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Huaqin Technology Co., Ltd. 2023 Sustainability Report

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

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About This Report

This sustainability report is the third of its kind released by Huaqin Technology
Co., Ltd. to its stakeholders. This Report discloses in detail the practices andperformance of Huaqin Technology Co., Ltd. in environment, society, and corporate
governance in 2023 to effectively communicate with stakeholders and respond totheir expectations and requirements in a systematic manner.

Basis of Preparation
GRI Sustainability Reporting Standards (GRI Standards), Global Sustainability Standards Board
Guidance on Social Responsibility (ISO 26000:2010), International Organization for Standardization
Guidance on Social Responsibility Reporting (GB/T 36001-2015), National Standard of the People’s Republic of China

Reporting Period
The period is from January 1, 2023, to December 31, 2023, and extends
appropriately to previous and subsequent years for some content to enhance thecomparability and perspicacity of this Report.

Reference in the Report
Huaqin Technology Co., Ltd. is referred to as “Huaqin”, the “Company”, “we”, “us”,
or “our”.

Scope of Report
The report discloses the policies, statements, materials, data, and typical casesof Huaqin and its subsidiaries in fulfilling environment, social, and corporate
governance responsibilities.

Guidelines of Shanghai Stock Exchange on Self-regulatory Supervision of Listed Companies No. 1 – Standardized Operation,
Shanghai Stock Exchange
2030 Sustainable Development Goals of the United Nations (SDGs)

Preparation and Release of the Report
This report is prepared on the basis of the ESG practices of the Company according to the procedure of “project initiation research on material topics - information collection - preparation and revision - review by the ESG Executive Committee - review
by the Board of Directors - release to the public”; moreover, we proactively communicated with stakeholders to discuss on theframework, structure, and content of this report.
This report was reviewed and approved for release by the Board of Directors on April 24th, 2024.

Reliability Assurance of This Report
The Board of Directors is responsible for the truthfulness, accuracy, and completeness of the content.
Huaqin engaged SGS to conduct an audit in accordance with AccountAbility AA1000 auditing standards. For the report of the
independent audit statement, refer to page 129.

Source of Information
The information disclosed in this report is from Huaqin and its subsidiaries.
This Report presents financial data in RMB; in the event of any inconsistency withfinancial reports, the financial reports prevail.

Access to This Report
This report is published in electronic form on the Company’s official website (https://www.huaqin.com) and the website of the
Shanghai Stock Exchange (www.sse.com.cn). If you have any questions or suggestions regarding this report, please send an
email to ir@huaqin.com or call 021-80221108.

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Message from the Chairman

Facing the intensified competition in the consumer electronics
industry on the general background of slowdown in global
economic development and the new opportunities from therapid technology iteration and a higher industry admission
threshold, Huaqin, as the world’s leading intelligent hardware
platform enterprise, is confronting the challenges featuringchanges and innovations. At this historical moment, Huaqin
remains true to our original aspiration by keeping sustainable
development as our strategic direction. As insisting on longtermism, we keep doing the right things and the harder things
to work with customers, employees, partners, shareholders,society, and other stakeholders to achieve long-term
development and create diverse value.
In 2023, Huaqin Technology generally maintained stable
operating performance and achieved preliminary results underits 2+N+3 strategy by successfully creating three major growth
curves, namely, data center business, automotive electronics
business, and software business, and completing the layoutof three overseas manufacturing bases in Vietnam, Mexico,and India (VMI), respectively. We ranked No. 213 in the 2023
Fortune China 500 and No. 16 in the Top 100 Competitive
Enterprises of Electronic Information Companies in 2023
and won the honorary titles of 2023 National TechnologicalInnovation Demonstration Enterprise, 2023 National
Intellectual Property Demonstration Enterprise, etc.
In August 2023, Huaqin Technology successfully got listed on
the capital market. While pursuing high-quality development,
we actively follow the symbiosis between technologies andhuman beings and willingly fulfill more responsibilities. We
have established a sustainable development management
system consisting of the Board of Directors, the Strategy
a n d Su sta i n a b l e D e v e l o p m e n t C o m mi tte e , th e ES G
Executive Committee, the ESG Office, and the ESG Working
Group to ensure the effective operation of the system in
aspects of leadership and supervision – decision-making –planning – execution, and clarified and achieved a common
understanding of our mission for sustainable development:
to insist on technological innovation as the driving force, play
the role of an industry leader, and provide customers withsustainable products, content, and ecology, hence promoting
the blueprint of fair, green, and inclusive development.
Compliant operation and scientific governance. As a largescale efficient company, Huaqin continuously optimizes its
corporate governance structure and risk management system

and improves the operation of the Shareholders’ Meeting,the Board of Directors, and the Supervisory Committee. Witha three-level internal control and compliance management
system established, we abide by business ethics both inChina and abroad, respect and protect intellectual property
rights, information security, and privacy, establish a soundinformation disclosure system, and safeguard the compliant
operation of the group both in China and abroad with thelegal, intellectual property, financial, taxation, and otherprofessional teams to protect the rights and interests ofcustomers, shareholders, and employees in all aspects.
We implement energy conservation and emission reduction
in pursuit of green and low-carbon development. We fully
implemented a green development strategy in the steadiest
manner to explore green values and opportunities in our
products, operations, and businesses. We have formulated
the “EHS 2026” plan to promote effective implementationof environmental management efforts. In 2023, we updated
our “carbon peaking and carbon neutrality” goals to strive
to achieve carbon neutrality throughout the Company by
2050, and released the short-term targets for the next five
years: achieve the clean energy substitution ratio of 40%,save energy by 500 million kWh, and cause our supplierpartners to save energy by 150 million kWh. By incorporating
the transformation of clean technologies into our strategy,
we invested over RMB 78.00 million to actively promote
innovation in clean technologies and catch the significant
opportunities from clean technologies. This is not only
Huaqin’s responsibility to our stakeholders, but also Huaqin’s
solemn commitment to the environment and the Earth.
We set a model of accountability with our acts. Internally,
Huaqin has always insisted on taking active measures tobuild an open and diversified organizational atmosphereadvocating learning and development and insisted on
the fresh graduate (including returned students studying
abroad) strategy to provide workplace newcomers with
opportunities for development and value creation. Externally,
we took active measures in ecology building, social welfare,and other aspects as our contribution to society. In 2023,
we invested over RMB 7.84 million in internal and external
public welfare activities, and operated 32 public welfare
projects in cooperation with 20 public welfare partners,
benefiting over 60,000 persons. As a result, we wereenlisted in the CSR CHINA TOP100 Rank of “Responsibility

100|2023 China Sustainable Responsibility Award”. Winning
this honor for the second consecutive year fully indicatedour strong belief in our long-lasting support and participationin contribution to society with our capabilities and influence.
We strive for innovation-driven development to build
healthy ecology. Huaqin continuously holds on to theideas of “innovation, cooperation, and win-win” to promotetechnological innovation and industry upgrades, hence
providing customers with high-quality products and services.
We will work with every partner to explore new technologies,
digital transformation, and intelligent development in pursuitof greater objectives with a more determined mind. In 2023,
at the annual “Global Core Partner Conference of Huaqin”,
we shared our achievements and progress on product R&D,
delivery efficiency, quality control, intelligent manufacturing,and strategic cooperation with partners in an attempt tomotivate more partners to actively participate in innovationand joint development efforts. Moreover, Huaqin also fulfilled
its responsibilities as a player in the industry chain bymaking joint efforts to promote industry upgrades, promote
ESG coordinated development, and build a win-win ecology
system.
Looking ahead to the future, we always hold our dreams
in mind. As a global industry leader, we are actively
pooling the strengths of all participants and making use oftechnologies to create the future, set a model in fulfillingsocial responsibilities, give back to society, and build abetter home together. We firmly believe that the intrinsic
power and competitive advantages derived from sustainable
development will provide unceasing energy for Huaqin tomaintain its leadership in the industry. We will work withstakeholders to contribute to the “Huaqin” efforts for global
sustainable development, hence creating a greener, better,and more sustainable future.

Founder, Chairman and CEO of Huaqin Technology Co., Ltd.

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06

Being deeply engaged in the intelligent hardware ODM industry, Huaqin has built up four core competencies, namely efficient
operation (Operation), R&D and designing (Development), advanced manufacturing (Manufacturing), and precision structuralparts (Mechanical) to consolidate its leading position in the intelligent hardware ODM industry.

Company Profile

Di
gi
ta
liz
at

D

Laptop
Brand

IP

With the mission to “Improve People’s Communication and Life”, Huaqin offers end-to-end product development, manufacturing,and operation of software, hardware, and systems to global technology companies. We have built a business layout of“2+N+3”. With a large customer base in more than 100 countries and regions worldwide, Huaqin provides global consumers
with hundreds of millions of intelligent products including mobile phones, tablets, laptops, smart wearables, AIoT products, data
center products, and automotive electronics.

ion

ODMM Core Values

Founded in 2005 and headquartered in Shanghai, Huaqin Technology Co., Ltd. is a world-leading enterprise specializing
in intelligent hardware products. In August 2023, Huaqin was successfully listed on the main board of the Shanghai Stock
Exchange (Stock Code: 603296).

SynergyInternet
Companies

Industry
Companies

Data Center Business

A

n

ut

io

is

om

at

ec

io

Pr

n

Auto
Companies

Smartphone
Brand

Automotive Electronics Business
Software BusinessMissionSmart Home

Improve people’scommunication and life

Keyboard

POS

RouterTabletEndingHeadsetSmartphone

Watch

AR/VR

+

AIO

Desktop

Laptop

2+N+3
2+N+3 Global Intelligent Hardware Platform

Docking Station

VisionTo be a leading provider
of intelligent products
and services

Our Culture

ValuesCustomer-oriented,
embrace change,
integrity, cooperation,commitment andpassion

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Milestones
Business Development
2005-20092010-2014

Mobile IDH

2015-2019

Mobile ODM

2020-Intelligent Terminal ODMIntelligent Hardware Platform

PCBA Mode

Mobile Devices

Diverse Intelligent Products

A manufacturer with strong R&D capabilities,

Emerging global brandDomestic top-tier brand and overseas regional brandGlobal first-line consumer electronics branda hardware player that excels in software,and a large-scale business of efficiency(IPD process for efficient decision-making)2019-20202015-2016
●

2005
●

●

Huaqin was established
to offer mobile phonedevelopment and designin China●

Entered the US mainstream market
Topped the global smartphone and tablet ODMrankings and has remained 1st place ever since
Delivered the first laptop to the global market

2023

●

Built two overseas manufacturing bases●

Nanchang No.1 Manufacturing Center went into operation●

Series B funding of RMB 1.15 billion (led by Qualcomm)●Established the Software Center and Evaluation Center●

Wuxi R&D Center started the operation●

Series C funding of RMB 1.0 billion (led by China Mobile)●●

Listed on the main board of Shanghai
Stock Exchange
Xi’an R&D Center (Silk Road
Headquarters) started the operation

Milestones

2011-2013●●

The first year of the smartphone business - 2011
Dongguan Manufacturing Center went into
operation●

Established Xi’an R&D Center●

Delivered 100 million units●

Delivered the first tablet to the global market●

Topped the global smartphone ODM rankingsand has remained 1st place ever since2021-2022

2017-2018
●

●

●

●

Established Wuxi R&D
CenterSeries A funding of RMB
870 million (led by Intel)
Mass production anddelivery of servers
Dongguan R&D Centerstarted the operation

●

●
●

●
●

Established Automotive Business Division, Innovation
Business Group, and X-lab
Huaqin Global R&D Headquarters started construction
Mass production and delivery of automotive electronics
product
Nanchang No.2 Manufacturing Center went into operation
Dongguan No.2 Manufacturing Center went into operation/
Dongguan No.2 Manufacturing Center started the operation

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Global Network
Huaqin has a strong global R&D network,with five R&D centers across China in
Shanghai, Dongguan, Xi’an, Nanchang, andWuxi, as well as two domestic manufacturing
centers in Nanchang and Dongguan andthree overseas manufacturing bases inVietnam, Mexico (Planned) and India.

Global Network

Headquarter:
ShanghaiFive R&D Centers:
Shanghai/Dongguan/Nanchang/
Xi’an/Wuxi

5

Nanchang Manufacturing Center

Xi’an R&D Center

Dongguan Manufacturing Center

Wuxi R&D Center
Shanghai R&D Center
Nanchang R&D Center

China+VMI:
Two Manufacturing Centers in China:

Vietnam DBG (JV)
Mexico Manufacturing Base (Planned)

Nanchang/Dongguan
Three overseas manufacturing bases:

India DBG (JV)

5

Vietnam/Mexico (planned)/India

Note: The figure is for reference only, and does not represent the real map

Dongguan R&D Center

Green and Low-carbon

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Commercial Organization

Industry
National Intellectual Property
Demonstration EnterpriseNo. 213 in the Fortune China 500

National Technological Innovation
Demonstration Enterprise

国家知识产权示范企业
国家知识产权局
2023年11月—2026年10月

Fortune China 500

China National Intellectual Property
Administration

Ministry of Industry and Information
Technology

国家知识产权示范企业

Industry Awards Granted by Governments

Association

No.62 in the Top 500 Private
Manufacturing Enterprises in China

No. 16 in the Top 100 Competitive
Enterprises of Electronic
Information Companies in 2023

2023 China Mike Award

All-China Federation of Industry
and Commerce

China Electronic Information Industry
Federation

MIKE

No. 98 in the Top 500 Private
Enterprises in China

All-China Federation of Industry
and Commerce

Employer Awards

Organizing Committee of China Sustainable Responsibility Award

2023 CSR CHINA TOP100

Organizing Committee of China Sustainable Responsibility Award

Top Graduate Employers

Best Employer of the Year in China
Most Intellectual Employer

Most Influential Employer

NowcoderZhaopinHaitou.cc

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MemberMemberMember

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14

Promoting Sustainable Management
ESG Management System

Member of the ESG
Executive Committee:

Huaqin has raised sustainable development to the highest
management of the Company and established a fourlevel sustainable development management structure of“leadership and supervision – decision-making – planning– execution”, consisting of the Board of Directors, theStrategy and Sustainable Development Committee, theESG Executive Committee, the ESG Office, the fivemodule working groups, and the ESG executive groups,
which guarantees the effective operation of the sustainable
development management system.

ChairmanVincent Qiu

Insist on long-termism;
Do the right thing;
Do the harder thing.

Executive Member, CSO Chen Xiaorong

The Board of Directors holds regular and interim meetings
to review the corporate sustainable development strategy,
execution plans, targets, and achievement reports submitted
by the Strategic and Sustainable Development Committees.

Fulfill responsibilities as a player in
the industry chain;

Wang Shichao

Technology for good;
Benefit everyone
with outstanding
intelligent products.

Work together to build a green, lowcarbon, and sustainable value chain.

Sustainable Development Management Framework

Liu LiDai Yigui

Create an open
and collaborative
organizational
atmosphere;

Make use ofadvantages intechnologicalinnovation;

Build a value
realization platform
featuring “the harder
you work, the happier
you will be”.

Build green products
for a zero-carbon
future.

MemberZhu Ronghui

Live in harmony with
the Earth and nature;
Work with society
toward a sustainable
future.

MemberWang Zhigang

Implement scientificgovernance topromote green andlow-carbon efforts;
Practice sustainable
development as afriend of time.

Division of Duties

Board of Directors

LeadershipandSupervision

Strategic and Sustainable Development Committee
Decision-making
ESG Executive Committee

ESG Office

Corporate
Governance

CSR

EHS

Carbon Neutrality

Corporate
Governance GroupCSR Group

Environment
Management Group

Carbon Neutrality
Group

Occupational Healthand Safety Group

Product Environmental
Compliance Group

Approve the Company’s ESG development strategy, policy, and objectives, anddecide on major ESG efforts, key planning, etc.
Decide on the ESG development strategy, policy, and objectives, review key ESG
risks and opportunities, and implement major ESG efforts, key planning, etc.

Planning

As the main management of ESG, formulate the ESG strategy, planning,objectives, and deployment, follow up on ESG efforts, report to the ESG
Executive Committee， and promote the implementation of major ESG
efforts.

Execution

Implement and carry out tasks under specific topics, regularly
report on the work results, and ensure the comprehensive
implementation in the operation of the Company.

Securities Affairs &Corporate Publicity

Securities Affairs &Corporate Publicity
Group

Highest responsible body of the Company’s sustainable development affairs. Leadand supervise the Company’s ESG efforts, and approve the Company’s ESG-related
information disclosure documents.

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ESG Strategy and Guidelines
ESG Working
Meeting

ESG
Executive
Committee

Interimthematic ESG
meeting

Bi-weekly meeting

Quarterly meeting

Interim meeting

Strategy formulation
Formulation of annual top
projects
Review of ESG working
procedures
Progress on top projects
Discussion on requests ofpain points and difficulties

Decisionmaking
ReportStrategic decision-making
Decision-making for annual
top projects
Review of quarterly
objectives of top tasks

Decisionmaking

With the mission to “Improve People’s Communication and Life”, Huaqin integrated stakeholders’ concerns with corporate
operations in all aspects of environment, society, and governance by building a sustainable development strategy system andsetting sustainable development goals, hence contributing to the blueprint of global sustainable development while pursuing its
own high-quality and sustainable development.

Improve people’scommunication and life
MissionKey tasks
Major events

Insist on technological innovation as the driving force, play the role of an industry leader, andprovide customers with sustainable products, content, and ecology, hence promoting the blueprintof fair, green, and inclusive development.

Emergencies

Report

ESG media report

Review of ESG information
disclosure
Decision-making on requests
for pain points and difficulties

To build a global intelligent hardware platform from a long-term perspective, andwork with customers, employees, partners, shareholders, and social stakeholders
to jointly create diverse value.

ESG working mechanism
To keep our sustainable development management system
in line with the relevant requirements in aspects of labor,
health and safety, environment, and ethics, and to effectively
fulfill our corporate social responsibilities, the Company has
been a member of the Responsible Mining Initiative (RMI)
for three consecutive years and has passed the BusinessSocial Standards Certification (BSCI Certification), theInternational Standard for Social Responsibility Certification(SA 8000 Certification), and the Responsible Business
Alliance’s Code of Conduct Certification (RBA Certification)with a silver medal.

Scientific Governance
Benchmarks Co., Ltd. 本臻力行有限公司

Green and Lowcarbon

Role Model of the
Responsible Company

Healthy Ecology

SA8000 MANAGEMENT SYSTEM CERTIFICATION
SA8000 社会责任管理体系认证

Certificate 证书
Cert. No.: BM-CN-20220400
This is to certify that 兹颁证证明

Nanchang Huaqin Electronic Technology Co., Ltd.
南昌华勤电子科技有限公司

Guidelines

Address 地址: No. 2999, Tianxiang Avenue, Nanchang high tech Industrial Development Zone, Nanchang City, Jiangxi Province,
Nanchang, China.江江西省南昌市南昌高新技术产业开发区天祥大道 2999 号

Has been found to conform with an appropriate and effective management system that meets the requirements of Social
Accountability Management System Standard 符合社会责任管理体系标准:SA8000:2014
The scope of certification described by this certificate releases to the empowerment and production of all personnel who
provide products or services for that organisation at the above address including personnel employed by the organisation
itself for the following activities: 本证书所述的认证范围涉及在上述地址为该组织提供产品或服务的所有人员的赋权和保护包括该组织为下列活动雇佣的人员
Manufacture of PCBA (printed circuit board assembly) used in electronic products, tablet computers, laptop
computers, wireless data terminal products, mobile communication equipment and parts, etc.
电子产品 PCBA、、平板电脑、笔记本电脑、无线数据终端产品、移动通信设备及配件的制造

Certification Issued Date

Certificate Issued At证书签发地:

证书签发日：

Shenzhen, China 中国深圳
18 Oct 2022

Issued Date 证书签发日期：

2022 年 10 月 18 日

18 Oct 2022

Certificate Expiry Date 有效期：On Behalf of Benchmarks Co., Ltd.

2022 年 10 月 18 日
17 Oct 2025
2025 年 10 月 17 日
LA 主任审核员
Larry Cai 蔡昌卫

GM 总经理Social Accountability International and other stakeholders in the SA8000 process only recognize SA8000 certification issued by qualified CBs granted accreditation by SAAS and do
not recognized the validity of SA8000 certificates issued by unaccredited organizations or organizations accredited by any entity other than SAAS. Additionally, all SA8000
certificates shall contain the address of the SAI website (https://sa-intl.org/saas-page-redirect/ ) where stakeholders can confirm the validity of an accredited SA8000 certificate.
唯 SAAS 认可的认证公司签发的 SA8000 有效。可在 SAI 网站查询。

This certificate is issued by SAAS Accredited Unit: Benchmarks Co., Ltd.
http://www.benchmarks.com.hk
本证书签发机构为 SAAS 认可审核机构：本臻力行有限公司

Guangdong Qiyang Technology
Nanchang Huaqin ElectronicCo., Ltd., a subsidiary of Huaqin,
Technology Co., Ltd., apassed the Business Social
subsidiary of Huaqin, passed theStandard Certification
International Standard for Social(BSCI certification)
Responsibility Certification(SA 8000 Certification)

Cornerstone

Improve governance
Promote the “carbon
regulations, implement peaking and carbon
an efficient and all-round neutrality” strategy
governance system,by establishing andand carry out scientificimplementing a green
decision-making andsupply chain and green
compliant operation, so manufacturing system
as to build sustainable
covering the entire
competitivenesslifecycle of products; fulfill
incorporated into the
responsibilities as a player
global value chain.
in the chain to promote
efforts for neutrality of theentire chain.

Huaqin Culture
and Values

Stakeholder
Engagement

Provide safe, respectable,
and worthwhile work
opportunities for
employees, and build
a work platform where“the harder you work, thehappier you will be” and adiversified growth space,endeavoring to become amodel enterprise in fulfillingsocial responsibilities.

Process andSystem Standard

Recognition that

Nanchang Qinsheng Electronic
Technology Co., Ltd(Floor 2, Building D, Industrial Park, No. 2999, Tianxiang Avenue)/ (No.638,
Hangkongcheng Avenue) Nanchang Hi-tech Development Zone, Nanchang
City, Jiangxi Province, 3000039,
China

Completed the RBA Validated Audit Process, achieving SILVER Status
without any priority findings, earning a score of 167.7
Validated Audit Report: VAR-20230228-CN-01A01-2
Audit date: February 28, 2023
Certificate issue date: March 15, 2023
Expiration date: March 02, 2025
Robert F. LedererCEO, RBA

Nanchang Qinsheng Electronic Technology Co., Ltd., a Subsidiaryof Huaqin, Passed the Responsible Business Alliance’s Code of
Conduct Certification (RBA Certification)

ESG Strategy and Guidelines

Provide commercial
partners with acorruption-free, fair,and healthy commercial
environment, andprovide customers withcompetitive products
and services to ensure
long-lasting businesscooperation.

ESG Digitalization

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Actively responding to the United Nations Sustainable Development Goals (SDGs), the Company is committed to contributing to
the global sustainable development process with its own sustainable development.
Huaqin’s Objectives and Commitments
to Sustainable Development

Progress Toward
Objectives in 2023

Improve water use efficiency,
and reduce wastewater
generation and discharge

Optimized water consumption
appliances and installed watersaving equipment, hence
reducing water consumption
by 52,800 tons throughwater-saving measures

Huaqin’s Objectives and Commitments
to Sustainable Development

Female directors accountfor over 28% by the end

Female directors accounted
for 22%

By the end of 2028,

Completed survey on conflictminerals involving 310 tier 1of 2028

Perform CSR inspections on
suppliers by 100% and due

diligence investigation on conflictminerals by 100%, pass third-

By the end of 2028, reduceenergy consumption by 500

million kWh through energy
conservation measures

Reduced energy consumption
by 34 million kWh throughenergy conservation measures

Progress Toward
Objectives in 2023

party certification (IPSA)

Promote suppliers to reduceenergy consumption by a total ofmaterial suppliers

Started survey on suppliers’
energy use and carbon
emission management, andraised green requirements

150 million kWh through energy
conservation measures

Respect the human rights of all
employees at home and abroad,build a diverse and inclusive
workplace, provide employeeswith competitive compensation
and benefits and a platform
for value realization, and pass
employer brand certification by
the end of 2026.

No incidents of humanrights infringement anddiscrimination; won several
employer brand awards

Motivate R&D and innovation ofcore technologies

433 new patents were

Increase investment in R&D
related to green products andclean technologies

By the end of 2028, no major risks,with 90% of risks prevented

Set up the Audit and Risk
Management Committee andthe Internal Control Committee
for risk assessment,
ranking, and classification
management

By the end of 2028, achieve theclean energy substitution rate of

Built the 19.5 MW distributed

By the end of 2026,

758 persons participated in

beforehand

40%

granted, leading to 5,295

patents in total

Invested approximately RMB
78.00 million in R&D

related to green products andclean technologies, winning
74 new patents

achieve 100% participation rate

in low-carbon training and 10%

business trips on low-carbon flights

No violation, exception, or accident of hazardous substances andchemicals; achieve 98% recycling rate of solid wastes

photovoltaic facilities,
contributing to the clean energy
rate of 6.63%

the energy conservation andconsumption reduction improvement suggestions and energy-saving activities;
Conducted 1 low-carbon training every quarter;

Preliminarily established themechanism of low-carbon flights

0 violations, 0 exceptions, 0
accidents of hazardous substances and chemicals; solid
wastes recycled to 96%

19

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting
Sustainable
Promoting Sustainable
Management
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending20

Communication with Stakeholders

With great importance attached to communication and exchange with internal and external stakeholders of the Company, welearned about the demands and expectations of various stakeholders through multiple channels and responded positively topromote the continuous improvement of ESG management efforts.

Stakeholder

Expectations and Demands

Communication and Response

The Company has established an open communication channel so that stakeholders can express concerns, inquiries, andopinions through esg@huaqin.com. The Company arranges dedicated staff to respond in a timely manner, and regularly
communicates and shares progress with stakeholders.

Stakeholder

Expectations and Demands

Communication and Response• Scientific and technological innovation• Compliant operation

Shareholders andinvestors• Stable performance growth• Sound risk management• Protection of shareholders’ interests• Periodical and interim information
disclosure• Governance of the Shareholders’Meeting, Board of Directors, andSupervisory Committee• Intellectual property protection• ESG governanceManagement

Customers• Smooth channel for communication
with investors• Mechanism of intellectual property
protection• Product R&D and innovation• Quality assurance• Product safety and quality• Customer feedback handling• High-quality services• Customer satisfaction survey• Data security and privacy protection• Information security management• Requirements for sustainable
development• Development of clean technologies• Social responsibility management• ESG management system andstrategy formulation• Stable performance growth• Compliant operation• Risk compliance• Sound risk management• Respond to national development
policies• ESG management system andstrategy formulation• ESG governance• GHG emission reduction• Tackling climate change• Development of clean technologies• Safeguard employee rights andinterests

Employees• Employee compensation and benefits• Comprehensive salary policy• Employee training and development• Smooth promotion channels• Occupational health and safety• Diversified training system• Abundant employee activities• Health and safety system

Partners
and industry
associations• Supplier management andempowerment• Industry development• Compliance with laws and regulations• Compliance with regulatory
requirements
Governmentand regulatory
authorities• Respond to national development
policies• Periodical and interim information
disclosure• Business ethics and anti-corruption• Sound risk management• Compliance in risk control• Treatment of three wastes• Ecological civilization building• Energy and resource conservation• GHG emission reduction• Sustainable supply chain
management• Controversial procurement
management• Industry discussion and exchange• School-enterprise cooperation• Cooperate in regulatory inspection• Supervision of integrity in operation• GHG emission reduction• Development of clean technologies

Public and media• Environment protection• GHG emission reduction• Social welfare• Green products and designs• Rural revitalization• Public welfare activities• Charitable donations

21

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting
Sustainable
Promoting Sustainable
Management
Management

FeatureAnalysis of Material Topics

Green and Low-carbon

Role Model of the
Responsible Company

Field

Tackling climate change
Clean technology opportunities

Comprehensive
Analysis of Results

Stakeholder Survey

Material Topic
Waste and recycling

Scan the QR code to accessthe survey questionnaire

Analysis Process of Material Topics

Chemical safety

Environment• Guidance of national macro
policies• Sustainable development
trends• Hot ESG topics of the year
• Major industry topics• Corporate business activities
and strategy• Requests of mainstakeholders

Green products and designs• Form:(1) Questionnaires(2) Email communication(3) Interviews• Categories of stakeholders: External
stakeholders include: shareholders andinvestors, governments and regulatory
authorities, customers, employees,
partners, industry associations, the public
and media, etc.; internal stakeholders
include managers at and above the middle
level of the Company• Based on the stakeholder
survey, the ESG Executive
Committee reviews,
discusses, and decides on
the final arrangement ofmaterial topics.

Energy management
Water conservation
Hazardous substances management• A total of 24 material topics
are identified, of which 10
are highly relevant, 9 aremoderately relevant, and 5
are lowly relevant.

Technology R&D and innovation
Product quality and safety
Sustainable supply chain• Survey data: Collected a total of 422
survey questionnaires• Third-party expert opinions

Protection of employee rights and interests

Society

Talent training and development
Occupational health and safety

Matrix of Material Topics

Industry leadership and collaboration

High
Environment

Diversity and equal opportunity

SocialGovernanceMateriality to stakeholders

Healthy Ecosystem

Ending

22

Impact of Material Topics on the Value Chain:

To get a more in-depth and accurate understanding of the expectations and demands ofstakeholders, the Company invites stakeholders to assess the material topics on sustainable
development, so as to identify the topics that are significant both to the Company’s business andstakeholders for specialized management as key content for disclosure in the report.

Topic Identification and
Selection

Scientific GovernanceCommunity responsibility

Technology R&D and innovation
Product quality and safety
Protection of employee rights and interests
Industry leadership and collaboration
Hazardous substances management
Energy management

Risk management

Sustainable supply chain

Intellectual property protection

Occupational health and safety
Risk management
Talent training and development
Information security and privacy protection
Business ethics andIntellectual property protection

Business ethics and anti-corruption

anti-corruption

Diversity and equal opportunity

Community responsibility

Information disclosure and transparency
Tackling climatechangeClean technology opportunities

Chemical safety

Operation of the Shareholders’ Meeting, Board of Directors, andSupervisory Committee

Materiality to corporate development

Information disclosure and transparency

Operation of the Shareholders’ Meeting,Board of Directors, and Supervisory
Committee

Waste and recycling

Water conservation

Information security and privacy protection

ESG governance

ESG governanceGreen products and designs

GovernanceHigh

Supply Chain

Production/
Operation

Customers

Employees

Society

23

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending24

Identifying Climate Risks and Opportunities

FeatureTaking Active Measures in Response to Climate
Change - Exploring Opportunities for Green
Development

With high sensitivity and farsightedness maintained towards climate issues, Huaqin actively identifies climate risks and explores
the means to maintain business continuity under various climate scenarios in an attempt to explore the potential opportunities
brought by climate change for the Company based on industries, regions, and business models.
In 2023, the Company followed the standards of the Task Force on Climate-related Financial Disclosures (TCFD) in identifying
relevant risks and opportunities and formulating detailed response strategies, and incorporated climate change risks into theCompany’s existing risk management structure, for which a top action project was established on a yearly basis based on thesignificance and urgency of the risk items.

Identification of Climate Risks and Opportunities
As an important player in society, enterprises have inevitable
responsibilities and missions in the face of the severe challengeof global climate change. Huaqin actively implemented theconcept of green development by integrating the response
to climate change into the Company’s strategy and decisionmaking, identifying and responding to the challenges andopportunities from climate change, and taking multiple
measures to reduce GHG emissions and enhance its climate
resilience.

Category
Topic

Clean energy

GHG

Water resources

Energy management

Risk

Policies and regulations at
production sites imposed
higher requirementson the proportion ofrenewable energy in use
and the energy efficiency
of equipment. In order tocomply with the regulations,
it is necessary to eliminate
and replace old equipment
or to purchase and use
renewable energy to acertain proportion, which
may lead to the risk of ashortage in renewableenergy supply on the market
and an increase in energy
prices in the future.

After the launch of anational carbon market,
the manufacturing industry
may be included in thescope of carbon market
management, which may
increase operating costs

Despite the absence of amandatory limit imposed on
the use of water resources
at present, wastewatershall be discharged inaccordance with regulatory
requirements.

Given the possible
temporary power shortages
and production underelectricity constraints, it isnecessary to consider the
impact of such conditions
on business continuity
and the increased costs ofelectricity generation by theCompany.

Impact on
operation

Increased costs andexpenses

Increased expenditures

Increased costs

Increased costs, operation
disruptions

Duration

Short

MediumLong

MediumPossibility

MediumMediumLow

MediumDegree of impact

High

MediumMediumMediumRisk
management
measures1. Take early measures toadjust the energy structure,and sign long-termcooperation agreements inadvance with power supply
companies on the market
to guarantee the supply of
renewable energy

Strengthening the Carbon Neutrality Governance System
Huaqin has set up a carbon neutrality module under the ESG Executive Committee, which is responsible for the strategicplanning, system development, and information disclosure of carbon neutrality to ensure scientific and effective decision-making.
At the execution level, a carbon neutrality working group has been set up, including executive groups in each park and special
executive groups, which are responsible for the breakdown of carbon neutrality goals and achievement thereof as planned.
ESG Executive Committee

Carbon Neutrality Module

Carbon Neutrality Working Group

Mainly responsible for theplanning, implementation, andimprovement of special projects
to address climate change.

Specific
Implementation
Group

Park-specific
Implementation
Group

Carbon Neutrality Governance System

Formulate carbon neutrality
strategies to ensure the Company’s
steady advancement toward carbon
neutrality goals; and report to the
ESG Executive Committee

Mainly responsible for the planningof such duties as the identification of
GHG emission sources, quantificationof emission data, and emission control,etc., and guiding the implementationof the Company’s action plan for the
carbon neutrality goals
Mainly responsible for identifying
energy-saving opportunities, andplanning and implementing energysaving and clean facility programsin the park; GHG inventory,
management, and certification in
the park

Policies and Regulations

2. Make arrangements earlyby constructing renewableenergy development
projects

Possible
opportunities

Participate in renewableenergy plans, increase theproportion of renewableenergy, respond to
the expectations ofstakeholders, win customer
recognition, and acquire
market opportunities

1. Continuously performthe inspection withreference to ISO 14064,
pass the certification, andset reasonable carbon
management objectives

1. Implement water
conservation measures,
including wastewater
recycling, process water
conservation measures, etc.
2. Implement advanced
management systems, suchas CWP, AWS, etc.

2. Study the development
trend to formulate andimplement carbon
management solutions

3. Monitor water
consumption indicators,
conduct regular reviews,
avoid waste, andcontinuously improve
efficiency in water
consumption

Establish carbon
management regulations,control carbon managementtargets, reduce costsof excessive carbon
emissions, and win
government support andrewardImprove water resource
management performance,
strengthen resilience toclimate change, improve theefficiency and diversificationof water resources, reduce
production costs, andensure business continuity

1. Carry out energy
conservation projects
2. Use advanced energyefficient equipment
3. Build and use an energy
management platform
4. Monitor electricity
consumption indicatorsand continuously improveenergy efficiency

Improve the Company’s
electricity consumption
efficiency, reduce production
costs, and develop energy
storage measures to ensurebusiness continuity, wincustomer recognition, andacquire market shares

25

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Category
Topic

Risk

Promoting Sustainable
Management

FeatureMarketUpstream - Disruption inraw material supply

Shipment of raw materials
and downstream production
are delayed due to anincrease in raw material
prices and suspended
transportation under the
impact of a shortage of
upstream chemical raw
materials caused byextreme weather, market
supply, and demands, etc.

Upstream - Increase in raw
material costs
The sales prices of productsin the upstream supply
chain increase due to the
response to climate change
by additional investments
in energy conservation andcarbon reduction, which
increased the operating
costs of the supply chain.\
Major mineral countries
tighten regulations onmineral extraction andexport in response to
climate change, which maylead to cost increases.

Scientific Governance

Investment ESG Rating

Given the increasingly
stringent environmental
regulations, customers
strive to meet scope 3
carbon neutrality, hence
raising more and more
specific requirements on the
proportion of clean energy
used in the production of
the Company

At present, investment
institutions around theworld are paying more
and more attention to
the ESG performance ofcompanies and consider
ESG performance in theirinvestment criteria. Failure
to continuously improve
ESG performance may
affect the Company’s
ability to attract overseas
institutions.

Impact on
operation

Increased costs, operation
disruptions

Increased costs andreduced revenues

Increased costs andreduced revenues

Financing costs

DurationLong

Medium

Short

Short

Possibility

High

High

High

High

Degree of impact

Low

MediumMediumLow

Risk
management
measures

Extreme high temperatures/drought

2. Monitor the trend of current prices and the impact ofmaterial price increases

3. Improve the Company’s
capabilities of hazardous
substance inspection
4. Acquire green
manufacturing technologies
and use recycled materials

Risk

Extreme high temperatures may
cause heat stroke or food poisoning,equipment faults, and the risk of selfignition of materials. In addition,
sustained high temperatures canlead to drought, which may affectproduction due to insufficient water forprocess, life, and fire protection.

May cause personal frostbite or foodshortages, equipment faults, andfreezing and bursting of fire-fighting
and other fuel transportation lines.

Floods affect employee attendance
and wastewater treatment systems,
and may also cause water andpower supply disruptions, logistics
and transportation suspension, or
supply chain disruptions, resulting in
production suspension or reduction
and loss of resources

Impact on
operation

Increased costs, operation disruptions

Increased costs, operation disruptions

Increased costs, operation disruptions

Duration

Long

Long

Long

Possibility

HighMediumMediumDegree of impact

Low

Low

Low

Risk
management
measures5. Develop low-carbon
green products
Establish diversified sources of raw materials to minimize
the risk of material shortage

Possible
opportunities

Reduce hazardous
substances in products
to comply with theenvironmental protection
regulations of mostcountries. Develop lowcarbon green products
to improve market
competitiveness andestablish long-termcooperation with customers

Investors (or prospective
investors) may decide
whether or how much toinvest in the Company
based on the Company’s
ESG performance tostabilize the source offunding and share price

26

Strong flood

1. Enhance ESG
performance

3. Enhance channels forexternal disclosure

EndingExtreme coldness

1. According to the weather forecastof the weather station, promptly notify
all departments and supervise them toget prepared for emergencies

2. Improve the quality ofreporting content

Healthy Ecosystem

EntityTopic

1. Evaluate new or changed
laws and regulations, andmake prompt improvements
for non-compliant
1. Establish secondary resources to avoid the risk of supply
from a single supplier, ensure smooth supply, and improvebargaining and service capabilities

Role Model of the
Responsible Company

Category

Downstream - Low-carbon
products

2. Manage and control
hazardous substances
strictly, and eliminate
hazardous substances

Green and Low-carbon

Possible
opportunities

2. Decrease the temperature of air
conditioners, shorten the duration ofhigh-temperature working, and prepare
heatstroke preventive medicines athealth stations

1. According to the weather forecastof the weather station, promptly notify
all departments and supervise them toget prepared for emergencies
2. Increase the temperature of the air
conditioner, shorten the duration of
low-temperature working, and prepare
antifreeze medicines at health stations

3. Equipment departments increase
the frequency of equipment and facility
inspection and maintenance andproperly handle equipment cooling

3. Dormitory management
departments shall prepare frostproof bedding to meet the needs of
employees who cannot return home

4. Get ready to respond to drought,
check the water storage volume of firefighting pools and living pools, properly
handle water storage, and enhanceefforts of water conservation publicity

4. Electrical and mechanicaldepartments shall take proper
insulation measures for machines,
equipment, and pipes

1. Forward the typhoon warning to
the city weather station prior to heavy
rainfall. The relevant departments
shall, upon receiving an announcementof a rainstorm, immediately issue awarning and carry out proper rainstorm
protection measures
2. Trigger the response mechanism
to prepare drainage pumps forelectrical and mechanical equipment,
perform comprehensive systeminspection, and check water pipes forblockage; the departments shall checkdrainage outlets for blockage, andrequest assistance from government
authorities when necessary
3. The parks shall construct flood
prevention facilities, such as flooddrainage stations, flood gates, flooddrainage pumps, and other facilities
and equipment

Strengthen the contingency mechanism to improve the Company’s resilience in operation

27

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending28

Commitment and Objectives of Tackling Climate Change

GHG Identification and Inventory

With an in-depth understanding of the urgency of the climate crisis and the necessity of participating in global climate
governance, Huaqin updated and released its objectives of “carbon peaking and carbon neutrality” at the end of 2023: to achievecarbon peaking in our operation by 2030 and achieve carbon neutrality in our operation by 2050.

Huaqin has formulated and implemented the GHG Control and Management Regulations, in which tools such as the Summary
Identification Form of GHG Emission Sources are used to identify over 20 emission sources within the scope of operation andrecord in detail the name, location, and emission amount of each source, hence completing the GHG emission inventory of theCompany in 2023. During the reporting period, the Company made GHG emissions of 230,661.53 tons of CO2 equivalent.

In order to effectively implement the objectives of “carbon peaking and carbon neutrality”, the Company has formulated fiveyear goals and plans: From 2024 to 2028, achieve the clean energy substitution ratio of 40%, save energy by 500 million kWhthrough energy conservation measures, and cause our supplier to save energy by 150 million kWh.

2021

2022

2023

Scope I4,824.73

4,233.71

5,217.70

Scope II103,922.15

142,152.14

203,335.16

Scope III24,754.20

19,895.42

22,108.67

Total
emissions

133,501.08

166,281.27

230,661.53

2023
In 2021, formally
started control overcarbon emission
reduction
Carry out continuous
iteration of green, lowcarbon, and recycling
development models
to improve energy
utilization efficiency
year by year

By 2030, achieve carbon
peaking
Clean energy accounts forover 40%, i.e., continuously
improve the ratio of 0
carbon emissions at thesource of power generation
and rapidly reduce carbon
emission

Achieve carbon neutrality
in each region asscheduled
Achieve carbon
neutrality at the R&D
Centers in Shanghai,
Wuxi, and Xi’an

Achieve carbon
neutrality in theoperation of theCompany

2022

2021

Greenhouse gas emissions statistics (tons CO2 equivalent)

At the source - Continuous
efforts in product design toreduce carbon emissions

Calculation basis:
1. The Company’s direct GHG emissions (Scope 1) were calculated on the basis of the values specified in the 2006 IPCC Guidelines for National
Greenhouse Gas Inventories and General Rules for Calculation of the Comprehensive Energy Consumption (GB/T2589-2020).
2. The Company’s indirect GHG emissions (Scope 2) were calculated using the emission factors specified in the Notice on the Management of GHG
Emission Reporting by Enterprises in the Power Generation Industry for the Period of 2023-2025 issued by the Ministry of Ecology and Environment.

2021

2030

2040

2050

The Company’s Objective of Carbon Neutrality
The Company will plan and carry out management and practical activities in pursuit of carbon neutrality at both the management
and technical levels. The objectives are broken down based on specific stages, years, and regions into stage-specific andregional implementation objections for continuous implementation, so as to ensure the smooth achievement of objectives.
At the management level:

At the technology level:

Continuously improve policies and regulations
for energy conservation and emission reduction,
strengthen internal training and publicity, andraise the awareness and sense of responsibilityof all employees for environment protection.
Gradually improve the monitoring and reporting
system for GHG emissions, and regularly evaluate
and assess the emissions of each department,
ensuring the effective implementation of emission
reduction measures. Establish and operate amanagement mechanism for Scope III carbon
emissions to gradually promote and empower
suppliers in energy conservation, efficiency
improvement, and clean energy substitution.

Actively acquire and apply advanced energysaving and emission-reduction technologies, suchas clean energy substitution, energy efficiency
improvement, resource recycling, etc., tocontinuously improve energy utilization efficiency
and the level of resource conservation andrecycling in the production process.

Carbon Emission Reduction Tasks in 2023

3. The Company’s other indirect GHG emissions (Scope 3) were mainly identified and inventoried under category 1 outsourced services, category 5 waste
generated from operations, category 6 business travel, and category 9 downstream transportation and distribution under the 2006 IPCC Guidelines for
National Greenhouse Gas Inventories and the China Products Carbon Footprint Factors Database (2022).
4. In 2023, compared to 2022, the Company’s boundary for GHG emissions data inventory further included Dongguan Huayu Precision Technology Co.,
Ltd. and Guangdong Xiqin Precision Mold Co., Ltd., which led to an increase in the emission data.

The Company conducted a comprehensive survey and preparation of the product-level carbon footprint inventory workflow
based on ISO 14067:2018 Greenhouse Gases - Carbon Footprint of Products - Requirements and Guidelines for Quantification,
so as to identify the emission sources and activity levels of the processes including purchase of raw materials, production andmanufacturing, transportation and logistics, sales and use, and disposal and treatment, establish a complete procedure andlist of carbon footprint inventory of key materials, hence laying a solid foundation for promoting the transformation toward clean
products.

Define products
and boundaries

Release results

Analyze product
LCA

Supplier list andquestionnaire

Collect data andmaterials

Conduct internal
inspection andemission reduction
activities

Prepare the CFP
reportCalculate theemission volume

Process of Product Carbon Footprint Accounting

29

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening
Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending30

31

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific
Scientific Governance
GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingOperation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee
Shareholders’ Meeting

Huaqin has established a sound corporate governance structure to protect shareholders’ rights and interests through thestandardized operation of the Shareholders’ Meeting, the Board of Directors, and the Supervisory Committee. The Company
pays special attention to the capacity building for the Board of Directors to ensure the diversity, professionalism, andindependence of Board members. In addition, the Company has implemented a competitive compensation policy for senior
executives to motivate the executive team to work for the long-term development goals of the Company through a diversifiedcompensation structure.

The Company strictly follows the requirements of the Company Law, the Securities Law, theArticles of Association, and Rules of Procedure of the Shareholders’ Meeting, and other laws,
regulations, and rules to convene, hold, and vote at shareholders’ meetings, hence effectively
safeguarding the legitimate rights and interests of small- and medium-sized shareholders.
We engage lawyers to attend the shareholders’ meeting as non-voting parties and issue
legal opinions on the convening and voting procedures thereof, so as to fully respect andsafeguard the legitimate rights and interests of all shareholders.

Governance Structure
Huaqin strictly abides by the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies,
and other laws and regulations and relevant requirements to constantly improve the corporate governance structure, andhas formulated and publicly released the Rules of Procedure of the Board of Directors of Huaqin Technology Co., Ltd., theWorking System of Independent Directors of Huaqin Technology Co., Ltd., the implementation rules of various specific-purpose
committees, and other institutional regulations. The Company’s power authority, decision-making body, supervisory body, andmanagement have clearly defined duties to fulfill their respective responsibilities while balancing each other. This provides asolid foundation for the standardized operation of the Company and safeguards the legitimate rights and interests of both theCompany and all shareholders.

Board of Directors
The Board of Directors has 4 professional committees, namely the Strategy and Sustainable
Development Committee, the Remuneration and Evaluation Committee, the Nomination
Committee, and the Audit and Risk Management Committee, to assist the Board of Directors
in fulfilling its decision-making and supervision functions, which play an important role inpromoting the standardized operation and healthy development of the Company.

Organizational Structure

Shareholders’ Meeting

Remuneration and
Evaluation Committee

Supervisory Committee

HR and Planning
SystemComputingBusiness
Group (CBG)

Data
Business
Group (DBG)

Automotive
Electronics
Business
Group (ABG)

Technology
Center

TMT Committee
Innovation
Business
Group (XBG)

Software &Test Center(STC)

HardwareCommittee
SoftwareCommittee
Structure
Committee

Financial System
Strategic
Cooperation
Department

R&D Centers

Hardware Business Groups

MobileBusiness
Group (MBG)

Smart Manufacturing Center

The Supervisory Committee of the Company is responsible for the Shareholders’ Meeting.
The Company has formulated the Rules of Procedure of the Supervisory Committee in strict
compliance with the requirements of the Company Law, the Articles of Association, and otherlaws, regulations, and rules, specifying the composition and authorities of the Supervisory
Committee, and the procedure of convening, holding, deliberation, and resolution making
at meetings of the Supervisory Committee to urge all supervisors to exercise supervisory
authorities independently in accordance with law, so as to supervise over the financial affairs
and the exercise of duties by the directors and senior officers of the Company in a manner ofbeing responsible to all shareholders.

Audit and Risk
Management Committee

CEO

Marketing
SystemSupervisory Committee

Nomination Committee

Board of Directors

Functional
Platforms

The Board of Directors consists of 9 directors, including 3 independent directors. The
directors attended Board meetings at the rate of 100% on average.

Strategic and Sustainable
Development Committee

Testing
Committee
ID Committee

The Supervisory Committee consisted of 3 supervisors, including 1 employee representative
supervisor.
XLAB

Key Performance

During the reporting period, the Company held
Directors,

6
3
9

3

meetings of the Supervisory Committee,

Committee,

Committee, andShareholders’ Meetings,

1

6

meetings of the Board of

meeting of the Strategy and Sustainable Development

meetings of the Remuneration and Evaluation Committee,
meetings of the Audit and Risk Management Committee.

2meetings of the Nomination

32

33

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureThe Company attaches great importance to the capacity building of the Board of Directors. The directors are talented persons
with rich operating experience in the industry and academy. Their backgrounds and working experience in different disciplines,
including the industry, finance, financial, etc., ensures the diversified, professional, and independent structure of the Board of
Directors and promotes scientific decision-making by the Board of Directors.

Name

Position

Industry
Vincent Qiu

Financial

Green and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending34

Information Disclosure and Transparency

Composition of the Board of Directors

Specialized Knowledge andSkillsScientific
Scientific Governance
Governance

Main Experience
Industry

Chairman

Gender

Age

Male

50

The Company has formulated the Management Measures for Information Disclosure and the Regulations for Investor Relations
Management in accordance with the Company Law, the Securities Law, the Administrative Measures for the Information
Disclosure of Listed Companies, the Work Guidelines for the Investor Relations Management of Listed Companies, and otherlaws, regulations, and normative documents with reference to the actual situation of the Company, so as to standardize theCompany’s management of information disclosure affairs and investor relations, improve the level of corporate governance, andsafeguard the legitimate rights and interests of the Company, investors, and other stakeholders.

Financial

Online meeting
Cui Guopeng Vice Chairman

Male

47

Wu Zhenhai

Director

Male

52

Chen Xiaorong

DirectorFemale52

Deng Zhiguo

Director

Male

46

Xi Pinghua

DirectorFemale50

Jiao Jie

Independent
Director

Male

51

Hu Saixiong

Independent
Director

Male

56

Huang Zhiguo

Independent
Director

Male

46

Remuneration Policies for Senior Officers
The Company provides competitive and comprehensive remunerations to its directors and senior officers in accordance withthe provisions of the Articles of Association and the Rules of Procedure of the Remuneration and Evaluation Committee. The
remuneration of the senior officers consists of fixed salaries, performance bonuses, long-term incentives, subsidies, medical
insurance, and annual medical examinations, etc., of which the performance bonuses are closely linked to the Company’s
overall achievement of strategies and objectives, while the long-term incentives are provided in the form of equity incentives tomotivate the senior officers to achieve the Company’s long-term development objectives.
During the reporting period, the Company set performance evaluation indicators related to ESG objectives for key positions
in ESG governance, such as the executive member of the ESG Executive Committee and CSO, Board Secretary, etc., andevaluated the indicators such as the achievement of ESG TOP projects, customer complaints, important awards, and rating
results on a quarterly basis, so as to define specific incentives to guarantee the achievement of the Company’s objectives in
ESG management.

Conference call

Performance
presentation
meeting at SSE
RoadshowCenterOn-site research

Activities
of Investor
Communication

Answer investor
questions at the SSE
E-interactive Platform

Dedicated telephoneanswering

Key Performance
During the reporting period, theCompany disclosed a total of

34

announcements

The Company publicly disclosed

32

including2
5announcements

regular reports

record forms of investor relations activities andannouncement of performance presentation, answered a total ofinvestors on the SSE E-interactive Platform, and conductedon the SSE Roadshow Center.

temporary

2

115

1

questions asked byinvestor communication activities

35

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

OpeningFeatureScientific
Scientific Governance
GovernanceRole Model of the
Responsible Company

Green and Low-carbon

Healthy Ecosystem

Ending36

Risk Management
Huaqin has established a sound internal control and risk management system, under which it conducts regular risk assessments
and makes corresponding risk response measures to manage risk items in a timely and effective manner. In addition, theCompany also continuously improves the compliance of internal management and enhances compliance awareness of
employees through internal auditing and compliance culture building to ensure compliant and sustainable operation of theCompany.

Risk Assessment
The Company organizes risk assessment, ranking, and classification management every year to accurately identify internal andexternal risks in connection with the achievement of control objectives, establish a risk database and risk heat map, and workout specific risk assessment methods and operational guidance based on environment changes and the Company’s actual
situation.

Internal Control System
Risk Category

Huaqin has established an Audit and Risk Management Committee and an Internal Control Committee under the Boardof Directors to ensure an all-round and compliant governance system for the Company. The Audit and Risk Management
Committee consists of internal directors and independent directors to ensure the independence of internal audit. Its duties
are to direct the work of the Internal Control Committee and ensure the internal audit free from restrictions by reviewing,supervising, and guiding the efforts of the Internal Control Committee. The Internal Control Committee is a virtual organizationthat undertakes the tasks of internal control building and operation of the Board of Directors. It is responsible for reviewing anddeciding on the management regulations and framework elements of internal control and leading and coordinating the execution
and implementation of the Company’s efforts for internal control environment building.
The Company has formulated the Internal Control Management System and Internal Control Framework, established a threelevel internal control and compliance management system, and formed three lines of defense for compliance, so as to inspectand supervise various business processes of the Company for compliant operation.
Responsible Department

Responsibilities

Audit and Risk Management Committee

Implement the Company’s strategy and set
internal control objectives

Internal Control Committee

First Lineof Defense

ReformManagement
Department

Systemoperation
platformBusiness
departments

Strategic
risk

Risk Item

Strategic
identification andstrategic insights
deviate frommarket and industry
development trends
so that the Company
fails to achieve
expected operating
results by a large
gap.

Major risks ofproduct recalls, lossof customers, andloss of businessqualifications, etc.
due to failure inmeeting environment
protection
requirements

Organize internal control

Optimize processes and regulations, andperform self-check on internal control

Risk Response Measures●

Establish strategic planning and management tools in consideration of thebusiness leadership model (BLM), covering “five views and three decisions”(views on the industry, customers, competitors, self, and opportunities, anddecisions on strategic control points, objectives, and policies) to strategy
formulation, annual review of progress, and update and iteration at intervalsof five years, hence creating a mechanism for strategic insights andbreakdown;●Control authorization and decision-making by level through the authorization
map, and respond to key matters at different levels by the EMT, decisionmaking committee, vice president in charge, etc.;●

Sort out and assess operating risks on a yearly basis, and review and refine
operating strategies at theory-discussing meetings at the president’s office
on a quarterly basis●

Supervise the evaluation of operating performance during the strategy trial
implementation through comprehensive budget management.

●

Environment protection engineers collect project-specific environment
protection information, and ensure the validity of such information and thecompliance of materials; the Project Specifications of Hazardous Substances
shall be archived in PLM; the procurement representative shall releaseresources to suppliers;●

Environment protection engineers collect changes in laws and regulations ona yearly basis, and incorporate such changes into Huaqin’s standards;●

At IQC environment inspection, promptly complete environment inspectionof incoming materials as required; the release of risky materials & finishedproducts shall be subject to review by the LPDT/IPMT.

●

Quarterly visits to suppliers to examine operating risks; quarter QBR of
supplier risks;●

Build a supplier resource pool to avoid the risk of supply to a project only
by a single risk supplier, or multiple suppliers from the same region for one
project;●

Hold system management monthly meetings to review supplier risks (delivery,
quality, customer share, payment status, etc.) on a monthly basis, and takemeasures depending on risk levels.

Operatingrisks
SecondLine of
DefenseThird Lineof Defense

Internal
Control ofInformation
Security

Quality Management
Department
Financial, Legal, and Human
Resources

Internal audit
Supervision

Output internal control compliancerequirements
Monitor internal control compliance

Audit effectiveness and compliance ininternal control

Internal Control and Compliance System

Anti-fraud investigation

AVL suppliers fail toperform routine risk
checks, which affects
business continuity
due to supply chaininterruptions causedby the situation in the
Taiwan Strait or otherreasons.

37

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Risk Category

Risk Item

Promoting Sustainable
Management

FeatureScientific
Scientific Governance
GovernanceGreen and Low-carbon

Healthy Ecosystem

Ending38

Risk Response Measures

Significant risks
The failure of reasonable capital
forecasts results in a shortageof funds for the Company, which
seriously affects the Company’s
cash flow and can even break
the Company’s capital chain,hence causing financial risks to
the Company.

Role Model of the
Responsible Company●

The fund management specialists and fund managers prepare
fund budgets and financing plans based on the operating budget,and prepare and update fund plans every month to ensure dailyfund sufficiency; and keep the funds above the minimum safe
level defined in aspects of finance and economics.

Medium

Implement risk avoidance, risk transfer, and risk
control strategies

Implement risk transfer and risk control strategies

Low risks

Implement risk acceptance strategies

Financialrisks

The provision of false financial
reports, misleads users offinancial reports, causing
decision-making errors anddisrupting the market order;
incomplete and inaccurate report
data.

Failure to reasonably andaccurately review the requests or
accurately evaluate the design
plan for the Company’s strategic
projects, projects with a target
volume of 10 million units, orindividual projects with sales of
USD 1 billion, leading to waste of
R&D resources.

●

The Finance Department prepares financial statements inaccordance with the Accounting Standards for BusinessEnterprises;●

The Securities Affairs Representative, after deciding the disclosure
time with the Shanghai Securities Exchange, promptly notifies
the accounting manager; the accounting manager prepares aninformation disclosure work plan based on the schedule andrequirements to complete the work on time and with high quality.

●

Specify the operating rules and requirements for project
evaluation, organize and analyze the project informationaccording to requirements, and organize meetings for relevant
participants to review the key stages of the project;●

The project review shall output specific meeting conclusions andmatters to follow up, the relevant interested parties shall express
their opinions, and the executive secretary shall organize regular
reports on project progress.

Marketrisks
Failure to fully understandthe comparison between thetarget product of a project andcompeting products, the bidding
strength of competitors, andchanges in market demands,
may lead to the risk of insufficient
market competitiveness of the
product.

●

Pay attention to plans for future products in the industry, andstudy the market situation of existing products;●

Pay attention to the products and resource investment(R&D resources, production capacity, advanced equipment)of competitors, and continuously evaluate the Company’scompetitiveness;●

Avoid leakage of the Company’s information and loss of coretalents

Risk Response Strategies

Internal Audit
The Company has formulated the Internal Audit Regulations, under which the Company formulates and implements internal
audit work plans every year and reports to the Audit and Risk Management Committee every six months on the implementationof audit efforts and the problems deducted during the internal audit. During the reporting period, the Company audited a total of
18 projects in terms of engineering, production and manufacturing, procurement, human resources, administration, etc., which
identified 9 major issues, 23 important issues, and 38 general issues. The relevant departments have rectified the problems
made improvements based on audit opinions, and have passed audit acceptance checks for their short-term countermeasures.

Compliance Culture
In order to enhance the efforts of complianceculture building and strengthen employees’
awareness of compliance, self-discipline, andred lines, the Company released the Huaqin
Compliance Brochure and carried out many
activities, such as speaking tours on compliance,
discussion on compliance by senior executives,and employee sharing of integrity andcompliance experiences, etc. to fully incorporate
compliance into the mind of everyone andimplement compliance in practice.

September Activities on Publicity of Compliance

39

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureScientific
Scientific Governance
GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending40

Business Ethics and Anti-corruption
Huaqin attaches great importance to business ethics and integrity efforts. It implements supervision responsibilities in practicalwork and adopts a “zero tolerance” attitude towards corruption and bribery in any form, so as to build an ecosystem ofcompliance and integrity. We have created a work atmosphere of compliance with regulations and disciplines and advocating
integrity in the Company by means of mechanism building, improving the supervision system, strengthening preventive
education, etc. Meanwhile, the Company advocates fair competition, and resolutely efforts in pursuit of competitive advantages
through unethical or illegal commercial practices.

Integrity Mechanism Building
In order to build an environment of fair competition and create a cultural atmosphere of anti-corruption and upholding integrity,
the Company has formulated and strictly implemented multiple regulations, including the Internal Control Management System,
the Integrity Management System, the Business Ethics Management System, and the Management Regulations on Handling
Employee Violations throughout the world, under which the internal audit department, being responsible for anti-corruption andanti-fraud efforts, actively promotes the efforts of building and implementing anti-corruption, anti-bribery, and other businessethics-related systems. Meanwhile, the Company has joined the “Trust and Integrity Enterprise Alliance” and established theintegrity blacklist with several renowned enterprises.
To employees

Publicity and
Education●

Integrity posters, and publicity of warnings using internal and external corruption cases●

Release reporting channels and encourage reporting●

Include anti-corruption education and oath-taking in induction training for new employees●

Arrange regular integrity education activities and watch integrity videos

To suppliers●●●

Sign theCommitment
to Integrity and
Self-discipline

Screen for
Association
Relationships

Gift Declaration
andManagement

Integrity Talk

●

●

●

●

Add a separate topic at the supplier meeting to advocate honesty and integrity to suppliers
 end emails to suppliers on major holidays to reiterate Huaqin’s requirements on integrity, selfS
discipline, and anti-commercial bribery

Publicity Training on Warnings of Corruption Cases

Publicity Comic Poser
for Internal Integrity
Publicity

Complaints and Whistleblower Protection

Integrity Publicity toExternal Suppliers

Reporting Channels

The Company clearly prohibits employees from taking illegal remunerationin any form, such as kickbacks or commissions, from customers or
suppliers by any means, or bribing those in business dealings with theCompany or public officials of judicial and administrative agencies. All
employees have the right to report unethical behaviors to senior officersof the Company. The Company accepts complaint information conducts
investigation in accordance with the Management Regulations on Handling
Employee Violations, and handles the case in accordance with legal
procedures once the reported information is verified.

report@huaqin.com

18516617679

18516617679

 ormulate annual supplier visit plan and conduct face-to-face communication to advocateF
integrity to suppliers equire employees at key positions and new employees of the Company, subsidiaries,R
and affiliates to sign the Commitment on Integrity and Self-discipline, incorporating integrity
management as one of the important tasks in daily management

Registration

 equire suppliers to sign the Supplier Commitment on Integrity and Self-discipline, managing
Rsupplier integrity as a red-line issue
New employees fill in the Employee Declaration Form of Association Relationships, and all
employees regularly declare and update their association relationships every year
Newly contracted suppliers sign the Commitment Letter of Huaqin Affiliated Suppliers andregularly declare and update the affiliation relationship every year●

Establish a Gift and Cash Gift Registration Form to standardize the management and audit of gifts●

Pre-appointment talk with cadres●

Integrity warning talkIntegrity Management Methods

Acceptance

Investigation

ReportingArchiving management

Process of Handling Complaints and Reports
The Company promises to keep the confidentiality of information about the whistleblower, protect their identities, or grant
appropriate rewards; it is prohibited to conduct any direct or indirect retaliation against whistleblowers. Whistleblowers, whenfeeling or experiencing retaliation, can directly seek help from the Company, and the Company will take specific measures toprotect the whistleblower and manage relevant information in a strict manner.

Fair Competition
The Company strives for fair and honest commercial competition and strictly prohibits efforts in pursuit of competitive advantages
through unethical or illegal commercial practices. The Company prohibits stealing proprietary information, processing trade
secret information obtained without the consent of owners, or inducing current or past employees of other companies to disclose
relevant information. The Company advocates that every employee shall respect and fairly treat the rights of the Company’s
customers, suppliers, competitors, employees, and other stakeholders, and prohibits any employee from acquiring unjust interests
by manipulating, concealing, abusing privileged information, misrepresentation material facts, or other illegal trading acts.

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureInformation Security and Privacy Protection
Huaqin strictly abides by laws and regulations including the Cyber Security Law and the
Personal Information Protection Law, and formulates and implements institutional documents
such as the Basic Policy for Information and Huaqin Information Security Manual. Whilesafeguarding its own information security, Huaqin respects and protects the privacy of
customers, employees, and other stakeholders. Moreover, the Company has passed ISO 27001
information security management system certification.
The Company strictly abides by the Personal Information Protection Law, the Data Security
Law, and other laws and regulations in personal information collection, authorization, protection,etc. It has formulated the Management Procedure for Personal Information Security Protection
Huaqin and Its Subsidiaries
to effectively control the Company’s risks in personal information security and fully guarantee
Passed the ISO 27001
the personal information security of employees, customers, suppliers, and other stakeholders.
Information Security Management
System Certification

Supplier Management andControl

Protection of Customer Privacy

Network Security Management

●

●

●

Internal audit on information security: In 2023, the internal audit on information security detected 48 issues, whichhave been rectified and closed at 100%. The audit efforts played a significant role in promoting the identificationand protection of the Company’s information assets, the detection of potential information security threats, theenhancement of employees’ security awareness, and the continuous improvement of business processes
Network security attack and defense drills: Conducted a total of 6 network security attack and defense drills
throughout the year, covering all of the Company’s external network assets, in which a total of 123 security
vulnerabilities were detected, while high-threat vulnerabilities were fixed within a period of 3.37 days on average.
The drills improved the practical abilities and emergency response abilities of security personnel and enhanced
security awareness
Data backup: Defined in detail the backup objects, responsible persons, operation steps, frequency, mode, storage
media, naming rules, retention period, and validity test cycles. In 2023, completed 22 level-1 application backups,

including 1,210 incremental backups and 264 full backups; and 63 level-2 application backups, including 3,465
incremental backups and 756 full backups

Scientific
Scientific Governance
Governance

Information Security Culture
Building

41●

Role Model of the
Responsible Company

Green and Low-carbon

Healthy Ecosystem

EndingThe Company organized the information security promotion month campaign, conducted information security
examinations and a total of 9 offline activities in Shanghai, Wuxi, Xi’an, Nanchang, and Dongguan. We also joined withcustomers to conduct entertaining information security promotion activities, covering approx. 2,750 time-persons.
With these efforts, all employees’ information security risk identification ability and awareness were improved. This
campaign was finally crowned with complete success.

●To prevent internal and external network attacks and intrusions, the Company identified and organized 3 anti-phishingemail training sessions, covering a total of 1,755 person-times. We also conducted training and examinations on
information security for confidential projects and confidential areas, covering 19,615 person-times. The pass rate forall participants was 99.7%. 17 pioneering teams and 30 outstanding individuals were honored.

Information Security Management MeasuresIntellectual Property Protection
With great importance attached to innovative R&D and intellectual property protection, Huaqin actively promotes patenting of innovative
R&D technologies and continuously improves the size and quality of patent layout. The Company has established a sound mechanism
for intellectual property protection and formulated and implemented the Regulations on the Management of Intellectual Property Rights
to standardize the requirements of project risk management and control, review requirements and procedures of intellectual property
applications, intellectual property rewards, etc.
Meanwhile, the Company signs the Commitment Letter of Intellectual Property Rights with suppliers, requiring suppliers to promise thatthe materials, products, or technologies provided directly or indirectly to the Company shall not infringe the legitimate rights and interestsof any third party in or outside of China.
During the reporting period, the Company was rated as a National Intellectual Property Demonstration Enterprise by the StateIntellectual Property Office, and three senior engineers were rated as Pearl Engineers by Pudong New Area.

Key Performance

11 overseas patent applications

11 overseas patent applications

5 PCT applications
12 patent applications

6 patents for designs

for designs●●

Perform strict background checks on 100% key positions with access to customer information, and require projectlevel key positions to sign project-specific commitments or confidentiality agreements
Specify the storage location and handling permissions of customer-related documents, deploy an encryption systemfor document encryption, prohibit all copying permissions for mobile storage through a terminal control system, andstrictly prohibit employees from sending the Company’s materials to personal mailboxes

During the reporting
period, the Company

192 patent

filed

applications forutility models597

the Company
was newly granted

237 patents for

new

433

utility models

patent applications

including 377 patentpatents

179 patents for inventions

applications for inventions●●

Suppliers shall sign a confidentiality agreement before entering into cooperation. In 2023, we completed an on-site
information security examination on 17 suppliers at the introduction stage
Perform information security supervision and inspection on key suppliers at least once a year. In 2023, a total of 47
key suppliers went through such supervision and inspection, which detected 689 problematic points, where 97.2%
of such problematic points have been closed●

All suppliers entering the Company must hold a valid identity certificate to prevent unauthorized entry●

Strictly restrict all physical and logical accesses conducted by suppliers

42

As of the end of the reporting period,

5,295

intellectual

1,596

property licenses

licenses

1,137

23

effective

invention patent licenses

licensesDuring the reporting period,
the Company conductedcopyright

21

intellectual property

training sessions,overseas patent

covering

620

participants.

43

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening
Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending44

45

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingEnvironment Protection

Green Operation

Huaqin strictly abides by national laws and regulations including the Environmental Protection Law, the Environmental Impact
Assessment Law, the Administrative Measures on Ecological and Environmental Standards, etc., and has formulated theManagement Regulations for Environmental Protection Facilities, the Accountability Regulations for Environmental Protection,
the Environmental Supervision and Control Regulations, the Emergency Plan for Environment Incidents, and other systems topromote the standardization of the Company’s environment management.

In order to promote the concept of green operations within the Company and create an environment-friendly and energysaving working environment, the Company has posted environment protection signs in the office area to disseminate
important information on resource conservation and environment protection to employees. Meanwhile, the Company
encourages employees to use renewable resources, reduce paper waste, save water and electricity, classify wastes, etc.

Management System
Huaqin has formulated the environment management policy of “green and environment protection to ensure sustainable
development”, and employed multiple methods and tools, including “daily management, reverse improvement, and systemmaturity” to formulate the “EHS 2026” plan, so as to promote effective implementation of environmental management efforts.
Participation of all employees in activities for environmental protection improvement
Extensive implementation of green processes to greatly reduce stages generating wastes at the factory

2025
Environment
2024

Pass the ISO 14001 Environmental Management
System Certification at the Company level
Environment monitoring results meet standards
Reduce water demand and consumption, so as toreduce wastewater generation and discharge

2026

Signs Posted by the Company for Advocating Green Office and Green Meeting

Render all elements harmless
Benchmark green factory
Whole-process visible, controllable,
traceable environment protection

Three-year Plan of Environment Management
Key Performance

No environmental penalty during the reporting period

As of the end of the reporting period, all the manufacturing centers, Shanghai
R&D Center, and Wuxi R&D Center of the Company have passed ISO 14001
Huaqin Passed ISO 14001
environment management system certification.
Environment Management
System Certification

Case: Advocating energy consumption management and control to enhance employees’ awarenessof energy conservation and consumption reduction

Xi’an R&D Center advocated energy-saving and emission-reduction measures in the office area. When leaving
unoccupied areas, employees shall proactively turn off energy-consuming equipment, such as air conditioners,
lighting, conference room equipment, laboratory equipment, etc. to eliminate unnecessary energy waste. In addition,
the Company also strictly controlled the set temperatures of air conditioners in the office area, keeping it at 20℃ ±1℃
in winter and 26℃ ±1℃ in summer. In 2023, the electricity consumption was reduced by approximately 114,163 kWh.

Case: Time management and control of floodlighting for efficient use of energy

Xi’an R&D Center adjusted its building facade lighting in real-time to achieve flexible management and reduce thetotal energy consumption while ensuring the effects. This saved approximately 1,800 kWh of electricity in total from
October to December 2023.

46

47

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureEnergy Management

Scientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingCase: Energy-saving technical transformation to disseminate the green concept of the company

Nanchang Manufacturing Center carried out energy conservation and consumption reduction activities, calling on all
employees to strive for energy conservation and consumption reduction with their wisdom and strength to achieveboth economic performance and environmental benefits for the Company. During the reporting period, Nanchang
Manufacturing Center collected 237 energy-saving suggestions and completed 90 energy-saving actions.

Lean energy management is an essential path for Huaqin
to follow towards carbon neutrality. The Company has
formulated and implemented the Energy Management
System in accordance with national energy policies andenergy management standards, and continuously explores
opportunities for energy improvement, energy efficiency,
and expansion of renewable energy in consideration of
the Company’s actual production and energy consumption
conditions, hence facilitating intelligent energy management
towards the objectives of carbon neutrality.

Key Technical Transformation Projects

Completed pressure reduction of air compressors in July 2023: Communicated with the equipment
departments in workshops to identify the air supply pressure requirements at terminals; in addition to thepressure reduction effects of the equipment and pipelines, reducing the front-end air supply pressures of aircompressors stage by stage to reduce the load of the main engine.

Nanchang Huaqin Electronic Technology Co., Ltd.,a subsidiary of Huaqin, passed the ISO 50001
Energy Management System Certification

Energy Conservation and Emission Reduction
The Company continuously enhanced management and investment in energy conservation and emission reduction. It acquireda digital energy management platform to monitor energy usage dynamics and electricity consumption trends in an intelligent
manner, analyze opportunities for energy conservation, and promote the efficient implementation of measures for energy
conservation and emission reduction.

Before improvement

After improvement

The air compressors consumed

The air compressors consumed

reducing the electricity consumption by

1,121,800

969,000

916,600

kWh per month on average fromJanuary to June 2023

kWh per month on average
from July to December 2023

kWh in 2023

Case: 5G+ intelligent energy consumption management cloud platform enhanced digital managementof energy emission reduction

The Company adopted a 5G+ intelligent energy
management cloud platform in Nanchang No. 1
Manufacturing Center. Over 5,000 monitoring points
were deployed around the factory to monitor the realtime power consumtion in the park. This can control
power consumption in the park by means of meterreadings, energy consumption monitoring, and alert
for electricity consumption management, so as tokeep aware of energy usage, energy distribution, andactual carbon emissions in real-time and make targeted
adjustments. The Company plans to adopt this projectin Nanchang No. 2 Manufacturing Center to further
strengthen the Company’s capabilities of digital energy
management.

Installed time switches for large equipment in workshops in July 2023:
Use time-controlled switches to control large equipment in workshops
during rest periods and holidays to reduce electricity consumption instandby modes.

5G+ Intelligent Energy Consumption Management
Cloud Platform

The Company regularly organizes all parks to share energy-saving programs and project progress on a weekly basis andpromotes the replication and expansion of outstanding cases. During the reporting period, the Company implemented a total of
15 major energy-saving projects covering all manufacturing centers and implemented 312 energy-saving management projects
and 71 energy-saving technical projects in four R&D parks and five manufacturing parks.

Completion of pipe combination for air-conditioners in September
2023: The separate water pump pipes of five buildings are combined,
so that two of the buildings share one water pump, while the other threebuildings share one water pump in summer (June to September) and twowater pumps in winter (October to May).

saving electricity consumption by

126,000

kWhof electricity in 2023

This reduced electricity
consumption by

841,200
in 2023

kWh

48

49

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureCase: Waste heat of air compressors recycling and utilization
The original hot water supply equipment in the dormitory building of Dongguan No. 1 Manufacturing Center was an
air heat pump with high energy consumption. After identifying this issue accurately, the Company adopted a solutionof recovering air compressor waste heat, so that the waste heat from the operation of the air compressor is converted
by a waste heat recovery device into heat energy for heating water. This achieved energy recycling and saved about
150,000 kWh of electricity throughout the year.

Role Model of the
Responsible Company

GreenGreen andand Low-carbon
Low-carbon

Scientific Governance

Healthy Ecosystem

Ending50

Case: Intelligent upgrade on boilers host

In 2023, Wuxi R&D Center carriedout an intelligent monitoring
project for boiler hosts. It installed
intelligent control sensor deviceson the boiler hosts to monitor theoperating parameters on a web
page and mobile phone in realtime, so as to promptly adjust the
number of units in operation andset temperatures, which effectively
reduced gas consumption.

112,969 cubic meters
decreased by 48% year-on-year

58,326 cubic meterswhich is 54,643 cubic meters
less than 2022
The gas consumption in 2022

The gas consumption in 2023

Clean Energy
Pipelines for Waste Heat Recovery

Waste Heat Recovery System

Case: Modified the cooling system of the smt reflow furnace for energy saving and emission reduction

The Company firmly promotes the use of clean energy. It continuously develops rooftop solar photovoltaic projects and explores
effective methods to reduce dependence on conventional energy by using clean energy equipment, direct purchase of green
electricity, and purchase of green certificates. In 2023, the Company further increased the proportion of clean energy in use,
hence implementing the concept of green development with practical actions.

6.63%

In order to further improve the efficiency of energy conservation and emission reduction, Dongguan No. 1
Manufacturing Center carried out a technology upgrade of the reflow furnace in the SMT workshop by replacing theoriginal air cooling system with a more efficient water cooling system. After implementation, this improvement measuresignificantly reduced energy consumption to keep heat emissions in the workshop under effective control. During
the reporting period, the 12 reflow furnaces in the SMT workshop of Phase 4 saved approximately 540,000 kWh ofelectricity.

1.72%

1.70%
2021

2022

2023

Proportion of Clean Energy Used in the Last Three Years
Key Performance
As of the end of the reporting period, the Company had

56

rooftop solar photovoltaic projects in operation andones under construction

generated photovoltaic electricity ofNameplate power for a single unit: 5.5kw

On-site measurement status reference data

14,320.7mWh in 2023

The projects in operation, with an
installed capacity of

19.5

MW

which is equivalent to reducing GHG emissions by

8,167.1

tons

51

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending52

Clean Technology Products
CleanTechnology
Products

New energy
vehiclesPhotovoltaic Project of Nanchang No.
1 Manufacturing Center

Phase III and Phase IV Photovoltaic Projects of Dongguan
No. 1 Manufacturing Center

Photovoltaic Project of Wuxi R&D
CenterPhotovoltaic Project of Wuxi R&D
CenterEnergy efficiency improvement

Phase I and Phase II Photovoltaic Projects of Dongguan
No. 1 Manufacturing Center

Heat dissipation
technologies formachine rooms

Product Description
The Company developed a comprehensive
solution to improve the energy efficiency
for new energy vehicles, so as to improveenergy utilization efficiency, increase
battery endurance capability, and facilitateenergy transition for zero carbon of theindustry
In view of the increasing computing
power and energy consumption densityof computer rooms, the Company useda more efficient and energy-saving coldplate/immersed liquid cooling solution
to work out a more energy-efficient
centralized power supply solution forcabinets; moreover, this solution can meetboth the requirements for the constantly
increasing computing power of data
centers and the requirements for efficiency
improvement in energy consumption

Data center
power supply

By incorporating the transformation of clean technologies into our strategy, Huaqin actively promotes innovation in clean
technologies and catches the significant opportunities from clean technologies. The Company continuously combines its
expertise with the national strategic initiative of ecological civilization and its own business development needs to makeinvestments in batteries, energy storage, power, etc., carry out R&D in energy efficiency improvement and industrial automation,and make great efforts to promote the R&D and innovation of clean technology products, technology breakthrough, andapplication for relevant intellectual property rights.

During the reporting period

RMB

78.00

million in clean technologies

Energy-efficient
products

109

intellectual property rights related toclean technologies

Whole-cabinet cooling plate design:This product is based on a rack server solution, in which thehigh-power consumption chip adopts a circulating cold plate
cooling solution, while the entire cabinet adopts a centralized
power supply; the advanced heat dissipation solution andefficient power supply solution work together to reduce thePUE of the computer room and improve the reliability andstability of the entire machine.

The Company selects efficient power
supplies and adopts optimal solutions andarchitectures to achieve optimal energy
efficiency and reduce electric energy loss

This standard redundant power supply design is in line with
the Intel x86 architecture, supports input from all power grids
around the world, meets the conversion efficiency requirementof 80 plus 96%, and meets the 2024 standard of EU for server
power supplies.
DC-DC power supply:
Light-load high-efficiency, automatic phase switch, and othertechnologies were employed to achieve ultra-high efficiency
of DC-DC conversion, and the new vertical power supply
technology significantly reduced energy loss on transmission
lines, hence ensuring efficient energy utilization.

and was granted

74

intellectual property rights

related to clean technologies

Made in-depth performance R&D efforts
to increase battery ranges and reduce
power loss, so as to create products withadvantages in power consumption control

By dissecting, implementing, and validating power
consumption strategies for PC products from the software's
lower-layer design to the upper-layer system applications,
we dedicate to create PC products that equipped with stable,
reliable, and long-lasting battery life core technologies.
Long-term storage POS products:
Adopted the ship mode circuit design to fully cut system power
when the POS machine product is turned off, which greatly
reduced the shutdown leakage current, reduced electricity
consumption, and increased the storage period
Using recyclable materials for products:

Resource
conservation

Key Performance

applications forHighly integrated to contain multiple systems including
the vehicle body, air conditioning, thermal management,
etc. to reduce overall wiring harness and reduce energy
consumption; high- and low-voltage power supply andenergy management to effectively improve battery endurance
capability and safety performance.

Optimization of Power Consumption Tuning Software System:

Clean Technology Opportunities

filedIntelligent vehicle control unit (VCU):

Titanium CRPS 2000w server power supply:

Photovoltaic Project View

the Company invested over

Key Cases

Productswith recurring
properties

Explored opportunities for recycling andreusing waste materials by technicalimprovement in products, so as to reduce
raw material consumption

Used recycled plastic particles and recycled aluminum in the
housing of tablet computer products. Meanwhile, adopted aremovable battery solution in the new tablet project in linewith the new EU regulatory requirements to facilitate material
recycling of electronic products.

The Company has established the Guangdong Intelligent Terminal Industrial Design Institute, which adopted the “platform +enterprise” operating model to create a design innovation ecological chain of “platform + investment + incubation + ecology”. We
have established industry-university-research cooperation relationships with Zhejiang University, Harbin Institute of Technology(Shenzhen), the Chinese Academy of Sciences, Central South University, and other units to jointly carry out industrial design
theoretical and technical research and cultivate technical support capabilities, build rich technical experience in industrial design,intelligent manufacturing, and other fields, and work with all parties in society to promote the R&D and exchange of clean
technologies in the clean technology field.

53

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureWater Resources Management

Sustainable Use of Water Resources

Enhance awarenessof water conservation
through training,
posting leaflets, etc.

Strengthen Daily
Managementof WaterConsumption

Role Model of the
Responsible Company

Healthy Ecosystem

Ending

54

The waste water of the Company is mostly domestic sewage and industrial wastewater generated during production from thetwo precision manufacturing centers, namely Huayu Precision and Xiqin Precision. For domestic sewage, the Company has
adopted appropriate and effective treatment technologies and procedures and entrusted a qualified third party for monitoring atleast once a year to ensure compliance with discharge standards. For industrial wastewater, the Company adopted responsible
treatment methods and recycling processes to ultimately transport and dispose of the waste liquids effectively. During thereporting period, the total wastewater discharged by the Company was 2,459,600 cubic meters.
Calculation of wastewater discharge

With great importance attached to the impact of its operations on water resources, the Company has taken various measures,
including optimizing water-use appliances, installing water-saving equipment, and strengthening water management, to reducewater consumption, improve water efficiency, and reduce waste.

Strengthen
Publicity
on WaterConservation

Green
Green andand Low-carbon
Low-carbon

Sewage and Wastewater Management

Huaqin has established and put into operation a water resources management system to promote the innovative applicationof water-saving technologies and wastewater treatment technologies, enhance the awareness of all employees for water
conservation and wastewater treatment and recycling, reduce water consumption from the source, and promote the efficient use
of water resources and the development of the circular economy.

Promptly replace
aged water supply
pipes, install or
replace with watersaving faucets, strictly
prohibit leakage, andavoid water flowing
for a long period oftime

Scientific GovernanceRegularInspection of
Water-saving
Appliances in
Public Facilities

Use automatic
open-close watersaving appliancesin public restrooms,
and conduct regularinspections to ensure
the normal operationof such facilities

Establish an
inspection
mechanism andconduct regularinspections

RegularInspection* Purchase volume of water for R&D centers and manufacturing centers * 80%; wastewater from the precision manufacturing centers is not discharged
externally.

Case: Enhance governance and recycling efforts to protect water resources and the environment

The two precision manufacturing centers of the Company, namely, Huayu Precision and Xiqin Precision, strictly abide
by national environment protection regulations and local requirements. They built classified diversion pipelines in eachproduction line to discharge waste liquid and waste water to the corresponding collection pools at the wastewater
treatment station for a thorough treatment of the waste water, which is reused only after reaching the standards ofrecycled water. Concentrated water from the reuse system went through reduction treatment and was eventuallytransferred to the hazardous waste disposal stage or evaporation system in a safe manner. The entire process isunder control to protect the environment of water resources to the maximum.

Waste and Recycling
In order to reduce the negative impact of the Company’s operations on the surrounding environment, Huaqin continuously
improves requirements on waste and emission management, strictly follows various environmental regulations and standards,
and is committed to effectively reducing waste, exhaust gas, and noise through a series of management measures, hence
creating a better environment.

Control of Waste Discharge

Control of Exhaust Emission

Classify solid wastes generated
during the production process
in accordance with the National
Catalogue of Hazardous Wastes,
Identification Standards for
Solid Wastes, and other national
standards

Install oil smoke purifiers in thecafeteria for discharge only
after treatment

Control of Noise Emission

Methods of Water Conservation
Case: Water-saving practices to use water resources in a sustainable manner

In order to thoroughly implement the concept of water
resources protection, the Company designed andposted water conservation signs at various water use
points in the Company to remind employees of water
conservation all the time. Meanwhile, the Company
adjusted water washing valves, so that the outflow ofwater washing valves is reduced while meeting normal
demands of water utilization. This reduced water
consumption by reducing the water outflow per unit time.

Hand over solid wastes to qualified
third parties for waste treatment instrict compliance with requirements
Require each factory to establish
a solid waste account to maintaindetailed records of waste type,amount generated, means oftransportation, treatment method,and other information

Collect production waste gas ina waste gas treatment tower fordischarge only after treatment
with activated carbon
Perform regular maintenanceon the treatment tower
Engage a third party to test
whether the waste gas isagainst standards every year

Select equipment with lessnoise
Put existing noisy equipment
together in the powder room
Build walls for isolation
Perform regular equipment
maintenance to avoid abnormal
noise due to equipment faults
Engage a third party to test
factory boundary noises every
year

Posting Signs Advocating Water Conservation

Control of Solid Waste, Waste Gas, and Noises

55

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureWith great importance attached to the responsible disposal of solid waste,
the Company continuously advocated the advanced management concept ofzero landfill waste. We enhanced management and control in the selectionof disposal suppliers, waste classification, waste recycling, waste reuse,
waste reduction, etc. to effectively improve the solid waste conversion rate
and resource utilization rate. Solid wastes that cannot be recycled are treatedin a scientific and reasonable manner to minimize the impact thereof on theenvironment. During the reporting period, Nanchang No. 1 Manufacturing Centerand Nanchang No. 2 Manufacturing Center have passed the UL 2799 zerowaste landfill certification.

Scientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending56

Case: Training on solid waste management to get familiar with requirements on standardized
management

In 2023, Nanchang No. 2 Manufacturing Centerorganized and implemented special training on solid
waste management, covering the description of solid
wastes, requirements on standardized managementof general industrial wastes, and requirements onstandardized management of industrial hazardous
wastes; moreover, the training specified acts inviolation of regulations for solid waste collection,
storage, transportation, treatment, and management
to help employees get familiar with the requirements
on standardized management of solid waste disposal.

Training on Standardized Solid Waste Management

Green Products and Designs
Activated Carbon Treatment Device

A Subsidiary of Huaqin Passed the UL 2799 Zero Waste Landfill Certification
Huaqin is committed to optimizing product and packaging design while ensuring product safety and quality, so as to minimize
unnecessary use of materials and use environment-friendly green materials first. By reducing the volume of shipment packaging
and paper consumption, we effectively reduced waste emissions to relieve environmental pressure.

Key Performance
During the reporting period, the Company’s manufacturing centers achieved waste gas and noise
emissions100%

in compliance with standards.

Case: Feasibility study of recycled material application to improve environment-friendlinessof products
In 2023, we organized a special study to systematically verify the feasibility of using recycled materials. On the basisof maintaining compliance with standards, we are using recycled materials in the housing of tablet computer products,
which effectively improved the environment-friendliness of products to meet the demands of customers and end users
for sustainable 3C products.

Case: Diversified efforts for waste management and control to reduce solid waste generation

Dongguan Manufacturing Center has formulated
the Regulations for the Protection of Warehousing
Products, which clearly stipulates the standards forpallet recycling and reuse. Moreover, it invested
a large number of resources and technologies tomodify, recycle, and reuse pallets at the production
site to reduce the amount of solid waste generated.
Meanwhile, the Company actively advocatedrecycling turnover boxes to improve the efficiencyof resource utilization.

Type ofenvironmentfriendly
materials

Feasibility Study ofRecycled Material
Application

On-site Pallet Recycling

Recycling of Turnover Boxes

Performanceand yield are
not lower thanconventional
materials

Proportionof recyclable
materials

Opening

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureCase: Adopting wiping paper with a width of 200mm to reduce resource consumption
In 2023, Dongguan Manufacturing Center refined the stencil wiping payer required in the device production processfrom two width levels of 250/300 mm to three width levels of 200/250/300 mm and replaced 80% of the wiping papersof the original width with the 200 mm width wiping paper. This resulted in the replacement of 192,000 rolls during
the year, reducing wiping paper waste by approximately 16% and reducing the total waste volume by approximately
541.44 kg.
Before Improvement
General-purpose 250/300mm width stencil
wiping paper

After Improvement

Scientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingHuaqin sets high standards for itself in implementing RoHS, REACH, WEEE, POPs, TSCA, California 65, PFAS, and otherglobal regulations and customer requirements, and has formulated and properly updated the Hazardous Substances Control
Standards and Huaqin Regulations for HSF Inspection, Management, and Control. With strict controls implemented in the entire
process covering product development, material procurement, production and manufacturing, and shipment traceability, we canensure product safety and compliance through material certification, test certification, sampling inspection in mass production,etc. During the reporting period, all the manufacturing centers of the Company have passed the QC 080000 certification.

R&D

In 2023, the Company carried out a packaging material improvement
project to optimize the entire packaging process in aspects of material
selection and packaging box designing. We selected more environmentfriendly and lightweight materials and improved the packaging box
structure and design to minimize the use of unnecessary packaging
materials, which greatly reduced waste generation downstream.

Before Improvement

Case: Design lightweight packaging materials to reduce waste generation

Procurement

Material Selection
Replace gray paperboard with corrugated paper, which reduced theweight of packaging materials by 30-40g

DesignReduce the weight of carton boxes by using fewer dividers

Production

Direction of Designing Improvementfor Lightweight Packaging

Sales

Select materials in accordance with project-specific environment protection standards,
excluding non-compliant hazardous substances.

The Company has established a strict cooperation mechanism with suppliers, underwhich the standards for hazardous substances are issued through the SRM system torequire suppliers to comply with relevant regulations in identifying and managing the use ofhazardous substances.

The Company strengthens supervision over production lines and tests incoming materials
for hazardous substances to avoid incoming hazardous substances.

The Company provides detailed information on product materials and composition tocustomers to notify them of the safety and compliance information of the products.

Whole-process Hazardous Substance Control

Case: 100% recyclable packaging solutions
The Company continuously makes in-depth measures for the R&D of sustainable packaging in aspects of paper,
plastics, ink, etc. After studying effective methods to increase the recycling rate of packaging, we have created asolution of 100% recyclable packaging, which has been applied in multiple product models.

Surface Process

Inner Boards

UV varnish oil layer

Soft varnish

Recycled gray boards

Clarifoil film 		

PLA film

Paper pulp tray box

Packaging Paper
Recycled paper

Recycled chipboard

Inks
FSC-certified recycled paper

Plan ink		

Solution of Sustainable Product Packaging

58

Hazardous Substance Management

About 80% of products were replaced with
200mm width stencil wiping paper

After Improvement

57

Mineral-free ink

Huaqin and its Subsidiaries Obtained the QC 080000 Hazardous Substances Process Management Certificates

59

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureRestricted Substance Management
During the reporting period, the Company updated the Hazardous Substances Control Standards to version 8.3 based on
regulations, industry standards, international conventions, and customer requirements on hazardous substances, which covers

89 prohibited substances, 330 restricted substances, and 16 substances subject to declaration. The Company signs a

Statement of No Prohibited Substances with customers, clearly promising not to use any substances that are explicitly listed asprohibited during product production, processing, and supply chain management.

Scientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending

60

Management on Hazardous Substance of Suppliers
The Company has developed a functional module for environmental protection in the quality management system independently
to release the latest regulations and the Company’s latest control requirements on hazardous substances to all suppliers.
Suppliers are required to sign an environment compliance statement before supplying materials, promising that the materials
supplied shall be free from any prohibited substances. In addition, the Company provided environmental protection training for
suppliers at least once every year to ensure material compliance from the beginning, so as to reduce the risks of hazardous
substances in products.

List of Prohibited, Restricted, and Declared Chemical Substances
Category

In 2023 (New Substances (Groups))

Prohibited

Mineral oil; PFHxA and its salts and related substances; Methoxychlor; Dechlorane; Phenol, isopropylated,
phosphate (3:1); UV 328; Hexachlorobutadiene (HCBD)

Restricted

Indium phosphide; Benzyl chloride; 4-Chlorobenzotrichloride; Benzenamine, 4-chloro-2-methyl-,hydrochloride (1:1)

Homogeneous Module

Hazardous Substance Base

Chemical Database

Receipt Module

Collect information on all
homogenized materials
to check for risk ofhazardous substances
item by item

Gather all hazardous
substances subject tolaws and regulations forautomatic identificationof harmful substancesby the system

Ensure the accuracy ofmaterial composition
declared from thesource and improvethe efficiency of thedeclaration

Collect environment
protection-relatedmaterials, such as
declarations and lettersof guarantee, etc.,
signed by suppliers

Functions of the Environment Protection Functional Module in the Quality Management System

Declared

Melamine; N-ethyl-2-pyrrolidone; Substituted diphenylamine (SDPA); Phosphoric acid, (1,1-dimethylethyl)
phenyl diphenyl ester; Isodecyl diphenyl phosphate; Di-tert-butylphenyl phenyl phosphate; Triethyl
phosphate; Cobalt; Nanomaterials

Reduction of Hazardous Substances
With the comprehensive elimination of hazardous substances as its long-term objective, the Company takes active measures toformulate and implement plans for the elimination, substitution, and reduction of chemical substances, so as to reduce the useof harmful substances from the source and reduce potential harm to the environment and human health. In 2024, the Company
will take the initiative to plan and formulate a list of substances to be eliminated in the future and a reduction plan and continue
to disseminate information about prohibited, restricted, and declared substances to drive the elimination of harmful substances
throughout the industry chain.

Case: Decrease in Lead Substances to Reduce Lead Pollution

In 2023, the Company took active measures to decrease lead substances in its products. For some products, lead-

Chemical Safety
Huaqin has formulated and continuously updated the Chemical Management Regulations in accordance with the requirementsof relevant laws and regulations, under which it strictly controls chemicals throughout the entire process, including development,
procurement, storage, transportation, use, and disposal.
All suppliers of hazardous chemicals shall affix safety labels in accordance with the General Rules for Preparation ofPrecautionary Labels for Chemicals. The procurement of new chemicals shall be reported to the EHS department, which shallparticipate and assess the procurement to ensure safety in use.

Chemical
adoption andprocurement
requestInboundchemicals
Procurementof chemicals

Emergency
handling ofchemicals

Release ofchemicals
ChemicalstorageUse ofchemicals

containing copper nuts were replaced with lead-free copper nuts, which reduced lead consumption of 14.93 kg in
total, hence reducing lead pollution to create green and healthy products.

Content of Chemical Management Regulations

Chemicalmonitoring andmeasurement

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OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreenGreen andand Low-carbon
Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending62

Case: Drills of chemical leakage to improve emergency response capabilities
Application of Material Number for General Materials
NG
Confirmation by
the applicant’s
manager

Material number
application

Procurement
Department

Create a material
numberRecognition of Important Materials

NG

NG
SamplerequestConfirm therequestThe applicant’s
manager

Provisionof sample
recognition
information

Confirmationof material
composition
list

Environment
protection
requirements

MSDS
confirmation

TDS
confirmation

Environment
protection
requirementson thestorage anddisposal ofhazardous
chemicalsElectrostatic
requirements,
drawings
with size
specifications,colors of thesampleSamplesubmission

Environment
protection
test

ESD test

Small batchverification

Reviewby thedepartment
manager

Create amaterial
numberIn order to ensure employees’ ability to use various
protective equipment and special facilities correctlyin an emergency, Nanchang Manufacturing Center
conducted a chemical leak emergency drill in March
2023. The employees successfully contained andcontrolled leaked chemicals within the duration
required in the drill plan, and collected and disposedof the leaked chemicals. This drill tested theemergency response capabilities of employees andimproved their competence of collaboration among
emergency response personnel, hence providing astrong guarantee for safety in the production of theCompany.

The Chemical Leakage Emergency Response Team Contained
Leaked Chemicals to Prevent Contamination Expansion

Biodiversity Protection
With biodiversity protection incorporated into its long-term plan for fulfilling environmental responsibilities, Huaqin takes active
measures to reduce the impact of its own operations and production on the ecological environment, and continuously plans andimplements ecological restoration and environment governance projects.

Case: Cultivate public welfare forests as a contribution to ecological restoration

Process of Chemical Adoption

Case: Formulated chemical management plans to standardize the use of chemicals

In 2023, Nanchang Manufacturing Center formulated a chemical management target plan at the beginning of the year,
under which it carried out all-around audits and inspections, formulated corresponding improvement measures forpotential problems, and implemented and improved such measures throughout the year.

Safety training for chemical
management personnel

Monthly special inspection onsafe chemical use and storage

Identification and compatibility
evaluation of major sources ofdanger in chemical storage areas

Conduct specialized training
for chemical management
personnel once every half-year

Monthly special inspection
on the use and storage of all
the Company’s units usingchemicals

Update the form of identificationand compatibility evaluationof major sources of danger inchemical storage areas

In the northwest region, which is one of the regions in
China with a relatively fragile ecological environment,
ecological forests are of great significance for improving
the local ecological environment, preventing landdesertification, and protecting water resources. In 2023,
the Company worked with the QingSuo Philanthropy
Development Fund and invested RMB 50,000 toplant a total of 3,500 suitable shrubs in an area of 50
acres, which is named “Huaqin Public Welfare Forest”.
The solution was designed in full consideration of thesite conditions to select haloxylon ammodendron, thelocal tree species featuring salt-alkali, drought, andsandstorm tolerance, which was planted at a ratio of 9:1
according to biodiversity requirements. This effectively
protected local biodiversity as a contribution to theecological restoration and green development in thenorthwest region.

Cultivate the “Huaqin Public Welfare Forest”

Make improvements based on
the inspection results

Project-specific Plan
Germinating Haloxylon Ammodendron Sapling

Germinated Hedysarum Scoparium Sapling

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening
Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

Ending64

65

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureDiversity and Equal Opportunities

Scientific GovernanceGreen and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

Ending66

Case: “Distinctive Female Strength” - Huaqin Women’s Leadership Forum

Insisting on the talent concept of “higher, deeper and boarder”, and pursuing the employer value proposition of “Grow (grow as
you wish), Inspire (Fight to win) and Enjoy (The harder we work, the happier we are)”, we work to create a more equal, diverse,
open and inclusive work environment, which has attracted talents from different regions, fields, and professions, fully stimulatingorganizational vitality and improving effectiveness.

Key Performance

On March 8, 2023, the Company held a Women’s Leadership Forum, focusing on “Distinctive Female Strength”.
Female colleagues from various fields and positions such as HR, administration, marketing, manufacturing, andfinance were invited to share their insights and stories about women’s growth in the workplace. Through the sharingof experiences, we can see their unique wisdom and power. This forum also provided guidance and inspiration forfemale colleagues to gain confidence, unleash their potential, and realize their value.
These excellent female colleagues are professionally skilled and self-confident, contributing their “Distinctive Female
Strength” to the growth and prosperity of the Company.

By the end of the reporting period, the Company had a total of

Female34,949employees

51 and above

29%

0.6%
41 to 50

8.4%
By gender

By age41 to 50

32.5%
FemaleHuaqin Women’s Leadership Forum

30 and below

71%

58.5%

The employees of theCompany are from

7

countries and regions

33

ethnic groups

Employee Composition in 2023

Protection of Employee Rights and Interests
Huaqin complies with labor standards and strongly believes that an enterprise can achieve sustainable development only by
respecting and protecting human rights. The Company strictly complies with international labor conventions and initiatives suchas the Universal Declaration of Human Rights, ILO Core Conventions, UN Guiding Principles on Business and Human Rights,
the Responsible Business Alliance Code of Conduct, Global Sullivan Principles and Social Accountability International Standard(SA 8000), and the applicable laws and regulations in operating locations at home and abroad, such as the Labor Law of thePeople’s Republic of China and Labor Contract Law of the People’s Republic of China. We resolutely oppose the use of childlabor, forced labor, and human trafficking, and prohibit discrimination on the basis of race, religion, gender, nationality, age,pregnancy, or disability in the whole process of management, promotion, and remuneration
To ensure the implementation of our labor management system, the Company has established a triple audit mechanism
composed of internal special audits, customer audits, and external third-party audits (such as the Responsible Business
Alliance), comprehensively covering the supervision of labor-management issues.

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureAdhering to fairness, justice, openness, and equality, the Company promises to provide
equal employment opportunities at the time of recruitment, regardless of ethnicity, race,
gender, region or nationality, social class, political affiliation

Fair
Employment

We insist on equal pay for equal work

Nondiscrimination

No Useof Child
Labor

Employees may make complaints about discrimination, written or oral, to theCompany. The HR and Administration Department shall give a written or oral
reply to complainants within 2 working days after investigation. Meanwhile,
the Company takes effective measures to keep complainants confidential andensures that the complainants will not be retaliated

The Company prohibits the use of child labor in strict compliance with theprovisions of the Regulations on Prohibition of Child Labor of the State Council
and the Labor Contract Law of the People’s Republic of China

Scientific GovernanceGreen and Low-carbon

Trade Union Feedback Channel
Employees contact employee representatives, whocompile information and provide feedback to themembers of the trade union
The member of the trade union contacts the relevant
department for follow-up based on feedback
The member of the trade union promptly provides
updated information to the employee representatives,

3

Key Performance
In the past three years
The signing rate of labor contracts was

100%

During the reporting period,
The signing rate ofcollective agreements was

100%

68

HR Feedback Channelssczx@huagin.com
4008913788 -- 1
(HR complaints and suggestions)
Provide on-site feedback to SSC
service centers

days

Employee Feedback Channels
Employee Engagement and Satisfaction
SurveyEmployees’ Conference

To safeguard the legitimate rights and interests of the Company and its employees, and establish a stable and harmonious labor
relationship, the Company and its employees reach a consensus in accordance with laws and regulations and sign collective
contracts and collective wage agreements, which cover various clauses such as working hours and vacation time, labor safety
and health, protection of female workers, labor insurance and benefits, vocational skills training, labor contract management,
and layoffs, rewards and punishments, contract term and change.

EndingThe Company respects employees’ rights to participate in trade unions, freedom of association, collective bargaining, andequal consultation. We strive to create a respectful and democratic working atmosphere. By continuing to enrich employee
communication methods and improving the union organization structure, we work to provide employees with a goodcommunication platform, carefully listen to their voices and needs, efficiently address their work and life demands, and keep
communication and exchange channels between the Company and its employees unimpeded.

The Company prohibits restricting the personal freedom of employees and opposes any
form of forced labor and harassment

Labor Management Principles

Healthy Ecosystem

Democratic Communication

ensuring a response within

Prohibitionof Forced
Labor andHarassment

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

The Company regularly holds the employees’
conference in October each year. At the conference,
the Company summarizes the completion of tradeunion work for the previous year, democraticallyreviews compliance with major rules and regulations
such as the employee handbook and discipline,
and listens to the feedback and suggestions of
employee representatives

Conduct an employee engagement survey
every two years, and an employee satisfaction
survey every year, covering association
satisfaction surveys, physical examination
satisfaction surveys, settlement satisfaction
surveys, etc., and focus on the voices andsuggestions of employees in both work and life

Establish the HR Service Desk

Establish Satisfaction Indexes

The indexes include satisfaction
with the service desk, service
quality, and complaint handlingeffectiveness, effectively monitoring
the improvement of employee
service quality based on satisfaction
data of various modules publishedquarterly

Provide convenient consultation services
for employees, covering all modules ofHR such as entry/transfer/promotion/
exit, and realize “one-stop service,zero-distance service”; monthly monitor
the satisfaction and dissatisfaction
received by the HR Help Center, etc.,
and promptly request the departmentswith low satisfaction to formulate andimplement improvement measures
Regularly Hold Meetings and Symposiums
with Key Managers/President

Understand the issues of employees, solvethese issues, listen to their demands, andrespond to their concerns

Open the Internal On-line Social Platform
called “Huaqin Moments”

Employees can anonymously raise questions
and suggestions regarding Huaqin’s work,
management, and life on the platform so thatthe needs and suggestions of employees at alllevels can be effectively heard and addressed.

Democratic Communication Activities

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OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

Ending70

Case: Medium and long-term incentive policy to motivate employees to grow together with theCompany
The Company has formulated the medium and long-term incentive policy to motivate employees to grow together with
the Company:
Employees hold 26.91% of the original shares in Huaqin through ESOP.
After listing, the Company implemented the 2023 Restricted Stock Incentive Plan of Huaqin in December 2023,
under which it granted 1,549,400 restricted stocks to 134 middle and senior management and key employees at
50% price, representing 0.21% of its total share capital.
Since 2015, the Company has implemented TUP (Time Unit Plan) for key employees every year. Based on theperformance of the respective year and the changes in the growth of the operating net assets per share for a rolling
three-year period, the Company allocates profits to employees without capital contributions by them, and shareswith key employees with the earnings generated by the growth of the Company, so as to stimulate key employees
to make long-term contributions.

Employee Symposium

97.52%
87.5%

Pension insurance, medical insurance, unemployment insurance, work-related injury insurance,and maternity insurance

86.6%

Last survey

With reference to national labor regulations and relevant industry standards, and based on its business management anddevelopment demand, the Company has formulated and implemented the Welfare Management System and Huaqin Care
Fund Management System. The Company provides all employees with statutory benefits such as pension insurance, medical
insurance, unemployment insurance, work-related injury insurance, maternity insurance, housing provident funds, andsupplementary housing provident funds, as well as statutory holidays such as marriage leave, funeral leave, and annual leave.
We also provide various welfare subsidies such as meal, transportation, and business trip subsidies, as well as commercial
insurance to improve the happiness and satisfaction of employees.

Housing provident funds, and supplementary housing provident funds

90.4%
2023 survey

Employee Engagement Survey

Statutory holidays such as marriage leave, funeral leave, and annual leave

Last survey

2023 survey
In addition to five insurances and one fund, the Company also purchases accident insurance andcommercial medical insurance for all employees annually

Employee Satisfaction Survey

Salaries and benefits

Health Welfare

The Company is committed to providing employees with competitive salaries and has formulated and continuously optimized
systems such as the Huaqin Employee Salary Management System and Huaqin Operator Salary Management System. Witha scientific, fair, and reasonable salary mechanism, the Company motivates employees at all levels and rewards outstanding
employees.

Fixed Salary

Performancebased Salary

Base salary

Quarterly performancebonuses
Annual comprehensive
bonuses

SubsidiesLong-term
Incentive

Meal

TUP

Transportation

ESOP

Seniority

Share incentives

OthersCompensation Structure of the Company

Basic Benefits

Purchase overseas business travel protection plans for employees traveling outside of China, including
accident protection, medical protection, personal property protection, and trip cancellation protection
Plan association activities every year, and offer free optional physical examinations at any time during
the year

Formal employees can apply for wedding gifts and childbirth gifts respectively when getting
married or giving birthFunds for major illness care and subsidies for major accidents are established to provide
timely assistance to employees
Long-service awards are set up to provide long-service prizes and exclusive leave toemployees who reach specific lengths of service

Care Welfare

The Company organizes and distributes various holiday-themed activities and benefits, such as gift
packages on the Chinese New Year, special activities on the Dragon Boat Festival, exquisite mooncakeson the Mid-Autumn Festival, and special activities on the International Women’s Day
Holiday Benefits
and Living
Subsidies

Organize singles’ social events, collective weddings, and family days to share happy moments.
Meal subsidies, transportation subsidies, business trip subsidies, and other benefits
Provide individual income tax subsidies to foreign employees according to the Notice of the Ministry of
Finance and the State Administration of Taxation on Several Policy Issues Regarding Individual Income Tax

71

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureCare for Employees

Scientific GovernanceGreen and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

Ending72

Good workplace

The Company values its human care and cares about employees’ work and life. We strive to create a work environment
featuring mutual trust, inclusion, and respect where employees can feel the warmth of home and enjoy work at Huaqin.

Abundant employee activities

The Company provides employees with diversified canteens, campus-style dormitory environments, and complete park facilities.
The employee canteen considers the special cultural customs of both northern and southern regions so that employees cantaste the flavors of their hometowns. The dormitory area is equipped with facilities such as libraries, parcel lockers, WIFI, laundryrooms, drug stores, basketball courts, and table tennis tables, creating a good rest environment. The garden-style factory
environment has given our employees a stronger sense of comfort and belonging.

The Company regularly holds a variety of colorful entertainment activities, such as birthday parties, basketball games,
anniversaries, and food festivals to enrich employees’ leisure and cultural life, promote communication and interaction among
employees, and strengthen its cultural construction. We encourage employees to actively participate in various activities basedon their hobbies.

Workplace

美食节
Parent-Child Party

Food Festival

Anniversary Celebration

Occupational Health and Safety
Huaqin resolutely upholds the bottom lines and red lines in work safety. We comprehensively fulfill the responsibilities of worksafety and occupational disease prevention and control and strengthen system construction and safety training, aiming to ensure
the safety and health of employees.

Diversified association activities
The Company had a total of 34 interest associations, including 32 sports associations and 2 handicraft art associations, tocultivate employees’ interests and hobbies and enrich their leisure activities. During the reporting period, a total of 20,500
employees participated in interest association activities.

Key Performance
During the reporting period, the Company made achievements as follows:
Fire safety:0

fires and explosions

Occupational health:0occupational diseases

Industrial safety:

0work-related fatalities

External audit:

0

violations

Great Importance to Work Safety
The Company highly values safety risk management. Through safety production management, safety hazard investigation,
safety emergency drills, safety production training, or other ways, we keep improving our overall safety production process andenhance our safety risk management capabilities. To this end, a stable production environment is created.
Badminton Association

Handicraft Art Association
Cycling Association

73

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

OpeningFeatureWork Safety Management

Scientific GovernanceGreen and Low-carbon

Healthy Ecosystem

Ending74

Prevention and Control of Safety Hazards

In accordance with laws such as the Work Safety Law of the People’s Republic of China and Law of the People’s Republic ofChina on the Prevention and Control of Occupational Diseases, and with the work safety concept of “caring for employees andsafeguarding the health and safety of employees” and “resolutely complying with the law and building a work safety defenseline”, the Company has put a work safety management system in place, issuing and implementing such rules and regulations as
the Environmental Safety Officer Management Code and Three Simultaneous Management Code, so as to ensure the effective
operation of work safety and achieve work safety goals.

The Company follows the principles of “putting safety first and placing emphasis on prevention”, and focuses on the inspectionof safety hazards of departments in production. The responsibilities of safety inspection for personnel at all levels are clarified
through daily, special, seasonal, and holiday inspections, and the safety hazard inspection checklist is also filled out, reducing
the risk of safety accidents from the source.

EHS Group
Fire Safety

Occupational Health

SafetyFirefighting equipment and facilities
Key fire safety areas
Personnel emergency response
Daily fire management

Occupational health protection
Occupational health monitoring
Personal protective supplies
Operating environment
improvement
Human-machine engineering
improvement

Equipment safety management
Electrical safety management
Logistics and storage safety
Full-process management ofchemicals
Hazardous operation
control

Key Management Measures for Work Safety
To implement the national work safety guidelines, policies, and regulations, and strengthen protection and achieve work safety,
the Company has established a Work Safety Committee. The management systems such as the Work Safety Responsibility
Code and Responsibility Code for the Work Safety Management Committee have been put in place, ensuring the safety andhealth of employees in work safety. Meanwhile, we pursue work safety standardization management and implement the worksafety responsibility system for leaders at all levels, functional departments, and employees.

Chairperson of the Safety Committee

Vice Chairperson of the Safety Committee

Head of the Safety Committee OfficeMembers of the Safety
Committee

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Executive Officer

Environmental Safety
Officer

Organizational Structure of the Work Safety Committee

Organize at least one
special meeting every
quarter to study andreview the safety workof various departments,and supervise theimplementation of
measures to eliminate
hidden accidents.

Work Safety Head

Organize more than two
safety inspections ineach department every
year

Main Department
Leaders
Organize more than
one safety inspection
every week
Cooperate with
the EHS team in acomprehensive safety
inspection every
month

Organize a special
safety inspection oneach department every
month

Safety Officer

Conduct a safety
inspection every day
Weekly on-site safety
inspection coveragerate reaches 100%,
focusing on the
project safety learning,safety facilities, andcompliance with safety
operating procedures

Organize production
safety inspections
every day

Safety Inspection Frequency and Responsibilities for Personnel at All Levels

The Company has formulated
the Risk Assessment andControl Management Code andother systems, drawn safety
risk four-color maps, posted
safety risk notification boards,
and assisted various factory
areas in identifying, analyzing,and evaluating risks in existingprocesses, public facilities, etc.
With these efforts, the level ofsafety risk prevention and control
has been comprehensively
improved.

Safety Risk Notification Board

75

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

OpeningFeatureCase: Conducting park safety management to create a work safety environment

外来人员安全承诺书为了满足南昌华勤电子科技有限公司安全生产管理要求，保障自身和他人安全，
本人作出如下承诺：

The Company’s EHS Department worked with security personnel
to ensure a safe working environment in the park. To be specific,
the security personnel checks every visitor; if construction workers
enter the park with tools, ESH personnel should confirm whether
they have submitted a construction application form and whether
their construction qualifications meet the requirements. Our aim is
to prevent unregistered and unqualified construction workers fromentering the park for operation. Meanwhile, the construction safetycommitment is also signed.

Scientific GovernanceGreen and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

Ending76

Emergency Response Drills
The Company has formulated the Emergency Response Plan and Work Safety Accident Emergency Response Plan andregularly carries out emergency response drills. Through these drills, we are able to handle possible production accidents in our
production areas in a quick, orderly, and proper manner, and organize timely and effective emergency rescue actions to prevent
accidents or control the spread of disasters. We also keep improving our risk control and emergency response capabilities.

1、本 人已接受过入场安全教育培训，熟知本工种的安全操作规程和安全生产
制度；施工中遵守安全施工强制性标准、规章制度和操作规程。
2、在 作业过程中能做到不伤害自己，不伤害他人，不被他人伤害，不让别人伤害别人。
3、不 违章指挥，不违章作业，不违反劳动纪律，拒绝违章指挥，纠正违章行为。
4、按 规定着装上岗，规范穿戴个人劳动防护用品，会正确使用安全防护设施
和机械设备；未经许可不可擅自拆除或挪用施工现场的各种安全防护设施 、设备和安全警示标志。
5、未 经许可不可从事非本工种作业；不酒后作业，不在非吸烟区吸烟、不赤脚、穿拖鞋、高跟鞋以及短袖上衣或短裤进入施工现场；施工作业中不嬉 戏
打闹、听音乐，不做与工作无关的行为。
6、作 业中不由上向下抛掷物品，不焚烧垃圾，不随地乱扔固体废弃物，不随
地大小便。
7、 本人服从项目领导和安全管理人员的指挥，接受安全管理人员的安全处罚；会报警、会自救、互救，会使用消防器材。
8、 安全知识欠缺时，本人将主动自觉学习或向安全管理人员咨询。

General Command所在单位：

Deputy General Command

承诺人签字：

时间：

年月日

Safety Commitment for Outsiders

Case: Carrying out work safety month activity to make solid progress in work safety
Emergency
Relief GroupIn the “Work Safety Month” campaign in June 2023, Dongguan Manufacturing Center organized activities suchas a comprehensive safety hazard search, a work safety-based garden party, and a safety production knowledge
contest. Frontline employees were encouraged to actively search for unsafe behaviors and conditions aroundthem. These activities have promoted the deep implementation of work safety measures and made solid andstable progress in work safety.

Security Alert
Group

Medical Rescue
Group

Logistics Support
Group

Structure chart of the emergency organization

Comprehensive
Emergency Plan

Special Emergency Plan

On-site Disposal Plan

On-site Disposal Plan on
Electrical Shock Accidents
On-site Disposal Plan on Scald
Accidents
Emergency ResponseAwards Ceremony for the Comprehensive Safety Hazard Search Activity

Subsequent Disposal

Special Fire Accident Plan

On-site Disposal Plan on Object
Strike Accidents

Emergency Support

Special Disaster Weather
Accident Plan

On-site Disposal Plan on Highaltitude Fall Accidents

Emergency Plan
Management

On-site Disposal Plan for Fire
Accidents
On-site Disposal Plan on
Mechanical Accidents
On-site Disposal Plan on
Hazardous Chemical Accidents

Work Safety-Based Garden Party

Safety Production Knowledge Contest

Work Safety Incident Emergency Response Plan

77

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureCase: Carrying out a mechanical injury emergency drill to enhance response capabilities

In May 2023, under the leadership of the Emergency Response Demand, Nanchang No. 1 Manufacturing Center
carried out a mechanical injury emergency drill in the scenario that “a maintenance staff’s hands were caught in
the equipment during maintenance”. The on-site accident handling team, medical rescue team, alert liaison team,and logistics support team completed the drill in an orderly manner based on the on-site situation. At the end of thedrill, the emergency drill leadership team and the heads of various departments (workshops) made a summary andgave guidance opinions for the on-site situation. Through this drill, the emergency rescue skills and comprehensive
response qualities of all employees are enhanced, reducing possible accidents and losses.

Photo of the Accident Alters the Scene

Transporting the Employee to the Hospital with a Stretcher

Work Safety Training

Scientific GovernanceOccupational Health and Protection Training

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

Ending78

Occupational HealthWith a focus on the occupational health and safety of employees, the Company keeps strengthening occupational healthmanagement, conducts health and safety training, and organizes mental health care activities, ensuring their physical andmental health.

Occupational Health Management
The Company strictly complies with the Work Safety Law of the People’s Republicof China, Labor Law of the People’s Republic of China, Regulations on the Safety
Management of Hazardous Chemicals, and other laws and regulations as well as local
policies, steadily improves the occupational, health and safety management system, andactively organized the self-inspection in the safety production process. With these efforts,
we have made constant progress in improving the occupational, health, and safety
management capabilities. By the end of the reporting period, all manufacturing centers,
Shanghai R&D Center, and Wuxi R&D Center of the Company have obtained ISO 45001
occupational health and safety management system certification.

Occupational
DiseasePrevention &Control andTraining

Huaqin Obtained ISO 45001
Occupational Health and Safety
Management System Certification

Regulations: Formulate the Occupational Disease Hazard Detection and Evaluation Management
Code, Occupational Disease Hazard Warning and Notification Code, Occupational Disease Hazard
Project Declaration Code, Occupational Disease Hazard Emergency Rescue and Management Code,and other regulations to reduce the risk of occupational diseases
Training: Offer pre-service and on-the-job training to employees
Publicity: Carry out publicity for the Occupational Disease Prevention and Control Law, postpromotional posters, distribute occupational health publicity manuals, conduct occupational healthand protection training to enhance employees’ awareness of occupational disease prevention, andimprove their self-protection capabilities

The Company actively conducts work safety training and has formulated the Environmental Safety Education and Training
Management Code. By conducting three-level safety training for new employees, training for key heads and work safety
management personnel, training for special operation personnel, training for hazardous operation personnel, and basic
firefighting knowledge training, the Company continuously improves safety awareness and self-protection capabilities of
employees to create a safer and healthier work environment together.

Work Safety Training

Green and Low-carbon

Comprehensive
PhysicalExaminations

Personalized configuration: Workers’ Occupational Health Monitoring File

Full Coverageof Medical
Insurance

Employee insurance: Purchase commercial medical insurance for all existing and retired employees
to provide medical protection for them

Enhanced
Employee
Protection

Institutional safeguard: Issue the Occupational Disease Protection Supplies Management System tostandardize the allocation and inspection labeling of labor and protection supplies, post occupational
hazard notification cards at occupational hazard positions, and equip corresponding protective
equipment.

Multiple examinations: Pre-job, during employment, leaving the job, emergency, post-employment
medical follow-up, re-examination, medical observation, occupational disease diagnosis

Mechanical Injury Emergency and Safety Training

Firefighting Skill Training

Equipment provision and supervision: Equip gas detection alarms, mechanical ventilation equipment,
respiratory protective equipment, safety ropes, and other safety protection equipment and emergency
rescue equipment adapted to the hazardous factors in the operating environment

Measures for Prevention and Control of Occupational Diseases for Employees

79

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

EndingCase: Huaqin organized the “Association Month” campaign, demonstrating youthful vitality andenhancing physical fitness

The Company has established several sports associations and continuously expands its scale to enrich employees’
leisure lives, encourage their participation in sports activities, and enhance their physical fitness. We organized the
Huaqin “Association Month” campaign to encourage employees to go outdoors and demonstrate youthful vitality.

Publicity of the Law on the Prevention and Control of Occupational Diseases

Caring About Physical and Mental HealthTennis Association

Football Association

Basketball Association

Yoga Association

Swimming Association

Billiards Association

The Company has established various sports associations and encourages employees to enhance their physical fitness andpromote communication through sports. We have formulated the Employee Psychological Assistance Plan and organizedactivities such as Sunshine Station to give comprehensive care for employees’ mental health.

Case: Caring about the mental health of employees and alleviating their mental stress

With great importance to the physical and mental health of
employees, the Company developed and implemented thepsychological assistance plan, and organized mental health training,mental health activities, career planning and development, mental
testing, and assessment to help employees relieve stress andenhance their sense of happiness.

Psychological Counseling Activity

80

81

Promoting Sustainable
Management

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability ReportFeatureScientific GovernanceRole
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Green and Low-carbon

Healthy Ecosystem

Ending82

Talent Training and Development
Talent is a key to the development of the Company. Huaqin has always been committed to attracting and cultivating talents.
A group of ambitious business management talents with deep expertise are gathered here and keep improving themselves
through multiple empowerment measures and growth paths while fueling the development of the Company.

Employment Philosophy
In line with Huaqin’s culturalvaluesKey Performance
Talent Philosophy

286,409.5

participants were trained

There was a total of

La

ity
t al

ca dreR e gi o n

he n

s in

al l

the

v ar

ea

cul

io u

de

ti v

sr

on

i on

of

s

l

ts

gt
he
nin
fa
gt
ct
he
ur
ing
trai
ning
tal
ent
s

C
o
ur re
in
gp
ers
onne
l

L ittl e S e q u

oia

n
tre
ps
u
e
an
Ke
m
of

high-tech talents

talentsteContinu
ously cultivae k eyts
Hig
h T-typed Talen

se rv

wi
th
vio
Hu
ra
aq
lg
in’s
uid
elin
es

t
ac
uf
n
ma

Re

ac
Pr
ue
Val

e
re
ag
a
nd
eh
da
lb
tan
ers
na
Und
so
per
as

s
value

tic
e

b u il d i n g

Talentdevelopment
strategy

Huaqin Group Training Systemrs

te a mt a le negnt

a nd reserve

at i

le
Ta

l vi

in
s
ut
on
yo c a tiolStr e ngt

Huaqin pays close attention to talent development and knowledge system construction and continuously optimizes the “selection,use, cultivation, and retention” mechanism for talents. We have established a hierarchical talent training system covering
all employees, with clear classifications and levels, and gradually improved such a system in terms of content, lecturers,
platforms, and systems. We spare no effort to provide employees with ample and equal learning development opportunities andcontinuously deliver professional talents for the steady development of the Company.
ach ang
Na n
xi +
u
+W
i’ a n
+X
ai
in a
gh
h
n
C
ha
u th
lt i p l eSo+mu

Talent Training System

Employment Philosophypi o nainternal training instructors

hi

P ro m o te or ga ni zat

2,201

hours per capita

ocS

training sessions

Assessing ability, and placing ahigher value on potential

Broad-minded, insightful,
speculative, and discerning

There were

11.5

face-to-facehours

Cadre Philosophy

ExpertiseOperations

Management

Professional academy

LPDT ClubIvy Plan

Departmental training

Product Director Club

Cuibai Plan

Business School

Directors

Professional
competence0→N

Wutong Plan

Operation Talents

Future Sequoia Campus Recruitment

New
Employees

Managers

Huaqin Flavour Social Recruitment

Tutorial System
Knowledge Management Platform & Pavilion of Diligence

Talent development strategy

Talent training system

Talent-position Match

323,251
885

Smart, strong, reliable, andopen-mindedwith a training duration totaling

Unity of knowing and doing

A total of

Focusing on performance, andprioritizing individuals fromwinning teams

83

Promoting Sustainable
Management

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability ReportFeatureThe Company has set up a well-developed training system, including an online learning platform that is open to all employees,
and offline professional empowerment activities. The online learning platform spans learning needs in many scenarios suchas cultural integration for newcomers, professional talent capability enhancement, empowerment for business line talents, anddevelopment of cadres. Through the closed loop of “test-learn-practice-examine-evaluate”, online learning can better empower
employees, and get the right people in the right positions. Huaqin is now guiding its business development with data.

Project Objectives

Course System

Learning Modes

Little Sequoia empowerment course:
professional field 0→1

Online: learning map

Difficult topics in professional fields

HR Academy

Offline: Centralized faceto-face teaching basedon the annual planning ofacademies

By combining online and offline methods, the Company’s empowerment training covers the entire lifecycle of employees. Offline
training courses focus on four major lines: newcomer, professional, management, and business lines. After new employees
join, they are provided with corresponding learning content spanning cultural integration, professional capability enhancement,
capacity reserves, and promotion. Meanwhile, their learning quality is continuously improved through the construction of
professional academies and internal trainers, the reference to excellent internal experiences, the introduction of high-quality
external courses, and rich learning formats.
Additionally, the Company has cooperated with more than 20 universities. We have strengthened vocational training, shared
university-enterprise resources, and achieved win-win cooperation through various forms of cooperation such as excellent
engineer programs, internship bases, activity sponsorship, joint training, and Huaqin Cup competitions.

Professionalization
Training

Professional
TrainingInduction training: The training courses encompass aspects such as company culture,
regulations, processes, business, professionalization, etc. These training courses will
be coordinated by either the Learning and Development Department or the regional HR
department, covering both online modules and offline centralized training sessions.
Professional academies: Professional skill training organized by academies, such as
Software Academy, Hardware Academy, Structure Academy, and Test Academy
Departmental training: Professional training is organized by departmental managers
based on job-related professional skill needs

Management
Training

Management training is carried out in a combined form of internal and external training tohelp new cadres adapt to new roles help current cadres improve management capabilities,
and empower reserve cadres

Operation
Training

The training targets include but are not limited to LPDT, market director, high potential
personnel, and core representatives. This training focuses on internal lectures and aims tocultivate the capabilities of the management teamSpecial Training

Green and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

EndingCase: Formulating and implementing all-around talent training plans

The Company has formulated all-around talent training plans to ensure the continuous growth of employees and thelong-term development of the Company. With training plans including “Future Sequoia”, “Wutong Training Course”,“Cuibai Traing Course” and “Ivy Training Course”, we empower employees at all stages.

Future Sequoia Plan
“Future Sequoia”, one of our important talent training plans, is customized for graduates. It aims to cultivate the talent
reserves of the Company and help new employees quickly integrate into the Company and adapt to work througha series of measures. With this plan, a talent team of the Company is established and the organizational vitality is
stimulated.

Wutong Elementary Training Course

Integrate the experience oflearning, capacity building,and talent cultivation in theprofessional field

Professional competence advancement
course: professional field 1→N

FinanceAcademy

Laptop Structure
Academy

Laptop Hardware
Academy

Laptop Software
Academy

Laptop Test
AcademyMarketingAcademyOperation
AcademyProcurement Academy Calculation

Procurement Academy Mobile

Quality Academy Calculation

Quality Academy Mobile

Manufacturing
AcademyIT Academy

Test Academy

Structure Academy

Hardware Academy

Software Academy

Huaqin Professional Academies
Software Academy

Scientific Governance“Wutong” elementary training course istargeted at new managers who joined theCompany within one year. The training
program was designated based on thecompetency model of managers. It aims tohelp new managers quickly acquire basic
management knowledge and skills, andhelp them quickly adapt to new positions
by a combination of training and practice,and through coach guidance, online
courses, and offline intensive courses.

Wutong Plan

Ivy Plan“Ivy Plan” is aimed at high-potential
directors and new VPs of the Company.
It aims to make existing leaders cultivate
new leaders into top management talents
through 18 months of training which is
conducted in combination with training andpractice.

Ivy Plan84

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureWith a focus on the construction of quality talent teams, the Company provides equal promotion opportunities for all employees
and builds transparent and smooth channels for career development. We offer three career paths for our employees to follow:
management, professional, and operation paths, with a total of six job groups. Employees are encouraged to constantly honetheir skills in professional fields and to grow across paths and professions. Employees are also encouraged to tap their potential
and grow with the Company.

Professional PathEndingeTechnical Position

d

Ed

a
uc

t

io n

Assistance toa Specialized
Football Schoolin Xi’an

Gr

Science
Assistance toBingzhongluo
Town Primary
SchoolDeeperBroaderMove toward higher levelsof career development

Deeper into professional
fieldsGain broader professional
experience[Cadre Competition][Professional Promotion][Cross-Position]

Manager - Senior Manager- Director - Senior Director- VP

Backbone - Senior
Backbone - Expert - Senior
Expert - Authority

Within the field - cross the field- cross business - cross region

f
lie
Re
ter
Disas

Higherio

Communication
with and Care for
Autistic Children

Assistanceto Povertyin Nujiang,
Yunan

Visit the elderly
homesMain Scope and Projects of Public Welfare
Key Performance

341,800

in public welfare

Including, RMB

240,000

in rural revitalization funds
benefiting more thanoperated

32

向

西

藏、

云

南

捐

赠

衣

During the reporting period,
the Company invested RMB

public welfare projects

There wereof employees achieved promotions during the reporting period

ctDonation of Little Q
Classroom

Social Welfare

Donation of
Clothes andBooks to Tibet
and Yunnan书

Key Performance

du

As
ak
sist
We
ance
e
h
t
to the Poor andCareer Development Paths

The Company has set up a dedicated platform for performance management, results inquiry, appeal, and communication toensure the transparency and fairness of the assessment process. If the assessment result is appealed, the Company’s HR
system will actively intervene in the analysis of reasons, and various systems will organize the Administrative Team (AT) to makea judgment of performance appeal, and give a reply to employees timely.

Green Poweron Campus

Assistance toDisaster Relief

Career development
paths

The Company implements annual assessments fairly and scientifically to promote the career development of employees. We
have formulated and implemented the Huaqin Employee Performance Management System and Huaqin Operation Employee
Performance Management System, and established a closed-loop management mechanism for performance plan formulation,
performance process coaching, performance assessment, performance result feedback, and performance appeal. Performanceassessments are conducted each quarter based on the completion of performance goals, and supervisors at all levels actively
communicate with employees after the completion of the performance assessment.

Re“Public Welfare
Forest”“Diligence &Reflection” Science
Campaign

Three Career Paths and Six Job Groups

bo n

n

Marketing Position

id

Operation Position

Operating Position

18.1%

Car

Operation Patcht- AProfessional Position

Healthy Ecosystem

86

The continuation and inheritance of public welfare undertakings is an important step for Huaqin to fulfill corporate social
responsibility. Since its establishment in 2011, Huqin Care Fund has always adhered to caring about employees and fulfillingsocial responsibility. With the core mission of “improve people’s communication and life”, we have always engaged in publicwelfare. The Company actively integrates the concept of social responsibility into its daily operations, actively fulfills social
responsibilities, engages in public welfare undertakings, and organizes various activities to give back to society. All of these
efforts contribute to the construction of a harmonious society.

anManagement Position

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Green and Low-carbon

Community Responsibility

Talent Assessment and Promotion

Management Path

Scientific GovernanceHe
alth-aiding Disability

85

662

60,000peoplean average duration ofvolunteer participants

3.22

hours per capita

87

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureCase: Green Power on Campus

Green and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

EndingCase: Revitalizing rural areas, and protecting intangible cultural heritage projects

In response to the strategy of “carbon peaking
and carbon neutrality”, the Company planned
and implemented the “Green Power on Campus”
project, which used solar energy as the source
and combined photovoltaic (PV) and energy
storage to ensure uninterrupted green power
supply to schools in areas with weak educational
resources. This project promoted the realizationof the “National High-quality Education Project”,
and initiated a zero-carbon new campus life.
In March 2023, the Company inspected andaccepted the first-phase project based in Huining
County, Gansu Province, and conducted on-site
investigations and evaluations of the secondphase project there. During the reporting period,
this project generated 76,000 kWh of electricity
accumulatively, equivalent to a reduction of
43.34 tons of carbon emissions, with a total
annual income of RMB 23,200. The installationsite of this system has also become an
educational demonstration point for low-carbon
technology in the region.

Scientific Governance

Based on the rural revitalization project, the Company further established the Dulongjiang Intangible Cultural Heritage
Handicraft Assistance Project in Gongshan County, Nujiang Prefecture, Yunnan Province in 2023. This project not
only helps solve employment problems in rural areas, supports the promotion of excellent traditional culture, butalso contributes to the development and utilization of traditional handcrafts and the development of cultural tourism
industries in Gongshan County.

Photo of the On-site PV Panel
Donation Certificate

Training Completion Ceremony

Case: Inheriting Chinese virtues and caring for the elderly

In October 2023, Huqin organized enthusiastic volunteers in Shanghai, Wuxi, and Xi’an to carry out elderly care
activities titled “Care for the Elderly on the Double Ninth Festival”, and passed on warmth and care to the elderly. Our
volunteers donated milk, toiletries, rice, and oil to Shanghai Beicai Lianxi Nursing Home, Wuxi Xinan Elderly Service
Center, and Xi’an Elderly Apartment, promoting the traditional Chinese virtues of respecting, loving, and assisting theelderly.
Love Library - Donation of Books to Puzhui
Primary School
Communication with and Care for Autistic
Children – Nanchang Ronghe Project

Care for the Elderly on the Double Ninth Festival
Science Popularization Campus Tour

Huaqin Public Welfare Forest - Planting site in Minqin County

88

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role
Role Model
Model ofof thethe
Responsible
Responsible Company
Company

Healthy Ecosystem

Ending90

91

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Ending92

Technology R&D and Innovation

Increased Investment in Technology R&D

With great importance to technical and management innovation, Huaqin increases resource investment in R&D technology, thebuilding of R&D teams, and the expansion of R&D business. Adhering to independent innovation, we actively lay out leadingindustry technologies, and tackle technical difficulties in the industry.

While focusing on enhancing its reserve of cutting-edge technology, Huaqin keeps building innovative platforms, lays out frontier
technology fields, attracts top technical talents, and expands R&D capabilities. We also make continuous efforts to enhance ourcore competitiveness and leading technological advantages, so as to gradually construct a globally competitive R&D layout andmulti-level R&D system.

Innovative Management Process
X-lab
The Company has introduced an Integrated Product Development (IPD) management model. Under this model, we haveestablished an IPD-based management system and end-to-end product development process to promote information flow,cross-domain cooperation, and teamwork. We work to create a “proactively responsible team-based management” model and torealize efficient operation of the organization. These efforts not only support the continuous development of the Company at thesame time of maintaining flexibility and efficiency but also allow more excellent talents to fuel the development of customers andthe Company while they keep improving themselves.
Meanwhile, IPD management reshapes organizations and processes, clarifies responsibilities, and ensures the effective
allocation of human resources in the stages of project establishment and development. The internal resources are integrated
into developing projects for customers. As a result, the process, standardization, and digitization of our R&D management are
further improved.

Department boundaries are broke to establish a mixed team with end-to end(E2E) accountability, and information is shared at all times.

Decision-making is balanced andcomprehensive, representing thebalanced interests of multiple
parties, and the knowledge andexperience from multiple fields areintegrated

The team focuseson products and is
responsible for the
success of products

The total development cycle is short,activities in all aspects are adequate, andcollaboration efficiency is highA structured process, compliance with theprocess, orderly and efficient synergy among
various fields to quickly meet customer needs.

IPD management features

Software andEvaluation
CenterResponsible for the R&D of innovative technologies and application technologies, which
covers five research directions: acoustics, optics, batteries (new energy), thermal design, andmicrowaves, and continuously enhance the technological reserve for productization, so as toachieve the Company’s leading position in cutting-edge technology. During the reporting period,
the Company invested RMB 72,771,200 in X-lab.

Undertake the pre-research of new products and new technologies in the software and evaluation
fields, project human resource support, capacity building, management and delivery of the entire
software life cycle, and achieve business objectives.

Innovation platform construction

Complete Machine
Structure Design

Hardware Design and R&D

Software Design and R&D

All ProductCategories

5ATM&IP68

Multi-platform

Lowe Power
Consumption

Multi-platform

SoftwareArchitecture
DesignSlim and Light
Model

Narrow Bezel

5G

Global Operator
Certification

CameraCalibration

Stability

Gap & Segment
Difference Control

New Material
Development

Thermal Design

Optical Design

Maintainability

SensorCalibration

Advanced R&D Capability

93

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureTo ensure the foresight of technology R&D and the reliability of product quality, the Company has established professional
laboratory resources in Shanghai, Dongguan, Wuxi, Nanchang, Xi’an, and other locations. Among them, the laboratories inShanghai, Dongguan, and Wuxi have successfully passed the laboratory certification of the China National Accreditation Service
for Conformity Assessment (CNAS).

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

EndingWhile developing and cultivating highly skilled R&D personnel and teams, the Company has formulated and implemented theInnovation Incentive Management System and Technology Innovation Management Code and regularly conducts innovation
selection activities to stimulate the innovative vitality of R&D teams.

Key Performance
During the reporting period,
the Company selected a total of

168

paid innovation rewards totaling RMB

5,135,300

innovative projects

Subsidiaries of Huaqin obtained CNAS Laboratory Accreditation Certificate

HardwareLaboratory

Environmental
Reliability
Laboratory

MechanicalReliability
Laboratory

ImagingLaboratory

Power
Laboratory

ESD
Laboratory

Comprehensive
Laboratory

Top 10 Technology

Top 10 Blue Chip
BrandsProfessional laboratory resources
Since the end of 2021, the Company
has initiated the construction of theKnowledge Management Platform(KMS). In this process, we transformthe experience accumulated in products
into potential energy for sustainedadvancement and gain knowledge
advantages to support talent growthand enhance the competitiveness ofenterprise intelligent manufacturing.
In 2023, the Company’s KMS won the2023 China MIKE Award, the Oscar forknowledge management in China.

Patent Innovation

Technological Innovation Selection Activities

Key Performance
By the end of the reporting period,
the Company had shared

34,127

Product Technology
Innovation

Manufacturing
Innovation

Data Dashboard of Knowledge Management Platformpieces of knowledge

established813

collections

realizing the unified knowledge language and cross-departmental sharing and communication.

94

Case: Making a breakthrough in aluminum sheet localization to supply lighter and moreenvironment-friendly products

The year 2023 has also seen a breakthrough in the aluminum sheet localization of the Company in the field ofsmartphone and tablet design. By replacing aluminum alloy with aluminum sheets and plastics, the process becomes
simpler and more environmentally friendly. While meeting performance requirements, the weight of each phone casecan be reduced by 15-20%. Based on the shipment volume of this product category, metal usage can be reduced byapprox. 40 tons annually.

95

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureCase: Joining hands to release a new generation of data center products and service platform

In September 2023, the Company held a press conference for new-generation data center products and service
platforms under the theme of the “Mountain and Sea Plan”. At the conference, the Company released the Taihang
series, an intelligent computing product, the Qilian series, a general-purpose computing product, and the “QinghaiLake” service platform V1.0, aiming to create new high-performance data center products with innovative technology
architecture and full-stack services with ultimate experience.

Scientific GovernanceRole Model of the
Responsible Company

Green and Low-carbon

Healthy
Healthy Ecosystem
Ecosystem

Ending96

Digital Transformation
The Company has established a Digitalization Committee and built a digital system around the Supply Chain Operation Center.
The full-process digital management from demand-side, supply-side to execution-side has been realized, ensuring rapid,
accurate, efficient, and transparent production and operation processes.

Digitalization Committee
Highest Decision-making Body

At the decision-making Level

Digitalization Promotion Group
Decision-making Body

Digitalization Office
Responsible for overall architecture,planning, and risk management

At theexecutionlevel

RAMT in various fields
Responsible for field-level business architecture, solutions, demands, planning, and risk management

Automation

Scaling
Advanced
Manufacturing
Capability

Punctuality

Lean
Manufacturing

At themechanismlevel

IT Internal Digitalization Project Group

BG-level Digitalization Project Group

Business Data Management
Manufacturing Digitalization Project Group

Procurement Digitalization Project Group

Quality Digitalization Project Group

HR/Administration/Legal Digitalization Project Group

Huaqin remains committed to improving
its level of digitization, automation, andlearning, and enhancing production
efficiency and product quality. We aim
to develop advanced manufacturing
capabilities throughout the field ofintelligent hardware.

Finance Digitalization Project Group

Digital Intelligence
Development

Marketing Digitalization Project Group

Product Press Conference

Operation Digitalization Project GroupR&D Digitalization Project Group

Digitalization Project Group

Project Assessment and Incentive, Daily Operation
Management of Projects

Domain Data Owner

Data
Administrator
Owner

Field Data
Owner

Problem-solving Mechanism,
and Exposure Mechanism

Management Regulations (Decision-making, Communication, and Risk Management)

Organization Structure of Digital Management

97

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

MRP | Material Reserves
Fast MRP Plan (within 30mins) to respond efficiently
to customer changes●

Meet complex substitutematerial selection scenarios

SRM

Big Operation Platform
OMP of Supply Chain

Accurate planning, andefficient scheduling

Material
Planning Part

OMS

Order Management

WMS+TMS●

Full-link visual logistics
warehousing

DMS

DemandManagement

Demand-side●

WMS

MRP + APS●

Fine management of the
procurement process

Full-process production processcontrol, leading manufacturing lean
improvement

Logistics

Cross-domain data aggregation,
ensuring stable delivery ofdiversified products by the Company

SRM

SupplyManagement

SchedulingManagement

QMS

Execution-side

TMS

MES+LPS+DIP●

Efficient sourcing, andcompliant procurement

Automatic
Planning

Algorithm + Advanced
SchedulingComplete
BudgetWarehousing●●

Core Planning
Platform

APS | Production Promotion

Supply-side●

FeatureQuality Management

QMS

MES

Production and Manufacturing

LPS

Lean
Manufacturing●

End-to-end processconnectivity, covering
all business●

Data transparency,
improving
management accuracy
and efficiency

DIP

Data Interface
Platform

Operation businesses empowered by digitalization

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

EndingProduct Quality and Safety
Huaqin is committed to becoming synonymous with highquality in the intelligent hardware industry. We have put
a comprehensive product quality management system
in place through precise control in the entire lifecycle.
Meanwhile, the Company actively promotes the digitalconstruction of quality, builds quality management
information systems, and improves quality management
efficiency. In addition, with great importance to publicity ofquality culture, the Company improves quality awarenessamong employees to ensure the effective operation andcontinuous improvement of the quality management
system and provide customers with excellent products
and services.

Quality Management
The Company strictly complies with the Production Quality Law of the People’s Republic of China, and always regards highquality products as one of its long-term strategies. We keep improving the product quality control system, and accurately
control such aspects as product R&D design, raw material procurement, production and manufacturing management, productcirculation, supply guarantee, and after-sales service, so as to create a high-quality company.

Intelligent Manufacturing
The Company has built the Huaqin Intelligent Manufacturing Data Platform under the principle of “unified platform, unified data,
and unified operation”, including the Manufacturing Command Center, Central Control Screen, and Intelligent Decision-making
Center. Further, it has built an intelligent manufacturing system covering data-driven management, data-driven business
transformation, and data-assisted management decision-making, and built a fully visual and controllable digital factory. By theend of the reporting period, the Company accumulated over 25,000 units of automated equipment and over 700 units ofrobotic automation. With the equipment, we can provide customized, flexible, and high-precision automation production andtesting solutions based on customer product characteristics and requirements.

98

Quality Vision

Quality Culture

To

qin

a
Hu
e
k
in
ma
s
ha the ioouTrdw ntmyare ellig
on hne
ind nt sy hig
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try with ty
ali
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do
t
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an
ing
ss
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ific
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firs
ak
on
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mp
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em
en
ts

99

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Ending100

Quantity System Construction

Quality Digitalization

Huaqi’s R&D and manufacturing centers have all passed ISO 9001 quality management system certification, and based on
the customer demand and the Company’s development strategy plan, have passed IATF 16949 international standards in theautomotive industry for quality management, and ISO 13485 medical device quality management system certification.

The Company values digitalization of quality management. We design, construct, update, and iterate quality module information
systems tailored to the industry and our own characteristics. We have established a digital platform for quality management
covering customers, R&D, materials, production, and systems. By adopting quality control models such as interconnection
with business systems, recording quality data capture, data visualization and analysis, online quality measurement, and realtime process progress visualization, Huaqin gradually promotes the interconnection of quality information, paperless quality
inspection, and transparent quality management, comprehensively enhancing the level and efficiency of quality management.

Certificate IATF 0474402
Certificate CN23/30012
The management system of

Dongguan Qinling Automotive
Electronics Co., Ltd.

IATF USI: CKRAZF
Building 3, No.8, Yingbin Road, Dongkeng Town, Dongguan City, Guangdong Province, P. R. China

has been assessed and certified as meeting the requirements of

Version no. 3. Current version updated 23 February 2024

Authorised by
Norman SHENG

Veto Power Authority
Contracted Office : SGS United Kingdom Ltd, Station Road, Oldbury, B69 4LN, UK.
Email : Neil.Hall@sgs.com

This document is an authentic electronic certificate for Client’ business purposes use only. Printed version of the electronic certificate are permitted and will be considered asa copy. This document is issued by the Company subject to SGS General Conditions of certification services available on Terms and Conditions | SGS. Attention is drawn to
the limitation of liability, indemnification and jurisdictional clauses contained therein. This document is copyright protected and any unauthorized alteration, forgery or
falsification of the content or appearance of this document is unlawful.

Page 1 / 2

Dongguan Qinling Automotive Electronics Dongguan Heqin Electronics Co., Ltd., a
Co., Ltd., a Subsidiary of Huaqi, Obtained Subsidiary of Huaqi, Obtained ISO 13485
IATF 16949 Quality System Certification Quality Management System Certification

The Company fully integrates the concept of product quality management into the entire lifecycle covering planning, design,
R&D, production, release, and after-sales, to comprehensively manage and improve product quality.

Product
Development
Process

R&D
Quality

Material
Quality

Production
Quality

Product
Planning

Standard Protocol
Identification andEstablishment

Management ISO 9001 Quality
SystemIT System

Management
SystemDevelopment

Product
Technology
Review

Test Strategy
Management

Material Maturity
Control

Trial
Line
Production
Certification
Quality Control
Environmental
Management System
Occupational HealthManagement System

Project Management
PLM System

DesignValidation

ReleaseIssue
Management
JIRA System

3T Trial Production
Site Support

Sample Sealing
Management

Resource Matching
Risk Management

Medical
Device Quality
Management
SystemChangeManagement

QSA/QPA and
Exception
Management

Production
Ramp-upManagement

After-sales EWPManagement

KPI Monitoring and
Supplier QBR

TQM
Supervision

Mass Production
Delivery Quality
Assurance

Hazardous
Automobile
CSR
Information Safety
Substance
Quality
Management
Management System
Management Management
SystemSystemSystemTraceability
System MES

Exception
Management OA

Document
SystemDCC System

Quality Management Throughout the Entire Lifecycle of Products

Data WarningIntelligent Detection

Mobile Office

Customer Quality
Management

R&D Quality
Management

Material Quality
Management

Production Quality
Management

SystemManagement

Quality Dashboard

Customer KPIManagement

TR Review
Management

Supplier Quality
Assessment

IQC System

RCA System

R&D Quality
Dashboard

FFR/DOAManagement

ChangeManagement

Material Issue
Management

Management ofFirst Five Pieces

Material Quality
Dashboard

Risk
Management

Customized
Material
Management

Routing
Inspection
Management

Document
Management
SystemSupplier Data
Sign-off

Production
Exception
Management

VOC
Management

R&D Issue
Management
Environmental
Management of
Products

Material
Isolation System

Review System

Production
Quality
Dashboard

Lifecycle

TOPN Special Quality
Improvement

Project Quality Scheme Planning

Material
Selection

Supplier Review
and Certification

Factory/Big T
Certification

Planning

Data Analysis
Quality BI

Infrastructure

Huaqin and its Subsidiaries Obtained
ISO 9001 Quality Management
System Certification

Data Visualization

Mass Production-side Issue

EXCLUSIONS : None
3 Year certification is valid from 16 May 2023 until 15 May 2026 and remains valid subject to satisfactory surveillance audits.

Project-side Issue

For the following Scope
Design and manufacture of cockpit Domain Controllers, vehicle display Screen, vehicle telematics-BOX, Vehicle Control Units
Manufacture of printed circuit board assembly (PCBA) and lighting controller

Quality Management Platform Construction

Application

IATF 16949:2016
Edition 1

Business
Architecture

Data Governance

Cloud Services

Master Data
GovernanceAnalysis Data
GovernanceDigital Platform for Quality Management

Empowerment by Quality Culture
To enhance the quality awareness of all employees, the Company puts forward the requirement of “quality rigidity”, holds quality
strategy meetings monthly, and promotes discussions of typical cases in “Quality Appraisal”. Our employees all bear quality
in mind through activities such as quality red and black lists, quality skill competitions, quality knowledge training, continuous
improvement (TOP N special projects, QCC, Six Sigma, RCA, etc.), and quality awards, to build a high-quality guarantee line.

Case: Six Sigma capability building

In 2023, the Company adopted a dual-channel model of “qualification certification + project practice” to carry out the
Six Sigma capability-building project, thereby promoting the improvement of quality operation efficiency and processoptimization. Through daily knowledge push, professional training guidance, special project practice, and Six Sigma
salon, etc., we have created 2 “demonstration-level” achievements of the China Quality Association Six Sigma
Management Black Belt and helped 38 employees obtain the China Quality Association Six Sigma Green Belt/Black
Belt qualification.

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureSince 2008, the Company organized a “Quality Month” campaign every September to promote quality vision, goals, andmanagement policies comprehensively. In the “Quality Month” campaign under the theme of “Quality Concerns Us All and the
Future” in 2023, we conducted a series of colorful quality promotion activities such as VP&LPDT high-quality endorsement,
quality image ambassador, company-side quality knowledge exam, and quality challenge game, aiming to enhance the quality
awareness of all employees.

Key Performance

26

quality image

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Ending102

Customer Service
Huaqin has established a sound customer complaint and after-sales problem handling process, which is promoted by the quality
operation team and the Customer Quality Manager (CQM). The CQM team, as the primary person responsible for customer
satisfaction, leads the handling of customer complaints. Specifically, the CQM team organizes a multi-domain and multi-leveltask force based on the categories and severity of customer complaints, and leads this task force to resolve issues according tocustomer demand. The Project Quality Engineer (PQA) team, as the core personnel of product end-to-end quality management,
leads the handling of after-sales problems. The Company will establish an after-sales exception working group (EWG) with thecollaboration of project, R&D, engineering, quality, and other fields at the early stage of product launch, so as to shorten the time
for resolving customer issues.

ambassadors were selected inthe "Quality Month" Campaign
Supplier

participated in the campaignof employees attended thequality knowledge exam

Quality Month Campaign
under the Theme of“Quality Concerns Us All
and the Future”

Company-side Quality
Knowledge ExamWith a focus on the comprehensive improvement of employees’
professional quality ability, the Company has set up fivebranches under the Professional Quality Academy, and built
a professional quality empowerment system serving thewhole company, so as to provide systematic and customized
quality training for the employees. In 2023, Huaqin’s
Professional Quality Academy designed multi-dimensionalcourses around the development plan and needs of quality
talents, including quality tools and methods, thinking methods
and communication skills, system knowledge and review,
quality rigidity and systems. These courses offer rich andcomprehensive quality knowledge empowerment to employees,
helping quality talents enhance their capabilities.

99%

passedImprovement
Control
Quality
PQM
Engineering PQE

Quality
Operation

Quality
Representative QFDPQA质量运营 CQM

Planning
QBR
Management

During the reporting period,

129

Product Quality Planning Scheme
quality training

sessions were offered

9,663

persons

participated in the training

DemandManagement

SQE

Production Factory

98.7%

Managementof Customer
Complaints

QPM
Development Team3,400+VOCManagement

Quality Engineering

trainees

Customer
Service

RiskManagement

Customer Satisfaction Planning Program

Basic Process for Handling Customer Complaints and After-Sales Issues
Case: Responding actively and efficiently to customer complaints, and investigating relevant issues
In January 2023, the Company received a customer complaint about charging failure issues of a certain terminal
product. The PQA team quickly responded and pinpointed the cause of the problem within the shortest period. To
thoroughly eliminate similar issues from the root, the Company’s Technical Committee organized a comprehensive
inspection of a total of 1,122 common materials across multiple categories and conducted a special quality
management program in new projects to identify risks and validate the 3T importation. With these efforts, similar
issues are avoided completely.

7.82
7.8
7.1
2021

2022
Customer satisfaction survey score

Note: The full score of the customer satisfaction survey is 10.

2023

103

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Honor

Promoting Sustainable
Management

FeatureBy insisting on delivering high-quality products and services, the Company has been widely
recognized by customers. During the reporting period, we received multiple honors such as
Outstanding Supplier and Excellent Quality Awards presented by customers.

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Ending104

Industry Leadership and Cooperation
Adhering to the concept of open collaboration, Huaqin actively participates in industry exchanges and exhibitions, continuously
expands the scope of cooperation, deepens cooperation, and works with all parties to promote the vigorous development of theindustry, making greater contributions to the prosperity and progress of society.

Case: Expanding data product collaboration scenarios, and signing the Memorandum ofUnderstanding with Digital China

AmazonBest Continuous Improvement AwardIn March 2023, the Company signed the Memorandumof Understanding with Digital China. The two parties
agreed to establish a long-term and in-depth businesscooperation relationship in areas such as data center
products, channels, technology, and digital ecosystem
integration. Capitalizing on the advantages of eachother, we work together to broaden the market
layout, develop efficient and collaborative innovativetechnologies and solutions, and create a new
ecosystem for the data center industry.

LenovoLenovoOPPOrealmeQuality Operation Award

Outstanding Quality
Management Award

Project Quality Award

Outstanding Project
Team Award

Signing Ceremony between the Company and Digital China

Case: Creating an ecosystem, and jointly launching specialized gaming devices
The Company deepens its global strategic partnership with Qualcomm. Specifically, they move beyond strategic
procurement relationships and carry out comprehensive cooperation in fields such as laptop platforms and gaming
platforms. More and better-specialized gaming devices based on the new Snapdragon G series handheld gaming
product platform will be jointly launched, enabling players to enjoy their favorite games on different terminals andecosystems.

Case: Industry-research cooperation to empower the new infrastructure of the digital economy

Xiaomivivo

Annual Excellent Quality Team Award

Excellent Quality Award

The white paper Strengthening Digital Infrastructure
for Moving Toward a Future Intelligent World, jointly
produced by the Company and the International Data
Corporation (IDC), was released. Based on years ofindustry insights of the IDC team, the accumulation of
Huaqin in the field of smart hardware, and extensive
research, the white paper systematically and rigorously
elaborates on topics such as “Future Blueprint of theDigital Economy”, “Layout of Digital Infrastructure
Ecosystem”, “Current Development Factors of Data
Centers”, “Opportunities for Full-Stack ODM in New
Industry Models”. Thanks to the white paper, moreindustry forces are gathered to jointly promote theconstruction of digital infrastructure, contribute toeconomic growth, and improve quality and efficiency.

Scan the QR Code to
download the white paper

White paper - Strengthening Digital
Infrastructure for Moving Toward a
Future Intelligent World

105

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureCase: Huaqin Closed Salon of Automotive Electronics

During the 20th Shanghai International
Automobile Industry Exhibition, the Company
held Huaqin Closed Salon of Automotive
Electronics, focusing on “New Species, New
Strength, and New Partners”. Hong Yifeng, thesenior vice president and the general managerof the automotive electronics business unit of
the Company, along with the market, product,
and R&D teams of the automotive electronics,
explored new cooperation models with nearly
60 upstream and downstream partners, so as
to create a new ecosystem for the automotive
industry.

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Ending106

Sustainable Supply Chain
Adhering to the concept of win-win cooperation, Huaqin has established a comprehensive supply chain lifecycle management
process. We place great importance on the development of a responsible supply chain, promote environmental and social
responsibility management and empowerment of suppliers, and work with suppliers to build an honest, safe, reliable, green,and sustainable value chain.

Supply Chain Management

Huaqin Closed Salon of Automotive Electronics

Huaqin is committed to establishing transparent, trustworthy, fair, and sustainable long-term cooperation with stable andreliable suppliers with good commercial reputations. We have put supplier selection standards and access thresholds in place.
Comprehensive assessments and audits are conducted on potential partners to ensure that they meet the business standards
and requirements of the Company.

Case: Attending the Intel IPDC Summit with new products

The Intel Protocol Data Center (IPDC) Summit
was held in Wuhan in September 2023.
The Company was invited to attend as an
ecosystem leader. At the conference, with its
strategic products, the Company shared andexchanged the latest industry trends, productfeatures, new cooperation models, and newtechnology landing solutions with global peers,customers, experts, and media, focusing on theinnovative transformation of Large Language
Models (LLM) technology.

No use of conflictminerals

Quality andsafety meeting
requirements

Protection ofenvironment
Competitive
pricing response
capabilities

Supplier Selection Principles
Observance ofcommercial ethics
Compliance withthe specified
delivery date
Booth of the Company at the Intel IPDC Summit
Respect for laborrightsCase: Attending the Fortune China 500 Summit to discuss “Accelerating Industrial Interconnection”

In November 2023, the Company, as the 213th Fortune China 500 company, was invited to attend the 2023 Fortune
China 500 Summit and participate in the roundtable discussions. At the conference, the Company talked about how
an enterprise can accelerate industry interconnection and promote digital transformation based on its leading industry
advantages and experiences.

Stable businessfoundation
Compliance withlaws, regulations, andindustry specifications

107

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureOperating Requirements for Tier - 1 Supplier Access Management System

Product Technology
Management System· High product technical maturity, and ability to provide reliable product specification test
reports, with the technology management system meeting the Company’s requirements

Product Quality
Management System· Quality Assurance System passed ISO 9001 certification or equivalent certification

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Occupational Healthand Safety Management
SystemDuring the reporting period,
the Company had a total of

2,013

Raw materials

58%· Be listed on the government website with corresponding qualifications

Environmental
Management System· Pass ISO 14001 system certification. If not, a commitment on certification shall becompleted within 9 months· Have no labor and safety violations in the past two years· Be listed on the government website with corresponding qualifications

Corporate Social
Responsibility (CSR)
System· Comply with regulations and RBA requirements, have no violations of labor, fire,
environmental, and safety health regulations, no violations of Huaqin’s CSR red lines(forced labor, use of prison labor, collective labor disputes, mass casualties and injuries,
and violations of business ethics).
· Have no negative records on the IPE website. If any, such records must be eliminatedwithin 6 months.
· Agree to sign the CSR agreement and accept the annual CSR review (online and onsite).
· Not use conflict minerals (tungsten, tin, tantalum, gold, cobalt)·E stablish an information security management organization and operate regularly
Information Security
SystemClassification of tier-1
suppliers

105

new tier-1 ones

· QC 080000 system certificate or documents available· Have no labor and safety violations in the past two years

Equipment

20%

The Company has established the Supplier Red and Yellow Light Management Code and formed a supplier review teamcomposed of business, procurement, development, material quality, information security, and environmental protection
departments. We conduct regular reviews and ratings of suppliers, continuously trace and manage key issues in a closed-loop
manner, and guide suppliers to fulfill their responsibilities, aiming to build a healthy supplier pool.

Huaqin’s engineers
enter the score
additions/deductions for all
performance in therelevant month

Huaqin’s system
automaticallycalculates theindex score

Improvement
completion
Huaqin’s
resource
development
engineers
release theresults
Around the10th to 15th
day of eachmonth

Receiveperformance
results of lastmonth/lastquarter

Uploadrectification
reportEmail + System
Score additions/deductions
Suggestions or
requirements forrectification

Deadline: Last
day of the monthwhen the report
is received

Supplier Improvement Process·D evelop and implement relevant standards, policies, and systems for information security
management·C lassify and manage information assets·S trictly implement the principles of “job relevance, minimum authorization, controlled
approval, and distrust” in the access and use of information assets

108

Raw materials

22%tier-1including· Reliable quality, and able to provide the reliable product reliability test report· Pass ISO 45001 system certification. If not, a commitment on certification shall becompleted within 9 months

Ending

Key Performance

suppliers

Product Environment
Management System

Healthy
Healthy Ecosystem
Ecosystem

The Company has formulated strict Supplier Exit Procedures
and Supplier Blacklist Management System. Once a red line
event occurs, the Company will take necessary measures
to name the relevant supplier in the blacklist, inform it of thespecific reasons and the blacklist handling methods.

Judgmentby Huaqin’s
engineers

YN
Re-upload
until
improvement
completion

109

Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

FeatureSupply Chain Risk Management

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

EndingDigital Management

Tier-1
suppliers

The Company identifies, assesses, responds to, and monitors
various potential risks that may affect the normal operation of the
supply chain, and timely reduce the impact of risks on business. We
aim to ensure the stability and continuity of the supply chain andenhance business resilience and competitiveness.

2,013

Tier-2material/tier2 suppliers

In December 2022, the Company launched the new Supplier Relationship Management (SRM) system. This system further
optimizes the procurement process, improves information accuracy, and enhances supply chain transparency. In July 2023,
the Company introduced corporate social responsibility (CSR) audits into the system, which regularly reminds suppliers andprovides timely alerts to ensure the comprehensiveness and timeliness of CSR audits.

247
Procurement

Supplier Classification Management

Model selection

Technical Review

Forecast(Project Establishment)(Trial Production)(Mass Production)
Forecast
Management

Check whether the material issupplied by the sole supplier,whether there are new materials,
whether there are materials to
be discontinued or technicallyeliminated at the model selection
stage

Re-check risk materials at the timeof trial production preparation andtechnical review, understand trial
production progress, first order,
mass production forecasts, andorder release

Check whether the project has
released forecasts, check therisks of supplier delivery anddelay based on forecast changes,
and formulate risk avoidance
measures

Order
Management

Material Receipt
Management

Emergency occurs

Identify theextent of material
impact, anddetermine long, medium- andshort-term risks
Procurement

Identify the scopeof subsequent
supply andmarket impact

Identify inventory
and future
demand broken
down into days

Identify alternative
resources andpartners’ supply
and demand

Integrate SOP/
plans
Identify subsequent
demandAssess alternative
resources
Identify import of
supply plans
Increase strategic
stocking

Process management:
Real-time updates until
OPEN closure

Risky orders
Decision-making
logistics
VMI/agency/OEM/
in-stockRe-inspection strategy
share/LTA/model
selection, etc.
Supplier rewards andpenalties

Supply chain emergency risk response mechanism

Specific reward andpenalty measures thatcan be implemented

DeliveryManagement

SRM Supplier Relationship Management System Architecture

Supplier Risk Management

Resources

110

SRM System

Supplier
Inventory

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

OpeningFeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Ending112

Supplier Environmental and Social Responsibility Management
Huaqin pays special attention to supplier environmental management and social responsibility and has formulated the Supplier
Corporate Social Responsibility Management Procedures and Supplier Quality Management Assessment (QSA) Introduction
Review Form. The two inspection modules of environmental protection and social responsibility are defined as threshold
modules, with veto power.

Unit

2021

2022

2023

Percentage of tier-1 suppliers who have signed the clauses
containing the environment and labor requirements

%

100

100

100

Number of tier-1 suppliers who have conducted social impact
assessments

number

1,671

1,908

2,013

Labor protection, non-discrimination, and prohibition offorced labor

Number of tier-1 suppliers who have conducted environmental
impact assessments

number

1,671

1,908

2,013

Good welfare and humane treatment

Number of tier-1 suppliers who have been identified as having
actual and potential significant negative social impacts

number000

Number of tier-1 suppliers who have been identified as having
actual and potential significant negative environmental impacts

number

0

0

0

%

100

100

100

Environmental protection

Social responsibility

Clear environmental management structure and responsibilities
Obtainment of all necessary environmental permits, approvals,
and registrations
Satisfactory with the requirements of the material environmental
policy, establish and implement a hazardous substance control
systemResearch and design of green products
Control over pollutants such as solid waste, wastewater, andnoise

Clear social responsibility management structure andresponsibilities
Freedom of association and communication

Production safety, equipment safety, fire safety, chemicalsafety, and occupational health
Observance of commercial ethics

Main audit contents of supplier threshold modules

Percentage of the procurement staff who have passed thesustainable procurement training

The Company requires potential suppliers to complete self-assessments based on the Huaqin Supplier Social Responsibility
Inspection Report Template and organize on-site assessments of corporate social responsibility based on the self-assessment
results. For listed suppliers, the Company follows the Responsible Business Alliance (RBA) Code of Conduct and conducts
online self-assessments and reviews on suppliers annually. We grade suppliers based on scores and arrange on-site reviews
on medium and high-risk suppliers to ensure that they comply with the Company’s ethical and social responsibility standards inoperations, and to promote the long-term sustainable development of the supply chain.

Existing suppliers

SQE Department
Newly introduced
suppliers

FailedReview

ConditionallypassedQualified

Returninformation

Review

Green Supply Chain
In response to international and domestic expectations for low-carbon development and to ensure that the Company achieves
its own “carbon peaking and carbon neutrality” goals, we actively promote the green transformation of the supply chain, andgradually carry out carbon emission management for suppliers. We encourage suppliers to actively respond to international,
domestic and our customers’ environmental protection and carbon reduction goals, carry out relevant management work,
establish and disclose their own carbon reduction plans, and implement them according to the plans.

Follow up CAP until improvement ismade and score exceeds 70

Successively
introduced

Ensure safe transportation,
storage, use, recycling orreuse, and abandonment of
hazardous substances

Public Affairs
Department
The Public Affairs
Department issues
the Huaqin CSR Selfinspection Audit Table

Key Performance

High-risk
suppliers

Annual on-site audit + coaching

Medium-risk
suppliers

On-site review every two years, andself-assessment review every year

Low-risk
suppliers

Self-assessment review every year

Supplier

Supplier social responsibility audit plan

Archive

Track and record scope
1 and scope 2 GHG
emissions, improve energy
utilization efficiency, andreduce energy consumption
and GHG emissions

Identify, manage, reduce,and responsibly disposeor recycle solid waste in asystematic manner

Huaqin’s Green
Requirements for
Suppliers

Conduct routine monitoring,
control, and handling of
exhaust gases as required

Implement water
management plans, record,classify, and monitor water
resources, usage, andemissions, seek opportunities
to save water, and control
pollution channels

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FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy
Healthy Ecosystem
Ecosystem

Transparent Supply Chain

Ending

114

CRS Responsibility Department
In response to the commitments of the RMI Joint
Working Group, responsible for coordinating
regular conflict mineral investigations of suppliers,
not accepting mining activities that could fuelconflicts, and disclosing and reporting on
the use and sources of tin, tantalum (coltan),gold, tungsten, cobalt, and mica in products in
Division
accordance with the Dodd-Frank Wall Street
Management
Reform and Consumer Protection Act.
Responsibilities

To jointly build a fair, open, just, and transparent business environment, and create a clean, upright, trustworthy, and win-win
business atmosphere, Huaqin has signed the Sunshine Integrity Agreement with suppliers. The two parties agree to abide bynational laws, regulations, and relevant policies on integrity and ensure compliance with the requirements of “Six Noes and One
Yes” (i.e., no bribery, no gifts, no conflicts of interest, no falsification, no cutting corners, no fraud, and keeping promises). If a
supplier violates the integrity policy, the Company will blacklist it and cease cooperation with it.

Product Environmental Responsibility
Department
Responsible for the preliminary evaluation of
the components of the raw material samples
provided by suppliers

No Gifts
No Conflictsof Interest

No Bribery

Keeping
PromisesNo
Falsification

During the reporting period, the Company initiated conflict mineral surveys covering all tier-1 material suppliers and received
responses from 310 suppliers, all of whom have a conflict-free supply chain. What’s more, the Company made conflict minerallearning videos, launched them on the SRM system, and sent learning reminders to suppliers, aiming to disseminate basic
knowledge of conflict minerals and guide suppliers in filling out CMRT and EMRT questionnaires. 267 suppliers have learned all
conflict mineral training videos and returned answers to exam questions.

No Fraud

No Cutting
Corners

Supplier Empowerment

Principles of “six noes and one yes”

The Company is committed to supporting the continuous improvement and development of suppliers and has formulated theSupplier Empowerment Process. We also work with suppliers to discuss and determine improvement plans and goals, andprovide them with necessary resources, training, and guidance, thereby enhancing their capabilities. Using this approach, wehave established long-term and stable cooperation with suppliers, and ensure the sustainability and stability of the supply chain.

Key Performance
During the reporting period, the Company signed the Sunshine Integrity Agreement withof Conflict
Minerals

100%

suppliers

Management of Conflict Minerals
Huaqin commits not to support or use conflict minerals, and mineral raw materials of unknown origin such as 3TG metals (tin,tantalum, tungsten, gold) and cobalt. Moreover, Huaqin supports actions taken against conflict minerals by the Responsible
Business Alliance (RBA) and the Global Electronics Sustainability Initiative (GeSI). As a member of the Responsible Minerals
Initiative (RMI) for three consecutive years, the Company promises to comply with the guidelines and standards advocated byit, and jointly promote the improvement and sustainable development of the mineral supply chain. With reference to the conflictmineral guidelines of the Organization for Economic Co-operation and Development (OECD) and the Responsible Business
Alliance (RBA) program, the Company conducts responsible supply chain procurement meeting requirements of Responsible
Mineral Country of Origin Inquiry (RCOI) and Due Diligence (DD). Meanwhile, the Company signs the Corporate Social
Responsibility Commitment with all suppliers, requesting suppliers to ensure that they do not use conflict minerals.
The Company has formulated the Investigation Management System of Conflict Minerals and conducts investigations on
suppliers according to the Conflict Minerals Reporting Template (CMRT) and the Expanded Minerals Reporting Template (EMRT)
questionnaires. To ensure the effectiveness of investigations, the Company analyzes the composition of products and categories
of materials in advance and conducts prior analysis and identification of the contents of questionnaires. Once a supplier isdiscovered to violate regulations, we require it to take corrective measures within the specified period of time. If the supplier fails
to do so, we will cease cooperation with it.

Review ofRequest for
Empowerment Empowerment
Empowerment Empowerment
Planning
Implementation
Needs
Needs

On-siteAcceptance
Review

Initiate
Acceptance
Review

Result Release

Supplier Empowerment Process

SystemOperation
ProcessLabor
Management

Quality

Information
Security

Health And
SafetyConflict
Minerals

Environmental
Protection

Supplier Training Topics

CSR
Management
Standards

Business
EthicsRBA
Requirements

Red Line
Issues

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

Opening

Promoting Sustainable
Management

Scientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingEnding116

Outlook

Key Performance
During the reporting period,
the Company offered a total of

5

Featuresupplier training sessions

Looking back on the year 2023, the Company’s public listing embarked on the commencement of a new chapter for Huaqin.

covering

2,377

trainees

Case: Global Core Partner Conference titled “Joints Hands Together for a Win-Win Future”

Looking ahead, we believe that we fight to win. In 2024, we will strive to achieve sustainable development and long-term
prosperity for the enterprise and constantly engage in environmental, social, and governance fields.
In the environment, we will continue to increase investment in environmental protection, contributing to the national strategy of“carbon peaking and carbon neutrality”. We will actively promote the R&D and application of clean technology, improve energy
and resource efficiency, and develop clean energy facilities to effectively reduce negative impacts on the environment. We will
also play as an industry chain leader and work with upstream and downstream partners to build a green production system andachieve the sustainable development of the industrial chain.
In society, we will always use technology to do good turns, actively undertake social responsibility, and benefit society throughtechnological innovation. We will focus on developing more intelligent and humanized products and technologies to help solve
social problems and benefit everyone’s communication and life. Additionally, we will actively undertake our responsibilities
towards customers, employees, suppliers, and other stakeholders, and give back to society with high-quality products andoutstanding management models.

Global Core Partner Conference of Huaqin was held in
Nanchang in November 2023. At the conference, theCompany awarded more than 80 suppliers who madeoutstanding contributions to product development,delivery efficiency, quality control, and strategiccooperation in 2023. We also encourage more
suppliers to participate actively in the cooperation with
the Company, aiming to achieve industrial upgrades,
promote the coordinated development of ESG, andbuild a symbiotic and win-win ecosystem.

In governance, we will keep improving our governance structure and enhancing our governance level. We emphasize
compliance and transparency of our business operations, always maintain good communication with investors, and reward
them with good corporate performance.
With a bright journey ahead, we will usher in a bright future. We believe that with the concerted efforts of all employees, Huaqin
will continue to move towards new heights and create more value for stakeholders.
Global Core Partner Conference

Case: Offering RBA training to suppliers, and promoting the sustainable development of the
supply chain

In 2023, the Company offered RBA training to material
suppliers. In the training, we introduced the evolution
and specific requirements of RBA and communicatedthe importance of sustainable development and social
responsibility to suppliers. This training improvescompliance levels and corporate responsibility ofsuppliers and promotes the sustainable developmentof the supply chain.

RMA Training for Suppliers

117

OpeningHuaqin Technology Co., Ltd. 2023 Sustainability Report

Promoting Sustainable
Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingEnding118

Key Performance Table
Environmental Performance

Unit

Environmental
protection

Environmental penalty eventsoccurrence

GHG emissions (scope 1)

tons CO2 equivalent

5,217.70

GHG emissions (scope 2)

tons CO2 equivalent

203,335.16

GHG emissions (scope 3)

tons CO2 equivalent

22,108.67

Total GHG emissions

tons CO2 equivalent

230,661.53

GHG emissions intensity

tons CO2 equivalent per
RMB 10,000 revenue

Annual reduction in GHG emissions directly
realized by technological improvements forenergy conservation

tons CO2 equivalent

19,516.86

Gasoline consumption in self-owned vehicles
for official use

L

83,978.19

Diesel consumption in self-owned logistics
freight vehicles

L

99,729.68

Total natural gas consumptionm3

3,390,005.60

Total electricity consumption

Mwh

38,097.09

GHG emissions

EnergyManagement

Water Resource
Management

Waste andRecycling

2023
0

Waste andRecycling

0.0270Electricity consumption per unit productkWh /per unit

Technological improvements for energy
conservation

EA

Electricity savings are directly realized bytechnological improvements for energy
conservation

Mwh

34,222.10

Installed capacity of PV projects put into
operation

Mwh

19.50

Proportion of clean energy utilization

%

6.63

383

m3

Water consumption intensity

m3 per RMB 10,000
revenue

Recycled/reused water

m3

Water consumption per unit productm3 per RMB 10,000
revenue

Annual water savings directly realized by watersaving measuresm3

52,830.00

Total wastewater discharges

m3

2,459,600

Total waste generation

ton

33,699.32

Hazardous waste generation

ton

493.62

3,126,916.99
0.3664
41,966.00
0.0132

ton

33,205.70

Incinerated waste

ton

771.45

Recycled waste

ton

32,763.97

Waste treated in other ways

ton

109.85Stored waste

ton

54.05

Waste recycling rate%

96

NOx emissionskg

808.90

VOCs emissionskg

12,454.30

Social Performance

1.607

Total water consumption

Solid waste generation

Diversity and Equal
Opportunity

Unit

2023

Total employees

person34,949per capita income generation

RMB 10,000
revenue/person244.18Disabled employees

person1

Female employees

person10,030Male employees

person24,919

Employees aged 51 and above

person199

Employees aged 41 to 50

person2,929

Employees aged 31 to 40

person11,364

Employees aged 30 and below

person20,457

Production staff

person18,430

Sales staff

person187

Technical staff

person11,253Finance staff

person272

Administrative staff

person4,807

Employees holding a doctor’s degree

person17

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Promoting Sustainable
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FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingEnding120

Employees holding a master’s degree

person1,303

Number of tier-1 suppliers who have conductedenvironmental impact assessments

number2,013

Employees holding a bachelor’s degree

person8,863

number0

Employees holding junior college diploma and below

person24,766

Number of tier-1 suppliers who have been identified ashaving actual and potential significant negative social
impacts

Han nationality employees

person32,152

Number of tier-1 suppliers who have been identified
as having actual and potential significant negativeenvironmental impacts

number0

Ethnic minority employees

person

2,797

%

100

Coverage of labor contracts%

Percentage of the procurement staff who have passed
the sustainable procurement training

number310

Investment in internal public welfare

RMB 0’000

Number of suppliers who have completed the conflictminerals survey

Employee physical examination coverage%

100

Incidence rate of occupational diseases%

0Work safety violations subject to external reviews

occurrence0

Safety hazard audits

EA

4,671

Rectification rate of safety hazards%

100

Safety emergency drills

session212

Number of work-related accidents

occurrence

12

Number of deaths from work-related injuries

person0

Number of fire and explosion accidents

occurrence0

Investment in employee training and empowerment

RMB 0’000

1,759.34

Total person-times receiving training

person-time323,251

Total training durationhour

286,409.50

Per capita training duration

hour

11.50

Number of internal training instructors

person2,201

Investment in public welfare

RMB 0’000

Including: investment in rural revitalization

Innovation and
R&D technology
Product Quality
and Safety

Diversity and Equal
Opportunity

Protection of
employee rights
and interests

Occupational
Health and Safety

Talent Training andDevelopment

Community
responsibility

Sustainable Supply
Chain

Sustainable Supply
Chain

100
750.15Governance Performance

Unit

2023

Operating revenue

RMB100mn853

Net profit attributable to parent company

RMB100mn

27.07

Shareholders’ Meeting

time

3

Meetings of the Board of Directors

time

6

Meetings of the Supervisory Committee

time

6

Percentage of independent directors

%

33.33

Percentage of female directors

%

22.22

Number of disclosed reports

copy

34

Internal audits

pcs

18

Handling rate of business ethics incidents

%

100

34.18

New patent applications

copy

597

RMB 0’000

24.00

New patents granted

copy

433

R&D investments

RMB100mn

45.48

Accumulated intellectual property applications

copy

7,969

Customer satisfaction survey (out of 10)

score

7.82

Accumulated intellectual property licenses

copy

5,295

Number of tier-1 suppliers

number2,013

Intellectual property training

session21

Percentage of tier-1 suppliers who have signed
the clauses containing the environment and labor
requirements%

Coverage of intellectual property training

person-time620

Number of tier-1 suppliers who have conducted social
impact assessments

number100
2,013

Economic
Performance

Operation of Three
Governing Bodies

Transparencyof Information
Disclosure
Business Ethics
and Anti-corruption

Intellectual
Property Protection

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Huaqin Technology Co., Ltd. 2023 Sustainability Report

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FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingEnding

SA8000

RBA

122

Certification Overview

Park

Operation Entity

Huaqin Technology Co., Ltd.
Shanghai R&D Center
Shanghai Anqin Zhixing Automotive Electronics Co., Ltd.

Xi’an R&D Center

South China R&D
CenterXi’an YEP Telecom Technology Co., Ltd.

Guangdong Hongqin Communication Technology Co., Ltd.
Guangdong Bay Area Intelligent Terminal Industrial Design
and Research Institute Co., Ltd.

Wuxi R&D Center

Dongguan No.1
Manufacturing Center

Wuxi Ruiqin Technology Co., Ltd.

Dongguan Huabei Electronic Technology Co., Ltd.

Dongguan Heqin Electronics Co., Ltd.

Guangdong Qiyang Technology Co., Ltd.
Dongguan No. 2
Manufacturing Center

Guangdong Dongqin Technology Co., Ltd.

Dongguan Qinlin Automotive Electronics Co., Ltd.
Dongguan No. 3
Manufacturing Center

Guangdong Ruiqin Technology Co., Ltd.

Nanchang No. 1
Manufacturing Center

Nanchang Huaqin Electronic Technology Co., Ltd.

Nanchang No. 2
Manufacturing Center

Nanchang Qinsheng Electronic Technology Co., Ltd.

Huayu Precision

Dongguan Huayu Precision Technology Co., Ltd.

Xiqin Precision

Guangdong Xiqin Precision Mold Co., Ltd.

ISO

ISO

ISO

QC

ISO

IATF

ISO

ISO

ISO

ESD

Auto

9001：

14001：

45001：

080000：27001：

16949：

14064-1:

13485:

50001：

S20.20：motive

2015

2015

2018

2017

2013

2016

2018

2016

2018

2014

SPICE

ISO/IEC
17025：2017

BSCI

UL2799

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Management

FeatureScientific GovernanceGreen and Low-carbon

Role Model of the
Responsible Company

Healthy Ecosystem

EndingEnding124

GRI Standard Index
GRI
STANDARD

Disclosure

ChapterPage

Statementof useHuaqin has reported the information cited in this GRI content index for the period from January 1, 2023, to December
31, 2023, with reference to the GRI Standards.

Strategy, policies and practices

GRI 1 used

GRI 1: Foundation 2021

2-22Statement on sustainable development strategy

Message from the Chairman

03

GRI
STANDARD

Disclosure

2-23

Policy commitments

ESG Strategy and Guidelines

16

2-24

Embedding policy commitments

ESG Strategy and Guidelines

16

ChapterPage

Organizational details
2-1

Organizational details

Company Profile

05

2-25

Processes to remediate negative impacts

Protection of Employee Rights and Interests

67, 102

2-2

Entities included in the organization’ssustainability reporting

About This Report

01

2-26

Mechanisms for seeking advice and raisingconcerns

Communication with Stakeholders

19-20

2-3

Reporting period, frequency and contact point

About This Report

01-02

2-27

Compliance with laws and regulations

No Violation of Laws and Regulations/

2-4

Restatements of information

GHG Identification and Inventory

28

2-28

Membership associations

ESG Management System, Business Ethics andAnti-corruption

15, 392-5

External assurance

Independent Assurance and Statement of Opinion

129-131

Stakeholder engagement

Activities and workers

2-29

Approach to stakeholder engagement

Communication with Stakeholders

19-20

Collective bargaining agreements

Protection of Employee Rights and Interests

67

2-6

Activities, value chain and other business
relationships

Company Profile

05

2-30

2-7

Employees

Diversity and Equal Opportunities

65

Material Topics

Governance
2-9

Governance structure and composition

Operation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee

2-10

Nomination and selection of the highest
governance body

Operation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee

31-33

2-11

Chair of the highest governance body

Operation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee

33

2-12

Role of the highest governance body inoverseeing the management of impacts

ESG Management System

13-15

2-13

Delegation of responsibility for managing
impacts

ESG Management System

13

2-14

Role of the highest governance body insustainability reporting

ESG Management System

13-15

2-16

Communication of critical concerns

ESG Management System

15

2-17

Collective knowledge of the highest governancebody

ESG Management System

13-14

2-18

Evaluation of the performance of the highest
governance body

Operation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee

33

2-19

Remuneration policies

Operation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee

33

2-20

Process to determine remuneration

Operation of the Shareholders’ Meeting, Board of
Directors, and Supervisory Committee

33

31

3-1

Process to determine material topics

Analysis of Material Topics

21

3-2

List of material topics

Analysis of Material Topics

21

Economic Performance
201-1

Direct economic value generated and distributed

Key Performance Table

120

201-2

Financial implications and other risks andopportunities due to climate change

Identifying Climate Risks and Opportunities

24-26

201-3

Defined benefit plan obligations and otherretirement plans

Protection of Employee Rights and Interests

70

Management of material topics

Sustainable Supply Chain

106-107

3-3

Management of material topics

Business Ethics and Anti-corruption

39

205-2

Communication and training about anticorruption policies and procedures

Business Ethics and Anti-corruption

39

205-3

Confirmed incidents of corruption and actions
taken

Business Ethics and Anti-corruption

40

Procurement Practices
3-3Anti-corruption

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Anti-competitive Behavior

Scientific GovernanceGreen and Low-carbon

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GRI
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Disclosure

Chapter

Page

305-3

Other indirect (Scope 3) GHG emissions

GHG Identification and Inventory

28

3-3

Management of material topics

Business Ethics and Anti-corruption

40

305-4

GHG emissions intensity

Key Performance Table

117

206-1

Legal actions for anti-competitive behavior, antitrust, and monopoly practices

No Relevant Lawsuits Concerning the Company

/

305-5

Reduction of GHG emissions

Energy Management

50

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), andother significant air emissions

Key Performance Table

117

Materials
3-3Management of material topics

Green Products and Designs

56

Waste

301-2

Recycled input materials used

Green Products and Designs

56

3-3

Management of material topics

Waste and Recycling

54

301-3

Reclaimed products and their packaging
materials

Green Products and Designs

57

306-1

Waste generation and significant waste-related
impacts

Waste and Recycling

55

306-2

Management of significant waste-related
impacts

Waste and Recycling

54-55

Energy3-3Management of material topics

Energy Management

47

306-3

Waste generated

Key Performance Table

118

302-1

Energy consumption within the organization

Key Performance Table

117

306-4

Waste diverted from disposal

Key Performance Table

118

302-3

Energy intensity

Key Performance Table

117

306-5

Waste directed to disposal

Key Performance Table

118

302-4

Reduction of energy consumption

Energy Management

48-50

Supplier Environmental Assessment

Water and Effluents

3-3Management of material topics

Sustainable Supply Chain

106

3-3

Management of material topics

Water Resources Management

53

308-1

New suppliers that were screened using
environmental criteria

Sustainable Supply Chain

112

303-1

Interactions with water as a shared resource

Water Resources Management

53

308-2

Negative environmental impacts in the supply
chain and actions taken

Sustainable Supply Chain

111

303-2

Management of water discharge-related impacts

Water Resources Management

54

Employment

303-4

Water discharge

Key Performance Table

117

3-3

Management of material topics

Diversity and Equal Opportunities

65

303-5

Water consumption

Key Performance Table

117

401-2

Benefits provided to full-time employees thatare not provided to temporary or part-time
employees

Protection of Employee Rights and Interests

68

Protection of Employee Rights and Interests

67-68

Biodiversity

Labor/Management Relations

3-3

Management of material topics

Biodiversity Protection

62

304-2

Significant impacts of activities, products andservices on biodiversity

Biodiversity Protection

62

3-3

Management of material topics

Commitment and Objectives of Tackling Climate
Change27

305-1

Direct (Scope 1) GHG emissions

GHG Identification and Inventory

28

305-2

Energy indirect (Scope 2) GHG emissions

GHG Identification and Inventory

28

Emissions

3-3Management of material topics

Occupational Health and Safety
3-3Management of material topics

Occupational Health and Safety

78

403-1

Occupational health and safety management
systemOccupational Health and Safety

73

403-2

Hazard identification, risk assessment, andincident investigation

Occupational Health and Safety

74

403-3

Occupational health services

Occupational Health and Safety

78

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Worker participation, consultation, andcommunication on occupational health andsafetyOccupational Health and Safety

74

403-5

Worker training on occupational health andsafetyOccupational Health and Safety

77

403-6

Promotion of worker healthOccupational Health and Safety

79-80

403-7

Prevention and mitigation of occupational healthand safety impacts directly linked by business
relationships

Occupational Health and Safety

76

403-8

Workers covered by an occupational health andsafety management system

Key Performance Table

119

403-9

Work-related injuries

Key Performance Table

119

403-10Work-related ill healthOccupational Health and Safety

73

Management of material topics

GRI
STANDARD

Green and Low-carbon

Role Model of the
Responsible Company

Disclosure

Healthy Ecosystem

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Chapter

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Forced or Compulsory Labor
3-3

Management of material topics

Protection of Employee Rights and Interests

67

409-1

Operations and suppliers at significant risk forincidents of forced or compulsory labor

Sustainable Supply Chain

111

Occupational Health and Safety75

No Violations Involving Rights of Indigenous Peoples
by the Company/

Security Practices
3-3Training and Education
3-3

Scientific Governance

Talent Training and Development

Rights of Indigenous Peoples
411-1

Average hours of training per year per employee

Talent Training and Development

81

404-2

Programs for upgrading employee skills andtransition assistance programs

Talent Training and Development

83-84

404-3

Percentage of employees receiving regularperformance and career development reviews

Talent Training and Development

85

Diversity and Equal Opportunity
3-3Management of material topics

Diversity and Equal Opportunities

65

405-1

Diversity of governance bodies and employees

Diversity and Equal Opportunities

65

Non-discrimination
3-3Management of material topics

Diversity and Equal Opportunities

67

406-1

Incidents of discrimination and corrective
actions taken

Diversity and Equal Opportunities

67

Incidents of violations involving rights ofindigenous peoples

Local Communities
3-3Management of material topics

Community Responsibility

86

413-1

Operations with local community engagement,
impact assessments, and development
programs

Community Responsibility

86

81

404-1

Management of material topics

Supplier Social Assessment
3-3Management of material topics

Sustainable Supply Chain

111

414-1

New suppliers that were screened using social
criteria

Sustainable Supply Chain

112

414-2

Negative social impacts in the supply chain andactions taken

Sustainable Supply Chain

111

Customer Health and Safety
3-3Management of material topics

Hazardous Substance Management

58

416-1

Assessment of the health and safety impacts ofproduct and service categories

Hazardous Substance Management

58

416-2

Incidents of non-compliance concerning thehealth and safety impacts of products andservices

ESG Strategy and Guidelines

18

Customer Privacy

Freedom of Association and Collective Bargaining
3-3Management of material topics

Protection of Employee Rights and Interests

67

3-3

Management of material topics

Information Security and Privacy Protection

41-42

407-1

Operations and suppliers in which the right tofreedom of association and collective bargaining
may be at risk

Sustainable Supply Chain

111

418-1

Substantiated complaints concerning breachesof customer privacy and losses of customer
data

No Relevant Complaints/

3-3Management of material topics

Protection of Employee Rights and Interests

67

408-1

Operations and suppliers at significant risk forincidents of child labor

Sustainable Supply Chain

111

Child Labor

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EndingEndingIndependent Assurance and Statement of Opinion

ASSURANCE STATEMENT
SGS-CSTC’S REPORT ON SUSTAINABILITY ACTIVITIES IN THE HUAQINTECHNOLOGY CO., LTD. 2023 Sustainability Report
NATURE OF THE ASSURANCE/VERIFICATIONSGS-CSTC STANDARDS TECHNICAL SERVICES CO., LTD. (hereinafter referred to as SGS) was
commissioned by HUAQIN TECHNOLOGY CO., LTD. (hereinafter referred to as HUAQINTECHNOLOGY) to conduct an independent assurance of the 2023 Sustainability Report (hereinafterreferred to as the Report).
INTENDED USERS OF THIS ASSURANCE STATEMENT
This Assurance Statement is provided with the intention of informing all HUAQIN TECHNOLOGY’s
Stakeholders.
RESPONSIBILITIESThe information in the Report and its presentation are the responsibility of the management, governing
body of HUAQIN TECHNOLOGY. SGS has not been involved in the preparation of any of the material
included in the Report.
Our responsibility is to express an opinion on the text, data, graphs and statements within the scopeof verification with the intention to inform all HUAQIN TECHNOLOGY’s stakeholders, especially theverification of the "Key Performance Table" in the report.
ASSURANCE STANDARDS, TYPE AND LEVEL OF ASSURANCEThe SGS ESG & Sustainability Report Assurance protocols used to conduct assurance are based
upon internationally recognised assurance guidance and standards including the principles ofreporting process contained within the Global Reporting Initiative Sustainability Reporting Standards(GRI Standards) GRI 1: Foundation 2021 for report quality, GRI 2: General Disclosure 2021 fororganisation’s reporting practices and other organisational detail, GRI 3: 2021 for organisation’s
process of determining material topics, its list of material topics and how to manage each topic, andthe guidance on levels of assurance contained within the AA1000 series of standards.
The assurance of this report has been conducted according to the following Assurance Standards:•
SGS ESG & SRA Assurance Protocols (based on GRI Principles and guidance in AA1000)
Assurance has been conducted at a moderate level of scrutiny.
SCOPE OF ASSURANCE AND REPORTING CRITERIA
The scope of the assurance included evaluation of quality, accuracy and reliability of specified
performance information as detailed below and evaluation of adherence to the following reporting
criteria:•
GRI Standards 2021 (Reference)
ASSURANCE METHODOLOGY
The assurance comprised a combination of pre-assurance research, interviews with relevant
employees located at Shanghai Headquarters (located at Building 1, No. 399 Keyuan Road, Pudong
New Area, Shanghai, P.R. China) for onsite assurance, and Dongguan No.1 MFG Center (located at
No.9, Industrial Northern Road, Songshan Lake Park, Dongguan City, Guangdong Province, P.R.
China), Nanchang No.1 MFG Center (located at J No.2999, Tianxiang Road, Nanchang High-Tech
Industrial Development Zone, Nanchang City, Jiangxi Province, P.R. China) and Wuxi R&D Center(located at No.28, Qingyuan Road, Xinwu District, Wuxi City, Jiangsu Province, P.R. China) for remoteinterviews.

LIMITATIONS AND MITIGATION
Financial data drawn directly from independently audited financial accounts has not been checkedback with source data as part of this assurance process.
The onsite assurance scope only covered Shanghai Headquarters of HUAQIN TECHNOLOGY, andremote interviews with the heads of relevant departments of Dongguan No.1 MFG Center, Nanchang
No.1 MFG Center and Wuxi R&D Center. The data for assurance of report information was from theabove scope.
The assurance process only involved interviews with the heads of relevant departments and certain
employees and consultation with relevant documents did not involve external stakeholders.
STATEMENT OF INDEPENDENCE AND COMPETENCEThe SGS Group of companies is the world leader in inspection, testing and verification, operating in
more than many countries and providing services including management systems and service
certification; quality, environmental, social and ethical auditing and training; environmental, social andsustainability report assurance. SGS affirms our independence from HUAQIN TECHNOLOGY, its
subsidiaries and stakeholders.
The assurance team was assembled based on their knowledge, experience and qualifications for thisassignment, and comprised auditors registered with CCAA Registered ISO 9001 auditor, ISO 14001
auditor, ISO 45001 auditor, Greenhouse Gas Verifier, SAI Registered SA 8000 auditor, CSR assuror,
ISO 37001 auditor, etc.
FINDINGS AND CONCLUSIONSASSURANCE/VERIFICATION OPINION
On the basis of the methodology described and the verification work performed, the information anddata in the Report have been verified to be accurate and reliable, and they provide a fair and unbiased
account of HUAQIN TECHNOLOGY sustainability activities in 2023.
The assurance team is of the opinion that the Report has referred GRI Standard.
Reporting Principles
Accuracy
HUAQIN TECHNOLOGY's report content is accurate and can publicly disclose multiple qualitative andquantitative information on performance to stakeholders.
BalanceHUAQIN TECHNOLOGY presented the balance reporting rule in the Report and reported theenvironmental, social and governance issues truthfully.
Clarity
The report uses a variety of expression methods such as text descriptions, data tables, graphics,
photos, etc., and is combined with case analysis narratives to make it easy for stakeholders tounderstand.
Comparability
HUAQIN TECHNOLOGY conducted the statistics and analysis for KPIs, and reported the disclosures’impacts and purposes. In the Report, some data were compared with historical years, which to better
assist stakeholders in evaluating and making decisions about the effectiveness of management
systems.
Completeness
HUAQIN TECHNOLOGY’s report covers the identified material issues and their boundaries, reflecting
the important impacts on the economy, environment and society, allowing stakeholders to evaluate
HUAQIN TECHNOLOGY's performance during the reporting period.
Sustainability Context
HUAQIN TECHNOLOGY demonstrates its efforts in sustainable development from the economic,
environmental and social aspects, and displays these performances in the context of sustainable
development.

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Reader Feedback
Dear reader,
Timeliness
Verification shows that reported data and information are timely and valid during the reporting cycle.
HUAQIN TECHNOLOGY publishes sustainability reports regularly every year starting from 2021,
which has good timeliness.

Thank you for sparing time to read the 2023 Sustainability Report of Huaqin Technology Co., Ltd. To provide you and otherstakeholders with more valuable information and improve our capabilities of performing the ESG responsibility, we are looking
forward to your comments and suggestions.

Reliability
All data and information within the scope of verification can be traced and verified.
Management Approach
HUAQIN TECHNOLOGY's report discloses the management approaches of the selected special
topics.
General Disclosures
HUAQIN TECHNOLOGY's report disclosed some indicators according to GRI 2: General Disclosure
2021.
Topic-specific Disclosures
The specific issues involved in the identified important economic, environmental and social substantive
issues were disclosed in accordance with the requirements of GRI Standards 2021.
Findings and Recommendations
Good practices and recommendations for the Report and management process were described in theinternal management report which has been submitted to the management of HUAQINTECHNOLOGY for continuous improvement.

Multiple-choice questions (Please tick the appropriate box)
1. What's your overall impression on this report?

□ Excellent □ Good □ Mediocre □ Subpar □ Bad
2. What's your overall impression on this report?

□ Excellent □ Good □ Mediocre □ Subpar □ Bad
3. Your evaluation of the structure of this report is:□ Excellent □ Good □ Mediocre □ Subpar □ Bad
Signed:4. Your evaluation of the layout and presentation of this report is:□ Excellent □ Good □ Mediocre □ Subpar □ Bad

For and on behalf of SGS-CSTCDavid Xin
Sr. Director – Business Assurance
16/F Century Yuhui Mansion, No. 73, Fucheng Road, Beijing, P.R. China
Apr. 11th, 2024
WWW.SGS.COM

5. Your evaluation of Huaqin’s overall performance on environmental issues is:□ Excellent □ Good □ Mediocre □ Subpar □ Bad
6. Your evaluation of Huaqin’s overall performance on social issues is:□ Excellent □ Good □ Mediocre □ Subpar □ Bad
7. Your evaluation of Huaqin’s overall performance on governance issues is:□ Excellent □ Good □ Mediocre □ Subpar □ Bad
Open-ended question
Do you have any comments and suggestions for Huaqin Technology Co., Ltd. in performing sustainability work or preparing thisreport?

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