About This Report
About Kaizhong
Precision
ESG Management
Governance
Innovation and
Operations
Environment
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
About This Report
About Kaizhong
Precision
ESG Management
Governance
Innovation and
Operations
Environment
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
About This Report
About This Report
About Kaizhong Introduction Sources
Precision
This Report is the 2025 Environmental, Social, and Governance (ESG) Report The information disclosed in this Report is sourced from the Company's internal
published by Shenzhen Kaizhong Precision Technology Co., Ltd. (hereinafter documents, 2025 financial report, and authentic records from actual operations.
referred to as "Kaizhong Precision," the "Company," or "we"). It discloses the The financial data in this Report is presented in RMB. In case of any discrepancy
ESG Management
Company's practices and performance in environmental, social, and corporate with the Company's annual financial report, the annual financial report shall prevail.
governance responsibility areas to all stakeholders.
Governance
Preparation Basis How to Obtain This Report
This Report is prepared with reference to the Global Reporting Initiative (GRI) This Report is available in both Simplified Chinese and English. In case of any
Innovation and Standards, the Guidance on Social Responsibility Reporting by the China National discrepancy between the two versions, the Simplified Chinese version shall
Operations
Institute of Standardization, the Self-Regulatory Guidance No. 1 for Listed Companies prevail. The electronic version of this Report can be viewed and downloaded
on the Shenzhen Stock Exchange - Normative Operations of Main Board Listed from the Company's official website (http://www.kaizhong.com), or from the
Companies, Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Shenzhen Stock Exchange website (http://www.szse.cn) and CNINFO website
Environment Stock Exchange - Preparation of Sustainability Report, and Self-Regulatory Guidelines (http://www.cninfo.com.cn).
No. 17 for Companies Listed on Shenzhen Stock Exchange - Sustainability Report
(For Trial Implementation) issued by Shenzhen Stock Exchange, and is benchmarked
Society
against the United Nations Sustainable Development Goals (SDGs). Contact Information
Reporting Scope If you have any suggestions regarding this Report, please contact the
Company through the following channels:
Key Performance
Data Sheet Organization: Shenzhen Kaizhong Precision Technology Co., Ltd. and its Address: No. 1 Guihua 4th Road, Longtian Neighborhood,
subsidiaries and branches. Pingshan District, Shenzhen, Guangdong Province, China
Reporting period: January 1, 2025, to December 31, 2025. To enhance comparability Tel:0755-86264859
Indexes and forward-looking relevance, certain content may be traced back to previous years or
may reference the latest publicly disclosed information as of the report's publication date. Fax: 0755-85242355
Release cycle: This is an annual report. Email:ESG@kaizhong.com
Reader Feedback
About Kaizhong Precision
About This Report
Company Profile The Company has established multiple sales offices, R&D centers, and production bases in Shenzhen,
Guangdong, Shanghai, Changsha, Hong Kong, and Taiwan in China, as well as in Germany and Japan.
By achieving localized R&D and production operations, the Company continuously enhances its service
About Kaizhong Shenzhen Kaizhong Precision Technology Co., Ltd. (hereinafter capabilities for core customers.
Precision referred to as "Kaizhong Precision," stock code: 002823)
is a national high-tech enterprise focusing on the research
and development, design, manufacturing, and sales of
core precision components. The Company is committed to Germany
ESG Management
providing customers with integrated solutions for core precision
components. Deeply cultivating key sectors such as new Changsha Heyuan
energy and intelligent driving, automotive electronics, thermal Shanghai Japan
Governance Dongguan Huizhou
management, communications, and consumer electronics,
Shenzhen Taiwan
the Company specializes in the custom development of Hong
Kong
connectors, commutators, and other precision components with
Innovation and
high technical requirements. Its products are widely applied
Operations in new energy vehicles and intelligent driving, aerospace,
communications, consumer electronics, health and medical Sales and R&D Centers, Production Bases
care, smart home and office, and intelligent equipment. Countries Where Major Customers Are Located
Environment Positioning itself in the mid-to-high-end market, the Company
deeply serves numerous leading downstream customers,
including globally renowned clients such as Daimler, Toyota,
Society
Bosch, Denso, ZF, Mahle, Valeo, Mabuchi, Continental, Corporate Culture
BorgWarner, and Ebersp?cher，as well as top-tier domestic
new energy vehicle and power battery enterprises.
Key Performance The Company continues to advance R&D and innovation,
Data Sheet possessing in-house capabilities for the R&D, design, and
manufacturing of precision stamping and bending dies, plastic Kaizhong vision Kaizhong mission Kaizhong values Corporate spirit
injection molds, automated precision machining production
Indexes lines, and automated inspection equipment with independent To become an Continuously create value for Integrity-based Prudence
intellectual property rights, establishing a complete industrial outstanding customers
Customer first Agility
chain capable of delivering integrated solutions for high- enterprise with global Provide good returns for investors
end components to global customers. Relying on advanced competitiveness Realize employee growth and value Goal-oriented Innovation
Reader Feedback
manufacturing technologies and superior product quality, the To create a better Achieve harmonious coexistence
Mutual growth Excellence
Company persists in continuous innovation and has garnered work and life and development with society
extensive recognition from customers. 04
Sustainability Performance and Honors
About This Report Economic performance Governance Performance
About Kaizhong
Operating revenue:RMB2928.35mn Percentage of female directors: 44.44% Proportion of female senior executives: 20%
Precision
Net profit attributable to shareholders of the listed
Proportion of independent directors:33.33% Board member attendance rate: 100%
company: RMB233.60mn
ESG Management
Social Performance Environmental Performance
Governance
Percentage of female employees:34.11%
Total environmental investment per million in Total hazardous waste generated per million in
Average salary per employee: RMB 201.2k
revenue:30% revenue:0.12 tonnes per million
Innovation and
Operations Revenue per employee: RMB812.75k
Total greenhouse gas emissions (Scope 1 & 2) per
Total non-hazardous waste generated per million in
Number of employees in hardship assisted per million million in revenue:31.64Tonnes of CO2 equivalent/
revenue:0.84 tonnes per million
Environment
Ratio of work safety investment to operating Total energy consumption per million in revenue: Total waste recycled per million in revenue:
revenue:0.15% 4.12tonnes of standard coal equivalent 0.46 tonnes per million
Society
Average safety training hours per employee:
Innovation & Operations
Occupational disease incidence rate:0%
Key Performance
Data Sheet
Workdays lost due to work-related injuries per million
in revenue:0.05 Days/RMB 1 million Supplier localization rate: 77.44% Proportion of R&D personnel to total
employees:9.35%
Indexes Number of work-related fatalities per 100 million: 0
Local procurement rate:93.29%
Work-related injury rate (employees):0.19% Number of authorized and valid patents held: 271
Proportion of R&D investment to operating revenue
Reader Feedback Lost time injury frequency rate (employees):0.95
times/million hours (per ten thousand): 2.81% Number of valid patents per million in revenue:0.09
About This Report
High-Tech Enterprise Guangdong Province Innovative Certificate of Intelligent Manufacturing
Certificate Enterprise Capability Maturity Assessment (Level 3)
About Kaizhong
Precision
Top 20 Listed Companies in
the Greater Bay Area for Green
Governance 2025
ESG Management
National-Level Green China Patent Excellence Enterprise with Law-Abiding and
Governance Factory Award Honest Labor Practices
Innovation and
Operations
Environment Outstanding Supplier in China's New Shenzhen Famous Brand Manufacturing Single Champion Outstanding Supporting Award for
Energy Vehicle Industry Certificate of Honor Product the Motor Industry
Society
Research and Technology Centers Academician and Expert Workstations Innovation Practice Bases
Machinery Industry Micro & Special Motor Guangdong Provincial Academician and Postdoctoral Innovation Practice Base
Key Performance
Commutator Engineering Research Center Expert Enterprise Workstation
Data Sheet
Application Demonstration Base, and Industry-
Guangdong Provincial Micro & Special Motor Academia-Research Base of the National Key
Commutator Engineering Technology Research Center Laboratory of Molds
Indexes Guangdong Provincial Engineering Technology Beijing Research Institute of Mechanical and
Research Center Electrical Technology - Micro-forming Technology
Experimental Base
Shenzhen Enterprise Technology Center
Reader Feedback Huazhong University of Science and Technology
Heyuan Municipal Engineering Technology Center Mold Experimental Base
ESG Management
ESG management is the strategic cornerstone for Kaizhong Precision
to achieve sustainable, high-quality development. The Company has
always embedded the concept of sustainable development into its
business management and strategic decision-making. Led by the Board
of Directors, the Company has established a sustainable development
management structure with clear responsibilities and systematic
operations. Through well-defined management policies and procedural
workflows, the Company continuously promotes ESG capacity building
at all levels and integrates material topics into the entire value chain of
strategic planning and business operations. Relying on regular internal
and external communication and performance evaluations, this system is
dedicated to systematically managing relevant issues and continuously
improving governance effectiveness, laying a solid foundation for the
Company's long-term and steady development.
Sustainable Development Materiality Analysis
Management
Stakeholder Engagement Responding to SDG goals
Sustainable Development ESG governance structure
Management Table note: The Company's ESG Structure
About This Report
Sustainable development
About Kaizhong
Precision management policy As the leading and decision-making body for ESG work, it is responsible for determining the
Company's ESG development direction and goals, reviewing and approving major matters such as the
ESG Management Company's ESG governance structure and key policies, and reviewing the Company's ESG report;
Sustainable Development The Board of Directors of Kaizhong Precision continuously monitors
Management global ESG development trends and changes in the macroeconomic
Stakeholder Engagement
environment, integrating ESG management into the corporate
Materiality Analysis 02 Strategy Committee of the Board of Directors
Responding to SDG goals strategy to ensure that the ESG development management policy
is highly consistent with the Company's long-term development
direction. Under the supervision and guidance of the Board, the As the research and guidance body for ESG work, it is responsible for studying major matters
Governance
Company has established a regular assessment mechanism for such as ESG strategic planning and goals and the construction of the ESG management system,
ESG risks and opportunities, incorporating sustainable development and providing recommendations. It also supervises and inspects the implementation of ESG work,
into strategic decision-making and business operations to promote and reviews and submits the Company's ESG-related reports to the Board of Directors;
the steady enhancement of long-term corporate value. At the same
Innovation and
Operations time, by linking executive assessment to key ESG performance
indicators, the Company clarifies the responsibilities and obligations 03 ESG Working Group of the Strategy Committee of the Board of Directors
of senior management in ESG management, thereby driving the
effective implementation of ESG goals.
Environment
Composed of senior management, heads of relevant functional departments, and relevant
Furthermore, through continuous communication with internal and persons in charge of subsidiaries, this group is responsible for implementing the Company's ESG
external stakeholders, combined with corporate strategic planning, development strategy and goals, organizing and arranging the implementation of ESG work by
operational realities, and feedback from all parties, the Company various executive units, understanding the demands, opinions, and suggestions of stakeholders,
Society
systematically identifies risks and opportunities in the ESG field and analyzing material topics, carrying out the information collection, preparation, and disclosure of the
dynamically adjusts its management strategies to ensure that ESG ESG report, and summarizing problems and achievements in ESG work. It also provides feedback
concepts and practices remain in sync with the times. on ESG work and makes recommendations to the Strategy Committee of the Board of Directors;
Key Performance
Data Sheet
Sustainable development 04 ESG Executive Units, composed of various departments and subsidiaries of the Company
management system Assume primary responsibility within their respective areas of duty, responsible for implementing ESG
Indexes
work tasks in accordance with the Company's overall plan and regularly reporting on their execution.
Kaizhong Precision has formulated the ESG Management System
and established a four-tier ESG governance structure with a
Reader Feedback complete framework and clear responsibilities, ensuring systematic In addition, the Company has established mechanisms for internal control evaluation, information
leadership, effective decision-making, and comprehensive execution communication, and external expert support to ensure the continuous improvement of ESG management and
of related work. its deep integration with the Company's overall strategy and operational decision-making.
ESG training Case: Conducting specialized ESG training to solidify the foundation
for compliance management and sustainable development
The Company provides diverse ESG learning resources and systematic training for
personnel at all levels and in different functions, continuously enhancing the overall
About This Report In 2025, focusing on the needs of corporate sustainable development and
organizational capability to deepen the ESG culture and build a sustainable long-
compliance management, Kaizhong Precision invited external ESG experts to
term competitive advantage.
conduct specialized ESG training for the Company's management. The training
focused on interpreting new domestic and international ESG regulatory rules,
About Kaizhong
Precision The Company's ESG knowledge training system key updates to policies, and industry implementation standards. It systematically
covered fundamental topics such as core ESG knowledge, environmental
ESG Management
control, social responsibility, and corporate governance. The training combined
Sustainable Development
Management For decision-making level thematic lectures, key point summaries, and practical explanations to help
Stakeholder Engagement management and employees fully grasp ESG management requirements and
Materiality Analysis
The Company regularly organizes specialized training and seminars focusing the latest regulatory norms. This effectively enhanced their ESG awareness
Responding to SDG goals
and compliance capabilities, promoting the deep integration of ESG concepts
on domestic and international ESG policy trends, double materiality issues,
into the Company's daily business management and solidifying the intellectual
Governance and strategic planning, aiming to enhance the top-level design and decision-
and capacity foundation for the steady advancement of the ESG system and
making capabilities of the Board of Directors and senior management in the
the achievement of sustainable development.
ESG field
Innovation and
Operations
Integrating ESG Management into Business Management
For management and core personnel and Decision-Making
Environment
The Company conducts customized and operational ESG-specific training The Company integrates ESG management into its strategic and daily operational
covering key areas such as ESG concepts, management systems, industry decision-making. For major investment projects, the Board of Directors and
practices, and performance management. This training is dedicated to management consider social benefits and ESG risk assessment as key bases
Society
strengthening the core team's capabilities in strategic execution, risk for their decisions. At the same time, the Company requires the investment team
identification, and collaborative management to integrate ESG factors when conducting financial forecasts, comprehensively
adjusting model variables to achieve responsible and sustainable investment
Key Performance decisions.
Data Sheet
For all employees
Indexes
The Company disseminates basic ESG knowledge and core environmental,
social, and governance topics through standardized courses, knowledge
sharing, and internal communications. This promotes the integration of
Reader Feedback
sustainable development concepts into daily work and culture, fostering an
ESG learning atmosphere with full employee participation
Stakeholder Engagement
About This Report
Based on its business attributes and value chain characteristics, the Company has systematically identified six core stakeholder groups. The Company is committed to
continuously listening to the ESG-related expectations and concerns of all parties through diverse and regular communication mechanisms, and incorporating their feedback
into management improvements and strategy formulation. To ensure effective communication and closed-loop management, the Company has established feedback and
About Kaizhong grievance mechanisms, including a dedicated ESG consultation email and phone line, to promptly respond to opinions or complaints from all parties. It has also set up
Precision
investigation and remediation procedures to continuously enhance its ESG governance level and the credibility of its sustainable development.
ESG Management
Sustainable Development
Management
Stakeholder Engagement
Materiality Analysis
Stakeholder
Responding to SDG goals
categories
Government
Shareholders Customers Employees Partners and regulatory Community and
Governance and investors departments the public
Innovation and
Operations
ESG management Product and service quality Protection of Integrity and Lawful and Achieved Community
Corporate governance Innovation-driven employee rights cooperation operations communication and
development Occupational health Transparent Tax payment in accordance participation
Environment Information disclosure quality
expectations
and safety procurement with the law Rural revitalization
Stakeholder
Risk management and Supply chain security
control Digital and intelligent Vocational training Win-win Responding to national Community public
empowerment and development development strategies welfare contributions
Investor returns
Information security and Compensation and Serving regional development Emissions and waste
Society Innovation-driven welfare benefits management
development privacy protection Green and low-carbon
Anti-bribery and anti- development
Anti-bribery and anti-
corruption corruption Anti-monopoly and fair
competition
Key Performance
Data Sheet
Shareholders' Meeting Customer satisfaction Employee satisfaction Daily business Daily communication and Community engagement
Earnings call surveys surveys communication reporting activities
Communication
Information disclosure Technical exchange Employee grievance Industry exchange Project approvals Public welfare projects and
methods
Indexes conferences and joint channels conferences Government supervision and volunteer activities
Investor development
communication events Regular training Supplier audits, inspections Environmental information
Audits and site visits Employee visits, and training Submission of statistical disclosure
Investor hotline/email/
Hudongyi Customer service, representative meetings Business reports Media interviews and
Reader Feedback training, and daily Corporate culture and negotiations public events
communication team-building activities
Materiality Analysis
About This Report Materiality analysis is a crucial step in Kaizhong Precision's ESG management, aiming to systematically identify the environmental, social, and governance issues most relevant to the
Company's operations and development. The Company references major domestic and international sustainability standards, combined with industry characteristics and business realities,
to conduct a "double materiality" assessment of these issues. On one hand, it analyzes the potential impact of each issue on the Company's financial performance over different periods.
On the other hand, it evaluates the actual and potential impact of the Company's performance on these issues on the environment and society. This process helps the Company to precisely
About Kaizhong
Precision focus its resources, set management priorities, and closely align its ESG strategy with stakeholder expectations and long-term value creation. The specific analysis process is as follows:
ESG Management
Sustainable Development
Management
The Company's Materiality Analysis Process
Stakeholder Engagement
Materiality Analysis
Responding to SDG goals The Company uses the 21 fundamental issues set out in the Shenzhen Stock Exchange's Guidelines as a framework to
systematically scan for issues, incorporating its own business characteristics, value chain impacts, and changes in the internal and
Governance external environment during the year. Through in-depth benchmarking against the disclosure practices of leading industry peers
Issue identification and and the focus areas of major ESG rating agencies, the Company identified and added several key industry and company-specific
peer benchmarking issues, expanding the initial issue pool to 28 items and laying the foundation for a comprehensive assessment.
Innovation and
Operations
The Company systematically collected the concerns and feedback of six core stakeholder groups on various ESG issues through
diverse channels such as shareholders' meetings, supplier audits, employee surveys, and community forums. This process
Environment
Stakeholder communication focused on understanding the qualitative and preliminary judgments of all parties regarding the impact of these issues, providing a
and expectation gathering direct basis for subsequent quantitative assessments.
Society
Impact Materiality Assessment: Internal and external stakeholders were invited to assess the actual and potential impacts of the
Company's operations on the economy, environment, and society from the two dimensions of "severity of impact" and "likelihood of occurrence."
Key Performance Financial Materiality Assessment: External shareholders and the Company's management were organized to assess the potential
Data Sheet Double materiality impact of each issue on the Company's financial performance in the short, medium, and long term from the two dimensions of
quantitative assessment "degree of financial impact" and "likelihood of occurrence."
Indexes
The Company consolidated the results of the double materiality assessment and reviewed them against established thresholds
to finalize a list of material topics requiring priority attention. These were then visualized in a "Double Materiality Matrix," which
Reader Feedback
Issue review and matrix clearly defines the management priority of each issue and provides clear guidance for strategic focus and resource allocation.
construction
List of material topics 10
About This Report
Environmental dimension 5 27
Impact materiality
About Kaizhong management management 6 10 3
Precision
ESG Management 5
Sustainable Development
Management
Stakeholder Engagement
Materiality Analysis
Responding to SDG goals 7
Governance
Social dimension 8
and quality privacy protection
Innovation and
Operations 10 Controversial sourcing 16 Employee employment 低 1 2 3 4 5 6 7 8 9 10
Environment 12 Innovation-driven 18 Employee career development With both financial and impact materiality With financial materiality but not impact
development and training materiality
development materiality
Society
Key Performance
Data Sheet
Governance dimension
Indexes
corruption management
Reader Feedback
Responding to SDGs
About This Report
Kaizhong Precision integrates the UN Sustainable Development Goals (SDGs) into its corporate strategy and daily operations, systematically planning and advancing related actions centered on
highly material topics. The Company is committed to aligning its development path with the global sustainable development agenda, making continuous contributions in the environmental, social,
and governance domains through technological innovation, Achieved operations, supply chain collaboration, and community co-construction.
About Kaizhong
Precision
ESG Management
Sustainable Development
The Company continuously builds and optimizes its ESG governance system, promoting board diversity and
Management
Stakeholder Engagement enhancing professional capabilities. At the same time, it strengthens compliance operations and internal control
Materiality Analysis development, maintains a zero-tolerance policy toward corruption and bribery, and has established a whistleblower
Responding to SDG goals
protection mechanism. Furthermore, the Company actively engages in transparent information disclosure and
regular investor communications, comprehensively protecting information security and data privacy to consolidate a
Governance Corporate
governance foundation for steady, honest, and responsible development.
Innovation and The Company adheres to innovation-driven development, increasing R&D investment to promote technological
Operations
advancement and product excellence. It has established and improved a full-chain quality management system,
implemented product testing and after-sales services, and fostered a quality-oriented culture. At the customer and
supply chain levels, the Company extends responsible practices to all links of the value chain through systematic
Innovation and
Environment customer relationship management, satisfaction surveys, and environmental and social assessments of suppliers.
operations
The Company will improve its environmental management system, continuously invest in environmental protection
Society
funds, and promote green packaging and technological upgrades for energy conservation and consumption reduction.
It systematically manages resources and emissions by building a water recycling system, strictly treating the three
types of waste, and setting carbon intensity targets. Benchmarking against the goal of becoming a national-level
green factory, the Company is committed to reducing its environmental footprint throughout the entire life cycle and
Key Performance
Data Sheet
Environment promoting the green transformation of the industrial chain.
Indexes
The Company is dedicated to promoting high-quality employment, adhering to equal employment practices, and
protecting the legitimate rights of its employees. It comprehensively empowers employee growth and ensures smooth
communication by providing a competitive compensation system, comprehensive training and career development
Reader Feedback channels, and establishing a workers' congress and grievance mechanisms. At the same time, the Company actively
Society participates in charitable activities and community co-construction to give back to society.
Governance
Kaizhong Precision has always regarded standardized governance
as the core cornerstone of sustainable development, establishing a
comprehensive governance system that covers corporate governance,
compliance and risk management, anti-bribery and anti-corruption,
and anti-unfair competition. Adhering to laws, regulations, and the
Articles of Association, the Company optimizes its governance
structure, improves its systems and processes, and strengthens risk
control. Upholding the principles of "fairness, justice, and openness"
and "zero tolerance," it fortifies the bottom line of Achieved operations,
maintains market order and investor rights, and empowers steady
corporate operations and long-term value creation through scientific
governance.
Corporate governance Anti-bribery and anti-corruption
Compliance and risk management Anti-unfair competition
SDG alignments
Corporate Governance
About This Report Corporate governance is the fundamental guarantee for the long-term, steady development of an enterprise. Kaizhong Precision strictly complies with laws and regulations
such as the Company Law of the People's Republic of China and the Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange, as well as the requirements
of its Articles of Association. The Company continuously improves its governance structure, clarifies the boundaries of powers and responsibilities and check-and-balance
mechanisms, focuses on the effectiveness and diversity of the Board of Directors, and strengthens investor relations management and shareholder return mechanisms.
About Kaizhong
Precision Through standardized operations and scientific decision-making, it effectively safeguards the legitimate rights of all shareholders and the Company.
ESG Management
Governance structure
Governance The Company has established a tiered governance structure of "Shareholders' Meeting—Board of Directors—Senior Management," forming a check-and-balance mechanism
Corporate Governance
Compliance and Risk
with clear powers and responsibilities, close coordination, and efficient operation.
Management
Anti-Bribery and Anti-
Corruption
Anti-Unfair Competition Shareholders' Meeting
Innovation and As the Company's organ of power, it exercises its authority in accordance
Operations
Shareholders' with the law to approve business policies and investment plans, review
Meeting profit distribution plans, and amend the Articles of Association, thereby
safeguarding shareholder rights.
Environment
Board of Directors
Audit Committee As the decision-making body, it is responsible to the Shareholders'
Society Meeting and exercises its authority to decide on business plans and
Board of investment proposals, review financial budgets and final accounts, and
Directors appoint and remove senior management personnel, ensuring scientific
Strategic Committee and efficient governance.
Key Performance
Data Sheet
Supervision and Management
Remuneration and
Appraisal Committee The Company promptly amended its Articles of Association in accordance
Indexes with the new Company Law and the Guidelines on the Bylaws of Listed
Companies. The powers and duties of the Board of Supervisors are now
Supervision and
Management exercised by the Audit Committee of the Board of Directors, and the Rules
Nomination Committee of Procedure for the Board of Supervisors have been correspondingly
Reader Feedback abolished, achieving full alignment of the governance structure with new
regulatory requirements.
Board of Directors
The Company adheres to standardized operations and scientific decision-making as its core principles. Through a sound governance mechanism, diverse professional
About This Report configurations, and continuous capacity building, it fully ensures the effectiveness, professionalism, and diversity of the Board of Directors.
About Kaizhong
Precision
ESG Management
Governance
Corporate Governance Improving Governance Mechanisms to Multi-Dimensional Composition to Solid Professional Configuration to
Compliance and Risk
Ensure Decision-Making Effectiveness Enrich Decision-Making Perspectives Enhance Decision-Making Expertise
Management
Anti-Bribery and Anti-
Corruption Clear Responsibilities：
Anti-Unfair Competition The Board of Directors has four specialized Gender Diversity： Professional Capabilities：
committees: Strategy, Audit, Nomination, and The Board of Directors consists of 9 members, Members of the Board of Directors possess
Innovation and Remuneration and Appraisal. Each has established including 4 female directors, accounting for comprehensive professional knowledge and
Operations
clear rules of procedure to provide professional 44.44%, fully reflecting the concepts of gender skills. The specialized committees provide
support for the Board's decisions, forming a closed- equality and diverse inclusion.
loop operational mechanism of "authorization by professional opinions in areas such as
Environment the Shareholders' Meeting—decision-making by Diverse Expertise： compensation and assessment, nomination and
the Board of Directors—support from specialized appointment, and audit supervision, assisting the
Members' professional backgrounds cover
committees—execution by Senior Management." Board in making prudent decisions.
multiple fields such as industrial operations,
System Updates： cutting-edge technology, legal compliance, and
Society In 2025, the Company amended core systems financial auditing. This diversity of perspectives Regular Training：
such as the Articles of Association, the Rules of provides a wealth of wisdom for the Company's The Company organizes regular specialized training
Procedure for the Board of Directors, and the major decisions on innovative development and sessions for the Board of Directors,covering topics
Detailed Rules for the Implementation of the Audit international expansion. such as laws and regulations, regulatory cases,
Key Performance Committee of the Board of Directors in accordance investor demands, and strategic benchmarking
Data Sheet with new regulatory requirements, ensuring that its Selection and Appointment Mechanism： against peers. This continuously enhances
governance rules are updated in sync with laws and the directors' sensitivity to compliance and the
The Nomination Committee extensively searches
regulations. forward-looking nature of their decision-making.
for suitable candidates both internally and in the
Performance Evaluation： talent market through standardized selection
Indexes
The Shareholders' Meeting reviews the Annual procedures, ensuring the continuous optimization
Work Report of the Board of Directors each year. of the Board's structure.
Independent directors provide an annual statement
of duties and self-assess their independence. The
Reader Feedback
Board of Directors regularly conducts independence
assessments, effectively leveraging their roles in
independent supervision and professional oversight.
Key Performance Information disclosure and investor rights protection
The Company strictly adheres to legal and regulatory requirements, improves Key Performance
The Board of Directors consists of
its information disclosure and investor relations management systems, and
About This Report
timely manner, effectively protecting the legitimate rights of investors, especially
small and medium-sized investors.
About Kaizhong
Precision
including 3 independent directors System Guarantees: The Company has formulated the Information Disclosure
ESG Management
accounting for 33.33% of the Board Management System, Investor Relations Management System, and Internal
Reporting System for Major Information to clarify information disclosure
procedures, responsible parties, and confidentiality requirements.
Governance 1 employee representative director System Building: The Company has established an investor communication
Corporate Governance
Compliance and Risk
Management 4 female directors system featuring "routine response + in-depth
empowerment." Through channels such as the official
interaction + reverse
website, investor hotline,
Anti-Bribery and Anti-
inquiry email, and the SZSE's Hudongyi platform, the Company provides high-
Corruption
accounting for The Company received
Anti-Unfair Competition quality services to investors.
a Grade A rating for its
information disclosure work
Innovation and Communication and Interaction: The Company regularly organizes various
Operations for the 2024-2025 period from
Percentage of Independent Directors investor relations activities, listens attentively to investors' opinions and
the Shenzhen Stock Exchange
in Specialized Committees of Kaizhong suggestions, and incorporates market concerns into the Company's strategic
Precision's Board of Directors planning and operational optimization. This approach promotes the evolution of
Environment investor relations from "information disclosure" to "value co-creation."
Strategic Audit
Committee Committee Investor returns
Society
The Company has a strong commitment to shareholder returns, balancing
Key Performance
independent directors independent directors established a scientific, sustainable, and stable shareholder return mechanism
Key Performance accounting for 25% accounting for 67%
Data Sheet
to effectively safeguard the legitimate rights of public investors. 2025
Mechanism Guarantees: In strict accordance with the Articles of Association
Remune- The Company's total
ration and and relevant regulatory requirements of the China Securities Regulatory
Nomination
Indexes Committee Appraisal Commission, the Company has formulated the Shareholder Return Plan for the cash dividends for the
Committee Next Three Years (2026–2028) to enhance the transparency and operability of year amounted to RMB
its profit distribution policy.
Reader Feedback 3 directors in total, with 3 directors in total, with Value Sharing: The Company strengthens the foundation for cash dividends
independent directors independent directors through stable operations and high-quality development, continuously creating
accounting for 67% accounting for 67%
long-term value for shareholders.
Compliance and Risk Management
About This Report Compliance and risk management are key pillars for a
company's stable and long-term development. Kaizhong
Precision has built a full-process control system based Governance
on a foundation of policies, enabled by tools, and guided
About Kaizhong Kaizhong Precision has established a Risk Management Committee to coordinate and supervise risk
Precision by culture. Through systematic risk identification and
control efforts. A system of policies has been built around the core documents of the Internal Control
dynamic response mechanisms, the Company ensures
Management System, Risk and Opportunity Management, and Emergency Response and Preparedness.
the steady achievement of its strategic objectives.
ESG Management The Company has established a collaborative governance structure with "three lines of defense" and
developed a risk indicator monitoring platform covering areas such as customers, supply chain, legal
Governance Key Performance affairs, and EHS (Environment, Health, and Safety). Through internal audits, internal control evaluations,
Corporate Governance and defect rectification, the Company ensures the effective operation of its internal control system and
Compliance and Risk promotes a culture of compliance and risk control that permeates the entire organization.
Management
Anti-Bribery and Anti-
Corruption Business Units
Anti-Unfair Competition The Company had 0 major risk incidents.
Product lines and business units, as accountable owners of risk, embed
Innovation and
Operations First line of internal controls into day-to-day operations and proactively identify and
defense manage business risks.
Environment
Management
Society The Risk Management Committee establishes risk strategies, while
Second line platform departments provide expert support—coordinating the
of defense development of internal control culture and risk monitoring.
Key Performance
Data Sheet
Oversight
Indexes
The Audit Department independently assesses the effectiveness of the
Third line of first two lines of defense and reports directly to the Board of Directors,
defense which retains ultimate oversight responsibility for the risk management.
Reader Feedback
Strategy
Kaizhong Precision deeply integrates risk management into its strategic planning, focusing on key risks and Compliance and risk control
potential opportunities during the strategy implementation process. For different types of risks, the Company
About This Report
systematically analyzes their impact on business operations and financial performance and formulates targeted
measures
response strategies. By dynamically tracking changes in risks and continuously optimizing control measures, the Case: Building a regularized internal control
Company achieves an organic integration of risk prevention and opportunity seizure, providing a solid guarantee evaluation system to strengthen the long-term
About Kaizhong
defense line for Achieved operations and risk
for the smooth advancement of the Company's business plans and investment programs. management
Precision
The Company has identified the following risks and opportunities related to "Compliance and Risk Management": In 2025, the Company established and improved
ESG Management a full-cycle, full-coverage internal control
Financial management system. Through a combination of
Risk Risk description Management measures quarterly special audits and annual comprehensive
Governance
impact
internal audits of subsidiaries, the Company
Corporate Governance systematically identifies internal control risks.
Compliance and Risk Policy and Continuous upgrading of policies Dynamically track policy directions
Increased Additionally, the Company prepares an annual
Management industry and compliance standards in and integrate ESG concepts into
Anti-Bribery and Anti- operating costs Internal Control Evaluation Report to continuously
Corruption
compliance risks downstream industries business optimize management processes and execution
Anti-Unfair Competition standards. This series of measures has effectively
Cross-border A high proportion of overseas Increased strengthened the Company's full-chain compliance
Innovation and Establish cross-border compliance capabilities, laying a solid internal control
Operations business revenue requires adaptation to the compliance
processes. foundation for sustainable development.
compliance risks regulations of multiple countries. costs
Environment Inherent risks in The internal control system needs Potential Conduct regular internal control
internal control dynamic adjustment with the increase in evaluations and build a multi-level Case: Conducting compliance and risk
control training to solidify the foundation for
execution business environment operational costs internal control management system compliance and risk control among mid- to
senior-level management and strengthen the
corporate standardized management system
Society
Financial
Opportunities Opportunity description Management measures
impact From October to November 2025, the Company
conducted specialized training for all mid- to senior-
Cross-border Increase level management personnel on the development
Key Performance Growth in overseas market Deepen cooperation with
Data Sheet compliance overseas revenue and application of risk control matrices. The
demand; compliance system international clients and strategically
empowers and stabilize training focused on risk identification in business
enhances competitive deploy overseas R&D, production, processes and the implementation of control
overseas cross-border
advantage supply, and sales bases measures, effectively enhancing the management
expansion earnings
Indexes team's risk prevention and control awareness. It
The Company's advanced Reduce tax costs Apply for tax incentives in promoted the establishment of a standardized and
Policy compliance systematic risk management and control system,
manufacturing and new and improve accordance with regulations and
to seize industry laying a solid compliance management foundation
Reader Feedback energy sectors receive operational focus on deploying in policy-
dividends for the Company's sustainable operations.
national policy support efficiency supported sectors
Impact, risk, and
opportunity management Anti-Bribery and Anti-Corruption
About This Report
Kaizhong Precision has established a systematic Kaizhong Precision adheres to a "zero-tolerance" principle
management mechanism centered on the Risk and for commercial bribery and corruption. With the Audit Key Performance
Opportunity Management procedure document Department as the core management body, the Company
and using the risk control matrix as a key tool. This
mechanism covers the complete closed loop of has built a comprehensive compliance management and
About Kaizhong
Precision "identification - assessment - response - monitoring control system featuring complete policies, a closed- The Company had no incidents of
- review," enabling quantitative management and loop supervision mechanism, and cultural integration. commercial bribery or corruption.
dynamic optimization of risks. The Company is fully committed to fostering an upright
ESG Management internal and external business environment to ensure the
Indicators and targets Company's Achieved and stable operations.
Governance
Compliance management training
Corporate Governance
Compliance and Risk coverage rate: 100% Anti-Commercial Bribery and Anti-Corruption System
Management
Anti-Bribery and Anti- Progress in 2025 Achievement status for
The Company has established a comprehensive integrity governance system, formulating documents such as the
Corruption
the reporting period
Anti-Unfair Competition Code of Business Ethics and Conduct, Anti-Fraud and Whistleblowing Management System, and Anti-Corruption
Innovation and and external partnerships, clearly defining prohibited behaviors, investigation procedures, accountability, and
Operations
whistleblower protection mechanisms. This delineates an integrity red line across all business scenarios and
Compliance knowledge assessment
pass rate for key positions: 100% extends management requirements to suppliers, standardizing the integrity and compliance conduct of partners.
Environment The Company has built three lines of defense: "prevention - supervision - accountability." The Audit Department,
Progress in 2025 Achievement status for
as the core management body, coordinates the implementation of policies, risk monitoring, and incident
the reporting period
investigation for anti-commercial bribery and anti-corruption efforts. Through regular internal control evaluations
Society
Key Performance
Prevention Line Supervision Line Accountability Line
Key Performance
Data Sheet 3Times
Number of training sessions on internal Annual internal control Special audits track the Strict accountability is
control, compliance, and risk management evaluations systematically progress of risk rectification, enforced for confirmed acts
identify integrity risk points, and in-depth monitoring is of fraud and bribery, creating
Indexes
and anti-fraud requirements implemented in key areas. a powerful deterrent.
are embedded into business
Coverage rate of training in internal control, processes.
Reader Feedback compliance, and risk management
Collaborative Internal and External Integrity Management and Control
Building an anti-commercial bribery
About This Report
Employees
Signed the Employee Anti-Bribery Commitment Letter,
achieving a 100% signing rate and clarifying employees'
and anti-corruption culture
obligations for integrity in their work. The Company focuses on anti-commercial bribery and anti-
corruption efforts by building a three-tiered empowerment system
About Kaizhong covering senior management, key personnel, and all employees.
Precision
Through diversified training and regular awareness campaigns, the
Signed the Supplier Integrity Cooperation Commitment Company promotes the integration of integrity principles into the
ESG Management Business Letter with suppliers and distributors, incorporating mindset and actions of its workforce.
partners integrity requirements into partner admission and ongoing
Comprehensive Training Coverage: The Company achieves a
Governance management. 100% training coverage rate for directors, senior management,
Corporate Governance and all employees. Through formats such as online courses,
Compliance and Risk specialized training sessions, and risk seminars, the Company
Management
Anti-Bribery and Anti- The Company has set up multiple reporting channels, including email and telephone, to systematically conducts interpretations of laws and regulations,
Corruption encourage all stakeholders to report any behavior that violates business ethics or harms the identification of red-line behaviors, analysis of typical cases, and
Anti-Unfair Competition
Company's interests. The Company has also established a comprehensive whistleblower instruction on using reporting channels.
protection mechanism, strictly keeping whistleblowers' information confidential and
Innovation and Regular Awareness Campaigns: The Company regularly publishes
Operations protecting their legal rights in accordance with the law. Additionally, the Company has set up articles promoting integrity through platforms such as Kaige
corresponding incentives to reward valid reports that are verified. magazine, internal emails, and bulletin boards. Guided by the
core principle that "integrity and self-discipline are the lifeline of a
Accessible Reporting Channels and Comprehensive Rights Protection
professional career," the Company deepens cultural penetration
Environment
through case warnings and slogan promotions.
Reporting by phone: 0755-66852689 ext. 6353
Reporting by email: audit@kaizhong.com
Society
Diversified
In-person reporting: Audit Department Office, Shenzhen
reporting
Pingshan Headquarters
channels
Key Performance
Data Sheet
Confidentiality Management: The Company strictly enforces the
confidentiality system for whistleblower information, prohibiting disclosure
unless necessary. When disclosure is required, the whistleblower's written
Indexes consent must be obtained. Retaliation against whistleblowers acting in
good faith is strictly prohibited, and any such cases, once verified, will be
Whistleblower handled seriously in accordance with regulations.
protection
Reporting Incentives: In accordance with the Anti-Fraud and
Reader Feedback mechanism
Whistleblowing Management System, whistleblowers who provide valid
leads will be rewarded accordingly to encourage compliance supervision.
Anti-Unfair
Case: Conducting specialized anti-fraud and anti-commercial bribery training to fortify the
integrity and compliance defense line for all employees
Competition
In December 2025, the Company's Audit Department led a specialized training on anti-fraud and
About This Report
anti-commercial bribery, covering all employees. The training, conducted in a hybrid online and
offline format, explained laws and regulations, integrity standards, and typical cases, and included
a company-wide assessment to reinforce learning outcomes. This training effectively enhanced Upholding the core value of "Integrity First," Kaizhong
employees' risk awareness and prevention capabilities, promoting the integration of integrity and Precision strictly complies with the Anti-Unfair Competition
About Kaizhong compliance into daily operations and strengthening the foundation for the Company's sustainable Law of the People's Republic of China, the Anti-Monopoly
Precision
development. Law of the People's Republic of China, and other relevant
laws and regulations. The Company has established a
ESG Management comprehensive management mechanism that "defines
boundaries through systems, explicitly prohibits certain
Governance behaviors, ensures supervision and reporting, and imposes
Corporate Governance accountability," resolutely safeguarding fair market order
Compliance and Risk and the Company's legitimate rights.
Management
Anti-Bribery and Anti-
Corruption Key Performance
Anti-Unfair Competition
Innovation and
Operations The Company has not been involved in any
incidents related to unfair competition and has
not faced any litigation concerning unfair
On-Site at the Specialized Training on Anti-Fraud and Anti-Commercial Bribery
Environment competition.
Key Performance
Society Anti-unfair competition
mechanism
Key Performance
Data Sheet which explicitly prohibits unfair competitive practices such
Number of reported anti-corruption incidents Signing rate of employee anti-bribery
as monopolies, bribery, and fraud, as well as the illegal
commitments
acquisition of trade secrets. The Company adheres to
the operational bottom line of not damaging the business
Indexes 100% 100% reputation of others and not misleading the public. At the
same time, the Company extends compliance requirements
Coverage rate of employees receiving anti- Coverage rate of directors receiving to its suppliers, eliminating anti-competitive behaviors
bribery and anti-corruption training anti-corruption training to achieve full coverage across all internal and external
Reader Feedback
business scenarios.
Unfair Competitive Practices Explicitly Prohibited by the Company
Anti-unfair competition controls
The Company has established a closed-loop compliance risk control mechanism
About This Report Information leakage for anti-unfair competition, covering "pre-emptive prevention, in-process control,
and post-event improvement." Through policy dissemination, risk screening,
Disclosing sensitive data tocompetitors, such as the Company's incident investigation, and corrective action tracking, the Company systematically
About Kaizhong core financial information or business information of its partners. implements compliance requirements and effectively mitigates competition risks.
Precision
Case: Conducting specialized training on trade secret protection to
ESG Management strengthen the compliance defense line against unfair competition
In October 2025, focusing on preventing and controlling unfair competition
Governance Intelligence gathering
Corporate Governance
risks, Kaizhong Precision held a specialized lecture on protecting trade secrets
Compliance and Risk Obtaining competitors'business intelligence through improper for employees in key positions across various product lines and business
Management
Anti-Bribery and Anti- means such as theft intrusion, bribery, or coercion. divisions. The training systematically covered five core topics: the importance,
Corruption definition, and protection methods of trade secrets, the legal consequences
Anti-Unfair Competition
of infringement, and procedures for handling leaks. This effectively enhanced
employees' risk awareness and prevention capabilities, providing a solid
Innovation and
Operations guarantee for the Company to build a fair and Achieved business environment.
Reputation slander
Environment Maliciously slandering orspreading rumors aboutcompetitors to
damage theirmarket image and businessreputation.
Society
Monopolistic collaboration
Participating in the signingand execution of monopolistic
Key Performance agreements to collaboratively restrict market competition.
Data Sheet
Indexes Abuse of dominantposition
Abusing a dominant marketbosition to engage in a seriesof
exclusive or discriminatorythatousiness practicesviolate
Reader Feedback
egulations. On-Site at the Specialized Training on Trade Secret Protection
Innovation and
Operations
Innovation and operations are the core drivers and cornerstones
of value for Kaizhong Precision's sustainable development. Led
by innovative R&D and supported by operational excellence, the
Company has systematically built a comprehensive management
system covering product quality, supply chain security, digital and
intelligent transformation, and data privacy protection. By deeply
integrating advanced manufacturing technologies with digital methods,
the Company continuously optimizes quality throughout the product
lifecycle, creates a secure, resilient, and responsible supply chain
ecosystem, and extends its innovative momentum to customer privacy
and data security. The Company is committed to providing customers
with more reliable and intelligent products and services, driving the
enterprise toward an efficient, intelligent, and sustainable future.
Product and service safety and Digital and intelligent
quality development
Supply chain security Data security and customer
privacy protection
Innovation-driven development
SDG alignments
Product and Service Safety and Quality
About This Report
Kaizhong Precision strictly complies with national laws and regulations and
regards the safety and quality of its products and services as the lifeline of System Guarantees
the enterprise. The Company has established comprehensive ISO 9001 and
IATF 16949 quality management systems, covering the entire process from The Company has formulated a comprehensive set of policy documents,
About Kaizhong
Precision R&D and procurement to production and customer service. Through strict including the System Management Manual, Control of Nonconforming
process controls and a multi-layered audit mechanism, the Company ensures Products, Internal Audit Control, and After-Sales Problem Analysis and Claims.
ESG Management
high-standard product delivery and continuously creates reliable value for its The Company conducts annual internal audits of the quality management
customers. system to evaluate its conformity, suitability, and effectiveness.
Governance Governance
The Company has established a governance system with clear responsibilities
Innovation and
Operations that covers the entire process. The Quality Management Committee, led by the Quality System Certifications
Product and Service General Manager, serves as the central decision-making body, coordinating
Safety and Quality
major quality decisions, formulating quality policies and annual targets, and
Supply Chain Security
reviewing supplier admissions, customer quality agreements, and the handling
Innovation-Driven
As of the end of the reporting period, all of the Company's production
Development of major quality incidents. The Quality Management Department, as the
Digital and Intelligent entities have obtained quality management system certifications such as
executive body, embeds quality control into the entire value chain, from R&D
Development
design and verification, procurement management, and production process ISO 9001 and IATF 16949, with 100% of their business scope certified.
Data Security and
Customer Privacy monitoring to customer delivery confirmation and after-sales service.
Protection
Environment
The Company's Quality Management Department structure
Society
General
Manager
Key Performance
Data Sheet
Quality Management
Committee
Indexes
Quality Management IATF 16949 Quality Management ISO 9001 Quality Management
Department
Reader Feedback System Certificate System Certificate
Strategy
Kaizhong Precision strictly adheres to the Product Quality Law of the Kaizhong Precision has identified the following risks and opportunities related to "Product and
People's Republic of China, with systematic policy development at its core. Service Safety and Quality":
About This Report
The Company continuously improves its modern quality management
system from three dimensions: quality assurance, cultivation of a company- Financial
wide quality culture, and closed-loop handling of quality feedback. Based Risk Risk description Management measures
impact
on its established quality management system, the Company has created a
About Kaizhong standardized system of quality control policies and procedural documents Under a globalized Strictly manage supplier quality
Precision Risk of
covering the entire product lifecycle (including design, procurement, supply chain layout, it is systems, advance quality
Supply Increased
production, inspection and delivery, and after-sales). By setting clear necessary to ensure the control through access audits
Chain operating
performance indicators for each key stage and implementing systematic stable quality of upstream and dynamic management, and
ESG Management Quality costs
raw materials and achieve full-process traceability
monitoring, the Company ensures that quality objectives are implemented Resilience
components of materials
and continuously optimized at every level.
Governance
Establish a rapid response
Product Process A mechanism for rapid Customer
Risk of mechanism for customer
Design Define Quality identification and closed- churn, legal
Innovation and Design and After-Sales demands and use after-sales data
Stage Requirements loop resolution needs litigation,
Operations Development Quality to drive front-end optimization,
to be established for reputational
Product and Service Upgrades forming a closed loop for quality
customer feedback damage
Safety and Quality improvement
Supply Chain Security
Innovation-Driven
Development
Procurement Incoming Inspection Incoming Material Opportunity Financial
Digital and Intelligent Opportunities Management measures
Development Stage and Testing Inspection description impact
Data Security and
Customer Privacy Build a transparent and
Opportunity Increased
Protection Excellent and stable reliable quality information
for Market pricing power,
product quality is key communication mechanism,
Differentiation customer loyalty,
to building a core and establish strict finished
Environment and Brand Value and market
Production In-Process Inspection brand moat product quality standards to
Process Control Enhancement share fully meet customer needs
Stage and Testing
Society
Stable long-
Excellent quality term orders, Precisely meet customer
Opportunity allows for deep increased quality demands and deepen
for Customer integration into the
Finished Product collaborative cooperative trust through
Key Performance Strategic R&D and supply
Inspection Final Inspection projects, and efficient responses and
Data Sheet Inspection and Collaboration chain systems of core
and Delivery and Testing R&D synergy regular communication
customers
Release benefits
Proactive quality Implement a quality cost
Indexes Opportunity for control and refined management system to
Operational management can Operational cost achieve a win-win outcome
After-Sales Customer Complaint Complaint and Optimization and optimize operational optimization of quality improvement and
Cost Savings costs throughout the
Stage and Return Handling Return Handling entire chain cost optimization
Reader Feedback
Product Lifecycle Quality Control Process Identification and Response to Risks in Product and Service Safety and Quality
Impact, risk, and opportunity management
Kaizhong Precision uses the monthly QCDS (Quality, Cost, Delivery, Service) Product quality assurance
About This Report performance evaluations from core customers as its primary management tool.
Combined with annual customer satisfaction surveys, the Company systematically Kaizhong Precision has established a systematic quality assurance mechanism
identifies and monitors risks and opportunities related to product and service quality. that covers the entire product lifecycle. Through a dual-drive approach of
By regularly receiving customer scorecards and standardized questionnaires, the institutionalized audits and refined process controls, the Company ensures the
About Kaizhong continuous reliability of product quality.
Precision Company can comprehensively identify operational weaknesses and gain insight into
areas for improvement based on customer expectations. Kaizhong Precision's product quality assurance measures
ESG Management
Indicators and targets The Company has built a quality audit
mechanism covering all aspects of production
Governance and operation. By combining routine inspections
In 2025, the Company continued to advance its quality control and improvement Establish a multi-layered, with assessments of key focus areas, the
efforts, meeting all quality indicators and targets. hierarchical quality audit Company continuously identifies potential quality
Innovation and mechanism
Operations risks and drives management improvements.
Product and Service Progress Achievement status for
Target
Safety and Quality in 2025 the reporting period
Supply Chain Security
Innovation-Driven Focusing on core manufacturing processes, the
Development Customer complaint handling rate of 100% 100% Achieved Company enhances the stability of production
Digital and Intelligent
Development processes and the consistency of product quality
Data Security and Number of customer complaints per Strengthen systematic through the synergistic efforts of institutional
Customer Privacy million shipments <0.3 production stages constraints and process management.
Protection
Product recall rate of 0 0 Achieved
Environment
The Company implements unified control of
Society nonconforming products for raw materials,
Key Performance Implement closed- production processes, and finished product delivery.
loop management of This ensures that quality issues are addressed
nonconforming products and feedback is provided in a timely and effective
Key Performance throughout the entire
Data Sheet process manner, preventing the recurrence of risks.
Indexes By applying information technology and automation,
PPM (Parts Per Million Number of ustomer issue Customer
the Company enhances the transparency and
defects) product recalls resolution rate satisfaction Promote digital and traceability of its production processes, reducing
automated empowerment the impact of human factors on product quality from
of manufacturing
Reader Feedback
processes the source.
Quality Feedback and Closed-Loop Handling
The Company has established a comprehensive quality handling mechanism that Case:Specialized training on APQP and VDA series to strengthen
covers the entire process of "feedback—analysis—action—improvement." This quality planning and audit capabilities
About This Report
ensures a systematic and timely response and closed-loop management for all types
of quality feedback, including customer complaints, after-sales issues, and product In December 2025, the Company
returns. The Company follows the 8D problem-solving methodology, from receiving organized a series of specialized
About Kaizhong the problem and analyzing the root cause to implementing and standardizing training sessions on APQP
Precision
(Advanced Product Quality
corrective actions. This ensures that every complaint is systematically resolved and
Planning) and VDA 6.3 (Process
forms a closed loop for improvement, continuously enhancing customer satisfaction.
ESG Management Audit), covering employees from
Kaizhong Precision Customer Complaint Handling Proces production, technology, and
quality departments across its
Governance product lines/business divisions.
lnitial confirmation Root cause investigation Develop & verify permanent
The training, conducted in a
& analysis & interim containment corrective actions Quality Series Specialized Training
Innovation and Receive complaint and conduct Investigate root cause and take Develop and verify permanent
hybrid online and offline format,
Operations initial confirmation and analysis interim containment actions corrective actions
Product and Service
systematically explained front-end quality planning methods for product
Safety and Quality development and the core requirements of process audits. This effectively
Supply Chain Security enhanced the team's capabilities in systematic quality planning and risk
Innovation-Driven
Development
Within Within Within 5 identification, representing a significant practice for the Company in
Digital and Intelligent
days implementing the "prevention first" quality policy and building a long-term
Development
quality control mechanism.
Data Security and Process Within 14 Within 10
Customer Privacy end working days working days
Protection
Environment Hazardous Substance Management
Archive lessons Internal review & customer Implement actions &
learned confirmation for closure monitor effectiveness The Company fulfills its responsibility for environmental protection and pollution
Society
Archive lessons learned Conduct internal review Implement actions and monitor prevention by strictly adhering to domestic and international regulations on
for future reference and obtain customer effectiveness, including document hazardous substance control, including the EU's Restriction of Hazardous
confirmation for closure standardization and horizontal deployment
Key Performance Substances (RoHS) Directive, the Registration, Evaluation, Authorisation and
Data Sheet Quality Culture Development Restriction of Chemicals (REACH) Regulation, and China's Administrative
Measures on the Restriction of the Use of Hazardous Substances in Electrical
The Company adheres to the quality policy of "full participation, prevention first,
and Electronic Products. The Company has formulated the Standard for the
continuous improvement, and long-term stable satisfaction of customer needs," and
Indexes Control of Restricted Substances to implement closed-loop management
continuously promotes the development of a quality culture. During the reporting
throughout the entire process, from the entry of raw materials and the production
period, the Company conducted a total of 196 specialized quality training sessions,
process to the shipment of finished products, ensuring that its products meet
with a total training duration of approximately 980 hours. The comprehensive system
Reader Feedback
the requirements for restricted substances and continuously improving its
coverage included professional content such as the five core tools (APQP, FMEA,
environmental quality. The Company also requires suppliers to provide third-
etc.) and VDA 6.3 process audits, effectively enhancing the prevention awareness
party compliance testing reports annually to ensure compliance throughout the
and improvement capabilities of all staff.
entire supply chain. 28
Supply Chain Security
About This Report Kaizhong Precision regards supply chain management as a key cornerstone of its sustainable development. Adhering to the principle of "integrity-based cooperation
and mutual benefit," the Company is committed to building transparent, fair, and collaborative partnerships. Through a systematic management framework and close
communication mechanisms, the Company works with its partners to promote quality improvement, technological synergy, and green operations. Together, they are building
About Kaizhong a secure, reliable, and sustainable supply chain ecosystem, contributing to the overall value creation and resilience enhancement of the industrial chain.
Precision
ESG Management
Governance
Governance
Kaizhong Precision has established a policy framework centered on the Supplier
Innovation and Management Process and the Supplier Management Manual to systematically Supply Chain Management Structure
Operations
Product and Service
regulate supplier development, evaluation, and ongoing management. The
Safety and Quality Company also strengthens business continuity assurance through mechanisms Strategic Procurement
Supply Chain Security Department
Innovation-Driven
such as the Emergency Plan Work Instruction and the Supplier Supply Risk
Management Plan to ensure the stable operation of its supply chain system. Procurement
Development
General
Digital and Intelligent Management Operations Center
Manager
Development
In terms of management structure, the Company implements a hierarchical control Committee
Data Security and
Customer Privacy system: the Procurement Committee, led by the General Manager, is responsible
Protection Business Lines
for overseeing supply chain strategy and major resource allocation; the Strategic
Environment Procurement Department leads supplier development and strategic procurement;
the Operations Center coordinates delivery and inventory optimization; and the
business lines handle execution and provide feedback on site-specific issues.
Society
This forms a three-tiered control structure of "strategy - coordination - execution,"
ensuring the stable operation of the supply chain system.
Key Performance
Data Sheet
Indexes
Reader Feedback
Strategy
Kaizhong Precision considers the supply chain a critical value chain for achieving sustainable
development. The Company systematically conducts supply chain risk identification and response, Impact, risk, and
continuously improves its full-cycle supplier management mechanism, and deeply integrates the
opportunity management
About This Report
concept of responsible operation into supplier cooperation and collaborative improvement processes.
The Company has formulated policies such as the Supplier Supply Risk Management Plan to
systematically identify and proactively manage supplier performance risks, minimizing their potential Based on the Supplier Supply Risk Management
About Kaizhong
Precision impact on the Company and its customers. Kaizhong Precision has identified the following risks and Plan, Kaizhong Precision has established a supply
opportunities related to "supply chain security": chain risk identification and response mechanism.
ESG Management
The Company's Strategic Procurement Management
Risk Risk description Financial impact Management measures Department tracks the external environment, supplier
Closely monitor market price
operations, and market dynamics, assesses and
Governance Drastic exchange rate ranks risk probability and impact, and forms a risk
trends, establish safety stock,
Economy and fluctuations, soaring Increased raw material level list. For key risks, the Company sets up cross-
and implement hedging
Market commodity prices, sudden costs
Innovation and mechanisms such as price departmental response teams to formulate and
Operations changes in market demand
linkage track prevention and control measures. Through
Product and Service
Safety and Quality developing alternative suppliers, maintaining safety
Shortage or interruption Production shutdown Core materials require
Supply Chain Security
Supply Chain of upstream raw material losses, increased raw multiple backups and safety stock, and establishing regional supply chain
Innovation-Driven
Development Delivery Risk supply, leading to material costs, risk of stock, with emergency layouts, the Company transforms risk control into
Digital and Intelligent
production stagnation order default escalation plans in place opportunities for enhancing supply chain resilience
Development
Data Security and and collaborative development.
Customer Privacy Suppliers changing Standardize supplier change
Protection Material Quality processes or materials Increased quality costs, processes, strengthening
Issue Risk without approval, affecting reputational damage process approval and risk
Environment product consistency traceability
Opportunity
Society Opportunities Financial impact Management measures
description
Systematic risk
Reduce losses Build a closed-loop risk
Key Performance Opportunity identification and response
Data Sheet
from sudden supply management system
to Enhance mechanisms transform
disruptions, optimize and promote regional
Supply Chain passive emergency
procurement costs, and diversification for key
Resilience response into proactive
enhance customer trust materials
Indexes
prevention
Deepen strategic Reduce total supply
Promote the transformation
Opportunity for cooperation in risk chain costs, improve new
of suppliers into value co-
Collaborative response and jointly product development
Reader Feedback creation partners to achieve
Development improve technology and efficiency, and establish
deep collaboration
quality long-term advantages
Indicators and targets The Company has established an ESG due diligence
and tiered audit mechanism covering the entire
Promote the transformation of suppliers into value co-creation partners to achieve deep collaboration admission process to preemptively mitigate EHS
About This Report risks, achieving closed-loop sustainable supply chain
management from sourcing to warehousing.
Progress Achievement status for
Target
in 2025 the reporting period
About Kaizhong 100% of new suppliers are screened using social and
Precision 100% Achieved Full-Process Due Diligence and Auditing
environmental responsibility standards
ESG Management 100% Achieved
responsibility impact assessments Needs analysis
and sourcing
Governance Commitment Letter and Confidentiality Agreement
Qualification
and compliance
Innovation and
Admission evaluation and due diligence investigation
Operations
Product and Service The Company has established a scientific admission mechanism for new suppliers, adhering to principles such
Safety and Quality as quality system requirements, industry preference, supply chain security, categorized development, and On-site audit of
Supply Chain Security
Innovation-Driven comprehensive evaluation. Suppliers are classified into four categories (A, B, C, and D) based on the impact of potential suppliers
Development their materials on product quality, with differentiated admission requirements.
Digital and Intelligent
Development
Sample and
Data Security and
During the admission process, the Company systematically conducts ESG due diligence, giving priority trial production
Customer Privacy to suppliers certified under management systems such as IATF 16949, ISO 9001, and ISO 14001. This verification
Protection preemptively mitigates environmental, health and safety, and compliance risks, ensuring that newly introduced
partners are aligned with the Company's long-term development strategy.
Environment Multi-level approval
Management System Certification Requirements for Suppliers for admission
Society
ISO 9001, IATF 16949, ISO 14001, and customer-specific requirements
Key Performance Key Performance
Data Sheet
A- and B-class suppliers C-class suppliers
Indexes
Priority shall be given to suppliers certified under IATF
Priority shall be given to suppliers certified 77.44% 93.29%
under ISO 9001.
requirements for the supply chain management system, Supplier Local procurement
Reader Feedback localization rate
those requirements must be adhered to. ratio
Performance management and exit mechanism
The Company implements dynamic performance management for suppliers based on the QCDS (Quality, Cost,
Delivery, Service) evaluation system. Through monthly quantitative assessments, suppliers are managed by Case: Specialized ESG training for suppliers
About This Report grade: Grade A suppliers engage in deep cooperation, are prioritized for order shares, and receive increased
procurement volumes; Grade B suppliers maintain cooperation with set improvement targets; Grade C suppliers
are given a deadline for rectification and face reduced shares; Grade D suppliers have their cooperation In December 2025, the Company updated the
suspended or face exit procedures. Supplier Management Manual to elaborate on
About Kaizhong
Precision ESG-related matters and conducted specialized
Furthermore, the Company conducts annual EHS-specific audits for high-environmental-risk suppliers and training for several key suppliers based on the
has established a three-level early warning mechanism. It intervenes in cases of significant quality hazards, latest management requirements. The training
ESG Management environmental violations, or persistent non-compliance to continuously optimize the supply chain structure. systematically explained ESG definitions,
requirements, and practical pathways. All
participating suppliers pledged to strictly adhere
Governance Multi-dimensional Elimination and exit to the relevant regulations and committed to
QCDS evaluation of underperformers promoting stable, sustainable, and mutual
Innovation and Dynamic development.
Operations
performance
Product and Service Tiered and differentiated Escalated risk management
management
Safety and Quality
application and control
Supply Chain Security
Innovation-Driven
Development
Digital and Intelligent
Development While ensuring that basic access and performance requirements are met, the Company will further promote the
Data Security and
development of a sustainable supply chain and continuously enhance the social and environmental management
Customer Privacy
Protection capabilities of its suppliers through methods such as audits and training.
Environment
Sustainable Supply Chain Development
Society The Company systematically promotes sustainable supply chain development, committed to building a secure,
Achieved, efficient, and resilient supply ecosystem. Key initiatives include:
Key Performance
Data Sheet
Localization and Compliance Social
Supplier training
synergy governance responsibility
Indexes Conduct specialized Increase the local Promote the signing of Conduct annual
training on ESG procurement ratio the Supplier Integrity assessments of the
requirements, to enhance supply Cooperation Commitment social and environmental
compliance guidelines, resilience Letter, Confidentiality responsibility impacts of
Reader Feedback etc. Agreement, and Supplier qualified suppliers
Code of Conduct
Key Performance
Indicator Unit 2025 data
About This Report
Number of supplier ESG training sessions conducted by the Company Times 3
Percentage of suppliers who received ESG training from the Company % 100
About Kaizhong
Precision
Percentage of suppliers who have signed the Supplier Code of Conduct % 85
ESG Management Percentage of suppliers identified with significant actual and potential negative
% 0
environmental impacts
Governance
Conflict Minerals Management
Innovation and Kaizhong Precision strictly manages the risks of conflict mineral procurement in its supply chain and adheres to its
Operations
Product and Service commitment to responsible sourcing. To implement its zero-tolerance policy on conflict minerals, the Company has
Safety and Quality established an annual investigation mechanism, ensuring that 100% of customer requirements are communicated
Supply Chain Security
to suppliers and that due diligence is conducted. The Company traces the smelting sources of metals such as
Innovation-Driven
Development tin, tantalum, tungsten, gold, and cobalt to ensure that its procurement does not involve conflict regions or human
Digital and Intelligent rights violations. Concurrently, the Company's global operations strictly comply with the laws and regulations of
Development
Data Security and
all countries. Through internal controls and codes of conduct, the Company ensures that its international trade is
Customer Privacy conducted legally and with integrity, thereby safeguarding its global reputation for compliance. During the reporting
Protection period, the Company found no instances of conflict mineral use by its supply chain enterprises.
Environment
Key Performance
Society
Key Performance
Data Sheet Coverage rate of suppliers who have Number of suppliers whose partnerships were
completed conflict minerals due diligence terminated due to controversial sourcing issues
Indexes
Number of major disputes related to
Reader Feedback
procurement activities
Innovation-Driven Development
Kaizhong Precision continues its development strategy with technology as the core driving force, fostering a vibrant R&D environment and a fair incentive mechanism. The
About This Report Company has established a three-tiered innovation management system of "decision-making, coordination, and execution," supported by relevant policies covering the entire
lifecycle of scientific research, technology transfer, intellectual property, and talent incentives. Guided by customer needs and market trends, the Company deepens industry-
academia-research collaboration, attracts and nurtures R&D talent, and maintains high R&D investment. Through standardized management and practical innovation, the
About Kaizhong Company aligns technological breakthroughs with business value, develops new quality productive forces, consolidates its advantages in proprietary intellectual property, and
Precision
continuously creates value for its customers.
ESG Management
Governance
Governance Building upon its improved technological innovation framework, Kaizhong Precision
has upgraded its R&D and innovation management system. Coordinated by the
Innovation and Engineering Technology Research Institute and the Germany R&D Center as core
Operations hubs, this system synergizes with domestic and international R&D centers and
Product and Service Board of Directors
other innovation platforms to integrate R&D resources and information. Supported
Safety and Quality
Supply Chain Security by core policies such as the Management Measures for Scientific Research
Innovation-Driven Projects, it forms a closed-loop management process covering "project initiation
Development
Digital and Intelligent
- execution - acceptance - commercialization - intellectual property protection."
Development The system focuses on core areas like materials technology and automation
Senior Management
Data Security and equipment, while also balancing talent incentives and the implementation of
Customer Privacy
Protection research outcomes, thereby ensuring the advancement of R&D innovation and
promoting breakthroughs in core technologies.
Engineering Technology Germany R&D
Environment
Research Institute Center New Materials
Additionally, the Company has established a comprehensive, Commutator Engineering
tiered management system for innovation-driven implementation. Engineering
Society Technology Center
The Board of Directors is responsible for steering strategic Technology Center
Connector Engineering
direction and risk control, approving innovation strategies and Technology Center
major investments, and evaluating innovation performance. Senior
Key Performance
Data Sheet Management is responsible for coordinating resources, promoting
collaboration, and monitoring processes; formulating innovation
priority matrices; establishing cross-functional project teams; and
improving innovation incentive mechanisms. The Engineering
Indexes
Technology Research Institute is responsible for execution. With
multiple specialized technology centers and research laboratories Engineering Computer-Aided
under it, the Institute coordinates project initiation, implementation, Technology Materials Technology Laboratory Standards Engineering
and result archiving. It works with various business departments Research Lab Research Lab Research Lab Research Lab
Reader Feedback
to ensure the orderly progress of R&D and innovation in products,
materials, processes, and validation. Structure of the Engineering Technology Research Institute
The Company has established a standardized management system for laboratory The Company has established a full-chain R&D and innovation assurance system
testing and calibration, ensuring comprehensive product inspections that cover covering innovation project management, technology transfer, talent development,
core dimensions such as appearance and performance. The laboratory is outfitted and intellectual property management:
with advanced instrumentation for precision measurement, reliability testing,
About This Report material analysis, and environmental testing. It possesses in-house calibration Innovation project management:
capabilities for length, electrical, and mechanical measurement devices. Accredited Standardize the entire R&D process through policies, clarify
by the China National Accreditation Service for Conformity Assessment (CNAS), roles and responsibilities, and support the development of
the laboratory ensures its test results are internationally recognized. Furthermore, talent pipelines
About Kaizhong
Precision the laboratory consistently participates in measurement audits and proficiency
testing programs to guarantee the accuracy and credibility of its data.
Technology transfer:
ESG Management
Promote the evaluation and mass production of scientific
and technological achievements to realize their value.
Governance
Talent development assurance:
Innovation and
Operations Build diverse career advancement channels and enhance
Product and Service
R&D capabilities through industry-academia-research
Safety and Quality
Supply Chain Security collaboration and internal training.
Innovation-Driven
Development
Digital and Intelligent
Development
Intellectual property management
Data Security and
Customer Privacy CNAS-certified laboratory's test results are internationally recognized Embed IP protection into the entire R&D process, clarify
Protection ownership, support the development of technical standards,
and comprehensively protect the rights of core technologies
Environment while promoting efficient innovation.
Society
Key Performance
Key Performance
Data Sheet
The Company has a total of 337 R&D personnel
accounting for 9.35% of all employees
Indexes
R&D investment amounted to RMB 82.24 mn
Reader Feedback
Participation in measurement audit and proficiency verification
and the certificates obtained
accounting for 2.81% of the total audited operating revenue for the year
Strategy
In response to the national "15th Five-Year Plan," The Company has identified the following risks and opportunities related to "Innovation-Driven Development":
About This Report Kaizhong Precision has deeply integrated the national
strategies of scientific and technological self-reliance
and building a manufacturing powerhouse into its Risk Risk description Financial impact Management measures
About Kaizhong R&D and innovation. The Company has constructed
Precision a tripartite innovation strategy system of "independent Failure to gain timely
Risk of identifying
innovation R&D - emerging industry development - insights into market and Decline in market Improve the market foresight
market and
green transition empowerment." The Company focuses industry dynamics, resulting share, affecting mechanism and product
ESG Management technology
on achieving independent control over key core in missed new market revenue growth. management system
opportunities
technologies. Leveraging its advantages in vertical opportunities.
Governance integration across the entire industry chain, it has
Insufficient internal technical
established an innovation chain that connects "basic
Risk of technology development capabilities, Low return on R&D Strengthen internal
research - technological breakthroughs - technology
Innovation and implementation making it difficult to translate investment, leading to and external technical
Operations transfer - industrial application," supporting the
and market demand into a decline in product collaboration to accelerate
Product and Service Company's sustainable development in the high-end
commercialization competitive products or competitiveness capability building
Safety and Quality
precision manufacturing sector. Seizing opportunities
Supply Chain Security solutions.
Innovation-Driven in emerging industries such as AI and the low-altitude
Development economy, the Company is accelerating R&D and Legal litigation and Establish a protection
Digital and Intelligent
market expansion for related new products, while Intellectual Infringement of others'
Development compensation costs, system for trade secrets and
making forward-looking layouts for future industries Property and intellectual property rights or
Data Security and loss of competitive intellectual property, and
Customer Privacy like intelligent robotics. The Company supports the Compliance Risks leakage of own trade secrets
Protection advantage conduct specialized training
achievement of national "dual carbon" goals through
Environment
breakthroughs in green and low-carbon technologies,
embedding concepts of energy conservation, emission
reduction, clean production, and the circular economy Opportunities Opportunity description Financial impact Management measures
Society throughout the entire product R&D lifecycle. This
creates a sustainable development pattern where Opportunity for Respond to global Develop high-value-
technological breakthroughs, market expansion, and Green Innovation environmental trends added product lines Formulate and execute a
Key Performance ecological benefits synergistically reinforce one another. and Market through the R&D of green to increase gross green R&D strategy
Data Sheet
Expansion and low-carbon technologies profit margin
Opportunity
Indexes Achieve data-driven
to Enhance
decision-making and Improve production
Competitiveness Implement an overall digital
intelligent manufacturing efficiency and reduce
through Digital strategy
through digital and intelligent operating costs
Reader Feedback and Intelligent
transformation
Transformation
Impact, risk, and opportunity Highlights of R&D and Innovation Efforts
management
Case: Collaborating with the Materials Research Institute of the Chinese University of Hong Kong to develop
About This Report Kaizhong Precision identifies and assesses risks and core polymer material modification technologies, empowering product upgrades and market expansion
opportunities related to R&D and innovation through
Kaizhong Precision has collaborated with the Shenzhen Institute for Advanced Polymer Materials of The
systematic processes and dynamic management
Chinese University of Hong Kong to develop polymer material modification technologies. This initiative
methods. The Company continuously monitors
About Kaizhong covers formulations and production processes for key insulation materials, effectively resolving technical
Precision identified risks and opportunities through mechanisms
bottlenecks. The technology has been applied to insulated wires for high-frequency transformers, serving
such as performance assessments, dynamic tracking,
multiple market sectors including consumer electronics, new energy, and data communications, providing
and closed-loop management.
ESG Management robust support for product competitiveness and business expansion.
Indicators and targets
Governance
Kaizhong Precision formulates its R&D strategic Case: Collaborating with Huazhong University of Science and Technology to develop material preparation technology
goals in short-, medium-, and long-term phases for SiC semiconductor power modules and completing reliability assessments under extreme environments
Innovation and to ensure that its innovation direction is aligned
Operations
with market trends and technological evolution. Relying on its industry-academia-research collaborative innovation mechanism, Kaizhong Precision has
Product and Service
Safety and Quality In the field of green development, the Company conducted in-depth cooperation with Huazhong University of Science and Technology, focusing on the
Supply Chain Security will prioritize the development and market launch R&D of core packaging materials for third-generation semiconductor SiC power modules. SiC power
Innovation-Driven
Development
of green products, gradually ensuring that its modules are key control devices in fields such as wind and solar power generation, smart grids, high-
Digital and Intelligent core product lines fully comply with international speed rail traction, and new energy vehicle drive control; therefore, performance improvements place
Development green standards, building a global low-carbon higher demands on the heat dissipation capability and reliability of packaging substrates. Through joint
Data Security and
Customer Privacy R&D network, and ultimately creating an industry- research, the two parties successfully developed a new preparation technology for high-performance
Protection benchmark green manufacturing plant. copper-clad substrates, which effectively optimizes the bonding quality and thermal conductivity of the
packaging interface and has passed rigorous environmental reliability verification.
Environment
Progress in Achievement
Indicator
Society
Case: Co-developing core components for high- and low-voltage switch units in electric vehicles with clients
Key Performance product ratio in 100% Achieved
Data Sheet
Serving as the energy transmission interface for EV battery packs, high- and low-voltage switch units rely
R&D on the reliability of their connection and disconnection mechanisms to ensure vehicle safety. Responding
to specific customer needs and leveraging full-process CAE simulation capabilities, Kaizhong Precision
engaged in deep collaboration to tackle challenges surrounding the unit's main components. This
Indexes joint initiative encompassed material selection, structural optimization, and manufacturing process
development. Consequently, the Company established a domestically leading automated production
line that ensures the stable mass production of ultra-large insert-molded parts, successfully meeting the
rigorous delivery standards of top-tier industry clients.
Reader Feedback
Intellectual property protection
Adhering to the principle of "Leveraging Intellectual Property to Drive
Innovation and Enhance Global Competitiveness," Kaizhong Precision Case: Conducting specialized intellectual property training to build a strong protective barrier
complies with the Intellectual Property Law of the People's Republic for R&D and innovation
About This Report of China, the Patent Law of the People's Republic of China, and other
regulations, continuously improving and optimizing its intellectual In June 2025, Kaizhong Precision
property management system. In 2025, the Company implemented conducted specialized intellectual
About Kaizhong policies such as the Intellectual Property Management System Manual to
property training for the R&D Department.
Precision systematically manage the maintenance, implementation, licensing, and
Using a hybrid "offline + online" format,
transfer of intellectual property. The Company strengthens the protection
the training systematically explained
ESG Management of its own intellectual property and values the protection of others'
intellectual property and trade secrets, promoting the development of patent searching and infringement risk
an innovative industry ecosystem and supporting sustainable innovation prevention, and included simulation
Governance and competitiveness enhancement through responsible practices. exercises. This effectively enhanced
The Company has obtained intellectual property management system all employees' awareness of patent
certification, and the certificate is currently valid. protection and risk control capabilities,
Innovation and
Operations building a strong protective net for R&D
Intellectual Property Training
Product and Service The Company's Intellectual Property Management System and innovation achievements.
Safety and Quality Certificate and patent certificates
Supply Chain Security
Innovation-Driven
Development
Digital and Intelligent
Development
Data Security and Key Performance
Customer Privacy
Protection
Environment As of the end of 2025
Society the Company held 271 authorized and valid patents
Key Performance
Data Sheet
including 86 invention patents
Indexes
The Company also held 14 software copyrights
Reader Feedback The Company has conducted a total of 5 internal training sessions related to intellectual property.
Digital and Intelligent Case: Building an MOM digital and intelligent management system to empower quality and efficiency
improvements throughout the entire production process
Development In 2025, focusing on the needs for lean manufacturing, quality traceability, and delivery agility, Kaizhong
About This Report Precision advanced the construction of a Manufacturing Operations Management (MOM) system in
With the core objectives of "data-driven decision-making,
phase. Led by the IT department, the project was jointly implemented with production, quality, and
intelligent-led manufacturing, and ecosystem-wide
external technical service providers. The system integrates IoT technology for equipment and connects
collaboration for mutual success," Kaizhong Precision is
About Kaizhong with existing systems such as ERP and PLM to build a digital management system covering the entire
Precision building a digital and intelligent transformation path focused
process from order to delivery. This digital and intelligent initiative makes the entire production process
on "data-driven operations, intelligent manufacturing, and
transparent and controllable, enhancing quality traceability and delivery response speed, and injecting
ecosystem collaboration." The Company is concentrating
ESG Management momentum into the global expansion and flexible manufacturing of the Company's new energy vehicle
on the digital and intelligent upgrading of the entire precision
precision components business.
manufacturing process to enhance lean production, quality
Governance traceability, and delivery agility, thereby strengthening its core
competitiveness in the global precision manufacturing field.
Innovation and
Operations
Product and Service
Safety and Quality Supplier Raw Material Material
Supply Chain Security Warehousing warehouse
Innovation-Driven Material
Development handling
Digital and Intelligent
Development
Data Security and
Customer Privacy
Protection
Environment
The Company obtained the Certificate of Intelligent
Manufacturing Capability Maturity (Level 3), Production
Society establishing a digital and intelligent management process
baseline that meets industry standards Customers Finished goods Finished Product
warehouse Handling
Key Performance
Data Sheet Key Performance Overall planning scheme for the Manufacturing Operations Management (MOM) system
To ensure the efficient application of the Manufacturing Operations Management (MOM) system, the
In 2025 Company provides supporting specialized training at different levels and for various categories of
Indexes employees. On the one hand, the Company explains the strategic value and data-driven decision-
the Company's investment in digital and
making logic to the management team. On the other hand, it offers hands-on training for workshop team
intelligent transformation reached RMB 10 leaders and process technicians on modules such as work order execution and quality traceability.
million, focusing on upgrading core production Additionally, the Company has established a "Digital Benchmark Production Line" as a practical training
Reader Feedback
systems and implementing new technologies. site. Using a combined approach of "theory + simulation + practice," the Company has conducted over
Data Security and Customer Privacy Protection
About This Report Kaizhong Precision has established a comprehensive data security and customer privacy protection management system featuring "hierarchical architecture control + closed-
loop institutional processes + technological tool support + emergency drill guarantees." Centered on ISO 27001 and TISAX standards, this system covers the entire data
lifecycle and all aspects of customer privacy protection. Through standardized policies, meticulous controls, and regular drills, the Company aims to achieve its management
About Kaizhong goals of "zero data security incidents and zero customer privacy leaks," ensuring the security and compliance of both the Company's and its customers' data assets.
Precision
ESG Management Data security and privacy protection management system
Governance The data security and customer privacy protection management architecture of Kaizhong Precision is led by the Information Security Management Committee, headed by the
General Manager, which serves as the top-level decision-making and coordination body. The Information Management Department acts as the lead executive department,
collaborating with the Information Security System Team, the Information Security Implementation Team, and other departments such as Human Resources and Marketing.
Innovation and
Operations This forms a three-tiered collaborative mechanism of "decision-making - management - execution." The Company has also formulated core management policies, including
Product and Service the Information Security Management Manual, and has obtained ISO 27001:2022 Information Security Management System and TISAX certifications. This ensures Achieved
Safety and Quality
Supply Chain Security control across all scenarios and processes, with certification covering the entire business scope of the Company and establishing a security control baseline that meets
Innovation-Driven international standards.
Development
Digital and Intelligent
Development
Data Security and
Customer Privacy
Protection
Environment
General
Society Manager
Key Performance Information Security
Data Sheet
Management Committee
Indexes Information Management
Department
Information Security
Management Architecture
Reader Feedback Information Security Management Architecture
The Company implements a triple- The Company collects only necessary
backup strategy (local, off-site, and information during collaborations and
offline) for system data and shared drive clearly identifies core assets.
files, establishing secure shared drives
About This Report to ensure storage safety. Backup and Data
Recovery Minimization
Terminal documents are encrypted Mutual privacy protection obligations
About Kaizhong during transfer, with approval required
Precision are defined in confidentiality and
for external distribution or decryption. cooperation agreements.
Core data is protected throughout
its lifecycle using national-grade Data Multi-Scenario
ESG Management
cryptographic products. Encryption Emergency Drills
Following the principle of least privilege, Data Security Customer Upon termination of cooperation, data is
Governance
data access requires approval and Control: Privacy returned or destroyed as required, with
authentication, with key operations Full-Lifecycle Protection: proof of destruction provided.
logged for traceability. Unauthorized Protection Balancing
Innovation and
Operations access attempts trigger data masking. access Compliance and
Post-Termination
Control Responsibility
Product and Service Handling
Safety and Quality
Supply Chain Security
The Company deploys firewalls and anti-
Innovation-Driven Constraints are placed on employees
malware software with updated virus
Development and authorized representatives, strictly
Digital and Intelligent definitions. Core network equipment is
prohibiting unauthorized access to or
Development configured with dual-unit hot standby.
disclosure of customer data.
Data Security and New systems undergo vulnerability
Customer Privacy scanning, penetration testing, and code Technical Personnel
Protection audits before going live. Protection Management
Environment
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
Data security and privacy protection initiatives in 2025
Multi-Scenario Emergency Drills Case: Conducting multi-scenario data security emergency drills to strengthen the
About This Report barrier for data security and customer privacy protection
In 2025, the Company conducted a total of 3 information security emergency In 2025, focusing on the core needs of data security and customer privacy
protection, Kaizhong Precision organized multi-scenario emergency drills for IT
drills, which verified the feasibility of its emergency plans and the response
About Kaizhong operations and maintenance personnel and related positions. In June, a power
Precision capabilities of its team.
outage drill was conducted in the data center, simulating emergency system
shutdowns and data recovery operations. In August, emergency drills for virus
ESG Management outbreaks and cyberattacks were organized, involving practical operations such
Company-Wide Security Training as network isolation, virus scanning and removal, and system recovery, thereby
strengthening the response process for sudden security incidents. This series
Governance of drills covered key data security risk scenarios, effectively enhancing the
In 2025, the Company conducted specialized training on customer
emergency response and collaborative handling capabilities of the O&M team.
information security and privacy protection via an online platform, covering These efforts have fortified the security defense line for the entire data lifecycle,
Innovation and
Operations all employees. The employee training coverage rate was 100%, enhancing safeguarding the Company's core data and customer privacy, and providing
Product and Service employees' understanding and execution of data security policies and support for business continuity.
Safety and Quality
Supply Chain Security
privacy protection requirements.
Innovation-Driven
Development
Digital and Intelligent
Development Data Security Audits Key Performance
Data Security and
Customer Privacy
Protection
In 2025, the Company conducted 3 information security audits, finding no As of the end of 2025
major compliance risks. These audits led to 3 optimizations in permission
Environment
configurations and 1 improvement in backup procedures.
Society
Completion rate of Success rate of backup Information security
important data backup data recovery tests training completion rate
Related Party Privacy Protection
Key Performance
Data Sheet
In collaborations with suppliers and customers, the Company
comprehensively signs agreements containing privacy protection clauses
that clearly define data usage boundaries and security obligations. In 2025, Number of major Number of information
Indexes
there were no data leakage incidents involving related parties, achieving a information security leakage incidents
Reader Feedback
Environment
Facing severe global environmental challenges, Kaizhong Precision
responds to the national "Dual Carbon" strategy by integrating
sustainable development into its corporate core. With the vision
of "building a green global supply chain to create a better home,"
and adhering to the policy of "green manufacturing," the Company
promotes green transformation and efficient resource utilization
through measures such as improving its environmental management
system. The Company commits to reaching peak carbon emissions
before 2025 and achieving carbon neutrality before 2050. It will
work with all parties to contribute to the green development and
ecological protection of the industry, fulfill its corporate environmental
responsibilities, and jointly build a green future.
Environmental compliance Pollutant emission
management management
Addressing climate change Waste management
Energy use and management Circular economy
Water resource utilization Biodiversity conservation
SDG alignments
EHS Governance Environmental Compliance
About This Report
Structure Management
Kaizhong Precision considers Environment, Health, and
Safety (EHS) management as the cornerstone of its Kaizhong Precision complies with the Environmental Protection Law of the People's Republic
sustainable operations and high-quality development. The of China and other relevant laws, regulations, and local administrative rules where it operates.
About Kaizhong Company has established a governance structure with the The Company has established a systematic environmental management system with clear
Precision
Risk Management Committee, led by the General Manager, responsibilities linked to performance, and has formulated environmental management policies,
and the EHS Department at its core, covering the entire procedures, and documents to monitor environmental factors. Adhering to the core principles of
ESG Management organization to coordinate ESG issues such as environmental "clear responsibility, prevention first, and continuous improvement," the Company has built an
compliance management and climate change response. environmental governance system with full employee participation and comprehensive coverage. By
Through a cross-departmental responsibility system, heads of implementing a regional management system, the Company delegates and solidifies environmental
Governance responsibilities to each department and business unit, creating a closed-loop accountability
various business divisions, operational units, and subsidiaries
drive implementation, forming a collaborative and efficient mechanism. At the same time, the Company embeds environmental requirements into the entire
Innovation and management network. Furthermore, through systematic audits production and operation process, promoting the transformation of environmental awareness into
Operations action. This approach integrates environmental management with daily operations, enhancing its
and a continuous improvement mechanism, the Company
regularly assesses risk control and the effectiveness of its capabilities for green and low-carbon development.
Environment
actions, promoting the enhancement of the risk management
Environmental Compliance
Management
system to ensure the Company's long-term stable System certification
Addressing Climate Change
development and the achievement of its strategic goals.
Kaizhong Precision actively promotes and conducts external third-
Energy Use and Management
Kaizhong Precision EHS party system certifications and reviews. The Company strictly
Water Resource Utilization
Pollutant Emission
Management Architecture adheres to audit regulations, undergoing annual surveillance audits
Management by external third parties to ensure the continued effective operation
Waste Management
of its management systems. Recertification audits are conducted
Circular Economy General Manager
Biodiversity Conservation
every three years to meet the latest requirements of certification
standards. Additionally, the Company conducts an internal system
audit annually to perform a comprehensive self-assessment of its
management systems. For any non-conformities identified, effective
Society corrective measures are formulated and implemented to ensure
all issues are thoroughly resolved, thereby further enhancing the
Risk Management
Key Performance Committee scientific and standardized nature of the Company's management
Data Sheet systems. As of the end of the reporting period, all major production ISO 14001 Certificate
plants of Kaizhong Precision have been certified under the ISO
Indexes
Reader Feedback EHS department
Environmental honors and titles Environmental emergency management
Kaizhong Precision aligns closely with the national "Dual Carbon" strategy, To respond to potential environmental emergencies, Kaizhong Precision has
benchmarking against green factory standards to build a system that integrates established a comprehensive and standardized environmental emergency
About This Report
a low-carbon circular economy with intelligent manufacturing. The Company management system. The Company has formulated an Emergency Response
continuously advances green transformation to comprehensively enhance its level Plan for Environmental Emergencies for risk scenarios such as leaks, fires, and
of green development and environmental competitiveness. excessive emissions, which clarifies the emergency organizational structure and
About Kaizhong response procedures to guide incident handling. At the same time, the Company
Precision
regularly promotes emergency preparedness by organizing at least one full-
Provincial-Level process drill annually to strengthen collaborative response effectiveness and
"Environmentally
ESG Management employee awareness. It also maintains an adequate stock of emergency supplies
Trustworthy Enterprise"
and equipment to ensure a rapid response and control the spread of pollution
during emergencies, safeguarding both the ecological environment and the
Governance Municipal-Level Company's operational security.
National-Level "Cleaner Production
"Green Factory" Demonstration Unit" Case: Participation in external environmental protection training on corporate
Innovation and
Operations environmental emergency response
Environment
Environmental risk identification and control In November 2025, Kaizhong Precision participated in a specialized training
session on corporate environmental emergency response organized by the
Environmental Compliance
Management Kaizhong Precision has established and implemented the Procedure for Shenzhen Municipal Ecology and Environment Bureau. By systematically
Addressing Climate Change Environmental Factor Identification and Evaluation. Led by the EHS Management studying major domestic and international environmental accident cases,
Energy Use and Management Committee, all departments are organized annually to comprehensively identify the Company gained a deeper understanding of the severe consequences
Water Resource Utilization
and systematically evaluate EHS risks and environmental factors. The evaluation and profound lessons learned from incidents such as chemical leaks, fires,
Pollutant Emission
covers multiple dimensions, including air emissions and water pollution, and uses explosions, and cross-border pollution, which were caused by a lack of
Management
quantitative scoring to determine significant risks, ensuring precise identification emergency systems, slow response, and management loopholes. This
Waste Management
Circular Economy and effective control. The Company integrates internal and external information training further enhanced the Company's awareness of the systematic and
Biodiversity Conservation sources to ensure a comprehensive and objective evaluation. For significant risks, hidden nature of environmental risks and prompted a review and improvement
specialized control plans are developed, and a dynamic update mechanism is of its internal environmental emergency response plans.
established to enhance the adaptability and foresight of risk management, thereby
achieving a closed-loop improvement of environmental performance.
Society
Conduct initial Conduct initial
evaluation evaluation Establish
Determine of internal of external identification and
Key Performance scope environmental
environmental evaluation team
Data Sheet
factors factors
Indexes
Update Manage and Conduct
management of control significant identification and
identification and environmental
Reader Feedback evaluation factors evaluation
On-Site Photo of the Specialized Training on Corporate
Environmental Emergency Response
Environmental Factor Identification and Evaluation Process
Addressing Climate
About This Report
Target 2025 Achievements
Change
The Company did NOT receive any In response to the national "Dual Carbon" strategy, Kaizhong Precision
The Company has set a target integrates climate change response into its corporate governance and
major administrative penalties or face
About Kaizhong
Precision of 0 environmental violation criminal prosecution from ecological
and environmental authorities due to
long-term development strategy. By establishing a management system,
setting emission reduction targets, and implementing energy conservation
incidents
environmental incidents. and emission reduction projects, the Company is reducing its carbon
ESG Management
footprint, enhancing climate resilience, and promoting green and sustainable
development to achieve a 50% reduction in carbon emissions by 2030
Governance and 100% carbon neutrality by 2050. Furthermore, the Company has
Key Performance incorporated greenhouse gas management into its core climate governance
Innovation and agenda. Benchmarking against ISO 14064-1:2018, it has established a
Operations Indicator Unit 2025 data climate change management system, issued relevant manuals and supporting
Environment
procedural documents, and built a full-chain management mechanism. For
Total investment in environmental protection RMB 10,000 878.48 emissions inventory, the Company implements quantitative management
Environmental Compliance
Management
covering all three scopes, identifying and calculating both direct and indirect
Addressing Climate Change Ratio of environmental protection investment % 30 carbon emissions, and has established a data screening mechanism. Relying on
Energy Use and Management to operating revenue (per million)
this management system, the Company ensures that carbon data is authentic,
Water Resource Utilization
Pollutant Emission
reliable, and traceable, supporting the setting of carbon targets and accelerating
Management
Number of non-Achieved pollutant discharge Cases 0 the transition of climate action from compliance to value creation.
incidents
Waste Management
Circular Economy
Biodiversity Conservation Number of environmental management
training sessions conducted Times 12 Strategy
Kaizhong Precision is progressively establishing and refining a climate risk
Society Total duration of environmental management management system that covers the entire value chain. The Company
training Hours 24
systematically identifies climate-related risks and opportunities at every stage,
from raw material procurement to product delivery. It integrates the sustainable
Key Performance
Data Sheet
Number of participants in environmental Person-times 120 development of key stakeholders into its management strategy to enhance social
management training
responsibility and sustainable value. The Company will continue to focus on key
issues, assess potential financial impacts, and develop cost-effective response
Indexes Number of environmental emergency risk Sessions 10 plans to secure a leading position in the low-carbon transition.
drills conducted
Reader Feedback
Kaizhong Precision has identified the following risks and opportunities related to
Number of participants in environmental Person-times 150 "Climate Change Response":
emergency risk drills
Risk Risk description
Financial
impact
Management measures Impact, risk, and opportunity
The Company's main operating management
locations are in coastal areas, Reduced Formulate natural disaster
About This Report Extreme making them susceptible to
typhoons and heavy rainfall, which
production
capacity leading
emergency plans and conduct
regular drills; transfer a portion
Climate change materiality assessment
weather risks could lead to damage to plants to a decrease in of losses through commercial Guided by its development mission and vision, and
and equipment and pose a threat revenue insurance.
considering internal and external resources, policies, and
to personnel safety.
About Kaizhong
Precision market conditions, Kaizhong Precision has mapped out its
Continuously track policy industrial value chain. The Company is positioned in the
Increased developments, promote energy
Increasingly stringent global middle of the value chain, transforming upstream materials
ESG Management Policy risk compliance conservation and emission
carbon emission control policies. costs reduction, and increase the and components into competitive products through its own
proportion of clean energy. R&D, production, and technological innovation.
Governance Reduced
Consumer focus on low-carbon demand for
products and
Conduct an organization-level
carbon inventory, set emission
Assessment method for climate-Related
Market risk standards driving the supply chain
Innovation and toward a green transition.
services leading reduction targets, and implement impacts, risks, and opportunities
Operations to a decrease in specific measures.
revenue
Impact assessment
Environment Strengthen talent development
The transition to low-
and retention, increase
Environmental Compliance carbon technologies requires
Increased R&D investment in low-carbon The Company strictly follows the ISO
Management Technology risks continuous R&D investment, and
costs technology R&D, and optimize
Addressing Climate Change technological iteration involves 14064-1 standard and local guidelines in
production processes to reduce
Energy Use and Management uncertainty. Shenzhen to quantify and assess the impact
energy consumption.
Water Resource Utilization
Disclose progress in climate of direct and indirect carbon emissions from
Pollutant Emission
Reputational Increasing attention from investors its operational activities through annual
Management Impact on risk management, and establish
and stakeholders on climate
Waste Management risk financing costs and monitor the achievement of greenhouse gas inventories.
action.
Circular Economy emission reduction targets.
Biodiversity Conservation
Financial
Opportunities Opportunity description Management measures
impact Risk and opportunity identification
Under the "Dual Carbon" strategy,
Society Increased Leverage green factories to build
the demand for new energy
Opportunity for operating a green product system, partner The Company employs a method that
vehicles and green manufacturing
green market revenue and with leading new energy vehicle
is growing, and a low-carbon combines qualitative analysis with industry
Key Performance expansion product gross companies, and expand into the
transition can expand access to
Data Sheet profit margin low-carbon sector. assessment. By monitoring policy dynamics,
high-end customers and markets.
analyzing customer needs, evaluating
Increase the proportion of green
Substituting with clean energy, electricity and promote energy- supply chain conditions, and studying local
Indexes
Opportunity for implementing energy efficiency saving technological upgrades; climate characteristics, it regularly identifies
Reduced
operational cost upgrades, and recycling resources optimize energy management and updates climate-related risks, physical
operating costs
Reader Feedback optimization can reduce energy costs and and establish a full-process
improve resource efficiency. energy consumption control risks, and potential opportunities.
mechanism.
Monitoring mechanism for climate-related issues Conducting climate change scenario analysis
Kaizhong Precision has established a regular and procedural monitoring mechanism To actively respond to the national "Dual Carbon" goals and meet policy requirements,
to continuously track climate issues. With the "Greenhouse Gas Management Team" customer demands, and industry development trends, Kaizhong Precision, after
About This Report at its core and the Environmental Protection Department as the executive hub, the assessment, selected the Beyond 2°C Scenario (B2DS) proposed by the International
Company has formed a stable organizational guarantee. A closed-loop monitoring and Energy Agency (IEA) for its climate scenario analysis. This scenario integrates multiple
management system has also been established to ensure the Company can respond risk dimensions, including extreme weather events, policy changes, and market
About Kaizhong promptly to internal and external changes and steadily advance its low-carbon transition. fluctuations, to effectively assess the Company's climate resilience.
Precision
Each department collects monthly/annual activity data on Tighter
ESG Management Routine The Company faces stricter environmental policies
energy consumption, materials, transportation, etc., according environmental
Data and regulations, which will drive adjustments in its
to their responsibilities. policies and
Collection operational strategies and cost management.
Governance regulations
Innovation and
Operations
At the beginning of each year, systematically account for the Market The Company plans to reduce potential compliance
Environment Annual previous year's greenhouse gas emissions and prepare an condition risks by proactively planning and investing in energy-
Quantitative inventory report. fluctuations saving and emission-reduction technologies.
Environmental Compliance
Management Inventory
Addressing Climate Change
Energy Use and Management
Water Resource Utilization
The Company will increase R&D efforts, promote
Pollutant Emission
Conduct independent internal audits of the inventory process, Unpredictability
Management Internal process innovation, and develop more efficient
data, and reports. of technological
Waste Management Quality thermal management solutions to meet market and
Circular Economy development
Verification environmental demands.
Biodiversity Conservation
Strategic The Company will assess and continuously
Society Compare key indicators such as total emissions and carbon
transition for optimize supply chain sustainability, adopting more
Performance intensity against baseline year data and established emission
corporate environmentally friendly materials and methods in raw
Comparison reduction targets to assess annual performance.
Key Performance revenue growth material procurement and product manufacturing.
Data Sheet and Analysis
Indexes
Incorporate climate performance, risk identification, Carbon emission The Company will closely monitor climate change-
Management and emission reduction progress into the Company's levels of new related risks and formulate risk management
Reader Feedback Review and management review to guide and adjust the climate strategy, businesses measures.
Iteration targets, and action plans for the following year.
Indicators and targets
Kaizhong Precision integrates into the national "Dual Carbon" strategic framework, demonstrating its firm commitment to the 3060 goals through practical actions. By
About This Report continuously increasing resource investment and implementing systematic emission reduction actions, the Company has translated its environmental responsibilities into
quantifiable performance results—as of 2025, the carbon emission intensity per unit of value added has decreased by 12.69% year-on-year, laying a solid foundation for its
medium- and long-term "Dual Carbon" targets. Looking ahead, the Company will continue to follow its "Carbon Neutrality Roadmap," driving the low-carbon transition forward
About Kaizhong
with phased milestones and steadily advancing toward a net-zero future.
Precision
ESG Management Carbon neutrality roadmap
Governance
Innovation and Short-term goal 2025 Science-based carbon target 2030 Long-term carbon goal 2050
Operations
Phased goals
Environment Reducing carbon intensity by 50% Achieving 100% carbon neutrality
Environmental Compliance
Management
Clean energy usage ratio of 50% Reducing absolute scope 1 and 2 carbon
Addressing Climate Change
Reducing carbon intensity
emissions by 50%
Energy Use and Management by12.69% year-on-year
Water Resource Utilization
Helping suppliers save 3 Achieving carbon neutrality before 2050
Pollutant Emission
Management million kWh of energy
Waste Management
Circular Economy
Biodiversity Conservation
Improving energy Optimizing energy Assisting suppliers in Promoting low-carbon Implementing green
efficiency structure emission reduction design operations
Society
Heat recovery and reuse Purchasing green Implementing supplier Recyclable product Advocating green
from equipment electricity energy-saving projects packaging design commuting
Key Performance
Replacement and energy-
Key strategies
Data Sheet Raising energy efficiency Reducing energy
saving retrofitting of high- Sorting, recycling, and Implementing cleaner
standards for equipment consumption in supply chain
energy-consumption reuse of solid waste production
transportation
Indexes equipment Developing green energy Product carbon Low-energy consumption Planning green
Establishing a digital energy sources such as photovoltaic footprint process design factories
management platform and wind power
Reader Feedback
Key Performance
Greenhouse gas emission reduction measures
Scope 1 greenhouse Tonnes of CO2 equivalent Kaizhong Precision reshapes its organizational behavior through green operations, creating a low-
About This Report gas emissions carbon ecosystem that covers work methods, lifestyles, and production models. The Company has
About Kaizhong
recycling, and intelligent manufacturing efficiency improvements into the fabric of daily operations.
Precision From desks to production lines, from commutes to community homes, a green mindset is becoming
ESG Management energy conservation and emission reduction and an intrinsic driver for the Company's journey toward
Scope 2 greenhouse Tonnes of CO2 equivalent a sustainable future.
gas emissions
Governance
Innovation and
Operations In 2025, the Company steadfastly implemented its green and low-carbon development strategy, making
the application of clean energy a core measure to optimize its energy structure and reduce carbon
Environment emissions, continuously increasing the proportion of green electricity in its production and operational
Environmental Compliance energy consumption. During the reporting period, the Company's green electricity consumption reached
Management 2024 2025
Addressing Climate Change
Energy Use and Management
Total greenhouse gas the Company achieved a cumulative carbon emission reduction of 13,065.4 tCO2e, effectively reducing
Water Resource Utilization emissions (Scope 1 + Tonnes of CO2 equivalent the carbon footprint of its production and operations.
Pollutant Emission Scope 2)
Management 107,195.93
Waste Management 92,657.99
Circular Economy 13.56% Case: Active participation in training on carbon market policy interpretation and trading capability
Biodiversity Conservation enhancement
To enhance its capacity to participate in the carbon market, Kaizhong Precision attended the 2025
Society capacity-building training session for key emitting entities in June 2025, organized by Shenzhen Green
Greenhouse gas practical skills for the carbon market, and guidance for annual compliance work, aiming to help key
Key Performance tCO2e / RMB 10,000 of
Data Sheet emission intensity industrial value added emitting entities deeply understand policy requirements, master trading processes, and successfully
fulfill their emission reduction responsibilities. Through this systematic learning, the Company has further
Indexes 0.795
for active participation in carbon emission rights trading and optimizing internal carbon management
processes in the future.
Reader Feedback
Energy Use and Management Low-Carbon Living
Kaizhong Precision places energy management at the core of its production, Green Commuting: Implement the "3-5-10 Commuting Plan" (walking for 3
About This Report
operations, and strategic development, establishing a systematic, company-wide energy km, cycling for 5 km, taking public transportation for 10 km, and driving for
governance system. Benchmarking against the ISO 50001:2018 Energy Management distances over 10 km), encourage walking, cycling, and public transport,
System standard, the Company has formulated institutional documents such as the and drive one less day per week.
About Kaizhong Energy Management Manual, which clarify its energy policy, responsibilities, and
Precision
operational standards, embedding energy management goals into the entire production Energy Conservation and Emission Reduction Behaviors: Advocate for
and operational process and strategic decision-making. To ensure the efficient taking the stairs, sorting and recycling waste, and conserving resources
ESG Management
operation of this system, the Company has established an Energy Conservation (water, paper, electricity) to cultivate environmental protection habits.
and Consumption Reduction Leading Group, composed of members from the EHS
Governance Management Committee and the Equipment and Power Department under the EHS
Department. This group drives the shift from passive cost control in energy conservation
Low-Carbon Office
and carbon reduction to proactive value creation, achieving synergistic environmental
Innovation and
Operations and economic benefits. This effort lays a solid energy management foundation for the
Company's low-carbon transition and high-quality development. Energy-Saving Electricity Use: Use energy-saving light fixtures and promote
Environment
the use of strong natural light for illumination; strictly require that electrical
Environmental Compliance Energy-Saving Targets
Management
appliances be turned off when leaving the office and set reasonable
Addressing Climate Change computer screensaver times; regulate the use of air conditioning, and
Reduce annual energy consumption by
Energy Use and Management suspend its use on specific days.
Water Resource Utilization
RMB million of industrial added value)
Pollutant Emission
Paperless Office: Promote paperless communication and document
Management
Waste Management The Company actively responds to the processing (using the OA e-office platform and video conferencing), save
Circular Economy national "dual control" policy and carries out printing paper, and advocate for double-sided printing.
Biodiversity Conservation energy conservation and emission reduction
work in conjunction with its main business,
comprehensively implementing green
operation strategies. The Company has issued Low-Carbon Manufacturing
Society
an energy conservation and emission reduction
initiative to all employees, implementing Resource Management: Promptly identify and address leaks, spills,
Key Performance
measures such as energy-saving electricity and drips to reduce energy waste.
Data Sheet use, paperless offices, green commuting,
resource management optimization, and Production Efficiency: Ensure machinery is turned off when not
production efficiency improvements. At the in use and non-essential power sources are shut down; improve
Indexes same time, the Company has formulated production quality and efficiency to save energy.
the Regulations on Energy Conservation
and Emission Reduction Management to Energy-Saving Improvements: Encourage suggestions for energy-
Reader Feedback ISO 50001 Energy Management further utilize energy effectively and rationally, saving equipment and improvements to enhance the Company's
System Certificate improve energy efficiency, control costs, and operational efficiency.
achieve the Company's dual control targets.
Water Resource Utilization
Key Performance
Indicator Unit 2025 data
About This Report Total energy consumption Tonnes of standard coal equivalent 12,063.76 To actively address the global challenge of water scarcity and promote sustainable
corporate development, Kaizhong Precision has always regarded water as a
precious strategic resource and is committed to building a comprehensive and
Total energy consumption Tonnes of standard coal equivalent/ efficient water resource management system. The Company strictly complies with
About Kaizhong per million in revenue RMB 1 million laws and regulations such as the Water Law of the People's Republic of China and
Precision
the Regulations on Water Conservation. Adhering to the management principles
Direct energy consumption Tonnes of standard coal equivalent 86.04 of "total volume control, efficiency first, recycling and reuse, and individual
ESG Management
accountability," the Company has formulated and implemented the Water Resource
Management System, integrating the concepts of water resource protection and
Including: Diesel Tonnes of standard coal equivalent 57.78 efficient utilization into every aspect of its strategic decision-making and daily
operations.
Governance
Including: Gasoline Tonnes of standard coal equivalent 28.26
Water conservation target
Innovation and
Operations Indirect energy consumption Tonnes of standard coal equivalent 11,977.73
Environment
Environmental Compliance
Management
Including: Electricity Tonnes of standard coal equivalent 11,977.73 Annual reduction of 5% (Unit: per RMB million of industrial added value)
Addressing Climate Change
Energy Use and Management
Water Resource Utilization
Pollutant Emission
Management
Waste Management
Circular Economy
Biodiversity Conservation
Society
Key Performance
Data Sheet
Indexes
Reader Feedback
Through strict compliance management of water withdrawal, a quota control Water Conservation and Recycling Management Measures
system, and a refined metering and monitoring network of "one meter per
household, one meter per machine," Kaizhong Precision achieves precise tracking
and dynamic management of water flow and consumption throughout the entire Water-saving fixtures are used in office areas and
About This Report plant area, laying a solid foundation for continuous improvement in water use Water- dormitories. Water-efficient processes and equipment
efficiency. saving are prioritized in production. The technical department
facilities regularly assesses and promotes water-saving retrofits for
Water Withdrawal and Use Management Measures older equipment.
About Kaizhong
Precision
ESG Management Achieved water withdrawal, strictly adhering to
legal red lines A production wastewater treatment and reuse system has
been established, with treated water used for workshop
Governance All water withdrawals are legally licensed and strictly Recycling
adhere to permit requirements; cleaning and landscape irrigation. Rainwater is collected
and reuse
for plant greening and road sweeping to reduce fresh
Unlicensed or excessive water withdrawal is strictly
Innovation and water consumption.
Operations prohibited to ensure full operational compliance.
Environment
Environmental Compliance
Planned management, implementing precise control
Management The technical department conducts weekly inspections of
Addressing Climate Change Annual departmental and monthly water use plans Leakage the water supply network and water-using equipment, uses
Energy Use and Management
are developed based on the production plan for the prevention professional methods to detect leaks, and repairs them
Water Resource Utilization
following year; and control within 24 hours. All departments are required to report any
Pollutant Emission
Management discovered leaks immediately.
Waste Management
Total water consumption and conservation targets
Circular Economy
are clearly defined to achieve refined, goal-oriented
Biodiversity Conservation management.
Key Performance
Indicator Unit 2025 data
Society
Quota control, promoting water conservation and
efficiency Total water consumption Tonnes 138,858
Key Performance Water consumption quotas for major products and
Data Sheet
processes are established with reference to national
and industry standards;
Recycled water volume Tonnes 41,199.30
Indexes
Workshop water use is strictly controlled within
quotas, with any excess requiring analysis and
Reader Feedback
corrective action, forming a closed management loop. Water recycling rate % 30
Pollutant Emission Special Management Measures for Pollutants
Management Air pollution prevention
and control
In accordance with national laws and regulations such as the Environmental Protection Establish an inventory management system for all exhaust emission sources, and adopt
About This Report
differentiated treatment processes for different types of exhaust gas, generally using a
Law of the People's Republic of China and the Regulations on the Administration of
combined model of "pretreatment + main treatment + end-of-pipe treatment";
Pollutant Discharge Permits, and based on its own production and operational realities,
Kaizhong Precision has formulated the Pollutant Emission Management System and has Process exhaust gases from organized emissions are strictly treated using high-
About Kaizhong established and continuously improved a pollutant emission management system covering efficiency processes such as adsorption and combustion. All exhaust emissions comply
Precision
the entire process. The Company implements a coordinated strategy of source reduction, with national and local standards, with some factories implementing stricter "special
process control, and end-of-pipe treatment for waste gas, wastewater, solid waste, and noise emission limits";
ESG Management to ensure that environmental impact is minimized and resource utilization is maximized. Strictly control the unorganized escape of dust and volatile organic compounds
(VOCs) through measures such as sealed storage of raw materials, optimization of
Furthermore, with environmental compliance as the baseline for its survival and transportation links, and treatment of fugitive emissions;
development, the Company has built a four-in-one environmental governance system
Governance Establish operational records for all pollution control facilities, which are regularly
encompassing "monitoring - record-keeping - permitting - emergency response." This
maintained to prevent unauthorized shutdowns.
system is founded on a five-dimensional monitoring network to establish a solid data
Innovation and foundation, a dual-track record-keeping system to solidify full-process traceability, a
Operations pollutant discharge permit system to define compliance boundaries, and a tiered emergency Water pollution
response mechanism to secure the risk bottom line. This forms a closed-loop environmental prevention and control
Environment management cycle covering "prevention - control - improvement - emergency response,"
Strictly implement "separation of rainwater and sewage, and separation of clean and
Environmental Compliance driving the transformation of pollution prevention from passive compliance to proactive polluted water." All production bases nationwide have established wastewater treatment
Management governance and from experience-based management to data-driven management. systems, with treatment processes combining physical, chemical, biochemical, and
Addressing Climate Change membrane technologies based on water quality and local environmental requirements;
Energy Use and Management Five-dimensional monitoring Dual-track record-keeping
Water Resource Utilization Production wastewater is treated to meet discharge standards or is reused as reclaimed
Pollutant Emission A five-dimensional self-monitoring A comprehensating on a water after deep treatment. Some factories have achieved "zero discharge," increasing
Management system of "location - indicator - dual-track basis of "primarily the water recycling rate;
Waste Management frequency -method - responsibility" electronic, with paper forbuilt,
Circular Economy has been established, covering operbackup."Retention periods Domestic sewage is pretreated before being discharged into the municipal pipe network;
Biodiversity Conservation all media includingwaste gas, are set by category to meet storage tanks, pipelines, and sewage pools on the plant site are equipped with anti-
wastewater, and noise. Monitoring is regulatory and trace ability seepage and emergency collection facilities to prevent leakage risks.
conducted with Achievedequipment, requirements.
ensuring data is traceable and publicly
Society disclosed in accordancewith the law.
Pollutant Noise pollution
prevention and control
Emission
Management
Key Performance
Tiered emergency response System Permit compliance Prioritize the use of low-noise equipment, and install soundproof covers and shock-
Data Sheet absorbing bases for high-noise sources to reduce noise at the source and equipment
A tiered emergency response The Company strictly implements level;
mechanism has been established. the pollutant discharge permit
Indexes In the event ofan incident, a system,completing permit applications, Reasonably plan production operation times to avoid high-noise operations at night;
"notification - reporting - disposal" renewals, and modifications in
process is activated. Drillsand accordance with the law to ensure that Regularly commission third-party monitoring of noise at the plant boundary to ensure
Reader Feedback reviews enhance risk prevention all discharge activities are lawful and compliance with the Emission Standard for Industrial Enterprises Noise at Boundary.
and control capabilities. Achieved throughout the entire process.
Case: Wastewater pipe leakage emergency response drill
Waste Management
In 2025, to test and enhance its practical response capabilities for environmental Adhering to the principles of "reduction, resource recovery, and harmless treatment,"
emergencies, Kaizhong Precision organized a special emergency drill for a Kaizhong Precision complies with the Law of the People's Republic of China on the
About This Report
"wastewater pipe leak in Production Department." The drill simulated a scenario where
Prevention and Control of Environmental Pollution by Solid Waste and other laws and
a workshop wastewater pipe was damaged. The emergency response team quickly
regulations. The Company has formulated policies such as the Waste Management
initiated the response according to the plan and efficiently completed a series of
actions, including cutting off the leakage source, containing the pollution, conducting Regulations and has established and optimized a full-lifecycle waste management
About Kaizhong
Precision environmental monitoring, and repairing the pipeline, successfully preventing the system. The Company is building a scientific, efficient, and sustainable waste treatment
pollutants from escaping. This drill effectively verified the operability of the Company's system to enhance its treatment capacity and management level, reduce the impact of
emergency plan, strengthened the collaborative response capabilities of multiple waste, promote green and low-carbon production and lifestyles, contribute to ecological
ESG Management
departments, and reflected the Company's management philosophy of "combining and environmental protection and sustainable development, and achieve standardized,
peacetime preparedness with wartime response and being well-prepared" in refined, and green management throughout the entire treatment process.
environmental risk control.
Governance
Waste Management System
Innovation and Case: Conducting specialized hands-on training for wastewater treatment to General industrial solid waste
Operations strengthen guarantees for Achieved waste disposal
Environment In 2025, to enhance the level of refined environmental management and the Sorted disposal: Subdivide categories such as scrap metal and waste plastics,
practical skills of frontline employees in waste and wastewater treatment, Kaizhong prioritize recycling and reuse, and commission Achieved units to dispose of
Environmental Compliance
Precision's Bao'an Branch conducted specialized on-site training and hands-on drills materials with no recycling value; establish storage/transfer ledgers and retain
Management
Addressing Climate Change focused on the wastewater treatment system. The training, based on the Wastewater them for no less than 5 years.
Energy Use and Management Treatment System Operation Manual, systematically explained the process flows of
Full-process control: Regularly update and file the solid waste inventory, sort
Water Resource Utilization the three wastewater treatment units. Through on-site demonstrations and one-on-
Pollutant Emission and collect at the source, store in a standardized manner, commission qualified
one practical guidance, it helped employees master skills in operational inspections
Management suppliers for disposal, conduct annual spot checks on the final disposal end,
and troubleshooting, and strengthened their professional knowledge of safe chemical
Waste Management and track the destination through manifests, GPS, etc., to prevent illegal
preparation. This training clarified job responsibilities and effectively enhanced
Circular Economy dumping and secondary pollution.
Biodiversity Conservation
the environmental safety awareness and emergency response capabilities of all
employees, providing both personnel and technical guarantees for the stable and
Achieved operation of the Company's wastewater treatment system and the standard-
Achieved discharge of pollutants. Hazardous waste
Society
Sorted storage and transfer: Store in dedicated warehouses with partitioned and
Key Performance Key Performance sorted areas, handle transfers through electronic manifests on the regulatory
Data Sheet platform, and commission qualified units for disposal to achieve full-process
traceability.
Indexes
regularly checked by the EHS department, and strictly control the collection/
cubic meters storage/transfer processes; formulate and drill emergency plans, and in the
Reader Feedback Total amount of event of an accident, activate the plan, notify affected parties, and report to the
wastewater discharge Total exhaust gas emissions environmental protection department.
The Company organizes at least one hazardous waste leakage emergency drill
annually to enhance employees' emergency response and handling capabilities,
and maintains records and summary evaluations of the drills. At the same time, Key Performance
the Company's regulatory departments include standardized hazardous waste
About This Report
management in their annual training plans, regularly training relevant employees
on laws and regulations, operating procedures, and safety awareness to ensure
About Kaizhong
that management requirements are deeply ingrained. 2,461Tonnes 356Tonnes
Precision
Total non-hazardous waste Total hazardous waste
Case: 2025 hazardous chemical leakage and fire emergency drill
ESG Management
To strengthen its emergency response capabilities for hazardous chemical
Governance accidents, Kaizhong Precision organized a joint emergency drill for a sulfuric Total waste recycled Percentage of waste recycled
acid leak and an alcohol fire in 2025. The drill simulated the neutralization,
Innovation and
containment, and cleanup procedures for a sulfuric acid leak, as well as
Operations initial firefighting operations for an alcohol fire, covering key aspects such
as alarm response, personal protection, leak control, and firefighting. This
Environment
multi-departmental collaborative drill effectively tested the applicability of Coverage rate of industrial solid Compliance rate of
Environmental Compliance the emergency plan, enhanced employees' practical response skills for waste sorting and recycling hazardous waste sorting,
Management
hazardous chemical incidents, and identified areas for control improvement in storage, and transfer
Addressing Climate Change
Energy Use and Management scenarios involving large-scale leaks and fire escalation, further solidifying the
Water Resource Utilization Company's production safety defenses.
Pollutant Emission
Management
Waste Management
Circular Economy
Biodiversity Conservation
Society
Key Performance
Data Sheet
Indexes
Emergency Drill for Responding to a Sulfuric Acid Leak and an Alcohol Fire
Reader Feedback
Circular Economy Biodiversity Conservation
In practicing the principles of a circular economy and promoting the The Company integrates biodiversity conservation into its corporate environmental
About This Report
green transformation of its production system, Kaizhong Precision is responsibility strategy, systematically managing its impacts on ecosystems across daily
not only committed to the resource recovery of end-of-pipe waste but operations, supply chain management, and long-term investments. During the project
also proactively integrates circular economy thinking into the source planning and feasibility assessment phases, the Company proactively identifies and avoids
About Kaizhong ecologically sensitive areas, strictly adhering to the regulatory requirements of ecological
Precision innovation of product design and production processes. Through
continuous material substitution and process optimization, the Company protection red lines, environmental quality baselines, resource utilization ceilings, and the
fundamentally reduces the use of hazardous substances and enhances negative list for environmental access. Throughout the construction and operational phases,
ESG Management
the environmental friendliness and resource recycling potential of its the Company minimizes disturbances to surrounding habitats and species through measures
products throughout their lifecycle. such as intensive land use, pollutant control, and facility greening. Furthermore, the
Governance Company has incorporated biodiversity compliance requirements into supplier qualification
and performance evaluation systems, driving the entire upstream and downstream value
Innovation and
chain to jointly fulfill ecological responsibilities.
Operations In production process management
Environment The Company proactively replaces high-
Key Performance
risk chemicals with low-risk, environmentally
Environmental Compliance
Management friendly alternatives. Citric acid is used
Addressing Climate Change instead of traditional sulfuric acid for cleaning During the reporting period, the Company's production, operations, products, and
Energy Use and Management
and treatment, significantly reducing the services did NOT have a significant impact on biodiversity.
Water Resource Utilization
Pollutant Emission environmental and safety risks associated with
Management the storage, use, and subsequent disposal of
Waste Management
strong acids.
Circular Economy
Biodiversity Conservation
In product design and material selection
Society
The Company actively explores and applies
innovative materials, such as using polymer
Key Performance plastic blades instead of traditional metal
Data Sheet
magnetic yokes in some components. This
move not only reduces product weight and
Indexes optimizes performance but also significantly
improves the material's recyclability and
Reader Feedback
environmental compatibility in final disposal.
Society
Kaizhong Precision upholds a "people-oriented" philosophy,
integrating employee well-being and social responsibility into its long-
term development logic. The Company is committed to creating a
fair, respectful, and inclusive work environment, safeguarding the
legitimate rights and interests of its employees, improving its talent
acquisition and development mechanisms, and fostering a strong
sense of belonging and organizational cohesion. With occupational
health and safety as its bottom line, the Company protects the lives
and health of its employees and ensures operational stability. It also
continuously engages in social contribution and rural revitalization
initiatives, responding to community and public concerns and driving
the parallel advancement of corporate growth and social value.
Protection of employee rights Occupational health and safety
Employee compensation and Social contribution
benefits
Rural revitalization
Employee career development
and training
Employee care
SDG alignments
Protection of Employee Rights The Company prohibits the hiring of employees under the age of
or juvenile workers are employed. If child labor is discovered,
Kaizhong Precision adheres to legally Achieved employment and a "zero tolerance for Prohibition
the Company immediately ceases their work in accordance with
About This Report infringement" bottom line. The Company integrates the protection of employee rights of child labor
labor laws, sends them for a medical examination at a specialized
into its systems and management by following domestic regulations, incorporating
institution, returns them to their guardians promptly, and assists
overseas requirements, and drawing on international initiatives. To improve its labor rights
them in continuing their compulsory education.
management mechanism, the Company has formulated and implemented policies such
About Kaizhong
Precision as the Employee Handbook, which covers aspects like equal employment, ensuring that
The Company signs labor contracts with employees in accordance
employee grievances are handled in a documented and traceable manner. The Company with the law, clearly defining the terms of employment. It strictly
fosters an inclusive, diverse, and equal work environment and improves mechanisms prohibits collecting deposits from employees in any form and does
ESG Management
centered on "equal employment and a diverse workforce." Opposition not hold, destroy, hide, or confiscate their documents, except as
to forced required by law. If any instance of forced labor is discovered, the
Talent acquisition is guided by job requirements and follows the principles of openness,
Governance labor Company promptly investigates, holds the responsible parties
transparency, and merit-based competition. The Company standardizes selection accountable, and provides reasonable assistance to the affected
processes to ensure information is authentic and processes are traceable, promoting a individuals, such as legal aid, financial compensation, and
Innovation and diverse workforce structure. At the same time, it emphasizes a combination of internal psychological counseling.
Operations
and external talent allocation to build a sustainable talent supply system. To implement
equal employment, the Company prohibits unfair treatment such as discrimination and
harassment through its policies, enhancing fairness, optimizing codes of conduct and The Company has established a labor union to ensure that
Environment
rights protection mechanisms, ensuring accessible complaint channels, and strengthening Freedom of employees can exercise their right to organize in an environment
protection for special groups. This improves employees' sense of belonging and cohesion, association free from violence, pressure, fear, intimidation, and threats. For
Society
achieving stable and integrated development of a diverse team. matters involving the vital interests of employees, such as wages,
and
Protection of Employee benefits, occupational safety and health, and social insurance,
Rights Measures for Protecting Labor Rights collective the Company supports listening to employees' opinions through
Employee Compensation and bargaining democratic forms like the workers' congress and union meetings,
Benefits The Company does not interfere with employees' freedom of belief.
and cares about and values their reasonable demands.
Employee Career It does not discriminate against employees in hiring, compensation,
Development and Training
training opportunities, promotion, dismissal, or retirement based on
Employee Care
Occupational Health and Anti- ethnicity, race, nationality, religious belief, gender, or other factors. Job assignment and transfer for female employees: The Company
Safety discrimination In the event of a discrimination incident or upon receiving a related prohibits arbitrarily assigning female employees to unsuitable positions.
Social Contribution complaint, the Company promptly investigates and provides If a position becomes unsuitable due to production changes, a timely
Rural Revitalization
reasonable assistance to the affected individuals, such as legal aid, transfer will be arranged. Female employees may apply for a transfer
financial compensation, and psychological counseling. for health reasons with a doctor's certificate.
Protection
Key Performance Labor protection during pregnancy: Pregnant employees are prohibited
Data Sheet All forms of harassment, including psychological, sexual, and of female
from working overtime. From the seventh month of pregnancy, they
verbal, are prohibited. Employees are encouraged to report employees' are not assigned to night shifts and are provided with rest time. Their
potential and actual incidents of harassment or abuse to their
rights working hours and tasks are monitored regularly.
Indexes Anti- company's HR & Administration department or their department
harassment head. In the event of an incident or upon receiving a complaint, Maternity and nursing leave: The Company ensures female employees'
the Company promptly investigates and provides reasonable rights to prenatal check-up leave, nursing leave, and parental leave in
Reader Feedback
assistance to the affected individuals, such as legal aid, financial accordance with the law. During the nursing period, female employees
compensation, and psychological counseling. are not assigned to work overtime or on night shifts.
Employee satisfaction
Total number of employees 3,603 Persons Kaizhong Precision regards its employees as core stakeholders in the
organization's development and values their requests and experiences. The
About This Report Company conducts annual all-staff satisfaction surveys to collect feedback on
key dimensions such as the work environment, career development paths,
Unit：Persons Unit：Persons
team collaboration effectiveness, and the competitiveness of compensation and
About Kaizhong
Precision to ensure that requests are directed to the responsible departments. This system
and targeted feedback on rectification results. This approach transforms value
ESG Management 2,374 3,233
By gender By region from "voices being heard" to "problems being solved," continuously enhancing
the employee experience and organizational commitment.
Governance Employee satisfaction
Innovation and
Operations Male Mainland China
Female Other countries and regions 85.25%
Environment
Key Performance
Society
Protection of Employee Indicator Unit 2025 data
Rights
Employee Compensation and Employees with disabilities hired Persons 8
Benefits
Employee Career Employees from ethnic minorities Persons 452 2023 2024 2025
Development and Training
Employee Care
Veteran employees % 25
Occupational Health and
Safety
Social Contribution
Percentage of female employees % 34.11
Rural Revitalization
Employee turnover rate % 9.96
Key Performance Workers' congress meetings throughout the year Times 5
Data Sheet
Labor contract signing rate % 100
Indexes
Social insurance coverage rate % 100
Reader Feedback No incidents involving infringement of the freedom of association and collective
bargaining rights, forced labor, illegal servitude, employment of child labor, or any
type of discrimination or harassment were found.
Employee Compensation and Benefits
About This Report Kaizhong Precision is committed to centering its efforts on employee well-being and long-term talent development.
The Company has built a compensation management system and an employee benefits framework that are both
externally competitive and internally equitable. Through performance incentives, medium- and long-term employee
stock ownership, and diverse welfare services, it addresses the multi-level needs of its employees. This ensures that
About Kaizhong
Precision employees receive more comprehensive support and care at the Company, enhancing their sense of belonging and
cohesion, and stabilizing its core talent team. By continuously reviewing and optimizing its incentive and benefits
ESG Management strategies, the Company maintains its attractiveness to talent and its market competitiveness.
Governance Employee compensation and performance
Kaizhong Precision continuously improves its compensation and incentive systems, such as the Compensation
Innovation and and Benefits Management System and the Performance Management System. The Employee Handbook clearly
Operations
outlines the performance-oriented principles, using performance results in key areas like bonus distribution. This
strengthens the role of the compensation system in driving strategic goals and supporting key positions, fostering a
Environment positive cycle. Additionally, the Company strictly adheres to the Performance Management System to improve the
entire process for employee performance feedback and appeals. After performance appraisal results are issued, the
Society employee's direct supervisor conducts a one-on-one performance feedback meeting to explain the results and their
Protection of Employee
Rights
basis, listen to the employee's opinions, and clarify subsequent improvement plans and resource support, thereby
Employee Compensation and aligning organizational goals with individual development.
Benefits
Employee Career
Development and Training Performance Appeal Process
Employee Care
Occupational Health and
Safety STEP 01 STEP 02 STEP 03 STEP 04
Social Contribution
Rural Revitalization
The Human Resources
Prioritize communication If no agreement is For major appeals, the
Department, in conjunction
and coordination with the reached,submit a matter must be reported
Key Performance with the Performance
appraiser's supervisor written appeal to the
Data Sheet Management Committee to the General Manager
Human Resources
conducts an investigation for approval before a
Department
and provides feedback final decision is issued
Indexes on the outcome within the
specified time limit
Reader Feedback
Equity incentives and employee stock Employee benefits
ownership plans
Kaizhong Precision is deeply concerned with employee benefits and well-being.
About This Report Kaizhong Precision uses a systematic performance management system to link Guided by the Welfare Management System, the Company has established a
medium- to long-term and daily incentives, applying organizational and individual benefits management framework covering all full-time employees. This framework
performance results to incentive distributions such as annual bonuses, salary emphasizes the legality, compliance, differentiation, and accessibility of benefits,
About Kaizhong adjustments, and performance awards. At the same time, to improve the benefit-sharing while standardizing the composition and applicability of benefits. This approach
Precision
mechanism between laborers and owners and align the interests of the Company, ensures that welfare resources more accurately match the multi-level needs of
shareholders, and employees, the Company has launched a stock option incentive employees, continuously enhancing their sense of belonging and team stability.
ESG Management plan and an employee stock ownership plan. These initiatives aim to motivate and
retain core talent, stimulate their enthusiasm and creativity, build a human resources Statutory benefits Statutory benefits
advantage, and ensure the achievement of long-term strategic goals.
Governance Includes off-site accommodation
Includes pension insurance,
Case: Implementing a stock option incentive plan to align core talent with medical insurance, work-related subsidies, meal allowances,
Innovation and performance goals injury insurance, unemployment annual physical examinations,
Operations and special care during
insurance, maternity insurance,
and a housing provident fund. The major holidays.
In September 2025, Kaizhong Precision launched the 2025 Stock Option Incentive
Company's
Environment Plan, covering certain senior and core management personnel. By implementing Employee
compensation securitization reforms, the plan links company-level performance Benefits
targets with individual performance results. This long-term incentive strengthens Special benefits System
Society
Flexible benefits
Protection of Employee the stability of key talent and aligns their objectives with the Company's business Includes comprehensive
Rights
goals, thereby boosting momentum for sustained growth. Includes commercial insurance,
Employee Compensation and benefit support covering
Benefits training, family care, and
family, life, transportation,
Employee Career educational support.
Development and Training
and communication.
Employee Care Case: Implementing an employee stock ownership plan to enhance key talent
Occupational Health and retention and long-term incentives
Safety
Social Contribution In May 2025, Kaizhong Precision launched the 2025 Employee Stock Ownership
Rural Revitalization Key Performance
Plan, with 160 outstanding employees participating. This plan improves the
corporate governance mechanism and enhances the Company's long-term,
Key Performance effective incentive and constraint mechanisms and compensation system. It fully
Data Sheet
mobilizes the enthusiasm and creativity of employees, attracting and retaining
outstanding management talent and business backbones, which is conducive Employee benefits coverage rate: 100%
Indexes to the Company's future performance improvement and high-quality sustainable
development.
Reader Feedback
Employee Career Development and Training
About This Report Kaizhong Precision adheres to a strategic focus on employee career development and training. The Company has systematically built an employee development support
system that balances institutional guarantees with capability enhancement. This system more closely aligns individual employee development with the Company's operational
needs, continuously improving team stability and professionalism, and creating an internal driving force that supports the Company's continuous innovation and stable
About Kaizhong
operation.
Precision
ESG Management
Talent development management system
Supported by policy frameworks such as the Kaizhong Corporate Culture Outline, Kaizhong Precision has established an employee development management framework
Governance
covering training, knowledge inheritance, and career paths. By standardizing processes, integrating dual-track growth paths, and reinforcing the application of performance
results, the Company enhances the clarity and predictability of employee growth paths, thereby strengthening its talent pipeline and organizational capabilities. The Company
Innovation and treats talent development as a key lever for organizational capability building, integrating it into this process. It uses dual-track paths and competency standards to guide
Operations
growth and promotion, complemented by mechanisms like needs identification, to solidify its knowledge inheritance and internal cultivation capabilities. This approach shifts
talent development from a "project-based" model to one that is "long-term and systematic," providing sustained support for key positions and core competency building.
Environment
Society
Protection of Employee
Rights
Employee Compensation and
Benefits
Differentiated Leadership development and
Employee Career
Development and Training development by stage high-potential pipeline
Employee Care
Occupational Health and New employees: Cultural integration;
Junior level: Team management; personal
Safety foundational skills
Social Contribution effectiveness
Rural Revitalization
Growth stage: Professional deepening; Mid-level: Cross-departmental collaboration;
independent contribution business management
Talent Development
Key Performance
Data Sheet Maturity stage: Domain expertise; management Mechanism Senior level: Strategic planning; organizational
capabilities development
Indexes Late career stage: Experience inheritance; High-potential program: Job rotation; special
organizational empowerment assignments; executive coaching
Reader Feedback
Employee promotion Employee training
Kaizhong Precision promotes employees based on competence and actual Kaizhong Precision prioritizes talent development by establishing a closed-loop training
performance, establishing a fair and impartial internal career development channel. and development system that encompasses "stratified training, process evaluation, result
About This Report
The Company has standardized the promotion process to broaden employees' application, and continuous improvement." Leveraging both internal and external training
growth opportunities, thereby motivating and retaining core talent. It has established resources, the Company offers a wide range of training programs for all employees. These
a job-grade system covering management, professional, and operational tracks, programs cover areas such as onboarding and integration, job-specific skills, professional
About Kaizhong supporting employee development within or across tracks based on their abilities. series, management capabilities, professional ethics, and legal compliance. This approach
Precision
The Company conducts four-dimensional, tiered reviews based on job qualifications, ensures that employee skill enhancement is effectively aligned with their career development
with mechanisms in place to ensure fairness. The results are linked to promotions paths, continuously strengthening the organization's talent pipeline and core competencies.
ESG Management
and compensation, creating a closed-loop management system.
Leadership enhancement training
Governance
Management
Case: Conducting external training on business acumen and strategic decision-
M17 Management expert M15 Advanced manager making to enhance the management capabilities of mid- to senior-level leaders
track
Innovation and
Operations
M16 Senior manager M14 Intermediate manager In November 2025, Kaizhong Precision organized a two-day specialized
external training session on "Business Acumen and Strategic Decision-Making"
Environment for its mid- to senior-level business managers. The course focused on key areas
such as expanding business perspectives, strategic analysis methods, and
Society P16 Expert P13 Intermediate pathways for decision implementation. Through systematic learning, the training
Professional
Protection of Employee strengthened the management team's business mindset and scientific decision-
track
Rights P15 Senior P12 Junior, staff making capabilities. This further enhances the executability of strategic planning
Employee Compensation and
Benefits P14 Advanced and the efficiency of operational management, providing talent and capability
Employee Career support for the Company's high-quality development.
Development and Training
Employee Care
Occupational Health and
Safety 014 Senior technician 012 Intermediate skilled worker
Operational
Social Contribution
track
Rural Revitalization 013 Technician 011 Junior skilled worker/
operator
Key Performance
Data Sheet
Additionally, the Company encourages employees to pursue higher education,
Indexes incorporating it into the career development support framework. By offering education
allowances and subsidies, it lowers the barrier for employees to advance their education
and enhances their sense of achievement, aligning their capabilities with job development
Reader Feedback
needs. This approach strengthens the Company's ability to attract and retain high-caliber On-site at the Business Acumen and Strategic Decision-Making training
talent, thereby boosting its overall talent competitiveness.
Professional skills training
Case: Conducting CAD&CAE application training to enhance engineering Case: Conducting training on the TRIZ theory of inventive problem solving to
About This Report collaboration and simulation capabilities enhance technical problem-tackling and problem-solving capabilities
In September 2025, Kaizhong Precision conducted CAD&CAE software In December 2025, Kaizhong Precision organized external training for R&D personnel
application training for production management personnel from on the theme of technological innovation. The training covered the innovation
About Kaizhong departments such as commutators and connectors. The training covered methodology system, an overview of TRIZ, the DTRIZ problem-solving path, and an
Precision
introductions to mainstream CAD/CAE tools, key points of internal
CAE application, and a detailed explanation of the full-process CAE explanation of related tools, complemented by hands-on exercises for key tools. By
simulation capabilities. By integrating software operation with practical introducing structured analysis and innovative tools into R&D workflows, this initiative
ESG Management
engineering scenarios, the training enhanced participants' understanding helps R&D personnel enhance their abilities to break down complex problems, generate
of the synergy between design, process, and manufacturing, as well as solutions, and validate them, thereby further supporting improvements in technical
Governance
their ability to use these tools. This provides methodological support for problem-tackling efficiency and the quality of innovation output.
product design optimization and manufacturing capability enhancement.
Innovation and
Operations
Environment
Society
Protection of Employee
Rights
Employee Compensation and
Benefits
Employee Career
Development and Training
Employee Care
Occupational Health and
Safety
On-site at the CAD&CAE software application training On-site at the TRIZ innovative methods practice training
Social Contribution
Rural Revitalization
Key Performance Key Performance
Data Sheet
Indexes The Company conducted a total of 580 with a total duration of an average satisfaction rate of
Reader Feedback online and offline employee training sessions 19,458 hours 94.18%
Employee Care
About This Report Kaizhong Precision consistently integrates employee care into its daily management and corporate culture. The Company continuously organizes a variety of employee activities focused
on physical and mental health, team integration, holiday celebrations, and community engagement. These activities provide richer opportunities for communication and interaction, foster
cross-departmental collaboration, enhance employees' sense of belonging, and cultivate a positive, harmonious, and inclusive work atmosphere.
About Kaizhong
Precision
Employee activities
ESG Management
Case: Organizing fun-themed activities for the Mid-Autumn Festival to Case: Operating sports club communities to promote inter-departmental team exchange
Governance enhance employees' sense of belonging and collaboration
Innovation and In 2025, the Company planned special activities for the Mid-Autumn In 2025, the Company established badminton and football clubs as regular employee
Operations Festival, combining interactive games with on-site participation and holiday community programs, holding weekly activities. Employees are encouraged to participate
gifts. It set up fun challenges and interactive sessions in common areas, voluntarily based on their interests and form teams freely. Through a model of "fixed
allowing employees to experience a stronger sense of festive ritual through frequency + stable organization," these sports activities have become a platform for cross-
Environment
collaboration and communication. This also provided an opportunity for departmental communication. On one hand, they help new employees integrate into teams
employees from different positions and shifts to connect in a relaxed more quickly; on the other, they foster tacit understanding and trust through long-term
Society
Protection of Employee setting, continuously enhancing team warmth and cohesion. interaction, providing "soft support" for daily collaboration and communication efficiency.
Rights
Employee Compensation and
Benefits
Employee Career
Development and Training
Employee Care
Occupational Health and
Safety
Social Contribution
Rural Revitalization
Key Performance
Data Sheet
Indexes
Reader Feedback On-site at the Company's Mid-Autumn Festival activity challenges On-Site at the Football (Left) and Badminton (Right) Club Activities
Case: Opening a cultural and activity room to support employees' fitness at any time
Occupational Health and Safety
In 2025, the Company opened a cultural and activity room free of charge to all Kaizhong Precision regards occupational health and safety as a fundamental
About This Report employees, 24 hours a day. It is equipped with basic fitness facilities such as baseline and a core capability for high-quality development. The Company
treadmills and stationary bikes, meeting the "drop-in-and-work-out" needs of adheres to the principles of prioritizing employee life and health, focusing on risk
employees on different shifts before or after work. By embedding a fitness space prevention, and ensuring accountability. Through institutionalized governance and
into employees' daily routines, the Company lowers the barrier to exercise, helps routine operations, it translates safety requirements into executable behaviors and
About Kaizhong
Precision employees develop more consistent health habits, and, to some extent, alleviates capabilities at the frontline. A closed-loop management system drives continuous
the effects of prolonged sitting and fatigue. This ensures that health support is improvement, which not only protects the occupational health and safety of its
ESG Management "accessible, usable, and sustainable" in practice. employees but also enhances the stability and resilience of its production and
operations, providing a guarantee for long-term sustainable development.
Governance Governance
Kaizhong Precision complies with the Law of the
Innovation and People's Republic of China on the Prevention and
Operations Control of Occupational Diseases, the Work Safety Law
of the People's Republic of China, and other laws and
regulations. The Company also adheres to occupational
Environment health and safety standards and regulations in its
overseas operating locations and references industry
association requirements to establish an occupational
Society
Protection of Employee Photos of the Company's Activity Room Space and Equipment health and safety governance system centered on
Rights policies, organization, and responsibility. The Company
Employee Compensation and has formulated a series of policy systems, including
Benefits
Employee Career
Assistance for employees in hardship the Occupational Health Management System and the
Work Safety Target Management System, to solidify
Development and Training target requirements, procedural norms, and supervision
Employee Care Kaizhong Precision has established an Employee Mutual Aid Foundation to provide
and assessment, ensuring that risks are identifiable, The Company and Its
Occupational Health and financial assistance to members and their families facing medical difficulties or significant measures are implementable, and responsibilities are
Safety Subsidiaries Are All Certified
losses due to natural disasters or emergencies. The foundation helps recipient families traceable. For the specific governance structure, please
Social Contribution Under the ISO 45001:2018
Rural Revitalization alleviate temporary financial pressures, supplements the employee welfare system, and refer to the EHS governance structure in Chapter IV,
"Environment," of this Report. Occupational Health and Safety
enhances employees' sense of gain and team cohesion.
Management System
Key Performance
Data Sheet
Key Performance Key Performance
Indexes The Company provided assistance to 12 employees in hardship The Company had no major work safety accidents.
Reader Feedback with 0.0041 employees assisted per million in revenue
Strategy Impact, risk, and opportunity
management
The Company adopts an overall strategy of "prevention first, proactive risk management, and accountability at every
About This Report post," elevating occupational health and safety management from isolated controls to a systemic capability that supports Kaizhong Precision regards occupational health and
business continuity. In 2025, considering the characteristics of multi-campus operations and overseas compliance safety as a fundamental capability to ensure employee
requirements, the Company established a routine risk and opportunity identification framework through mechanisms well-being and business continuity. Following a closed-
About Kaizhong such as three-level work safety standardization, specialized inspections of key facilities, and monthly investigations. This loop logic of "risk prevention - process monitoring -
Precision
ensures that management decisions are based on verifiable identification results, allowing for precise resource allocation emergency response - review and improvement,"
and enhancing both delivery stability and long-term resilience. the Company implements the policy of "safety first,
ESG Management
prevention foremost, and comprehensive governance."
Kaizhong Precision has identified the following risks and opportunities related to "Occupational Health and Safety":
It comprehensively implements daily prevention and
Governance control, emergency management, safety culture, and
Financial psychological support to form executable, collaborative,
Risk Risk description Management measures
Innovation and
impact and traceable management arrangements. This
Operations approach continuously reduces exposure to accidents
Typical accident types such Increased Formulate emergency plans, strengthen and occupational health risks, while transforming "safer
Production Safety
as fires, electric shocks, and operating safety training and drills, and normalize work methods, a more stable workforce, and higher
Accident Risks
Environment mechanical injuries costs hazard identification and rectification
operational resilience" into opportunities for improving
organizational efficiency and long-term competitiveness.
Society
Identify and control occupational hazards,
Protection of Employee Occupational Inadequate control of hazardous Increased
conduct regular monitoring and public
Rights Health Exposure factors such as dust, noise, and compliance
Employee Compensation and disclosure, and implement full-lifecycle
Risks chemicals costs
Benefits health examinations
Employee Career
Development and Training
Employee Care
Financial
Occupational Health and Opportunities Opportunity description Management measures
Safety
impact
Social Contribution
Reduce costs
Rural Revitalization
Business Comprehensive emergency associated with Establish a tiered response mechanism
Continuity plans reduce shutdown shutdowns and validate its effectiveness through
Key Performance Opportunities losses from accident impacts and secondary regular drills
Data Sheet disposal
Reduce
Indexes Closed-loop management absenteeism Conduct evaluations and occupational
Preventive
of hazardous factors and work-related health examinations, and strengthen
Management
reduces the probability of injury expenses, protective optimization and on-site
Reader Feedback Opportunities
occupational health damage and improve per improvements
capita efficiency
Indicators and targets
Key Performance
About This Report Quantitative indicator disclosure
Unit 2025 data
item
Investment in work safety RMB 10,000 448.88
About Kaizhong Target Progress in 2025
Precision
Investment in work safety liability
RMB 10,000 12
Six "Zeros" insurance
ESG Management
Zero fatalities and serious injuries (including Ratio of work safety investment to
% 0.15
traffic liability) accidents operating revenue
Governance
Zero major fire (or explosion) accidents Number of work safety emergency drills Times 48
Achieved
Innovation and Zero major equipment accidents Cumulative number of participants in
Operations Person-times 12,603
emergency drills
Zero major liability accidents
Coverage ratio of work safety liability
% 100
Environment Zero major environmental pollution incidents insurance
Zero incidence rate of occupational diseases Cumulative number of safety risk
Times 92
Society
among employees inspections
Protection of Employee
Rights Safety risk inspection coverage rate % 100
Employee Compensation and
Benefits
Number of occupational health and safety
Employee Career Times 320
Development and Training
trainings
Employee Care
Occupational health and safety training
Occupational Health and % 100
Safety
coverage rate
Social Contribution Target Progress in 2025
Rural Revitalization ccupational disease incidence rate % 0
Four "100%s"
Days 135
Key Performance
education and training related injuries
Data Sheet
insurance and work safety liability insurance Achieved per million in revenue million
Indexes
disease physical examinations Work-related injury rate % 0.19
Reader Feedback Incidents/million
and safety training hours (LTIFR)
Occupational health and work safety emergency plans
Kaizhong Precision considers the development of emergency plans a key barrier in occupational health and safety risk management. The Company has formulated the Emergency
About This Report
Plan for Production Safety Accidents and the Emergency Response and Handling Mechanism for Safety Accidents with the goal of achieving "rapid response, coordinated handling, and
minimized losses" during emergencies. These plans integrate the protection of employees' lives and health with the assurance of business continuity into a single mechanism. Through
process-based, tiered, and traceable management arrangements, the Company ensures that the plans are "usable, responsive, effective, and reviewable," continuously enhancing its
About Kaizhong accident prevention and emergency response capabilities.
Precision
ESG Management The Company's Emergency Response and Support for Work Safety Accidents
Governance
Emergency Response Emergency Support
Innovation and
Operations Level III (Department-Level): Initial response by the Communication and Information Guarantees: Broadcasting systems, internal
accident department or team, with emergency support telephones, and mobile phones are used by zone; command center and team members
from other departments. are on 24/7; the logistics support team is responsible for maintaining broadcasting and
Environment
office telephone systems.
Level II (Company-Level): Activated by the General
Society Commander/Deputy General Commander, uniformly Emergency Teams and External Linkage: Teams cover emergency rescue, security
Protection of Employee
mobilizing company emergency resources for response. and evacuation, medical aid, communications, and logistical support; external forces
Rights
Employee Compensation and such as 110/119/120 are engaged when necessary.
Benefits
Level I (Community-Level): Activated and directed by
Employee Career the local sub-district office and government emergency Materials, Equipment, and Neighborhood Collaboration: The Company is equipped
Development and Training management departments, coordinating social with emergency supplies that can be deployed as needed; an emergency linkage
Employee Care
Occupational Health and
emergency resources for reinforcement. mechanism has been established with neighboring enterprises to strengthen mutual
Safety resource assistance.
Social Contribution Escalation Principle: When a lower level cannot control
Rural Revitalization the situation, the response level is escalated sequentially Financial Guarantees: Special funds for emergency rescue are legally guaranteed
from III to II to I. for material procurement, team training and drills, emergency response expenses, and
Key Performance rescue rewards.
Data Sheet Early Warning/Information Reporting Chain: First
Discoverer On-Duty Manager General (Deputy) Other Guarantees + Institutionalized Operation: Transportation support, security,
Emergency Commander Relevant Government medical aid, and rapid external firefighting reinforcement; implementation of a 24-hour
Indexes
Departments. In emergencies, reporting can bypass duty system, annual training, inspection and maintenance, and regular meetings and
levels. drills (comprehensive/specialized at least once a year, on-site response plans at least
Reader Feedback once every six months).
Safety culture and mental health development Case: Training mental health first aiders to establish a peer support network
Kaizhong Precision uses safety culture development as a driver, integrating employee work
safety awareness and mental health care into its daily management system. In 2025, the In April 2025, guided by a mental health management approach of "prevention first, early
About This Report
Company continued its themed event mechanisms, such as Safety Month and Fire Safety identification, and timely support," Kaizhong Precision selected and trained a group of
Month, and strengthened occupational health compliance training and the mental health volunteer employees from various departments to serve as "Mental Health First Aiders."
support system. These efforts promote the transformation of safety standards into frontline After receiving basic training, these individuals can provide initial listening and support
About Kaizhong capabilities and extend health care to both physical and mental well-being, fostering an to colleagues experiencing psychological distress in their daily work, much like physical
Precision
atmosphere where employees "know the risks, can respond to emergencies, and have first aid, and guide them to seek more professional help when necessary. By building an
support." This reduces safety and health risks and enhances team stability and operational accessible peer support system within the organization, the Company further enhances
ESG Management
resilience. Additionally, the Company strictly complies with regulations such as the Design its employee care system, reduces the hidden risks of mental stress issues, and promotes
Health Standard for Industrial Enterprises and the Administrative Provisions on Occupational the development of a more stable and resilient work atmosphere.
Governance Health at Workplaces, and regularly provides training on relevant knowledge and skills for
first-aid personnel, safety managers, and other staff.
Innovation and Case: Conducting "safety awareness month" training to enhance
Operations emergency response capabilities
In June 2025, Kaizhong Precision launched a Safety Awareness Month campaign themed
Environment "Everyone Talks About Safety, Everyone Knows Emergency Response." Department
heads and employees participated in safety training that focused on strengthening risk
Society identification, hazard prevention, and key aspects of emergency response. Through
Protection of Employee
promotion to encourage learning and training to drive application, this initiative embedded
Rights
Employee Compensation and safety awareness and emergency response capabilities into daily work, reinforced the
Benefits Company's primary responsibility for work safety, and continuously ensured the safety of
Employee Career
employees and the stability of production.
Development and Training On-Site at the Employee Mental Health Training
Employee Care
Occupational Health and
Safety
Social Contribution
Key Performance
Rural Revitalization
Key Performance
Data Sheet As of the end of 2025
Indexes the Company had 40 45 personnel holding safety
Red Cross first-aiders management certificates
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On-site at the Safety Awareness Month training
Social Contribution Rural Revitalization
Kaizhong Precision actively fulfills its corporate social responsibility by integrating it into its business development. The Kaizhong Precision upholds a rural revitalization philosophy
About This Report
Company continuously engages in public welfare and charitable activities, giving back to society through actions focused on of "pragmatic participation and long-term mutual benefit."
promoting rural employment, assisting vulnerable groups, making charitable donations, and providing educational support and The Company considers rural revitalization a key direction
care. At the same time, the Company practices environmental protection and low-carbon concepts, promoting the extension of for its social responsibility and regional co-development.
About Kaizhong
Precision green awareness into the community. It is committed to consistently enhancing the stability and impact of its social contributions, Adhering to a needs-oriented approach, it focuses on the
contributing to the construction of a harmonious society. foundational conditions for industrial development and
shortcomings in public well-being, prioritizing investments
ESG Management
Case: Launching a "June 1st" love and education support program to bolster campus learning in projects with long-term benefits. Through a model of
"small, precise investments + project-based management,"
Governance the Company collaboratively promotes infrastructure
In June 2025, in Pingshan District, Shenzhen, the
improvement, production stability, and income-generating
Company donated learning materials to the Pingshan
Innovation and capacity, fostering co-development and mutual benefit
Operations Foreign Language Wenyuan School and conducted a visit.
between the Company and rural areas.
The event focused on supporting students' learning and
growth, conveying the warmth of public welfare through Case: Kaizhong Precision's Heyuan base: Driving
Environment material aid and on-site interaction to help improve campus rural labor employment through industrial upgrading
learning conditions and create a caring atmosphere. The
Society school presented a plaque to the Company in thanks, In active response to the rural revitalization strategy,
Protection of Employee
Rights
acknowledging the social value of its corporate public Kaizhong Precision invested in the construction
welfare actions. The Company Receives a Thank-You Plaque
Employee Compensation and of an intelligent manufacturing industrial base for
Benefits From Pingshan Foreign Language Wenyuan
new energy vehicle components and an intelligent
Employee Career School in Pingshan District, Shenzhen
Development and Training manufacturing project for "precision connectors
Employee Care + high-performance functional materials" in the
Occupational Health and
Jiangdong New Area of Heyuan in 2017 and 2025,
Safety
Social Contribution Case: Donating to poverty alleviation and aid funds to solidify the foundation of public well-being and respectively. The establishment of these industries
Rural Revitalization common prosperity has powerfully driven local industrial upgrading and
effectively boosted regional employment. As of the
Key Performance During the 2025 Guangdong Poverty Alleviation Day event, Kaizhong Precision donated funds to the Sanhe Sub-district end of the reporting period, the Heyuan base had
Data Sheet cumulatively employed 477 local laborers, creating
Office through the Huizhou Charity Federation. The donation was specifically designated to support the "Hundred,
Thousand, Ten Thousand Project" and other public welfare initiatives. This action leveraged a standardized charitable stable job opportunities for the rural workforce through
Indexes platform to connect with grassroots needs, directing funds toward community livelihood and addressing shortcomings tangible actions. This has injected new momentum
in public services. It collaboratively enhanced the capabilities of social assistance and grassroots governance support, into the regional economy and vividly demonstrates
contributing to the steady advancement of work related to rural revitalization and common prosperity. the Company's proactive role in contributing to rural
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revitalization.
Key Performance Indicator Unit 2024 2025
Percentage of independent
About This Report
Governance dimension directors on the Remuneration % 66.67 66.67
and Appraisal Committee
Percentage of independent
Indicator Unit 2024 2025 directors on the Nomination % 66.67 66.67
About Kaizhong Committee
Precision
Operating revenue RMB 10,000 304,960.76 292,835.38
Percentage of independent
Net profit attributable to directors on the Strategy % 25 25
shareholders of the listed RMB 10,000 17,011.08 23,359.85 Committee
ESG Management company Coverage rate of directors
% 100 100
Accounts payable RMB 10,000 27,961.39 24,103.53 receiving anti-corruption training
Number of reported anti-
Governance Ratio of accounts payable to total Times 0 0
% 7.85 6.65 corruption incidents
assets
Coverage rate of employees
Total cash dividends RMB 10,000 10,830 11,000
receiving anti-bribery and anti- % 100 100
Innovation and corruption training
Percentage of female directors % 44.44 44.44
Operations
Signing rate of employee anti-
Percentage of female senior % 100 100
% 20.00 20.00 bribery commitments
executives
Number of training sessions on
Environment Percentage of independent
% 33.33 33.33 internal control, compliance, and Times 3 3
directors
risk management
Percentage of independent
Coverage rate of training in
directors with a tenure exceeding % 0.00 0.00
Society internal control, compliance, and % 100 100
risk management
Percentage of independent
Information security training
directors with a tenure exceeding % 0.00 0.00 % 100 100
Key Performance
completion rate
Data Sheet Number of major information
Percentage of independent Cases 0 0
security incidents
directors serving on the boards of % 0.00 0.00
more than 3 listed companies (%) Standard deviation of the age
Indexes
of directors, supervisors, and Years 8.7 8.7
Percentage of independent senior management
% 66.67 66.67
directors on the Audit Committee
Board member attendance rate % 100 100
Whether the convener of the Number of directors who
Reader Feedback
Audit Committee is an accounting / Yes Yes attended less than 75% of Persons 0 0
professional meetings
Environment dimension
Indicator Unit 2024 2025 Indicator Unit 2024 2025
About This Report
Environmental Tonnes of CO2
protection RMB 10,000 999.11 878.48 Scope 2 greenhouse gas emissions 107,005.45 92,478.99
equivalent
investment
About Kaizhong Ratio of total Tonnes of CO2
Precision
Total greenhouse gas emissions 107,195.93 92,657.99
environmental equivalent
protection Total greenhouse gas emissions Tonnes of CO2
% 33 30
investment to per million in revenue (Scope 1 and equivalent/ 35.15 31.64
ESG Management operating revenue Scope 2) (tonnes of CO2 equivalent) RMB 1 million
(per million)
Total water consumption Tonnes 175,836.00 138,858.00
Diesel Liters 47,606.29 47,205.11
Governance Water recycling rate % 24 30
Gasoline Liters 14,692.37 25,952.67
Purchased Recycled water volume Tonnes 41,659.00 41,199.30
kWh 112,968,623.90 111,228,147.60
electricity
Innovation and
Operations Total energy Tonnes of standard Total amount of wastewater discharge Tonnes 100,819.00 78,170.00
consumption coal equivalent
Ten thousand
Total energy Tonnes of standard Total exhaust gas emissions 255,053.06 291,496.41
cubic meters
Environment
consumption per coal equivalent/ 4.58 4.12
million in revenue RMB 1 million Total production waste Tonnes 2,747.00 2,817.00
Direct energy Tonnes of standard Total non-hazardous waste Tonnes 2,390.00 2,461.00
Society consumption coal equivalent
Total non-hazardous waste generated Tonnes/RMB 1
Tonnes of standard 0.78 0.84
Including: Diesel 58.84 57.78 per million in revenue million
coal equivalent
Key Performance
Including: Tonnes of standard Total non-hazardous waste recycled Tonnes 1,490.00 1,361.00
Data Sheet 15.84 28.26
Gasoline coal equivalent
Indirect energy Tonnes of standard Total hazardous waste Tonnes 357.00 356.00
Indexes
consumption coal equivalent
Total hazardous waste generated per Tonnes/RMB 1
Including: Tonnes of standard 0.12 0.12
Electricity coal equivalent
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Scope 1 Total hazardous waste landfilled Tonnes 357.00 356.00
Tonnes of CO2
greenhouse gas 190.48 179.00
equivalent
emissions
Innovation and operations dimension
Indicator Unit 2024 2025
Total waste recycled Tonnes 1,490.00 1,361.00
About This Report
Indicator Unit 2024 2025
Total waste recycled per million in Tonnes/RMB 1
revenue million
Percentage of waste recycled % 54.24 48.33 Customer complaint handling rate % 100 100
About Kaizhong
Precision
Coverage rate of industrial solid PPM (Parts Per Million defects) Times 0.080 0.079
% 100 100
waste sorting and recycling (New)
Product recalls Times 0 0
ESG Management Compliance rate of hazardous waste
sorting, collection, storage, and % 100 100 Number of quality and safety training
Times 80 196
transfer (New) sessions
Governance Total duration of quality and safety training Hours 300 980
Number of environmental
management training sessions Times 10 12
conducted Supplier localization rate % 77.30 77.44
Innovation and Total duration of environmental Local procurement ratio % 93.25 93.29
Operations Hours 20 24
management training
Number of supplier ESG training sessions Times 2 3
Number of participants in
Person-times 100 120 Percentage of suppliers who received ESG
Environment
environmental management training % 100 100
training
Number of environmental emergency
Sessions 8 10
risk drills conducted Percentage of suppliers who have signed
% 76 85
Society the Supplier Code of Conduct
Number of participants in
Person-times 120 150
environmental emergency risk drills
Key Performance Number of non-Achieved pollutant
Cases 0 0
Data Sheet discharge incidents
Indexes
Reader Feedback
Indicator Unit 2024 2025 Indicator Unit 2024 2025
R&D personnel Persons 363 337
Signing rate for the Supplier Integrity
About This Report
Cooperation Commitment Letter and % 100 100 Proportion of R&D personnel to total
Confidentiality Agreement % 9.86 9.35
employees
Number of authorized and valid
About Kaizhong Percentage of suppliers with contracts Cases 240 271
Precision patents held
including environmental and labor % 100 100
requirement clauses Including: Invention patents Cases 68 86
ESG Management Percentage of new suppliers screened Including: Utility model patents Cases 168 177
using social and environmental % 100 100
responsibility standards Including: International patents Cases 4 8
Governance
Percentage of suppliers who have Number of valid patents per million in Cases/RMB 1
undergone social and environmental % 100 100 revenue million
responsibility impact assessments
Number of software copyrights Cases 10 14
Innovation and
Operations
Percentage of suppliers identified with Internal training on intellectual
Sessions 5 5
significant actual and potential negative % 0 0 property
environmental impacts
Environment
Coverage rate of suppliers who have Society dimension
completed conflict minerals due % / 100
diligence
Society Indicator Unit 2024 2025
Number of suppliers whose
Total number of employees Persons 3,682 3,603
partnerships were terminated due to Counts / 0
Key Performance controversial sourcing issues Male Persons 2,365 2,374
Data Sheet
Number of major disputes related to Female Persons 1,317 1,229
Cases / 0
procurement activities Mainland China Persons 3,272 3,233
Indexes RMB 10,000 7,606.42 8,224.10
R&D investment Other countries and regions Persons 410 370
Proportion of R&D investment to Number of ethnic minority
% 2.49 2.81 Persons 462 452
operating revenue employees
Reader Feedback
Indicator Unit 2024 2025 Indicator Unit 2024 2025
Number of employees with disabilities Persons 9 8 Investment in work safety liability
RMB 10,000 12 12
insurance
About This Report Number of veterans recruited Persons 2 25
Ratio of work safety investment to
% 0.04 0.15
Total employee turnover rate % 6.28 9.96 operating revenue
Coverage ratio of work safety liability
About Kaizhong Labor contract signing rate % 100 100 % 100 100
Precision
insurance
Social insurance coverage rate % 100 100 Investment amount for work-related
RMB 10,000 70.7 80.64
injury insurance
Total number of training courses
ESG Management Times 344 580 Number of occupational health and
conducted Times 205 320
safety trainings
Total duration of employee training Hours 11,074 19,458
Cumulative occupational health and
Hours 2,496 4,200
Governance
Average training satisfaction rate % 90.02 97.00 safety training hours
Average safety training hours per
Employee satisfaction % 91.78 94.18 Hours 1.85 2.65
person
Innovation and Number of employee representative Occupational health and safety
Operations Times 4 5 % 100 100
assemblies held training coverage rate
Cumulative number of safety risk
Percentage of female employees % 35.16 34.11 Times 85 92
inspections
Environment
Average salary per employee RMB 10,000 20.62 20.12 Safety risk inspection coverage rate % 100 100
Revenue per employee RMB 10,000 82.82 81.28 Occupational disease incidence rate % 0 0
Society
Number of workdays lost due to
Number of employees in hardship Days 155 135
Persons 12 12 work-related injuries
assisted
Key Performance
Workdays lost due to work-related Days/RMB 1
Number of employees in hardship Persons/RMB 1 0.05 0.05
Data Sheet
assisted per million in revenue million
Number of work-related fatalities Persons/RMB
Investment in work safety RMB 10,000 108.45 448.88 per 100 million in revenue 100 million
Indexes
Work-related injury rate
Number of work safety emergency % 0.21 0.19
Times 35 48 (employees)
drills
ost time injury frequency rate （LTIRF）
Reader Feedback Cumulative number of participants in Incidents/million 1.08 0.95
Person-times 10,864 12,603 (employees)
emergency drills hours (LTIFR)
Index of Indicators
Corresponding SZSE Guidelines Corresponding SZSE Guidelines
About This Report Chapter GRI index Chapter GRI index
section clauses section clauses
About This Report / 2-2、2-3 Supply chain security Article 45 308-1、414-1
About Kaizhong
About Kaizhong
Precision / 2-1、2-6 Innovation Digital and intelligent
General Precision / /
development
and
ESG management Article 52, Article 53 Data security and
ESG Management 2-29、3-1、3-2
customer privacy Article 48 418-1
protection
Corporate governance / 2-9、405-1
Governance Compliance and risk Protection of employee
Article 52 2-27 Article 50 405-1、406-1、
General management rights
Anti-bribery and anti-
Article 55 205-2 Employee
corruption
Innovation and
compensation and Article 50 401-2
Anti-unfair competition Article 56 206-1 benefits
Operations
Environmental Employee career
compliance Article 33 / development and Article 50 404-1、404-2
management training
Environment Society
Addressing climate 201-2、305-1、 Employee care Article 50, Article 53 2-30、401-2
Article 24, Article 27
change 305-2
Energy use and Occupational health
Society Environ- Article 20, Article 35 302-1、302-4 Article 50 403-3、403-5、
management and safety
ment 403-6、403-9
Pollutant emissions and 303-5、306-3、 Social contribution Article 40 203-1、413-1
Key Performance Article 31, Article 33
Data Sheet
waste disposal 306-4
Rural revitalization Article 39 203-1、413-1
Circular economy Article 37 /
Appendix I: Key
Biodiversity / /
Indexes / 304-2 Performance
conservation
Innovation-driven Appendix Appendix II: Index of
Innovation Article 42 203-2 Article 57 /
development Indicators
and
Reader Feedback Product and service
operations Article 47 416-1 Appendix III: Reader
quality and safety / /
Feedback
Reader Feedback
About This Report
Dear Readers,
Thank you for taking the time to read this Report. To provide you and other stakeholders with more comprehensive, professional, and valuable ESG information and to improve the quality of our
About Kaizhong sustainability reporting, we sincerely invite you to assist us by completing the following feedback form. We welcome your valuable input.
Precision
ESG Management
What is your relationship with Kaizhong Precision? Are you satisfied with the overall design of this Report?
Governance
□ Employee □ Customer □ Supplier □ Regulatory Authority □ Media □ Other Yes □ Average □ No □
Innovation and
Operations Are you satisfied with your overall impression of this Report? We welcome any other comments or suggestions you may have regarding
the Kaizhong Precision 2025 Environmental, Social, and Governance (ESG)
Yes □ Average □ No □ Report.
Environment
Do you believe this Report reflects Kaizhong Precision's material ESG impacts?
Society Yes □ Average □ No □
You can share your valuable feedback with us through the following channels:
Do you think the information provided in this Report is complete? Tel: 0755-86264859
Key Performance
Data Sheet Fax: 0755-85242355
Yes □ Average □ No □
Address: No. 1 Guihua 4th Road, Longtian Neighborhood, Pingshan District,
Indexes Do you think the information provided in this Report is readable? Shenzhen
Email: ESG@kaizhong.com
Yes □ Average □ No □
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