Stock Abbreviation: Huaming
Stock Code: 002270
ENVIRONMENTAL、SOCIAL
AND GOVERNANCE REPORT
CONTENTS
About This Report 01
Message from the Chairman 03
About Huaming 05
Development History 07 Corporate Governance Safety Responsibility Social Responsibility
Our Governance 13 Product Safety 43 Employee Management 67
Risk Control and Compliance 26 Supply Chain Management 47 Promoting Industry Development 76
Business Ethics 29 Data Security 50 Public Welfare 78
Work Safety and Occupational Health 51
Key Performance Indicators 79
Index of Indicators
Feedback98
Environmental Protection Client Service
Environmental Management 33 R&D and Innovation 57
Resource and Energy Management 35 Client Service 61
Emissions and Waste 39
Green Operations 40
About This Report
A+
This is the third Environmental, Social and Governance (hereinafter referred to as "ESG") Report issued by Huaming
Power Equipment Co., Ltd. (hereinafter referred to as "Huaming" or "We") for stakeholders.
Report Scope and Boundaries Reliability Assurance
This report takes Huaming Power Equipment Co., Ltd. as the subject and covers all directly-managed This report contains no false records, misleading statements or material omissions, and Huaming
subsidiaries of Huaming. The disclosure time frame is consistent with that of the financial information assumes full responsibility for the authenticity, accuracy and completeness of the contents of this
in Huaming's 2025 Annual Report. Meanwhile, to ensure the completeness and coherence of the report.
disclosed information, some information may be traced back to previous years.
Data Explanation Publication Format
The data used in this report is sourced from Huaming's actual operational raw data, public data from The electronic version of this report is available on Huaming's official website (www.Huaming.com)
government departments, annual financial data, internal relevant statistical statements, etc. The and CNINFO (www.cninfo.com.cn).
financial data in this report is denominated in RMB. In case of any inconsistency with the financial
report, the financial report shall prevail. Huaming will continuously improve the level of report disclosure and our social responsibility
governance in the future. For any questions or suggestions about this report, please feel free to
contact us:
Preparation Basis
Huaming Power Equipment Co., Ltd.
·Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability
Tel: +86 21 5270 8824
Report (Trial)
Email: dsh@huaming.com
·China National Standard Guidance on Social Responsibility Reporting (GB/T 36001-2015)
Address: No. 977 Tongpu Road, Putuo District, Shanghai, China
·C hinese Academy of Social Sciences the Guidelines on Sustainability Reporting for Chinese
Enterprises (CASS-ESG 6.0)
·United Nations Sustainable Development Goals (SDGs)
·Global Reporting Initiative (GRI) Sustainability Reporting Standards (GRI Standards)
Message from the Chairman
Dear Stakeholders, Cultivating a Strong Employee Foundation to Activate the Internal
Driving Force of the Enterprise
Huaming upholds the spirit of "Uphold integrity in business operation, treat others with benevolence
and virtue, pursue continuous innovation, and strive for self-improvement", and deeply integrats the
ESG philosophy into all aspects of Huaming's strategic planning and daily operations. As a world-leading Adhering to the people-oriented philosophy, Huaming improved a fair and equal employment management
manufacturer of tap changers, we fully recognize that ESG is the core support for Huaming to achieve system, safeguarded the legitimate rights and interests of disabled employees, part-time workers and other
high-quality and sustainable development, and an inevitable choice to respond to the expectations of groups, built a dual-track career development path for management and technical personnel, constructed a
shareholders, employees, clients and all sectors of society. In 2025, Huaming continued to deepen ESG multi-level and all-round employee training system, and deepened humanistic care and diversified welfare
practices, advanced steadily in various fields with standardized governance, solid actions and outstanding protection. Huaming also provides targeted assistance to employees in difficulty, creating a warm "home
achievements, striving to realize the synchronous development of corporate value and social value. culture".
Striving for Breakthroughs in Core Technologies to Consolidate the
Fulfilling Social Responsibilities to Empower Industrial and Social
Foundation of Innovative Development
Development
Focused on the development direction of ultra-high voltage (UHV) and green power equipment, Huaming
deepened R&D and innovation guided by market demand, improved the industry-university-research Upholding the concept of mutual prosperity with the industry and society, Huaming played a leading role to
collaborative innovation system, and participated in the formulation of national industrial standards in promote the high-quality development of the industry, deepened the management of green supply chain and
depth. In 2025, UHV products entered batch operation in the Longdong-Shandong ±800kV UHV DC Project, business ethics, and actively participanted in social welfare to repay society with practical actions.
and the key performance of the SHZVII on-load tap changer for converter transformers reached the world-
leading level. The independently developed 24kV power electronic on-load tap changer overcame the arc Huaming participated in the formulation of national standards for tap changers used in UHV transformers,
issue. These continuous breakthroughs in core technologies laid a solid foundation for us to consolidate our showcased achievements at domestic and international exhibitions such as the Shanghai International Power
industry position and expand into the global market. Equipment Exhibition and the Dubai Navigator Conference, set up the "Huaming Education" Special Fund,
donated to many schools to support their educational development, and also made charitable donations to
many medical institutions. In addition, Huaming has won numerous honors in the industry and capital market.
Deepening Green Operations to Build a Benchmark for Low-Carbon
All these demonstrate the era responsibility of Huaming as a national manufacturing enterprise.
Development through Intelligent Manufacturing
Guided by the "dual carbon" goals, Huaming built a comprehensive environmental management system Looking to the future, standing at a new development starting point, Huaming will continue to be guided
covering energy management, emission disposal and green operations, strictly implemented environmental by the new development philosophy, integrate ESG governance into every link of business development.
protection laws and regulations, and promoted the green and low-carbon transformation of the entire We continue to strive for breakthroughs in core technologies, deepen green and low-carbon transformation,
production process. In 2025, our Fengxian Production Base and Guizhou Chenting actively advanced cultivate advantages in employee development, and expand the boundaries of social responsibility. We will
distributed photovoltaic (PV) projects to increase the utilization of clean energy. We also completed the always adhere to the original aspiration of the enterprise, fulfill our sustainable development responsibilities
intelligent transformation of the Fengxian automated warehouse and achieved standardized and intelligent with more stringent standards and more pragmatic actions, walk hand in hand with all stakeholders, jointly
material storage management through an automated warehouse management model. This model not promote the high-quality development of the power equipment industry, and contribute more Huaming
only achieved the core goals of intensification and resource consumption reduction, but also improved strength to social development!
the utilization rate of warehouse space and cargo turnover efficiency, and reduced warehousing costs.
Meanwhile, Huaming introduced the self-designed VMC series vertical and horizontal composite machining
centers to strengthen the overall CNC machining capacity, upgraded the insulation workshop to create a
Chairman：Xiao Yi
modern standard production environment, and introduced manipulators in the assembly workshop to
replace some manual repetitive operations, improving assembly accuracy and production efficiency. In the April, 2026
future, Huaming will continue to promote digital transformation, provide support for the digitalization and
paperless operation of the production process, and improve the production system in an all-round way.
About Huaming Business and Products
Huaming is mainly engaged in power equipment, CNC equipment and power engineering businesses. Our products
are sold well all over the world, with power equipment exported to Europe, North America, Southeast Asia and
Company Profile many other countries and regions.
Huaming (Stock Code: 002270) is a world-leading manufacturer of transformer tap changers. According to Frost &
Sullivan, we ranked second globally and first in the China by revenue in the tap-changer market in 2024.Huaming offer
a broad portfolio of tap-changers and related solutions for traditional and high-growth end markets. As essential and Power Equipment
mission-critical components of power transformers, tap-changers position us to benefit from the growth of the power
industry driven by demand from new energy sectors, ESS, AIDC and other end markets. As the core business of Huaming, it mainly involves the R&D, production, sales and full-
life-cycle operation, maintenance and overhaul of transformer tap changers.
We have been focusing on the tap-changer business for more than three decades, investing substantially in product
development, high-precision precision manufacturing and technology R&D. As a result, we have established
comprehensive end-to-end capabilities covering R&D,design, manufacturing, testing, sales and after-sales services,
while building long-standing relationships with leading transformer manufacturers and power grid operators
worldwide. We have reached major milestones across multiple dimensions that have reinforced our market
position and global competitiveness. CNC Equipment
The R&D, production and sales of complete sets of CNC equipment.
Corporate Culture
We uphold the spirit of "Uphold integrity in business operation, treat others with benevolence and virtue, pursue
continuous innovation, and strive for self-improvement", and build a good image of integrity with this work
attitude. At the same time, Huaming makes every effort to create a favorable working atmosphere for employees, Power Engineering
caring about employee protection and career development, and building a warm "home" for all employees.
Contracting, Design and Construction of New Energy Power Plants
Development History 2022
The Company was recognized as a national-level Specialized,
Refined, Distinctive, and Innovative "Little Giant" enterprise
People's Republic of China ("MIIT").
We expanded the HV electrical equipment manufacturing
We established a wholly-owned subsidiary in Singapore
base in Fengxian, Shanghai, establishing a core hub for
large-scale manufacturing and integrated industrial chain
the Southeast Asian market.
We completed the Major Asset
Shanghai Huaming Power 2007 Restructuring (as defined below), and
Equipment Co., Ltd. ("Huaming our business became listed on the
Power"), our wholly-owned We were recognized as a "Shanghai Patent Demonstration Shenzhen Stock Exchange.
subsidiary, was established as a Enterprise " by Shanghai Intellectual Property Administration.
limited liability company under the
laws of the China. 2023
Our tap-changer was recognized as
one of the "first set of major technical
equipment" in the energy field by the
National Energy Administration.
Huaming Power was recognized as a National
Manufacturing Champion Enterprise by MIIT.
Our OLTC was recognized as "Shanghai Shandong Fin CNC Machine Co.,
Famous Brand " by Shanghai Famous Ltd. was renamed Huaming Power
The new-type vacuum OLTC has been officially
Brand Product Recommendation Equipment Co., Ltd..
commissioned for large-scale commercial
Committee. operation in the Longdong-Shandong ±800kV
We commenced production at our
UHV DC transmission project.
Turkey production base.
We expanded our export market to
Our tap-changer testing center obtained Huaming Power was recognized as a
Europe by exporting our tap-changers to
CNAS laboratory accreditation. We established sales and service outlets "National Advanced Collective in the
Italy and Germany.
in Brazil and the United States. Industrial and Information Technology
System" by MIIT.
Shanghai Huaming Electric Power Equipment Manufacturing Co., Ltd.
Selected for the 2025 Listed Companies
Cash Dividend List
China Association for Public Title of "Advanced Collective in the Re-certification as a Shanghai "Little
Companies National Industry and Information Giant" Specialized, Refined, Differential
Technology System" and Innovative (SRI) Enterprise
The 16th China Listed Companies Ministry of Industry and Shanghai Municipal Commission of Economy and
Future 20 Growth Enterprise of the Year Investor Relations Management— Information Technology (MIIT) Information Technology
Shareholder Return Award
China Business Network Securities Times Re-certification as a Shanghai Specialized,
Refined, Differential and Innovative (SRI)
Enterprise
Shanghai Municipal Commission of Economy and
The 16th China Listed Companies Investor Investor Relations Gold Award (2024) — Information Technology
Relations Management—Tianma Award Outstanding Institution Attention Award
Shandong Fin CNC Machine Co., Ltd.
Securities Times Panorama Network
Third Prize for Scientific and Technological
Future Energy Industry Star Listed
of the Year
Company
China Machinery Industry Federation（CMIF）、Chinese
F-CN.CN Snowball Mechanical Engineering Society（CMES）
Corporate
Huaming adheres to the governance philosophy of "Compliant and Our Actions Supporting of the UN SDGs
Steady Operation, Transparent and Efficient Management", and
integrates standardized operation into the entire development process.
•Improve Our Governance
Governance By improving the governance structure, perfecting the risk control and
compliance system, building a full-dimensional ESG management
•Strengthen Investor Relations
•Establish an ESG Management System
mechanism, strengthening communication with stakeholders, we
•Enhance Risk Control
strictly abide by the bottom line of business ethics and clean operation.
•Deepen Compliance Development
Our Governance Governance System
Huaming strictly complies with the requirements of laws and regulations such as the Company Law of the
Huaming continuously improves the governance structure, deepens communication with stakeholders, accurately
People's Republic of China and the Code of Corporate Governance for Listed Companies in China, formulates
identifies key ESG topics, and integrates SDG goals into governance practices. We consolidate the foundation for
and continuously improves the Articles of Association and the Rules of Procedure for the Board of Directors and
development through a sound investor relations management and risk prevention and control system.
other relevant systems, and builds a governance structure with the General Meeting of Shareholders, the Board
of Directors and the management as the core. The Board of Directors has set up special committees including the
Strategy Committee, Remuneration and Appraisal Committee, Nomination Committee and Audit Committee to
ensure compliant and transparent operation. Huaming formulates and implements management systems such
as the Detailed Implementing Rules for the Audit Committee of the Board of Directors, laying a solid institutional
foundation for the orderly operation of the governance structure.
The General Meeting of Shareholders
As the highest authority of Huaming, the Shareholders' general meeting exercises core functions and powers
Audit Department such as decision-making on significant corporate matters, review of profit distribution and electing Directors, in
accordance with the law, safeguarding the legitimate rights and interests of all shareholders, especially minority
shareholders. The Board of Directors focuses on strategy formulation, risk control and oversight of management,
Audit Committee serving as the "decision-making hub" for Huaming's development. The senior management is responsible for
implementing Huaming's strategies and overseeing day-to-day operations, coordinating and advancing production
and operations, technological innovation and other key initiatives to ensure the efficient achievement of our
Strategy Committee
business objectives.
Board of Directors
Remuneration and The Board of Directors has a rational member structure, with the proportion of independent directors meeting
Appraisal Committee regulatory requirements and an appropriate proportion of female directors. At the same time, the members of
the Board of Directors have excellent professional literacy and rich governance experience, and the recruitment of
Board of Directors Office
Nomination Committee personnel adheres to the fair principles of gender equality and ethnic equality.
Key Performance Indicator
General Manager
?The Board of Directors has 9 members, including 3 independent non-executive
directors, accounting for 33.3%
?The Board of Directors has 1 female director, accounting for 11.1%
?4 sessions of the General Meeting of Shareholders were held, reviewing 33 proposals
?9 sessions of the Board of Directors were held, reviewing 86 proposals
?14 sessions of the special committees of the Board of Directors were held, reviewing
Governance Honors Investor Relations Management
With a standardized and efficient governance structure and compliance practices, Huaming has been recognized by Huaming formulates and implements the Investor Relations Management Policy and the Information Disclosure
the industry and regulators, and won many honors in the capital market during the reporting period. Management Policy to standardize the whole-process management requirements. Attaching great importance
to safeguarding the legitimate rights and interests of all investors, especially minority shareholders, Huaming
helps investors understand Huaming's operating conditions and development strategies by holding performance
briefings, receiving investor research visits, and promptly replying to the Shenzhen Stock Exchange Interactive Easy
Platform. Huaming's information disclosure comprehensively covers statutory information such as periodic reports
and interim announcements, as well as key content such as operating data, financial status and major investments.
It makes no selective disclosure and ensures that all investors obtain Huaming's information on an equal basis.
Key Performance Indicator
?Held a total of 136 investor research sessions, receiving more than 1,200 person-times
of investor research
China Association for Public Companies Attention Award
?Issued a total of 155 periodic reports and interim announcements to the public
Panorama Network
Huaming issued and implemented the Shareholder Return Plan for the Next Three Years (2023-2025),
stipulating that the annual cash dividend distribution shall not be less than 60% of the distributable profits
realized in the current year. In 2025, Huaming has been selected into the dividend list of China's listed
companies.
Key Performance Indicator
?Interim and third-quarter dividend distribution of RMB 358 million
?Total dividend distribution of RMB 547 million in 2025
Investor Relations Management Shareholder Return Award Investor Relations Management Tianma Award
Securities Times, "The 16th China Listed Companies Securities Times, "The 16th China Listed Companies
Value Selection" Value Selection"
ESG Governance Client Service
·Maintain R&D investment, overcome key technologies such as UHV, and drive product iteration;
·Participate in the formulation of national and industrial standards to lead the standardization of
Supporting of the UN SDGs industrialtechnology;
·Carry out industry-university-research cooperation, build innovation platforms and promote technological
transformation.
Social Responsibility 丨 Safety Responsibility
Social Responsibility
·Establish an occupational health and safety management system and conduct regular employee physical examinations;
·Strengthen work safety control and carry out safety training and emergency drills; ·P rovide fair employment and promotion opportunitiesfor employees with different educational
·Provide diversified employee benefits to protect employees' physical and mental health. backgroundsand experiences;
·Establish a support mechanism for employees in difficulty and provide financial and material support;
·Layout production bases in multiple regions to drive local employment and balanced economic development.
Social Responsibility
·Build a multi-level employee training system coveringskills, safety and other dimensions; Social Responsibility 丨 Environmental Protection
·Set up an education incentive fund to support the educational reform and employee training of ·Promote the green transformation of production andoperation to reduce the impact
colleges anduniversities; on the urban environment;
·Carry out school-enterprise cooperation to provide practical and employment support for students. ·Participate in community public welfare activities to help improve community
infrastructure;
Social Responsibility ·Fulfill social responsibilities and improve the quality of community life.
·A dhere to gender equality in recruitment and promotion with no gender Environmental Protection
discrimination;
·Safeguard the legitimate rights and interests of female employees and provide ·Implement classified waste management, promote the compliant disposal and
benefits such as special physical examinations; resource recycling of hazardous waste;
·Cultivate female management employees and optimize the gender structure of ·Build a green supply chain and require suppliers to comply with environmental
the management team. and ethical standards;
·P romote the application of lightweight and long-life materials to reduce
Environmental Protection resource consumption.
·B uild a sewage treatment system to ensure the up-to-standard discharge of Environmental Protection
wastewater and promote recycling;
·Standardize the environmental health management ofthe production site to ·I ncorporate climate change into strategic planning and conduct carbon
reduce pollution risks; emission inventory;
·Promote green office and improve the cleanliness ofthe office environment. ·Implement energy-saving transformation projects to reduce greenhouse gas
emission intensity;
Environmental Protection ·R&D and promote low-carbon and environmentally friendly products to help
clients reduce emissions.
·Build photovoltaic power generation projects in the factory area to increase the proportion of
clean energy use; Huaming Governance
·E stablish an energy management system and implement energy-saving technological
transformation; ·Establish an integrity management system to eliminate commercial bribery and fraud;
·Promote high-efficiency and energy-saving equipment to reduce energy consumption intensity. ·Operate in compliance with laws and regulations, actively respond to government regulatory
requirementsand maintain market order.
Social Responsibility
Social Responsibility 丨 Client Service
·Improve the salary and performance system to ensure reasonable salaries and benefits for employees;
·B uild a dual-track career development path for management and technical personnel to support
employeegrowth; ·Establish long-term and stable cooperative relations with suppliers and clients to achieve win-win results;
·Strictly abide by labor laws and regulations, safeguard the legitimate rights and interests of employees, and ·Participate in industry exchanges and international cooperation to share sustainable development experience;
eliminate forced labor. ·Build a stakeholder communication mechanism to listen to and actively respond to the demands of all parties.
ESG Development Philosophy Stakeholder Engagement
Huaming actively implements the new development philosophy of innovation, coordination, green development, Huaming has established and improved a stakeholder communication mechanism, listened to the opinions and
opening up and sharing. Huaming promotes promotes the high-quality development of the industry through efforts suggestions of stakeholders, and accurately identified material ESG topics.
and practices in work safety, scientific and technological innovation, corporate governance, employee training and
other aspects.
ESG Management
In accordance with the Basic Standards for Enterprise Internal Control, SZSE Self-Regulatory Guidelines for Listed Stakeholders Expectations and Requirements Actions
Companies No. 1 — Standardized Operation of Main Board Listed Companies and other relevant provisions, Huaming
formulates and implements the ESG Management Policy. We establishe a sound ESG management structure to exercise
·Hold the General Meeting of
unified leadership, decision-making and organization for relevant work.
Shareholders
·Compliant disclosure
·Receive investor visits
·Risk management
Shareholders/Investors ·Disclose information regularly
·Hold performance briefings
·Rural revitalization and social ·Create employment opportunities
welfare ·Practice rural revitalization and
·Business ethics social welfare
Government and Regulators
Management ·Industry trends and policies ·Conduct exchanges and cooperation
Responsible Body Responsibilities
Level
ESG Leading ?Determine Huaming's ESG development direction and goals; ·Open and transparent procurement
·Supply chain management
and Decision- Board of Directors ?Review and approve Huaming's ESG management systems; ·Build a green supply chain
·Intellectual property protection
Making Body ?Review Huaming's ESG reports and major ESG topics, etc. Suppliers and other partners ·Protect intellectual property rights
?Coordinate the relevant internal and external work in an overall ·Product quality and safety, ·Strengthen product quality control
manner; ·Customer satisfaction ·Organize customer visits and
?Study the laws, regulations, policies and material topics of Huaming in ·R&D and innovation training activities
Strategy Committee
ESG Research the ESG field; Clients ·Information security and privacy ·Provide high-quality services
of the Board of
and Guidance ?Identify and manage ESG-related risks and opportunities that have a protection ·Enhance privacy protection
Directors
Body significant impact on Huaming's business;
?Guide the daily development of ESG work and the compilation of ESG
·Safeguard employee rights and interests
reports. ·Employee rights and interests
·Organize diversified employee activities
·Employee care
·Provide fair promotion channels
All Departments and ?Implement ESG work tasks in accordance with Huaming's overall ·Employee training and development
Employees ·Create a safe and healthy working
Subsidiaries plan and report the implementation progress regularly. ·Employee health and safety
environment
ESG Execution ?Understand the demands, opinions and suggestions of stakeholders
Units Board of Directors and analyze material topics; ·Support rural revitalization
·Rural revitalization
Office ?Be responsible for the information collection, compilation and ·Launch student assistance programs
·Social welfare
disclosure of ESG reports. Society and the Public ·Conduct charitable activities
Dual Materiality Analysis of Topics Due Diligence
Huaming carries out the identification and analysis of material topics, and identifies 24 topics that are financially Scope of Impact
Risk Response Corresponding
material to itself and impact material to stakeholders. Through questionnaires conducted among investors, clients, Dimension Topic Topic Objective
Value Corporate Social Identification Measures Chapter
employees, suppliers and other parties, we collect evaluations and suggestions, and combine expert opinions to Chain Operation Impact
evaluate and rank the dual materiality of the topics.
Improve the
transparency
of corporate Continuously
decision-making improve the
and operational corporate
efficiency, and governance
Very Important
?Water Resource Management safeguard the rights system, set
and interests of all up special
?Environmental Protection Management
shareholders by committees of
?Waste Management Corporate Organization and Corporate
establishing and √ the Board of
?Addressing Climate Change Governance governance risks Governance
?Employee Training and Development maintaining a sound Directors and
?Energy Management governance structure report regularly,
?Employee Care
?Environmental Protection Management and an operation and strictly
?C ompliant Employment and Employee
?Occupational Health and Safety mechanism of the implement the
Rights Protection
Importance to Economy, Socirty and the Environment
three meetings information
?Product Quality and Safety
?Competitive Compensation and Benefits (General Meeting of disclosure
?R&D and Innovation Shareholders, Board system.
?Responsible Marketing
?High-Quality Customer Service of Directors, Board of
?Promoting Industry Development Supervisors).
?Sustainable Supply Chain
?Business Ethics Formulate and
?I nformation Disclosure and Investor Prevent operational implement
compliance and relevant risk
Management
business interruption control systems,
risks, and ensure the Organization conduct annual
Governance
steady development and governance internal control
Risk of Huaming by risks, Legal and self-evaluation Corporate
√ √
Management establishing a risk litigation risks, and external Governance
identification, Operational and audit, and
assessment and supply chain risks establish a
prevention system dynamic risk
covering the entire monitoring and
?Corporate Governance business process. early warning
?ESG Governance
?Risk Management mechanism.
?Community involvement and commitment
?Information Security and Privacy Protection Proactively respond
Incorporate
to the policy and
Address climate
physical risks
change into
brought by climate
strategic
change, and Legal and
planning and
promote low-carbon litigation risks,
conduct carbon
Addressing transformation Operational
emission Environmental
Climate by setting carbon √ √ √ and supply
inventory; Protection
Change emission reduction chain risks,
implement
goals, implementing Reputational and
energy-saving
energy-saving brand risks
transformation
Less Important Importance to Finance Very Important technological
and explore the
transformation
application of
and management
clean energy.
improvement.
Materiality Topic Analysis Matrix
Scope of Impact Scope of Impact
Risk Response Corresponding Risk Response Corresponding
Dimension Topic Topic Objective Dimension Topic Topic Objective
Value Corporate Social Identification Measures Chapter Value Corporate Social Identification Measures Chapter
Chain Operation Impact Chain Operation Impact
Promote the
Formulate construction
Systematically an energy of work safety
improve energy management standardization,
Prevent industrial
use efficiency, system, conduct conduct regular
accidents and
control energy energy audit hidden danger
occupational
costs and reduce and monitoring, investigation,
Operational and diseases, and
the environmental invest in and Organizational safety training
Energy supply chain Environmental safeguard employees'
impact of operations √ introduce high- and employee and drills, and
Management risks, Legal and Protection Occupational life safety and
by establishing efficiency risks, Legal and occupational Safety
litigation risks Health and physical health by √ √
a sound energy energy-saving litigation risks, health Responsibility
Safety establishing and
management system equipment, Reputational and monitoring;
implementing a
and updating energy- and carry out brand risks carry out special
comprehensive
saving equipment energy-saving occupational
work safety and
and technologies. publicity and health
occupational health
training. examinations
management system.
and protection
for posts such
Establish an
as assembly and
environmental
welding.
management
Implement
organization
full-process
and system, and
quality control
conduct regular
and conduct
environmental Ensure the safety and
Governance Social quality training
protection reliability of products, Legal and
and selection;
Ensure compliance training and meet customer litigation risks,
Product establish a global
with emission emergency requirements and win Reputational Safety
Quality and √ √ √ rapid response
standards, drills; market trust through and brand risks, Responsibility
Safety mechanism for
and prevent strengthen a full-life-cycle quality Operational and
customer faults
environmental Legal and the compliant management system supply chain risks
and provide
pollution incidents litigation risks, monitoring and strict control.
remote diagnosis
Environmental and related Reputational and disposal
Environmental and on-site
Protection reputational losses by √ √ and brand risks, of waste gas,
Protection maintenance
Management strictly implementing Organizational wastewater and
services.
environmental and employee solid waste,
protection laws risks strictly manage Formulate
Drive technological
and regulations waste cutting an R&D and
upgrading and
and improving the fluid and oily innovation
product iteration,
pollutant and waste wastewater strategy, increase
and consolidate and
management system. generated by R&D investment,
enhance Huaming's Organizational
machining, and build industry-
core competitiveness and employee
disclose the R&D and university-
by continuously √ √ risks, Operational Client Service
up-to-standard Innovation research
increasing R&D and supply chain
emission data platforms, and
investment, building risks
of pollutants improve the
innovation platforms
from production intellectual
and protecting
bases regularly property
intellectual property
and publicly. protection
rights.
mechanism.
Scope of Impact
Risk Response Corresponding
Risk Control and Compliance
Dimension Topic Topic Objective
Value Corporate Social Identification Measures Chapter
Chain Operation Impact
Improve customer
satisfaction and
Optimize the
customer service
Governance
loyalty, and establish process, provide
long-term and stable Reputational product training
High-Quality strategic cooperative and brand risks, and guidance, Huaming strictly complies with relevant laws, regulations and industry regulatory requirements, formulates and
Customer relations by building √ √ Organizational and conduct Client Service implements the Internal Audit Policy, and establishes a management structure of "hierarchical responsibility,
Service an efficient demand and employee satisfaction
coordination and linkage".
response mechanism risks surveys and
and a customer closed-loop
relationship management of
management system. complaints.
Audit Committee under the Board of Directors
Social
Establish a
Build a safe, stable,
supplier access
responsible and ?Formulate and disclose the rules of procedure for the Audit Committee;
evaluation
sustainable supply
system, conduct
chain system Operational and ?Guide the Internal Audit Department to carry out audit work.
ESG training,
by conducting a supply chain
implement
Sustainable comprehensive risks, Legal and Safety
√ √ √ open and fair
Supply Chain evaluation and litigation risks, Responsibility
procurement,
management Reputational and
and sign
of suppliers brand risks
integrity and Internal Audit Department
covering quality,
environmental
environmental
protection
protection and ethics.
agreements.
?Inspect and evaluate the completeness, rationality and effectiveness of the internal control system;
?Audit the legality, compliance, uditauthenticity and completeness of Huaming's accounting materials
and other relevant economic materials, as well as the financial revenues and expenditures and related
economic activities reflected therein;
?F or internal control deficiencies found in the review process, urge the relevant responsible
departments to formulate rectification measures and a time schedule, conduct follow-up review of
internal control andsupervise the implementation of rectification measures;
?Be responsible for the special audit of various acts that violate Huaming's systems, encroach on
Huaming's assets, cause serious waste and damage Huaming's interests;
?Report work to the Audit Committee regularly.
Strategy Management of Impacts, Risks and Opportunities
Management Strategy Audit Work Development
Focusing on our core power equipment business and key development priorities—including ultra-high voltage (UHV) Huaming conducts annual internal control self-evaluation and external audit. In 2025, Huaming engaged Shine
projects and overseas expansion—we focus on critical risk areas such as market, technology, and supply chain risks. We have Wing Certified Public Accountants to conduct an internal control audit across all operating locations, obtaining an
established mechanisms for risk anticipation and dynamic adaptation to ensure risk management progresses in tandem with audit report with a standard unqualified opinion.
business development, thereby laying a solid foundation for Huaming's sustainable, high-quality development.
Risk Control and Risk Analysis Compliance Culture Building
Impact Potential Financial Huaming organizes core personnel to participate in official regulatory training by the CSRC and stock exchanges,
Risk Type Risk Description Response Measures
Timeframe Impact as well as special practical training by external law firms and professional institutions. At the same time, Huaming
also actively carries out comprehensive compliance training to ensure that employees fully understand and strictly
Continuously improve the abide by relevant laws and regulations.
internal control system and
The lack or inadequate
promote our information-
implementation of control over
Internal Short-term, Financial losses, audit based implementation;
Control
key business processes may
lead to financial misstatement,
Medium-term, adjustments, increase conduct regular internal Indicators and Goals
Failure Risk Long-term costs control self-evaluation and
asset loss or low operational
special audit; strengthen
efficiency.
the assessment of system
implementation. With improving risk prevention and control quality and upgrading system efficiency as the core goals, Huaming's risk
control and compliance work formulates annual indicators focusing on key links such as compliance training, audit
supervision and defect rectification. Huaming builds a solid compliance defense line in line with business reality.
Ensure the independence
Incomprehensive coverage of
and resource guarantee of
internal audit and ineffective
Inadequate internal audit; establish a
follow-up on the rectification Short-term, Accumulation of
Audit closed-loop mechanism for
of audit suggestions may lead Medium-term, potential risks,
Supervision the rectification of problems Key Performance Indicator
to failure to detect and correct Long-term regulatory penalties
Risk found in audits; strengthen
potential risks in a timely
manner.
the reporting of audit results ?Held 6 meetings of the Audit Committee
to the Board of Directors.
?T he audit scope mainly covers the compliance and effectiveness of internal
control, as well as the efficiency and performance of business operations; audits
Failure of the compliance
Establish a dynamic update
system to respond to changes
mechanism for compliance; cover procurement and payment, outsourcing business, departure audit of key
in laws and regulations in a
Compliance Short-term, carry out hierarchical
Management
timely manner, and inadequate
Medium-term,
Fines, litigation costs,
compliance training for positions and other aspects, with a total of 10 special audits conducted
compliance training and reputational damage
System Risk Long-term all employees; set up
awareness raising increase the
compliance performance
possibility of non-compliant
assessment indicators.
operations.
Business Ethics Reporting Channels
Huaming discloses anti-fraud reporting channels to all stakeholders, assigns special personnel to be responsible
for reporting records and investigations, keeps all reports strictly confidential, and resolutely eliminates any form of
Integrity Management System threat and retaliation.
Huaming strictly abides by the Anti-Unfair Competition Law of the People's Republic of China, the Interim Anti-Fraud Reporting Channels
Provisions on Prohibiting Commercial Bribery Acts and other laws and regulations, and formulates and implements
the Anti-Fraud Management Policy of Huaming Electric Power Equipment Co., Ltd. On the eve of important festivals
and holidays, Huaming reminds employees to adhere to the bottom line of integrity through internal notices,
emails and other means. In 2025, Huaming had no litigation cases related to corruption. Reporting Hotline: +86 21 5899 5505
Huaming's Integrity Management Requirements Mailing Address: Internal Audit Department, Huaming, No. 977
Tongpu Road, Putuo District, Shanghai
E-mail: jubao@huaming.com
It is strictly forbidden to take Postcode: 200333
Shall not solicit or accept cash Shall not participate in
advantage of one's position to
gifts, presents, credit cards, entertainment activities such as
extort or accept bribes; it is strictly
shopping cards, kickbacks or other
forbidden to seek benefits for commercial song and dance halls,
items from business partners or
nightclubs, leisure and tourism
individuals in any name.
relatives and friends by taking
advantage of one's position, and invited by clients, suppliers and
Supplier Business Ethics Management
Huaming's business cooperation
other parties, and shall not have
shall not be conducted with Huaming signs the Supplier Integrity Commitment Letter and the Integrity Agreement with all suppliers, clarifying
personal expenses reimbursed by
relatives and friends who have a
business partners. the responsibilities and disciplinary measures of both parties to reduce procurement compliance risks. In 2025,
conflict of interest with oneself.
Huaming's suppliers had no violations related to corruption and embezzlement.
Huaming's financial and relevant Business trips shall have a clear Anyone who finds others engaging
personnel shall not use public business purpose, be conducted in acts that damage Huaming
funds to speculate in stocks or in a thrifty manner, with no over- such as favoritism and fraud,
misappropriate public funds for standard reimbursement of abuse of power and commercial
personal use; anyone found doing travel expenses, and no detours bribery shall report to Huaming in
so shall be dismissed immediately, for tourism under the pretext of a timely manner. Failure to report
and those with serious acts shall official business. after knowing the facts shall be
be held criminally responsible in regarded as concealing fraudulent
accordance with the law. acts.
Environmental
Huaming regards green and low-carbon development as the core Our Actions Supporting of the UN SDGs
driving force for the enterprise's sustainable development. We
have systematically built a multi-dimensional governance system •Environmental Management
Protection covering energy, waste, waste gas and wastewater management.
Huaming is committed to identifying and addressing climate
•Address Climate Change
•Energy Management
risks, seizing low-carbon transformation opportunities in green •Waste Management
operations, and fulfilling the environmental responsibilities of •Waste Gas Management
an equipment manufacturing enterprise. •Wastewater Management
•Green Operations
Environmental Management
Governance Strategy
Huaming strictly abides by the Environmental Protection Law of the People's Republic of China, the Environmental All subsidiaries and production units of Huaming conduct risk investigations in accordance with the Emergency
Impact Assessment Law of the People's Republic of China and other relevant domestic and foreign laws and regulations. Plan for Sudden Environmental Incidents. We improved emergency facilities, organized regular emergency drills,
We have improved and optimized a number of systems including the Quality / Environment / Occupational Health and strengthened the ability to prevent and control various accidents. No environmental accidents occurred during
and Safety Management System, the Procedure for Identification and Evaluation of Environmental Factors and the the reporting period.
Regulations on the Management of Hazardous Waste Storage Sites, and constantly improved the environmental
management system. In 2025, the major subsidiaries of Huaming maintained compliance with the ISO 14001
Environmental Management System certification requirements. Management of Impacts, Risks and Opportunities
Huaming established a top-down, all-round environmental management organizational structure, clarifying the person
in charge of environmental management and their responsibilities. We and our subsidiaries regularly conduct analyses of environmental management risks and opportunities.
Shanghai Huaming has formulated and implemented the Control Procedures for Responses to Organizational
Environment, Risks and Opportunities, by which it regularly identifies risks, assesses their severity, and documents
Environmental Management Structure the assessment results in the Form for Identification, Analysis and Evaluation of Risks and Opportunities.
As the primary individual accountable for the environmental protection, Shanghai Huaming's Environmental Emergency Plan System
General Manager
the General Manager bears full responsibility for overseeing all aspects of
the environment protection.
Leading the Safety and Environmental Protection Department, these leaders Comprehensive Special Emergency On-site Disposal
Department Leaders in
are tasked with regularly developing environmental protection work plans, Emergency Plan Plan Plan
Charge
promptly examining and analyzing critical environmental issues, and
formulating measures and solutions to address environmental challenges.
These leaders ensure that newly constructed, reconstructed, and expanded
Technical Leaders in Charge engineering projects comply with legal environmental impact assessments.
They organize and facilitate the upgrading of the company's pollution
prevention and control equipment technology.
Head of Safety and Environmental Bearing sole responsibility for the environmental protection duties of the Safety
Protection Department and Environmental Protection Department, this individual oversees and guides
the environmental protection efforts of various departments within Huaming.
Welding Environmental Protection Environmental Emergency Drill
Training
As the primary individual responsible for the environmental protection
Workshop Director work within the workshop, the Workshop Director organizes and
implements Huaming's environmental protection management system and
work requirements, ensuring compliance and effectiveness.
Resource and Energy Management Category Details Timeframe Potential Impacts Response Measures
Acute risks: Extreme weather Production delays, ormulate disaster emergency plans and
F
Addressing Climate Change (e.g., heavy rain, typhoons) leads asset losses enhance the disaster resistance capacity of
to factory shutdowns, supply Short term and increased facilities;
chain disruptions or equipment insurance Lay out a diversified supply chain to reduce
damage premiums regional concentration risks
Governance Physical
Risks
Chronic risks: Rising average Increased
Promote energy-saving and water-saving
Through product innovation and service upgrading, Huaming is transforming from a "key supplier of power grid temperatures and water operating costs
Medium-to- transformation of factories;
equipment" to a "key enabler of new power systems and energy transformation solutions". shortages affect the efficiency of and enhanced
long term Explore self-use solutions for renewable
production and operation or the resource
energy (e.g., photovoltaic power)
stability of energy supply dependence
Strategy Product and service
opportunities: Growing demand
Open up new ocus on the R&D of customized equipment
F
for new energy infrastructure
Medium-to- markets and in the new energy field;
such as wind power, photovoltaic
long term expand profit Expand cooperation in overseas green
power and UHV drives the
margins infrastructure projects
demand for Electric Power
Equipment upgrading
Opportunities
Resource efficiency opportunities:
Category Details Timeframe Potential Impacts Response Measures Lower production Establish a product recycling and
Reduce raw material costs
Medium-to- costs and enhance remanufacturing system;
through the circular economy
long term supply chain Promote the application of lightweight and
Strengthen R&D of energy-saving (e.g., recycling and utilization of
Policy and regulatory risks: Increased resilience long-life materials
technologies and drive the upgrading of waste equipment)
Tighter carbon emission production costs,
product energy efficiency;
reduction policies may subject Short-to- restricted product
Conduct carbon accounting and explore
high-energy-consuming medium market access,
low-carbon supply chain management;
equipment manufacturing to term and impacts
Participate in the formulation of industry
higher environmental standards on traditional
standards to adapt to policy changes in
or carbon emission costs business models
advance
Technological iteration risks:
The Electric Power Equipment Increase R&D investment in new energy
Eroded market
Industry is transforming field equipment (e.g., UHV, energy storage);
Transition Medium-to- share and
towards green and intelligent Cooperate with scientific research
Risks long term increased pressure
development, and traditional institutions to lay out low-carbon
on R&D investment
technological paths may be technologies
replaced
Market and reputational risks:
Damaged Establish an ESG information disclosure
Customer preferences shift to
Medium-to- brand value mechanism;
low-carbon products; poor ESG
long term and increased Launch green product certification and
performance may affect corporate
financing costs strengthen sustainable brand promotion
image and financing capacity
Management of Impacts, Risks and Opportunities
We fully integrate climate-related risks and opportunities into our strategic management framework, and
implement systematic management through a dynamic closed-loop mechanism of "Identification - Assessment
- Response - Monitoring". At the operational level, we conduct resilience assessments of the supply chain,
production processes and product portfolio, and identify high-priority areas. In response to transition risks, We
proactively address them by developing green technological products and optimizing the energy mix; for physical
risks, we strengthen the adaptability of infrastructure and lay out supply chain resilience solutions. At the same
time, Huaming actively seizes opportunities such as the expansion of the new energy equipment market, the
improvement of resource efficiency and green financing, and converts them into growth drivers. All management
actions are supported by key performance indicators and disclosed in the annual ESG report.
Photovoltaic Power Generation at Fengxian Production Base
Indicators and Goals Case Guizhou Chenting Distributed Photovoltaic Power Generation Project
In 2025, Guizhou Guizhou Chenting Co., Ltd. built a distributed photovoltaic power generation project using the idle roof of
In 2025, Huaming conducted a greenhouse gas (GHG) inventory for the scope of the consolidated financial
the factory area, adopting the self-generation for self-use model. Constructed by a professional photovoltaic enterprise and
statements in accordance with ISO 14064:2018 and the GHG Protocol.
promoted through multi-department collaboration, the project was connected to the power grid for generation in June of the
same year. By the end of December, we had achieved an accumulated power generation of 1.71 million kWh, accounting for
Indicator Unit 2023 2024 2025
reduction and efficiency improvement, effectively lowering electricity costs and the carbon footprint.
Total GHG Emissions tCO2e 11,548.35 12,638.87 11,166.70
Direct GHG Emissions (Scope 1) tCO2e 1,178.16 798.79 735.41
Direct GHG Emission Intensity (Scope 1) tCO2e/RMB 1 million 0.60 0.34 0.30
Indirect GHG Emissions (Scope 2) tCO2e 10,370.19 11,840.08 10,431.29
Indirect GHG Emission Intensity (Scope 2) tCO2e/RMB 1 million 5.29 5.10 4.30
Notes:
Huaming's Scope 1 GHG emissions come from direct GHG emissions in the operation process (e.g., combustion of gasoline, diesel, natural gas and
gas fugitive emissions).
Huaming's Scope 2 GHG emissions come from indirect GHG emissions generated by purchased electricity. Energy Consumption Type Unit 2023 2024 2025
Direct Energy
kgce 438,624.47 416,583.44 415,205.28
Direct Energy Consumption Volume
Energy Management Consumption Direct Energy kgce/RMB 1
Consumption Intensity million
Indirect Energy
kgce 2,223,957.95 2,560,850.24 2,254,906.93
Huaming strictly follows national energy conservation requirements, formulates relevant energy-saving and Indirect Energy Consumption Volume
consumption-reduction control documents, and regulates and guides the energy-saving work of all its plants. Consumption Indirect Energy kgce/RMB 1
Consumption Intensity million
We and our subsidiarie actively adopt energy-saving measures and introduce green electricity. During the reporting Comprehensive Energy
Comprehensive kgce 2,662,582.41 2,977,433.68 2,670,112.21
period, the photovoltaic power generation projects at the Guizhou Chenting plant and our Fengxian production Consumption Volume
Energy
base were completed and put into operation. At the same time, we successfully relocated the high-energy- Comprehensive Energy kgce/RMB 1
Consumption 1,357.67 1,282.16 1,100.26
consumption steel casting workshop at the Fengxian production base, significantly reducing diesel consumption. Consumption Intensity million
Emissions and Waste Green Operations
Huaming strictly abides by the Environmental Protection Law of the People's Republic of China and Law of the People's Huaming has gradually improved a series of internal
Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste, and continuously optimizes management systems such as the Green Office Policy,
the Waste Control Procedure, clarifying the requirements for the whole-process management of waste. and advocates environmentally friendly behaviors such
as power saving, paper saving and green commuting. At
Waste Management Fengxian Production Base, Huaming adopts plastic pallets
to replace original wooden pallets, reusable plastic pallets
Huaming strictly complies with the Law of the People's Republic of China on the Prevention and Control of Environmental feature extended service life and help avoid resource waste. Replacement of Wooden Pallets with Plastic Pallets
Pollution by Solid Waste, the Measures for the Administration of Transfer of Hazardous Wastes and other laws and regulations,
improves systems such as the Waste Management Measures and the Solid Waste Control Procedure, and standardizes waste Green Office Advocacy
disposal. Waste is classified into hazardous waste and general waste for separate management.
Huaming encourages employees to issue documents (notices) through electronic means such as the collaboration
In accordance with the Hazardous Waste Management Measures, Huaming implements standardized control over hazardous network and QQ groups to avoid unnecessary paper printing. For non-important documents, employees shall print on
waste. All subsidiaries and branches establish a hazardous waste management list, which clearly records waste categories, the reverse side of waste paper; for important documents, double-sided printing is advocated to minimize paper waste.
generation links, hazardous attributes, disposal units and treatment methods. All hazardous waste is entrusted to qualified Unless necessary, all archive materials shall not be printed in principle to reduce paper consumption.
third-party units for professional disposal or resource utilization.
Power Saving Advocacy
Huaming's domestic garbage is collected by classification and uniformly transported and disposed of by the environmental
sanitation department; general industrial solid waste (e.g., waste iron filings generated from steel plate cutting and mechanical
Huaming has optimized and adjusted office lighting, changing the original double-lamp mode to single-lamp mode, and
processing) is transferred to qualified units for comprehensive utilization as a renewable resource.
promoted the use of energy-saving LED lamps. For air conditioning use, it is stipulated that the air conditioning temperature
shall not be lower than 26℃ in summer and not higher than 18℃ in winter, effectively reducing energy waste.
Waste Gas Management
Huaming strictly implements the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution Green Transportation Advocacy
and relevant regulatory requirements, and conducts classified monitoring and treatment of waste gas generated in all links of the
entire production process. Major waste gas pollutants in the production process are subject to real-time control by relying on on- Huaming encourages employees to choose electric vehicles for business trips and overtime work outside the
line monitoring equipment to ensure up-to-standard emissions. During the reporting period, Huaming continued to promote office, reducing the use of traditional fuel vehicles and further lowering carbon emissions from transportation.
production optimization and technological transformation, and constantly improved the level of ultra-low emission.
Huaming conducts daily inspections of the production site, regularly replaces the activated carbon of VOCs treatment facilities, Building a New Benchmark for Green and Intelligent Warehousing - Shanghai Huaming High-Bay
Case
and monitors online data in real time to ensure timely handling of abnormal situations. Huaming entrusts qualified third-party Warehouse Project
institutions to conduct regular environmental monitoring of waste gas, wastewater, noise and other indicators.
Huaming carried out an intelligent transformation
Wastewater Management of the high-bay warehouse at the Fengxian District
production base, adopting an automated high-bay
Huaming strictly abides by the Law of the People's Republic of China on the Prevention and Control of Water Pollution, storage system, which has greatly improved the
the Regulations on Urban Drainage and Sewage Treatment and other relevant laws and regulations. For various storage capacity and the overall storage volume.
wastewater pollutants generated in the production process of different factory areas, Huaming adopts corresponding Through packaging standardization and the
high-efficiency treatment processes to ensure the compliance of discharged water quality. integration of WMS and ERP systems, unmanned
operation has been realized, reducing energy
Huaming's sewage treatment station includes a comprehensive sewage treatment system and a dedicated cyanide-containing consumption and pollution. After the project was
wastewater treatment system. The comprehensive system conducts systematic purification of sewage to ensure up-to-standard put into operation, the warehousing operation
discharge; the cyanide-containing wastewater treatment system specifically removes harmful substances such as cyanide and efficiency, labor costs and inventory management
promotes the recycling of treated water resources. Every year, Huaming entrusts qualified third-party environmental monitoring accuracy have been significantly optimized.
institutions to conduct regular monitoring and evaluation of the sewage discharge of all factory areas.
Safety
Safety is the bottom line of our development and a Our Actions Supporting of the UN SDGs
solemn commitment to clients, partners and employees.
Huaming strictly adheres to the bottom line of product
•Strictly Control Product Safety
Responsibility safety and quality, strengthens supply chain collaboration
and transparent management, safeguards data and
•Strengthen Supply Chain Management
•Protect Data Security
information security, and builds a solid occupational
•Promote Work Safety and Occupational Health
health and safety protection system for production sites.
Product Safety Management of Impacts, Risks and Opportunities
Governance Quality Control Process
Huaming has established a three-level quality management mechanism led by the general manager, with the quality We have established a quality management system centered on procurement control and production process control. On the
management department as the primary responsible department and the quality inspection department as the procurement side, standardized supplier selection procedures are implemented with strict material inspection; every batch of raw
implementation entity. Major topics related to product safety are included in the scope of regular review by the management materials must be accompanied by quality documentation and pass qualification testing. In the production phase, the Quality
to ensure the senior management effectively performs supervision duties. Huaming has built a sound quality control system, Management Department conducts sampling inspections in compliance with established standards, while refining the supplier
managed and implemented by the Quality Management Department. The system is subject to supervision and audit on an evaluation mechanism and implementing regular, systematic management to ensure stable and reliable product quality.
annual basis and certificate renewal review every three years to comply with the requirements of ISO 9001:2015 certification.
In 2025, Huaming completed the annual system planning as scheduled to ensure the validity of system documents. All major In 2025, We completed evaluations of multiple suppliers. Meanwhile, all subsidiaries have enforced rigorous quality control
subsidiaries and branch companies of Huaming have obtained ISO 9001 Quality Management System certification. measures for suppliers in parallel. Guizhou Chenting conducts on-site audits on outsourced manufacturers and suppliers, and
carries out on-site evaluations for newly added suppliers. We have put in place a supplier claim and accountability mechanism
Strategy to reinforce quality accountability through economic measures. Shandong Fin CNC, another subsidiary, advances collaborative
management by conducting regular visits to key suppliers, Huaming promptly interviewed suppliers with batch non-conformity
Management Strategy problems, compiled monthly statistics on the non-conformity rate of components, and incorporated such data into performance
appraisals. This forms a closed-loop management framework of "Evaluation – Feedback – Assessment – Improvement".
In 2025, Huaming promoted the upgrading of quality management from traditional quality control to a business strategy,
and deeply integrated quality into the core competitiveness of the enterprise. Starting from the tenet of "Starting with clients, In our production processes, each production unit is staffed with dedicated inspection personnel. We implement full-process
ending with clients", Huaming advanced the construction of a full staff-participated total quality management system and quality monitoring covering first article inspection, in-process patrol inspection, and pre-storage final inspection. Huaming is
quality culture with the full support of the leadership. Huaming transformed our management thinking from post-inspection equipped with advanced testing and measuring instruments including large-scale bridge coordinate measuring machines, X-ray
to whole-process prevention, moved quality control forward to the R&D and supply chain links, and pursued the goal of non-destructive testing facilities, spark direct reading spectrometers, so as to enhance the accuracy and efficiency of inspection
"zero defects". At the same time, we strengthened the closed-loop of after-sales feedback to drive continuous product activities.
improvement. By introducing advanced testing equipment, optimizing quality processes (such as weekly / monthly problem
reports and the PDCA cycle), improving the management system, and combining market and competitor analysis, Huaming
continuously enhanced product precision, stability and customer satisfaction, empowered sales, and built a sustainable Product Quality Improvement
quality advantage in the fierce competition.
Huaming included the first inspection pass rate in the departmental performance appraisal, and the culture of
Quality Risk Analysis "Everyone is a quality inspector" achieved initial results: all departments met the pass rate goals throughout the
year, quality problems in finished product assembly were significantly reduced, and the risk of defective products
flowing to clients was effectively lowered.
Impact Potential
Risk Type Risk Description Response Measures
Timeframe Financial Impact
Huaming promoted automation and zero-point positioning fixtures in production processes, phasing out manual
Uneven professional quality of Boost employee motivation through
Short- and simple mechanical tooling, which delivered continuous improvements in the qualified product yield. We also
employees may lead to non-standard performance appraisal; continuously introduce
Personnel term, Increased costs, organized specialized skill training covering standard operating specifications for profile projectors, as well as daily
operations in the production process, employees; pay attention to employees'
Quality Risk Medium- declining revenue maintenance and upkeep procedures for spectrometers and other equipment. All subsidiaries focused on capacity
directly affecting the stability of product reasonable needs to enhance a sense of
term
quality. belonging and operational standardization. building with targeted resource allocation:
Formulate scientific procurement strategies •In 2025, Guizhou Chenting carried out quality training and regular quality meetings, specially promoted the
Unstable quality of raw materials or
Short- based on production plans; conduct
components provided by suppliers solution to a number of key quality problems, organized special seminars and conducted interviews with relevant
Supplier term, Increased costs, annual review and performance appraisal
will directly lead to production suppliers. They simultaneously completed the revision of the Quality Manual and established a hierarchical
Quality Risk Medium- declining revenue of suppliers; implement dynamic supplier
interruption or finished product management system of procedural documents.
term management and require timely rectification
quality defects of Huaming.
or replacement for problematic suppliers.
Risk of Rising Clients' ever-increasing requirements for Short- Strengthen communication with clients to unify •Shandong Fin CNC strived to improve testing accuracy and personnel capabilities, invested in the introduction
Customer product quality, testing standards and term, Increased costs, technical and inspection standards; enhance of high-precision equipment such as Renishaw laser interferometers, ball bar testers and laser calibrators from
Quality consistency pose challenges to Huaming's Medium- declining revenue production process control to ensure products the UK, entrusted the original factory to conduct special training for inspectors, and recruited high-level quality
Requirements existing quality control capabilities. term meet the latest customer requirements. inspection employees.
Quality Problem Control Indicators and Goals
Huaming has set two core quality management goals: customer satisfaction of not less than 95% (including an
Huaming has established a closed-loop mechanism linking customer complaints and quality improvement. For product after-sales service quality assessment Goal of 98%); a 100% pass rate of finished products ex-factory. In 2025, all
quality issues and complaints, Huaming High Voltage adopts the 8D methodology to complete rectification through monthly sub-Goals were completed on schedule.
cross-departmental meetings. Service-related issues are incorporated into performance appraisals: points will be deducted
from responsible personnel with penalties imposed as appropriate. Employees making repeated errors will receive remedial
training or be referred to the human resources department for further handling, ensuring effective control over product and Overall Objectives
service quality risks. In 2025, all customer quality complaints were addressed in a timely manner, and major quality issues
were fully closed and resolved. Goals Actual Achievement
Guizhou Chenting formulates targeted rectification measures for all types of non-conformities and strengthens follow-up
Customer Satisfaction Rate ≥ 95% 100% achieved
verification to ensure effective implementation and closed-loop resolution of improvements. We have built a full-chain quality (including 98% for after-sales service quality assessment) (Customer Satisfaction Rate 98%)
control system covering suppliers to finished products, preventing non-conforming items from entering subsequent processes
or being delivered to customers, so as to fully guarantee product quality and delivery reliability. 100% achieved
Finished Product Delivery Qualification Rate: 100%
(Finished Product Delivery Qualification Rate 100%)
Shandong Fin CNC implements dynamic management for inventory and in-transit materials. Once non-conformities are
identified, relevant batches are immediately frozen, and on-site materials are labeled and isolated to prevent misuse. For
delivered products, product recall procedures are initiated, accompanied by root cause analysis and the issuance of non-
conformity analysis reports. Meanwhile, a component traceability system has been built to realize one item, one code with Sub-objectives
full lifecycle traceability. We have also optimized supply modes to strengthen source traceability capabilities. In internal
production processes, strict assessments are conducted on the first-pass inspection yield of each procedure, with full tracking
and closed-loop management applied to all quality issues. Supplier performance is linked to the non-conformity rate of Goals Actual Achievement
components, with quantitative assessment and integrated reward-and-penalty mechanisms implemented.
Effectiveness of System Documents: 100%
(Effectiveness of System Documents 100%)
Quality Culture Building
Process Implementation Rate ≥ 95%
(Process Implementation Rate 98.5%)
Huaming disseminates the quality philosophy of the
"Four Three Principles" and twelve key implementation
guidelines through daily morning meetings, special 100% achieved
Procurement (Machining) Qualification Rate ≥ 90%
training sessions and team workshops, helping (Procurement (Machining) Qualification Rate 91.74%)
employees understand the impacts of quality-related
issues and corresponding prevention methods.
Equipment in Good Condition Rate ≥ 95%
We set up a monthly Quality Award and a Problem (Equipment in Good Condition Rate 96%)
Feedback Award, and selects Quality Models every
year to stimulate employees' active participation in
Finished Product First Pass Inspection Qualification Rate ≥ 100% achieved
quality improvement. In accordance with the Employee
Handbook, Huaming implemented a quality loss claim
and hierarchical accountability mechanism, which
effectively promoted employees to reflect on and rectify Calibration Qualification Rate of Monitoring and Measuring
(Calibration Qualification Rate of Monitoring and Measuring
problems, and the recurrence rate of similar problems Equipment: 100%
Equipment 100%)
decreased significantly. Quality Training
Supply Chain Management Risk Type Risk Description
Impact
Potential
Financial Response Measures
Timeframe
Impact
Governance Delayed payments due to For contracts performed normally, make
internal process or capital payment in full and on time in strict accordance
Supplier
arrangement issues of Huaming with agreements;
Huaming has established a cross-departmental collaborative supplier governance mechanism. Led by the Performance Increased
damage business reputation, Establish a coordination mechanism between
Procurement Department, a supplier management team composed of the Technology Department, Process and Medium- costs,
which may lead suppliers to payment plans and cash flow to ensure
Cooperation term declining
Department and Quality Department conducts overall planning for the full lifecycle management of suppliers. By lower supply priority, tighten performance credit;
Relationship profits
formulating institutional documents including the Supplier Management Policy, Procurement Control Procedure credit terms or even terminate Regularly communicate with core suppliers on
Risk
and Contract Management Procedure, we have clarified the division of responsibilities and standardized procedures cooperation, thereby affecting cooperation experience to maintain long-term
the timely supply of materials. trust relationships.
covering supplier development, admission, assessment, evaluation, elimination and relationship maintenance.
Conduct annual review and performance
Fluctuations or insufficient
appraisal of suppliers covering quality, delivery,
All suppliers of major materials are incorporated into the unified management system and subject to regular consistency in supplier product
service and other dimensions;
document reviews and on-site evaluations, with assessment dimensions covering key factors such as quality, quality lead to production
Increased Implement dynamic management of the supplier
pricing and qualification. Evaluation results are directly applied to the dynamic update of the Qualified Supplier Supplier interruption, increased rework or Medium-
costs, list, conduct timely interviews with suppliers
Quality customer rejection of Huaming's term, Long-
List. For non-compliant suppliers reviewed by the management team, the Application Form for Disqualification of declining with quality problems, order rectification within
Stability Risk products, which is more term
Non-conforming Suppliers will be completed to suspend or terminate cooperation. profits a time limit or suspend cooperation;
prominent in suppliers with
Implement the strategy of "at least two qualified
weak technology or extensive
We implement a monthly performance appraisal mechanism. The Monthly Supplier Assessment Form is filled out suppliers for the same material" to reduce single-
management.
source dependence.
based on indicators including the incoming inspection pass rate, on-time delivery rate, service quality and pricing
level, so as to drive continuous improvement. Guizhou Chenting has further refined management requirements
by formulating the Supplier Control Procedure, conducting annual on-site evaluations, and revoking the supply
qualification of suppliers failing the evaluation, thereby strengthening the rigid enforcement of relevant regulations.
Management of Impacts, Risks and Opportunities
Strategy
Supply Chain Risk Analysis Supplier Due Diligence
Potential We have established a structured supplier selection process to ensure that suppliers meet our standards. Prior to
Impact
Risk Type Risk Description Financial Response Measures adding new suppliers, our cross-functional supplier management team conducts initial assessments of potential
Timeframe
Impact suppliers' credentials, covering qualifications, certifications and background checks on integrity and dispute
A sharp rise in raw material costs Implement hedging strategies such as "copper records. Qualified suppliers then undergo assessments of raw materials to be procured, under which we examine
due to violent fluctuations in locking" to balance price and capital risks; the quality of materials in accordance with our technical specifications and review the competitiveness of pricing.
bulk commodity prices (e.g., a Formulate scientific procurement plans based on
Upon finishing the assessments and obtaining internal approval, we arrange pilot production runs and conduct type
Raw Material rapid increase in copper prices), production plans and raw material consumption
Short-term, or specific testing on key components, and only suppliers that pass these tests may enter the mass procurement
Price and policy changes or logistics Increased rhythms to avoid blind large-volume stockpiling;
Medium- stage.
Procurement disruptions; signing large- costs Strengthen market intelligence collection and
term
Strategy Risk volume procurement contracts dynamically monitor changes in supply and
to lock in prices may lead to demand and policies; We conduct periodic assessments of our existing suppliers pursuant to our supplier management framework.
inventory backlog and capital Establish an information sharing mechanism with Through on-site inspections and off-site reviews comprehensive assessments are performed on indicators including
pressure. industry partners for early warning. incoming material inspection standards, delivery timeliness, service quality and pricing, to ensure suppliers
continuously meet the management requirements.
Supplier Capacity Building Data Security
Huaming organizes suppliers to learn the ISO 9001 Quality Management System standards every year, formulates
Governance and Strategy
implementation plans and provides guidance and support. Huaming holds an annual Supplier Conference to
Huaming strictly complies with laws and regulations including the Cybersecurity Law of the People's Republic of China
strengthen the communication of quality requirements and two-way exchanges. During the reporting period,
and the Data Security Law of the People's Republic of China, and have formulated internal institutional documents
special quality training was provided to multiple suppliers.
such as the Network and Information Security Management Policy and the Procedure for Reporting and Assisting in
the Investigation of Cyber-related Illegal Cases. We have established a Leading Group for Network and Information
Guizhou Chenting conducted special interviews and in-depth communication for quality problems, invited
Security, composed of the Information Security Office and heads of various departments. This group is responsible for
suppliers to observe production and application scenarios on site, and jointly optimized and improved products
approving and making decisions on major matters concerning the construction and implementation of the Company's
combined with on-site feedback, promoting suppliers to shift from "supplying according to drawings" to
cybersecurity system, conducting cybersecurity awareness education and security skills training for system operators,
"understanding needs and taking the initiative to improve", which effectively improved the matching degree of
investigating security incidents, and maintaining records and reports of such incidents.
supply quality.
Transparent Procurement Data Security Risk Identification
Huaming and our subsidiaries conduct regular security audits and risk assessments. Through analysis and evaluation of the
We determine suppliers and prices for materials used in our products through tendering procedures. Public bidding
Company's network systems, potential security risks and vulnerabilities are identified, and timely measures are taken for
is implemented for bulk materials and large-scale infrastructure renovation projects. For procurement matters not
remediation and optimization. Guizhou Chenting has deployed hardware firewalls and issues a daily Security Report for the
covered by the tendering scope, inquiry information shall be sent to no fewer than two suppliers. Procurement
Company's local area network, which is under the management of dedicated personnel. Corporate information and network
activities may only be executed after comprehensive price comparison, verification and negotiation, followed by
security risks are identified on the basis of such reports. At the beginning of 2025, Shandong Fin CNC identified the risk of
authorized approval.
hardware and software failures in the local OA server, which may affect business continuity and data security. In view of the
deficiencies of the local architecture in disaster recovery, operation and maintenance and security protection, We migrated the
Huaming requires all cooperating suppliers to sign the Integrity Commitment Letter, while procurement personnel
office automation system to the group's unified cloud platform and formulated a special upgrade and switchover plan. The new
shall receive dedicated training and sign commitments on professional integrity in their duties. We maintain
system was put into trial operation in early April and officially launched on May 1. On the basis of retaining core functions such as
multiple qualified suppliers for all key materials to diversify regional risks through cross-regional layout. For long-
the original process approval and notice announcement, we added mobile approval capabilities, effectively reducing the risk of
lead-time materials, advance stocking is arranged; during the product design phase, compatibility with alternative
data interruption or loss caused by infrastructure failures. No network security incidents occurred in Huaming in 2025.
brands offering equivalent performance and quality is prioritized wherever possible.
Management of Impacts, Risks and Opportunities
Green Supply Chain
Information Security Management Measures
Supplier Admission
Huaming continuously improves the network security architecture, strengthens the capabilities of firewalls, intrusion
Huaming stipulates that all purchased materials must comply with international, national and industrial detection and prevention systems and security monitoring, and regularly carries out security equipment upgrades and
environmental and quality standards. Cooperation will not be granted to suppliers without valid vulnerability patching; we fully adopt encryption technology to protect the integrity and confidentiality of data during
relevant qualifications, so as to control environmental compliance risks at the source. transmission and storage, and implements regular backup and recovery tests.
Huaming formulates and strictly implements the Network Security Management System, clarifying norms for network
Packaging and Material Recycling equipment management, data backup, and emergency response to security incidents; and regularly conducts network
security audits and risk assessments to timely identify hidden dangers and optimize protection strategies.
Huaming adheres to the principle of reusing original factory packaging materials directly whenever possible
to avoid unnecessary consumption of new materials. Silica sol plastic drums are regularly returned to Huaming organizes network security training on a regular basis and establishes an internal information sharing mechanism,
suppliers to realize closed-loop recycling of packaging materials. Mullite sand shell residues generated clarifying sharing boundaries and responsibilities to prevent the leakage of sensitive information and intellectual property
from precision casting are also returned to suppliers for reprocessing. Wooden cases, cardboard and rights. During the reporting period, Huaming further refined and implemented the unified encryption management of
other packaging materials for outsourced parts are sorted and recycled for equipment cabinet packaging, all technical documents and drawings, deployed employee behavior management software to standardize operational
workshop transit or secondary packaging. Empty oil drums are modified and reused as production tools. behaviors, and promoted a unified work communication platform to achieve full traceability of communication content.
Informatization Construction Strategy
Huaming adopts an office collaboration system, with the group uniformly deploying a cloud OA system to support Work Safety Risk Analysis
mobile approval. We also use the professional version of DingTalk Pro for daily operational activities such as human
resource management, attendance, approval and work reporting, promoting the online of management processes Potential
Impact
and information traceability. Shandong Fin CNC launched the ERP system upgrade work, replacing the original on- Risk Type Risk Description Financial Response Measures
Timeframe
premise system limited to the local area network with a cloud platform, aiming to integrate business functions such Impact
as finance, supply, procurement, marketing, manufacturing and internal collaboration. Huaming's management system
All departments operate in accordance with the
is in the revision stage, and the
Management Increased prescribed management processes, and timely adjust
rationality of the process is to
Privacy Protection System Medium- costs, non-conformities to maintain process operability.
be verified, which may lead to
Operation term declining Huaming shall review the processes through meetings
unclear safety responsibilities
Risk profits at an appropriate time to ensure their operability and
and inadequate implementation,
compliance with Huaming's actual situation.
?The General Manager's Office serves as the competent department for confidentiality work of Huaming, overall resulting in operational instability.
responsible for the supervision and inspection of encryption and decryption work. Huaming has formulated a Conduct a comprehensive assessment and hidden danger
The presence of operation
number of systems including the Corporate Privacy Policy, Employee Privacy Protection Regulations, Customer investigation of production sites, equipment and facilities,
points in the production
Information Confidentiality System, Computer Use Management System and Privacy Protection Process Norms, Insufficient Increased workplaces and operation links every year, set up safety
site that may lead to major Medium-
Control of costs, control points and include them in the management of the
clarifying the requirements for personal information management and establishing an emergency plan. accidents may trigger safety term,
Major Hazard declining List of Major Hazard Factors.
accidents if not effectively Long-term
Sources Risk profits Adopt the LEC (Job Hazard Analysis) method to
identified, assessed or
?We also implement encryption protection for all files stored in computers; file transmitted externally can only conduct accident risk assessment and organize
controlled.
special hidden danger investigation work.
be sent after unified decryption by the Archives Room. All employees have signed confidentiality agreements.
Regularly organize occupational health examinations for
During the reporting period, Huaming further strengthened the control of computers for employees The presence of occupational
employees in hazard-exposed positions, and establish
in sensitive positions such as the Sales Department and Customer Service Department, and deployed hazard factors in the
and improve monitoring files.
encryption software to enhance data protection. Insufficient workplace, such as inadequate
Increased Provide personal protective equipment, facilities and
Occupational protective measures, Medium-
costs, tools that meet the requirements of occupational
Health employees' non-standard term,
declining health protection.
Work Safety and Occupational Health Protection use of personal protective
Risk equipment, or lack of health
Long-term
profits Evaluate the "occupational hazard risks" and publicize
the corresponding evaluation materials (reports) to
monitoring, may lead to
enable employees to fully understand and follow the
Governance occupational health incidents.
implementation.
The Company strictly complies with laws and regulations including the Work Safety Law of the People's Republic of China
and the Law of the People's Republic of China on the Prevention and Treatment of Occupational Diseases, and continuously Management of Impacts, Risks and Opportunities
optimizes our occupational health and safety management system. As of the end of the reporting period, all production
premises maintain valid ISO 45001:2018 certifications. Work Safety Management
Huaming implements the general manager responsibility system, with the legal representative (General Manager) as the
In 2025, Huaming conducted risk re-identification in light of our business layout and technological upgrading. Following
primary person responsible for work safety and occupational health. We have built a three-level management structure
the overall relocation of the steel casting workshop, the original high safety and environmental risks have been completely
of Company - Department - Team, with the EHS Department performing overall management duties under the leadership
eliminated. After the commissioning of the new automated three-dimensional warehouse, we promptly identified newly added
of the General Manager. The management system covers four modules: goal setting, responsibility system, inspection and
risk points and incorporated them into standardized management; their risk levels are significantly lower than those of the
evaluation, and training and hidden danger rectification. Annual safety goals and measures are decomposed on a monthly
original steel casting operations.
basis, and the implementation is dynamically monitored through the 6S inspection and evaluation mechanism.
We completed a comprehensive special renovation of on-site electrical compliance, effectively reducing the risks of fire and
Huaming revised systems such as the Work Safety Responsibility System and the Provisions on the Extraction and Use of electric shock. A 3D sensor protection system equipped with robotic arms was installed on injection molding production lines to
Work Safety Expenses, refined the safety responsibilities of all levels of positions, and all employees signed work safety prevent mechanical injuries through technological means. Meanwhile, an intelligent mini-program for hidden danger inspection
responsibility letters. Huaming insists on conducting daily patrol inspections, organizes company-level comprehensive and was launched to enhance risk visibility and improve the efficiency of closed-loop rectification. Huaming also carried out a full
special inspections throughout the year, systematically identifies hidden dangers and strictly urges rectification. annual inspection of fire-fighting facilities to systematically assess the operational status of the fire protection system.
Huaming revised and issued the updated Work Safety Emergency Response Plan for Production Accidents, clarifying
organizational responsibilities, response procedures and disposal measures. Grassroots emergency teams have been
Indicators and Goals
established for each workshop, greatly improving the speed of initial response and on-site disposal capacity. Based on Huaming has set two overall work safety and health management goals: 1. a zero incidence of occupational
actual production and operational conditions as well as risk distribution, diversified and targeted emergency drills are diseases in hazardous types of work; 2. the elimination of major safety accidents and personal injury and death
organized annually, including comprehensive fire safety and environmental drills, together with special drills for high- accidents. In 2025, all sub-Goals were completed on schedule.
risk scenarios such as special equipment and confined spaces. These activities effectively verify the validity of emergency
plans and strengthen employees' safety awareness and practical response capabilities.
Case Huaming Conducts Fire and Explosion Emergency Drill in the Administrative Building
Overall Goals
On November 24, 2025, Huaming organized all personnel in the administrative building to conduct a Level 1 and Level
warehouse, and carried out full-process practical operations such as alarm, initial fire fighting, hierarchical evacuation,
on-site security, and docking with external fire support. All participants responded quickly and operated in an orderly
manner during the drill, with no delay in personnel evacuation, and the drill was successfully completed. This drill
improved the practical response capacity of Huaming's employees to sudden fires.
Sub-Goals
Goals Actual Achievement
Compliance Rate 100% 100% achieved
Fire and Explosion Emergency Drill in the Administrative Building
Fire-fighting Facility Qualification Rate 100% 100% achieved
Occupational Health Management
Huaming strictly abides by the Law of the People's Republic of China on the Prevention and Treatment of Occupational Procurement Qualification Rate of PPE/Safety Materials 100% 100% achieved
Diseases and other laws and regulations, and formulates system documents such as the Occupational Health and Safety
Operation Control Procedure and the Integrated Management Manual for Quality, Environment, Occupational Health
Warehouse Safety and Fire-fighting Qualification Rate 100% 100% achieved
and Safety to systematically standardize occupational health management work. All production sites are equipped
with ventilation systems and dust and noise control facilities, and receive annual occupational hazard assessments
conducted by certified third-party institutions. Regular occupational health examinations are provided for employees
Safety Qualification Rate of Inspection and Test Devices 100% 100% achieved
in high-risk positions, and complete health files are established to ensure early detection and intervention of potential
health problems. Personal protective equipment, facilities and tools meeting standards are equipped according to post
risks to effectively safeguard employees' occupational health rights and interests. Correct Wearing Rate of PPE ≥ 98% 100% achieved
Safety Education and Training
Safety Device Qualification Rate ≥ 95% 100% achieved
Huaming has established a systematic safety and occupational health
training system, formulated and implemented an annual training plan,
and strictly implemented three-level safety education. We also carry Certification Holding Rate for Special Types of Work 100% 100% achieved
out special training around high-risk fields, and regularly disseminates
new safety regulations and accident lessons through full-staff safety
Timeliness Rate of Annual Occupational Disease Examinations
learning and examinations, case warnings at morning meetings and 100% achieved
other means to comprehensively improve employees' safety awareness. Work Safety Month Training
Client
Huaming has always been client demand-oriented, focusing on improving Our Actions Supporting of the UN SDGs
service response efficiency and professional capabilities, continuously
optimizing the client experience and consolidating long-term cooperative •Accelerate R&D and Innovation
Service relationships. Meanwhile, we adhere to taking scientific and technological
innovation as the core driving force, constantly increasing investment in
•Optimize Client Service
technological R&D to drive product performance upgrading, and actively
integrating into the development trend of digitalization and intellectualization,
injecting sustained momentum into sustainable development.
R&D and Innovation Management of Impacts, Risks and Opportunities
Governance Scientific Research Management
Huaming has built the first domestic tap changer laboratory accredited by CNAS, whose test reports are internationally Huaming has formulated the Administration Measures for the
recognized and capable of independently completing full-item tests for new products before their launch. We have set Approval of Scientific and Technological Projects, the Innovation
up an R&D base in Shanghai and an industrial base in Zunyi City, with many of our subsidiaries rated as National High- Incentive and Reward Regulations and other policies, yielding
Tech Enterprises; our subsidiary Shanghai Huaming has been successively awarded the title of Shanghai "Specialized, fruitful achievements in scientific and technological innovation.
Refined, Unique and Innovative SME" and National-level "Little Giant Enterprise in Specialization, Refinement, The project "Key Technologies and Application of Intelligent
Differentiation and Innovation". Huaming's R&D personnel have rich industry experience, with expertise covering Manufacturing for High-Speed Turnouts and Base Plates"
machinery, high-voltage electrical appliances, mechatronics and other fields. undertaken by Shandong Fin CNC was awarded the Third Prize
of the National Science and Technology Progress Award in
Strategy the Machinery Industry. The ZVD Type Vacuum On-Load Tap-
Changer independently developed by Guizhou Chenting has
passed on-site appraisal, with its comprehensive performance
In 2025, Huaming successfully realized the mass commissioning
reaching the international leading level. The SHZVII On-Load
of UHV tap changers, pushing domestic substitution into a brand-
Voltage-Regulating Tap-Changer for Converter Transformers,
new stage. Relying on the manufacturing, testing and inspection
jointly developed by Shanghai Huaming and China Southern
advantages of the Shanghai production base, we have built a full-
Power Grid EHV Transmission Company, boasts key performance
process control system for UHV products and deepened strategic
indicators up to the international leading level. These scientific
cooperation with power grid companies, universities and other
and technological innovation achievements fully demonstrate
parties. In the future, Huaming will continue to increase R&D
the Company's robust independent innovation capability and Third Prize of Science and Technology Progress in
investment, focus on upgrading the core technologies and processes
our leading position in the industry. the National Machinery Industry
of tap changers, accelerate the import substitution of UHV and
EHV products, and promote the application of self-developed
technologies in high-end scenarios. SHZVII On-load Tap Changer for Converter Transformers Passes Authoritative Product Appraisal,
Case
with Key Performance Reaching World-leading Level
R&D Risk Analysis
On September 14, 2025, the "Product Appraisal Meeting for SHZVII On-load Tap Changer for Converter Transformers"
organized by the China Machinery Industry Federation was held in Shanghai. After strict review by the expert group, the SHZVII
To support the effective implementation of the technology strategy, Huaming has systematically identified and on-load tap changer for converter transformers, jointly developed by China Southern Power Grid EHV Power Transmission
evaluated key risks in the R&D link that may affect the innovation process and product competitiveness: Company and Shanghai Huaming, fully met the requirements of technical specifications in all performance indicators, and our
key performance indicators reached the world-leading level, successfully passing the product appraisal.
Potential
Impact
Risk Type Risk Description Financial Response Measures
Timeframe
Impact
Relatively obsolete existing
Continuously carry out equipment
Risk of production equipment and
technological transformation and research
Outdated process technologies lead to Increased
Medium- to eliminate operational hidden dangers and
Technical low production efficiency, high costs,
term, Long- improve equipment efficiency;
Equipment manufacturing costs, and lack declining
term Optimize production processes, strengthen
and of market competitiveness profits
process control to ensure stable processes and
Processes of products in terms of
improve product quality.
performance or price.
According to production needs, Huaming updated and added existing machining equipment, and completed the selection and
Case Huaming's Independently Developed 24kV Power Electronic On-load Tap Changer
acceptance of multiple sets of machining equipment.
During the voltage regulation process of on-load tap-changers, conventional
oil-immersed arc-extinguishing tap-changers rely on insulating oil to quench
electric arcs, which is prone to generating toxic and harmful gases. In 2025,
the we developed a 24kV power electronic on-load tap-changer. Leveraging
power electronic technology, this product breaks the circuit at the zero-
crossing point of the electric current, thereby achieving completely arcless
switching operation.
VMC Series Vertical-Horizontal Combined Machining Center
To meet the requirements of part processing accuracy and consistency, Huaming developed a high-precision
DET Power Electronic On-load Tap Changer SHZVII Oil-immersed Vacuum On-load Tap computer control system, realizing visual programming and precise regulation of parameters such as winding
Changer diameter, winding angle and winding speed. The newly added automatic glass fiber tension control and automatic
glue scraping functions have solved the quality fluctuation problem caused by manual operation and significantly
improved the stability of part production.
Protection of Intellectual Property Rights
Huaming strictly abides by laws and regulations such as the Patent Law of the People's Republic of China and Copyright Law
of the People's Republic of China, formulates and improves the Patent Management Policy, Intellectual Property Management
Policy and Intellectual Property Emergency Plan to standardize the intellectual property management process.
Huaming protects independent R&D achievements by applying for patents, software copyrights and other means, and
conducts technology novelty search at the new product project approval stage to avoid infringing on the intellectual property
rights of others. Huaming implements technical encryption for R&D computers and network systems, and incorporates patent
and software copyright registration into the control nodes of new product development. In 2025, Huaming was not involved in
any major litigation procedures related to intellectual property rights, nor received any notices of major intellectual property
infringement claims.
Automation Upgrading
In 2025, Huaming continued to increase R&D resource investment in the field of automation, and built a full-chain automation Winding Equipment
innovation system covering tooling, processes and equipment. We also successfully launched the zero-point substrate
supporting tooling system and hydraulic / pneumatic automated tooling, which efficiently solved the pain point of rapid model
changeover in multi-variety production and realized precise positioning and stable clamping of workpieces; independently Indicators and Goals
developed automated equipment for wire insulation wrapping, upgraded special equipment such as filament winding
production lines, fully replacing traditional manual processes with high labor intensity; simultaneously built the Product Driven by both quantitative indicators and qualitative goals, Huaming promotes the deep integration of
Lifecycle Management System and EAMic Equipment Management System, opened up the data collaboration channel for the technological innovation with production and operation, industrial upgrading, and continuously consolidates and
entire production process, and realized digital operation and maintenance control for the full lifecycle of equipment. strengthens our technological leading advantages in the Electric Power Equipment field.
Management of Impacts, Risks and Opportunities
Key Performance Indicator
?A total of 314 patents held
communication and telephone follow-ups. Shandong Fin CNC relies on sales and after-sales teams to embed a
demand perception link in regular services, and conducts face-to-face technical exchanges for key clients; Guizhou
Chenting actively organizes client visits and two-way exchange activities to strengthen communication and
interaction. During the reporting period, Huaming held multiple training sessions for clients, including internal
Client Service training that provides product theoretical and practical teaching for power supply companies and end users,
and external training focusing on product principles and application explanations to help clients master the use
Governance of equipment proficiently. For overseas agents and internal engineers, the Overseas Department launched a
number of bilingual special online training courses covering fault diagnosis, new technology application, safety
Huaming has set up a Marketing and Service Center, under which the Sales Department and After-sales Service Department
specifications and other fields, and organized multiple cross-regional online seminars to complete re-certification
are established. The Sales Department divides our business by product line, and sales personnel focus on specific products to
training for service personnel in core regions such as Asia-Pacific, Europe and Africa, and the Americas, ensuring
improve professional capabilities and demand matching efficiency; the After-sales Service Department has established a client
unified global service standards and improved professional capabilities, and enabling Huaming to accurately grasp
complaint registration mechanism with full-time staff to ensure timely communication and closed-loop handling of problems.
the actual application needs.
Huaming has formulated the Control Procedure for Client-Related Processes to implement standardized management and
Huaming specifies service time standards, with rapid responses to technical consultations. Upon receiving written
control of the entire pre-sales, mid-sales and after-sales processes. We conduct a systematic review of service processes
on-site service requests from clients, relevant personnel will promptly arrive at the site. Even for remote areas with
every year; each department holds a weekly problem review meeting and cross-departmental seminars every two weeks to
inconvenient transportation, on-site arrival will be completed within a reasonable time frame.
continuously optimize the collaboration mechanism and work processes. In terms of service resource scheduling, Huaming
divides three fixed service areas and implements a regional accountability system, and establishes a cross-regional linkage The client Service Department compiles frontline service information every month, analyzes common problems
mechanism, which effectively improves response efficiency and reduces operating costs on the basis of ensuring service quality. and potential needs, forms reports and pushes them to the technology, production and other relevant
departments. Based on this, Huaming organizes special improvements, with the technology department taking
Strategy the lead in formulating corrective and preventive measures to promote continuous optimization of products and
services. At the same time, we implement differentiated management for different client groups, identify potential
Huaming's overall development strategy is to improve client satisfaction, enhance client loyalty, optimize service
needs combined with feedback, and support product function innovation and user stickiness improvement.
experience and reduce client churn rate. We have systematically sorted out potential risks in all links of client
service and conducted special assessments.
Client Service Risk Analysis
Potential
Risk Impact
Risk Description Financial Response Measures
Type Timeframe
Impact
Delayed after-sales response •Strictly implement client requirements and standardize after-
and inadequate problem sales service processes;
After- handling lead to an increase •Strengthen the training and assessment of service personnel
sales in client complaints and a to improve problem-solving capabilities;
Medium- Declining
Service decline in satisfaction, which •Establish a rapid response and closed-loop mechanism
term profits
Quality in turn affects repurchase for client complaints to ensure timely communication and
Risk intention and brand effective handling;
reputation, and weakens •Conduct regular client follow-ups, actively collect feedback,
sales conversion capability. and continuously optimize the service experience.
"Inviting In and Going Out" Specialized Training
Responsible Marketing
Huaming strictly abides by relevant laws and regulations, and resolutely eliminates all forms of exaggerated or false
publicity in the product marketing process. In business activities such as contract signing, product sales and brand
promotion, Huaming strictly complies with various internal systems to ensure that all marketing behaviors are legal
and compliant, and avoid any form of unfair competition.
Transparent Information Disclosure
Shanghai Huaming has been awarded the Guizhou Chenting has been awarded the title
Huaming strictly adheres to the use of standard product brochures
title of " Top Ten Suppliers "by its client of "Excellent Supplier" by its client
and officially provided product parameter information for
introduction and communication. In the event of any product
changes, the Company will promptly issue official letters to inform
Client Complaint and Handling customers.
Huaming operates a 24-hour service hotline, and accepts client consulting and maintenance complaints around the
Product Change Notice
clock through manual, fax, WeChat and other methods. All client letters, correspondence and calls are registered,
and their demands are recorded in detail. Huaming carefully analyzes and handles every letter and correspondence
received.
Reasonable Expectation Management
Huaming has established a targeted service mechanism for overseas clients, integrated scattered feedback
channels and uniformly connected them to the upgraded Global Customer Service platform, which provides Huaming fills in the technical specification sheet, which can only be put into production after review and
multilingual support, realizes automatic assignment of complaint work orders and full-process tracking, and approval. For content that cannot meet client needs, Huaming will clearly inform clients in written form to
shortens the average initial response time to within 4 hours. Huaming implements a hierarchical processing avoid disputes between the two parties. For client inquiries in communication, Huaming will also reply to
mechanism. According to the complexity and impact scope of problems, local teams, headquarters technology clients in written form in a timely manner.
or cross-departmental groups intervene at different levels. Based on the monthly global complaint case
review meeting, Huaming systematically identifies improvement opportunities in product design, installation
guidance, maintenance documents and other links. In 2025, the overseas business team put forward a number of
improvement suggestions to the R&D and production departments based on this, most of which were adopted, Indicators and Goals
effectively reducing the recurrence rate of similar problems.
Every year, Huaming conducts a questionnaire survey on major clients covering product performance and safety, delivery
time, price, service response and new product demand, and implements a one-on-one exclusive communication
mechanism for key clients. In 2025, third-party survey results showed that the overall satisfaction of customers in key
Case Guizhou Chenting Efficiently Solving the Packaging Adaptability Problem Based on Client Feedback
overseas markets rose compared with the previous year, and repurchase intentions increased accordingly.
A client reported that the forklift could not access the base of the product packaging box. In response to this
problem, Guizhou Chenting contacted the client immediately, assisted the client in selecting matching forklift
specifications, and the client actively cooperated with Huaming's suggestions. The problem was successfully solved Key Performance Indicator
and recognized by the client.
?Distributed and collected questionnaires to major domestic transformer
manufacturers, achieving an overall satisfaction rate of 98.00%.
Social prosperity between enterprises and employees, the industry and society,
and regards it as the core driving force for the sustainable development.
•Employee Management
We have built a comprehensive and multi-level training system and
Responsibility
•Promoting Industry Development
career promotion channels, continuously increased R&D investment and
•Public Welfare
deepened industry cooperation, actively fulfilled our responsibilities as
a corporate citizen, integrated social responsibility into the corporate
gene, and repaid social concerns with practical actions.
Employee Management Employee Employment Profile as of the end of the reporting period
By Gender By Education
Employee Recruitment and Employment
Huaming strictly abides by national laws and regulations and adheres to compliant and equal employment. We actively
recruit outstanding talents from both domestic and global markets, and are committed to building a rigorous rights and
interests protection system. We have formulated rules and regulations such as the Measures for Employee Recruitment 17.98%
and Admission, Regulations on Labor Contract Management, and Regulations on Employee Departure Management,
establishing compliant guidelines for the entire process from onboarding to resignation.
Huaming strictly prohibits the employment and use of child labor, and firmly opposes restricting employees'
Male Female Master's Degree and above Bachelor's Degree
physical or mental freedom for any reason. We resolutely resist any form of forced labor against personal will,
College Diploma Below College Diploma
and have formulated the Protection of Female and Juvenile Workers to provide special rights protection for
special groups. During the reporting period, we had no illegal acts such as child labor employment or forced
labor, and safeguarded the dignity of workers with a zero-violation performance.
By Age
Huaming thoroughly implements the requirements of laws and regulations such as the Labour Law of the
People's Republic of China and the Personal Information Protection Law of the People's Republic of China,
ensuring that job seekers and employees are not discriminated against on the basis of skin color, ethnicity, 12.03% 27.45%
Aged 51 and over
race, religious belief, gender, marital status, age or other factors in the recruitment and employment process.
Huaming attaches great importance to the social integration and employment equity of persons with Aged 41 to 50
disabilities, and provides equal employment opportunities for special groups. Aged 31 to 40
Huaming ensures that all part-time employees enjoy the same core rights and interests as regular employees 32.24%
in terms of remuneration, labor safety, working conditions, training opportunities and other aspects. A
smooth regularization channel has been established, part-time employees who meet the standards of job
competence, performance and cultural fit can apply for regularization without any quota restrictions.
Employee Introduction and Protection
Key Performance Indicator
?Total number of employees: 1,796 Person(s) ?Major labor dispute incidents: 0
Huaming actively expands diversified recruitment channels. While deepening cooperation with mainstream
online recruitment platforms, we extensively use industry communities, employee referrals, campus recruitment, ?Total number of managers: 150 Person(s) ?Labor contract signing rate: 100%
headhunting cooperation and other methods to enrich employee sources. Huaming has established long-term
?Female managers: 22 Person(s) ?Social insurance coverage rate: 100%
cooperative relations with many universities, actively participates in university graduate recruitment fairs, and
deeply engages in municipal and district-level high-level employee recruitment fairs, effectively attracting a large ?Employees with disabilities: 21 Person(s) ?Employee turnover rate: 10.7%
number of outstanding fresh graduates and injecting new vitality into enterprise development.
Huaming attaches great importance to the scientificity of employee quality, and specially organizes interview skills
training for senior management personnel to improve the interviewers' competency assessment level and ensure
that the introduced employees are highly matched with Huaming's high-quality development needs.
Remuneration and Communication Employee Cultivation
Huaming has formulated and implemented the Measures for Wage Calculation and Payment, the Provisions on
Huaming is committed to building a learning organization, and has formulated policies such as the Training Management
Overtime Management, the Provisions on Attendance Management and the Trade Union Funds Management
Provisions and the Training Control Procedure to standardize the training process. We have built a multi-level training system
Measures ,continuously improving the remuneration system and democratic management mechanism.
covering new employee training, general quality training, environmental and safety training, on-the-job skill training and
management capability training. Through the combination of "online + offline" channels and internal trainers with external
training institutions, Huaming provides high-quality courses for employees and cultivates high-caliber employees.
Remuneration and Performance
Combined with the functional characteristics of each factory, Huaming implements a broadband salary policy Multi-level Training System
that highlights the core position of personal ability and performance in the remuneration system. Huaming strictly
abides by the bottom line of timely and full wage payment, and pays social insurance and housing provident fund
for employees in accordance with the law. Employee remuneration consists of basic salary, performance-based
salary and annual bonus. When determining positions and salary levels, Huaming conducts a comprehensive
evaluation of job responsibilities, personal ability and performance, and refers to industry salary levels to ensure
that the remuneration system has both internal equity and market competitiveness. Training Level Training Content Training Method
In 2025, Huaming further deepened the goal responsibility assessment mechanism, fully transformed job
• Basic information such as Huaming's development
responsibilities into a measurable indicator system. The assessment system focuses on core operational history, organizational structure, corporate culture,
dimensions such as "delivery time, quality and cost", and decomposes the enterprise's strategic goals to various business scope and market position
functional departments and key positions. By establishing a clear goal implementation path and evaluation model, New Employee Training • Three-level safety education for new employees • Offline classroom teaching
Huaming has effectively stimulated employees' internal motivation to strive for excellence. • Huaming's various management policies, rules and
working processes
• IT training
Democratic Communication • Financial knowledge training
• Legal knowledge training
General Quality Training • Offline classroom teaching
• Etiquette training
Huaming strictly abides by the Trade Union Law of the People's Republic of China, the Constitution of the Chinese • Others
Trade Unions, and the Regulations on the Grass-roots Trade Union Members' Congress, establishes a trade union in
accordance with the law and improves management systems. We reviews democratic proposals through the Staff • Explanation of work safety laws and • Offline classroom teaching
Representative Congress, effectively safeguarding employees' right to know, participate and supervise. Environmental and Safety regulations and safety systems • Online course learning
Training • Teaching of safe operating procedures • Case analysis
The Trade Union Committee is responsible for receiving employee letters and visits, reports and accusations, • Emergency response skill training • Written examination
and mediating labor disputes; employees may file rights claims with the Labor Supervision Committee to ensure
unimpeded channels for appealing demands. During the reporting period, Huaming signed a Collective Contract • Offline practical drill
• Forklift operation skill training
• Skills competition
with employees in accordance with the law, and conducted equal consultations and reached agreements on terms • Electrician practical skill training
On-the-job Skill Training • School-enterprise cooperation
such as working hours, wages, allowances, bonuses and welfare benefits. • New product learning
• Vocational qualification
• Others
certificate examination
Training and Development • Production and operation management
• Cost control
Management Capability Training • Lean production management •O
ffline classroom teaching
Huaming continues to explore and optimize employee training strategies, and comprehensively improve the
• Financial management
comprehensive quality and professional skills of the employee team by building a comprehensive and multi-level • Others
training system.
Employee Development
Key Performance Indicator
?A total of64 internal and external training sessions held Huaming has established a well-defined employee echelon system and implemented a dual-track career development pathway for
management and technical streams, supported by standardized promotion mechanisms. Through diversified approaches including
?Total number of trained employees: 1,346 Person(s) training, assessment and promotion, as well as open internal job competitions, Huaming ensures every employee is granted
?Total training hours for employees: 20,556 hours
development opportunities tailored to their personal potential. Meanwhile, We have rolled out a company-wide performance
management mechanism to fully energize the workforce, alongside a comprehensive feedback system. Should employees disagree
with performance appraisal results, employees may file complaints to the trade union via official appeal channels, or submit rights
claims to the Labor Supervision Committee, so as to effectively safeguard employees' legitimate rights and interests.
To enhance employees' core competitiveness and advance the scientific management of employee, Huaming continues to
empower employees' career development through diversified measures. During the reporting period, we actively integrated high-
quality external educational resources, and supported employees in academic upgrading and professional further studies via
university-enterprise cooperation, with a focus on key fields such as CNC technology and mechanical engineering. In addition, we
have continuously optimized our employee evaluation system. By developing scientific job competency models, we conduct in-
depth assessments of competency performance for core positions, helping employees accurately identify their skill gaps and set
clear goals for career advancement.
Safety Education Training Fire Safety Training Employee Career Path
Management Sequence Marketing Sequence Production Sequence Technical Sequence
General Manager
Executive Management
Deputy General Manager Chief Engineer
Level
On-site Motor Vehicle Safe Operation Training Chemical Raw Material Leakage Emergency Disposal Drill
Department Manager Department Manager Department Manager Department Manager Managerial Level
Huaming actively promotes the innovation of training models and introduces a standardized video teaching model. Key
production processes, operating specifications and quality control points are recorded in high definition and structured Section Chief Regional Manager Workshop Supervisor Section Chief Supervisor Level
to form a traceable and reusable digital training resource library. Employees can watch and learn independently on this
platform repeatedly to ensure accurate understanding and standardized implementation of technical details, effectively
Senior Specialist Team Leader Senior Designer
avoiding problems such as incomplete mastery of employee skills and inconsistent process standards.
Huaming continues to promote the spirit of labor and the spirit of craftsmanship, and actively encourages and organizes Customer Manager
employees to participate in various forms of labor and skills competitions in multiple fields. Huaming strengthens the
professional capacity building of the employee team through practical training and continuously drives employees to Specialist Technician Designer Professional Level
improve their core competencies.
Assistant Customer
During the reporting period, Huaming sent two core technical employees to represent Huaming in the municipal-level Assistant Specialist Assistant Designer
Manager
Assembly Fitter Skills Competition sponsored by the Human Resources and Social Security Bureau of Minhang District,
Shanghai. Huaming's employees successfully qualified for the final and ranked among the top 50 in the city after Support Worker Support Staff Level
multiple selections, fully demonstrating the strong strength and high spirits of Huaming's technical team.
Welfare and Activities
Huaming has formulated systematic rules and regulations such as the Employee Welfare Management Measures Company Exclusive Benefits
and the Measures for the Implementation of Employee Paid Annual Leave, building a comprehensive and multi-
level welfare security system. For employees in difficulty, Huaming has taken a number of targeted assistance
measures to help employees overcome difficulties.
Festival Care Health Protection Life Services Learning and Growth Subsidies
• Birthday parties • Regular health • Staff •O
n boarding professional training • Rental
Expanding Employee Welfare
and birthday check-ups dormitories • Vocational qualification training subsidies subsidies
cards • Cool Care • Points-based •P
rofessional title promotion expense
In addition to strictly implementing the Five Social Insurances and Housing Fund and paid annual leave, Huaming • Festival benefits in Summer household subsidies
also provides diversified benefits such as commercial insurance, festival condolences, annual health check-ups, campaign registration •F
ull reimbursement of academic
staff dormitories and rental subsidies. In addition, Huaming actively carries out special training on endowment • Commercial • Staff canteen advancement expenses for outstanding
insurance, retirement policies and employee household registration, assigns special personnel to handle retirement insurance employees
and medical insurance benefit continuation, and assists employees in handling the relocation of collective
household registration.
On International Women's Day, Huaming specially organizes health check-ups for female employees to safeguard
their occupational health. During the high-temperature season, Huaming launches the Cool Care in Summer
Campaign to provide heatstroke prevention and cooling supplies for front-line employees. Huaming holds regular
employee birthday parties every month with sessions such as senior management messages, interactive games
and food sharing, strengthening team cohesion through meticulous care.
Huaming actively builds a platform for
employees' cultural and sports activities,
and regularly organizes basketball matches,
badminton matches, handcraft experience
activities and staff galas, creating favorable
Employee Birthday Parties
conditions for employees to develop
hobbies and enrich their spare time life.
Statutory Benefits
Five Social Insurances and Housing Fund Paid Annual Leave
Basic old-age insurance, work-related Statutory paid leave, statutory annual
injur y insurance, unemployment leave, marriage leave, maternity leave,
insurance, maternity insurance, basic bereavement leave, prenatal check-up
medical insurance, housing provident leave, paternity leave, breastfeeding
fund leave, etc.
Cool Care in Summer Campaign
Caring for Employees in Difficulty Promoting Industry Development
Huaming deeply participates in municipal and district-level Staff Mutual Aid Associations for Emergency Relief to ensure Huaming has established in-depth strategic cooperative relations with well-known enterprises, universities and research
that employees enjoy mutual aid rights such as hospitalization subsidies. For employees with special difficulties, institutions, extensively carried out industry-university-research cooperation and industry exchanges. We also deeply
Huaming issues special relief funds and materials. We have applied for Trade Union Member Service Cards for all participate in the formulation and revision of industry standards, leading technological changes in the industry.
employees and uniformly purchased special basic protection for trade union members, enabling employees to obtain
additional serious illness subsidies and hospitalization insurance benefits in case of major diseases or hospitalization.
Huaming's Strategic Cooperative Relations
A regular condolence mechanism has been established by Huaming. Every Spring Festival, the trade union organizes
the Warm Care in Spring Festival campaign to send condolence funds and sincere wishes to employees in difficulty. In
special moments such as employees' illness or the death of immediate family members, Huaming and the trade union
organize condolences at the first time to provide employees with spiritual support and material security.
During the reporting period, Huaming conducted an in-depth survey of employees in difficulty, sorted out and registered
detailed information such as their family members, living conditions and causes of difficulty, and established special
dynamic files in the trade union assistance management system. This ensures that assistance resources are accurately
matched to employees' needs, realizing full coverage and effectiveness of assistance and relief.
Executive Director Unit, 9th Council, Transformer Branch of China Electrical Equipment Industry Association
Participation in the Formulation/Revision of Industry Standards
In 2025, Huaming deeply participated in the formulation of the Technical Requirements and Test Methods for Tap-
Changer for Ultra High Voltage Transformers (GB/T 46131-2025). As a key field of the national energy strategy, the
formulation of this standard is a milestone for improving the reliability and technical level of power equipment.
Warm Care in Spring Festival Campaign Employee Condolence Activities
Huaming participates in the formulation of national power industry standards.
Participation in Selected Industry Exchanges Public Welfare
Huaming continues to focus on public welfare fields such as medical assistance, educational empowerment and
Huaming Debuted at EP Shanghai International Power Equipment Exhibition, Empowering Power rural revitalization, conveying corporate warmth and helping improve people's livelihood with pragmatic actions.
Case
Transformation with Innovative Technology In 2025, Huaming donated RMB 5 million to Ruijin Hospital Affiliated to Shanghai Jiao Tong University School of
Medicine, Shanghai Children's Hospital and Shanghai Mental Health Center through the Education Development
Foundation of Shanghai Jiao Tong University School of Medicine. We set up the Huaming Education Special Fund
In November 2025, Huaming appeared at the 32nd
through the Shanghai Education Development Foundation, and donated RMB 400,000 to ChangZheng Middle
China International Power Equipment Exhibition
School and ChangZheng Central Primary School in Putuo District to support the development of their educational
(EP Shanghai), showcasing a one-stop intelligent
undertakings. We donated RMB 500,000 to Shanghai Engineering and Technology Management School through
operation and maintenance solution centered on
Luye Education Development Foundation of Chongming District, Shanghai. We donated RMB 170,000 to the Love
vacuum combined on-load tap changers. During the
Under the Blue Sky charity initiative via Shanghai Charity Foundation, as well as RMB 42,000 to Mal Road Village,
exhibition, Huaming's expert team conducted in-
Fengxian District, Shanghai, and contributed RMB 150,000 to Guizhou Charity Federation.
depth discussions with State Grid and well-known
domestic and foreign manufacturers on cutting-edge
topics such as vacuum interruption and predictive
maintenance. This participation not only fully
demonstrated Huaming's technical strength under the
"dual carbon" goals, but also accurately empowered
the reliable operation and digital upgrading of the
global power system through efficient industry
dialogue and market insight.
Letter of Thanks from Ruijin Hospital, Shanghai Jiao Tong Letter of Thanks from Shanghai Children's Hospital
University School of Medicine
Huaming Debuted at the Dubai Navigator Conference, Deeply Participating in the Global
Case
Sustainable Energy Dialogue
In April 2025, Huaming was invited to participate in the Transformer Magazine Industry Navigator Conference in Key Performance Indicator
Dubai. On this globally recognized platform in the high-voltage power field, Huaming discussed the industry's
sustainable development strategy with world industry leaders. Through on-site forum speeches, Huaming shared
?Total public welfare donations: 6.90 million RMB
cutting-edge technological achievements on key topics such as sustainable materials, environmentally friendly
manufacturing and digital trends. This international exchange not only demonstrated Huaming's innovative
strength in the field of green power equipment, but also explored future power grid solutions with global partners.
Key Performance Indicators
Governance Performance Environmental Performance
Primary Indicator Secondary Indicator Tertiary Indicator Unit 2025 Primary Indicator Secondary Indicator Unit 2025
RMB 1 Diesel L 72,995.67
Revenue 2,426.79
million
RMB 1 Energy Consumption Gasoline L 133,428.45
Net profit 719.63
Business million
Economic Indicators Purchased electricity kWh 18,347,493.31
Performance RMB 1
Tax amount 298.03
million Total GHG emissions tCO2e 11,166.70
Total cash dividends RMB 1 Greenhouse Gas
(Including Tax) million (GHG) Emissions
Indirect GHG emissions (scope 2) tCO2e 10,431.29
Disclosed reports / 155
Total Waste Gas Emissions m? 276,153,324.66
Board of Directors meetings / 9
Particulate matter kg 334.92
Audit Committee meetings / 6 Gaseous Pollutant
Total Non-Methane Hydrocarbons (NMHC) kg 1,274.44
Emissions
Nomination Committee meetings / 2 Nitrogen Oxides (NOx) kg 0.00
VOC emissions kg 1,655.57
Remuneration and Assessment Committee meetings / 4
Water Resource
Total water consumption Ton(s) 102,629.00
Usage
Governance Independent Directors' Special meeting / 2
Total wastewater discharged Ton(s) 55,406.00
Board of Directors members Person(s) 9
Chemical Oxygen Demand (COD) kg 22.88
Male directors Person(s) 8 Biochemical Oxygen Demand/five-day (BOD5) kg 7.68
By gender Water Pollutant
Suspended Solids (SS) kg 2.06
Female directors Person(s) 1 Emissions
Ammonia Nitrogen (NH3-N) kg 1.41
Independent directors Person(s) 3
By type Total Phosphorus (TP) kg 1.06
Non-independent directors Person(s) 6
Total Nitrogen (TN) kg 19.79
Social Performance
Secondary
Primary Indicator Secondary Indicator Unit 2025 Primary Indicator Tertiary Indicator Unit 2025
Indicator
Total number of employees Person(s) 1,796
Total general solid waste Ton(s) 860.90
Waste Emissions Male Person(s) 1,502
Total hazardous waste Ton(s) 148.84 By gender
Female Person(s) 294
Total packaging material usage Ton(s) 510.49 51 years old and above Person(s) 493
Packaging material usage - Wood Ton(s) 408.75 By age
Packaging Materials Packaging material usage - Plastic Ton(s) 26.87 30 years old and below Person(s) 216
Master and above Person(s) 44
Packaging material usage - Paper Ton(s) 73.95
Bachelor Person(s) 323
By education
Packaging material usage - Others Ton(s) 0.92 background Junior college Person(s) 396
Junior college diploma and
Environmental Person(s) 1,033
PV generation capacity kWh 111,775,911.00 below
Protection
Employee Total number of junior level Person(s) 1,646
Employment
Middle management Person(s) 101
Female employees in middle
By employee Person(s) 19
management
category
Total number of senior
Person(s) 49
Management
Female employees in senior
Person(s) 3
management
Production personnel Person(s) 1,030
Sales personnel Person(s) 259
By employee Technical personnel Person(s) 226
professional
Financial personnel Person(s) 36
composition
category Administrative personnel Person(s) 208
Engineering personnel Person(s) 9
Procurement personnel Person(s) 28
Secondary Secondary
Primary Indicator Tertiary Indicator Unit 2025 Primary Indicator Tertiary Indicator Unit 2025
Indicator Indicator
Total departing employees Person(s) 193 R&D R&D investment RMB 1 million 88.47
Employee Turnover
Employee turnover rate % 10.7 Number of patents / 314
Total employees trained Person(s) 1,346 Number of copyrights / 31
Trademarks and taxt
Male employees trained Person(s) 1,141 Technological / 49
Intellectual registrations
By gender Innovation
Female employees trained Person(s) 205 property rights Software copyrights / 27
New patent applications
Junior staff trained Person(s) 1,281 / 38
annually
By employee
Middle management trained Person(s) 54 New copyright applications
category / 0
annually
Senior management trained Person(s) 11
Supplier Total suppliers / 1,814
Total employee training hours Hour(s) 20,556
Employee Training Customer Service Customer satisfaction % 98
Average training hours per employee Hour(s) 15.27 Social
Charitable donations RMB 1 million 6.90
Responsibility
Male employees training hours Hour(s) 18,923
By gender
Female employees training
Hour(s) 1,633
hours
Junior staff training hours Hour(s) 19,462
By employee Middle management training
Hour(s) 732
category hours
Senior management training
Hour(s) 362
hours
Workdays lost due to injuries Day(s) 310
Employee deaths due to work Person(s) 0
Occupational
health and safety Employees in occupational
Person(s) 364
hazard roles
Employees undergoing
Occupational Person(s) 362
occupational health checkups
Health and Safety
Production Occupational disease cases Person(s) 0
Fatal work accidents(incidents) Case 0
Safety incidents
and personnel Fatal work accidents(fatalities) Person(s) 0
Fatality rate per million work
% 0
hours
Index of Indicators Chapter Omission Description
GRI Standards Disclosure Reference
Omission
Chapter Reason Explanation
Required
GRI Content Index 2-9 Governance
Structure and Our Governance
Composition
GRI 2: General
Huaming Power Equipment Co., Ltd. has reported the information cited in this GRI Content 2-10 Nomination and
Statement of Use Disclosures
Index for the period January 1, 2025 to December 31, 2025 with reference to the GRI. Selection of the Highest
Governance Body
GRI 1 Used GRI 1: Foundation 2021
Governance Body
Our Governance
Governance Body
Chapter Omission Description Risk Control and
in Overseeing the
GRI Standards Disclosure Reference Compliance
Omission Management of Impacts
Chapter Reason Explanation
Required 2-13 Delegation of
General Disclosures Responsibility for Our Governance
in the Organization's Governance Body in the the Chairman
Sustainablillity Report About This Sustainable Reporting Our Governance
Frequency and 2-16 Communications of
Our Governance
Contactpoint CriticalConcerns
Information Indicators Knowledge of the
Huaming has GRI 2: General Highest Governance
Information not conducted Disclosures Body
GRI 2: General Incomplete assurance on the public due
Performance of the 2-18-a, 2-18-b, Confidentiality
Disclosures the ESG report Omitted to information
Highest Governance 2-18-c Restrictions
Body
Report requirements
Chains and Other Supply Chain Employee
Policies
Business Relationships Management Management
Product Safety 2-20 Processes
Employee
Client Service to Determining
Management
Employee Remuneration
Management Not disclosed to
Key Performance the public due
Indicators Omitted to information
Remuneration Ratio 2-21-c Restrictions
Employees Management requirements
Chapter Omission Description Chapter Omission Description
GRI Standards Disclosure Reference GRI Standards Disclosure Reference
Omission Omission
Chapter Reason Explanation Chapter Reason Explanation
Required Required
Message from 201-1 Direct Economic
the Chairman Value Generated and
on Sustainable Report
Our Governance Distributed
Development Strategy
Huaming implicationans and Resource
Information will disclose other riska and and Energy
Insufficient/ in a timely opportunities from Management
Commitments
Incomplete manner when GRI 201: Climate Change
appropriate Economic Huaming
Huaming Performance 201-3 Defined Benefit Information will disclose
Information will disclose 2016 Plan Obligations and Omitted Insufficient/ in a timely
Insufficient/ in a timely Other Retirement Plans Incomplete manner when
Commitments 3-e
Incomplete manner when appropriate
appropriate Huaming
Product Safety Information will disclose
GRI 2: General 2-25 Processes to Financial assisstance 201-4-a, 201-
Data Security Omitted Insufficient/ in a timely
Disclosures Remediate Negative recived from 4-b, 201-4-c
Employee Incomplete manner when
Management appropriate
Seeking Advice and Employee Information will disclose
Entry-Level Wages
Raising Concerns Management Insufficient/ in a timely
by Gender to Local
See Relevant Incomplete manner when
Chapters of the appropriate
Laws and Regulations Performance
Report Huaming
Promoting Information will disclose
Industry Insufficient/ in a timely
Associations Hired from Local
Development Incomplete manner when
Communities
to Stakeholder Our Governance Promoting
Engagement Industry
Investments and
GRI 203: Indirect Services Supported
Bargaining Agreements Management Public Welfare
Economic
Promoting
Industry
Determining Material ESG Governance Indirect Economic
Development
Topics Impacts
GRI 3: Material Public Welfare
Topics 2021 ESG Governance Supply Chain
Topics GRI 204: 204-1 Proportion of
Management
Procurement Spending on Local
ESG Governance Practices 2016 Suppliers
Material Topics Indicators
Chapter Omission Description Chapter Omission Description
GRI Standards Disclosure Reference GRI Standards Disclosure Reference
Omission Omission
Chapter Reason Explanation Chapter Reason Explanation
Required Required
GRI 303: Water 303-4 Water Discharges
Assessed for Risks Business Ethics Indicators
and Effluents
Related to Corruption 303-5 Water Key Performance
Risk Control and
GRI 205: Anti- and Training on Anti- 304-1 Operational Sites
Compliance Huaming
Corruption 2016 Corruption Policies and Ownedd, Leased,Managed
Business Ethics Information will disclose
Procedures in,or Adjacent to
Insufficient/ in a timely
Incomplete manner when
Incidents of Corruption Business Ethics of High Biodiversity Value
appropriate
and Actions Taken Outside Protected Areas
GRI 206: Anti- 304-2 Significant
for Anti-Competitive Key Performance Information will disclose
Competitive Impacts of
Behavior,Anti-trust,and Indicators Yes Insufficient/ in a timely
Behavior 2016 Activities,Products and
monopoly practices Incomplete manner when
GRI 304: Services on Biodiversity
Resource appropriate
Biodiversity
and Energy Huaming
Management Information will disclose
Within the Organization 304-3 Habitats Protected
Key Performance Yes Insufficient/ in a timely
or Restored
Indicators Incomplete manner when
Consumption within the and Energy 304-4 IUCN Red LIst
Huaming
Organization Management Species and National
Information will disclose
Resource Conservation List
GRI 302: Energy Yes Insufficient/ in a timely
and Energy Species with Habitats
appropriate
Key Performance Operations
Indicators Resource
Resource and Energy
and Energy Management
Energy Consumption GHG Emissions
Management Key Performance
R&D and
Energy Requirements of Resource
Innovation
Products and Services 305-2 Energy-Indirect and Energy
GRI 305:
Emissions and Emissions 2016
Water as A Shared Emissions Key Performance
Waste
Resource Indicators
GRI 303: Water
and Effluents Emissions and
Water discharge-Related 305-3 Other Indirect Information will disclose
impacts (Scope 3) GHG Insufficient/ in a timely
Key Performance Emissions Incomplete manner when
Indicators appropriate
Chapter Omission Description Chapter Omission Description
GRI Standards Disclosure Reference GRI Standards Disclosure Reference
Omission Omission
Chapter Reason Explanation Chapter Reason Explanation
Required Required
Intensity Indicators to Full-time Employees
Employee
Resource that are not Provided to
and Energy Temporary or Part-time
GHG Emission Employment
Management Employees
Huaming
Employee
GRI 305: 305-6 Emissions of Information will disclose 401-3 Parental Leave
Management
Emissions 2016 Ozone-Depleting Insufficient/ in a timely
Substances (ODS) Incomplete manner when
appropriate GRI 402: Labour Employee
Periods Refarding
Operational Changes
Oxides(Nox),Sulfur Waste
Oxides,and other Key Performance 403-1 Occupational Work Safety and
significant air emissions Indicators Health and Safety Occupational
Emissions and
and Significant Waste- 403-2 Hazard
Waste Work Safety and
RelatedImpacts Identification, Risk
Occupational
Emissions and Health
of Significant Waste- Incident Investigation
Waste
relatedImpacts Work Safety and
GRI 306: Waste Emissions and Occupational
Health Services
Key Performance 403-4 Worker
Work Safety and
Indicators Participation
GRI 403: Occupational
Occupational Health
from Disposal Waste Communication on
Health and Employee
Safety 2018 Management
Disposal Waste and Safety
that were Screened Management Occupational
GRI 308:
Using Environmental Key Performance 403-5 Worker Training Health
Supplier
Criteria Indicators on Occupational Health Employee
Environmental
Assessment
Environmental Impacts Supply Chain Key Performance
in the Supply Chain and Management Indicators
Actions taken Work Safety and
Employee Occupational
GRI 401: 401-1 New Employee 403-6 Promotion of
Management Health
Employment Hires and Employee Worker Health
Key Performance Employee
Indicators Management
Chapter Omission Description Chapter Omission Description
GRI Standards Disclosure Reference GRI Standards Disclosure Reference
Omission Omission
Chapter Reason Explanation Chapter Reason Explanation
Required Required
and Mitigatiion of GRI 406: Anti-
Discrimination and Employee
Occupational Health Supply Chain Discrimination
Corrective Actions Management
and Safety Impacts Management 2016
Taken
Directly Linked by
Business Relationships GRI 407: 407-1 Operations and
Huaming
GRI 403: Work Safety and Information will disclose
by an Occupational Association the Right to Freedom Employee
Occupational Occupational Insufficient/ in a timely
Health and Safety and Collective of Association and Management
Health and Health Incomplete manner when
Management System Bargaining Collective bargaining
Safety 2018 appropriate
Rights May be at Risk
Injuries Indicators 408-1 Operations and
Work Safety and GRI 408: Child Suppliers at significant Employee
Occupational Labour 2016 risk for incidents of Management
Health Child Labour
Issues
Key Performance
Indicators
GRI 409: Forced Suppliers at Significant
Employee Employee
Management Management
Training per Year per Labour 2016 Forced or Compulsory
Key Performance
Employee Labour
Indicators
Local Community
GRI 404: upgrading Employee Management
Engagement ,Impact Social Welfare
Training and Skills and Transition Key Performance
Assessments ,and
Education 2016 Assistance Programs Indicators GRI 413: Local
development programs
Employee 2016 413-2 Significant Actual
of Employees
Management and Potential Negative Environmental
Receving regular
Key Performance Impacts on Local Management
Performance and Career
Indicators Communities
Development Reviews
Our Governance Huaming
Governance Body and Management that were Screened Insufficient/ in a timely
GRI 405:
Employees Key Performance GRI 414: Using Social Criteria Incomplete manner when
Diversity
Indicators Supplier Social appropriate
and Equal
Huaming Assessment Huaming
Opportunity 405-2 Ratio of 414-2 Negative Social
Information will disclose 2016 Information will disclose
Insufficient/ in a timely Insufficient/ in a timely
Remuneration of Chain and Response
Incomplete manner when Incomplete manner when
Women and Men Actions
appropriate appropriate
Indices of Guidelines Topics in Self-Regulatory Guidelines
No. 17 for Companies Listed on Shenzhen Stock Exchange—
Sustainability Report (Trial)
Chapter Omission Description Dimension NO. Topic Chapter Reference
GRI Standards Disclosure Reference
Omission
Chapter Reason Explanation Resource and Energy Management
Required 1 Address Climate Change
Key Performance Indicators
of Health and Safety Key Performance Indicators
Product Safety
Impacts of Products and Emissions and Waste
GRI 416: 3 Waste Disposal
Services Categories Key Performance Indicators
Customer
Health and 416-2 Incidents of Non- 4 Ecosystem and Biodiversity Protection Not Applicable
Environment
Safety 2016 Compliance Concerning
the Health and Safety Product Safety
Impacts of Products and Resource and Energy Management
Services Key Performance Indicators
Emissions and Waste
Key Performance Indicators
Product and Service
Client Service 8 Circular Economy Green Operations
Information and
labelling 9 Rural Revitalization Not Applicable
GRI 417: Compliance Concerning Key Performance Indicators
Marketing and Product and service Client Service R&D and Innovation
Labeling 2016 Information and Key Performance Indicators
Labeling
Society 13 Supply Chain Security
Non-Compliance Key Performance Indicators
Client Service
Concerning Marketing
Communications
GRI 418: Complaints Concerning 16 Data Security and Customer Privacy Data Security
Customer Breaches of Customer Data Security
Employee Management
Privacy 2016 Privacy and Losses of 17 Employees
Key Performance Indicators
Customer Data
Governance Anti-Commercial Bribery and Anti-
Corruption
Abbreviations Feedback
Dear Readers,
Glossary Term Explanation
Thank you for taking the time to read the 2025 ESG Report of Huaming. To provide you and other stakeholders
Huaming, We Refers to Huaming Power Equipment Co., Ltd.
with more valuable information and effectively promote Huaming's ability and level of fulfilling corporate social
responsibility, we sincerely welcome your opinions and suggestions.
Refers to Shanghai Huaming Electric Power Equipment
Huaming Manufacturing, Shanghai Huaming
Manufacturing Co., Ltd.
Refers to Guizhou Chenting Power Equipment Manufacturing Multiple-Choice Questions (Please tick in the corresponding box)
Guizhou Chenting
Co., Ltd. 1. What is your overall evaluation of this report?
Shandong Fin CNC Refers to Shandong Fin CNC Machine Co., Ltd. □ Excellent □ Good □ Average □ Poor □ Very Poor
Refers to Shanghai Huaming High Voltage Switchgear
Huaming High Voltage
Manufacturing Co., Ltd. □ Excellent □ Good □ Average □ Poor □ Very Poor
Refers toultra high voltage, alternating current voltage levels in
UHV
power systems that are higher than or equal to 1000kV □ Excellent □ Good □ Average □ Poor □ Very Poor
Refers toextra high voltage, alternating current voltage levels in 4. How do you think Huaming performs in terms of environmental responsibility?
EHV power systems that are higher than or equal to 330kV and lower □ Excellent □ Good □ Average □ Poor □ Very Poor
than 1000kV
ESS Refers toenergy storage system □ Excellent □ Good □ Average □ Poor □ Very Poor
AIDC Refers toartificial intelligence data center □ Excellent □ Good □ Average □ Poor □ Very Poor
R&D Refers to research and development □ Excellent □ Good □ Average □ Poor □ Very Poor
Refers to on-load tap-changer, a type of tap-changer that
changes the tap connections of a winding and enables □ Excellent □ Good □ Average □ Poor □ Very Poor
OLTC
adjustment of a transformer's output voltage while the
transformer remains energized and under load
□ Yes □ No
Refers to computer numerical control, the automated control of
CNC machine tools by a computercomputer numerical control, the Open-Ended Question
automated control of machine tools by a computer 1. Do you have any opinions or suggestions on Huaming's performance of social responsibility and this report?
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