously optimized the quality control mode to create a new, open, and flexible management structurethat effectively aligns Huaqin's internal quality control with the customer value chain.
In the early stage of a project, we identify potential risks regarding new goals, processes, and technologies for proactive planning andprevention. During project execution, we break down quality objectives and implement them individually, and review the fulfillment ofleading indicators regularly for timely improvement. Meanwhile, we encourage 4Q (PQE, PQA, SQE, and IQC) interaction and end-to-end
interconnection among the R&D, procurement, and production departments, so as to provide adequate resources for smooth project
implementation and quality control. Huaqin and the manufacturing centers have been certified with ISO 9001 and QC 080000 (International Electrotechnical Commission quality assessment system for hazardous substance in electronic components). The domestic manufacturing centers have passed IATF 16949 (technical specification for automotive sector quality management systems), ISO 13485 (medical device standard), and other quality system certifications.

QC 080000 Certificate

IATF 16949 Certificate

Quality Vision

ISO 13485 Certificate

ISO 9001 Certificate

Quality Culture

Our quality vision: To make Huaqin synonymous with highQuality is deeply embedded in our culture and reflects our corequality in the intelligent hardware industry.

values. The abbreviation "HQ" for "HuaQin" can also be interpreted as "High Quality", implying that Huaqin has been committed
to quality since its inception. Our quality culture: follow process
specifications, ensuring that things are done correctly the firsttime, and continuously seeking opportunities for improvement.

22

Internal and External Quality Empowerment
To create an atmosphere where everyone values quality and to raise their quality awareness, Huaqin organizes an annual "Quality Month"
campaign. This campaign includes various activities such as skill competitions, knowledge lectures, examinations, special internal audits,on-site training, and questionnaires every year. These quality training sessions and all-round communication have assured that ouremployees can always bear high quality in mind.

Case: Quality Month

Since 2008, Huaqin has been organizing the "910 Quality Month" campaign as part of our ongoing efforts to build aquality culture. Guided by the quality culture of "following process specifications, doing things right the first time, andalways making improvements",
we clearly communicated our quality vision, objectives, management policies, and benchmarks to all of our employees
so that they can always bear high quality in mind.
Themed "High Quality for Future", the quality month campaign in 2022 included diverse promotional activities likequality commitment and knowledge quizzes to enhance the quality awareness of all employees.

Case: Quality Skill Competitions

Every year, we launch various quality skill competitions. In 2022, a series of skill competitions like appearance inspection, quality control, knowledge quiz, and scenario simulation
were held to motivate employees to strictly follow the production process, learn quality knowledge, raise quality awareness, and spread quality culture, ensuring that all the employees bear quality in mind.

23

2022 Quality Honors
By maintaining full lifecycle quality control, Huaqin continues to build high-quality products and services, with wide recognition from
customers. In 2022, we received a number of excellent and outstanding quality awards from customers.

Sunmi Annual Quality AwardFCNT ATAMI Quality Excellence AwardFCNT Quality Excellence AwardOPPO Quality Excellence Award
realme Project Quality AwardSONY Quality Award

In 2022, our wholly-owned subsidiary Nanchang Huaqin Electronic Technology Co., Ltd.
was awarded the "Fourth Nanchang Mayor's Quality Award" by Nanchang Municipal
People's Government for its high quality performance.

24

Business Continuity Management
After years of effort, Huaqin has built an end-to-end business continuity management system, identified relevant procedures, set up a
management organization, and developed preparedness plans for various risk events. We have developed policies and processes inprocurement, manufacturing and logistics, backed up by HR, finance, legal, and IT departments. With effective process building and risk
management measures, we have continuously improved our emergency preparedness and disposal, maintained the continuity of strategic objectives, and realized steady and sound business operations.

Key Initiatives in Procurement
We source raw materials from multiple suppliers, prioritizing those with multiple manufacturing sites. During mass production, we
prepare safety stock to better address the ever-changing customer demand and uncertainties during the pandemic.

Key Initiatives in Manufacturing
We have established two domestic manufacturing centers in Nanchang and Dongguan, as well as three overseas manufacturing basesin India, Indonesia, and Vietnam. These complementary sites allow Huaqin to provide quality products and services to global tech customers in a sustainable manner.

Information Security Assurance
Huaqin works to protect the information security for ourselves, customers, and employees. We have implemented effective measures tocontrol and protect internal information security. This includes enhancing our internal information security management systems,
strengthening the information security protection mechanism, and enhancing employees' awareness of information security protection.

Construction of the Information Security System
In strict accordance with the Cybersecurity Law of the People's Republic of China and the
Personal Information Protection Law of the People's Republic of China, Huaqin has
obtained the ISO 27001 (information security management system) certification anddeveloped a complete information security system that classifies all information, sets up
corresponding approval processes, and defines all violations and penalties.

ISO 27001 Certificate

25

Information Security Risk Control
Huaqin has established the Information Security Committee to strengthen information protection policies and implement prevention
strategies for physical security, data security, and personal information security. To ensure the security of information in use, Huaqin
provides internal employees with online and offline training courses on subjects such as the prevention of internal and external network
attacks and intrusions, and information security in secure areas. Moreover, Huaqin carries out information security month activities andorganizes information security exams every year to enhance all employees' awareness of information security risks and their ability toidentify them. Based on the comprehensive information security protection system, Huaqin also reinforces the protection of customer
information through controls over its internal operation and suppliers.

Internal Operation Control
Strict background checks are done for all key positions that have access to customer information. In addition, for key positions at the
project level, a commitment letter or confidentiality agreement specific to the project will also be signed. Customer-related documents are
encrypted, with specific storage locations and disposal authority defined. The use of removable storage devices for copying operations isstrictly prohibited. Furthermore, Employees are strictly prohibited from sending company documents to personal email addresses.

Supplier Control
All suppliers are required to sign a confidentiality agreement before their cooperation with Huaqin. Moreover, they must present theirvalid ID when entering the company to prevent unauthorized access. Huaqin has strict restrictions on all physical and logical access by
suppliers. In addition, Huaqin conducts annual information security inspections and supervision of key suppliers to ensure complianceand mitigate any potential risks.

26

SocialCommitment
and Responsibility
Promoting Social Equity

28

Public Welfare

32

27

Promoting Social Equity
Promoting the Popularity of the Internet
Huaqin has been committed to improving people's communication and life since its inception. We always believe that everyone shouldbe able to enjoy a smart life through technical inclusion to promote social equity.
Through efficient operation, R&D innovation, advanced manufacturing capabilities, design and manufacturing capabilities of precision
mechanical parts, we continue to deliver better smart terminal products with enhanced R&D and manufacturing efficiency. This enables
us to offer cost-effective and stay ahead of market competition. In 2022, Huaqin led the industry in terms of total shipment. In particular,
the shipment of smartphones, tablets, and laptops segments are topped the global ODM/IDH industry. As a result, Huaqin has becomea driving force in promoting smartphones, tablets, laptops, smart hardware, and connectivity worldwide, contributing to the cause of forsocial equity.

Enabling Inclusion and Equity for Seniors
So what can the ever-developing technology help solve the aging population in China? How can technology assist the elderly in adapting
to the later years of life? We take the physical and mental differences into account when designing elderly-friendly products. With emerging technologies such as smart hardware, IoT, cloud computing, and AI, we are able to help the elderly enjoy convenient tools for their
daily life and travel and improve their quality of life, sense of happiness, and social engagement.
Huaqin is committed to being a socially responsible organization. In response to the call of "making technology easier for seniors", wehave developed AI technologies that help the elderly cross the "digital divide" and lead a happier and better life, promoting the development of a Healthy China.

Case: Elderly-Friendly and Accessibility Features

HAC, TTY, Easy Mode on Moto G6 Plus, Moto G7 Play, and othermodels help the hearing-impaired and the elderly communicate moreeasily and enjoy a smart lifestyle.
HAC: Hearing aids can be used with smartphones to help hearing-impaired/elderly people. With hearing aid compatibility (HAC), noises
caused by the incompatibility between digital mobile phones andhearing aids are eliminated, so that people wearing hearing aids cananswer phone calls without interference.
TTY: Teletypewriters can be used with smartphones to support people
who are deaf, hard-of-hearing, or have a severe speech impairment.

Moto G6 Plus

Easy Mode (Simple Mode/Elderly Mode): This mode only provides
some basic features such as camera, photo album, phone call, and SMS
and increases the icon and font size, making it easy to use for seniors.
Voice Assistant: The feature provides voice feedback to help blindand visually impaired users. For example, it describes what to tap,
select, and activate.

Moto G7 Play28

University-Business Cooperation
Huaqin works with colleges and universities through technical seminars and internship programs, helping cultivate new skilled professionals for local communities. By building a collaborative innovation system and integrating respective resources, we have improved ourcapabilities in innovation and entrepreneurial capabilities while creating mutually beneficial outcomes in talent training, entrepreneurship,and business incubation.
Huaqin keeps exploring new modes of university-business cooperation. In 2022, Huaqin signed agreements with multiple colleges anduniversities regarding new apprenticeship and talent training initiatives. High-caliber talents that can meet corporate needs are cultivatedto promote quality socio-economic growth. In 2022, our manufacturing centers were recognized as the demonstration base for thecultivation of highly skilled talents, providing vocational skill training for enterprises, educational institutions, and society.

29

Public Welfare
To better highlight our social commitment and fulfill our corporate social responsibility, Huaqin set up the "Huaqin Care Fund" in January
2011. This fund supports various charitable activities, including grant-aided education, environmental protection and carbon reduction,
health assistance to the disabled, assistance to the poor and the weak, and disaster relief support.

Grant-Aided Education

Environmental Protection
and Carbon Reduction

Health Assistance tothe Disabled

We foster education, bridge the education gap,

Under the goal of carbon neutrality, Huaqin
facilitates ecological construction and environmental protection and explores a green operation
mechanism in environmental pollution prevention
and control, green development, and water resource
conservation.

By subsidizing early diagnosis and earlyintervention technologies, we help kids withcongenital diseases to improve, recover, and livewith dignity.

and diversify education in impoverished areas.

Assistance to the Poorand the Weak
We provide financial support to resource-poor
areas in central and western China or the
disadvantaged in cities, fund social organizations
to carry out sustainable development programs inurban and rural communities, and help rural
revitalization through skill training.

Disaster Relief Support
Whenever there is a major natural disaster, we
make every effort to provide as many resources
as possible to ensure people's basic living needsin the affected areas.

By the end of December 2022, we have operated
There is no end to public welfare.
Huaqin is actively contributing its partand joining hands with more to help
those in need.

Public Welfare
Projects

Partners

Number ofBeneficiaries

28

15

5万+

30

2022 Charitable Activities

Grant-Aided Education and Assistance to the Poor and the WeakIn December 2022, Huaqin donated winterclothes and books to the children in Bugu
Village, Maxiu Township, Bianba County,
Changdu City, Tibet Autonomous Region
and Yunzhou Primary School, Heba Town,
Datong Lake District, Yiyang City, Hunan
Province to pass on warmth and hope.

"Diligence & Reflection" Science Campaign

2022 Library Support

In September 2022, Huaqin, Shanghai United Foundation, and Shanghai Yusi Youth Computing Science Development Center launched
the "Diligence & Reflection" Science Campaign. Focusing on "popularizing science and inspiring innovation", a specially designed scienceand technology education course is held once a week, including an introduction to computer programming and hands-on practice increative electronics. As of January 2023, 11 science courses have been conducted, serving more than 450 people in total.

In 2021, Huaqin became one of the first members of "Huiyi Respect for the Elderly Alliance" established by the Beicai Town Governmentof Pudong New Area, Shanghai. In 2022, we continued to take practical actions to respect and support the elderly, creating a newenvironment where senior citizens are respected, cared for, and live happily in their later years. In September and October 2022, Huaqin
donated epidemic prevention supplies, daily necessities, and food to three senior care centers in Nanchang and Wuxi, conveying ourgood wishes for their health.

Care for the Elderly

Care for the Elderly

In July 2022, Huaqin made a donated to Dongguan Charity Federation for a charity station in Tangxia Town aiming to provide
assistance to those facing temporary and emergency difficulties.
It is part of the efforts to build the "Dongguan Charity" service
brand and shape an atmosphere where everyone is actively
involved in helping one another.

Charity Station in Tangxia Town, Dongguan, Guangdong Province31Communication — Care for Autistic Children
In March 2022, Huaqin funded to the Shanghai Qingcongquan Training Center for Children with Special Needs to develop "Q Scenario
Simulation Classroom", This innovative initiative is designed to enhance the cognitive, life, and social skills of autistic children, so thatthey can learn to adapt to the simulated real-life scenarios in a safe and healthy environment. The classroom features simulated real-lifescenarios such as supermarkets, hospitals, and clothes stores can fully engage children in experiencing and learning new things, thus
creating a more inclusive environment for their integration into society.

Support to Autistic Children

Communication — Care for Autistic Children

Green Power on Campus
In response to China's carbon neutrality goal and to improve education and ensure equal access to education in poor areas, Huaqin
started in February 2022 the "Green Power on Campus" project which combines photovoltaic (PV) technology and energy storage toensure uninterrupted green power supply to schools in areas with weak educational resources. Together with the Overseas China Education Foundation, we funded the installation of a 68.20 kWp PV power generation system at Liuzhai Middle School in Huining County,
Gansu Province to reduce its electricity expenses. The PV system can reduce CO2 emissions by 99 tons per year, equivalent to planting
5,000 new trees every year.

Green Power on Campus

Green Power on Campus

32

Environmental
Protection andGreen Leadership
Dual Carbon Strategy

34

Environmental Management Mechanism

34

Creating Environmentally Friendly Products

35Green Manufacturing for High-Quality Development

37

Developing Green Logistics

42

Promoting Green Office Practices

42

33

Dual Carbon Strategy
China and its businesses have shared the goal of addressing climate change and advancing the transition to a low-carbon economy. Asa global leading intelligent hardware platform, Huaqin has formulated the "dual carbon strategy" in response to China's "dual carbon"
goal. Huaqin is dedicated to promoting low-carbon development and lead the industry toward a greener, win-win and sustainable"Dual Carbon" Targets
Based on Huaqin's carbon neutrality targets, the carbon neutrality plan is divided into four stages:

2021

2030

2050

2060

Starting to control
carbon emissions

Peaking carbon
emissions

Achieving regionaltargets

Achieving overalltargetEmission strategy

Carbon emissions and theirsources are effectively controlled

for carbon neutrality

for carbon neutrality

Designing the roadmap to carbon neutrality
with yearly targets
Consulting professional firms to empower
teams with skills and certification
Keeping updated with government policies

前Green technology R&D
Purchasing renewable energy
Controlling carbon emissions of top 100
suppliers in the upstream supply chain

前

前Achieving targets in Shanghai, Wuxi, andXi'an first
Achieving targets for some of the products

Requesting customers to provide training
Enhancing organizational influence withachievements and expanding gradually

Huaqin continues to increase efforts in response to climate change, promoting energy saving, and emission reduction. Each year, weinvest in carbon reduction innovation and practices through managerial and technological measures to ensure relevant goals areachieved. We continue to improve energy efficiency and reduce carbon emissions through self-built PV projects, energy-saving renovation projects, investment in high-efficiency equipment, and lean management. In 2022, our total greenhouse gas (GHG) emissions were160,215 tons of carbon dioxide equivalent.

Environmental Management Mechanism
In strict compliance with relevant local laws and regulations and industry emission standards, Huaqin has
developed such as the Hazardous Waste Disposal Agreement, the Solid Waste Management Regulations,and the GHG Control Management System to improve our environmental management system. Guided byour "dual carbon strategy", we have established a group-wide management system and framework forcarbon emission reduction. The Carbon Neutrality Committee has also been set up to conduct annual
audits of carbon emission reduction throughout the group and promote continuous progress in green andlow-carbon production and operation. We actively promote certification to third-party authoritative environmental standards. Huaqin and the manufacturing centers in China have been certified with ISO 14001(environmental management system). In 2022, our wholly-owned subsidiary Nanchang Huaqin Electronic
Technology Co., Ltd. received ISO 50001 (energy management system) certification. I In the future, Huaqin
will improve internal environmental management standards by promoting ISO 14001 and green factory

ISO 14001 Certificate

certification and plans for third-party GHG inventory.

34

Creating Environmentally Friendly Products
Huaqin integrates the concept of green and sustainable development into the full product life cycle from material procurement to R&D,
design, production and packaging. This approach allows us to provide customers with more eco-friendly products.

Green Supply Chain
All our materials comply with strict environmental laws and regulations, directives or certifications. A variety of renewable materials suchas recycled paper and plastic have been used in many products. We will also work with our suppliers to explore the possibility of using
more high-quality renewable materials. Furthermore, we actively collaborate with our suppliers to fulfill their responsibilities underenvironmental laws and regulations. These include compliance with RoHS (Restriction of Hazardous Substances), REACH (Registration,
Evaluation, Authorization and Restriction of Chemicals) requirements, PAHs (Polycyclic Aromatic Hydrocarbons) Directive, Battery Directive, Packaging Directive, WEEE (Waste Electrical and Electronic Equipment) Directive, POPs (Persistent Organic Pollutants) Regulation,
California Proposition 65, and Restriction on the Use of Hazardous Substances in Children's Products. For example, materials provided
by suppliers must meet the latest requirements of our corporate standards and technical documents on the restricted use of hazardous
substances in eco-friendly products, and applicable laws and regulations. Suppliers are expected to provide test reports on hazardous
substances, as stipulated by environmental protection laws and regulations for the materials they provide.

Green Design
Our commitment to green products starts with design phase.
We conduct strict audits of raw materials to meet all environmental requirements. By pursuing technological innovation,
applying low-carbon technologies, and reducing energy
consumption, we strive to achieve environmentally friendly
design and research and development (R&D) practices. One
example of our approach is modular product design, whichallows easy upgrade and maintenance and increased usage. To
create reusable green products, we start from the non-destructive disassembly of high-value modules, explore possible
recycling solutions, and classify and put the reusable materials
into reprocessing, thus improving the re-utilization rate ofrecycled and original products.

35

Green Manufacturing
Huaqin consistently follows a "high quality strategy" and manufactures products that are durable
and high-quality products. During the manufacturing stage, we conduct strict reliability tests againstinternational standards to ensure enhanced productusability in severe conditions and reduced resource
consumption. To carry out these tests, we havemultiple specialized reliability labs in China, where

Environmental reliability

Mechanical reliability

we simulate use scenarios and perform reliability
tests on different products and components toensure product quality before shipment. Tests
include drop tests, temperature cycling tests, andabrasion tests.
RF antenna radiation

Audio and call

Hazardous substance testing

Green Packaging
We have developed better and more efficient packaging designs that meet customer needs, aiming to reduce the use of packaging
material and cut packaging and logistics costs. Huaqin is using a variety of renewable materials such as recycled paper and plastic invarious products to reduce resource consumption.

36

Green Manufacturing for High-Quality Development
Our major manufacturing centers in Nanchang and Dongguan take steps to pursue green, low-carbon, and sustainable operations based
onthe principle of "low consumption, low pollution, and high efficiency", We strive for green and high-quality development by implementing various measures.
To create green factories, we use as much renewable and clean energy as possible at the source, take technical and managerial measures
to save energy during our operations, and properly dispose of hazardous waste and organize environmental awareness programs. These
efforts have enabled us to cut costs with increased resource utilization and reduced waste generation, and achieve more efficient,sustainable, low-carbon operations.

2022 green manufacturing data for thetwo manufacturing centers in Nanchang and Dongguan:
Energy saving andconsumption reduction
measures implemented

Total energy savings

50+

12,109,739

kWhTotal CO2 emission
reduction

CO2 reduction
year-on-year increaset

11,507

80.93

tons

%

NanchangNanchang No.1 Manufacturing Center

Nanchang No.2 Manufacturing Center

Dongguan

Dongguan No.1 Manufacturing Center

Dongguan No.2 Manufacturing Center

Dongguan No.3 Manufacturing Center

37

Use Clean Energy

PV Power Stations

We use renewable energy in our operations wherever possible andMore than 6,000 PV panels have been installed at Nanchang No.1

are building PV power systems, solar water heating systems, andManufacturing Center to provide over 5 million kilowatts ofother green energy facilities at our two manufacturing centers.

electricity per year. In 2022, we continued to build PV power
stations at the manufacturing centers in Nanchang and Dongguan.

Case: PV Power Station at Nanchang No.2 Manufacturing Center

In 2022, we started a 7.3MW rooftop solar power project at the Nanchang No.2 Manufacturing Center, coveringa total rooftop area of 84,200 m².
The estimated annual power generation is 7.43 million kWh, equivalent to an annual reduction of about 5,900
tons of carbon dioxide.

Case: PV Power Station at Dongguan Manufacturing Center

In 2022, we started the construction of PV power generation facilities at the Dongguan manufacturing center,covering a total rooftop area of 34,000 m².
The first phase has an installed solar capacity of 818 kWp over 10,000 m².

38Solar Water Heating System
The solar water heating systems at our Nanchang and Dongguan centers provide hot water for thousands of people eachday. By replacing the traditional hot water system with
air-source heat pumps and building a solar hot water systemthat can be used all year round, we can reduce gas andelectricity consumption and reduce carbon emissions.
Nanchang Solar Water Heating System

Technology-Backed Energy Saving
Spending on energy-saving renovation projects kept growing to $701,650 in 2022. Nanchang and Dongguan manufacturing centers
adopted new technologies to save energy, including air compressor heat recovery, warehouse and dormitory lighting renovation, scheduled operation of hot water units, and frequency reduction of fresh air units.

Case: Air Compressor Heat Recovery at Dongguan
Some dorm buildings in Dongguan Manufacturing Center
used air-source heat pumps for hot water supply. As theenergy consumption is high, the waste heat of the aircompressor is recovered to bring down both electricity usage
and carbon emission.

Case: Frequency Reduction of Fresh Air Units at
The fresh air units can ensure satisfactory temperature andhumidity at 45 Hz. To save energy, the frequency of each unit
is lowered by 5 Hz to lower the energy consumption by about
3.4 kW/h each, while desired

BeforeAfter

Energy Saving Through Management
Huaqin keeps refining energy management through various measures, including the standard energy use models, improving basic equipment maintenance, adjusting equipment parameters, scheduling reasonable production downtime, energy saving signs, and area
management. These efforts help improve energy utilization efficiency and achieve energy saving.

Case: Energy saving signs and area management

Huaqin keeps improving its energy-saving measures andimplementing prompt signage and area management forelectricity usage.

Case: Factory Monitoring & Control Systems (FMCS)The Company has introduced the FMCS at No. 2 Manufacturing
Center in Nanchang, enabling remote centralized monitoring ofenergy and power systems in the plant. By implementing remotecontrol and independent control and automation of various subsystems, it has reduced the energy consumption of foundamental
equipment and achieved energy conservation and emission reduction.

39

Internal Energy-saving Audit
To enhance energy conservation, reduce consumption andpromote low-carbon environment protection, Huaqin has set

Floor/division
management
Set up an internal energy
saving organization
Establish a daily spot
check mechanism

Departmental
inspection andsupervision

Platform audit
management

Establish the departmental
energy-saving inspection system
Create inspection duty roster

Biweekly energy-saving audit
Park inspection
Key energy-using equipment audit
Key inspection on holidays

Forecast line operation
on holidays

up an internal energy-saving organization and introduced thedepartmental energy-saving inspection system and a daily spot-checking mechanism. Energy consumption in all areas of the plant isaudited on a daily basis to ensure on-demand use of electricity and power shutdown are conducted in a timely manner. Potential
problems are analyzed for future optimization.

Three-waste Management
Huaqin has a well-developed system for waste management, including partnerships with certified waste disposal companies to classify anddispose of our waste, aiming to minimize the negative environmental impact to the greatest extent possible. Meanwhile, we have undertaken
initiatives to reduce waste generation by raising awareness among our employees, which have received a tremendous response from ouremployees. Our employees join in these campaigns enthusiastically and have learned a lot about environment protection.
Waste Classification

Solid Waste

Wastewater

ExampleDisposal

Non-recyclable waste

Domestic waste

Designated suppliers regularly sort and remove the waste

Canteen waste

Leftovers and waste cooking oil and fatsHarmless disposal by designated certified suppliers

Recyclable waste

Packaging boxes and metal parts

Recycled and reused by designated suppliers and then handed over to certified
suppliers for disposal

Hazardous waste

Waste cutting fluid

Centrally stored in a designated area and then processed by certified suppliers

Construction waste

Waste from refurbishments

Centrally stored in a designated area and then processed by construction companies

Canteen wastewater

Oily wastewater from canteens

After oil is removed through an oil separation tank, wastewater is discharged into themunicipal sewers if it meets the required standards.

Other domestic wastewater

Wastewater from bathrooms, office pantries, and sanitation

Discharged into the septic tank for sedimentation if it meets the required standards

Sporadic wastewater

Sporadic wastewater generated from the production process

Recycled and disposed of by an industrial wastewater treatment facility and discharged if
it meets the required standards

Waste gases from canteens

Cooking fumes from hobs

After being purified by purifiers and meeting the standards, the emissions are discharged
in an organized manner. Additionally, we have installed online monitoring devices formonitoring the concentration of oil fumes, which are connected to the government website,allowing real-time monitoring to ensure compliance with emission regulations

Industrial waste gases

Industrial waste gases generated from the production process

Centrally disposed of by the waste gas treatment facility on the roof of the building andthen discharged if it meets the required standards

Waste Gases

Case: Waste Gas Disposal on Dongguan Campus

Industrial Waste Gas Disposal
Currently, there are two bag filter facilities, 2 activatedcarbon waste gas treatment facilities at Songshan Lake
production base in Dongguan, as well as 4 and 2 activatedcarbon waste gas treatment facilities in Dongkeng andTangxia, respectively, with the treatment efficiency of over
90%. A total of 21 organized exhaust gas emission outlets
in the Park have been tested and the emission concentrations from these outlets all comply with regulatory
standards for exhaust gas emissions.

Waste Gas Disposal Facilities

Zero Landfill of Wastes
We have regularly monitored and analyzed the waste data of each plant to identify potential improvements in
waste disposal methods and worked with all plants to implement targeted improvements, gradually enhancing
the overall resource utilization rate of the Group, replacing direct incineration and landfilling of wastes andincreasing waste transformation rate. Besides, we have also been promoting the construction of zero landfill
construction and replicating successful experience within the Group. During the reporting period, ourwholly-owned subsidiary Nanchang Huaqin obtained UL 2799 Zero Landfill certification and achieved thehighest Platinum level in waste transformation rate (100%, with 8% for waste-to-power generation).

UL 2799 Zero
Landfill of Wastes

40

Noise Management

We adopt eco-friendly, low-noise equipment, sound layouts, and sufficient greenerycoverage to keep the noise generated by our factories below the standard limit. We have
optimized processes by transforming aging from offline to online, lowering worker
exposure to noise. We also install mufflers on nitrogen generators, air compressors, andother machinery and equipment to reduce noise by up to 30 dB. Noise detection is
performed in all directions around the factory perimeter to ensure we meet the national
Class 2 limit, that is, < 60 dB(A) during the day and < 50 dB(A) at night.

Water Resources Management

Diagram for Noise Sampling Points

Biodiversity

Huaqin has promoted water conservation and strengthened the

Huaqin is committed to making every effort to protect therecycling and utilization of water resources. In accordance withbiodiversity. To this end, we have prohibited the use of persistent

relevant laws and regulations and local emission standards,

organic pollutants that may harm the biodiversity, incorporated all

Huaqin has actively promoted the concept of water resource

substances regulated by POP regulations into Huaqin's hazardous

management. In daily production and operations, we have actively

substance management standards, and ensure compliance with

implemented various water conservation measures, including the

POP Regulations for all products and chemicals in our production

installation of water-saving sanitary ware, sensor-activatedprocesses.

faucets, monthly water consumption monitoring, special inspections and posting of water-saving signage, all of which havecontributed to water conservation efforts.

Safe Use of Chemicals
To reduce environmental pollution fromelectronic waste andprotect the health and safety of users, we have built a comprehensive chemical management process and strictly comply withthe laws and regulations of various countries around the world. At
the same time, we have established a hazardous substancetesting laboratory to conduct thorough analysis of our product's
chemical composition of our products. To ensure ongoing prevention and management, we have established a hazardous
substance management system based on the QC080000 system
to guarantee Huaqin's sustained competition in environmental
protection. For example, all mobile phones, tablets, and wearablesof Huaqin are free from brominated flame retardants (BFRs),
chlorine flame retardants (CFRs), phthalates, contributing to ourcommitment to environmental protection and sustainability.

Promoting Energy-Saving AwarenessTo promote energy conservation knowledge awareness among all employees, Huaqin regularly organizes energy-themed promotional
activities and holds annual implementation meetings focused on energy conservation. These initiatives aim to engage all employees andenergy conservation, within the group each year and carried out the implementation meeting of energy conservation to ensure the participation of all employees to effectively carry out energy-saving initiatives and reduce energy consumption.

41

Vigorously Developing Green Logistics
Transition from Paper toElectronic Documents

Recycling Packaging Materials andUsing Recyclable Materials

Electronic documents are available in Huaqin's on-site warehousing

The pallets used in the transportation between factories andsystem and logistics system, allowing customers, suppliers, andwarehouses are recycled, and it is strictly prohibited to scrap

Huaqin employees to exchange electronic documents easily. Thispallets that are still in usable condition. Some orders fromenvironmentally friendly and efficient solution effectively reduces

direct-delivery warehouses require pallet dismantling before

the consumption of paper documents. It is expected to savedelivery. The corner guards removed during the dismantling

500,000 sheets of paper annually.

process are recycled and reused in packaging operations, reducing from secondary packaging and transportation. Previously
100% lead or steel wire seals for vehicles have been mostly
replaced by recyclable plastic seals.

Reduced Carbon Emission in
Storage and Transportation

Reducing Transport Trips

In 2022, we have replaced more fuel-powered forklifts with electricones in warehouses to reduce carbon emissions. Additionally, ourcarriers have upgraded their fleet with vehicles that meet thenational emission standard I and II with that of vehicles meeting
standard III, with the carbon emission reduced by 30%.

In 2022, we have continuously optimized the transportation routes
of self-procured and customer-furnished materials and promoted
a direct delivery model for materials to plants to reduce thenumber of transportation trips. Moreover, for shipments ofcomplete units with the height below 1.2 meters, we implemented
stackable transportation methods. This approach improved thevehicle loading capacity and reduced the number of transportation trips.

Actively Promoting Green Office
Huaqin has been actively advocated and promoted green office initiatives, and formulated the Regulation on Office Environment Safety
Management. We encourage employees to cultivate green office practices and adopt energy-saving habits, aiming to create a green andenergy-efficient workplace. To achieve a paperless office, the company has adopted smart collaborative office software which enable
online approval process and online document sharing. Since 2021, Huaqin has launched hotel and ride-hailing platforms for digitalmanagement and reimbursement of business trip expenses and hotel invoices, through which more papers have been saved.
Huaqin has made significant efforts to promote

Papers for receipts and invoices saved in 2022

green logistics by adopting electronic documents
instead of paper documents. Together with green

Logistics Bills

Hotel Invoices

Ride Hailing Invoices

office practices, hotel and ride-hailing platforms,

saved annually

saved annually

saved annually

Huaqin has saved over 880,000 sheets of paper

500,000

97,000290,000

throughout the whole year of 2022.

42

People-oriented
Development
Employee Rights and Interests Protection

44

Talent Attraction and Development

45

Healthy Workplace and Care

47

Occupational Health and Safety49

43

Employee Rights and Interests Protection
Adhering to the human resource policy of "People-oriented", Huaqin is committed to respecting, caring for, and protecting the legitimate
rights and interests of employees. We strictly complied with various labor laws and regulations, including the Labor Law, the Labor
Contract Law, the Social Insurance Law, the Law on the Protection of Minors, the Regulations on the Prohibition of Child Labor, and otherrelated laws and regulations. Huaqin has always complied with the International Labor Organization (ILO) and implemented non-discriminatory management policies in all production and business activities including recruitment and employment. We have strongly oppose
the practices of child labor, forced labor, and human trafficking. According to the actual production and operational needs of the company, we ensure reasonable arrangements for employees' work, rest, and vacation, and uphold the bottom line of employee rights andbenefits.

Diverse and Inclusive Workforce with Equal Opportunities
The diversity of our employees is the source of our innovation andsuccess, and it is an integral part of our corporate culture. Huaqin places

As of the end of the reporting period,
among all Huaqin employees

great value on diversity and equal opportunities for all employees.
We are committed to building an inclusive and equal workplace that
respects fair competition and religious liberty, fights discrimination, andprovides equal employment opportunities to workers as per law. As ofthe end of the reporting period, among all Huaqin employees, 72% aremale and 28% are female.

Maleemployees

72 %Femaleemployees

28 %Listening to and Interacting with Employees
Huaqin is willing to listen to its employees and providing multiple channels for them to express their voices, including employee
workshops, meetings with senior management and the president, and offline employee consulting days. In this way, the voices, needs,
problems, and suggestions of employees at all levels could be heard and resolved. Employees can also offer feedback through theemployee relations hotline and suggestion boxes. Futhermore, Huaqin offers an internal social platform called "Huaqin Moments", where
employees are encouraged to express their problems and suggestions regarding jobs, workplace, management, daily life, and evenpublicly or anonymously. This allows our functional departments to optimize our work processes and resolve issues timely.

Employee Consulting Day

Employee Consulting Day

Meeting with the President

44

Talent Attraction and Development
Talent as the most valuable asset remains a strategic focus of Huaqin. We have always been committed to attract and cultivate talents.
A group of operations and management talents with deep expertise are gathered here to fuel its development as they keep improving
themselves.
Over the past three years, Huaqin have contributed to job creation and cares for its employees.
51job.com | Outstanding Human Resource Management
Chinahr.com | Attractive Employer of the Year
MOKA | Best Digitalization Practice
Nowcoder.com | Most Popular Employer
Among College Graduates
Haitou.cc | Most Influential Employers
National Model Enterprise for Harmonious Labor Relations

Talent Recruitment
Huaqin searches for talent through various internal and external channels every
year, including regular on-campus recruiting, online recruitment platform,
internal recommendations with rewards, and talent rotation opportunities.

Employees enrolled in
on-campus recruiting in 2022

On-campus recruiting is a great way to find qualified talent. Huaqin has collaborated with over ten colleges and universities, sending over 500 interviewers
to more than 100 on-campus publicity events each year.

1429

We have a comprehensive internal recommendation system that encourages
all to recommend talents both inside and outside the company. Successfulrecommendations are rewarded depending on the job level. Furthermore,
exceptional recommendations are recognized and honored annually.

Multi-tiered Employee Training
Huaqin Training System

Huaqin has set up a well-developed training system, including the Internal Mentor System and Part-time Lecturer

professional training and empowerment activities, all our
employees can receive comprehensive training for self-im-

Unity ofknowingand doing

learning platform that is open to all employees, and offline

ExpertiseOperations

Management

Ivy Project
Cypress Project

Professional academy

LPDT Club

Departmental training

Product Director Club

Professional competence

Business school

0N

Directors

Talent-position
Match

System. Together with Pavilion of Diligence, an online

Phoenix Tree ProjectManagers

Operation Talents

provement.
New
Promising Sequoia—Campus Recruitment Employees

Love at Huaqin—Social Recruitment

Tutorial system
Knowledge Management Platform & Pavilion of Diligence

Integrated Talent Training System at Huaqin
45

Our training courses primarily focus on five categories: general, management, business, professional, and operations, which help employees at all levels to improve their professional skills and occupational competency. To ensure effective training, we have set up a team ofinternal trainers and professional mentors.

Training Data in 2022
Employee Training Coverage

Total Employee Training Hours

Number of certified internal trainers in 2022

100 %

117,732

600+

hours

Huaqin has a comprehensive online learning platform that offers a wide rangeof courses. The online learning platform has satisfied the needs for various
empowerment scenarios such as professional knowledge for R&D personnel,
empowerment of operation talents, and management development. Through theclosed loop of learning, practice, and examination, online learning can better
empower employees, and improvements can be applied in many talent development scenarios. Huaqin is now guiding its business development with data.

By the end of 2022
Total internal
online courses

Monthly
average logins

1452

30,000Case: Professional Academy

Huaqin offers 14 professional academies that span
hardware, structure, testing, and large-scale operations.
Huaqin academies are constantly looking for new ways
to empower our people from newcomers to veterans,with a focus on individualized, differentiated, andsystematic needs. In 2022, a total of 446 face-to-facecourses were offered.

Case: Phoenix Tree Advanced Training Course

Target: High-potential managers
Highlights: Strict admission to find high-potential students;
combination of training and practice for all-around improvement.
Course: [Embracing Huaqin Culture] [Strategy-Performance
Balance] [Shaping An Enthusiastic and Powerful Team] [Better
Leadership for Organizational Excellence]46

Comprehensive Promotion System
We offer three career paths for our employees to follow: operations, managers, and specialists, with a total of six job groups. Each year,
we provide promotion opportunities for specialists, make available management job openings, and hold internal recruitment events. We
assess the professional capabilities of all personnel based on the qualification criteria to get the right people in the right positions.
Moreover, we encourage managers to develop their leadership and specialists to improve their professional skills, allowing all employees
to constantly hone their skills in a variety of sectors in a performance-oriented and behavior-oriented approach to empower growthacross paths.

Healthy Workplace and Care
Harmonious Working Workplace
We value the workplace and living conditions of our employees. Our R&D centers are equipped with an array of amenities such as
canteens, convenience stores, and ATMs. Our manufacturing centers offer canteens run by trusted suppliers. To maintain the safety andnutrition of staff meals, we regularly evaluate food safety, hygiene, food quality, services, and prices, removing suppliers with low ratings.
Our dormitories offer pharmacies, barbershops, laundromats, activity centers, and mobile karaoke facilities. Additionally, our branch officebuildings include multiple beverage stations and leisure areas, nursing rooms, all-in-one SSC service centers, and gyms. These efforts
have given our staff a happier and more contented workforce.

47

Rich Cultural and Sports Activities
We hold a variety of entertainment and activities for our employees, with a focus on health, services, and skills, aiming to improve theiremployees' well-being. We also organize blind date events twice a year and a group wedding ceremony once a year to bring happinessand balanced life to employees. Besides, family days are held regularly to encourage employees to spend more quality time with theirfamilies outside of work. Huaqin employees set up 25 employee clubs to enrich their leisure time. These include a badminton club,basketball club, swimming club, billiards club, foodie club, running club, and reading club. With the support of local associations andtrade unions, Huaqin encourages and supports physical activities that help employees manage physical and mental health, such as the"Lingang Cup" Health Run, "Golden Autumn Cup" Games, Huaqin Shanghai 2022 Tennis Parent-Child Game, South China Huaqin 2022
Fun Games, 2022 Wuxi Huaqin Cup Basketball Tournament, 2022 Nanchang Huaqin 3rd Badminton Competition, and 2022 Xi’an Basketball Game. These events enrich the lives of our employees and helping them relax and find a better work-life balance.

Comprehensive Remuneration and Benefits System
Huaqin is committed to providing employees with a comprehensive remuneration system that is fair and competitive. Besides, theCompany has also established an ability assessment mechanism to objective performance evaluation, along with reasonable remuneration incentives and a personal growth platform with multiple career paths. We have also set medium and long-term salary incentive
policies to encourage our employees to grow and develop together with us. In addition, the Company has established a comprehensive
honor system that timely offers employees not only spiritual recognition as well as generous material rewards. Huaqin provides comprehensive benefits for employees and their families. Huaqin has always complied with applicable laws and regulations to sign labor
contracts with all employees on onboarding. All employees have access to social insurance and provident fund, and enjoy paid holidays
such as legal holidays, annual leave, wedding and funeral leave, maternity leave, and paternity leave, as required by law. In addition todaily subsidies for transportation, meals, and communication expenses. To attract external talents and support of the Huaqin Nanchang
Development Strategy, the company is actively working on talent acquisition and promotion. For instance, we have set up the "Lakeside
Talent Housing Program" by working with local governments and partners. The talent housing is adjacent to the office area of the
Nanchang manufacturing center, effectively solving the housing problem for high-value employees. To make it easier for employees'
children to attend local schools, Huaqin has concluded agreements with primary and secondary schools in Nanchang and Dongguan tooffer spaces for employees' children. This solves a major concern for employees with young children.

Onboarding

Enjoyable work

Growth and development

Entertainment and activities

New employee
orientation/mentoring

Meal and transportation subsidies,
team building, model selection,quarterly bonuses, and annual bonuses

Career planning, multiple career paths,
training system, and internal trainer system

Department activities,
interest clubs, blind date events,
and group wedding ceremony

Holidays

Anniversary gifts

Marriage

New parents

Holiday gifts, anniversaries,
and R&D day

Gifts for 1st, 3rd, 5th, 10th,and 15th anniversaries with Huaqin,
Meritorious service award

Wedding bonus

Maternity and paternity leaves,and gifts for new parents

Healthcare

Retirement

Annual physical examination,
medical insurance,
commercial insurance,
paid sick leave,
and Employee Care Fund

Social pension insurance andmeritorious service award

BENEFITS48

Employee Care Fund
The Employee Care Fund, established in 2011, focusese on solving difficulties faced by
employees. Our Employee Care Fund is available to all Huaqin people, providing
financial assistance in cases of of illness or serious accidents. As a result, employees
can rest assured that they and their families are always protected. Huaqin values thewell-being of its employees and their families and offers employee gift packs for
special occasions, such as marriages and the birth of children.

In 2022, the Employee
Care Fund received
over

840

requests

Occupational Health and Safety
EHS (Environment, Health, and Safety) is a top priority for Huaqin, which is committed to providing employees with a healthy and safe
working environment, ensuring that they can work with assurance and ensuring safe and stable production operations.

Construction of the Health and Safety Management System
Huaqin has complied with the Law of the People's Republic of China on the Prevention and Control ofOccupational Diseases, the Work Safety Law of the People's Republic of China, international occupational
health and safety management systems and standards, and other laws and regulations. Huaqin has
implemented a multi-level safety and health management system that regularly updates information on
hazard sources and formulates hierarchical control measures, including the Risk Assessment and Control
Management Code, Safe Production Responsibility Code, Occupational Disease Hazard Prevention andControl Responsibility Code, Emergency Preparedness and Response Control Procedures, Hidden Danger
Investigation and Management Code, Fire Safety Management Code, Occupational Disease Hazard
Emergency Rescue and Management Code, etc. The Safe Production Management Committee and Safe
Production Management Team have been set up to head and coordinate safety management. The Safe
Production Management Committee involves management specialists for safety, occupational health,environmental protection, and emergency response, who are fully responsible for the safety, environment, and occupational health in the plants. An occupational health management platform is also in place

ISO 45001 Certification

to apply for medical examinations online and maintain an independent health record offline in strict
accordance with the requirements of the Occupational Disease Prevention and Control Law. Huaqin conducts conducted various audits(including internal audit, external audit, customer and government audits) annually to verify that the safety management system operates
properly.
Huaqin has been certified for ISO 45001 occupational health and safety management system, ISO 14001 environmental management
system, Level 2 Safety Standard, and Results-Based Accountability (RBA).
With the goal of "100% safety and no hazards", Huaqin has introduced the production safety responsibility system and requires all
employees to sign the liability statement regarding safe production. Through safety performance assessments and detailed responsibilities, all employees are engaged in EHS to improve the safety performance. In 2022, there were no safety and environmental accidents.

Health and Safety Digitalization
We has built an intelligent manufacturing information system, which introducing automated equipment or processes for jobs that arelabor-intensive, exhausting, or involve occupational hazards to reduce occupational health and safety risks.

49

Health and Safety Culture
Huaqin has regularly held fire drills, hands-on fire extinguisher training, safety training sessions, special drills, and safety month events
for all its staff. In 2022, multiple fire drills, equipment safety training, and safety training that involve all employees were held.

Case: Safe Production Month Activity

In response to the national call for safe production,
Huaqin has held Safe Production Month every June to
implement the safe production responsibility and create
an atmosphere that engages all in safety management.
Under the theme of “Perform Duty As Per Safe Production
Law”, the campaign focuses on responsibility implementation, root cause elimination, and supervision and checks.
Through such activities as watching promotional videos,cross-checking, fire drills, and safety knowledge contest,
employees' safety awareness was enhanced to drive thesafe development of the company.

Case: Work Safety Training at Nanchang Manufacturing Center in 2022

In 2022, Nanchang Manufacturing Center organized 23 safe
production training sessions, 16 equipment safety training
sessions, 29 fire protection theoretical and hands-on training
sessions, 194 onboarding training sessions, 2 fire drills, and 8other emergency response drills. We conducted multiple
safety hazard investigations and real-time equipment safety
inspections, held relevant activities, recognized outstanding
performance, and published monthly health and safety
journals and group articles to help improve the health andsafety awareness of our employees, especially rank-and-file
employees.

In addition to annual and pre-employment physical examination, Huaqin has also provided commercial insurance to employees based on
their occupational needs to make sure that all employees stay healthy. Employees' families can take the physicals at the same discounted
price. Each year, Huaqin conducts regular surveys among employees in all regions on their satisfaction with physicals and improves these
services accordingly. Besides, Huaqin invites healthcare professionals to present 3 or 4 health workshops each year, covering various
topics such as nutrition and mental health.

50

Appendix 1: GRI Index

Disclosures

GRI Standard

Organizational
Profile102-1 Name of the organization

About This Report102-2 Activities, brands, products, and services

About Huaqin

102-3 Location of headquarters

About Huaqin

102-4 Location of operations

About Huaqin

102-5 Ownership and legal form

About Huaqin

102-6 Markets served

About Huaqin

102-7 Scale of the organization

About Huaqin

102-8 Information on employees and other workers

People-oriented Development

102-9 Supply chain

Supply Chain Management102-10 Significant changes to the organization and its supply chains

Supply Chain Management102-11 Precautionary principles or approach

Corporate Governance102-12 External initiatives

Environmental Protection andGreen Leadership

102-13 Membership of associations/

102-14 Statement from senior decision-maker

Message from the Chairman

102-15 Key impacts, risks, and opportunities

Message from the Chairman, Efficient
Operations for Long-term Development

102-16 Values, principles, standards, and norms of behavior

About Huaqin

102-17 Mechanisms for advice and concerns about ethics

Effective Governance for Sustainable
Development

102-18 Governance structure

Corporate Governance102-19 Delegating authority

Corporate Governance102-20 Executive-level responsibility for economic, environmental, and social topics/

102-21 Consulting stakeholders on economic, environmental, and social topics

Sustainable Development Management102-22 Composition of the highest governance body and its committees

Corporate Governance102-23 Chair of the highest governance body

Please refer to the financial audit report102-24 Nominating and selecting the highest governance body

Please refer to the financial audit report

Strategy

Ethics andIntegrity

Governance

Chapters and Sections

51

Appendix 1: GRI Index

Disclosures

GRI Standard

Stakeholder
Engagement

Reporting
Practice

Chapters and Sections

102-25 Conflicts of interest

Please refer to the financial audit report102-26 Role of highest governance body in setting purpose, values, and strategy/

102-27 Collective knowledge of highest governance body/102-28 Evaluating the highest governance body's performance

Please refer to the financial audit report102-29 Identifying and managing economic, environmental, and social impacts/

102-30 Effectiveness of risk management processes

Please refer to the financial audit report102-31 Review of economic, environmental, and social topics

Please refer to the financial audit report102-32 Highest governance body's role in sustainability reporting

Sustainable Development Management102-33 Communicating critical concerns

Sustainable Development Management102-34 Nature and total number of critical concerns

Sustainable Development Management102-35 Remuneration policies

Please refer to the financial audit report102-36 Process for determining remuneration/

102-37 Stakeholders' involvement in remuneration/

1102-38 Annual total compensation ratio/

102-39 Percentage increase in annual total compensation ratio/

102-40 List of stakeholder groups

Sustainable Development Management102-41 Collective bargaining agreements/

102-42 Identifying and selecting stakeholders

Sustainable Development Management102-43 Approach to stakeholder engagement

Sustainable Development Management102-44 Key topics and concerns raised

Sustainable Development Management102-45 Entities included in the consolidated financial statements

About This Report102-46 Defining report content and topic Boundaries

About This Report102-47 List of material topics/

102-48 Restatement of information

Not applicable52

Appendix 1: GRI Index

Disclosures

GRI Standard

Reporting
Practice

Management
ApproachEconomic
Performance

Chapters and Sections

102-49 Changes in reporting

Not applicable

102-50 Reporting period

About This Report102-51 Date of most recent report

About This Report102-52 Reporting cycle

About This Report102-53 Contact information for questions regarding the report

About This Report102-54 Claims of reporting in accordance with the GRI Standards

About This Report102-55 GRI content index

Global Reporting Initiative(GRI) Standards

102-56 External assurance/

103-1 Explanation of the material topic and its Boundary/

103-2 The management approach and its components/

103-3 Evaluation of the management approach/

201-1 Direct economic value generated and distributed

About Huaqin

201-2 Financial implications and other risks and opportunities due to climate change

Green Manufacturing201-3 Defined benefit plan and other retirement plans/

201-4 Financial assistance received from government/202-1 Ratios of standard entry level wage by gender compared to local minimum wage/

202-2 Proportion of senior management hired from the local community/

203-1 Infrastructure investments and services supported

Community Responsibilities203-2 Significant indirect economic impacts

Community Responsibilities

204-1 Proportion of spending on local suppliers/

205-1 Operations assessed for risks related to corruption

Corporate Governance

205-2 Communication and training about anti-corruption policies and procedures

Corporate Governance

205-3 Confirmed incidents of corruption and actions taken

Corporate Governance

206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices/

Market Presence

Indirect Economic
Impacts

Procurement
Practices

Anti-corruption

Anti-competitive
Behaviors

53

Appendix 1: GRI Index

Disclosures

GRI Standard

Materials

EnergyWater
Resources

Chapters and Sections

301-1 Materials used by weight or volume/301-2 Recycled input materials used/

301-3 Reclaimed products and their packaging materials

Green Manufacturing

302-1 Energy consumption within the organization

Green Manufacturing302-2 Energy consumption outside of the organization/

302-3 Energy intensity

Green Manufacturing302-4 Reduction of energy consumption

Green Manufacturing302-5 Reduction in energy requirements of products and services

Creating Environmental-Friendly
Products; Green Manufacturing303-1 Water withdrawal by source

Green Manufacturing303-2 Water sources significantly affected by withdrawal of water

No such water sources303-3 Water recycled and reused

Water Resources Management304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas

Not applicableand areas of high biodiversity value outside protected areas

Biodiversity304-2 Significant impacts of activities, products, and services on biodiversity

Not applicable304-3 Habitats protected or restored

Not applicable304-4 IUCN Red List species and national conservation list species with habitats in

Not applicableareas affected by operations

Emissions305-1 Direct (Scope 1) GHG emissions

Green Manufacturing305-2 Energy indirect (Scope 2) GHG emissions

Green Manufacturing305-3 Other indirect (Scope 3) GHG emissions

Green Manufacturing305-4 GHG emissions intensity

Green Manufacturing305-5 Reduction of GHG emissions

Green Manufacturing305-6 Emissions of ozone-depleting substances (ODS)/

305-7 Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions/

54

Appendix 1: GRI Index

Disclosures

GRI Standard

Chapters and Sections

306-1 Water discharge by quality and destination/

306-2 Waste by type and disposal method/306-3 Significant spills

No major spills

306-4 Transport of hazardous waste

Green Manufacturing306-5 Water bodies affected by water discharges and/or runoff

Green Manufacturing

307-1 Non-compliance with environmental laws and regulations

No occurrence

308-1 New suppliers that were screened using environmental criteria

Supplier Management308-2 Negative environmental impacts in the supply chain and actions taken

Supplier Management401-1 New employee hires and employee turnover

Talent Attraction and Development

401-2 Benefits provided to full-time employees that are not provided
to temporary or part-time employees

Healthy Workplace and Care

401-3 Parental leave

Healthy Workplace and Care

402-1 Minimum notice periods regarding operational changes

Strict compliance with national/
regional laws and regulations

403-1 Workers representation in formal joint management–worker
health and safety committees

Occupational Health and Safety403-2 Types of injury and rates of injury, occupational diseases, lost days,
and absenteeism, and number of work-related fatalities/

403-3 Workers with high incidence or high risk of diseases related totheir occupation

Not applicable

403-4 Health and safety topics covered in formal agreements with trade unions

Occupational Health and Safety404-1 Average hours of training per year per employee

Talent Attraction and Development404-2 Programs for upgrading employee skills and transition assistance programs

Talent Attraction and Development

404-3 Percentage of employees receiving regular performance and careerdevelopment reviews/

405-1 Diversity of governance bodies and employees

Talent Attraction and Development405-2 Ratio of basic salary and remuneration of women to men/

406-1 Incidents of discrimination and corrective actions taken

Employee Rights andInterests Protection

Freedom of Association
and Collective Bargaining

407-1 Operations and suppliers in which the right to freedom of associationand collective bargaining may be at risk/Child Labor

408-1 Operations and suppliers at significant risk for incidents of child labor

Employee Rights and Interests
Protection; Supply Chain Management

Effluents andWaste

Environmental
Compliance
Supplier
Environmental
Assessment

Employment

Labor/Management
RelationsOccupational
Health and Safety

Training and
Education

Diversity and Equal
Opportunity

Non-discrimination

55

Appendix 1: GRI Index

Disclosures

GRI Standard

Chapters and Sections

Forced orCompulsory Labor

409-1 Operations and suppliers at significant risk for incidents of forced orcompulsory labor

Healthy Workplace and Care

Security Practices

410-1 Security personnel trained in human rights policies or procedures

Not applicable

Rights ofIndigenous Peoples

411-1 Incidents of violations involving rights of indigenous peoples

Not applicable412-1 Operations that have been subject to human rights reviews or impact assessments/

412-2 Employee training on human rights policies or procedures/

412-3 Significant investment agreements and contracts that include human rights
clauses or that underwent human rights screening/

413-1 Operations with local community engagement, impact assessments,
and development programs/

413-2 Operations with significant actual and potential negative impacts
on local communities/

414-1 New suppliers that were screened using social criteria

Supply Chain Management414-2 Negative social impacts in the supply chain and actions taken

Supply Chain Management415-1 Political contributions

Not applicable416-1 Assessment of the health and safety impacts of product and service categories

Creating Green
Environmental-Friendly Products

416-2 Incidents of non-compliance concerning the health and safety impacts ofproducts and services

No relevant incidents

417-1 Requirements for product and service information and labeling/417-2 Incidents of non-compliance concerning product and service information and labelingNo relevant incidents

417-3 Incidents of non-compliance concerning marketing communications

No relevant incidents

Customer Privacy

418-1 Substantiated complaints concerning breaches of customer privacy and lossesof customer data

Information Security Assurance

Socioeconomic
Compliance419-1 Non-compliance with laws and regulations in the social and economic area

No violation of relevant laws
and regulations

Human Rights
Assessment

Local Communities

Supplier Social
Assessment

Public Policy

Customers Healthand Safety

Marketing andLabeling

56

Appendix 2: Feedback

Item

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Good

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Average

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Bad

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disclosed in this report

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What suggestions do you have for our future ESG
work/report (please specify)Your contact information(Huaqin will keep your personal information strictly confidential)

Name:

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57

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