Huaqin Technology
Sustainability Report 2021
Improve people's communication and life

About This Report

Reporting Scope
The report covers Huaqin Technology Co., Ltd. and its subsidiaries, unless otherwise
noted. References in this report to "Huaqin Technology", "Huaqin", "the Company","we", "us", and "our" mean Huaqin Technology Co., Ltd.

Reporting Period
This report covers the period between January 1, 2021 and December 31, 2021, unlessotherwise noted.

Release Date
April 21, 2022 (the next report is expected to be released in April 2023)

Disclosure Principles
The report is prepared in accordance with the Global Reporting Initiative (GRI) Standards(Core option), and presents our sustainability performance in business operations, social
responsibility, environmental protection, and employer practices.
This report covers all the entities that Huaqin controls or over which Huaqin exercises a
significant influence with respect to financial or operating policies and actions, which are
the same as those covered by the company's annual report. Any matters not included in
the report due to various objective conditions will be disclosed in future reports.

Data Collection
The entities' data on operation, social responsibility, environmental protection, andemployer practices for 2021 was collected by following the company's existing process.
The financial data is based on our "2021 Annual Financial Audit Report".

Huaqin Technology Sustainability Report 2021 / 1

About Huaqin
Founded in 2005 and headquartered in Shanghai, Huaqin
Technology Co., Ltd. ("Huaqin") is the world's leader in
intelligent hardware products. Committed to "making
people's communication and lives better", Huaqin provides
global hi-tech companies with end-to-end services coveringdevelopment, manufacturing and operation of software,
hardware and systems.

Xi’an R&D Center
Dongguan R&D Center
Nanchang R&D Center
Wuxi R&D CenterWith a global presence in more than 100 countries andregions, Huaqin provides billions of users with intelligent
products including smartphones, tablets, laptops, wearables(smart watches, TWS earphones, and smart bands), AIoT
products (smart POS, automotive electronics, and smart
speakers), and servers, covering more than 80 operators
worldwide.

Shanghai R&D Center

India Manufacturing
Base

NanchangIndonesia

Manufacturing Center

Manufacturing Base

DongguanVietnam

Manufacturing Center

Manufacturing Base

Huaqin has a strong global footprint. It has five R&D centers
across China in Shanghai, Dongguan, Xi'an, Nanchang, andWuxi, two domestic manufacturing centers in Nanchang and
Dongguan, and three overseas manufacturing bases in India,
Indonesia, and Vietnam.

Global Network

Positioned as an intelligent hardware provider driven by
efficient operation, R&D, and advanced manufacturing, Huaqin
has horizontally expanded the product lines and developed a"1+N+3" product category strategy, which includes
smartphones, consumer electronics, enterprise data centers,
automotive electronics, and software. The company ranks firstin the world in terms of ODM/IDH combined shipment volumeof smartphones, tablets, and laptops.
By deepening digital transformation around the core strategy

Smartphone
BrandsLaptopBrandsof "building an intelligent hardware platform", Huaqin works
to pursue innovation together with global tech companies andecosystem partners. With core R&D, manufacturing, andoperational competencies, Huaqin has grown into a
manufacturer with strong R&D capabilities, a hardware playerthat excels in software, and a large-scale company also
devoted to flexibility and high efficiency.

Internet ProductCustomers

Industrial
Customers

Auto ProductCustomers

5G AI Big Data
Internet of Everything
SoftwareData Center

Automotive
Electronics

Smartphone
AR/VR

Smart Home
POS

TV
Earphone

TabletLaptopWatch

Smart Speaker

Intelligent Hardware Platform
1+N+3

2 / Huaqin Technology Sustainability Report 2021

Huaqin Ideas

ValuesCustomer-oriented

MissionImprove people's
communication and life.

VisionTo be the world's
premier intelligent
products and service
provider.

Embrace Change
Integrity
Cooperation
Commitment
Passion

Huaqin Technology Sustainability Report 2021 / 3

2021 Data

200,000+hours

4 / Huaqin Technology Sustainability Report 2021

2021 Industry Honors

Ranked 18th among China's Top
100 electronic informationcompanies- China Electronic Information Industry
Federation

Pudong New Area
Outstanding
Contribution Award forPrivate Enterprises

Jiangxi Province
Meritorious
Enterprise of theYear- Shanghai Pudong People's
Government- Jiangxi Provincial
Development and Reform
Commission

Top 500 Private Enterprises
in China
Top 500 Private
Manufacturing Enterprises in
China- All-China Federation of Industry andCommerce

Top 30 Best Practices in Human
Resources Informatization in China- MOKA

China Best Employer Award 2021
- Zhaopin

Top Graduate Employers 2021
- 51job.com

Most Influential Employers 2021
- Haitou.cc

Huaqin Technology Sustainability Report 2021 / 5

Sound Governance Structure

In strict accordance with the provisions of the Company Law, the Securities Law, the Code of Governance for Listed Companies, andother normative documents on corporate governance in China, Huaqin has established a legal and compliant institutional frameworkthat satisfies the needs of actual operations.
Huaqin has a corporate governance structure consisting of the Shareholders' Meeting, the Board of Directors, the Supervisory
Committee, the special committees under the Board of Directors, and the management. The sound organizational structure with clear
responsibilities and authority, rules of procedure, and working procedures at all levels ensures that decision-making, execution, andsupervision are separated, promoting scientific decision-making, compliant operations, and healthy corporate development.

Shareholders' Meeting

Strategic Committee

Supervisory Committee

Remuneration and Evaluation
Committee

Board of Directors

Nomination Committee
CEO

Functional
Platforms
Marketing System
HR and Planning
SystemAudit CommitteeIntelligent Hardware Business Groups

MobileBusiness Group(MBG)

ComputingBusiness
Group
(CBG)

Data
Business Group(DBG)

Automotive
Electronics
Business
Group (ABG)

R&D Centers

Innovation
Business Group(XBG)

Technology
Center(TBG)

TMT Committee
Hardware Committee
Software Committee

Process & IT System

Structure Committee
Financial System

Smart Manufacturing Center

Strategic Cooperation
Department

ID Committee

Corporate Governance Structure

6 / Huaqin Technology Sustainability Report 2021

Testing Committee

XLAB

Good Institutional Operation

Shareholders' Meeting
Our shareholders include our founding members, China
Mobile, Intel, Qualcomm, Northern Light Venture Capital,
China Merchants Securities Investment, and Zhangjiang HiTech Park. All these corporate shareholders have a strong andhighly visible presence in such fields as semiconductor andstrategic investment.
The Company regulates the convening, holding, and voting
procedures of shareholders' meetings in strict accordancewith the provisions of the Company Law, the Securities Law,
the Articles of Association, the Rules of Procedure for
Shareholders' Meetings, as well as other applicable laws andregulations in China, to protect the rights and interests ofminority shareholders. We also engage lawyers to attend theshareholders' meetings and to issue legal opinions on
relevant convening and voting procedures, fully respecting
and safeguarding the legitimate rights and interests of allshareholders.

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 and regulations, the Articles
of Association, and its implementation rules. The Board of
Directors comprises high-end talents with rich experience anda good reputation in the industry and academia.

Key Performance
Shareholders' Meeting

1 general meeting ofshareholders was held and 22 proposals wereDuring the reporting period,
deliberated.

Board of Directors
The Board of Directors has a total of

9 directors,

3 independent directors. During the reporting
period, 3 meetings were held and 33 proposals were
includingdeliberated.

Supervisory Committee
The Supervisory Committee has a total of1

including employee supervisor.
during the reporting period.

3 supervisors,

3 meetings were held

Supervisory Committee
The Supervisory Committee is accountable to the shareholders' meetings, and its size and composition comply with applicable laws
and regulations. The Supervisory Committee has formulated the Rules of Procedure for the Supervisory Committee, which stipulates
its composition and functions and powers, as well as the procedures for meeting convening and holding, proposal discussion, andvoting. All supervisors are urged to independently and lawfully exercise their supervisory powers over the Company's financial
situation and the duty performance of directors and senior managers in the principle of being responsible for all shareholders.

Comprehensive Internal Management
Huaqin has formulated an internal control system under the Company Law, the Articles of Association, and relevant laws andregulations in China, which has guided its implementation of standardized control across the Company to protect the rights andinterests of minority shareholders, improve institutional operation, and enhance internal management. The sound internal control
system complies with applicable laws and regulations in China, and plays an effective role in risk control and prevention in all aspectsof business management. In 2021, Huaqin prepared an annual evaluation report for internal control based on its daily and special
supervision to evaluate the effectiveness of internal control as of December 31, 2021 (reporting base date), and Da Hua Certified Public
Accountants issued a standard and unqualified audit report on the Company's internal control.

Huaqin Technology Sustainability Report 2021 / 7

Promote Sustainable
Development withTechnological Innovation
Facing the uncertainties such as the ongoing pandemic, raw material shortage, power
rationing measures, and exchange rate fluctuations in 2021, we became aware thatbusiness operation is a systematic and long-term process of fulfilling social
responsibilities. Only by pursuing long-term development and building our sustainablecapabilities against external uncertainties can we help solve social problems with ourcore competencies.

Vincent Qiu

Chairman and CEO of Huaqin
Technology

Sustainable social and economic development depends on scientific and technologicalinnovation. In this era of uncertainty, technological innovation is the key for businesses
to stay ahead. While moving toward a dual-drive system of market development andtechnological innovation, we have strategically built our competitive advantages toenhance our core competency. By stepping up investment in technological innovationand innovation incentives in 2021, Huaqin established an innovation system covering
technology research, platform support, and product development. The TMT Committeeorganizes and implements our technology planning, the Product and Manufacturing
Division works on specific and generic technologies around products and processes,
and X-Lab focuses on core and cutting-edge technologies. Together we work to build amore technology-oriented business where employees are bold in and adept at
innovating.
Today, digital economy has become a new impetus behind the high-quality economic
development in China, and digitalization and intelligence are the key drivers. In 2021,
Huaqin actively promoted digital transformation to create a happier business, anothermajor change since the IPD reform in 2015. Through digital transformation, we canalways make correct and effective data-driven decisions to improve the efficiency of
the whole value chain. From company-wide ISC and financial reforms to rapid
improvement across the systems, Huaqin is advancing digital transformation in anorderly manner. With advanced processes and digital systems, we can significantly
reduce repetitive manual workloads and allow our people to engage in more complex
and rewarding work, thus bringing a greater sense of happiness and achievement.
Therefore, ensuring the well-being of all employees is the ultimate goal of digitaltransformation.
While promoting digitalization, Huaqin is also sparing no effort to drive automatedmanufacturing. To improve manufacturing efficiency, Huaqin piloted several lean
production projects and introduced a lot of automation equipment in 2021. We will
step up efforts in automated manufacturing and promote the trial and application of
automation in more product lines, so that we can realize intelligent manufacturing andbuild our competitive advantages in the industry.

8 / Huaqin Technology Sustainability Report 2021

Openness and cooperation are the trends of global
development. Huaqin remains committed to open and winwin collaboration with global partners. As a typical "chain
leader" in the electronic information industry, Huaqin has
raised the acceptance bar of individual component
parameters while ensuring that the overall performancemeets requirements, so as to provide opportunities for morechip companies in China and help the country enhance theupstream of the intelligent hardware industry. In 2021,
Huaqin also worked with local governments on multiple
projects in response to the 14th Five-Year Plan. For example,
we built a new manufacturing center in Nanchang and a new
manufacturing center for servers and mobile terminals in
Dongguan, and signed a contract with Shanghai Lingang
Special Area on setting up an R&D and manufacturing base for
automotive electronics. With these moves, we have increased
our business scale and multi-location collaboration
advantages. Bearing technology inclusion in mind, we willcontinue to improve our R&D and manufacturing efficiency
and deliver highly cost-effective smart devices, allowing more
people to enjoy a smart life and effectively promoting social
equity.
At present, carbon neutrality has become a global consensus.
Guided by the idea of "green, low-carbon and sustainable
development", we work to reduce the environmental impactof our production, operations, and products throughout theirlife cycle. Our measures to improve energy efficiency andcontrol pollutant emissions include resource recycling,pollution control, waste disposal, and environmental
digitization. In 2021, the two manufacturing centers inNanchang and Dongguan alone reduced over 6,000 tons ofcarbon emissions through energy-saving technology
improvements, clean energy utilization, and other measures.
Meanwhile, we advocate circular development with moreenvironment-friendly materials, more durable products,
greener packaging materials, and less waste.

Over the years, Huaqin has been fulfilling social
responsibilities and getting involved in public welfare.
Internally, efforts are seen in talent development, welfare
insurance, working environment optimization, and frontline
employee training. We are striving to build a diversified spacefor growth where "the harder you work, the happier you willbe". By adhering to the industry consensus of putting people
first, we work to strengthen risk management, ensure
workplace safety, and value inputs from employees. Under
ESG commitments of employment equality, employee
diversity, and the prohibition of child labor and forced labor,
we have been actively fulfilling our responsibility toemployees.
In the future, Huaqin will continue to pursue technologicalinnovation and sustainable development to create value forthe whole industry and the whole society. Huaqin is ready towork together with global industry partners and promote
innovative green, low carbon, energy conservation, andenvironmental protection technologies to achieve the UN
sustainable development goals. We strive to bring a smart life
to everyone, every family, and every organization, making
people's communication and lives better.

Vincent Qiu, Chairman and
CEO of Huaqin Technology

Huaqin Technology Sustainability Report 2021 / 9

Table of Contents

1

Business Operations
P14 / Technological Innovation
P15 / Digital Management
P17 / Supply Chain Management
P18 / Business Automation
P20 / High Quality Strategy
P22 / Business Continuity Management
P22 / Information Security Assurance
P23 / Business Ethics

2

Social Responsibility
P26 / Promoting Social Equity
P28 / Public Welfare

10 / Huaqin Technology Sustainability Report 2021

Table of Contents

3

Environmental Protection
P31 / Dual Carbon Strategy
P32 / Green Technologies and Products
P34 / Green Supply Chain
P35 / Green Manufacturing
P40 / Contributing to a Circular Economy

4

Care for Employees to
Motivate GrowthP43 / Talent Attraction and Development
P45 / Employee Engagement and Communication
P47 / Care for Employees
P48 / Occupational Health and Safety

Huaqin Technology Sustainability Report 2021 / 11

1Business Operations

12 / Huaqin Technology Sustainability Report 2021

Technological Innovation
Digital Management
Supply Chain Management
Business Automation
High Quality Strategy
Business Continuity Management
Information Security Assurance
Business Ethics

Huaqin Technology Sustainability Report 2021 / 13

Technological Innovation
Huaqin is committed to establishing a globally competitive R&D network and a multi-level R&D system that is tailored to its businessand local conditions , and has built five major R&D centers across China in Shanghai, Dongguan, Xi'an, Nanchang and Wuxi. The
centers focus on the research of such smart hardware products as smartphones, tablets, laptops, smart wearables, data center
products and automotive electronics. With an R&D investment of $567.8 million and 12,471 R&D experts, we have 3,173 intellectual
property licenses, 2017 authorized patents, 804 invention patents, and 1,000+ software copyrights in 2021.

$567.8millionInvest in superior R&D resources and advance intelligent
manufacturing through large-scale R&D projects

invested in R&D resources

12,471R&D experts

3,173
intellectual property
licenses

1,000+

By leveraging location advantages and integrating R&D resources, Huaqin has built five
major R&D centers in Shanghai, Dongguan, Xi'an, Nanchang and Wuxi to establish aregional R&D network with complementary advantages.
We built a technology center as our technological innovation platform to apply our years ofexperience in smartphone R&D, embedded software and rapid to such smart products astablets, computers, smart wearables, AIoT products, data center products and automotive
electronics.
We established a software center to make Huaqin competitive in software and evaluation.
On top of that, a comprehensive infrastructure platform that integrates hardware-software
solutions has been built to meet the complex needs of customers from all fields.
X-lab was established to improve our innovation capabilities in acoustics, optics, thermal
design, microwave, and battery (new energy), enhancing our technology for productizationand securing our industry leadership in cutting-edge technologies.

software copyrights

Shanghai R&D Center

New Shanghai Headquarters / Global R&D Center

Nanchang R&D Center

Xi’an R&D Center

Dongguan R&D Center

Wuxi R&D Center

14 / Huaqin Technology Sustainability Report 2021

Digital Management
To support the overall business strategy of "1+N+3" and achieve operational excellence, we set up a digitalization committee under
the general principle of "integrated design, central platform, and unified standard". The committee aims to improve management for
digital transformation step by step and unify end-to-end core business processes, data standards and systems by 2025. In this way,
Huaqin can realize efficient and transparent operations, consistent management, and risk control.

Digitalization Committee
The Digitalization Committee was formed for the group to
support the departments at all levels in setting goals andobjectives for digital transformation and putting them into
practice under the general principles. The Digitalization
Committee includes 8 senior managers from R&D, supply
chain, marketing, finance, HR, investment, process and IT
systems.

The committee also includes an office for the execution andcoordination of transformation routines and theimplementation of strategic objectives. The Digitalization
Office operates on a weekly and monthly basis, holds special
meetings for discussions as needed, and reports to theDigitalization Committee for decisions.

Digitalization Committee

Digitalization Office

Project Teams
R&D
Project
Teams

SupplyChain
Project
Team

Marketing
Project
Team

Finance
Project
Team

HR
Project
Team

Investment &Assets
Project
Team

IT
Project
Team

Organizational Structure of Digitalization Committee

Responsibilities of Digitalization Committee• To formulate digitalization strategies, principles, objectives, guidelines, policies and systems for the company, andpromote their implementation.
• To evaluate the level of each digitalization project, and give guidance on IT platform selection, master plan, pilot design andpromotion units.
• To facilitate coordination and problem-solving in cross-domain and cross-process digitalization, and enable end-to-end
synergy of digital transformation.
• To channel internal and external resources for various project teams engaged in digital transformation.

Huaqin Technology Sustainability Report 2021 / 15

Digital Transformation Results
From the beginning, Huaqin has outlined the general pof "integrated design, central platform, and unified standard" to steer digitaltransformation in R&D, operations, marketing, manufacturing, HR, administration, and finance. Remarkable results have beenrinciples achieved.

UnifiedStandard

General Principles ofDigital Transformation

Integrated
DesignR&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,comprised of an operational director, marketing
representatives, R&D representatives, procurement
representative, manufacturing representatives, and quality
representatives, is formed for each R&D project. This raises thecompany-wide awareness of whole-process productdevelopment and integrates internal resources to support
customers in project development. Furthermore, Huaqin canrealize standardized, digital, and process-oriented R&D
management.

CentralPlatformMarketing
We have launched the whole process system of contract
management, quotation, order processing, forecast, expense,and customer management to enable a digital business value
chain, providing data support for business decisions, andimproving the precision of strategic management.
Manufacturing
We have started systematic construction of the
manufacturing dashboard following a three-year plan
covering data visualization, early warning and error proofing,
and intelligent transformation. We expect to complete factory
digitization in 2024. With core data visualization completed in
2021, 90% of data visualization is expected to be completed
by 2023 at the latest.
HR & Administration
After institutional review, process development, and data
governance, Huaqin has improved key areas of HR andadministration in DL recruitment, electronic signature, and HR
self-service, satisfying tens of thousands of employees inscenarios like contract signing, electronic signature, one-stop
HR services.

IPD Process
Operations
An operation middle platform has been built to share datawith customers through EDI and reduce the manual operationand error rate. It also allows us to share data with upstream
suppliers through the SRM platform, increasing the efficiencyof the whole supply chain. The internal departments areconnected through the IBP platform for full coverage of the
supply chain. In a word, it provides efficient support forreceiving customer orders and communicating purchaseorders and forecasts.

16 / Huaqin Technology Sustainability Report 2021

Finance
We have also reformed our financial systems (IFS) and built asound digital financial system by reviewing the financial
process framework (FPF), building platforms for financial data
management, developing and optimizing core financial
systems, and promoting data governance.

Supply Chain Management
We are committed to building a transparent, secure, agile, cost-leading and sustainable supply chain system and maintaining a winwin partnership with our suppliers. To create a world-class supply chain system, we build an efficient operation process and acomprehensive digital and systematic IT system for effective vertical resource integration. For the purpose of our strategic goals, we
also develop a team of differentiated suppliers, a global network of strategic procurement, and a risk management mechanism toestablish a competitive supply chain.

Technology procurement

Supplier healthTechnological Innovation
Joint planning, design, anddevelopment
Localization, standardization, andgeneralization

Talent pipeline

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

2-4 h supply circle
Environmental
Protection

Tailoredgreen supply
chain

Digital transformation

Project-based promotion
Data quality assurance
System visualization

Supply security

Demand management
Layered stock
Industry-financial
integration

Fixed asset ecosystem
EAM system management
Centralized procurement
Self-developed procurement

Supply Chain CSR Management System
Huaqin has established a supplier relationship management(SRM) system that spans the whole lifecycle from supplierintroduction, on-site audit, contract management toperformance management. To fulfill our corporate social
responsibility and deliver on our commitment tosustainability, Huaqin has established a comprehensive
procurement CSR management system based on the United
Nations Guiding Principles on Business and Human Rights(UNGP), the Organization for Economic Cooperation andDevelopment (OECD) Guidelines for Multinational Enterprises
and the International Labour Organization (ILO) Guidelines forMultinational 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 systemthat encompasses labor standards, safety and health,environmental protection, business ethics, and management
systems. Huaqin strives to conduct sourcing and business on
our products, employees, and suppliers in a socially,
environmentally, and ethically responsible manner.
Suppliers are subject to joint field audits by the R&D,
procurement, and quality departments to evaluate theirworkplace environment and compliance with relevant
environmental protection requirements. In addition, suppliers
need to have certifications including ISO9001 and ISO14001.
Huaqin incorporates the anti-commercial bribery commitment
into the procurement framework agreement, and makes

integrity a red line issue. Any supplier who crosses the line will
be banned from cooperation forever.
Suppliers in the Approved Vendor List (AVL) are subject toregular performance assessments by multiple departments on
costs, delivery, quality, and CSR fulfillment and services. We
identify the continuous improvements to be made bysuppliers based on the assessment results, and help suppliers
improve their awareness of social responsibilities andmanagement capabilities.
Huaqin promises that we will never support or use conflictminerals and tin, tantalum, tungsten, gold, and cobalt fromunknown sources, and we encourage the actions of the
Responsible Business Alliance (RBA) and the Global eSustainability 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) andDue Diligence (DD).
We encourage suppliers to develop policies that prevent andreduce any human rights and environmental risks caused byminerals in their products. Suppliers must trace the source ofand conduct due diligence on minerals in the purchased
products. We share due diligence information with customers,
and work with customers and suppliers to promote thesustainable development of mineral supply chains.

Huaqin Technology Sustainability Report 2021 / 17

Business Automation
Huaqin established its Automation Department in 2017 and the Equipment Technology Department and Automation Committee in2020 dedicated to automating the manufacture of a full range of products including mobile phones, tablets, laptops, and smart
wearables. By 2025, the business is expected to be automated on a larger scale, with nearly 50,000 sets of equipment in use, an
improved baseline automation rate of 70%, and a cumulative manpower saving of over 20,000 people, leading to an intelligent
equipment management ecosystem that will set the standard for the industry.

Automation Committee
We have created an Automation Committee to help all
relevant manufacturing departments set and work toward
their individual goals that are aligned with the overall
organizational automation goals.
Comprised of senior executives from the Equipment
Technology Department and various manufacturing
departments, the Committee has set up an Automation
Implementation Office to control

the execution and coordination of automation routines andthe implementation of strategic objectives.
The Automation Committee is responsible for defining thecompany's automation roadmap and overall objectives;
assisting the Automation Implementation Office in setting
project objectives for each business segment; and guiding andmonitoring objective implementation, providing guidance on
project improvements, and reviewing their results.

Automation Committee

Automation Implementation
OfficeProject Management Team

Product
Department

Product Engineering
Department

Manufacturing Center

Organizational Structure of the Automation Committee

18 / Huaqin Technology Sustainability Report 2021

Procurement
Department

Automation Outcomes
In 2021, Huaqin purchased about 6,700 sets of automationequipment including FATP and SMT lines, which saved nearly
2,000 jobs. Huaqin supercharged its automation efforts atbaseline in 6 categories of products by introducing
automation equipment in such categories as smartphones,
tablets,

smart bands, and smart watches, as well as TWS earphones
and laptops.

Independent
R&D team

Low equipment
failure rate

Capacity building
Design standardization
Asset activation capabilities

Less Manpower andHigher Efficiency
High Quality
High reliability

Efficient collaboration

Promotion of equipment
standardization
Shortened idle time

6,700

DFA technology platform

sets

of automation equipment procured

2,000

Equipment condition
monitoring
Intelligent equipment warning
systemjobs

saved through customized automationequipment

The independent automation R&D team was expanded tocover the whole process of design, assembly, commissioning,formal use, renovation, and reuse. Equipment
standardization was promoted to realize modularized design,
generalized control platforms, and integrated user interfaces.
We also managed to shorten idle time to enable highreliability of equipment by adopting relevant mechanisms,
growing our talent pools, improving the automation
introduction process, and identifying key risks.
We customized the TPM (total productive maintenance)system and established an equipment data acquisition
warehouse to integrate real-time monitoring, instantalarming, intelligent prediction and analysis warning, andpulling features to ensure high availability of the equipment.
We created a DFA (design for assembly) middle platform thatinvolves special DFA items, baselines, projects, and rules, toenable effective collaboration between the manufacturing
and R&D departments and improve the standardization ofdesign and production.

Huaqin Technology Sustainability Report 2021 / 19

High Quality Strategy
Huaqin has been regarding product quality as its lifeline since the very beginning. We treat high quality as a group-level strategy, keep
improving the product quality control system, and always get an accurate picture of product R&D and design, raw material
procurement, manufacturing management, product flows, supply assurance, and after-sales services. Such practices bring a good
reputation to Huaqin, making it a high quality benchmark in the industry.

Background
With changes in consumption patterns, consumers have shifted their consumption demand from the ultimate cost
performance to the best user experience. This means customers now pay more attention to brand reputation and productquality control.
The industry is experiencing high-quality development, which is indicated not only by the continuous market expansion andgrowth, but also by the radical improvement in product quality. China has changed from a technology follower to a market
leader in many fields, especially in the electronic information industry, during its course of upgrading from a manufacturer ofquantity to one of quality. It is an inevitable choice for Huaqin Technology, as a top 18 player in China's electronic informationindustry and a representative of intelligent manufacturing in China, to make quality control a corporate strategy.

High-quality Control Throughout the Lifecycle
Huaqin has built an integrated quality management andorganization mechanism that spans the full product lifecycle
and aims to build a diverse talent pool, to facilitate its
transformation into an agile organization. Based on the overall
organizational structure and corporate culture, we havecontinuously optimized the quality control mode to create a
new, open, and flexible management structure that effectively
supports the interconnection between Huaqin's internal
quality control and customer value chain.
In the early stage of a project, we first identify risks regarding
new objectives, processes, and technologies for the project,

20 / Huaqin Technology Sustainability Report 2021

and make plans in advance for proactive prevention of risks.
During project execution, we break down quality objectives
and implement them individually, and review the fulfillmentof leading indicators regularly. Meanwhile, we encourage 4Q(PQE, PQA, SQE, and IQC) interaction and end-to-end
interconnection among the R&D, procurement, andproduction departments, so as to provide adequate resources
for the smooth implementation and quality control of the
project.

Quality Culture"HQ", the abbreviation for "HuaQin", can also be interpreted
as "High Quality", implying that Huaqin has been committed
to quality since its inception. In 2008, Huaqin initiated the "910
Quality Month", marking the building of our quality culture
system.

With the advocacy for high-quality development in all fields,
we clearly communicated our quality vision, quality objectives,
quality management policies, quality benchmarks, etc. to all of
our employees so that they can always bear high quality in
mind.

Case I 2021 Quality Month
Huaqin holds Quality Month campaigns every September. The quality month in 2020 was themed "Success Through Quality
Instead of Quantity", and a variety of campaigns such as signing in for prizes, collecting likes for prizes, and making videos of
the Quality Ambassador in My Heart were rolled out to enhance the quality awareness of all employees.

2021 Quality Honors
Samsung I ODM Grand Prize
Lenovo I Best Operation Quality
Award
OnePlus I Project Quality
Excellence Award
MOTO I Award for Best AfterSales Service Quality
Xiaomi I Factory with Excellent
Quality System Operation
OPPO I Quality Excellence AwardOPPO I Award for Excellent
Contribution to ODM Quality
Lenovo I Perfect Quality Award
FUJISTU I Outstanding
Contribution Award
Honor I Excellent Quality Award

Listed in no particular order

Huaqin Technology Sustainability Report 2021 / 21

Business Continuity Management
In 2021, by further reviewing existing policies and processes, Huaqin clarified the approval process and the assignment of authority
and responsibility for various economic and non-economic matters to ensure that important control points of key business were
properly managed, and streamlined the decision-making process to be as efficient as possible. Through years of sustained
investment, Huaqin has developed policies and processes in procurement, manufacturing and logistics, backed by HR, finance, legal,
and IT backend departments providing backup services.

Key Initiatives in Procurement

We source raw materials from multiple suppliers, and prefersuppliers that have multiple manufacturing sites. During mass
production, we prepare safety stock to better address theever-changing customer demand and uncertainties during the
pandemic.

Key Initiatives in Manufacturing

We have established two China manufacturing centers inNanchang and Dongguan, and three overseas manufacturingbases in India, Indonesia, and Vietnam. These manufacturing
sites also serve as integrated equipment backups for eachother.

Information Security Assurance
Huaqin implements effective control of information security by improving its information security management systems andprotection mechanism and raising employees’ information security awareness.

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 passed theISO27001 (information security management system)
certification and developed a complete information security
system that classifies all information and sets up approval
processes, and defines all violations and penalties.

Tight Information Security Control
Huaqin has established an Information Security Committee tostrengthen the company's information protection policies andimplement control strategies on physical security, data
security, and personal information security.
To ensure the security of information in use, Huaqin provides
internal employees with online and face-to-face training
courses on subjects such as prevention of internal andexternal network attacks and intrusions, and information
security in confidential areas. Moreover, Huaqin carries out
information security month activities and organizes
information security exams every year to enhance all
employees' awareness of information security risks and theirability to identify them.
Based on the comprehensive information security protection
system, Huaqin also reinforces the protection of customer
information through controls over its internal operation andsuppliers.

22 / Huaqin Technology Sustainability Report 2021

Internal Operation Control
Strict background checks are done for all key positions withaccess to customer information. For key project positions, acommitment letter or confidentiality agreement specific to theproject will also be signed.
Customer-related documents are encrypted and stored insecure locations with specific permissions defined. Copying to
removable storage devices are prohibited.
Employees are forbidden to send company documents topersonal email addresses.
Supplier Control
All suppliers are required to sign a confidentiality agreement
before their cooperation with Huaqin. To prevent
unauthorized entrance, suppliers must show their valid IDs
when entering the company.
Huaqin has strict restrictions on all physical and logical accessby suppliers. In addition, Huaqin conducts information
security inspection and supervision of key suppliers at least
once a year.

Business Ethics
With the central task of company development in mind, Huaqin effectively strengthens its clean governance and anti-corruption
efforts by supervising company operations and working practices in accordance with applicable disciplines and regulations. Huaqin
has fostered a culture of compliance, integrity, uprightness and entrepreneurship within the company by establishing relevant
systems and mechanisms, perfecting the supervision system, and enhancing preventive education.

Develop Systems and Mechanisms

Strengthen Preventive Education

In 2021, Huaqin kept improving relevant systems andmechanisms to promote its internal audit and supervision
capabilities. The company reshaped its internal audit team,established Huaqin Regulations on Internal Audit and Huaqin
Integrity Management System, and revised the Huaqin
Regulations on Handling and Managing Violations and the
Employee Handbook.

Huaqin has been promoting warning education and integrity
culture while implementing punishment and governance.
The preventive measures sound the alarm for employees toprevent them from corruption. Typical examples of
misconduct are used as both deterrents and guidelines ofintegrity culture to enhance the warning and prevention
effects.
To further deepen the construction of "Huaqin of Integrity",
the Internal Audit Department has developed the Huaqin
Integrity Manual for internal and external use. In the middle ofevery September, Integrity Compliance Week campaigns are
simultaneously held in five locations to enhance thepopularity of integrity culture.

Establish a Supervision System
In 2021, Huaqin strengthened its internal audit and completed
a total of 14 audit projects in such fields as procurement,
finance, and operations.
With an optimized report and complaint channel, we handledover 10 complaint and report cases in 2021 and provided
appropriate corrections and reinforcements through analysisof the cases to address both symptoms and root causes.

Integrity manual

Procurement system integrity
compliance training

Case I 2021 Integrity Compliance Publicity Week
Huaqin holds integrity compliance campaigns every September. The theme in 2021 was "Integrity Effort Matters and Compliance
Requires Diligence". We launched various campaigns in five locations including Shanghai, Nanchang and Dongguan. Employees
learned about the bottom lines in our corporate culture and enhanced their awareness of integrity compliance through a series ofoffline games and online quizzes.

Campaign in Nanchang

Campaign in ShanghaiCampaign in Dongguan

Huaqin Technology Sustainability Report 2021 / 23

2

Social Responsibility

24 / Huaqin Technology Sustainability Report 2021

Promoting Social Equity
Public Welfare

Huaqin Technology Sustainability Report 2021 / 25

Promoting Social Equity
Bring the Internet to Everyone
Background
According to the latest Poverty Trends: Global, Regional and National, in 2021, an estimated 698 million people, or 9% of the
global population, were living in extreme poverty – that is, living on less than $1.90 a day. 1,803 million people were living
below the higher poverty line, and over 3,293 million people were living below $5.50 a day.
It is difficult and costly to maintain income equality. However, the Internet plays an important role in social distribution bypromoting equity through public services. Children in poverty can receive basic education online. Simple health issues can be
diagnosed quickly with online medical services. Also, poverty relief and financial inclusion can be done through the Internet.
The cost-effectiveness of smart products determines whether those with financial hardships can access the Internet.

Huaqin has been committed to improving people's
communication and life since its inception. We always believethat everyone should be able to enjoy a smart life throughtechnical inclusion to promote social equity.
Through efficient operation, technical R&D and innovation,
and advanced manufacturing, we continue to improve thequality of our smart products and R&D and manufacturing
efficiency to provide cost-effective products and stay ahead inmarket competition.
In 2021, Huaqin's total shipment was over 220 million units, ofwhich the total shipment of smartphones, tablets, and laptops
topped the global ODM/IDH industry. Huaqin has become adriving force in promoting smartphones, tablets, laptops,
smart hardware, and connectivity around the world for social
equity.

26 / Huaqin Technology Sustainability Report 2021

220+

million units

shipped in 2021

Enabling Inclusion and Equity for Seniors
Background
According to the Seventh National Census of China, 190 million people, 13% of the total population in China, are aged 65 years
or over, indicating a 4.6% increase compared to 2010. The aging population is growing faster than the national population andwill continue to grow at a faster rate over the next 30 years.
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 easy tools for their daily lives andtravel and improve their quality of life, sense of happiness and social engagement.

Case I Elderly-Friendly and Accessibility Features
HAC, TTY, and Easy Mode on Samsung A02S, A11, andother smartphones help hearing-impaired and the elderly
communicate more easily 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 and hearing aids are
eliminated, so that people wearing hearing aids cananswer phone calls without interference.
TTY
Teletypewriters can be used with smartphones tosupport people who are deaf, hard-of-hearing, or have asevere speech impairment.

Samsung A02S

Easy Mode (Simple Mode/Elderly Mode)
This mode only provides some basic features such as
camera, photo album, phone calls, and SMS andincreases the icon and font size, making it easy to use forseniors.

Samsung A11

Huaqin Technology Sustainability Report 2021 / 27

Public Welfare
In June 2012, Huaqin, in collaboration with Shanghai Charity Foundation, set up the
Huaqin Special Care Fund for environmental protection, disaster relief and rescue services,and various charitable activities to help farmers, children, students, and those withdisabilities or financial difficulties. Since the launch of the fund, Huaqin has sponsored thebone cancer treatment project for care worker Pan Jinfeng, the Zhufei project, earthquake
relief projects for areas such as Ludian in Yunnan, and projects for supporting teachers
suffering from serious diseases. In addition, Huaqin also supported earthquake relief
through Shenzhen One Foundation.
In 2021, Huaqin organized a wide range of charitable activities. We stood with local
communities through thick and thin when facing the outbreak of COVID-19 or supporting
long-term charitable projects.

Social Responsibility Activities
in 2021:• Outstanding Philanthropic
Enterprises in Pudong New Area• "Communication - Supporting
Education for Children with
Autism" Project• Student Support at Zuolong Town,
Langao County, Ankang, Shaanxi• Poverty Relief for Villages in
Yunnan• Nursing Home Elderly Support in
Pudong New Area

Huaqin Technology Sustainability Report 2021 / 28

3

Environmental Protection

29 / Huaqin Technology Sustainability Report 2021

Dual Carbon Strategy
Green Technologies and Products
Green Supply Chain
Green Manufacturing
Contributing to a Circular Economy

Huaqin Technology Sustainability Report 2021 / 30

Dual Carbon Strategy

BackgroundIn recent years, China puts forward a set of new strategies for the construction of ecological civilization. Huaqin has set up the
Carbon Neutrality Committee to keep pace with the goal of "peaking carbon emissions by 2030 and achieving carbon neutrality
by 2060" ("dual carbon" targets) set in 2020. The "dual carbon" targets has brought us new opportunities and challenges inbuilding technical and service capabilities.

Targets

Peaking carbon emissions by 2030 and achieving carbon
neutrality by 2060

Clarify targets"Dual Carbon" Targets

Set feasible and challenging carbon emission reduction targets

Clear strategies

Based on Huaqin's carbon neutrality
targets, the carbon neutrality plan isdivided into four stages:
Stage I: In 2021, we started to control
carbon emissions and developed anemission control strategy; Stage II: By
2030, we plan to peak our carbon emissions
and fully control our carbon emissions andtheir sources; Stage III: By 2050, we plan toachieve regional carbon neutrality targets;
Stage IV: By 2060, we plan to achieve ouroverall targets for carbon neutrality.

In
2021

Launching carbon
emission control
Emission strategy• Designing the roadmap to carbon
neutrality with yearly targets• Consulting professional firms toempower teams andenhancing skills with certification• Keeping updated with government
policies• Requesting customers to provide
training• Enhancing organizational influencewith achievements and expanding
gradually

Develop clear strategies, measures, and roadmaps for reducing carbon
emissions based on the targets
Organizations

Mechanism

Resources

Capability

Execution

Monitoring

Clarifying the
responsibilities ofand requirements forrelevantorganizations

Developing themanagement
mechanism forcarbon emission
reduction, including
the development ofprojects andstrategies, plan
formulation,
implementation,
monitoring,assessment, andincentives

Ensuring that
resources requiredfor implementing
carbon emission
reduction
strategies andmeasures are inplace

Empowering
participants tounderstand policies
and industry
standards on carbon
peaking, carbon
neutrality andcarbon emission
reduction to enhance
the team's capability
to reduce carbon
emissions

Ensuring thatmeasures andplans areimplemented
effectively

Setting indicators forevaluating theimplementation ofcarbon emission
reduction strategies
and measures(including the
progress) to evaluate
and provide
feedback regularly

By
2030

Keeping pace with thepolicies

Peaking carbon emissions –carbon emissions
and their sources are controlled• Moving toward zero-carbon
campuses• Green technology R&D• Purchasing renewable energy• Controlling carbon emissions of top
100 suppliers in the upstream
supply chain

31 / Huaqin Technology Sustainability Report 2021

By
2050

Achieving regionaltargets
for carbon neutrality• Achieving targets in Shanghai, Wuxi,
and Xi'an first• Achieving targets for some of the
products

By
2060

Achieving overall target
for carbon neutrality

Green Technologies and Products
As a world-leading smart hardware enterprise, Huaqin produces hundreds of millions of smart products every year, including
smartphones, tablets, laptops, smart wearables, AIoT products, data center products, and automotive electronics. Huaqin has longvalued technological innovation and R&D and investment in green technologies to contribute to a sustainable
world.

Green Technologies
Huaqin is committed to exploring new ways to contribute more to the circular economy, reducing ourreliance on natural resources, and providing customers with more eco-friendly products.

Case I "Liquid Server Cooling" — Reducing Power Consumption of Data Centers by More Than 30%
The power usage effectiveness (PUE) of traditional data
centers with air cooling systems is usually 1.5-1.8 (PUE is a
key indicator that describes the energy efficiency of a data
center; an ideal PUE is 1.0).
In 2021, Huaqin started to develop cold plate liquid coolingtechnology and reliable immersion liquid coolingtechnology for servers and switches in data centers.
The cold plate liquid cooling technology can cut the
average PUE of data centers to about

1.2 throughout the year, while the immersion liquid coolingtechnology can cut the PUE to less than 1.1, reducing thepower consumption of data centers by over 30-40% anddecreasing carbon emissions significantly.
The liquid cooling system significantly reduces the number
and load of cooling fans used in IT equipment and noise in
the data center, resulting in an easy operation andmaintenance environment.

More Durable Products
Huaqin always adheres to the "high quality strategy" and produces durable and highquality products to reduce the consumption of natural resources. In the design stage, we
ensure that raw materials meet all environmental requirements by selecting them basedon strictly controlled evaluations; in the manufacturing stage, we conduct strictreliability tests against international standards to ensure that our products function
normally, even in severe conditions.
We have multiple specialized reliability labs in China, where we simulate use scenariosand perform reliability tests on different products and components to ensure productquality before shipment. These include drop tests, temperature cycling tests, andabrasion tests.

Lab

Huaqin Technology Sustainability Report 2021 / 32

Green Materials & Packaging
Huaqin uses a variety of renewable materials such as
recycled paper and recycled plastic in its products, andkeeps exploring new possibilities of using more highquality renewable materials together with material
suppliers.
In terms of green packaging, we have adopted
lightweight and compact packaging designs that meetcustomer needs to reduce the use of packaging
materials and cut packaging and logistics costs.

Our environmental protection efforts were recognized by the industry:

China Energy Conservation
Program (CECP)

China Environmental Labelling
Program (CELP)

CECP aims to reduce energy consumption and emissions byencouraging manufacturers to produce more resource-efficient
products and helping consumers make sustainable purchasing
decisions.

CELP, also known as the Ten-Ring Certification, is currently themost authoritative eco-friendly product certification in China.
CELP-certified products use less hazardous substances and are
more energy efficient than similar products in the same
industry.

Energy-Related Products (ERP)

Energy Star

Energy-related products are any products that have beenplaced on the market and/or put into service and have an
impact on energy consumption during their use.

The Energy Star rating has become a key factor in thepurchasing decisions of both consumers and businesses.
More efficient buildings, applications, and hardware can leadto significant savings on heating time or power costs.

33 / Huaqin Technology Sustainability Report 2021

Green Supply Chain
All the materials supplied by all the suppliers of Huaqin shall comply with RoHS
(Restriction of Hazardous Substances) and REACH (Registration, Evaluation, Authorization
and Restriction of Chemicals) requirements, as well as applicable national or regional
regulations, government environmental directives, and certification requirements, andmeet our environmental directives and green design requirements. Our suppliers areincorporated into our quality management system.
Huaqin requires all suppliers to fulfill their responsibilities under environmental laws andregulations, including but not limited to the PAHs (Polycyclic Aromatic Hydrocarbons)
Directive, REACH Regulation, Battery Directive, Packaging Directive, POPs (Persistent
Organic Pollutants) Regulation, California Proposition 65, and Restriction on the Use ofHazardous Substances in Children's Products:
For example, materials provided by suppliers must meet the latest requirements of ourcorporate standards and technical documents on the restricted use of hazardous
substances in eco-friendly products, and applicable laws and regulations. Suppliers must,upon Huaqin's request, provide test reports on hazardous substances underenvironmental protection laws and regulations for the materials they provide (the report
request will be released by Huaqin through the Quality Management System (QMS)
platform, and suppliers shall reply on the announcement platform). The test report must
be valid for 12 months. In addition, test reports, ingredient reports, declaration
documents, drawings, management regulations, and other technical documents andquality records related to the RoHS and REACH regulations must be retained by suppliersfor 10 years.

Huaqin Technology Sustainability Report 2021 / 34

Green Manufacturing
In China, Huaqin has two manufacturing centers in Nanchang and Dongguan. Huaqin
takes steps to make sure our own operations are green, low-carbon, and sustainable.
Guided by the principle of "low consumption, low pollution, and high efficiency", we havebeen striving to build green, sustainable company campuses.
To create green campuses, we use as much renewable or clean energy as possible at thesource, take technical and managerial measures to save energy during our operations,
properly dispose of hazardous waste and organize environmental awareness programs.
These efforts have enabled us to cut costs with increased resource utilization andreduced waste generation, and achieve more efficient, sustainable, low-carbon
operations. In 2021, Huaqin manufacturing centers reduced their carbon dioxide
emissions by 6,374 tons.

Nanchang Manufacturing Center

6,374

tons

of carbon dioxide emissions
reduced this year
at Huaqin's manufacturing
centers

Dongguan Manufacturing Center

Use Renewable/Clean Energy
As the urgency of combating climate change becomes clearer, more countries, regions, and organizations are now interested inacquiring and using renewable energy. We use renewable energy in our operations wherever possible and are building more PV power
plants, solar water heating systems and other green energy facilities on our campuses.

Photovolt
Solar Water
Case
Case
| Photovoltaic System / Solar Water Heating Systemaic
Heating System
SystemThe photovoltaic system on our Nanchang campus has a
The solar water heating system on our Nanchang campus
total of more than 6,000 PV panels, which can provide morethan 5 million kWh of electricity per year.

Photovoltaic System

35 / Huaqin Technology Sustainability Report 2021

provides hot water for thousands of people each day.

Solar Water Heating System

Since 2019, Huaqin's manufacturing centers have engaged incomprehensive energy-saving initiatives through technicaland managerial measures, and used energy-saving proposals
and promotional activities to raise awareness among all
personnel.
In 2021, Nanchang and Dongguan manufacturing centers
implemented technical energy-saving projects, including air
compressor waste heat recovery, workshop heat-generating
equipment cooling and exhaust renovation, energy-efficient
LED light replacement, renovation of factory corridor lighting,renovation of lighting switches in dormitory activity areas andpackaging areas, and energy-saving renovation of the processcooling water system for reflow ovens in the SMT workshop. In
addition, professional energy-saving institutions conducted
special technical renovation evaluations on central airconditioning, air compressors, water pumps, and other energyintensive equipment.
Managerial energy-saving projects included formulating energy
consumption standards, introducing energy management
systems, establishing energy use auditing mechanisms,
starting and stopping equipment as needed depending on theload, and conducting energy efficiency reviews when new
equipment was installed.

Case | Dongguan & Nanchang Technical Energy Saving: Air Compressor Waste Heat Recovery

Before Renovation:
1. The dormitories required a lot of hot water and the heatpumps used a great deal of energy, resulting in highelectricity consumption.
2. The water tower was frequently replenished, resulting ina significant loss of heat energy.
3. The ambient temperature in the air compressor room
was high, which was unfavorable for equipment operation.

After Renovation:
1. Plate heat exchangers are added to the air compressor totransfer excess heat.
2. The excess heat is used to heat water via plate heatexchangers, reducing the energy needed to supply hot water
to dormitories and decreasing the energy consumption of
the boiler and the heat pumps.
3. The temperature in the air compressor room is reduced,
improving the equipment operating environment andlowering the risk of equipment failure.
4. The water consumption from the water tower is reduced
so the water tower turbine can not be kept on at all times.
This reduces energy and electricity consumption.

Case | Dongguan Technical Energy Saving: Energy-saving Renovation of Cooling Water System for Reflow Ovens

Before Renovation:
Cooling water circulation was enabled bya split-type industrial chiller, which
consumed a large amount of energy anddischarged hot air into the workshop.
Process Cooling
Water System

BeforeRenovation

NC

Reflow
Oven

NC
After
Renovation

Industrial
Chiller

After Renovation:
1.The process cooling water system isused as the main cooling water circuit for
reflow ovens.
2.The industrial chiller is used as an
emergency backup cooling water source
through a three-way bypass valve.
3. Estimated energy savings: 22,000 kWh
per month.

Huaqin Technology Sustainability Report 2021 / 36

Managerial Energy Saving | Nanchang: Energy Management System
Before Renovation:

1. Employees had to manually read the meter and record alarge amount of data. This took a lot of time and effort.
2. Employees might make mistakes when recording data,so the recorded totals did not exactly reflect actual energy
usage.
3. We could not precisely analyze the actual data, which
made it harder to manage energy consumption.

After Renovation:

1. An energy management system is established to digitallydisplay energy consumption data in real time.
2. The system analyzes the electricity consumption of eachdepartment, analyzes the consumption of each unit basedon the total production output and the output quantity ofeach MD unit, and apportions the electricity consumptionof each MD. It compares the standard electricity costs withthe actual electricity costs of production units.
3. Reasonable energy management plans are in place.

Managerial Energy Saving | Nanchang: Energy-efficient Management of Equipment Operation
Workshop Temperature Increased by 1°C
On the premise of compliance with manufacturing
environment standards, we increased the temperature of
all workshops from 23℃ to 24℃ in July 2020, theoreticallyreducing energy consumption by about 3%. In September
2021, we increased the temperature of all workshops
again to 25℃ for an extra 3% energy saving, enablingenergy efficiency at scale.
Precise Control of HVAC Units
We turned off some HVAC units based on the maximum
workshop temperature and humidity requirements to limit
the number of exhaust fans in operation.

37 / Huaqin Technology Sustainability Report 2021

Workshop operating
parameters can be
adjusted as appropriate.

Management of Solid Waste, Wastewater, and Waste Gases on Huaqin Campuses
To better manage waste on our campuses and minimize our impact on the environment, we have hired certified waste disposal
companies to classify and dispose of our waste. To reduce waste, we have also organized environmental awareness campaigns,
which have received a tremendous response from our employees. Our employees join in these campaigns enthusiastically, and havelearned a lot about protecting the environment.

Waste Classification

Solid
waste

Wastewater

Waste gases

ExampleDisposal

Non-recyclable
waste

Domestic waste

Regularly removed by designated suppliers .

Canteen waste

Leftovers and waste cooking oil
and fats

Harmlessly treated by designated certified suppliers.

Recyclable waste

Packaging boxes and metal parts

Recycled and reused by designated suppliers and thenhanded over to certified suppliers for disposal.

Hazardous waste

Chemical containers

Centrally stored in a designated area and thenprocessed by certified suppliers.

Construction
waste

Waste from refurbishments

Centrally stored in a designated area and thenprocessed by construction companies.

Canteenwastewater

Oily wastewater from canteens

After oil is removed through an oil separation tank,wastewater is discharged into the municipal sewers if itmeets the required standards.

Other domestic
wastewater

Wastewater from bathrooms,
office pantries, and sanitation

Discharged into the septic tank for sedimentation andthen into the municipal sewers 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 therequired standards.

Waste gases fromcanteens

Cooking fumes from hobs

Purified by purifiers and then discharged at a steadyrate if they meet the required standards.

Industrial waste
gases

Industrial waste gases generated
from the production process

Centrally disposed of by the industrial waste gas
treatment facility on the roof of the building in which
the waste gases are produced and then discharged ifthey meet the required standards.

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, aircompressors, and other machinery and equipment to reduce noise by up to 30 dB. Noise
detection is performed in all directions around the factory perimeter to ensure that wemeet national Class 2 limit, that is, < 60 dB(A) during the day and < 50 dB(A) at night.

Noise Sampling

Huaqin Technology Sustainability Report 2021 / 38

Case | Waste Gas Disposal on Dongguan Campus
Industrial Waste Gas Disposal
Bag filters are installed on the roof of one factory buildingon Dongguan campus, achieving a dust removal efficiencyof over 90%. There are a total of 14 detection points for theorganized waste gas emission outlets and 8 detection
points for fugitive emission outlets on the campus. Theiremission concentrations all comply with Guangdong
Province's emission standards for waste gases.

Waste Gas Sampling

Promoting Energy-Saving AwarenessTo get employees engaged in energy-saving practices, Nanchang and Dongguan manufacturing centers hold various faceto-face or online promotional activities themed by energy saving.

Case | Energy-Saving Activities on Dongguan Campus
An energy-saving team comprised of representatives from each department was established, which holds monthly meetingsand special meetings on energy saving. On-site investigation of implementation results, collection of energy-saving proposals,
energy-saving improvement by each department, and major special projects for energy saving all contribute to the effective
execution of energy-saving projects. In addition, effective promotional activities are regularly launched through emails,
WeChat, posters, and wall decals.

39 / Huaqin Technology Sustainability Report 2021

Contributing to a Circular Economy
Green Logistics
Transition from Paper to Electronic Documents

Recycling of Packaging Materials

Reducing Transport Trips

Using New Energy Vehicles to Create Green
Transportation Channels

Electronic documents are available in Huaqin's on-site
warehousing system and logistics system, allowing customers,
suppliers and Huaqin employees exchange electronic
documents easily. This low-carbon and efficient solution
effectively reduces the consumption of paper documents.

By integrating transportation plans and resources on similarroutes, we build regional direct-delivery warehouses incustomers' areas to reduce the transport trips of finishedproducts.
For machines and materials that cannot be stacked, we offer
the high-pallet option to reduce transport volumes andtransport trips.
In this way, we can cut down on energy use and waste.

The pallets used in the transportation between factories andwarehouses are recycled. It is strictly prohibited to scrap
pallets that are still usable.
Some orders from direct-delivery warehouses require palletdismantling before delivery. The removed corner guards canbe recycled and processed for reuse in packaging operations.
This reduces the waste generated by secondary packaging andtransportation.

Transportation takes a crucial part in the logistics process.
Huaqin has introduced new energy vehicles for short-distanceintra-city deliveries, reducing the energy consumption andwaste from traditional vehicles. This effectively reduces
exhaust emissions from intra-city transportation vehicles.

Green Office
In 2021, Huaqin launched hotel and ride-hailing platforms for digital management and reimbursement of businesstrip expenses and hotel invoices. This helps to kill paper waste instead of trees.

72,000sheets of paper

Hotel Platform

Saves 72,000 paper invoices each year

210,000

sheets of paper

Ride-Hailing Platform

Saves 210,000 paper invoices each year

Huaqin Technology Sustainability Report 2021 / 40

4Care for Employees to Motivate Growth

41 / Huaqin Technology Sustainability Report 2021

Talent Attraction and Development
Employee Engagement and Communication
Care for Employees
Occupational Health and Safety

Huaqin Technology Sustainability Report 2021 / 42

Talent Attraction and Development
As the world's leading enterprise specializing in smart hardware products, Huaqin has experienced several transformations over the
past 17 years. Huaqin has updated its service offerings and revolutionized its business model, organizational structure, culture,
leadership, and competencies. In response to the ever-changing technology landscape, Huaqin sees being self-motivated andinnovative at work as a vital move towards sustainable business growth.

Talent Recruitment

Employee Training

Huaqin searches for talents through various internal andexternal channels every year, including regular on-campus
recruiting, online recruitment platforms, internal
recommendations with rewards, and talent rotation
opportunities.

Huaqin has formulated a comprehensive and detailed training
system, including the Internal Trainer System and the Parttime Instructor System, to encourage the sharing of
information and knowledge within the Company. Our training
courses mainly focus on five categories: general, management,
business, expertise, and operations. We also tailor our training
plans for employees at each stage of their careerdevelopment. In 2021, we held 530 online courses with thetotal training duration of over 200,000 hours.

On-campus recruiting is a great way to find qualified talents.
Huaqin has collaborated with over ten colleges anduniversities, sending over 500 interviewers to more than 100
on-campus publicity events each year. Huaqin has actively
responded to the call of the government to ensure stability on
the six fronts (employment, the financial sector, foreign trade,
foreign investment, domestic investment and expectations)and security in the six areas (job security, basic living needs,
operations of market entities, food and energy security, stableindustrial and supply chains, and the normal functioning ofprimary-level governments). In 2021, we enrolled over 1,500
students from on-campus recruiting.

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, with a focus on individualized, differentiated, andsystematic needs.
For the purpose of effective training, we set up a team ofprofessional mentors and over 400 internal instructors.

Besides, we have a comprehensive internal recommendation
system. Successful recommendations are rewarded
depending on the job level. Outstanding recommendations
are recognized and honored each year.

2021 Employer Awards
MOKA | Top 30 Best Practices in Human Resources
Informatization in China
Zhaopin | China Best Employer Award 2021
51job.com | Top Graduate Employers 2021
Haitou.cc | Most Influential Employers 2021

200,000+

hours

of training duration

530
online courses

400+
internally certified instructors

43 / Huaqin Technology Sustainability Report 2021

2021 Phoenix Tree Project - Courses for Beginners
In September 2021, Huaqin hosted the 9th Phoenix Tree Project - Courses for Beginners which focused on real-world managementcases through face-to-face and online courses and exams, aiming to help junior managers evolve from "individual contributors" to"team managers" and easily fulfill their responsibilities for business management and talent training.

Comprehensive Employee 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, andhold internal recruitment events.
We evaluate the professional capabilities of all personnel
based on the qualification criteria to get the right people in
the right positions. Moreover, we encourage managers todevelop their leadership and specialists to improve theirprofessional skills, allowing all employees to constantly honetheir skills in a variety of sectors in a performance-oriented
and behavior-oriented approach to empower growth acrosspaths.

Huaqin Technology Sustainability Report 2021 / 44

Employee Engagement and Communication

Harmonious Workplace
We value the workplace and living conditions of ouremployees. 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 qualified
suppliers. To maintain the safety and nutrition 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. Also, our branch
office buildings include multiple beverage stations and leisureareas, nursing rooms, all-in-one SSC service centers, and gyms.
These efforts have given our staff a stronger sense ofhappiness.

Huaqin WorkplaceEntertainment at Huaqin
We hold diverse staff care activities with focuses on healthmaintenance, skill development, and better services. We arealways looking for ways to improve our employees' well-being.
We also organize blind date events twice a year and a groupwedding ceremony once a year to give our employees a strong
sense of happiness and help balance their lives. Besides, familydays are held regularly to encourage employees to take moretime with their families outside of work.
Badminton Club Activities

Tennis Club Activities

45 / Huaqin Technology Sustainability Report 2021

Huaqin employees set up 31 employee clubs to enrich theirleisure time. These include a badminton club, basketball club,
swimming club, billiards club, foodie club, running club, andreading club. Backed by local clubs and trade unions, Huaqin
encourages and supports physical activities that help
employees manage physical and mental health, such as the
4th "Lingang Cup" Health Run, "Golden Autumn Cup" Games,
Huaqin Shanghai Summer Basketball League, South China
Huaqin Cup Basketball Tournament, Wuxi Huaqin Cup
Basketball Tournament, and Shanghai Spring Badminton
Tournament. These events enrich the lives of our employees
and help them relax and find a better work-life balance.

Diverse and Inclusive Workforce
The diversity of our employees is the wellspring of our innovation and success, forming a vital part of our corporate culture. Huaqin
values diversity in the workplace and is committed to creating an inclusive workplace where all employees enjoy equal
opportunities. As of December 31, 2021, Huaqin boasts a global employee base of 33,141 people, of which more than 25% arefemales.

25%+

2021

25%+ female employees

Listening to Employees
Huaqin is willing to listen to its employees and provides many ways for them to express their voices, including employee workshops
and meetings with senior management and the president. 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 employee relations hotline and suggestion boxes.
Besides, Huaqin offers an internal social platform called "Huaqin Moments", where employees are encouraged to express theirproblems and suggestions regarding jobs, workplace, management, and daily life, either publicly or anonymously. This allows ourfunctional departments to optimize our work processes and resolve issues quickly.

Employee Workshop

Meeting with the General Manager

Huaqin Technology Sustainability Report 2021 / 46

Care for Employees
Occupational Health

Employee Care Fund

In addition to annual physicals and pre-employment
physicals, Huaqin also provides commercial insurance toemployees based on their occupational needs. Employees'
families can take the physicals with the same discounted
price. Each year, Huaqin surveys employees in all regions on
their satisfaction with physicals services and improves these
services accordingly. Besides, Huaqin invites healthcare
professionals to present 3 or 4 health workshops each year,
covering topics such as nutrition and mental health.

Huaqin cares about employees and their families and offers
employee gift packs for special occasions, such as marriages
and the birth of children.
Our Employee Care Fund is available to all Huaqin people,
providing financial assistance in the event of illness or serious
accidents. As a result, employees can rest assured that theyand their families are always protected.

Employee Benefits
Huaqin provides comprehensive benefits for our employees and their families. In addition to daily subsidies for transportation andmeals, Huaqin is working hard to attract external talents and promote internal talents in support of the Huaqin Nanchang
Development Strategy. For instance, we have set up the "Lakeside Talent Housing Program". The talent housing is adjacent to theoffice 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 to offer spaces for employees' children. This solves a major concern for employees with young
children.

47 / Huaqin Technology Sustainability Report 2021

Occupational Health and Safety
Huaqin is committed to providing employees with a healthyand safe working environment, allowing them to work withassurance and ensuring safe and stable production
operations. With the goal of "100% safety and no hazards",
we are constantly working to improve our safety
performance. We built an intelligent manufacturing
information system, introducing automated equipment orprocesses for jobs that are labor-intensive, exhausting, or
involve occupational hazards to reduce occupational healthand safety risks.
Huaqin complies with the Law of the People's Republic ofChina on the Prevention and Control of Occupational
Diseases, the Work Safety Law of the People's Republic ofChina,

international occupational health and safety management
systems and standards, and applicable laws and regulations
in all jurisdictions where it operates. Huaqin's safety
management system has passed the ISO45001 (occupational
health and safety management system) certification,
ISO14001 (environmental management system) certification,level-2 safety standardization certification, and Responsible
Business Alliance (RBA) certification.
Huaqin boasts a multi-level safety and health management
system that regularly updates information on hazard
sources and formulates hierarchical control measures.
Beyond these, Huaqin regularly holds fire drills, hands-on
fire extinguisher training, and safety training for all its staff.

Case | 2021 Work Safety Training in Nanchang Manufacturing Center

Huaqin sets up a professional EHS (Environment, Healthand Safety) team to ensure occupational health and safety
and compliance with environmental regulations. In 2021,
the Nanchang manufacturing center held 15 equipment
safety training sessions, three EHS certification sessions forteam leaders, 14 fire drills, and six forklift safety training
sessions. 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.

15equipment safety training
sessions

14

fire drills

Huaqin Technology Sustainability Report 2021 / 48

Copyright © 2022 Huaqin Technology Co., Ltd.

Huaqin Technology Co., Ltd.
Headquarters: Building 1 & 9 & 11, No. 399, Keyuan Road,
Pudong New Area, Shanghai
Headquarters Tel.: 021-61651266
Email: huaqin@huaqin.com

www.huaqin.com