About this Report
Report Description
This report is the sixth annual Sustainability Report of Hunan Valin Steel Co., Ltd. (hereinafter
referred to as "Valin Steel", "the Company" or "we"). This report presents, in a true and objective
manner, the activities undertaken and specific information relating to the environmental, social
and governance performance of Valin Steel and its controlled subsidiaries in 2025. Unless otherwise
specified, all monetary amounts in this report are denominated in Renminbi (RMB).
Reporting Scope
Reporting period: This Report is an annual report covering the period from January 1, 2025 to
December 31, 2025 (the "reporting period"). To enhance comparability and completeness, certain
information may extend beyond the reporting period where appropriate.
Organizational scope: Unless otherwise specified, this report covers Hunan Valin Steel Co., Ltd. and
its principal subsidiaries, including Hunan Valin Xiangtan Iron and Steel Co., Ltd. ("Xiangtan Steel"),
Hunan Valin Lianyuan Iron & Steel Co., Ltd. ("LY Steel"), Hengyang Valin Steel Tube Co., Ltd. ("HYST"),
Valin ArcelorMittal Automotive Steel Co., Ltd. ("VAMA"), and Yangchun New Iron and Steel Co., Ltd.
("Yangchun New Steel").
Basis of Preparation
This report has been prepared mainly with reference to the Self-Regulatory Guidelines No. 17 for
Companies Listed on Shenzhen Stock Exchange — Sustainability Report (For Trial Implementation)
and Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Stock Exchange —
Preparation of Sustainability Report issued by the Shenzhen Stock Exchange, the Guidelines
for Corporate Social Responsibility Report Preparation in China (CASS-ESG 6.0) issued by China
Enterprise Reform and Development Society and CSR Cloud Research Institute, and Sustainability
Reporting Standards (GRI Standards) issued by the Global Reporting Initiative (GRI).
Access to the Report
This report is available in Simplified Chinese for readers' reference. The electronic version may be
downloaded from CNINFO (www.cninfo.com.cn) and from the Company's official website (http://
www.valin.cn / the "ESG Report" page under the "Sustainability" section).
Contents
Chairman's Message 04
About Valin Steel 06
Highlights 2025 10
Honors 2025 12
E S G
ESG Management 108
Future Outlook 114
Appendix 116
Key Performance Table
Putting Strivers First Building on Sound Governance
Indicator Index Taking Ecological
and Empowering the
Feedback 121
Stewardship as a Guiding to Safeguard the Steady
Valin Steel Honors in Previous Years 122
Principle and Advancing Co-Creation of Development of the Steel
the Mission of Green Social Value Business
Metallurgy
Party Building
Reinforcing Safety Responsibilities
Responding to Climate Change Standardizing Corporate
Strengthening Environmental Optimizing Customer Service 57 Governance 82
Protection Management 31 Preventing and Controlling
Growing Together with Employees Compliance Risks
Advancing Energy Conservation
and Emissions Reduction 34 Working with Partners for Mutual Safeguarding Shareholder
Success Rights and Interests
Green and Eco-Friendly Operations 46 67 90
Deepening Digital and
Enhancing Public Well-Being 75 Intelligent Innovation 93
Advancing Intelligent
Manufacturing 104
Chairman's Message
build differentiated competitive strengths. Xiangtan Steel developed 80 mm wear-resistant steel plate and copper-clad steel rolled clad
plate, filling domestic gaps, while its 1000 MPa high-strength steel for hydropower and 420 MPa offshore engineering steel were recognized
China's 14th Five-Year Plan. Over
as reaching internationally advanced levels. LY Steel rolled out the first coil of non-grain-oriented "hand-tearable steel" for new energy
Li Jianyu
Chairman and General Manager Hunan Valin Steel Co., Ltd.
the past five years, Valin Steel
applications and successfully established the full-process production route for grain-oriented silicon steel with high magnetic induction
has pressed ahead in the face
under full low-temperature conditions, achieving new breakthroughs in the high-end silicon steel market. HYST was accredited as a National
of challenges with courage and
Enterprise Technology Center, achieved extensive domestic substitution in the high-end steel tube segment, and secured a leading position
determination. Always mindful of the
for its non-API OCTG products in the deep earth engineering market. VAMA launched a range of innovative solutions, including advanced
mission of a state-owned enterprise,
high-strength steel, integrated multi-part solutions, and steel battery packs, demonstrating its industry-leading role. At the same time, the
we have stayed focused on the
Company continued to empower its core steel business through digital and intelligent technologies, deploying 46 artificial intelligence
grand vision of the "Three Highlands
application scenarios and a cumulative total of 261 robotic units. Several subsidiaries were selected for inclusion in the first group of national
and Four New Missions Strategy",
excellence-level intelligent factories, demonstrating the tangible results of its digital and intelligent transformation.
aligned ourselves with the direction
of high-quality development in
the steel industry, and advanced
Advancing Green and Low-Carbon Transformation in Depth and Demonstrating the Responsibility of a State-Owned Enterprise
transformation through the "four We have consistently regarded "ecological priority and green development" as a mandatory task. Guided by the goals of carbon peaking and
transformations" of high-end, green, carbon neutrality, we have driven green transformation from basic compliance toward ultimate energy efficiency and low-carbon leadership.
intelligent and service-oriented We have resolutely assumed principal responsibility for environmental governance. All of our production bases completed full-process ultra-
development. In overcoming low-emission retrofits and public disclosure, with environmental indicators continuing to outperform industry standards. Xiangtan Steel, LY
difficulties, we consolidated our Steel and VAMA were successfully rated as Class A for environmental performance, demonstrating the Company's solid green development
strengths; through innovation and capabilities. We have systematically planned our low-carbon transformation by formulating and improving carbon peaking and carbon
breakthroughs, we further enhanced neutrality action plans, establishing carbon management organizations, clarifying functional responsibilities, and continuously tapping the
our capabilities, delivering a strong potential of recovering and utilizing waste heat, surplus pressure, residual energy and steam from production processes. As a result, we have
annual performance characterized steadily improved comprehensive energy utilization efficiency and clean self-generation capacity. During the year, self-generated electricity
by both improved quality and reached 10 TWh, setting another historical record. Xiangtan Steel, LY Steel and Yangchun New Steel were successfully selected as cultivation
efficiency and the successful enterprises for the industry's "Best Practice Energy Efficiency Benchmark Demonstration Plants" for carbon peaking and carbon neutrality.
conversion of growth drivers. On We have actively responded to green transformation requirements and green trade barriers by steadily advancing carbon emissions data
behalf of Valin Steel, I would like to extend my sincere gratitude to our customers, partners, leaders at all levels, and management, carbon footprint accounting, carbon asset management, and green low-carbon product certification. Our subsidiaries
friends from all sectors of society for their long-standing trust and support. I also wish to express my highest respect successfully completed carbon footprint certification for multiple products and issued multiple Environmental Product Declarations (EPDs),
to all our employees and officers who have worked tirelessly in every position. consolidating the Company's development foundation through green practices across the entire value chain.
Party Building Providing Strategic Leadership and Cohesion for a New Chapter of Development Upholding Responsibility to Benefit All Stakeholders and Embarking on a New Journey Together
We have consistently taken Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guiding We have always integrated value creation and social contribution into the fabric of our development, and in a complex market environment,
principle, thoroughly studied and implemented the guiding principles of the 20th National Congress of the Communist we have continued to increase returns to customers, suppliers, employees, shareholders and society. For customers, we comprehensively
Party of China and the plenary sessions of the 20th CPC Central Committee, and translated the strengths of Party enhanced product quality, service capability and market competitiveness to meet the needs of different customer segments, creating added
building into strong momentum for development. In 2025, in pursuing the vision of "building a world-class steel value through integrated steel solutions combining "products + technology + services". For suppliers, we advanced transparent and digital
enterprise", all of the Company's subsidiaries demonstrated strong development momentum. Xiangtan Steel was procurement across the board, integrating compliance with applicable laws and regulations, business integrity, professional ethics, and
included in the first public list of "Leading Standard-Compliant Enterprises" under the Normative Conditions for the social responsibility into supply chain management to foster a clean and healthy procurement ecosystem. For employees, we effectively
Steel Industry (2025 Edition), while LY Steel, HYST and Yangchun New Steel were included in the first public list of safeguarded their rights and interests, established a well-structured training system and broad career development pathways, celebrated
"Standard-Compliant Enterprises" under the Normative Conditions for the Steel Industry (2025 Edition). Guided by its the achievements of 3 national model workers and 4 provincial model workers in 2025, and welcomed more than 1,000 new employees to
"Striving Pioneer" Party-building program, Xiangtan Steel advanced technological breakthroughs in high-end wide the Company. For shareholders, we maintained frequent communication, increased the cash dividend payout ratio year by year, made our
and heavy plate products, with the related achievements winning a provincial first prize for scientific and technological first attempt at share repurchase, actively introduced insurance institutions as long-term strategic shareholders holding more than 5% of
progress. LY Steel integrated "Party Building + Quality Improvement and Excellence Creation" into its steel production the Company's shares, responded promptly to market concerns, and effectively enhanced investor returns. We continued to deepen rural
lines, driving key performance indicators to the forefront of the industry. HYST empowered its specialty steel revitalization efforts, expanded effective models such as consumption-based assistance and industrial assistance, and actively carried out
transformation through Party-building case practices, strengthening the foundation for the R&D of steel tubes for public welfare initiatives including charitable donations and community services, deeply integrating the responsibility of a state-owned
extreme operating conditions. Leveraging its "cooperation and win-win" Party-building model, VAMA deepened enterprise into the enhancement of public well-being.
international collaboration and achieved breakthroughs in both technology and market development. Yangchun New
Steel used Party building to drive breakthroughs in environmental protection, taking the lead in the public disclosure Remembering where we came from, we now embark on a new journey. In pursuing our aspirations across mountains and seas, action must
of its full-process ultra-low-emission retrofit. The deep integration of Party building with production and operations come first. 2026 will be a crucial year for launching China's 15th Five-Year Plan. The steel industry will face multiple tests, including deeper
has enabled us to maintain strategic resolve at all times, stay firmly on course, and move forward with steady steps. policy regulation and heightened international barriers, while also embracing development opportunities arising from the release of demand
in high-end manufacturing and the realization of green transformation dividends. We will always keep in mind the mission of a state-owned
Innovation Drives Breakthroughs, High-End Manufacturing Sets Industry Benchmarks enterprise, strive ahead with determination and practical action, foster new quality productive forces, and press forward to secure success
in major tasks such as structural adjustment, digital and intelligent upgrading, and green and low-carbon development. We will move with
Focusing on the core task of "innovation-enabled high-end development", the Company achieved dual successes in resolve toward the goal of becoming "a comprehensive service provider of steel products dedicated to customer value", contribute to the
technological breakthroughs and product upgrades. During the year, we obtained authorization for 640 new patents, high-quality development of China's steel industry and to the implementation of the "Three Highlands and Four New" Strategy in Hunan
won 26 major science and technology awards, and saw 2 products receive the title of "Golden Cup Premium Product". Province, and work hand in hand with all stakeholders toward an even better new journey ahead.
A number of products achieved either "first domestic launch" status or import substitution, and the proportion of
key steel grades increased to 68.5%. Each subsidiary continued to deepen its presence in specialized segments and
About Valin Steel Major Production Bases
Company Profile
Xiangtan Steel LY Steel
Valin Steel is a joint stock limited company established in 1997, with Hunan Iron & Steel Group Co., Ltd., the largest
provincial state-owned enterprise in Hunan Province, as its principal sponsor. It was listed on the Shenzhen Stock
Exchange (SZSE) in August 1999. The Company is principally engaged in the production and sale of steel products,
and possesses full-process technological equipment covering coking, sintering, ironmaking, steelmaking, rolling,
and steel deep processing. Its core equipment and production processes are among the most advanced in the world.
Headquartered in Changsha, Hunan Province, the Company operates five specialized production bases in Xiangtan, Loudi
and Hengyang in Hunan Province, and Yangjiang in Guangdong Province. HuNan XiangTan HuNan LouDi
Vision: Committed to building a modern steel Vision: Committed to becoming a domestically
enterprise with international competitiveness and leading, world-class, and sustainably competitive
broad respect comprehensive steel service provider
Organizational Structure HYST VAMA
Shareholders' Meeting
Strategy and ESG Committee
Board of Directors Audit Committee
HuNan HengYang HuNan LouDi
Executive Committee Nomination and Remuneration
Assessment Committee
Vision: Committed to building a world-class Vision: Committed to becoming the best supplier
Other Senior Executives General Manager specialized seamless steel tube enterprise of integrated automotive steel solutions in China
Yangchun New Steel
Strategy
Company Development Internal Control
Human Resources
Office Department and Audit
Securities and Corporate Finance
(Corporate (Safety and Department
Department Management Department
Culture Environmental (Legal Affairs
Department
Department) Protection Department)
Department)
Xiangtan Procurement Finance Factoring Valin Hong Kong GuangDong YangJiang
LY Steel HYST VAMA
Steel Center Company Company International
Trading Company Vision: Committed to becoming a major production
Yangchun base and industry leader for wire rod and bar
New Steel
products in South China
Organizational Structure of Valin Steel
Major Products1 2025 2024年度可持续发展报告
The Company adheres to the strategy of "building strength through specialization and achieving regional leadership",
and continues to refine its three strategic support systems: lean production, the integration of sales, R&D and production,
Capable of meeting customers' personalized Accounting for 68.5 %
end-use requirements—reached of total steel sales
and marketing and service. Focusing on market segments and targeting landmark projects and benchmark customers,
the Company is committed to providing satisfactory steel products and services to customers worldwide. The Company's
product mix is centered on steel plate products, primarily serving the industrial steel market and aligning with the
million tonnes
其中，宽厚板已经形成造船板、锅炉压力容器板、桥梁及高建板、管线钢、耐磨钢、海洋平台用钢六大
其中，宽厚板已经形成造船板、锅炉压力容器板、桥梁及高建板、管线钢、耐磨钢、海洋平台用钢六大
系列； 冷热轧薄板系列产品已成功开发出高强薄规格工程机械用钢、耐磨钢、中高碳合金钢、电工钢、
future direction of China's manufacturing transformation and upgrading. Its products cover nearly 10,000 varieties and 系列； 冷热轧薄板系列产品已成功开发出高强薄规格工程机械用钢、耐磨钢、中高碳合金钢、电工钢、
汽车用钢、镀锌家电用钢等系列产品；无缝钢管产品覆盖大、中、小全组距，涵盖油气用管、压力容器
specifications across four major series: wide and heavy plate, hot- and cold-rolled sheet, wire rod and bar, and seamless
汽车用钢、镀锌家电用钢等系列产品；无缝钢管产品覆盖大、中、小全组距，涵盖油气用管、压力容器
用管、机加工用管等系列。公司以优异的产品、稳定的质量、超预期的服务，在能源与油气、造船和海工、
steel tubes.
用管、机加工用管等系列。公司以优异的产品、稳定的质量、超预期的服务，在能源与油气、造船和海工、
工程机械和桥梁、汽车等细分领域建立了领先优势。
Product Category
Steel Tubes
量达到年，公司产品中具有高技术含量、高附加值、高盈利能力，能满足客户终端个性化需求的品种钢销
Cold-rolled Coils
engineering
by Product 关键绩效
Coated Steel Sheets
Steel for construction machinery 1.65 10.66
Wide and Heavy
Plate
Unit:
tonnes
品种钢销量达到 1,641
Steel for bridges and high-rise buildings
万吨 品种钢销量占比 65 % 1.40 9.06
Wire Rod
Hot-rolled Coils
单位：万吨 2024 年
Steel for equipment manufacturing 1.01 6.53
品种 销量 占比
单位：万吨
销量
占比
Home
工程机械用钢 183 11.2%
Appliances Others
Other Equipment
Manufacturing
能源与油气用钢 217 13.2%
Energy and Power
Corporate Culture
Metal Products
Downstream
Automobiles
Valin Steel vigorously explores and promotes 12.1%
the value orientation of "putting strivers first" and the enduring red cultural
Construction
heritage of Huxiang. The Company regards corporate culture as the soul and pillar of corporate development, and remains
Machinery
Unit: million 装备制造用钢 109its corporate culture
committed to observing and upholding 6.7%
in all business activities, using it as the foundation for uniting
Infrastructure
家电用钢 90 5.5%
Shipbuilding and
家电用钢 90 5.5%
Offshore Engineering
其他 13 0.8%
High-rise Buildings and
Bridges
Business Philosophy
Among these, wide and heavy plate products have formed six major series: shipbuilding plate, boiler and pressure vessel R&D and Marketing Strategy
plate, bridge and high-rise building structural plate, pipeline steel, wear-resistant steel, and offshore platform steel. Building Strength
The hot- and cold-rolled sheet series has successfully developed products including high-strength thin-gauge steel for
Core Value through Specialization Deepening Industry Presence
construction machinery, wear-resistant steel, medium- and high-carbon alloy steel, electrical steel, automotive steel, and
Putting Strivers Regional Leadership
galvanized steel for home appliances. Seamless steel tube products cover large, medium and small size ranges, including Regional Market Leadership
First
product series for oil and gas applications, pressure vessels, and machining. With premium products, stable quality and
Staying Half a Step Ahead
services exceeding customer expectations, the Company has established leading advantages in market segments such as
energy and oil and gas, shipbuilding and offshore engineering, construction machinery and bridges, and automobiles.
was comprehensively strengthened. Adhering to a "high-end + differentiated" approach, the Company continuously upgraded its production lines
Highlights 2025 and equipment toward the high end. At Xiangtan Steel, projects including Phase I of the quality upgrading project for Plate Line II, Phase III of the bar
finishing line, and the new large-bloom continuous caster in the steelmaking plant progressed in an orderly manner. At LY Steel, the No. 3 cold-rolling
galvanizing line rapidly reached target output and acquired the capability to produce key products such as automotive outer panels and DP1180, while
In 2025, the steel industry remained in a phase of deep adjustment and continued to operate under a pattern of "development through volume the silicon steel production line achieved full production and target performance and successfully established the full-process route for producing high-
reduction and optimization of existing capacity." The imbalance between supply and demand remained pronounced, and enterprises continued magnetic-induction grain-oriented silicon steel entirely under low-temperature conditions. HYST fully launched its industrialization and sustainable
to face significant operating pressure. In response to the complex and challenging market environment, the Company maintained strong strategic development project for extra-large-diameter continuously rolled pipes, providing solid hardware support for the continued move toward a more
resolve, actively aligned itself with market demand, vigorously advanced cost reduction and efficiency enhancement initiatives, and accelerated high-end product mix. Second, digital and intelligent upgrading was implemented across the board. The Company further advanced digital and
transformation and upgrading toward high-end, intelligent and green development, maintaining relatively stable production and operations. During intelligent development in depth. In 2025, 46 AI large-model application scenarios were launched, and the cumulative number of robot units deployed
the reporting period, the Company recorded total operating revenue of RMB 121.741 billion. Total profit, net profit, and net profit attributable to in the core steel business reached 261. Xiangtan Steel was selected for inclusion in the first group of national excellence-level intelligent factories, LY
owners of the parent company amounted to RMB 4.820 billion, RMB 3.870 billion, and RMB 2.611 billion, respectively, representing year-on-year Steel was included in the list of "5G factories", and HYST's smart industrial park was recognized as one of Hunan Province's landmark" digital new
increases of 16.37%, 20.97%, and 28.49%, respectively. The Company continued to maintain a leading level of profitability within the steel industry. infrastructure" projects. Projects such as the financial digitalization at headquarters, the intelligent equipment-process integration at Xiangtan Steel,
the integrated smart energy-and-carbon management and control at LY Steel, and the energy management system at HYST all accelerated. Third, green
bases completed ultra-low-emission retrofits and full-process public disclosure. Compared with pre-retrofit levels, emissions of particulate matter,
sulfur dioxide, and nitrogen oxides decreased by 60%, 69%, and 54%, respectively. Xiangtan Steel, LY Steel, and VAMA successfully achieved Class A
certification and published EPD reports.
Deepening Best-in-Class Benchmarking, with Remarkable Results in Cost Reduction and Efficiency
Enhancement through Lean Operations.
-0.018
The Company continued to refine its benchmarking system, strengthen refined management, and deliver cost reduction and efficiency enhancement
end of end of end of end of end of end of end of end of end of across all operations. First, process costs were continuously reduced. The Company adhered to the mechanism of holding one benchmarking meeting
Total Operating Revenue Net profit Finance Costs
Asset-liability ratio (%) Major production lines maintained lean and stable operation, with more than 60 techno-economic indicators setting new records. 6 furnaces and
(RMB billions) (RMB billions) (RMB billions)
production units received the titles of "Excellence Furnace" and "Pacesetter Furnace" in the national benchmarking competition on energy saving
and consumption reduction for key large-scale energy-consuming steel production equipment. The solid fuel consumption of Xiangtan Steel's 450 m2
Closely Aligning with High-End Demand, Achieving Further Breakthroughs in Product Upgrading. sinter machine and the fuel rate of LY Steel's No. 7 blast furnace remained industry-leading, while the hot metal cost of Yangchun New Steel ranked
among the top five in the industry. Second, procurement cost competitiveness was enhanced. The Company consolidated its primary sourcing
Staying committed to innovation as the primary driver, the Company obtained authorization for 640 new patents during the year, including 242
channels and expanded new resource channels, achieving notable results in the development of non-mainstream resources. The share of non-
invention patents, and received 26 major science and technology awards, including 7 at the provincial or ministerial level and 19 industry and other
mainstream imported ore used reached 55.6%, up 3.6 percentage points year on year. It also continued to optimize port deployment and ocean-
awards. Focusing on the high-end transformation of industrial steel, the Company developed 163 new products, achieved first launches of 19 high-
shipping COA chartering. Despite challenges including strong currents during the Yangtze River flood season, canal lock congestion, shortages of
end, precision and advanced products, realized import substitution for 8 steel grades, saw 1 product recognized as a national manufacturing single-
empty vessels, and two maintenance shutdowns at the Changsha hub, the share of coal transported by water increased by 6 percentage points over
champion product, and won 22 awards for metallurgical product physical quality. Sales of key steel products accounted for 68.5% of total sales,
the previous year. Third, energy costs were further reduced. The Company continued to strengthen the recovery and utilization of secondary energy
representing a further increase of 3.5 percentage points over 2024.
and maintained an industry-leading position in areas such as coke dry quenching, sintering waste-heat power generation, and waste-heat power
By product category, in the wide and heavy plate segment, Xiangtan Steel focused on high-strength, extra-thick and corrosion-resistant applications, generation from downstream steel processing. Total self-generated electricity reached 10 TWh for the year, an increase of 333 GWh year on year,
and developed 28 new products including deepwater subsea pipeline steel and 260 mm rack steel. Its 80 mm wear-resistant steel and copper-clad steel setting another new record. The newly commissioned 150 MW supercritical generating units at Xiangtan Steel and LY Steel operated stably. Fourth,
rolled clad plate filled domestic gaps, while its 1000 MPa steel for hydropower applications and 420 MPa steel for offshore engineering applications financial costs remained low. At the end of 2025, the Company's liability-to-asset ratio stood at 53.46%, significantly lower than its historical peak for
were recognized as reaching an internationally advanced level. Sales of nickel-alloy steel, high-strength wear-resistant steel, and low-temperature the same period and down 2.55 percentage points from the end of the previous year, reflecting a sound financial position. Financial expenses for the
shipbuilding steel increased by 36%, 75%, and 256% year on year, respectively. In the sheet steel segment, LY Steel's "cold-rolled hot-forming steel year amounted to RMB 32.66 million, down RMB 55.05 million year on year, representing a decrease of 62.77%. Overall financial costs remained well
sheet and strip" was awarded the title of "Golden Cup Premium Product". Its SK series products achieved a major technological breakthrough in rolling under control at a relatively low level, and the Company's overall financing cost remained at a historical low.
from 1 mm to 0.01 mm and, together with customers, realized China's only mass production of such products. Finished high-magnetic-induction
grain-oriented silicon steel achieved its first delivery, and the first coil of non-grain-oriented ultra-thin steel for new energy applications—known as
"hand-tearable steel"—was successfully rolled off the line, with a thickness of only 0.10 mm. Low-temperature high-manganese steel was supplied in Unleashing Reform Momentum and Sustaining the Vitality of Institutional and Operational Innovation.
volume for fuel tanks used in green-powered vessels. Sales of high-margin products such as grain-oriented silicon steel, high-strength coated steel,
The Company continued to improve its market-oriented operating mechanisms, deepen state-owned enterprise reform, and work to build a model
and quenched and tempered plate increased by 21%, 103%, and 93% year on year, respectively. In response to supply chain integration, vehicle body
of modern governance for traditional manufacturing enterprises. First, the Company continued to deepen reform of its institutional frameworks and
modularization, and sustainability requirements in the automotive industry, VAMA secured 24 additional technical licenses for new steel grades. Its
operating mechanisms. The Company further optimized its corporate governance structure and advanced the reform of the board of supervisors. It
Yujian multi-part integration solution once again won industry recognition and received the "2025 Automotive Industry Rotary Award", while its steel
also improved a market-oriented system featuring hard constraints and strong incentives, implemented performance-linked remuneration, widened
battery pack solution received the "Value Empowerment Award" at the International Forum of Automotive Traffic Safety, supporting new breakthroughs
income differentiation, and further stimulated development momentum. The Company deepened reform of the labor, personnel, and remuneration
for China's automotive industry in lightweighting, safety, and cost efficiency. In the seamless steel tube segment, HYST's "pilot-scale testing platform
systems. The labor productivity in the core steel business remained at an advanced level in the industry. The Company continued to promote the
for high-performance OCTG" was recognized as a new materials pilot-scale testing platform by Hunan Province, and its "OCTG for deep and ultra-
culture of "putting strivers first", comprehensively advanced benchmarking and management enhancement against world-class standards, and
deep wells" was included in the list of national manufacturing single-champion products. HYST achieved direct supply to Huaneng Group's four major
received 10 management innovation awards at or above the provincial or ministerial level. In line with its strategic transformation objectives,
piping systems, further expanded into high-end energy markets along the Belt and Road, passed QatarEnergy's certification for line pipe products,
Xiangtan Steel carried out management reform by establishing a new Industrial Development Department and a Digital and Intelligent Research
and obtained supply qualifications for both structural tubes and line pipes. It also passed TotalEnergies' certificate extension review and premium
Institute, while reorganizing its operations into three business divisions covering ironmaking, specialty steel, and plate products. At the same time,
connection audit, expanding the certified range from K55, N80Q, L80-1, and P110 to corrosion-resistant casing grades including C90, T95, C110, and
it revised 192 system documents and management policies and streamlined 28 business processes, further improving operating efficiency. Second,
Q125. In the industrial wire rod and bar segment, Xiangtan Steel accelerated product quality upgrading and developed 52 new products, including
the Company continued to strengthen the development of management, technical, and skilled talent pipelines. The Company organized tiered and
specialized training programs for management, technical, and skilled personnel; held knowledge forums for PhD recruits and chief specialists on
resistant steel for rivets was realized, non-quenched-and-tempered crankshaft steel entered Toyota's supplier system, bearing steel met the admission
the "four new" areas—new technologies, new processes, new equipment, and new materials; invited external experts to deliver special lectures on
standards of Luoyang Bearing Group, and Grade 10.9 high-strength cold-heading steel was certified by Geely and Ford. Sales of high-end gear steel,
sintering, steelmaking, digitalization, and other topics; introduced technical authorities, industry experts, and PhD graduates from leading universities
non-quenched-and-tempered steel, and spring steel bars increased by 47%, 132%, and 331% year on year, respectively.
to strengthen its talent pool; and maintained recruitment from universities and disciplines designated under China's "Double First-Class" Initiative.
Among newly hired graduates, 25% held master's or doctoral degrees, and 143 employees had been selected for the Yingpei Program on a cumulative
Focusing on High-End, Intelligent and Green Transformation, with Coordinated Progress in Intelligent basis. A total of 23 employees received honors at or above the provincial or ministerial level, while 2 teams and 8 individuals were selected for the
Manufacturing and Green and Low-Carbon Development. Hunan Furong Talent Action Plan. In addition, 3 employees were named National Model Workers, 4 were named Provincial Model Workers, and 1 was
named a Great Country Craftsman, all record highs, further demonstrating the growing leadership role of the Company's talent base.
Closely aligned with Hunan Province's "4×4" modern industrial system, the Company developed new quality productive forces suited to local
conditions and intensified its transformation toward high-end, intelligent and green development. First, hardware support for high-end manufacturing
Golden Cup Premium / High-Quality Products
Honors 2025
Platform Name Entity Level
Over the years, Valin Steel has continued to advance and has earned broad recognition from governments, institutions,
Weather-resistant structural steel plate for
industry organizations, and wider society. In 2025, the Company and its subsidiaries received numerous honors in areas Xiangtan Steel Golden Cup Premium Products
bridges (Q420qDNH)
such as product quality, scientific and technological innovation, and social responsibility.
Cold-rolled hot-forming steel sheet and strip
LY Steel Golden Cup Premium Products
(LG1500)
Structural steel with guaranteed hardenability
Xiangtan Steel Golden Cup High-Quality Products
Science and Technology Honors
(20CrMnMoH)
Heat-treated steel plate for ultra-high-strength
Xiangtan Steel Golden Cup High-Quality Products
structures (Q1100E)
Innovation Platforms Hot-rolled wire rod for free-cutting steel
(XY1215)
Xiangtan Steel Golden Cup High-Quality Products
Hot-rolled alloy tube billet for high-pressure
Xiangtan Steel Golden Cup High-Quality Products
Platform Name Entity Level boilers (15CrMoG)
Steel plate for building structures (Q460GJ) Xiangtan Steel Golden Cup High-Quality Products
National Enterprise Technology Center HYST National
Hot-rolled wire rod for steel used in cold
Chen Wenbin National-Level Skills Xiangtan Steel Golden Cup High-Quality Products
LY Steel National heading and cold extrusion (SAE10B21A)
Master Studio
Pilot Enterprise for the Construction Weather-resistant structural steel plate for
Xiangtan Steel Golden Cup High-Quality Products
of Hunan Provincial Innovation Xiangtan Steel, LY Steel Provincial bridges (Q420qDNH)
Consortiums Steel for low-temperature pressure vessels
Hunan Provincial Manufacturing LY Steel Golden Cup High-Quality Products
(16MnDR)
Innovation Center for High-Quality LY Steel Provincial
Silicon Steel High-manganese austenitic wear-resistant steel
LY Steel Golden Cup High-Quality Products
plate (MN13)
Hunan Provincial Pilot-Scale Testing
HYST Provincial Heat-treated steel plate for construction
Platform for High-Performance OCTG LY Steel Golden Cup High-Quality Products
machinery (LG800T)
Hot-rolled steel sheet and strip of quality
National Manufacturing Single Champion Enterprise
LY Steel Golden Cup High-Quality Products
carbon structural steel (20)
Continuously hot-dip galvanized high-strength
LY Steel Golden Cup High-Quality Products
interstitial-free steel strip (HC220YD+Z)
Award-Winning Item Participating / Awarded Unit(s) Award Level
Continuously hot-dip galvanized low-alloy steel
LY Steel Golden Cup High-Quality Products
The Ninth Batch of National strip (HC340LAD+Z)
Manufacturing Single Champions Seamless steel tubes for high-pressure boilers
"OCTG for Deep / Ultra-Deep Wells" HYST HYST Golden Cup High-Quality Products
designated by the Ministry of Industry (12Cr1MoVG)
and Information Technology (MIIT)
Tubes for offshore engineering (X100Q) HYST Golden Cup High-Quality Products
Seamless steel tubes for crane booms (BJ890) HYST Golden Cup High-Quality Products
Steel pipes for casing used in oil and gas wells
in the petroleum and natural gas industry (P110 HYST Golden Cup High-Quality Products
(HS110TT, P110TT, 110V, HS110V))
Seamless steel tubes for rotary drilling rig drill
HYST Golden Cup High-Quality Products
rods (HG850)
Hot-rolled ribbed steel bars in straight lengths
Yangchun New Steel Golden Cup High-Quality Products
for reinforced concrete (HRB500E)
Hot-rolled plain steel bars for reinforced
Yangchun New Steel Golden Cup High-Quality Products
concrete (HPB300)
Science and Technology Awards LY Steel's "Key Core Technologies
for Efficient Production of Wide
LY Steel's "R&D and Application of LY Steel's "Magnetically Controlled
High-Quality Medium- and High- Extraordinary Metallurgical Preparation
Key Technologies and Equipment
Carbon Steel Strip" won the First Technology for High-Quality Steel
for Intelligent Leveling of Advanced
Prize of the Metallurgical Science Materials" won the First Prize of
Xiangtan Steel and Valin V Cloud's High-Strength Steel" won the First
and Technology Award from the the Metallurgical Science and
"Key Technologies and Equipment Prize of the Metallurgical Science
China Iron and Steel Association Technology Award from the China
for Low-Carbon Equalizing Sintering and Technology Award from the
Xiangtan Steel's "Development and the Chinese Society for Metals. Iron and Steel Association and the
Based on Fuel Segregation" won the China Iron and Steel Association
and Application of Complete Chinese Society for Metals.
First Prize of the 2025 Metallurgical and the Chinese Society for Metals.
Technologies for Ultra-Thick
Science and Technology Award.
Straight-Mold Arc Continuous
Slab Casters" won the Grand
Prize of the 2025 Metallurgical
Xiangtan Steel's "Steel for the Science and Technology Award.
Haiji-2 Deepwater Jacket" won
a first prize for scientific and
technological progress in the
China Petroleum and Chemical
Industry Federation.
Xiangtan Steel's "Development and
Yangchun New Steel's R&D and
Application of Key Technologies
Xiangtan Steel's "Development Xiangtan Steel's "R&D and Industrial LY Steel's "Innovation and Practice Application of an Intelligent Control Xiangtan Steel's "Key Manufacturing
for Weather-Resistant Bridge Steel
and Application of Key Preparation Application of Key Technologies in Key Equipment Technologies System for Equipment Across the Technologies and Engineering
in Special Service Environments"
Technologies for High-Quality for Ultra-Wide High-Strength, High- for Heat Treatment Lines for High- Entire Steelmaking Process won the Application of 420/460 MPa-Grade
won the Second Prize of the 2025
Rolled Clad Plates" won the First Toughness and Easy-to-Weld Steel Quality Thin-Gauge Steel Plates" won First Prize of the 2025 Guangdong Extra-Thick Steel Plates for Deep-
Metallurgical Science and Technology
Prize of the Metallurgical Science Plates" won the First Prize of the the First Prize of the Metallurgical Metallurgical Science and Technology Sea Jackets with High Service
Award.
and Technology Award from the 2025 Metallurgical Science and Science and Technology Award from Achievement Award from the Safety" won the Second Prize of
China Iron and Steel Association Technology Award. the China Iron and Steel Association Guangdong Association of Iron and the 2025 Metallurgical Science and
and the Chinese Society for Metals. and the Chinese Society for Metals. Steel Industry and the Guangdong Technology Award.
Provincial Metal Association.
Science and Technology Awards Other Science and Technology Awards
"Development of a New
Generation of Soft Magnetic
HYST and Xiangtan Steel's "Development and
Materials for Extreme Application
"Key Manufacturing Technology "420 MPa-Grade Series of Scenarios and Application in
Application of Key Technologies for High-Quality and Application of 420 MPa- High-Strength Low-Alloy High-Quality Motor Systems"
Continuous Casting and Quality Control of Steel" Grade Extra-Thick Steel for Structural Steel for Offshore won the Second Prize of the
won the Second Prize of the Metallurgical Science
Deepwater Jackets at Xiangtan Platforms" won the 2024 Mechanical Industry Science
Steel" won the Grand Prize from
and Technology Award from the China Iron and Steel
Product Development and and Technology Award from
LY Steel's "Development and Application the China Machinery, Metallurgy Market Expansion Award the China Machinery Industry
Association and the Chinese Society for Metals. of Key Technologies for Design and Control and Building Materials Workers' from the China Iron and Steel Federation and the Chinese
of Nitrogen Microalloying in High-Quality
Technical Association. Association. Mechanical Engineering Society.
Steel" won the Third Prize of the Metallurgical Xiangtan Steel Xiangtan Steel LY Steel
Science and Technology Award from the
China Iron and Steel Association and the
Chinese Society for Metals. "High-Quality Steel for Diverse
Extreme Environments in
Deep Sea and Deep Earth
Applications" was selected as
"Thin-Gauge Heat-Treated a Hunan Province advanced
Steel Plate for Crane Booms manufacturing "open
of LY Steel" won the Product "Thin-Gauge High-Strength, competition for selecting
Development and Market High-Toughness and Wear- the best candidates" project
Expansion Award from Resistant Steel" received the issued by the Hunan Provincial
the China Iron and Steel "Innovative Product" award Department of Industry and
Association. from World Metals. Information Technology.
LY Steel LY Steel HYST
"Development and Application of "Development and Application
Key Technologies for High-Quality of Key Technologies for Anti-H2S Three products, including "Hot-
Low-Alloy Weather-Resistant Corrosion OCTG of 110 ksi and Rolled Plain Steel Bars for
HYST's "Development and Steel" won the Second Prize Above Steel Grades" won the Reinforcement in Concrete",
Application of Key Technologies
of the Science and Technology Second Prize for Scientific and received the 2025 Guangdong
Award from the Chinese Society Technological Progress from the Famous, High-Quality and
for Seamless Steel Tubes for
Yangchun New Steel's Construction
for Corrosion and Protection. China Steel Construction Society. Innovative Products.
High-End Automotive Axles" HYST's "Product Development and
and Practice of an Integrated Cost
won the Third Prize of the National Standard Formulation for
HYST LY Steel Yangchun New Steel
Management and Control System
Metallurgical Science and Precision Seamless Steel Tubes for
Across the Full-Process Chain in Steel
Technology Award from the Hydraulic Cylinders in Construction
Product Quality / Management Innovation
Enterprises won the Third Prize of the
China Iron and Steel Association Machinery" won the Third Prize
and the Chinese Society for of the Metallurgical Science and
and Technology Achievement Award
Metals. Technology Award from the China
from the Guangdong Association of Iron
Iron and Steel Association and the First Prize of the 22nd Modern "Development and Application
and Steel Industry and the Guangdong
Chinese Society for Metals.
Management Innovation of Innovative Thin-Gauge High-
Provincial Metal Association.
Achievement Awards for Nomination Award of the 8th Strength, High-Toughness and Wear-
Metallurgical Enterprises, Hunan Governor Quality Award, Resistant Steel" received the "Three
awarded by the China Iron and presented by the People's Innovations Brand Achievement"
Steel Association Government of Hunan Province award from World Metals
Xiangtan Steel LY Steel LY Steel
Building an Integrated Risk Prevention and Control
System Based on the Interconnection of Discipline
Inspection, Audit, Legal Affairs and Business National Quality Brand for Machinery
Operations in a Large Steel Tube Enterprise received Steel of the Year, awarded by Shanghai
the First Prize of the Hunan Modern Enterprise Ganglian E-Commerce Holdings Co., Ltd.
Management Innovation Achievement Awards
HYST HYST
Included in Hunan Advanced-Level Intelligent
Hunan Province Manufacturing Quality "National Manufacturing Quality Provincecs 2025 List Factory of Hunan Province,
Benchmark; Hunan Province Manufacturing Benchmark", awarded by the China of Typical Application recognized by the Hunan Included in the 2025
Single Champion Association for Quality Scenarios for "Artificial Provincial Department of List of 5G Factories of
First Prize in the Hunan
Intelligence + Citywide Industry and Information the Ministry of Industry
IPv6 Application
Digital Transformation" Technology and Information
Innovation Competition
VAMA VAMA Technology
Xiangtan Steel LY Steel LY Steel LY Steel
Green Production Included in Hunan
Included in the "100 Province's classification
Advanced Collective Landmark Projects for Digital list for cybersecurity of
Enterprise selected for Environmental New Infrastructure in Hunan industrial internet enterprise
for cultivation under Protection Statistics Province (2025)" list, released networks, released by Advanced-Level
the industry's "Best in China's steel by the Hunan Provincial the Hunan Provincial Intelligent Factory of
Practice Energy industry, awarded by Department of Industry and Department of Industry and Guangdong Province
Advanced Collective Efficiency Benchmark the Information and Information Technology Information Technology
National Green Demonstration Plants" Statistics Department
of the 2025 China
Factory for carbon peaking and of the China Iron and
Water Saving Awards HYST HYST Yangchun New Steel
carbon neutrality Steel Association
Xiangtan Steel Xiangtan Steel Xiangtan Steel Xiangtan Steel
Enterprise selected External Recognition / Investor Relations
for cultivation under
the industry's "Best
Practice Energy Awarded the Shenzhen
Efficiency Benchmark "2025 Best Practice Stock Exchange's Recognized as the Assigned an ESG "AAA"
Successfully Demonstration Successfully achieved Award for Board Office", highest information "Outstanding IR Team" rating by the China
achieved Class A Plants" for carbon Class A environmental National Green Factory awarded by the China disclosure rating and received the Annual Metallurgical Industry
environmental peaking and carbon performance Association for Public of "A" for seven Investor Relations Gold Planning and Research
performance neutrality Companies (CAPCO) consecutive years Award from P5W Institute
Xiangtan Steel LY Steel LY Steel HYST Valin Steel Valin Steel Valin Steel Valin Steel
Enterprise selected Recognized as a "Contract-
for cultivation under Honoring and Credit- Second Prize of the AAA Enterprise for High- "Top 100 New Supply Chain
the industry's "Best Reliable Enterprise" in National Enterprise Culture Quality Development in Enterprises in China's
Practice Energy Hunan Province Achievement Awards China's steel industry Automotive Industry"
Successfully Efficiency Benchmark
National Green achieved Class A Demonstration Plants"
National Green Factory
Factory environmental for carbon peaking and
performance
HYST HYST HYST VAMA
carbon neutrality
VAMA VAMA Yangchun New Steel Yangchun New Steel
"Value Empowerment
Award", presented
by China Automotive
Engineering Research No. 84 in the 2025
Intelligent Manufacturing
Institute and CIRI No. 192 in the 2025 Top 100 Guangdong No. 73 in the 2025
Automobile Technology Top 500 Guangdong Manufacturing Top 100 Guangdong
Institute Enterprises Enterprises Innovative Enterprises
Included in the "100 Grand Prize of
Optimization- Landmark Projects for the First China VAMA Yangchun New Steel Yangchun New Steel Yangchun New Steel
Level Intelligent Included in the Digital New Infrastructure Artificial Intelligence
Factory, awarded by 2025 List of 5G in Hunan Province (2025)" Application Innovation
China Metallurgical Factories of the list, released by the Hunan Competition 2025,
Information and Ministry of Industry Provincial Department of awarded by the Chinese
Standardization and Information Industry and Information Society of Technical
Institute Technology Technology Economics
Xiangtan Steel Xiangtan Steel Xiangtan Steel Xiangtan Steel
Ltd. 2025 Sustainability Report 21
E nvironment
Taking Ecological
Stewardship as a Guiding
Principle and Advancing
the Mission of Green
Metallurgy
Guided by the principle of "ecological priority and green development", Valin
Steel has developed an innovative city-enterprise integration model and
systematically advanced its low-carbon transformation. By carrying out ultra-
low-emission upgrades and energy-efficiency improvements across the entire
steelmaking process, continuously enhancing the recycling and efficient use
of energy and resources, and accelerating the development of garden-style
factories, the Company has remained committed to a sustainable development
path that advances economic and ecological benefits in tandem.
Responded to SDGs
Strengthening capacity building
Responding to Climate Change The Company places great importance on building systematic capabilities for climate change management, has
intensified training on carbon management capabilities, and has established a tiered and categorized training system.
Valin Steel has actively responded to the national strategy for carbon peaking and carbon neutrality and regards
At the Company level, special training sessions were organized, with industry experts and policy researchers invited to
addressing climate change as a responsibility it is duty-bound to fulfill. The Company has unswervingly made green
and low-carbon development a core strategic priority, formulated its action plan and targets for carbon peaking and provide training on topics including new carbon tariff policies, carbon footprint accounting standards, and the frontiers of
carbon neutrality, integrated climate governance into all aspects of its operations, and comprehensively accelerated low-carbon technologies, covering management and key technical personnel from both the Company and its subsidiaries.
low-carbon transition. At the same time, we have further strengthened governance structures, strategy implementation,
risk management and control, and target achievement in the area of climate change, while continuing to advance
Strategy
technological application, product innovation, and operating model optimization in the green and low-carbon field,
striving to become a global pioneer in green steel. In 2025, the Company's Green and Low-Carbon Research Center was
officially inaugurated, injecting strong momentum into its green and low-carbon development and the enhancement of With the Action Plan for Carbon Peaking and Carbon Neutrality as its core guiding document, the Company has anchored
its core competitiveness. its overarching goals of achieving carbon peaking before 2030 and carbon neutrality before 2060. It has continued to
refine six major decarbonization pathways—ultimate energy efficiency, process optimization, technological innovation,
collaborative emissions reduction, circular utilization, and carbon capture and storage—and promoted differentiated
Key Performance implementation by subsidiaries based on their respective business characteristics.
Xiangtan Steel, LY Steel, and Yangchun New Steel were all included in the cultivation list for the China Iron
and Steel Association's "Best Practice Energy Efficiency Benchmark Demonstration Plants" Annual Strategic Priorities
for carbon peaking and carbon neutrality.
Pathways Key Tasks
Governance
Optimize Adjust the blast
The Company continued to improve its climate change governance by establishing a three-tier management Apply process
raw material furnace burden
framework,featuring top-level roadmapping, headquarters-led coordination, and subsidiary-level implementation, to technologies Improve energy Adopt high- Adopt
resources structure and
I. Ultimate Energy for energy processing and efficiency intelligent Increase the
ensure full-process and whole-value-chain coverage of its carbon peaking and carbon neutrality efforts. Efficiency conservation conversion power-saving digital control
to support increase the
scrap ratio
low-carbon proportion of
and carbon efficiency technologies technologies
development at pellets / lump
reduction
Optimizing the organizational structure the source ore
The Board of Directors serves as the highest decision-making body for climate change matters and is responsible for
overseeing and reviewing related work. The Company has established the Strategy and ESG Committee to coordinate
Advance the application
the formulation of climate change-related strategic plans, institutional standards, and resource allocation plans. At II. Process Upgrade and improve
Low-carbon transport
of green-electricity-
the headquarters level, the Strategic Development Department (Safety and Environmental Protection Department) inside and outside the Extend the industrial chain
Optimization existing equipment based short-process
plant
is responsible for overall coordination, and the Company has established a Green and Low-Carbon Research Center technologies
composed of members of management, relevant persons in charge, and external experts. The Research Center formulated
the Action Plan for Carbon Peaking and Carbon Neutrality , which clearly sets out the timeline targets for achieving carbon
peaking and carbon neutrality and outlines a series of key tasks and measures, providing guidance for coordinated action Develop and produce green
III. Technological Apply new low-carbon
by the Company's major steel-producing subsidiaries. Each subsidiary actively implements these arrangements and carries Innovation metallurgical technologies
products across the full life Apply CCS / CCUS technologies
out climate change-related work in its respective location. cycle
Top-Level Planning
Build, independently
Guidance Promote resource
or jointly, distributed Carry out carbon
Board of IV. Collaborative recycling and reuse, and Increase purchases of
photovoltaic power management and carbon
Directors of the Decarbonization synergistic pollution and green electricity
generation and hydrogen sink initiatives
Company carbon reduction
energy projects
Strategy and ESG
Committee
Reuse secondary resources
V. Circular Utilization Optimize steel recycling generated in the production Recycle scrap steel from society
Coordinated Planning at process
Strategy Development Department Headquarters Level
Green and Low-
(Safety and Environmental Carbon Research
Protection Department) Center
Explore technologies and theoretical research relating to CO2 cyclic enrichment, low-energy-consumption
VI. Carbon Capture
absorbents, different carbon capture technology pathways, CO2 resource utilization, and large-scale CO2
and Storage
transportation and storage
Subsidiaries Responsible
Production Plants of Each Functional Research Institute
Subsidiary departments for Implementation
Valin Steel Climate Change Governance Structure
Identification of risks and opportunities and response strategies
Opportunity Potential Financial
The Company has established a normalized mechanism for identifying, assessing, and responding to climate change- Potential Impact Response Strategy
Type Impact
related risks and opportunities. Taking into account industry development trends and the actual operating conditions
of its subsidiaries, we systematically identify transition risks, physical risks, and various opportunities, and formulate
targeted control and response measures. Improving energy efficiency and advancing
Operating costs↓ Advance initiatives for ultimate energy efficiency, and
resource recycling and utilization to conserve
Resource efficiency continuously improve the comprehensive utilization
energy, reduce carbon emissions, and lower Additional income↑ of resources.
operating costs
Specific Potential Financial
Risk Type Potential Impact Response Strategy
Category Impact
Study the development of distributed photovoltaic
Energy conservation and carbon reduction Increasing the use of renewable energy, power generation and biomass energy projects
remain long-term policy objectives firmly Develop a carbon neutrality roadmap, and invest including the purchase of green electricity, through self-investment or joint development.
advanced across the industry.Carbon in key initiatives such as ultimate energy efficiency, Energy source to raise the share of renewables, reduce Operating costs↓
emissions policies are becoming more process optimization, technological innovation, dependence on fossil fuels, and lower energy Increase the proportion of purchased green electricity
stringent, increasing operating costs. Revenue↓ and collaborative emissions reduction to ensure costs at appropriate times in line with business development,
Policy and China's carbon market trading mechanism achievement of the Company's carbon peaking and so as to reduce carbon emissions intensity.
Operating costs↑
legal risk is being improved and allowances are carbon neutrality goals.
expected to tighten. With the formal Credit risk↑
implementation of the EU Carbon Border Optimize carbon asset management strategies, and
Adjustment Mechanism (CBAM), exported advance product carbon footprint accounting and Closely monitor demand for low-carbon products in
products may face higher carbon costs certification to meet CBAM compliance requirements.
key downstream sectors such as automobiles and
and compliance pressure. As domestic steel demand enters a plateau
Revenue ↓ machinery.
phase, market demand for green and low-
Products and
carbon steel products is rising, expanding Credit risk↑ Advance product carbon footprint certification and
services
Core technologies such as low-carbon market space for high-performance, low- Environmental Product Declaration (EPD) certification.
Track and study the application of emerging low- Market competitiveness↑
metallurgy and CCUS involve long R&D Revenue ↓ carbon products across the full life cycle.
carbon metallurgical technologies, keep abreast Provide integrated low-carbon steel solutions to
cycles, substantial investment, and
Technology R&D investment↑ of the latest technological developments and strengthen relationships with core customers.
rapid technological iteration. Failure
risk applications, deepen collaboration among industry,
to achieve timely breakthroughs or Market academia and research institutions, and strengthen
application may affect the pace of competitiveness↓ related technology reserves.
Transition emissions reduction.
Align with green procurement standards in downstream
Risk
industries, and seek inclusion in core customers' green
supplier lists.
Green supply chain requirements and carbon Revenue ↑
Demand from downstream industries Closely monitor decarbonization needs in key Market tariff policies create opportunities to enhance Expand overseas markets for green products to mitigate
for green and low-carbon steel products downstream sectors along the automotive and Profit margin↑
green product premiums and market share. carbon tariff barriers.
continues to grow. Delays in upgrading Revenue ↓ machinery industry chains, and continue to strengthen
Market risk products toward greener performance the market positioning of green steel products. Participate in the development of green steel trading
may result in loss of market share. The Credit risk ↑
platforms to seize market opportunities.
premium potential of green products is Strengthen branding and communication for green
also affected by industry competition. products to enhance customer recognition.
Track and study the application of emerging low-
Enhancing the ability to manage climate risks carbon metallurgical technologies, and advance
and capture climate-related opportunities, collaboration across the green industrial chain.
Establish and improve stakeholder communication while strengthening the brand image Revenue ↑
Stakeholders are paying increasing Revenue↓ mechanisms, and respond promptly to stakeholder Resilience Deepen exchanges and cooperation with upstream
attention to corporate climate action. associated with social responsibility, through Credit risk↓
Reputation concerns regarding climate change-related information.
Inadequate response measures or Operating costs↑ climate change-related business research and downstream supply chain enterprises, pursue
risks
insufficient information disclosure may Disclose the sustainability report on a regular basis to and industry exchange collaborative emissions reduction, and strengthen
result in reputational damage. Credit risk↑
address stakeholder concerns. the Company's industry influence.
More frequent extreme rainfall, typhoons, Improve emergency management plans for extreme
freezing conditions, and other severe weather, and carry out emergency drills.
Revenue ↓
weather events may affect the operation
Short-term Upgrade the protection capabilities of production
of production facilities, raw material Operating costs↑
(acute) facilities, and establish emergency supplies reserves.
transportation, and supply chain
stability, potentially causing business Fixed asset value↓
Optimize supply chain deployment, and expand the
interruptions. diversified supplier base.
Physical
Risk
Long-term changes in natural patterns, Advance water-saving technological upgrades, and
such as sea level rise and persistent high Production
Long-term improve the recycling rate of water resources.
temperatures and drought, may affect constraints↑
(chronic) Assess the impact of long-term climate risks on
the Company's normal production and Operating costs↑
operations. facility layout, and formulate optimization plans.
Impact, Risk and Opportunity Management
The Company rigorously completed all work related to carbon emissions
Closely aligned with its overarching carbon peaking and carbon neutrality goals, the Company has promoted the accounting. Each subsidiary prepared its annual carbon emissions accounting report
formation of a carbon management framework among its subsidiaries characterized by coordinated action and and data quality control plan, completed platform-based reporting, formulated
synergistic efficiency gains, focusing on key areas such as policy and regulatory compliance, breakthroughs in rectification plans for carbon emissions accounting and metering equipment, and
technological innovation, green product upgrading, and energy structure optimization. Based on their respective business improved various ledgers covering procurement, sales and inventory, metering
characteristics and stages of development, the Company's subsidiaries have deeply embedded climate change response and statistics, and carbon emissions metering equipment, strengthening the data
into the full process of production and operations, R&D and innovation, and supply chain management, laying a practical foundation for participation in the carbon market.
foundation for effectively managing climate change-related risks and opportunities.
Carbon Market In relation to carbon market management, the Company closely monitored policies,
Response regulations and industry allocation plans relating to carbon trading, strictly fulfilled
mandatory compliance requirements, and completed the surrender and settlement
The Company has advanced energy-saving and carbon-reduction technological of carbon emissions allowances in full and on schedule, ensuring compliant
upgrades and equipment renewal across the entire production process. We have operations. The Company also preliminarily established an internal dynamic carbon
implemented mature projects such as energy efficiency improvement upgrades asset management ledger, conducted simulation analysis of allowance surpluses
for high-energy-consuming equipment, blast furnace blast air dehumidification, and shortfalls under different production scenarios, accumulated experience in
and oxygen-enriched combustion in reheating furnaces, while further unlocking market trading and proactive management, and enhanced its ability to anticipate
energy-saving potential in each production process. At the same time, the Company and manage risks arising from fluctuations in carbon costs.
has planned the phased advancement of follow-up technological transformation
Decarbonization projects such as waste heat recovery and energy-saving upgrades for pumps and
Technology fans, while steadily carrying out R&D on cutting-edge decarbonization technologies
Upgrades including hydrogen-rich blast furnace metallurgy and carbon sequestration using Xiangtan Steel | A Multi-Dimensional Response to CBAM Strengthens Defenses Against Green
Case
steel slag. Trade Barriers
In parallel, the Company has focused on process-level improvements by implementing As an enterprise with direct or indirect exports to the European Union, Xiangtan Steel actively established a full-
targeted energy-saving technological upgrades. These include upgrading intelligent chain response system for the EU Carbon Border Adjustment Mechanism (CBAM). Xiangtan Steel formulated the
combustion control systems to achieve dynamic optimization of heating curves and air- Action Plan for Responding to the EU CBAM "Carbon Tariff" , clearly defining core tasks such as data reporting,
fuel ratios, and retrofitting the oxygen-enriched combustion systems of blast furnace carbon footprint accounting, and supplier traceability. Xiangtan Steel reviewed the list of products falling
hot stoves to increase blast temperature and reduce coke ratio, effectively lowering within the scope of CBAM, collected emissions data from upstream and downstream suppliers to establish a
energy consumption in production. preliminary carbon footprint traceability mechanism, and invited an EU-recognized third-party institution to
conduct pre-verification of CBAM report data for exported products, so as to ensure full compliance. At the same
time, Xiangtan Steel made early arrangements for carbon asset reserves by purchasing 100,000 tonnes of carbon
allowances to address future compliance costs. Through standardized data management, Xiangtan Steel also
LY Steel | Pilot Trial of CO Catalytic Combustion Technology Delivers Dual Breakthroughs in met carbon market verification requirements, effectively mitigating the erosion of product margins caused by
Case
Emissions Reduction and Energy Savings carbon tariffs and safeguarding the stability of its market share in the European Union.
In response to the pain points of carbon monoxide emissions from the sintering process in the steel industry
and the high energy consumption of SCR denitrification systems, LY Steel conducted a pilot trial of CO catalytic
combustion technology on its 360 m? sinter machine. Using a dedicated catalyst, the technology enabled
efficient and complete oxidation of CO, featured a low ignition temperature and thorough combustion, and
The Company regards digital development as a core lever for improving energy and
directly supplied heat to the SCR denitrification system, replacing conventional direct-fired furnaces. The project
carbon management. The Company has preliminarily established a management
achieved deep reductions in CO emissions from the sintering process and lowered the operating cost of the
platform for its carbon verification and reporting system, enabling the collection,
denitrification system through waste heat recovery, providing the steel industry with a replicable low-carbon Digital Carbon
accounting and reporting of data from energy consumption through to carbon
technical pathway for "treating waste with waste". Management
emissions. Through digital means, the Company has standardized, refined and
electronically archived carbon emissions data, laying a data foundation for precise
emissions reduction.
Metrics and Targets Green Product R&D
The Company has established a clear and quantifiable system of carbon peaking and carbon neutrality metrics and In the R&D and upgrading of green product categories, each business segment has made targeted arrangements across a
targets to ensure the orderly advancement of its decarbonization pathways. wide range of steel products. The Company developed cold-rolled galvanized sheet with a scrap ratio of more than 55%,
achieving the first launch of RC50 chromium-free anti-fingerprint green steel produced via the long-process route. The
Company developed high-strength, lightweight seamless steel tube products, reducing steel consumption and energy use
in downstream applications through structural and compositional design. The Company also deepened its presence in
high-end automotive lightweight steel by optimizing the production processes for galvanized sheet, cold-rolled sheet and
Overall Targets other products. The Company further developed low-carbon steel materials with low life-cycle emissions for industries
Strive to achieve such as shipbuilding, automobiles, construction machinery and wind power. Through the optimization of material
carbon neutrality composition and the enhancement of product strength, the Company achieved further lightweighting of steel products.
before 2060 In addition, the Company continued to launch low-carbon, high-strength rebar products to meet demand for green
By 2050, reduce construction materials in areas such as infrastructure development.
carbon emissions
By 2040, reduce carbon by 65%
Xiangtan Steel | High-Performance Hydropower Steel Products Support Low-Carbon
Case
emissions by 39% from
the peak level Hydropower Development
Achieve carbon
In April 2025, a 1000 MPa-grade hydropower steel bifurcated pipe model, for which Xiangtan Steel supplied the
peaking before 2030
materials, Zhengzhou Research Institute of Mechanical Engineering Co., Ltd. undertook the design and testing,
and Sinohydro Engineering Bureau 8 Co., Ltd. carried out the fabrication and installation, successfully underwent
a hydraulic burst test in Yueyang, with the burst pressure reaching 26.7 MPa. According to the expert panel's
assessment, the overall performance of the bifurcated pipe reached an internationally advanced level, providing
core material support for the construction of hydropower stations with a water head of over 700 meters. The
achievement also supported the upgrading of hydropower stations toward higher HD values under the carbon
peaking and carbon neutrality strategy, marking an important transition for China in large-scale hydraulic
Green Product Innovation engineering materials — evolving from a follower to a global leader.
Focusing on the core needs of downstream industries for lightweighting and emissions reduction, the Company
coordinates its subsidiaries in advancing decarbonization efforts across the full life cycle of products and integrates the
concept of carbon reduction into the entire process of product design, production and delivery. Through performance- Case HYST | Green Products Support a Major Breakthrough in National Clean Power Generation
oriented R&D and the provision of customized solutions, the Company develops green steel products featuring low
emissions, high strength and lightweight properties, supported by dedicated services. In doing so, the Company On November 28, 2025, the 660 MW high-efficiency ultra-supercritical circulating fluidized bed boiler completed
helps downstream customers reduce the carbon footprint of both manufacturing and end-use processes and builds a one year of safe operation and passed authoritative appraisal, marking a major breakthrough in China's clean
collaborative decarbonization ecosystem in which "upstream emissions reduction benefits downstream users". power generation technology. HYST supplied high-pressure boiler tubes for the project on a batch basis,
supporting the achievement of ultra-high operating parameters, ultra-low emissions and ultra-low energy
consumption.
Green Product Certification
Strengthening Environmental Protection Management
Xiangtan Steel LY Steel With a sound environmental management system as its foundation, Valin Steel continued to strengthen environmental
risk prevention and control awareness across the workforce. By cascading environmental protection responsibilities at
As a pilot entity under the national product carbon With emissions reduction at the production
every level, establishing and improving emergency response mechanisms for environmental incidents and digital control
footprint labeling and certification program, the end and public disclosure of product carbon
Company completed carbon footprint accounting emissions data to support downstream supply platforms, and continuously advancing environmental management toward standardization, normalization and long-
and labeling certification for seven pilot products, chain carbon footprint traceability as key green term effectiveness, the Company has further reinforced the foundation for its green development.
including products produced through the blast measures, the Company successfully rolled out
furnace-basic oxygen furnace long-process route cold-rolled galvanized sheet with a scrap ratio of
and the electric furnace short-process route. The more than 55% and achieved the first launch of Optimizing the Environmental Management System
Company also obtained China's first recognized RC50 chromium-free anti-fingerprint green steel
certificate carrying a green supplementary mark for produced via the long-process route. Valin Steel strictly complied with national laws and regulations, including the Environmental Protection Law and the
the carbon footprint of marine products.
Measures for Emergency Management of Environmental Incidents , and comprehensively optimized its environmental
management structure. In 2025, the Company organized the revision of the Environmental Protection Management
Measures, further strengthened accountability and assessment for various environmental incidents, linked environmental
performance to the remuneration of subsidiary management, reinforced awareness of ecological and environmental
protection red lines across the workforce, and clarified environmental responsibilities throughout the full chain from
decision-making to execution.
Principles of Environmental Responsibility Management of Valin Steel
HYST
The Company obtained a total of 32 carbon footprint certificates
covering the full range of products for pressure vessels and
machining tubes, OCTG, and line pipes, issued respectively by the Shared responsibility of One position, dual Multi-party Source control
international certification authority Bureau Veritas (BV) and the Party and administration responsibilities coordination
domestic leading certification body CTI.
In 2025, Xiangtan Steel, LY Steel, HYST, VAMA, and Yangchun New Steel all maintained the validity of their ISO 14001
environmental management system certification. The coverage rate of ISO 14001-certified sites reached 100%. All
construction projects completed environmental impact assessment approval, and all pollutant discharge permits
VAMA Yangchun New Steel remained valid, achieving full coverage of licensed, lawful and compliant pollutant discharge.
The Company completed Environmental Product Yangchun New Steel's high-strength rebar products
Declaration (EPD) certification and published the complied with green development requirements
relevant information on the international EPD throughout the full life cycle. Following on-site
platform. The Company also completed life cycle evaluation and review by MCC Testing Certification
assessment (LCA) for five core products, further Co., Ltd., the products were awarded a Green
Key Performance
improving its product carbon footprint data system. Product Certification Certificate.
Xiangtan Steel, LY Steel, and VAMA successfully achieved Class A environmental performance
Yangchun New Steel was continuously recognized as a Guangdong "Green Card" Environmental
Integrity Enterprise
Both environmental compliance and environmental performance ranked among the industry's leading
levels
Environmental protection investment amounted to RMB 2.8 billion, representing 2.28% of operating
revenue
Managing and Controlling Environmental Risks and Hidden Hazards Enhancing Environmental Awareness
The Company established a dual control mechanism combining "internal inspection + external professional support" The Company attaches great importance to environmental capability building and collaborative social governance.
to identify and manage environmental compliance risks. Internally, the Company established a normalized system for Through systematic environmental training, the Company improves the professional capabilities of all employees, while
identifying and investigating hidden environmental risks and hazards, enabling timely identification, rectification, and proactively accepting public oversight to strengthen its environmental governance system on all fronts.
elimination of environmental hazards at production sites through routine inspections and special reviews. Externally,
the Company leveraged professional expertise by engaging the South China Institute of Environmental Sciences of the
Ministry of Ecology and Environment to provide environmental stewardship services. This enabled comprehensive review
and inspection of key areas such as production-site controls and environmental monitoring, systematically improving the Formulating annual environmental training plans on a regular basis; organizing special
level of environmental compliance management. low-carbon and environmental protection training in 2025 for management personnel
and technical staff at all levels; focusing on requirements under the Measures for the
All subsidiaries formulated emergency response plans for environmental incidents in strict accordance with laws and
Environmental Administration of Pollutant Discharge Permits and the Interim Regulations on the
regulations and completed filing with the competent authorities. During the year, the Company organized 15 training
training Administration of Carbon Emissions Trading , as well as professional knowledge relating to
sessions and drills for environmental emergencies covering scenarios such as wastewater leaks, abnormal exhaust gas solid waste disposal and carbon emissions management; extending training coverage to all
emissions, and emergency situations involving solid waste disposal. These efforts enhanced the emergency response and employees; and significantly enhancing employees' awareness, risk prevention capability,
coordinated handling capabilities of personnel at all levels and reduced the impact of environmental incidents. and professional skills in environmental protection.
Actively accepting environmental oversight from all sectors of society; organizing plant
visits and community outreach activities; maintaining open channels for feedback and
Key Performance Environmental communication with community residents; building communication bridges for positive
communication interaction between the enterprise and the public; and fostering a modern environmental
Number of environmental emergencies: 0 governance framework based on collaboration among the enterprise, communities, and
society.
Advancing Smart Environmental Management
The Company is comprehensively advancing the development of a smart environmental management platform and Key Performance
building an integrated management system that combines environmental protection operations, data management, and
daily office functions. By empowering environmental management through digital, information-based, and intelligent Coverage rate of environment-related employee training: 100%
means, the Company is promoting more science-based integrated decision-making, more refined environmental
management, and more precise emissions control, while driving the full online operation of environmental protection
functions and innovation in environmental management. This platform has become a key support for the Company's
green transformation and development.
At present, Xiangtan Steel, LY Steel, HYST, and Yangchun New Steel have all established and put into operation integrated
environmental protection control platforms. These platforms enable real-time monitoring and intelligent control over key
environmental management information, including organized and fugitive emission sources, emissions information for
vehicles entering and leaving plants, the operating status of environmental protection facilities, and ambient air quality
within plant areas, significantly enhancing the level of digital environmental management.
Through the Internet of Things
stations formed a dynamic sensing
dust early warning system was implemented for 10,202
network
emission points
Energy Efficiency Benchmarking
Advancing Energy Conservation and
With ultimate energy efficiency as a core lever, the Company comprehensively advanced its benchmarking initiative for
Emissions Reduction ultimate energy efficiency, conducted competitions among production lines for ultimate efficiency, and continuously
optimized its energy cost control system. Xiangtan Steel and LY Steel were successfully included in the cultivation list for
Guided by its strategy of resolutely advancing comprehensive conservation and green development, Valin Steel has the industry's "Best Practice Energy Efficiency Benchmark Demonstration Plants" for carbon peaking and carbon neutrality.
embedded energy conservation and emissions reduction into every aspect of its operations and management. The Key production equipment, including the 3,200 m? blast furnace and 360 m sinter machine, reached advanced levels in the
Company has systematically promoted the efficient use of energy and water resources, the compliant treatment and national benchmarking competition on energy saving and consumption reduction for major large-scale steel production
resource utilization of waste, and the development of a circular economy system covering the entire production process, equipment, setting exemplary benchmarks for energy efficiency in the industry.
delivering coordinated improvements in both economic and environmental performance.
Energy Recycling and Utilization
Efficient Energy Management
The Company regards efficient energy management as a strategic pillar of green development and has systematically The Company has further tapped the potential of captive power generation through recycling and has continued to increase
advanced energy efficiency benchmarking, energy recycling and utilization, and clean energy substitution. Supported by investment in and R&D for secondary energy recovery and utilization technologies, maintaining an industry-leading position in
smart energy platforms for refined control, the Company has continued to optimize its energy mix and improve energy use areas such as coke dry quenching, sintering waste-heat power generation, and waste-heat power generation from downstream
efficiency, building a clean, low-carbon, and highly efficient energy system. steel processing. Xiangtan Steel and LY Steel phased out part of their medium-temperature and medium-pressure thermal
systems and invested in four 150 MW ultra-high-temperature generating units, achieving zero flaring of low-calorific-value blast
The Company has continued to improve its institutional framework for energy management and prepared documents furnace gas, substantially increasing self-generated electricity, and significantly improving the comprehensive utilization of
including the Energy Measurement Management System, Measures for the Management of Key Energy-Using Equipment secondary energy. In parallel, the Company intensively implemented a series of nationally promoted energy-saving and waste
and Facilities, Management System for Project Energy Conservation Review and Carbon Emissions Evaluation , and heat recovery projects, including coke oven riser waste heat recovery, sinter main flue waste heat recovery, and CO catalytic
Energy Management Measures Plan . At the same time, the Company has continued to strengthen and refine its energy combustion, further unlocking the potential of energy recycling and utilization.
management system. Guided by the Energy Management System Manual and the accompanying series of Management
Procedures, the Company has promoted the continual improvement of its energy management system. Key operating
Clean Energy Substitution
entities, including Xiangtan Steel, LY Steel, and HYST, have all obtained ISO 50001 (GB/T 23331) energy management system
certification, achieving full coverage of major production units. The Company has vigorously promoted the optimization of its energy mix, with the large-scale deployment of photovoltaic
projects as a core focus. By making full use of office buildings, plant rooftops, and vacant land within plant areas, the
Each production base has established comprehensive energy management supervision procedures. Through the
Company has built distributed photovoltaic power stations and comprehensively promoted distributed photovoltaic power
online monitoring system of the Energy Management Center (EMS), the Company conducts daily monitoring of energy
generation. In 2025, the Company completed 64 MW of self-owned photovoltaic clean energy generation capacity, with
consumption, tracks in real time the energy consumption data of each process and major equipment, and automatically
annual power generation reaching 25.52 GWh, further improving its energy self-sufficiency rate.
issues alerts for abnormalities. The Energy Management Department analyzes the energy performance of key units each
month and prepares monthly energy reports to support regular reviews. Internal audits of the energy management system In addition, the Company adopted high-efficiency electricity-saving technologies, carried out green lighting upgrades
are conducted annually to examine the conformity and effectiveness of system operation. Management review meetings across its plants, and promoted solar-powered street lighting, improving energy efficiency while continuously enhancing
chaired by management are also held to assess the system's continuing suitability, adequacy, and effectiveness in light of the lighting environment within plant areas. At the same time, the Company actively expanded clean energy application
changes in policy, technology, and performance, and to determine directions for improvement. In addition, compliance scenarios, advanced the implementation of hydrogen energy projects, and continuously reduced its dependence on fossil
evaluations are conducted regularly to verify whether the Company's energy activities comply with applicable laws, energy.
regulations, and other requirements.
Key Performance
Monitoring
Total energy consumption: 13,913,196.85 tonnes of standard coal Developing distributed opportunities for the
photovoltaic power deployment of hydrogen
Steam consumption: 1,650,105.73 tonnes of standard coal generation projects energy projects at
appropriate times
Fuel oil consumption: 7,014.81 tonnes Planning to increase the
Advancing the proportion of purchased
integrated use of wind,
Diesel consumption: 7,006.23 tonnes solar, and hydropower
green electricity
Gasoline consumption: 8.58 tonnes
Coal consumption: 11,620,542.70 tonnes
Natural gas consumption: 255,306,016.93 m3
Smart Energy Platform
Key Performance
The Company has made all-out efforts to advance the development of its smart energy management system. The system
Total annual clean energy consumption: 1,822,530 MWh covers major energy media including water, electricity, air, and gas, and integrates multiple functional modules such
as energy monitoring screens, operation management, intelligent decision-making, energy analysis, refined process
Total electricity consumption: 15.2 TWh management, carbon emissions management, and energy-saving technologies. The system effectively breaks down
barriers between departments and professional functions. Through horizontal business integration and vertical data
Self-generated electricity: 9,999.77 GWh connectivity, it enables the integration of energy information across different processes. Supported by refined production
organization and energy planning management, the system helps achieve precise energy supply and lean production,
effectively reducing the Company's power and energy costs.
Case LY Steel | Smart Energy Platform Improved Energy Management Efficiency
Xiangtan Steel LY Steel
LY Steel's energy management system was put into operation in 2009 and successfully enabled comprehensive
online monitoring and management of the Company's energy production, conversion, and supply. At present,
In 2025, the clean energy used by the Company At present, the Company uses 1.042 TWh of
all operating equipment related to energy management has achieved online collection and real-time monitoring
included wind power, solar power, and hydropower, photovoltaic power and hydropower, representing
of energy consumption data. Over the years, the platform has been continuously improved, with management
totaling 765.7 GWh, accounting for 37.95% of 48% of the relevant total. Natural gas consumption
functions such as energy balancing, energy forecasting, indicator management, and energy efficiency
purchased electricity and 12.77% of total electricity amounted to 77.97 million m?, and natural gas
management gradually added. In addition, LY Steel implemented the project of integrating power metering data
consumption. energy consumption accounted for 1.6% of total
into the energy network, launched an overall upgrade of its energy system, and advanced the overall planning of
energy consumption.
intelligent manufacturing, further improving the precision and efficiency of energy management.
Innovative Application of Hydrogen Energy Technology
Case HYST | Photovoltaic Power Generation Improved Green Power Self-Sufficiency The Company has actively advanced the R&D and exploratory application of hydrogen energy technology, regarding it as
an important pathway for optimizing the energy mix and achieving deep decarbonization. The Company has continuously
HYST actively advanced clean energy projects. In 2025, HYST cooperated with China City Investment Group promoted innovation, research, and practical application in this field to support the upgrade of its energy system toward
under an energy performance contracting model to develop two photovoltaic power generation projects, with greener and lower-carbon development.
installed capacities of 12.5 MW and 4 MW, respectively. Both projects have now been successfully commissioned.
The implementation of these photovoltaic projects effectively improved the Company's self-sufficiency in green
electricity. In 2026, the projects are expected to add 16 GWh of self-generated electricity, helping the Company Case LY Steel | Industrial Application of Clean Hydrogen Built a Low-Carbon Steel Benchmark
optimize its energy consumption structure and reduce its dependence on fossil energy.
LY Steel made the innovative application of hydrogen energy a key driver of its green transformation. Through
cooperation with Runze New Energy, LY Steel implemented a hydrogen-oxygen flame cutting project for
continuous casting, replacing traditional fuel gas with a greener production process. Together withSany Hydrogen
Energy, LY Steel also built a 250 Nm3/h alkaline water electrolysis hydrogen production demonstration project
for its cold-rolled high-end home appliance sheet project, driving a process breakthrough in "replacing carbon
with hydrogen", and building an independent green hydrogen supply chain. Both practices were selected as part
of the first batch of industrial low-carbon hydrogen application scenarios in Hunan Province, providing the steel
industry with a replicable and scalable green application pathway integrating "hydrogen production + hydrogen
utilization".
Refined Water Resource Management
The Company strictly implemented the Water Law of the People's Republic of China and, guided by the Industrial Water Key Performance
Management Measures , established a water resource management system featuring source control, process control, and
recycling and reuse. The management team of the Company is responsible for setting objectives and responsibilities for Total water consumption: 4,383.69 million m3 Water recycling rate: 97.91%
water resource protection and utilization. The Energy Department is responsible for supervising the implementation of
such objectives, while each subsidiary implements management responsibilities at different levels, continuously improves
water use efficiency, and keeps total freshwater withdrawal stable with a downward trend.
VAMA | Combining Internal and External Measures to Achieve New Breakthroughs in Water
Case
Conservation
Key Performance VAMA formulated and implemented rules and regulations such as the Water Resources Management Plan and
the Measures for Water Conservation Management , improved the recycling efficiency of water resources, and
Xiangtan Steel was recognized as an Advanced Collective of the 2025 China Water Saving Awards by achieved water savings.
the Ministry of Water Resources
romoting source-side water conservation through technological upgrading. VAMA invested in and optimized
P
Xiangtan Steel, LY Steel, and HYST all continued to retain the title of "Water-Saving Enterprise" in the make-up supply of demineralized water for the clean circulating water system, increasing the concentration
Hunan Province ratio from 3.0 to 4.0 and reducing the annual make-up volume of freshwater for the clean circulating water
system by 172,800 m3.
dvancing condensate recovery and reuse. VAMA transformed the steam condensate generated in the pickle
A
line tandem cold mill, galvanizing, and continuous annealing workshops from direct discharge to recovery
and reuse. In the pickle line tandem cold mill, the condensate was used for emulsion preparation, while in
the galvanizing and continuous annealing workshops it was used in the degreasing section, thereby reducing
the make-up demand for demineralized water. In 2025, VAMA recovered and reused 10,000 m 3 of steam
condensate, reducing freshwater make-up by 13,000 m3.
Water Withdrawal Management
The Company established a scientific management and
control system for water withdrawal and strengthened
Case HYST | Multi-Dimensional Technical Upgrades Enabled Efficient Water Resource Management
water withdrawal management during special periods.
In response to difficulties in water withdrawal during
dry seasons, the Company formulated dedicated water HYST completed the renovation of multiple above-ground pipeline sections, including the main inlet water pipe
withdrawal plans, reduced freshwater intake through for the southern pressurized system and the main water pipe at the ironmaking plant, with a cumulative upgraded
comprehensive internal water management and recycling,
length of more than 2,300 meters, reducing pipeline leakage. HYST also optimized its wastewater reuse system
and ensured that neither the quality nor the quantity
by overhauling key equipment and adding overflow alarms, which improved the production capacity of reused
of river water was adversely affected. In addition, the Water Conservation Management
Company systematically identified short-, medium-, water. In addition, liquid-level alarms were installed for water storage tanks, and operators were trained in refined
and long-term risks and opportunities in water resource control practices. Following the implementation of these measures, monthly water savings reached nearly 4,000
The Company improved the efficiency of wastewater reuse. In
management, formulated targeted response strategies, tonnes, freshwater consumption in ironmaking decreased by 20,000 tonnes year on year, and after October water
safeguarded the stability of water withdrawal through
for separating rainwater and sewage, enabling the annual loss stabilized at around 5.5%, demonstrating significant water-saving results.
measures such as water source expansion and technology
recovery and reuse of more than 20,000 m3 of rainwater. The
deployment, and promoted the transformation of water
Company also treated reclaimed water reuse as a core alternative
resource management toward a value-centered approach.
water source by establishing dedicated treatment facilities
to enable full treatment and large-scale reuse of industrial
wastewater, substantially increasing the recycling rate of water
resources.
The Company further promoted the conversion of once-through
process water systems into recirculating systems, applied
high-density tank wastewater treatment technology, and
addressed leakage, seepage, dripping, or overflow issues. Online
monitoring equipment was added at key nodes and connected
to the platform to enable real-time monitoring of wastewater
discharge and abnormality alerts, enhancing water conservation
management and control through digital solutions.
Connection works for the renovation of the main inlet water Renovation of the fire water system for the main water pipe
pipe for the southern pressurized system supplying the ironmaking plant
Delivering Targeted and Effective Pollution Prevention and Control Focus on three core measures, namely upgrading sinter machine bodies for energy efficiency and
Sintering
In the course of production and operations, Valin Steel strictly complied with national laws and regulations, regional environmental performance, advancing flue gas desulfurization and denitrification, and strengthening
Process
emissions policies, and industry standards, including the Law of the People's Republic of China on the Prevention and control of fugitive emissions from materials; complete full-process retrofits of sinter machines;
Control of Atmospheric Pollution, the Law of the People's Republic of China on the Prevention and Control of Water implement dedicated sintering flue gas desulfurization and denitrification projects; construct enclosed
Pollution, the Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid facilities for integrated sinter raw material yards; and ensure organized emissions consistently meet
Waste, the Law of the People's Republic of China on the Prevention and Control of Noise Pollution, and the Law of the ultra-low emission standards while achieving full control of fugitive emissions.
People's Republic of China on Prevention and Control of Soil Pollution . The Company also formulated a series of internal
policies, including procedures for wastewater pollution prevention and control and air pollution prevention and control,
LY Steel | Advancing Ultra-Low Emissions Through Environmental Upgrading
and has progressively established a pollution prevention and control system covering the entire process. Case
of Sinter Machines
The Company carried out self-monitoring of the environment in strict accordance with high standards. Its subsidiaries
Since 2023, LY Steel has invested a cumulative total of more than RMB 5 billion in a three-year action
prepared and implemented monitoring plans and engaged qualified institutions to conduct monitoring of exhaust gas,
plan for ultra-low emissions retrofits. In May 2025, with the commissioning for trial operation of the
wastewater, and boundary noise to ensure that pollutant emissions met applicable standards. At the same time, in
energy-saving and environmental upgrading projects for the 130 m2 and 180 m2 sinter machines,
accordance with the Measures for Self-Monitoring and Information Disclosure by State Key Monitored Enterprises , the
LY Steel's ultra-low emissions retrofit program reached a milestone, marking the completion of a
Company disclosed monitoring data and maintained communication with environmental protection authorities to ensure
series of organized emissions control projects represented by the environmental upgrading of its
that data remained stable and compliant.
large sinter machines.
Ultra-Low Emissions Retrofit The sinter machine retrofit project enabled all organized and fugitive emissions to meet ultra-low
emissions standards on a stable basis. Compared with the older sinter facilities, the new sinter
In response to the national campaign for air pollution prevention and control, the Company invested a cumulative total
facilities are expected to reduce annual emissions of particulate matter, sulfur dioxide, and nitrogen
of nearly RMB 15 billion over six consecutive years to comprehensively advance ultra-low emissions retrofits across key
oxides by more than 2,000 tonnes, representing a reduction of more than 75%, and making an
production processes. In 2025, the Company successfully completed the construction of more than 80 retrofit projects.
important contribution to regional air quality improvement.
Benchmarking against the standards applicable to enterprises with Class A environmental performance, the Company
completed flue gas desulfurization and denitrification, upgraded and built dust removal systems, and carried out enclosed
retrofits of raw material yards, stockyards, and conveyor corridors.
Following these retrofits, atmospheric pollutant emissions were substantially reduced, the ultra-low emissions targets were
fully achieved, and pollution control results were significant.
Key Performance
All four of the Company's steel production bases—Yangchun New Steel, Xiangtan Steel, LY Steel, and
HYST—achieved full-process ultra-low emissions and were publicly announced by the China Iron and Steel
Association
Panoramic view of the 416 m2 sinter machine
Flue gas desulfurization and denitrification retrofit of the 360 m2 sinter machine
Ironmaking Combine source reduction with end-of-pipe treatment; implementing targeted desulfurization of Raw Material Implement fully enclosed retrofits for raw material yards and stockyards; construct fully enclosed
blast furnace hot stoves and deep desulfurization of blast furnace gas; optimizing the mix of raw
and Storage and conveyor corridors; advance enclosed retrofits for material transportation processes; implement
materials and fuels to reduce sulfur content; reducing the generation of nitrogen oxides and sulfur
Steelmaking
dedicated dust suppression and dust reduction projects; and achieve full-chain control of fugitive
Transportation
Processes
compounds at source; achieving full control of atmospheric pollutant emissions from ironmaking dust emissions.
processes.
Upgrade dust removal systems; implementing dedicated dust removal projects for steelmaking HYST | Ultra-Low Emissions Retrofit Supported "Enterprise-City Integration
Case
refining; fully upgrading existing dust removal facilities across metallurgical systems. and Green Development"
On December 18, 2025, HYST's full-process ultra-low emissions retrofit successfully passed
review and acceptance and was publicly announced on the website of the China Iron and Steel
Association, marking that HYST had achieved ultra-low emissions requirements across all
Yangchun New Steel | Entering a New Stage of Ultra-Low Emissions in processes and operating procedures. HYST invested a cumulative total of RMB 1.3 billion in a
Case
Metallurgical Processes Through "Source Control + Process Upgrading" series of ultra-low emissions retrofit projects, including enclosed retrofits for material storage
and transportation. As a result, pollutant emissions were reduced by nearly 70%, greatly
Yangchun New Steel has continued to deepen retrofits in improving the environment both within and around the plant.
its metallurgical processes and, since 2018, has invested
a cumulative total of more than RMB 1.5 billion in related
projects. The Company focused on optimizing the mix
of raw materials and fuels and substantially reducing
their sulfur content, while carrying out low-nitrogen Key Performance
combustion retrofits for blast furnace hot stoves to reduce
pollutant generation at source. At the same time, the Sulfur dioxide (SO2) emissions: 3,769 tonnes Particulate matter (PM) emissions: 9,545 tonnes
Company built efficient end-of-pipe treatment facilities, enabling both organized and fugitive
Nitrogen oxides (NOx) emissions: 9,111 tonnes
emissions from its metallurgical processes to meet ultra-low emissions standards.
Wastewater Pollution Prevention and Control
Carry out dedicated treatment of tail gas from phenol- and cyanide-containing wastewater; The Company has established a full-process and refined control system for wastewater management, spanning source
Coking construct tail gas collection projects; improve tail gas collection pipeline networks and treatment control at the production end, technological upgrading at the treatment end, real-time supervision at the monitoring
Process facilities; achieve comprehensive collection and centralized treatment of tail gas generated during end, and cascading recycling at the utilization end, enabling both efficient wastewater treatment and resource utilization.
coking; and eliminate fugitive tail gas emissions at source. In 2025, the Company's total wastewater pollutant discharges fully complied with all applicable total discharge control
requirements.
In the production process, the Company used dedicated pipelines to separately convey and treat wastewater from
Xiangtan Steel | Tail Gas Collection Retrofit for Phenol- and Cyanide-Containing
Case processes such as sintering, coking, cold rolling, and steel slag treatment, preventing cross-contamination at source.
Wastewater Contributed to Continued Improvement in Ambient Air Quality
For specific wastewater streams such as phenol- and cyanide-containing coking wastewater, the Company adopted the
Xiangtan Steel invested nearly RMB 6 billion in ultra-low emissions retrofits. All 139 air pollution A2O2 biochemical process combined with ozone-based advanced treatment. We also established integrated wastewater
prevention and control projects involving both organized and fugitive emissions were put treatment systems and cold-rolling wastewater treatment systems. Through a process route of physicochemical
into operation on schedule, and in November 2025 Xiangtan Steel successfully completed coagulation-sedimentation combined with sand filtration, the Company ensured that all categories of discharged
the public announcement process for full-process ultra-low emissions. As part of its ultra- wastewater met applicable standards.
low emissions retrofit program, Xiangtan Steel implemented a tail gas collection project for
phenol- and cyanide-containing wastewater in the
coking process, completing the installation of tail gas
collection pipeline networks and treatment facilities Key Performance
for the entire coking process. This enabled compliant
collection and treatment of the relevant tail gas, Wastewater discharge volume: 26,732,136 tonnes
resolved the issue of fugitive tail gas emissions in the
Chemical oxygen demand (COD) emissions: 282.65 tonnes
coking process, and further improved ambient air
quality in the surrounding steelmaking area. Ammonia nitrogen (NH3-N) emissions: 14.50 tonnes
Tail gas collection project for phenol- and
cyanide-containing wastewater
Closed-Loop Waste Management Circular Economy Practices
Adhering to the principles of reduction, harmlessness, and resource Key Performance Valin Steel has deeply embedded the concept of circular economy development into its operations, integrating efficient
utilization, the Company strictly complied with the Law of the People's resource utilization and the conversion of waste into reusable resources throughout the entire production process.
Republic of China on the Prevention and Control of Environmental Hazardous waste disposal
The Company has actively promoted the R&D and application of new technologies for the comprehensive utilization
Pollution by Solid Waste and implemented controls in accordance with volume165,494 tonnes of solid waste, established a development model featuring internal closed-loop resource recycling and coordinated
the Standard for Pollution Control on the Storage and Disposal Site for circulation across the external industrial chain, and advanced the cascading utilization of waste gas, waste heat, and
Solid waste utilization
General Industrial Solid Wastes and the Standard for Pollution Control on other resources generated at various stages of production. In doing so, the Company has built a circular economy chain of
Hazardous Waste Storage , ensuring that all solid waste was utilized and volume13,123,827 tonnes
"resources-products-waste-recycled resources", maximized resource efficiency, and supported the green and low-carbon
disposed of in a safe and compliant manner. transformation of the steel industry.
The Company has established a scientific and well-developed solid waste management system. On the one hand, it
has strengthened full-process control over solid waste disposal; on the other hand, it has vigorously advanced resource
recycling models. Through process optimization and technological upgrading, the Company has improved the efficiency of
solid waste recovery and utilization and promoted the conversion of industrial solid waste into recyclable resources.
For hazardous waste, the Company formulated the Hazardous Waste Management Plan , completed filing with local
environmental protection authorities in a timely manner in strict accordance with national environmental requirements,
and prepared emergency response plans for hazardous waste while regularly organizing drills to strengthen its capability to
Yangchun New Steel
handle emergency situations involving hazardous waste. The Company has established compliant hazardous waste storage Xiangtan Steel Introduce advanced treatment
LY Steel
sites and achieved classified storage and standardized management of hazardous waste. Hazardous waste generated
technologies, expand the
during production, such as waste oil and spent lead-acid batteries, is entirely entrusted to qualified professional entities for Establish a recycling resources company Invest RMB 130 million in the recovery and utilization of
compliant recovery, utilization, or disposal, ensuring full life-cycle control of hazardous waste with no blind spots. to centralize scrap steel operations and environmental upgrade project waste gas, channel surplus
strengthen in-house processing and for converter steel slag, raise blast furnace gas into power
Clean Transportation Upgrades handling of internally generated scrap annual treatment capacity to generation, and improve the
Valin Steel advanced its clean transportation upgrade through a multi-pronged strategy. This included optimizing 2 million tonnes, and expand combined utilization of waste
Commission the roller-press hot-stifling
logistics routes, increasing the share of waterway transportation, and phasing out outdated vehicles and non-road mobile utilization channels through gas and waste heat through
project, and continue advancing the downstream processing of slag newly installed gas engines
machinery that failed to meet ultra-low emission standards. Concurrently, the company renewed its fleet with new energy
recycling project for desulfurization powder
and China VI-compliant vehicles, established access control and monitoring systems, and worked towards building a
waste liquor
clean transportation logistics network.
Xiangtan Steel HYST
Accelerate the replacement of in-plant transport vehicles Fully enclose material storage and handling areas, Key Performance
with new energy vehicles, phase out non-road mobile and upgrade associated transport
Comprehensive utilization rate of solid waste: above 98%
machinery below China III standards, and maintain the
Conduct clean-transport training via third-party
share of clean transportation at above 80% Comprehensive utilization rate of steel slag: 100%
specialists
Comprehensive utilization rate of dust and sludge: 100%
LY Steel Yangchun New Steel
Procure a cumulative total of 121 new energy and China Increase the share of rail transport in inbound raw
VI-compliant vehicles, and raise the share of clean material deliveries and outbound finished product
transportation by rail and new energy vehicles to nearly shipments, while replacing in-plant vehicles and
models or equipment meeting more stringent
Advance in-plant clean transportation upgrades, and emissions standards
use suction and discharge vehicles for the transport of
all types of dust Integrate weighing and inspection systems, video
surveillance, and access control systems to enable
end-to-end monitoring of vehicles entering and
leaving the plant
Ecological Environment and Biodiversity Protection
Green and Eco-Friendly Operations
Before project construction, the Company strictly assessed potential impacts on the ecological environment and avoided
ecologically fragile areas. During project operation, the Company continuously carried out monitoring of the surrounding
Valin Steel has unswervingly advanced ecological civilization development, protected the ecological environment
ecological environment to ensure that production activities did not damage the regional ecology, while steadily improving
and biodiversity in an all-round manner, and promoted the deep integration of modern eco-steel cities with urban
regional environmental quality and laying a solid foundation for ecological protection.
development. Xiangtan Steel, VAMA, and Yangchun New Steel were selected as national Green Factories, while LY Steel
and HYST were selected as provincial Green Factories in Hunan Province. Yangchun New Steel was also awarded the title
The Company prepared science communication materials such as the World Environment Day – Biodiversity Knowledge
of National Environmentally Friendly Enterprise.
Bulletin and organized employees to participate in biodiversity protection training and practical activities. In plant
greening projects, the Company gave priority to native and locally adapted plant species and built diversified plant
communities to provide habitats for birds, insects, and other living organisms.
Improving the Plant Environment
With the goal of "enterprise-city integration", the Company continued to increase investment in improving the plant
environment and promoted the transformation of steelworks toward a greener and more livable environment through Xiangtan
measures such as road hardening, plant building beautification, and lighting upgrades.
LY Steel VAMA
Steel
Key Performance
Carry out discharge control Strictly protect the ecological environment Advance plant-wide greening up-
and water quality monitoring of the upstream drinking water source grades, raise green coverage to over
The Company implemented nearly 70 greening, beautification, and lighting enhancement projects, added
along the Xiangjiang River protection area of the Lianshui River within 90%, and create a favorable habitat
approximately 100,000 m2 of green area, and raised plant-wide green coverage to over 40%.
(Xiangtan section) within the the plant area, rigorously implement attracting as many as 56 species of
Xiangtan Steel continued to retain its designation as a National AAA Tourist Attraction, further plant area to ensure com- environmental impact assessment birds and reptiles, including hares,
advancing the deep integration of a modern eco-steel city with urban development. pliance with government requirements for construction projects, pheasants, and weasels
regulatory requirements and strengthen environmental control
over the riverfront section involved in the Carry out emergency feeding measures
Leverage activities such as LY Steel high-end home appliance sheet during winter when wild animals face
World Environment Day on project difficulty foraging, and place corn and
June 5 to promote knowledge other food at designated locations in
of wildlife protection and raise Implement greening works for steel slag areas frequently visited by wildlife
public awareness hills, carry out ecological restoration of
exposed slopes, and restore a cumulative
area of approximately 10,000 m2
Xiangtan Steel tree-planting volunteer activity on Arbor Day Yangchun New Steel plant environment improvement campaign
Exploring a green path toward high-quality and sustainable development for steel plants
Egrets were seen visiting the HYST plant
S ocial
Putting Strivers First
Empowering the Co-
Creation of Social Value
Valin Steel has always adhered to the value orientation of "putting
strivers first". Anchored in work safety and committed to excellence in
quality, the Company has built an ecosystem that supports employee
growth, earns customer trust, promotes industrial collaboration,
and delivers win-win outcomes across the supply chain. As a state-
owned enterprise, the Company has also actively contributed to
rural revitalization and community development, working with
stakeholders to create integrated value and share the benefits of
development through collective effort.
Responded to SDGs
Strengthening Quality Management Key Performance
Valin Steel strictly complied with laws and regulations including the Product Quality Law of the People's Republic of China and the During the reporting period, supported by the full-process quality control system, all of the Company's products
Standardization Law of the People's Republic of China , and established a sound quality management system and process control strictly complied with applicable health and safety standards and industry certification requirements. The percentage
documentation. The Company continued to strengthen quality control over raw and auxiliary materials and promoted full coverage of products withdrawn or recalled for health and safety reasons was 0% .
of internal control standards. At the same time, the Company vigorously advanced intelligent quality control, established a quality
data monitoring platform, deepened the digitalization of quality management, and built a market-driven smart industrial internet The Company received 22 awards for the physical quality of metallurgical products, including two products—cold-
platform covering lean production and continuous quality improvement across the full process, supporting quality enhancement and rolled hot-forming steel sheet and strip, and weather-resistant structural steel for bridges—that were designated as
transformation-driven development. "Golden Cup Premium Products".
Quality System
Quality Improvement
The Company firmly believes that quality is the lifeline of the enterprise. By continuously improving product quality and expanding
The Company has established a full-chain quality management network covering raw material procurement, production and
the scope of certifications, the Company has established a quality management system covering the entire steel production process,
manufacturing, and customer service, enabling continuous quality improvement. The Company and its subsidiaries have established
ensuring that product quality continues to meet industry standards and customer expectations. The Company has obtained a number
a comprehensive set of quality inspection and control systems across the steel industry chain. These systems, which include the
of authoritative certifications, including ISO 9001 Quality Management System Certification and IATF 16949 Automotive Quality
Measures for the Quality Management of Bulk Raw Materials , the Measures for the Management of Purchased Scrap Steel , the
Management System Certification. The coverage and certification levels of the Company's quality management systems are fully
Procedures for Product Testing and Release , and the Measures for Process Monitoring Management, ensure that all quality activities
aligned with internationally advanced standards, laying a solid foundation for further expansion in domestic and overseas markets.
are governed by clear rules and procedures.
Major system and qualification certifications obtained by the Company Through diversified approaches such as project-based problem solving, dedicated quality optimization initiatives, quality culture
training, and quality case sharing, the subsidiaries not only improved product quality but also fostered quality awareness among all
employees, comprehensively reinforcing the Company's quality management capabilities.
ISO 9001 Quality Management System Certification GJB 9001C Quality Management System Certification
ISO 10012 Measurement Management System JIS Quality Management System Certification
Certification EU CE Certification
Certifications from ten major international Case VAMA | Full-Process Quality Risk Management
DNV, SCS, JIS, AD2000, COC, API 5CT, API 5L, API 5DP,
classification societies and other certifications "Four-Zero" Management Goals
IATF 16949 Automotive Quality Management System
Certification Based on its assessment of industry trends and internal
capabilities, the production bases under VAMA have
zero zero zero zero
established the "Four-Zero" management goals. These
product equipment inventory in safety
goals are centered on achieving zero product defects, zero
The Company has established a customer-oriented quality management system and deeply embedded the concept of "zero defects" defects failures delivery incidents
equipment failures, zero inventory in delivery, and zero safety
throughout full-process management. By implementing zero-defect projects, "open competition for selecting the best candidates" incidents. A scientific control and improvement mechanism
projects, and quality improvement projects, the Company has systematically promoted the upgrading of product quality. Guided has also been put in place to support these objectives.
by the principles of prioritizing the quality of steel grades and optimizing alignment with customer standards, and with quality
performance as the key orientation, the Company implemented performance mechanisms such as top executive accountability for "Three Major Improvement Mechanisms"
quality and economic responsibility systems, ensuring the efficient operation of the quality management system.
Xiangtan Steel LY Steel HYST VAMA Yangchun New Steel Cross-Industry--Chain Collaborative Nurturing Talent and a Quality Data-Driven Knowledge
Innovation Culture Management
We have established i ndustry- We launched the"VAMA Certified We have systematically consoli-
Xiangtan Steel obtained LY Steel's galvanized HYST obtained VAMA advanced Yangchun New university-research partnershipswith Internal Trainer" program to datedproduction data, optimization
PED certification for 39 products obtained QatarEnergy supplier carbon verification Steel completed leading automakers, universities, and develop cross-functional talentpro- cases, and failure analysesto build
ASTM-grade clad steel internationally qualification for and published China Customs AEO institutes to jointly address challenges ficient in both steelmaking processes the corporate "Lessons Learned
plates, including the recognized SCS Recycled structural tubes and Environmental Product Advanced Certification, like enhancing the formability of high- and business operations. Simul- Repository". This is not merely a
SA516 and S355 series, Content Certification line pipes, and passed Declarations (EPDs) accelerated Cares, strength steel sheets. This integrated taneously, through initiatives like database, but an expert system
securing qualification ("Kite Mark"), and TotalEnergies certificate on the international Ecars, and EPD R&D model, covering the "material- the"Improvement Star Award" capable of providing intelligent
for exports to the achieved a 50% scrap extension review and EPD platform, fully certification, and part-vehicle"chain, ensures our quality and company-wide continuous solution recommendations for new
European Union. content ratio in converter- premium connection supporting domestic initiated product export enhancements are continuously improvement campaigns, we have projects and new issues, enabling
process galvanized audit. automakers' green steel activities. synchronized withend-market needs. ingrained a zero-defect mindset in valuable experience to be preserved
products, the first such initiatives. every employee. and reused.
achievement in China.
Reinforcing Safety Responsibilities
Valin Steel regards employee safety and work safety as top priorities. The Company has strengthened the implementation of safety
responsibilities, continuously improved its safety control system, enhanced its safety supervision and emergency management
capabilities, and advanced safety education, training, and safety culture development, further consolidating the foundation for safe
development.
Strengthening Safety Management
Valin Steel strictly complied with laws and regulations including the Work Safety Law of the People's Republic of China , the Law of the
People's Republic of China on the Prevention and Control of Occupational Diseases , and the Hunan Province Work Safety Regulations .
VAMA, the joint venture, has been recognized as a benchmark within ArcelorMittal's global operations and was honored with the group's 2025
Adhering to the management principles of "leadership engagement, line accountability, and full employee participation", the
Operational Excellence Award
Company effectively fulfilled its primary responsibility for work safety.
Case LY Steel | Digital and Intelligent Technologies Empowered Quality Improvement Safety Management Structure
The Company established a Work Safety Management Committee under the direct leadership of the Chairman, with participation
LY Steel established a full-process quality control platform to enable a complete functional chain covering the collection from relevant functional departments and subsidiaries, forming a work safety management structure featuring vertical integration and
of product quality and process parameters across the entire process from steelmaking to rolling, pre-event prediction, in- horizontal coordination. The Company signed Work Safety Target Responsibility Statements with each subsidiary and implemented
process monitoring and judgment, and post-event traceability and analysis. monthly assessments to effectively enforce the work safety responsibility system.
Quality Intelligence Control Center (Phase I) project was completed. The Company established and improved the evaluation mechanism for work safety responsibilities, advanced the Work Safety
A cumulative total of 22,530 data collection points, 45 production line monitoring screens, and 107 key process parameters Management Committee's paired-point working mechanism, and strengthened supervision, guidance, and support for work safety
were established, enabling the production, quality aggregation, and categorization of 147 data tables across the Level 2 system, and occupational health at secondary-level units. At the same time, the Company implemented grid-based safety management to
downstream steel manufacturing management system, integrated business platform, and the full production process. ensure that safety responsibilities were assigned down to the smallest operational unit.
LY Steel further improved quality data traceability and data analysis reports covering desulfurization, converter operations,
argon station operations, refining, continuous casting, hot rolling, and cold rolling. Customized reporting functions were also
enabled, allowing process data to be selected based on specific data requirements for the preparation of analytical reports.
Work Safety Management Framework
Company Office
of Valin Steel
Quality Training
Company Work Safety Committee Strategic Development Department
Director: Chairman
To standardize operating procedures and strengthen employees' quality awareness, the Company formulated annual quality training Finance Department Functional
plans and tasks, and carried out quality system training for key quality-related positions and personnel. By inviting external experts departments
Office of the Work Safety Committee
to deliver training, conducting benchmarking studies, participating in professional academic exchanges, and organizing quality Securities Department
Director: Vice President
knowledge competitions, the Company comprehensively enhanced quality management awareness across the workforce.
Deputy Director: Head of the Safety and Audit and Risk Control Department
Environmental Protection Department (Legal Affairs Department)
Product Experts from Human Resources and Corporate
certification bodies external research
Internal Management Department
were invited to institutions
presentations were
deliver quality were engaged to
organized on cases
briefings provide training
involving quality Decision-Making Level
objections
Work Safety Committees of Secondary
Units
Safety and Environmental Protection Responsible functional
Department department
Execution Level
Safety Management Measures Emergency Management and Safety Training
Adopt a comprehensive protection strategy combining "human defense, technical defense, and management defense" The Company continued to improve its emergency response management system and capability-building system. We formulated
the Emergency Response Plan for Production Safety Accidents and completed filing with the provincial emergency management
authority, clearly specifying key elements such as emergency response organizations and responsibilities, response procedures,
and emergency response processes. To enhance its capability to respond to accidents, the Company organized emergency drills
and training every year covering a range of potential accident scenarios, including confined spaces, gas-related incidents, and
heatstroke.
Enhancing intrinsic safety Strengthening Precise Risk Control Advancing intelligent supervision
To strengthen employees' safety awareness and improve their safety knowledge, the Company formulated an annual safety
The Company fully allocated and The Company deepened the identification The Company accelerated the
training plan to ensure that all units fully implemented the "five in place" requirements with respect to safety investment, safety
utilized work safety expenses, and remediation of hidden hazards, imple- development of its smart safety
training, safety management, emergency rescue, and assessment. The Company also focused on building a long-term mechanism
continued to invest in automation mented a reward mechanism for hazard management system and adopted a
for work safety and continued to carry out warning education based on safety accidents, with the aim of reducing and preventing
and intelligent equipment upgrades, reporting, and encouraged participation from model combining online and offline
major safety accidents.
and enclosed operating areas to all employees in hazard identification efforts. oversight. Through daily inspections
reduce risks at source. The Company The Company also strengthened hierarchical by safety coordinators, special
also comprehensively implemented risk classification and control, conducted inspections, and video spot checks, Enhancing Safety Awareness
standardized material storage and and refined the four-level risk control checklist, loop management mechanism compliant operations, capability enhancement,
safety signage, and fostered a safe advancing precision in risk management. covering inspection, recording, and responsibility implementation, the Participation in Work Safety Training 252,940 person-times
and orderly working environment. Daily inspections and monthly specialized rectification, and review, ensuring a Com p a ny s ys tem a tica l l y ca rried out
categorized, specialized, and tiered safety Duration of Work Safety Training 197,428 hours
remediation efforts were implemented for 100% rectification rate for identified
critical areas and during specific periods. hazards. education and training. Through systematic Average Duration of Safety Training per Employee 8.54 hours
a nd ta rgeted tra ining, the Com p a ny
continuously improved the safety competence
Key Performance of all employees.
During the reporting period, the Company continued to maintain a strong focus on work safety, with particular emphasis
on hazard identification and remediation in areas such as construction projects, hazardous chemicals, and fire safety,
and overall work safety remained stable. Certification
Special operations
Work safety investment during the year: RMB 232.42 million; Work safety investment as a percentage of operating training for safety Safety awareness
training for special
management training
revenue: 0.19% equipment
qualifications
Number of work-related fatalities: 1, Work-related fatalities per RMB billion of revenue: 0.00008
Number of major and above accidents: 0; Fatality rate from major and above accidents: 0%
Safety training was provided
Special drills were conducted for special equipment accidents for line managers Spot checks on safety knowledge were conducted
Youth-themed activities were
Fire emergency drills were carried out organized for Work Safety Month Safety warning education sessions were held
Strengthening Safety Management
Optimizing Customer Service
for Related Parties Standardizing qualification
For contractors and other related parties, review for related parties Valin Steel adheres to a customer-centric approach and has developed an integrated service system guided by customer needs and
the Company formulated dedicated systems Strictly reviewing the safety integrating production, sales, R&D, and application. Through intelligent manufacturing and a digital system integrating sales, R&D,
including the Related Party Management qualifications and professional production, and delivery, the Company has comprehensively optimized scheduling, production, quality, and logistics to ensure precise
Procedures , the Measures for the Safety capabilities of related parties to and efficient product delivery. At the same time, the Company carries out R&D and improvement activities based on market and
Management of Labor Employment , ensure that they possess lawful and customer needs, while its 24-hour customer service center and EVI/CTS teams provide rapid response and support throughout the
and the Safety Management System for compliant operating qualifications entire process, continuously enhancing customer experience and service value.
Outsourced Projects and Outsourced Labor .
From the perspectives of implementing Customer Information Security and Privacy Protection
primary responsibility for work safety,
The Company attaches great importance to the protection of customers'
building management systems, reviewing
intellectual property rights and trade secrets. By formulating dedicated
qualifications, managing assessments,
Strengthening safety Reinforcing on-site Key Performance
confidentiality measures and clauses and continuously improving its
maintaining records and documentation,
training and education safety supervision
confidentiality management system, the Company ensures that customer
and providing safety and technical training, Providing systematic safety Assigning dedicated personnel
information and trade secrets are subject to strict oversight and compliant use. Number of information security
training for related party to oversee related party
the Company comprehensively strengthened breach incidents: 0
personnel to enhance their operations on site to ensure The Company has established a comprehensive information management
safety management over related parties.
safety awareness and improve the effective implementation system covering business processes, customer information, and cooperation
arrangements. The Company implements registration and full-process Number of customer privacy breach
their safety skills of all safety measures
traceability management for all types of documents and materials; applies graded incidents: 0
authorization and confidential access control to customer information; and signs
legally binding confidentiality agreements with customers to clearly define liability
Prioritizing Occupational Health for breach, systematically preventing the risk of information leakage.
The Company has continued to improve its occupational health and safety
management system. Its subsidiaries, including Xiangtan Steel, LY Steel, HYST, VAMA,
and Yangchun New Steel, have all obtained GB/T 45001 or GB/T 28001 occupational Key Performance Xiangtan Steel has continuously improved its customer privacy protection system. In 2025,
health and safety management system certification. The Company regularly the Data Guardian System (DGS) was launched to provide enhanced protection for customer-
organized testing for occupational hazard factors. For identified occupational hazards related information, and no customer privacy breaches occurred during the year. In terms of data
Health examination coverage
arising in the production process—such as high temperatures, dust, noise, carbon security management, the Company further improved its data security management framework.
rate: 100%
monoxide, benzene, and coke oven fugitive emissions—the Company adopted a In accordance with the Data Security Law of the People's Republic of China and the Measures
range of measures to effectively safeguard employees' occupational health and for Data Security Management in the Industry and Information Technology Sector (For Trial
continuously improve the management of occupational health and safety. Implementation) , Xiangtan Steel formulated the Data Security Management System, clarifying
Xiangtan Steel
requirements in areas including the responsibilities of various entities, system development,
data classification and grading management, full life-cycle data security management, and data
The Company strictly followed the requirements of the "one list and four mechanisms" approach for addressing security operation and maintenance.
major hidden risks of accidents, with a focus on targeted remediation in key areas such as hazardous chemicals, high-
temperature molten metal, gas-related hazards, and confined spaces, effectively safeguarding the occupational safety of
frontline production employees.
HYST coordinated the implementation of both institutional and technical measures, forming
a dual protection mechanism combining institutional controls and technical safeguards.
The Company further deepened the Ankang Cup competition and carried out contests on safety standardization and
A closed-loop management system was established around data security, supported by
benchmark safety teams to strengthen safety awareness at the frontline team level.
improved network management rules, including those relating to data and information. These
rules clearly define requirements for data classification and grading, access authorization, and
full life-cycle management, providing an institutional basis for data security management.
Occupational hazard notice boards were installed, regular training on occupational disease prevention was organized,
At the technical protection level, HYST advanced the full deployment of IMC and endpoint
and occupational health examinations were carried out for newly hired and departing employees, ensuring effective
protection software, enabling unified management and security monitoring of terminal
screening for occupational diseases.
HYST
devices. The Data Guardian System continued to operate and encrypted core internal file data,
reducing the risk of data leakage. At the same time, HYST further optimized network isolation
The Company also established occupational health surveillance files for employees and organized occupational health by dividing networks into different zones based on business scenarios and setting access
examinations, special examinations for female employees, and mental health counseling in stages. boundaries to prevent unauthorized penetration between networks at different levels.
Responsible Marketing
Case HYST | Always Putting Customer Service First
The Company upholds the principles of responsible marketing, fully complies with laws and regulations such as the Advertising Law
of the People's Republic of China and the Law of the People's Republic of China on the Protection of Consumer Rights and Interests ,
and has established and improved responsible marketing management systems and internal compliance guidelines for publicity and HYST has established a comprehensive and highly efficient marketing and service system. In terms of service response,
communications. The Company standardizes advertising and promotional activities, provides customers with complete, accurate, domestic sales personnel remained stationed on the front lines with customers, conducted regular visits, and responded
objective, and readily understandable information, and continuously strengthens compliance control across the entire marketing rapidly to customer needs. In particular, for oilfield customers, HYST provided wellsite support for a cumulative total of 620
value chain, including marketing, pricing, channels, and operations. During the reporting period, the Company was not involved in any wells during the year, winning strong customer recognition through full-process technical support. In terms of collaborative
litigation or penalties relating to responsible marketing. mechanisms, HYST fully leveraged the role of its IPD teams to effectively cover the entire pre-sales and in-sales cycle. In terms
of digital enablement, HYST continuously optimized its marketing and service platform, enabling real-time contract progress
The Company remains committed to providing customers with transparent product information and professional technical support,
inquiries and online issuance of invoices and quality certificates, greatly improving service convenience and significantly
helping them understand product performance characteristics as well as methods of use, maintenance, and servicing. The Company
enhancing customer experience and satisfaction.
also organized technical seminars and similar activities to improve customers' understanding and application of customized products.
Enhancing After-Sales Service
Maintaining Customer Relationships
The Company formulated the Product Service Management Procedures and the Measures for the Management of Quality Objections
for Shipped Products to standardize services across the entire process, including pre-sales, in-sales, and after-sales. The sales The Company consistently places customer needs first and has formulated
department uniformly receives customer complaints or quality objections submitted through various channels and communicates dedicated systems such as the Customer Satisfaction Measurement
them to the relevant internal units in the form of reports, which then complete rectification and handling in a timely manner in Management Procedures and the Management System for Monitoring
accordance with established procedures. and Measuring Customer Satisfaction to more effectively obtain customer
satisfaction data and feedback on products and services. The Company
Each subsidiary attaches great importance to service capability development and has established sound and efficient customer
organized its subsidiaries to carry out systematic customer satisfaction
feedback mechanisms to obtain customer evaluations and suggestions regarding product quality and service satisfaction in a timely
evaluations, using quantified results to identify service shortcomings more
manner. Through continuous service skills training and optimization of service workflows, the Company has promoted coordinated
directly and implement targeted improvements, steadily enhancing customer
responses among multiple departments, such as Technology, Production, and Quality.
satisfaction.
The Company pays close attention to customers' diverse needs and, based
Responding to Customer Feedback on factors such as customer type, cooperation arrangements, and specific
Formulating improvement measures Handling customer complaints Providing technical services requirements, designs tailored sales contracts that clearly define key terms
including product quality standards, delivery schedules, and after-sales
services. The Company also regularly organizes customer engagement
The Company systematically collects The Company further optimizes The Company provides customers
activities such as industry seminars and new product launch events to deepen
feedback through multiple channels, complaint handling procedures with training on product application
interaction, mutual trust, and win-win cooperation, and to work together with
including satisfaction surveys, complaint and response times, clearly defines and assists them in the proper
customers in advancing the sustainable development of the steel industry.
handling, and market research. The responsible persons and completion design and use of products. For key
Company promptly reviews and milestones at each stage, and ensures products, the Company provides
analyzes such information, accurately a rapid response to customer concerns pre-sales EVI support and trial die LY Steel | Holding an Annual Customer Conference to Broaden the Path of Mutually Beneficial
Case
identifies issues in products and relating to product quality. For major management, building a proactive Development
services, and develops corresponding complaints, the Company establishes service system that enables a more
On November 11, 2025, LY Steel invited leaders from customer organizations and business partners to attend its 2026 annual
improvement measures. At the same dedicated quality task forces to accurate understanding of product
customer conference, held under the theme "Intelligence Converges in Boao, Steel Opens a New Chapter." The conference
time, the Company regularly updates conduct in-depth investigations and application scenarios and customer
featured four technical exchange sessions dedicated to green, low-carbon, and high-strength steel and high-end hot-rolled
customers on the progress of rectification, root cause analyses, ensuring the quality requirements.
automotive products, high-strength galvanized and cold-rolled products, high-alloy steel and special wear- and corrosion-
continuously enhancing customer effective implementation of corrective
resistant steel, and high-end medium- and high-carbon products. These sessions provided detailed introductions to the
satisfaction. measures.
Company's product R&D and application achievements, helped the Company better understand market demand, and laid a
solid foundation for consolidating strategic trust with customers and expanding cooperation in high-end markets.
Case Xiangtan Steel | Responding Efficiently to Customer Needs and Honoring Six Commitments
Xiangtan Steel has consistently adhered to the business philosophy of being customer-centric and formulated the VAMA | Actively Expanding Emerging Customers and Continuously Improving Customer
Case
Procedures for Control of Product and Service Requirements and the Sales Service Management System to respond Satisfaction
efficiently to customer delivery and service needs and handle customer complaints promptly. Quality objections, metering
While continuing its strategic cooperation with core customers, VAMA actively expanded relationships with emerging
objections, and various service requests were all accepted and confirmed within one working day. Among them, the
partners and steadily increased business volumes with multiple new-energy and emerging automotive brands. In 2025,
average case closure cycle for quality objections was 15 days, metering objections were resolved within 5 days, and
VAMA signed more than 50 cooperation agreements in total. Its business covered the mid- to high-end automotive sheet
responses or solutions to customer complaints and service requests were provided within 2 working days. In addition,
market and included strategic customers in key categories such as automotive outer panels, high-strength steel, and hot
Xiangtan Steel introduced six service commitments covering delivery, billing, complaint handling, and digital services for all
forming, further enhancing customer satisfaction and loyalty.
customers, effectively safeguarding customer rights and interests.
Customer Service Performance Key Performance Selected Customers
Over the years, the Company has established leading
advantages in key market segments such as energy Customer satisfaction: 94.39%
and oil and gas, shipbuilding and offshore engineering,
Global customer servic
machinery and bridges, and automobiles and home
serving more than 150 Fortune Global 500 companies worldwide
Key Strategic Customers
appliances, driven by superior product performance,
stable quality control, and service experiences
International market presence
that exceed customer expectations. The Company
products exported to more than 60 countries and regions
has also built deep cooperative relationships with
benchmark customers in major industries. During the
Industry position
reporting period, the Company and its subsidiaries
leading market share in multiple downstream sectors
received multiple honors such as "Excellent Supplier"
"Outstanding Supplier" and "Strategic Partner" in Energy and Shipbuilding Offshore Automobiles
recognition of their strong performance, earning Power Engineering
widespread market acclaim and high recognition.
Construction High-rise Bridges Home Appliances
Machinery Buildings
Selected Honors and Awards
Excellent Supplier of China 2025 Outstanding Supplier of
Caterpillar Outstanding
National Chemical Engineering Zoomlion Engineering Crane
Supplier
Group Corporation Company
Xiangtan Steel
Xiangtan Steel LY Steel
Annual Quality Trusted Supplier 2024 Excellent Supplier of
(Small-Diameter Tubes) of the 725th Research Institute
Foshan Yonglitai Axle Co., Ltd.
Dongfang Boiler Co., Ltd., of China State Shipbuilding
Dongfang Electric Corporation Corporation Limited
HYST
HYST HYST
Annual Quality Trusted Supplier Excellent Supplier of Hunan
(Small-Diameter Tubes) of Excellent Supplier of Sany
Zoomlion Crawler Crane Co.,
Dongfang Boiler Co., Ltd., Heavy Lifting Business Un
Ltd.
Dongfang Electric Corporation HYST
HYST
HYST
Award of ArcelorMittal Jingxing Coal Coking Co., Ltd.
VAMA Yangchun New Steel
Sales personnel Procurement personnel Doctoral degree holders Master's degree holders
Growing Together with Employees 478 persons 313 persons 79 persons 791 persons
Valin Steel consistently implements the strategy of strengthening the enterprise through talent, upholds employee rights and interests, Administrative personnel Finance personnel
establishes and improves fair and equitable mechanisms for talent selection and appointment, and continues to foster an open,
inclusive, and diverse workplace environment. On the premise of safeguarding occupational health, the Company eenables every Bachelor's degree holders
employee to grow and advance in their career based on their own capabilities. Technical personnel
Safeguarding Employee Rights and Interests By educational
By professional
Compliant Employment, Equality and Inclusion
background
category
The Company has always regarded equal employment as a core principle of human resources management. The Company strictly
complies with laws and regulations including the Labor Law of the People's Republic of China , the Labor Contract Law of the People's
Republic of China , the Provisions on the Prohibition of Child Labor , and the Special Provisions on Labor Protection for Female
Employees . At the same time, the Company also refers to labor and human rights standards such as the Universal Declaration of
Human Rights and the International Labour Organization's Declaration on Fundamental Principles and Rights at Work, so that every
employee can create value in a sound workplace environment. Production personnel
Others
The Company adheres to the employment principle of "capability-based selection and equal opportunity", and does not differentiate
on the basis of ethnicity, race, gender, religious belief, age, disability, marital status, or social origin in recruitment, promotion, Compensation and Benefits
compensation and benefits, training, or career development. At the same time, the Company actively promotes the employment of
The Company continues to improve a compensation and benefits system aligned with its development strategy and closely linked
persons with disabilities and provides necessary labor protection and career development pathways for special groups. The Company
to value contribution. In strict compliance with national social security laws and regulations, the Company pays salaries in full and on
strictly implements national requirements prohibiting child labor, rigorously verifies identity information during hiring, and prohibits
time, makes full contributions to five types of social insurance and two housing-related funds, and ensures that statutory leave and
the employment of minors. The Company also firmly opposes all forms of forced labor and does not engage in, support, or tolerate any
overtime entitlements are implemented in accordance with the law, bringing together talent to support the Company's high-quality
forced employment practices involving violence, threats, or unlawful restriction of personal freedom, ensuring that all labor is based on
development.
the principle of mutual consent. During the reporting period, the Company did not record any incidents related to child labor, forced
labor, human trafficking, discrimination, or harassment.
The Company integrates the principles of diversity, equity, and inclusion into its talent strategy and systematically builds inclusive
management mechanisms around key areas such as recruitment and selection, performance evaluation, promotion and development,
and organizational culture. Through measures such as employee diversity training and enhanced employee care, the Company Enhanced benefits protection
continues to foster a cultural environment of "respecting differences, unlocking potential, and sharing growth." ive types of social insurance and
F
The Company has formulated internal policies relating to human rights, clarifying basic principles in areas such as employee two housing-related funds for all
management, the workplace environment, and benefits and treatment. In line with the requirements of the Responsible Business employees
Alliance (RBA), the Company has carried out human rights due diligence and continuously improved its human rights management
Tiered and differentiated incentives Diversified compensation structure
upplementary insurance, such as
S
anagement employees: tilting
M ages and bonuses, such as
W
processes. The Company has established communication mechanisms for employee grievances and complaints. Employees may enterprise annuity, supplementary
incentives toward high performers position-based salary, performance-
report issues they encounter, either by name or anonymously, to the trade union, the office, or the discipline inspection function medical insurance, home property
who achieve performance targets based salary, and special bonuses
by telephone, letter, email, face-to-face communication, or online channels. Relevant units keep employee information strictly insurance, and personal accident
confidential. At the same time, through internal training and communication initiatives, the Company regularly provides all employees echnical employees: tilting
T arious allowances and subsidies,
V
insurance
with training on human rights and labor rights and interests, enhancing their awareness and capability for self-protection. incentives toward innovative talent such as position allowance,
enefits programs, such as regular
B
rontline employees: tilting
F professional title allowance, housing
health examinations, free working
incentives toward production roles subsidy, and settling-in allowance
Total number of employees 23,130 persons Female employees 3,195 persons meals, and dedicated parking areas
that are hard, dirty, hazardous, or Medium- and long-term incentives
eave system, including statutory
L
physically demanding erm-based incentives, among
T
Ethnic minority employees 479 persons Employees with disabilities 304 persons holidays, weekends, paid leave,
others
home leave, recuperation leave,
childcare leave, and other leave
entitlements
Percentage of Labor contract Percentage of ethnic Percentage of employees
female employees signing rate minority employees with disabilities
Key Performance
Social insurance coverage rate: 100% Average paid leave per employee: 10.42 days
Employee Satisfaction Surveys and Continuous Improvement
Case Xiangtan Steel | Building a Tailored Compensation System
Regard employee satisfaction as an important gauge of management effectiveness and organizational health; establish an annual
employee satisfaction survey mechanism; conduct, in principle, one survey each year through a combination of anonymous online
Xiangtan Steel followed the principle of linking compensation levels to operating performance and established a questionnaires and offline forums and interviews; capture employee needs with greater precision; and drive continuous management
differentiated and tailored compensation system. For chief-level core talent, Xiangtan Steel implemented an annual salary improvement.
system. For urgently needed talent introduced from outside, Xiangtan Steel adopted an agreed salary arrangement. For
Accelerate the development of the employee satisfaction and engagement survey system; enable online data collection, automated
technical and skilled personnel, Xiangtan Steel established project-based incentives for tackling key technical challenges.
analysis, and closed-loop rectification; improve the workplace experience through a normalized and digitalized survey mechanism;
Employees who won various competitions were granted additional rewards of up to RMB 50,000, and employees in
and enhance employees' sense of belonging, fulfillment, and well-being.
designated positions who obtained professional qualification certificates received allowances, continuously encouraging
employees to enhance their professional capabilities.
Case LY Steel | Improving Employee Satisfaction
Case VAMA | Innovating a Dual-Track Performance Incentive System
LY Steel surveyed employee perceptions in areas including corporate culture, learning, working and living environment,
VAMA directly linked its incentive mechanisms to employees' performance-based pay, year-end bonuses, and other direct attendance management, rest and leave arrangements, occupational safety and health, labor protection measures,
remuneration, with coverage extending to all employees. Project-based incentives focused on four core areas—sales growth, compensation and income, benefits, and career development pathways. In 2025, LY Steel's employee satisfaction score
inventory control, equipment stability, and delivery assurance. VAMA also established dedicated rewards and granted flexible reached 83.41, representing an increase of 0.61 points over the previous year.
bonuses based on project milestones, creating a long-term incentive model under which all employees share responsibility
for strategic goals while key initiatives deliver targeted breakthroughs.
Democratic Management Empowering Employee Growth
Valin Steel has continuously advanced democratic management and improved an institutional system for employee participation
Improving the Talent System
centered on the employee representative congress. The Company regularly convenes employee representative congresses, carries
out collective consultation and employee representative inspections in a standardized manner, and extensively listens to employees' The Company has built a multi-dimensional talent system and formulated the Human Resources Development Plan during the 15th
opinions and suggestions on corporate development, production and operations, and the protection of rights and interests. The Five-Year period , using institutional innovation to strengthen the foundation for stable employment. In 2025, the Company recruited
Company also strictly implements the system of open factory affairs, and discloses matters involving employees' vital interests and 1,053 new employees through campus recruitment, social recruitment, and the introduction of experienced talent, including 10
major corporate decisions in a timely manner through multiple channels, including the corporate intranet, notice boards in plant doctoral graduates and 203 master's graduates. In campus recruitment, the Company closely aligned recruitment with internal
living areas, the official website, and official social media accounts, so as to effectively safeguard employees' rights to know, the right job demand and innovated a government-enterprise collaborative talent recruitment mechanism, covering multiple levels from
to participate, the right to express opinions, and the right to exercise oversight At the same time, the Company has given full play to management positions to frontline operational roles. In 2025, 866 fresh graduates joined the Company. In employment for special
the bridging role of labor unions, kept channels for employee feedback and communication open, and built a new framework for groups, the Company developed disability-friendly positions through job redesign and facility modification, established channels for
democratic management featuring balanced rights and responsibilities, joint consultation, and shared decision-making. receiving and placing demobilized soldiers, and carried out a dedicated recruitment initiative in support of Tibet, strengthening the
talent foundation for the Company's high-quality development.
Key Performance
Number of employee departures: 156 Number of new employees hired: 1,053
The 12th Session of the 15th Employee Representative Congress and the The 2026 Work Conference and the 2nd Session of the 3rd Trade Union
Valuing Employee Development
The Company has consistently aligned talent growth with corporate development and built clear and diversified career development
pathways for all employees. The Company has developed a multi-dimensional career development map spanning management,
Implementing the rights and responsibilities of the employee representative congress
technical, skilled, and business functions, breaking down barriers to growth so that employees in different positions and fields can
Advance grassroots democratic management with the employee representative congress as the principal vehicle; solicit find suitable advancement pathways. At the same time, the Company has established standardized and transparent mechanisms
employee views in advance on key and difficult issues of concern to employees, including fundamental institutional for horizontal rotation and vertical promotion, and improved a talent development system to enable both advancement and
development, cadre appointments, remuneration and benefits, and other matters affecting employees' vital interests; accept adjustment, as well as structured recruitment and exit. Through a fair development environment and broad growth platform, the
employee oversight afterward; and safeguard employees' rights to know and participate to the fullest extent possible. Company empowers employees to make the best use of their strengths and talents, enabling each employee to achieve growth and
breakthroughs in individual career value alongside the development of the enterprise, and truly ensuring that capable employees are
Conduct collective consultation on an equal footing; conclude the 2025 collective wage consultation agreement and
given both opportunity and recognition.
collective contract; and actively mediate labor disputes involving employees.
Strengthening Employee Training
The Company aligned talent development more closely with its development strategy and role-specific capability requirements,
strengthened its management, technical, and skilled talent pipelines, and built a multi-tiered talent development system. At the
management level, it focused on leadership enhancement and introduced innovative training models combining online and offline
learning. For technical personnel, it strengthened professional capabilities in collaboration with external institutions, while also
covering key areas such as digital office applications, marketing, and the integration of business and finance. For the operating
workforce, it prioritized rotating training for team leaders and work safety training for young employees, while also implementing
specialized training and skills evaluation for key positions and promoting skill enhancement across the workforce through competition-
based learning.
Case HYST | Building the "Six Navigation" Branded Training System
Under the overarching framework of the "Six Navigation Plan", HYST has meticulously built a branded training system. Visits were paid to employees in need Employee basketball games were held
Leveraging three key platforms—the Hengshan Forum lecture series, micro-classrooms, and the Craft Star Academy—HYST
has integrated a wide range of topics including Party building, management, technology, skills, and safety, systematically
advanced talent development across all talent streams, and achieved dual improvements in training continuity and brand
impact, injecting strong momentum into the Company's sustainable development.
Key Performance
Employee training coverage rate: 100% Total employee training hours: 971,460 hours
Average training hours per employee: 42 hours Percentage of employees receiving vocational and skills training:
Improving employee caring
A mini-marathon was held in the plant area "Her Classroom" development activities were organized for female
The Company has earnestly carried out the "I Do Practical Things for the People" initiative, improved employees' working and living employees
environments, and upgraded their sense of well-being in an all-round way. The Company also organized popular sports and cultural
activities such as employee basketball tournaments, badminton matches, air volleyball competitions, and e-sports tournaments,
enriching employees' cultural life outside work.
Working with Partners for Mutual Success
Assisting Caring for
Guided by the principle of collaborative win-win development, the Company has strengthened supply chain management, deepened
employees with female
strategic cooperation, and participated in industry co-building, establishing and improving an open and inclusive partnership
difficulties employees
mechanism. In doing so, the Company has continuously enhanced the resilience and vitality of the industrial chain and worked hand in
hand with all partners to create a new landscape of high-quality development.
LY Steel developed tailored support plans for employee In 2025, VAMA made a dedicated investment of RMB
families facing financial hardship due to illness, disability, 90,000 to provide comprehensive screening services for Supplier Management
education expenses, or unexpected disasters, and breast cancer and cervical cancer to 116 eligible female The Company has introduced institutional documents covering the full life cycle of the supply chain, including the Supplier
provided assistance through hardship relief funds or employees. Management System , the Supplier Management Procedures for Procurement , the Measures for the Management of Authorized
medical assistance funds. Yangchun New Steel, together with the Yangchun (Entrusted) Agencies , and the Management Measures for the Handling of Quality Objections and Settlement Disputes . The Company
Xiangtan Steel continued to carry out support programs Maternal and Child Health Hospital, organized lectures carries out supplier onboarding, review, evaluation, and exit management, and is committed to building a responsible supply chain.
for employees in difficulty. In 2025, the Company on women's health, conducted gynecological health
invested more than RMB 4.55 million in assistance funds, examinations for female employees, and distributed more
benefiting 2,012 employee visits. than RMB 170,000 in hygiene and healthcare allowances
to female employees and employees with a single child.
Supplier Onboarding Incorporating ESG into Ongoing Supplier Tracking and Evaluation
The Company has established a sound onboarding evaluation system and strictly implements supplier onboarding review procedures.
The Company incorporates ESG requirements into its ongoing supplier tracking and dynamic evaluation mechanism, strengthens
For new suppliers, the Company conducts comprehensive reviews of relevant qualifications and overall service capability, preventing
sustainability risk management across the supply chain, and promotes the coordinated adoption of sustainable development
suppliers with weak credit standing, poor performance capability, or frequent legal disputes from entering the qualified supplier list,
principles across upstream and downstream partners.
safeguarding a high-quality and sustainable supply chain.
Qualification review by On-site inspection or on-site Admission review by the Incorporating high-priority topics into evaluation criteria, such as supply chain financial health
procurement department testing and trial use Supplier Review Committee Establishing (for example, compliance with 45-day or 60-day payment terms) and full-life-cycle carbon
evaluation criteria footprint management capability, including the ability to respond to mechanisms such as the
EU Carbon Border Adjustment Mechanism (CBAM).
Submit for approval by the Submit to the Marketing Department
Process one-off procurement Setting bottom Clearly defining non-negotiable "one-vote veto" items, such as the use of child labor or forced
responsible company executive to process the onboarding procedure
lines and red lines labor, major environmental or safety accidents, and serious commercial bribery.
Tiered Supplier Management
Designing a tiered Classifying suppliers based on evaluation scores and implementing differentiated
The Company implements dynamic supplier management across dimensions including product quality, price competitiveness, management management.
contract performance, overall capability, after-sales service, and tendering performance. Comprehensive supplier evaluations and system
grading are conducted on a quarterly and annual basis, with annual decisions made on supplier elimination and upgrading. Based on
overall evaluation results, suppliers are classified into three categories—strategic, key, and general—and are managed accordingly.
Strategic suppliers Key suppliers
Priority payment and increased Normal payment and procurement Grade Positioning and Characteristics Management Strategy and Cooperation Approach
procurement volume according to plan
Outstanding ESG performance and a partner in green Deepen cooperation: jointly develop low-carbon materials,
Strategic Cooperation
innovation share carbon data, and jointly
Rectification / Removal Provide focused guidance: offer training on weak areas,
Strong ESG performance, systematic management, with
Priority Improvement assist in formulating improvement plans, and consider
For suppliers with average or lower overall evaluation some areas requiring improvement
medium- and long-term orders
General suppliers results, the Company supports capability improvement
or issues rectification requirements and requires Require rectification within a specified period: sign
Controlled procurement volume and Observation and Passable ESG performance or identifiable risks, but with
rectification within a specified period. Suppliers may rectification commitments, increase audit frequency, and
stricter payment approval Rectification willingness and basic capacity to improve
continue supplying only after rectification is completed reduce order share
and accepted. If no improvement is achieved within
the required timeframe, cooperation will be gradually ESG performance fails to meet requirements, touches red Initiate exit: launch elimination procedures and identify
Phase-out Clearance
reduced until supplier qualification is withdrawn lines, or rectification proves ineffective alternative suppliers
Advancing Transparent Procurement
Xiangtan Steel Review the qualification status of registered enterprises against the latest national laws and
In procurement operations, the Company adheres to the principle of "transparent and standardized operations", implements
regulations imposing mandatory licensing requirements, and adjust the basic Supplier Onboarding
institutional documents such as the Measures for the Administration of Tendering (and Competitive Negotiation) and the Procurement
criteria in a timely manner as required.
Control Management Procedures , comprehensively promotes public tendering, discloses public inquiry information, and broadens
Incorporate the fulfillment of social responsibility into annual performance evaluation criteria, and access to high-quality resources. The Company signs the Transparent Cooperation Agreement, the Integrity and Ethical Commitment
award additional points to suppliers that have obtained certifications in quality, environment, and Letter , and the Clean Transaction Responsibility Letter with suppliers, communicating expectations relating to compliance with
occupational health and safety management systems or actively participate in industry association national laws, integrity in business, professional ethics, clean and transparent operations, and fulfillment of social responsibility.
development, establishing a positive incentive mechanism.
Strengthening Oversight of Procurement Processes Advancing Procurement Standardization
Strengthen oversight of key procedures and Use valve procurement as a pilot category for
Optimize processes and revise systems such as the Measures for the Management of Bulk Raw sensitive positions, including procurement standardized and refined procurement; evaluate
LY Steel Material Prices ; implement dynamic supplier management; conduct quarterly supplier evaluations; tendering and incoming inspection of raw tenders across dimensions such as weight,
and increase the development of high-quality new resources. In 2025, add 87 new suppliers and materials and fuels. material, selection, and brand; refine itemized
product categories for bulk raw materials, and eliminate 45 suppliers and product categories. Raise sampling inspection rates, refine sampling criteria; and progressively achieve value-for-
methods, increase penalties, strengthen money procurement.
source quality control, and implement monthly
evaluations to effectively curb fraudulent practices.
Introduce additional requirements for key service providers, including on-site assessments and
HYST
compliance verification in relation to laws and regulations, patents, safety, and environmental
protection; and further strengthen tiered management of such providers across the processes of
Supplier Onboarding, confirmation, change, performance evaluation, re-evaluation, elimination,
Safeguarding Integrity in Procurement Digital Procurement Management and Control
Require suppliers to sign the Integrity and Ethical
Advance the development of an electronic signature
and reinstatement.
Cooperation Agreement and employees to sign service platform; integrate the platform with the
Revise the HYST Supplier Management System ; standardize tiered Supplier Onboarding and
the Commitment to Integrity and Self-Discipline ; existing ERP integrated system and other relevant
management; and clarify the processes for evaluation, confirmation, and cooperation incentives
impose severe penalties on any attempt by systems; and achieve seamless connectivity across
applicable to suppliers with outstanding overall strength and demonstrably high quality.
suppliers to improperly influence procurement business processes.
personnel through bribery or other inducements; Progressively promote and standardize digital price
and strive to achieve zero disciplinary violations and comparison procurement for bulk raw materials
zero non-compliance. and fuels, making the coal procurement process
Integrate ESG requirements into Supplier Onboarding criteria; require all suppliers to sign the
VAMA more open, transparent, efficient, and traceable.
Supplier Code of Conduct or a Supplemental Agreement on Sustainable Due Diligence ; and
formally incorporate ESG control requirements into contractual terms of cooperation.
Implement dynamic supplier management; conduct comprehensive evaluations across
Advancing Green Procurement
dimensions including supply quality, price, delivery, and service; define procurement priority levels
corresponding to Grades A, B, C, and D; and apply a last-place elimination mechanism. The Company actively promotes green procurement with the aim of reducing the environmental impact of production activities and
lowering resource consumption, driving the supply chain toward an energy-saving and low-carbon transition.
For materials such as environmental protection equipment, safety equipment, and labor protection supplies, the
Yangchun New Steel Implement dynamic management for suppliers of key procured materials such as scrap steel and
Company strictly prohibits the procurement of non-compliant products banned by the state. Suppliers of special
coke; conduct monthly scoring, rating, and tiered management; require rectification within a
labor protection products are required to provide safety appraisal certificates or inspection reports.
specified period for unqualified suppliers or terminate cooperation where necessary; and strictly
control supply quality.
Recycled raw materials such as scrap steel must comply with the requirements of relevant national authorities. Suppliers
must hold the requisite business qualifications, and purchase and sales contracts must clearly stipulate and enforce
control clauses relating to hazardous substances such as explosives and radioactive materials.
For the transportation of toxic and hazardous chemicals, oils, and similar materials, suppliers must hold the
corresponding qualifications and implement protective measures against damage and leakage. For flammable,
explosive, and hazardous goods, fire- and explosion-prevention measures must be taken, and suppliers are required
to provide safety data sheets.
Case LY Steel | Showcasing at the 4th Changsha International Construction Equipment Exhibition
Key Performance
In May 2025, LY Steel presented a number of
Number of local suppliers: 996 Localization rate of procurement: 23.34%
flagship products at the 4th Changsha International
Construction Equipment Exhibition. At the exhibition,
LY Steel highlighted six categories of advanced
materials, including steel for construction machinery,
Supply Chain Decarbonization
wear-resistant steel, silicon steel, galvanized sheet,
In terms of supply chain decarbonization, the Company has developed a detailed visit and research plan for key suppliers. Over the medium- and high-carbon steel, and hot- and cold-
next few years, the Company will strengthen management in the following two areas: formed structural steel, as well as its two brands,
Acetough wear-resistant steel and Aceshield protective
steel. Through these exhibits, LY Steel showcased
to global customers its innovation capabilities and
green development philosophy in the field of high-end
Cultivating green Establishing green
equipment manufacturing.
strategic suppliers procurement standards
HYST | Exhibiting at the Karamay Petroleum Equipment Exhibition and Signing an Agreement with
Case
Xinjiang Oilfield Company
Establishing long-term partnerships with core Using carbon footprint as an important procurement
upstream steel producers and other key suppliers, decision-making indicator, conducting carbon
In August 2025, the 7th China (Karamay) International
jointly investing in low-carbon technologies, accounting for suppliers, and gradually phasing out
Oil & Gas and Petrochemical Technology & Equipment
and securing part of the capacity for green raw high-carbon suppliers.
Exhibition opened. During the exhibition, HYST
materials.
highlighted high-performance premium connections
such as gas-tight, high-torque, and direct-connect
types, as well as high-grade OCTG products including
Advancing Industry Cooperation 13Cr. HYST also signed a procurement framework
agreement with CNPC Xinjiang Oilfield Company,
Upholding the development philosophy of openness and collaboration, the Company has continued to cultivate the broader industry
further deepening cooperation between the two
ecosystem on all fronts. By actively participating in various industry exchanges, the Company has engaged in frequent and in-depth
parties.
discussions with industry peers on frontier trends and paths for technological innovation, jointly exploring new opportunities for
development.
Case Xiangtan Steel | Joining Hands with a Well-Known Enterprise to Establish a Joint R&D Center
Case VAMA | Actively Co-Organizing and Participating in Multiple Major Industry Events
In May 2025, Xiangtan Steel signed a
In November 2025, VAMA attended the 19th
strategic cooperation agreement with
International Forum of Automotive and Traffic
Haina Special Steel Co., Ltd. and jointly
Safety and received the Value Empowerment Award,
inaugurated the Xiangtan Steel-Haina
highlighting the contribution of steel battery packs to
Special Steel Joint R&D Center. The center
safety in new energy vehicles. In December 2025, VAMA
will enhance both parties' innovation
co-organized the Chery-VAMA & GONVVAMA Supply
capabilities in high-end materials R&D,
Chain Technology Co-Creation Exchange Day, focusing
accelerate the commercialization of
on advanced high-strength steel, multi-part integration,
technological achievements, and realize
and battery pack solutions. VAMA discussed trends in
resource sharing and complementary
vehicle body electrification with experts from Chery,
advantages.
demonstrating its leading role in technology co-
creation and industry empowerment.
Inauguration of the Xiangtan Steel-Haina Special Steel Joint R&D Center
Participating in Standards Development
Leveraging its distinctive strengths, advanced manufacturing processes, process technologies, and well-established standards system,
Enhancing Public Well-Being
the Company led, participated in, or revised a total of 28 national, industry, and group standards during the reporting period, including
Valin Steel has consistently integrated a strong sense of social responsibility with the pursuit of high-quality corporate development.
GB/T 6730.45-2025 Iron Ores—Determination of Arsenic Content—Arsine Separation-Molybdenum Blue Spectrophotometric Method
Through concrete actions, the Company has fulfilled its obligations as a corporate citizen and written a meaningful chapter in
and GB/T 9948-2025 Seamless Steel Tubes for Petroleum Cracking and Chemical Equipment, effectively promoting the improvement
advancing public well-being.
and upgrading of the industry's standards system.
Implementing
Standard Title
Standard
Role
Approval
Standard No.
Advancing Rural Revitalization
Key Performance
Entity Category Date
Valin Steel has earnestly carried out rural revitalization
Wire rod for super-large-span load-bearing bridge
Xiangtan Steel
cables
Group standard Participating in drafting 2025-03-12 T/CISA 518-2025 initiatives, continuously promoting industrial assistance,
educational assistance, and consumption-based assistance to Total investment in rural revitalization: RMB
Xiangtan Steel Hot-rolled wire rod for cold heading steel National standard Participating in drafting 2025-03-28 GB/T 28906-2025
raise the overall level of rural revitalization and demonstrate 10.22 million
Xiangtan Steel Hot-rolled wire rod of quality carbon steel National standard Participating in drafting 2025-03-28 GB/T 4354-2025 the responsibility of a state-owned enterprise in advancing all- Number of beneficiaries of rural revitalization
around rural revitalization.
initiatives: 9,521
Xiangtan Steel Alloy spring steel wire Industry standard Participating in drafting 2025-04-10 YB/T 5318-2025
Iron ores—Determination of arsenic content—Arsine
GB/T 6730.45-
Xiangtan Steel separation-molybdenum blue spectrophotometric National standard Leading drafting 2025-06-30
method
Xiangtan Steel Stainless steel clad plates and strips National standard Participating in drafting 2025-06-30 GB/T 8165-2025 By leveraging the resource advantages of the assisted regions, the Company has continuously promoted local economic development
Xiangtan Steel Nickel and nickel alloy welding electrodes National standard Participating in drafting 2025-06-30 GB/T 13814-2025 and social progress in rural areas. In 2025, Valin Steel and its subsidiaries purchased consumption-based assistance products through
multiple channels, with cumulative spending of RMB 9.86 million, effectively helping local farmers increase their income.
Xiangtan Steel Nickel and nickel alloy solid welding wires and strips National standard Participating in drafting 2025-06-30 GB/T 15620-2025
Steel plates and strips for pressure equipment—Part
Xiangtan Steel 8: Roll-bonded clad steel plates of homogeneous and National standard Participating in drafting 2025-08-01 GB/T 713.8-2025
dissimilar metals
Case Xiangtan Steel | Targeted Procurement Supported Consumption-Based Assistance
General requirements for packaging, marking, and
Xiangtan Steel National standard Participating in drafting 2025-08-01 GB/T 247-2025
quality certificates for steel plates and strips
Xiangtan Steel introduced an innovative targeted procurement assistance model, proactively supporting distinctive local
Xiangtan Steel Flux-cored wires for gas-shielded arc welding National standard Participating in drafting 2025-08-01 GB/T45857-2025
industries and establishing long-term, stable procurement partnerships with multiple assisted villages and townships.
Iron ores—Determination of arsenic content—
GB/T 6730.46- For high-quality local agricultural products, handicrafts, and other specialty products, Xiangtan Steel carried out targeted
Xiangtan Steel Distillation separation-molybdenum blue National standard Leading drafting 2025-08-29
spectrophotometric method
Xiangtan Steel Structural steel plates for wind power towers National standard Participating in drafting 2025-08-29 GB/T 28410-2025 teams to provide on-site support in rural areas, helping local residents increase their income in a tangible way.
Xiangtan Steel Steel wire rod for welding National standard Participating in drafting 2025-08-29 GB/T 3429-2025
Permissible deviations in product chemical composition
Xiangtan Steel National standard Participating in drafting 2025-08-29 GB/T 222-2025
of steel and alloys Industrial Assistance
Xiangtan Steel Thiocyanate method for chromium determination National standard Participating in drafting 2025-08-29 GB/T 4236-2025 Through targeted assistance, the Company has helped stimulate endogenous momentum for rural revitalization. We have both
injected new vitality into specialty agricultural industries and built growth pathways for projects integrating agriculture, culture, and
LY Steel Stainless steel clad plates and strips National standard Participating in drafting 2025-06-30 GB/T 8165-2025
tourism, promoting a virtuous cycle in which enterprises drive development, farmers participate, production and sales are smoothly
Full-process cold-rolled electrical steel—Part 2: Grain-
LY Steel National standard Participating in drafting 2025-08-29 GB/T 2521.2-2025 connected, and collective income increases, so that the results of industrial assistance truly benefit local communities.
oriented electrical steel strip (sheet)
General requirements for surface quality of hot-rolled
LY Steel National standard Participating in drafting 2025-08-29 GB/T 14977-2025
steel plates Conducting on-site assessments and identifying
Pooling resources to improve industrial efficiency
LY Steel Cold-rolled steel sheets and strips for home appliances National standard Participating in drafting 2025-08-29 GB/T 30068-2025 development pathways
Steel plates and strips for hydrogen transportation and
LY Steel National standard Participating in drafting 2025-10-31 GB/T 46598-2025 VAMA management visited Yunpan Village, Doulishan LY Steel supported Shuangyuan Village in Shuangfeng County,
storage pipelines
Town, Lianyuan City, to hold discussions on industrial Loudi City, in tapping into its natural landscape and red
LY Steel Structural steel for bridges National standard Participating in drafting 2025-10-31 GB/T 714-2025
development. In response to the challenges faced, VAMA cultural resources, improving exhibition halls and scenic area
Methods of measurement for geometrical characteristics
LY Steel
of electrical steel strip and sheet
National standard Participating in drafting 2025-10-31 GB/T 46476-2025 management proposed preliminary suggestions such infrastructure, and investing more than RMB 300,000 in tourism
as introducing soilless fodder cultivation and expanding facilities, which increased annual collective village income
Large-diameter extra-heavy-wall seamless steel tubes
HYST Group standard Participating in drafting 2025-01-15 T/CIET 985-2025 e-commerce sales channels, while also gaining an in-depth by more than RMB 50,000. LY Steel also supported Tanshan
for thermal power generating units
Seamless steel tubes for petroleum cracking and understanding of the existing "cooperative + farmers" Village in Qiaotouhe Town in leveraging the "Vegetable Town"
HYST National standard Leading drafting 2025-06-30 GB/T 9948-2025
chemical equipment operating model and the state of the village collective brand to integrate cultivation and sales, with growers expected
HYST Seamless machined steel tubes for structural use National standard Participating in drafting 2025-06-30 GB/T 45781-2025 economy, so as to support coordinated industrial planning. to increase income by RMB 15,000 per mu. In addition, LY Steel
HYST Seamless steel tubes for ships National standard Participating in drafting 2025-08-29 GB/T 5312—2025
provided focused support to Wuyunshan Agriculture Co., Ltd.'s
white tea base of more than 300 mu, which achieved an annual
Technical specification for quality control of continuous T/CAPS 048—
HYST
casting billets
Group standard Participating in drafting 2025-09-24
Contributing to Public Welfare
Valin Steel actively fulfills its corporate social responsibility by making efforts across multiple areas, including public welfare and
charity, volunteer services, and emergency rescue. Each subsidiary carried out diversified public welfare initiatives in light of its own
circumstances, conveying the warmth of a state-owned enterprise through concrete action.
Among them, Xiangtan Steel focused its public welfare efforts on student support, elderly care, and disability assistance, raising and
distributing charitable funds and materials with a total value of nearly RMB 200,000. During the same period, Xiangtan Steel carried out
as a candidate for the national "Four 100" Best Volunteer Service Organization list. LY Steel's labor union distributed more than RMB 1.65
million in various subsidies and support payments, benefiting more than 6,000 person-times, including hospitalized patients, retirees,
and persons with disabilities, while also organizing Lei Feng volunteer activities, voluntary blood donation, and sponsorship of local
cultural and sports events. HYST organized multiple voluntary blood donation activities for employees throughout the year. VAMA's
safety experts were invited on multiple occasions to provide safety training and exchanges for surrounding enterprises, supporting
the safe development of the industry through professional expertise. Yangchun New Steel organized 65 employees to participate
in voluntary blood donation, while its fire protection brigade handled 6 fire incidents during the year and successfully rescued one
trapped individual in a traffic accident, making a broad contribution to society.
Key Performance
Funds invested in social contribution activities: RMB 24.62 million
Participants in social contribution activities: 14,065 person-times
LY Steel supported a 300-mu white tea base in Lianyuan City Total volunteer service hours: 30,773 hours
Average volunteer service hours per volunteer: 1.33 hours
Employment Assistance
The Company has consistently treated employment assistance as a core means of fulfilling its social responsibility, actively taking on LY Steel visited and extended support to elderly people living alone
the responsibility of stabilizing employment and safeguarding livelihoods. Focusing on key groups such as residents in priority rural
revitalization areas, urban groups facing employment difficulties, and college graduates, the Company established a green channel for
employment assistance through an integrated model of "skills training + targeted recruitment + job incubation". Case HYST | Voluntary Blood Donation Delivered Social Warmth
In August 2025, HYST organized nearly 300 employees to participate in Hengyang's 2025 voluntary blood donation campaign
and received a special note of appreciation from the Hengyang Central Blood Station, demonstrating the Company's
LY Steel VAMA Yangchun New Steel compassion and sense of responsibility through voluntary blood donation.
Throughout the year, the Company The Company also visited Yunpan In addition, the Company jointly
Building Harmonious Communities
provided employment information Village in Mayang County to organized a recruitment event for
Valin Steel adheres to the concept of integrated development between communities and enterprises, promoting positive interaction
more than 10 times, delivered extend support to 3 outstanding veterans, successfully recruited 2
between its subsidiaries and surrounding communities. Through regular co-building activities, targeted services, and diversified
employment training to more graduating college students, veterans, and contributed to local
initiatives, the Company has worked to create a harmonious community environment featuring joint participation, joint governance,
than 150 person-times, created providing financial assistance employment stability.
and shared benefits. At the same time, through regular community forums, factory open days, suggestion boxes, and other measures,
public welfare positions such as and development guidance to
the Company has ensured convenient and efficient communication with communities.
cleaners and forest rangers, and support rural education and talent
recommended individuals for work cultivation. Among them, Xiangtan Steel established a regular co-building mechanism with Chunchongtang Community, including a weekly "Co-
in poverty alleviation workshops Building Activity Day" every Friday and monthly civility promotion activities on designated road sections. Through actions such as
within villages and elsewhere sanitation cleaning, facility repair, waste sorting promotion, and the establishment of a "Caring Hair Salon", Xiangtan Steel improved
within and outside the province. In the community living environment and extended holiday visits to more than 400 households in special-needs groups during traditional
total, more than 100 employment festivals. LY Steel regularly held district work meetings to promote knowledge relating to safety, fire prevention, and anti-fraud, and
placements were arranged for led visits to 3 communities to hold discussion-based research meetings on better approaches to integrated community-enterprise
formerly impoverished individuals, development, while also providing regular assistance to more than 2,300 person-times of elderly people facing hardship, living alone,
helping local residents achieve or suffering serious illness. HYST organized all employees to participate in the 2025 "One-Day Charity Donation" campaign, raising RMB
stable income growth. 116,029.10, and also carried out regular Lei Feng volunteer activities and fire assistance programs. VAMA built a community governance
model featuring multi-party coordination and source-based governance, visited more than 300 community merchants and residents,
helped resolve neighborhood disputes and environmental issues, and provided legal awareness and risk prevention training to
community residents, effectively improving community safety awareness.
GBuilding on Sound
overnance
Governance to
Safeguard the Steady
Development of the
Steel Business
Valin Steel regards outstanding corporate governance as the
foundation for its steady development. The Company upholds and
strengthens the Party's overall leadership, continuously improves
a modern corporate governance system with clear powers and
responsibilities and coordinated operation, and integrates compliance
management and risk control into the full process of decision-making
and operations. Through sound decision-making, effective supervision,
and clear accountability, the Company safeguards its long-term and
steady progress on the path of high-quality development.
Responded to SDGs
Strengthening the Grassroots Foundation and Consolidating Fighting Fortresses
Upholding the Leadership of Party Building
The Company has maintained a clear focus on strengthening the grassroots foundation, optimized the setup of grassroots
Party organizations, and, in line with the principles of business relevance, geographic proximity, and ease of management,
Valin Steel adheres to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guide, fully aligns
established Party organizations in parallel across key projects, critical areas, and upstream and downstream segments
with the overall requirements for Party building in the new era, and deeply integrates Party building with corporate reform
of the industrial chain, achieving full coverage of Party organizations and Party work with no blind spots. The Company
and development, production and operations, as well as transformation and upgrading. This integration provides a strong
improved the institutional framework for grassroots Party building, strengthened basic mechanisms such as the
driving force of Party leadershipfor the Company in addressing market challenges and pursuing high-quality development. "Three Meetings and One Lecture" system and democratic evaluation of Party members, stimulated the vitality of
mass organizations, and formed a working pattern featuring Party building leadership and coordinated action by mass
Building Consensus Through Ideological Guidance organizations.
The Company upholds the study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics The Company also continued to deepen the integration of Party building with production and operations. Focusing on key
tasks such as major priorities and difficult issues in production and operations, project breakthroughs, and cost reduction
for a New Era as its primary political task. We have refined the practice of treating the Party's latest theoretical
and efficiency enhancement, the Company carried out more than 1,200 initiatives such as "Secretaries Tackling Difficult
developments as the "first item for study and deliberation" in relevant meetings. Through various channels—including
Problems" and "Party Members Delivering Outstanding Results", translating Party building achievements into tangible
theoretical study sessions of the Party committee, thematic reading workshops, Party lecture series, and warning
business performance. 4 cases were selected as outstanding cases in the provincial SASAC's "Hundreds, Thousands and
education—the Company delivers tailored learning programs to different management levels and employee groups. Tens of Thousands" (large-scale model case selection initiative) program, while 15 grassroots Party organizations, 17 Party
These efforts ensure the Party's innovation theories are not only deeply comprehended but also translated into concrete members, and 6 Party affairs workers received "Two Excellent and One Advanced" commendations from the provincial
action. SASAC.
Xiangtan
Steel Organize42 sessions on the "first item for study and deliberation" and 19 Party committee theoretical study Building Party Brands to Enhance Corporate Image
group sessions, reaching over 8,000 participant attendances among Party members, management, and
The Company has cultivated a Party building brand system with distinctive corporate characteristics, continuously
personnel in sensitive positions.
identifying role models, organizing cultural activities, and strengthening communication and promotion, bringing people
together through brand building and projecting a strong corporate image.
Take the study of the guiding principles of the 20th CPC National Congress and the third and fourth plenary
LY Steel
sessions of the 20th CPC Central Committee as a core political task. organize centralized study and discussion
Xiangtan Steel LY Steel HYST
sessions in 245 Party branches; and arrange for more than 280 Party organization secretaries to deliver
Deepen the development of the "Striving Pioneer" Develop distinctive Party-building brands such Organize thematic training on
thematic Party lectures.
Party-building brand; build a digital and integrated as "Party Building Leadership, Deepening Safety building high-quality Party-building
media communications matrix; appear 6 times Culture"; win the Second Prize for Innovation and brands; issue more than 196
HYST Conduct 27 study sessions on the "first item for study and deliberation" and 17 Party committee theoretical throughout the year on CCTV News and in the People's Technical Achievement in SOE Party Building; and editions of the Company Updates
study group sessions throughout the year; and organize 4 reading workshops and launch the "Hengshan Forum"
Daily ; and win the First Prize of the National Corporate strengthen cohesion through cultural activities Bulletin ; and continuously enhance
Culture Achievement Awards for the project Forging such as the "Steel BA" basketball event and plant- recognition of its Party-building
Party building quality and branding training program. the Soul of Culture, Tempering the Steel of the Brand. area mini-marathons. brands.
VAMA Deliver 5 thematic Party lectures by members of the Party committee leadership team and 50 micro-Party VAMA Yangchun New Steel
lectures by Party members; organize 52 centralized study and discussion sessions by Party branches; and
Develop a "cooperation and win-win" Party- Closely align with the requirements of the
achieve a 100% participation rate in online training programs. building brand; promote the integration of "Striving Pioneer" Party-building brand;
Party building into five major areas, including strengthen brand communication through
strategic objectives and business management; Party affairs disclosure boards, knowledge
Yangchun Organize
carry out activities such as "three highlights and competitions, and similar activities; deepen
New Steel
themed Party Day programs; complete 686 person-times of thematic online training on the SASAC e-learning three comparisons"; recognize 25 recipients of the integration of Party building with the
platform; and promote the implementation of the Party's innovative theories through knowledge competitions "Two Excellent and One Advanced" honors; and development of a refined enterprise; and
set new records in both Alusi output and ultra- project an image of lean production excellence.
and similar activities.
thin-gauge output.
Strengthening Discipline and Work Conduct to Safeguard the Bottom Line of Development
The Company unswervingly advanced full and rigorous Party self-governance, placed political development at the forefront,
and treated the in-depth study and implementation of the spirit of the Central Party leadership's eight-point decision on
improving work conduct as an important political task, building a closed-loop working system of learning, review, rectification,
and governance. The Company strengthened its institutional safeguards, revised systems and procedures in key areas such
as tendering and competitive negotiation, official reception, and supplier management, and closed management loopholes.
The Company also improved long-term mechanisms for inspection rectification to ensure that corrective actions are thorough
and effective. Focusing on key areas and critical links, the Company regularly carried out targeted rectification in areas such as
Submission ceremony for responsibility letters on Party Study session on the guiding principles of the Fourth Plenary
Session of the 20th CPC Central Committee
improper personal gains derived from association with the enterprise and risks in overseas projects, fostering a pattern of precise
and sustained rectification and creating a clean and upright political ecology and business environment.
Board Development
Standardizing Corporate Governance
The Company continued to strengthen Board development, revised the Independent Director System , steadily advanced
Valin Steel has continuously strengthened corporate governance, adhered to the principle of operating with integrity, Board diversity, improved mechanisms safeguarding the performance of independent directors' duties, effectively
treated investors, shareholders, customers, and suppliers with consistent sincerity, and shared the fruits of development protected the interests of minority shareholders, and promoted standardized corporate operation.
with all stakeholders. At the same time, the Company strictly complies with laws, regulations, and regulatory requirements
applicable to listed companies, and has established a systematic and well-developed modern corporate governance
system to support high-quality development through sound governance.
Consider factors such as gender, age, educational background, professional competence,
Improving the Governance Structure
professional qualities, and work experience in the selection and appointment of directors,
ensuring that independent and external directors together account for more than half of the
Board, with a balanced mix of experienced and newly appointed members and an appropriate
The Company strictly follows the requirements of laws, regulations, and normative documents including the Company
combination of professional backgrounds.
Law of the People's Republic of China and the Securities Law of the People's Republic of China . In accordance with the
Increase the proportion of independent directors and female directors, and continue advancing
Articles of Association and internal control systems, the Company standardizes business decision-making processes, Board Diversity gender diversity on the Board so as to strengthen strategic decision-making through more
continuously improves its corporate governance structure, and has established and refined a corporate governance diverse perspectives.
mechanism centered on the Board of Directors, with clearly defined responsibilities and effective checks and balances Formulate the Rules of Procedure of the Board of Directors to further enhance governance
among the shareholders' meeting, the Board of Directors, the board of supervisors, and management. The Company's transparency; require the presence of more than half of all directors for a Board meeting to be
CEO serves as Chairman of the Board. The Board consists of 9 directors, including 3 independent directors and 2 external convened; set the minimum attendance rate for Board meetings at 50%. During the reporting
period, the average attendance rate of the Company's Board members at Board meetings
directors. Its members bring professional backgrounds spanning management, technology, finance, and financial services,
reached 100%.
providing diversified professional support for strategic decision-making and risk control. The Board has established
three categories of specialized committees to carry corporate governance principles through all levels of operation and
to ensure both compliant management and efficient business execution. With the exception of the Strategy and ESG
Committee, independent directors hold a majority of seats on all Board specialized committees and serve as conveners.
Within the scope of their authority, they diligently perform their duties, effectively safeguarding the independence and
fairness of audit, internal control, and the assessment and appointment of directors and senior executives.
Require independent directors to strictly comply with the Company Law , other relevant laws
and regulations, and the Articles of Association; perform their duties with loyalty and diligence;
The Company actively advanced the optimization of its governance system. At the 30th meeting of the Eighth Board of
conduct prudent reviews of major matters such as director nominations, appointments of senior
Directors, the Company reviewed and approved the Proposal on Revising the Articles of Association and Eliminating the executives, profit distribution, and related-party transactions; and safeguard the lawful rights
Board of Supervisors, under which the board of supervisors will no longer be established. The Company also promoted Safeguards for and interests of all shareholders, especially minority shareholders.
the renaming of the Strategy Committee to the Strategy and ESG Committee, adding sustainability- and ESG-related the Performance Provide comprehensive support for the performance of independent directors' duties, including
management functions to support the Board in formulating dedicated policies and overseeing their implementation. of Independent regular research visits, monthly operating information briefings, and thematic communication
Directors' Duties sessions; ensure that independent directors hold a majority of seats on all Board specialized
committees and serve as conveners; enable them to provide professional opinions on
matters including macro-strategic research, safety and environmental protection control,
and capital operation planning; and secure strong attention to and active adoption of their
recommendations by management.
Key Performance
Number of shareholders' meetings held: 4; Number of proposals approved at shareholders' meetings: 24
Number of Board meetings held: 10; Number of proposals approved by the Board: 57
Number of Nomination and Remuneration Assessment Committee meetings held: 3 ; Number of Audit
Committee meetings held: 4; Number of Strategy and ESG Committee meetings held: 3; Number of special
meetings of independent directors held: 6
Average tenure of Board members: 3.57 years
Composition of the Board of Directors of Valin Steel
Male 8 88.89%
Nomination and
Strategy
Board of Audit Remuneration Gender Female 1 11.11%
Position Representative Gender Professional Background and ESG
Directors Committee Assessment
Committee
Committee
Internal directors (including
Industry management (Senior the Chairman)
Chairman Li Jianyu Male Engineer; experience in steel
production and operations) Director Category Independent director 5 55.56%
Industry management and financial
Industry/Technology
Director Yang Xianghong Male management (former Chief Financial 7 77.78%
Management
Officer; MBA)
Finance/Financial
Professional Management
Background
Industry management (Senior
Law/Risk Management 2 22.22%
Director Xie Jiuyuan Male Engineer; experience in strategy and
manufacturing management)
Doctoral degree holders 2 22.22%
management and financial
Director Ma Peiqian Male management (experience in bank
credit and investment management) Master's degree holders 4 44.44%
Highest Education
Attained
Bachelor's degree holders 3 33.33%
Industry management (Senior
Director Zheng Shengbin Male Engineer; experience in steel
production management)
Aged 35-45 2 22.22%
Risk management (LL.B.; experience
Director Zhang Xuhong Male in corporate compliance and Aged 46-55 4 44.44%
Age Structure
management)
Aged 56 and above 3 33.33%
Financial management (Master of
Independent Accounting; Ph.D. in Management
Jiang Yanhui Female
director Science and Engineering; accounting
expert)
Key Performance
Number of independent and external directors: 5, representing 55.56%
Industry management (Senior Number of female directors: 1, representing 11.11%
Independent Engineer; electrical and automation
Xiao Haihang Male Proportion of independent directors serving more than six years: 0%; Proportion of independent directors
director specialist; industry association
expert) serving on the boards of more than three listed companies: 0%
Proportion of independent directors on the Audit Committee: 66.67% ; Proportion of independent
directors on the Nomination and Remuneration Assessment Committee: 66.77%
Industry management (Ph.D. in
Independent
Yuan Guo Male Materials Processing Engineering;
director
expert in digital steel)
As approved at the Company's first extraordinary general meeting of shareholders of 2026 on February 9, 2026, Zhang Xuhong was elected as a non-independent
director of the Ninth Board of Directors and serves as an external director.
Implementing tiered and categorized risk management
Preventing and Controlling Compliance Risks
Internal Control and Risk Management The Company clearly assigns primary responsibility for "risk management" and "managing risks" respectively to
the Internal Control and Audit Department and the functional departments, establishing an overall internal control
Valin Steel has established and advanced its internal control and enterprise-wide risk management framework in strict framework centered on the Internal Control and Audit Department, management, the Audit Committee, and the
accordance with regulatory requirements, including the Basic Standard for Enterprise Internal Control and the Guidelines Board of Directors.
on Enterprise-wide Risk Management for Central Enterprises , and in alignment with the Articles of Association. To this end,
the Company formulated two core policies: the Measures for Internal Control Management and the Enterprise-wide Risk
Management Policy . The Company places strong emphasis on strengthening risk awareness, compliance consciousness,
Tiered management: Establishing a three-tier risk control structure
and the development of professional talent. We have guided subsidiaries at all levels to deliver compliance training closely
aligned with their business needs, covering topics such as the new Company Law , investment management, anti-money The Company has established a three-tier risk management structure covering headquarters, first-level enterprises, and
laundering, contract management, and regulatory policies, while also carrying out diversified legal awareness activities. second-level and lower-level enterprises, and implements tiered risk response measures and graded risk control based on
the business characteristics and key risk exposures at each level.
Key Performance Categorized management: Building the three lines of defense for risk management
Participants in internal control, risk management, and compliance training: more than 1,200 person-times In accordance with the principle of risk ownership by function, the Company allocates different categories of risk to the
corresponding business units and functional departments, achieving categorized risk management and building a clear
three-lines-of-defense structure.
Across key operational and management areas such as sales, procurement, production, investment, capital management,
and budgeting, the Company has established supporting internal control systems covering strategic planning, equity First line of defense：Business units Second line of defense：Risk
investment, contract management, and other areas. These systems clearly define approval authorities, operating Third line of defense：The Board of
and functional departments, as the management departments and
procedures, and control standards for each process, strengthen process control and supervision, and ensure that internal Directors and its Audit Committee
primary risk owners, are responsible management are responsible for
controls are embedded throughout all stages and aspects of business management, effectively preventing and mitigating are responsible for final oversight of
for frontline risk prevention and overall coordination, supervision,
operational risks and ensuring that the Company's operations are conducted in a compliant, orderly, and efficient risks and approval of key decisions.
control. and guidance of risk management.
manner.
Following the logic of "standards first, identification and assessment, response and treatment, focused monitoring,
and reporting and review", the Company has established a closed-loop risk management system. Based on unified
risk standards, the Company identifies risks and develops a risk database, risk registers, and risk maps; formulates and
implements response measures for identified risks; builds a closed loop of identification, rectification, and verification;
and carries out monitoring, reporting, post-event review, and annual assessment of major risk events, achieving full-
process closed-loop management and continuous improvement. Audit Oversight
Based on the above risk management logic and framework, the Company has fully embedded ESG risk factors into the The Company engaged ShineWing Certified Public Accountants (Special General Partnership) as its internal control audit
entire risk management process. With overall coordination by the Board's Strategy and ESG Committee, the Company firm for 2025. The firm issued a standard unqualified opinion on the effectiveness of the Company's internal control
incorporates ESG requirements into strategic planning, the review of major investment decisions, and day-to-day over financial reporting, confirming that the Company maintained effective internal control over financial reporting in
production and operations. ESG dimensions such as green and low-carbon development and social responsibility are all material respects, while also reviewing the status of internal control over non-financial reporting. The Company's
included in risk classification and assessment criteria, enabling coordinated management of ESG risks and other business previous internal control audit firm was Tianjian Certified Public Accountants (Special General Partnership). This change
risks. Based on the Company's risk management framework, no material risks have been identified at present. was intended to better align financial statement audits with internal control audits and improve overall efficiency. The
Company communicated with Tianjian in advance and obtained its confirmation of no objection. The change complied
with the Measures for the Selection and Appointment of Accounting Firms by State-owned Enterprises and Listed
Companies and was reviewed without objection by the Audit Committee and the Board of Directors.
In addition, through measures such as continuously optimizing internal control processes and achieving full three-
year coverage of internal control effectiveness evaluations across subsidiaries at all levels, the Company has effectively
safeguarded the operational effectiveness of its internal control system.
In 2025, audit departments at all levels strictly implemented regulatory requirements and focused closely on the
objectives of "strengthening internal audit, preventing risks, promoting compliance, and creating value." Concentrating
on key areas and critical links, they worked to break down the boundaries between audit, risk management, and legal and
compliance functions, building an integrated framework for risk oversight across the Company.
Business Ethics
Key Performance
Anti-Bribery and Anti-Corruption
The Company has continued to deepen the development of a "Clean Steel" culture, actively practiced the core value of Coverage rate of operational sites subject to corruption risk assessment: 100%
"putting strivers first", and strongly promoted the values of responsibility, integrity in professional conduct, and honest
business operations. Requirements for integrity have been comprehensively embedded in all aspects and areas of the
Company's internal management and external cooperation. The Company formulated and improved integrity-related Whistleblowing and Complaint Channels
systems, including the Implementation Measures for Enforcing the Decision-Making System for Major Matters, Major
Valin Steel consistently upholds the principle of putting people first, fully respects employees who report concerns,
Personnel Appointments and Removals, Major Project Arrangements, and Large-Sum Fund Operations, the Measures
provide leads, or cooperate with investigations, and is committed to conducting thorough reviews and prompt handling
for Post-Investment Management of Equity Investments, the Measures for Accountability for Losses Arising from Non-
of all reports of misconduct. In accordance with applicable rules, discipline, and laws, the Company adopts targeted
Compliant Operations and Investments, and the Notice on Issuing the "Red Line" Rules for the Performance of Duties
corrective measures, including but not limited to policy clarification, strengthened education and training, process and
by Senior and Mid-level Management Personnel . These systems clearly define anti-corruption requirements for internal
mechanism optimization, and serious accountability measures.
and external stakeholders and systematically advance the development of a "Clean Steel" culture. At the same time,
the Company has incorporated matters such as employees' professional ethics, fraud for personal gain, and integrity The Company fully respects every employee who raises concerns or makes a report and, in accordance with the law,
in performing public duties into its employee reward and disciplinary system, strictly upholding disciplinary red lines, protects the lawful rights and interests of employees who are subject to investigation. The Company also ensures, in
resolutely prohibiting any form of improper benefit transfer, and continuously reinforcing an organization-wide line of accordance with applicable laws, rules, and discipline requirements, that employees are not subjected to improper
defense for integrity and honesty. treatment for reasonably expressing concerns or reporting misconduct or illegal acts. Any individual or relevant party that
retaliates against a whistleblower will be held seriously accountable in accordance with the rules, and in serious cases the
For third-party partners such as suppliers, contractors, and service providers, the Company has established a full-process,
labor contract will be terminated.
multi-level anti-corruption oversight system, clearly communicated compliance expectations, and sought to prevent risks
such as third-party commercial bribery and improper transfer of benefits.
Valin Steel Whistleblowing and Complaint Channels
Deepening Learning and Education. The Company carried out in-depth study and education on
Mailing address: Room 1102, Discipline Inspection Commission, Valin Steel, No. 222 Xiangfu West Road, Tianxin
implementing the spirit of the Central Party leadership's eight-point decision on improving work conduct,
District, Changsha, Hunan 410004
advanced learning, review, and rectification in an integrated manner, convened 395 warning education
sessions, and identified and rectified 135 issues. Whistleblowing box location: Beside the elevator on the 1st floor of the main building of Valin Steel, No. 222
Xiangfu West Road, Tianxin District, Changsha, Hunan
Sustaining Integrity Education as a Standard Practice. The Company innovatively organized themed
Reporting hotline: 0731-12388
activities such as "Good Family Traditions, Good Inheritance" and extensively carried out the "Five Ones"
integrity education program: delivering one integrity-focused Party lecture, conducting one integrity-
themed home visit, issuing one integrity risk reminder letter, holding one high-quality integrity conversation,
and presenting one set of integrity-themed books. During the year, 214 pre-appointment integrity interviews Anti-Unfair Competition
were conducted, helping integrate integrity values into daily work and embed them in employees' thinking.
The Company places great importance on preventing unfair competition and fostering a fair competitive environment, and
has strengthened its compliance safeguards from multiple dimensions. Through a dedicated compliance management
Strengthening Targeted Control of Integrity Risks. The Company improved its dynamic integrity risk system, the Company regularly conducts internal audits and compliance inspections to promptly prevent acts of unfair
reminder mechanism. Discipline inspection and supervision bodies at all levels issued 88 integrity risk competition. The Company also actively strengthens industry self-discipline, opposes improper practices such as
reminders and urged rectification of 164 issues, continuously reinforcing the integrity risk prevention and malicious low-price competition and false advertising, improves its price management system to regulate pricing, and
control network. strengthens intellectual property protection to guard against infringement and information leakage. Through transparent
tendering procedures and integrity agreements, the Company has also reinforced its defenses against commercial
bribery. At the same time, the Company closely monitors market developments, protects its rights in accordance with the
law, reports malicious competitive conduct, promotes the establishment of a fair competition environment, and carries
out regular compliance training with a focus on anti-monopoly and fair competition topics to strengthen employees'
risk awareness and prevention capabilities. In addition, the Company advances digital and transparent management to
enhance the traceability and oversight of business processes. During the reporting period, the Company did not incur any
fines relating to unfair competition, anti-money laundering, anti-terrorism, conflicts of interest, or insider trading.
In January 2025, the Secretary of the Discipline Inspection In February 2025, LY Steel organized the 2025 Conference on Party
Commission of Yangchun New Steel conducted integrity education Conduct and Clean Governance and Anti-Corruption Work
training for mid-level managers, general supervisors, and part-time
discipline inspection officers
Implementing Share Repurchase and Cancellation
Safeguarding Shareholder Rights and Interests In response to investor concerns, the Company convened the 28th meeting of the Eighth Board of Directors on January
Valin Steel attaches great importance to the protection of shareholder rights and interests, effectively safeguards
first-ever share repurchase plan since listing. The plan clearly specified that the repurchased shares would be cancelled
shareholders' lawful rights, ensures that shareholders can lawfully exercise decision-making and oversight rights, strictly
and the registered capital reduced accordingly.
regulates information disclosure management, fully protects shareholders' right to know, and maintains diversified
communication channels to safeguard the lawful rights and interests of all shareholders. The Company completed the repurchase of a cumulative total of 56.02 million shares for a total repurchase amount of
RMB 279 million. Together with the cash dividends declared under the 2024 profit distribution plan during the reporting
period, shareholder returns accounted for 47.5% of the Company's net profit attributable to shareholders of the parent
Shareholder Rights company for 2024, reaching a record high since listing and ranking in roughly the top one-third among more than 5,000
The shareholders' meeting is the Company's supreme authority. The Company Key Performance A-share listed companies and within the steel sector.
attaches great importance to protecting shareholders' lawful rights and
interests, actively builds communication bridges, and invites shareholders Shareholding ratio of
to participate in shareholders' meetings. Through the official website, the senior executives: 0% Information Disclosure
Company promptly discloses key materials including annual reports, semi-
Share pledge ratio: 0% The Company strictly complies with laws and regulations including the Company Law of the People's Republic of China ,
annual reports, quarterly reports, and various ad hoc announcements and
the Securities Law of the People's Republic of China, the Rules Governing the Listing of Stocks on the Shenzhen Stock
circulars, providing shareholders with convenient access to information.
Exchange , and the Guidelines for Fair Information Disclosure of Listed Companies, and revised its Information Disclosure
During the reporting period, the Company convened a total of 4 shareholders'
Management System . The Company has established a regular internal review process for information disclosure and
meetings.
continuously improves the efficiency and quality of information disclosure to ensure that disclosed information is true,
accurate, complete, timely, and fair, and to eliminate false records, misleading statements, or material omissions,
Returning Value to Shareholders effectively safeguarding investors' lawful rights and interests. At the same time, through designated channels including the
China Securities Journal, the Securities Times , CNINFO, and the website of the Shenzhen Stock Exchange, the Company
Increasing the Cash Dividend Payout Ratio
promptly discloses information that may have a material impact on investor decision-making and the Company's share
The Company adheres to a prudent and sustainable dividend policy and dynamically updates its Three-Year Shareholder price, and fully reveals potential risks.
Return Plan. In principle, the cumulative profit distributed in cash over the most recent three years shall be no less than
year, including any interim cash dividends already distributed, shall be no less than 20% of the Company's net profit
attributable to shareholders of the parent company for that year. Key Performance
From 2021 to 2024, the Company's cash dividend payout ratios were 21%, 26%, 31%, and 34%, respectively, achieving Number of statutory announcements prepared and disclosed: 142; Information disclosure rating from the
steady year-by-year growth. For 2025, while balancing capital expenditures and dividends, the Company continued to
Shenzhen Stock Exchange: Class A for the seventh consecutive year
return value to investors with strong commitment. The Company has declared a cash dividend of RMB 1.60 (tax inclusive)
for every 10 shares, amounting to total cash dividends of RMB 1.096 billion. The cash dividend payout ratio reached 42% Ranking among companies listed in Shanghai and Shenzhen: top 3.28%
of the Company's net profit attributable to shareholders of the parent company for 2025, representing a further increase
Award received: "2025 Best Practice Award for Board Office" from the China Association for
of 8 percentage points over the previous year.
Public Companies (CAPCO)
Dividend
Dividend payout ratio
Dividend payout ratio 42%
Dividend
Dividend payout ratio 34%
Dividend payout ratio
payout ratio 31%
payout ratio 26%
Cash dividend per Cash dividend per Cash dividend per Cash dividend per Cash dividend per Cash dividend per
(tax inclusive) (tax inclusive) (tax inclusive) (tax inclusive) (tax inclusive) (tax inclusive)
Shareholder Communication
Deepening Digital and Intelligent Innovation
Introducing Long-Term Active Shareholders
The Company actively responded to the policy call to improve the modern enterprise system with Chinese characteristics
Optimizing the Innovation System
and support listed companies in introducing institutional investors holding more than 5% of shares as active shareholders, Strengthening Innovation Management
and proactively engaged in communication with long-term capitalproviders such as insurance institution.
Valin Steel has continued to strengthen its innovation management system by formulating policies and procedures
During the reporting period, the Company successfully introduced Xintai Life, under Hunan Province-owned enterprise including the Measures for Basic Research Management , the Research and Development Control Procedures , the Detailed
Wuchan Zhongda, as an active shareholder holding more than 5% of the Company's shares. Through continued purchases Rules for the Management of Science and Technology Projects , and the Measures for the Management of R&D Projects . In
in the secondary market, Xintai Life increased its holding to 7.97%. Xintai Life has nominated one director to the Company. doing so, the Company has established a management mechanism covering the full chain from R&D project initiation and
With a financial background, this director contributes to the continued diversification of the Board and brings more process control to the commercialization of results, ensuring that research projects are advanced in an orderly manner
diverse perspectives to the Company's strategic decision-making. and executed efficiently in accordance with plan. At the same time, in order to fully stimulate the innovation motivation of
R&D personnel, the Company's subsidiaries, in accordance with documents such as the Measures for Awards for Scientific
and Technological Progress and the Measures for Awards for Technological Innovation , have defined dedicated R&D
Strengthening Investor Relations Management incentive measures and granted additional rewards based on researchers' contributions and R&D achievements, creating
The Company actively implements the principle of being investor-oriented and continuously improves and strengthens a dual support mechanism of institutional safeguards and incentive-driven motivation.
investor relations management. Through various means such as investor roadshows, participation in investor strategy
meetings, and reception of investor research visits, the Company has maintained a visible presence in the capital market.
The Company also regularly holds performance briefings through written interaction, livestreaming, and other channels,
and promptly communicates operating information. The Company actively collects and analyzes market views on the Key Performance
investment value of the listed company, reasonably guides investor expectations, and proactively listens to investors'
opinions and suggestions. Through channels such as the investor hotline, email, the Shenzhen Stock Exchange's During the reporting period:
Interactive Easy platform, and shareholders' meetings, the Company responds to investor inquiries and concerns and R&D investment: RMB 5.378 billion, accounting for 4.44% of total operating revenue for the year
continues to build a sound two-way communication mechanism with investors.
Number of R&D personnel on staff: 3,308; Proportion of R&D personnel: 14.30%
During the reporting period, the Company organized 79 investor communication activities of various kinds, covering 243
mainstream institutions, received 33 recommendation reports from steel industry analysts, and responded to 665 investor
questions on the Shenzhen Stock Exchange's Interactive Easy platform.
Maintain high-frequency investor engagement 4.2
R&D investment (RMB billions)
Number of institutions engaged Number of Interactive Easy Number of recommendation R&D investment as a percentage of total operating revenue (%)
(times) replies (times) reports (times)
R&D Platform Development
The Company has pooled high-quality internal and external resources
and vigorously advanced the development of its innovation platform
system. By the end of 2025, we had established 11 national-level R&D Provincial
National
Xiangtan Steel LY Steel HYST VAMA Yangchun New Steel
platforms, including three national enterprise technology centers
at Xiangtan Steel, LY Steel, and HYST, as well as two postdoctoral
level: 12 High-level
level:
research workstations. In parallel, the Company has also put in place
Leverage Science and Formulate dedicated pat- Integrate and establish Establish incentive mech- Optimize resource alloca-
multiple provincial-level and above R&D platforms, including the
diversified
Technology Week activities ent development plans; set a technology innovation anisms such as the VAMA tion under the IPD model;
to recognize outstanding patent targets for each unit; incentive system; reward Patent Incentive Measures; strengthen research on Hunan Engineering Technology Research Center for High-Strength innovation
research projects, tech- and implement supporting achievements in scientific and provide both financial common technologies and
Structural Steel and Steel for Construction Machinery and the Hunan platforms
nological achievements, incentive and evaluation honors, standards, and rewards and honorary brand building; and im-
Key Laboratory of Welding Technology, forming a multi-level, high-
and teams; grant awards mechanisms to stimulate patents in 2025; and im- recognition to teams and plement dedicated bonus
totaling over RMB 8 million; innovation. plement an annual perfor- individuals with outstand- allocation mechanisms to caliber scientific research support system. In addition, the Company's
Physical and Chemical Testing Center has obtained certification Enterprise
N
and confer plaques to the mance evaluation system ing contributions to tech- incentivize key R&D initia-
first batch of 10 "Innovation for IPD R&D personnel with nological innovation. tives. under the ISO, CMA, and CNAS systems and is recognized within the
Studios". multi-dimensional bonus
industry as an authoritative testing laboratory. level:
criteria to incentivize results
in real time.
HYST | Recognition as a National Enterprise Technology Center Demonstrated National-
Case
Level Recognition of Its Innovation Strength
In April 2025, HYST was successfully included in the 2024 (31st batch) list of newly recognized national
enterprise technology centers, with its innovation capability, commercialization of achievements, and
industry leadership receiving authoritative national recognition. HYST has consistently adhered to the path
Intellectual property protection
of independent innovation, achieved large-scale import substitution in the high-end steel tube segment,
The Company strictly complies with laws and regulations including the Patent Law of the People's Republic of China, successfully broken through multiple critical "bottleneck" technologies in key national fields, and participated
the Trademark Law of the People's Republic of China , and the Copyright Law of the People's Republic of China . We extensively in major national engineering and strategic projects, injecting strong momentum into the
have formulated the Intellectual Property Management Measures and continues to improve its intellectual property development of a manufacturing powerhouse and the high-quality development of the steel industry through
management system, strengthening the protection of core intellectual property assets such as trademarks, patents, its hard-core technological strength.
and copyrights on a comprehensive basis. Among the Company's organizational functions, the Science and Technology
Management Department serves as the central function for intellectual property management and is responsible for
overall coordination. The subsidiaries undertake day-to-day intellectual property management and have formulated
supporting rules and procedures, including the Patent Management Measures . Commercialization of Scientific and Technological Achievements
The Company implements the strategy of "strengthening the enterprise through science and innovation" and regards
The Company also conducts regular dedicated training on intellectual property, strengthens awareness of intellectual
the commercialization of scientific and technological achievements as a core pillar of high-quality development. The
property management and protection across the workforce, and has built an intellectual property protection framework
Company continues to deepen its technological innovation system and collaboration among industry, academia, research,
characterized by sound systems, effective execution, and full employee participation, effectively safeguarding the
and application, increase R&D investment, improve commercialization mechanisms, and promote the industrialization of
Company's core intellectual property assets.
core technologies, tempowering the transformation and upgrading of its core business.
The subsidiaries delivered notable and substantial results in the area of scientific and technological achievements. In
Improving the efficiency of domestic Strengthening the forward-looking overseas 2025, Xiangtan Steel completed the evaluation of five scientific and technological achievements, including R&D and
intellectual property protection deployment of intellectual property Industrial Application of Key Technologies for Ultra-Wide High-Strength, High-Toughness, and Easy-to-Weld Steel Plates
for Lightweight Construction Machinery, all of which were assessed as reaching an internationally leading level. LY Steel
Revise the Patent Management Measures; Engage patent agencies to conduct freedom- received 4 first prizes in the 2025 Metallurgical Science and Technology Awards, including one project led by LY Steel,
proactively engage with provincial and municipal to-operate (FTO) analyses for the overseas marking another historic breakthrough for the Company. HYST received 3 Metallurgical Science and Technology Awards,
intellectual property authorities; secure inclusion deployment of core products, including premium 1 second prize of the Science and Technology Award of the China Steel Construction Society, and 1 second prize of the
in the Hunan Intellectual Property Protection threaded connections; file one PCT international Science and Technology Award of the Chinese Society for Corrosion and Protection.
Center's fast-track channel for expedited pre- patent application; and build a legal protection
examination, rights confirmation, and rights framework to support the global expansion of the
protection; and shorten patent grant cycles by Company's products and technologies.
R&D Achievements in Specialty Steel Products
Xiangtan Steel
In recent years, Xiangtan Steel has remained committed to its strategy of advancing toward higher-end quality
and branding, continuously upgrading and optimizing its product mix and extending product structure adjustment Steel for Hydropower Applications
toward the higher end of the industrial and value chains. In 2025, Xiangtan Steel delivered fruitful R&D results. In the Xiangtan Steel has continued to strengthen
plate segment, it focused on areas such as steel for polar low-temperature vessels, preheat-free engineering steel, its position in the field of hydropower
corrosion-resistant bridge steel, and steel for the storage and transportation of clean energy, and developed 28 steel, with product quality moving further
new high-end grades. Among them, 80 mm wear-resistant steel and copper-clad steel rolled clad plate successfully upmarket. Its products have been widely
filled domestic gaps, while 1000 MPa steel for hydropower applications, 420 MPa steel for offshore engineering used in key domestic and international
applications, and 5.5Ni and 7Ni nickel-alloy low-temperature steel were recognized as reaching an internationally
hydropower projects such as the Yangjiang
leading level. These products have been widely applied in major projects including the world's largest metamorphic
Pumped Storage Power Station, the
buried-hill oilfield, the Huajiang Grand Canyon Bridge—the world's highest bridge—and the "Light of the Sea" Opera
Jatigede Hydropower Station in Indonesia,
House in Shenzhen. In the wire rod and bar segment, Xiangtan Steel accelerated quality improvement and efficiency
enhancement, focusing on the needs of high-end manufacturing and developing 52 new products, including 80 kg- and Phase IV of the Tarbela Hydropower Yangjiang Pumped Jatigede Hydropower Tarbela Hydropower
grade high-strength alloy welding wire and 2000 MPa-grade high-strength mono-leaf spring steel. It also achieved the Station in Pakistan, achieving essentially Storage Power Station Station in Indonesia Station in Pakistan
first domestic application of 1Ni weather-resistant steel for rivets, saw its non-quenched-and-tempered crankshaft full coverage of all strength grades for (Phase IV)
steel enter Toyota's supplier system, enabled its bearing steel to meet the admission standards of Luoyang Bearing hydropower steel.
Group, and secured certification from Geely and Ford for Grade 10.9 high-strength cold-heading steel, continuously
enhancing its high-end and precision-oriented supply capabilities.
High-Strength Wear-Resistant Steel
Backed by a strong technical team, Xiangtan Steel has achieved key breakthroughs in high-strength wear-resistant steel,
Steel for Shipbuilding and Offshore Engineering successfully developing 80 mm full-thickness NM600 high-grade wear-resistant steel that can substitute for imported
Xiangtan Steel positions steel for shipbuilding and offshore engineering as a mid- to high-end product category Hardox 600 products. Bulk delivery at this thickness represented an industry first, significantly enhancing Xiangtan
and has continued to deepen integrated upgrading in both technology and high-end products. Closely aligned with Steel's reputation in heavy-duty applications. The product has been widely supplied to high-end customers both in
industry trends toward larger scale, lightweighting, and greener development, Xiangtan Steel has focused its R&D and China and overseas, including Caterpillar and Liebherr internationally and SANY and XCMG domestically. Xiangtan
upgrading efforts on frontier areas such as special-purpose vessels, steel for polar applications, deepwater jackets, Steel's Caterpillar 1E4187 product has successfully replaced comparable products from SSAB and JFE. At the same time,
and offshore wind power, and has established strategic cooperation with internationally renowned companies orders for Q960-grade and above ultra-high-strength structural steel exceeded 41,000 tonnes, and Xiangtan Steel jointly
including CNOOC and Saudi Aramco. Its products have obtained approvals from ten major international classification achieved breakthroughs with XCMG Mining Machinery in the application of ultra-low-temperature steel, breaking foreign
societies, as well as certification under the U.S. API system and EU EN 10225, and have consistently maintained the dominance in this field.
leading domestic market share while securing a strong position in the high-end international market.
At the same time, Xiangtan Steel has taken the lead in industry standard-setting, leading the drafting of China's first Jointly Breaking Through the Application Bottleneck of Ultra-Low-Temperature Engineering
Case
standards for Steel Plates for Offshore Platform Structures and Steel Plates for Offshore Platform Jackets, filling Steel with XCMG Mining Machinery
domestic gaps in the relevant standards. Building on its technological strengths, Xiangtan Steel has accelerated its
move toward higher-end quality and branding in this segment, achieved continued breakthroughs, overcome 12 In 2025, Xiangtan Steel, together with XCMG Mining Machinery, completed the development and industrial
internationally leading technologies, completed 15 first domestic launches, and realized supporting capability across application of the full series of Q355–Q690 high-strength structural steels and NM450F wear-resistant steel
all product categories, all specifications, and all vessel types. In 2025, its High-Strength, Extra-Thick, High-Quality for service temperatures of -50°C/-60°C, achieving full coverage of specifications. The delivery of this series of
Steel for Deep-Sea Offshore Engineering was recognized as reaching an internationally leading level. equipment for extreme cold conditions broke foreign monopolies and filled the domestic gap in large-scale
engineering equipment for service temperatures below -50°C, providing strong support for construction and
mineral development in high-latitude regions.
Case First Domestic Application of Ultra-High-Strength Wear-Resistant Ship Plate
In February 2025, the 20,000-ton transfer barge MINRES ROSILY, which uses
Xiangtan Steel's AB/AQ98 ultra-high-strength wear-resistant ship plate, was
Clad Plate
successfully delivered, marking the first domestic application of this type Xiangtan Steel achieved a major breakthrough in roll-bonded cladding technology with the successful development
of ship plate. The vessel is used for iron ore transshipment and operates of copper-clad steel plate, providing a new materials solution for industries such as new energy, power, chemicals,
in a highly demanding service environment, requiring exceptionally high and metallurgy. Xiangtan Steel became the first steel enterprise in China to master the full-process technology
strength and wear resistance from the steel plate. Leveraging its advanced for roll-bonded copper-clad steel. The Company has launched high-end products including high-grade clad plate
equipment, strong R&D capability, and efficient delivery performance, Successful delivery of the 20,000- for bridges, clad plate for nuclear power, chrome-moly clad plate, nickel-based alloy clad plate, and clad plate for
Xiangtan Steel secured the entire 5,000-ton order, and the product received ton transfer barge MINRES ROSILY
shipbuilding, which have been widely used in key projects such as the Tongling Bridge in Anhui, Bailong Nuclear
high recognition from the customer. Power Station, and the Pinglu Canal in Guangxi. Its clad plate R&D capabilities are at a leading level in China.
LY Steel
LY Steel has continued to optimize its product mix and strengthen technological innovation. In the silicon steel
segment, it successfully mastered the production process for grain-oriented silicon steel with high magnetic induction
under a full low-temperature conditions, and made breakthroughs in the rolling technology for thin-gauge SK series
Case Grain-Oriented Silicon Steel Achieved a Key Breakthrough in Localized Production in Hunan
products, achieving exclusive mass production in China of products as thin as 0.01 mm. In the construction machinery
steel segment, LY Steel developed a series of key grades featuring high strength and toughness, with multiple
In November 2025, the first coil of grain-
products achieving import substitution and strongly supporting market expansion and profitability improvement in
this segment. In 2025, LY Steel achieved breakthrough progress in specialty steel development, with annual output oriented silicon steel was successfully
and sales of specialty steel reaching 6.29 million tonnes, up 4.9% year on year. High-end products accounted for 38% rolled off LY Steel's No. 4 rolling mill,
of total sales volume. A cumulative total of 39 new products were developed, and the proportion of plate products marking a key leap toward localized
exceeded 80%, further strengthening product competitiveness. production of high-grade grain-oriented
silicon steel in Hunan. This achievement
filled the gap in high-end electrical steel
Silicon Steel
in Central South China and, supported by
LY Steel's silicon steel business has undergone multi-stage leapfrog development, with continuous improvement breakthroughs across the full production
in industrial layout and steady enhancement of technological capability. In 2007, its first heat of silicon steel was process, provided core material support
successfully smelted. In 2018, it joined the first tier of domestic substrate suppliers and ranked first in market share
for downstream industries such as
in the industry. In December 2022, the Electromagnetic Materials Company was formally established, laying a solid
power transmission and transformation
foundation for the industrialization of high-end silicon steel. In June 2023, the first coil of non-oriented silicon steel
and new energy vehicles, contributing
was successfully rolled off the line, marking a breakthrough in a key process link. In June 2025, the first coil of grain-
oriented silicon steel with high magnetic induction was successfully rolled off the line. LY Steel set industry records for to the upgrading of Hunan's electrical
both project construction speed and the speed of commissioning the process route for high-magnetic-induction grain- equipment industry.
oriented silicon steel, filling the gap in high-end electrical steel in Central South China and providing core material The first coil of grain-oriented silicon steel was successfully rolled off LY
support for downstream industries such as power transmission and transformation and new energy vehicles. Steel's No. 4 rolling mill
LY Steel completed the development
of 46 grades across four major product
series. These products are widely used Wear-Resistant Steel
in home appliances, motors, and other
Thin-gauge wear-resistant steel plate is an important raw material for major equipment, key engineering projects,
fields. Its product portfolio of non-
and national defense. In response to the urgent demand from large-scale engineering equipment for wear-resistant
oriented silicon steel for new energy
Non-Oriented steel with higher strength, thinner gauges, and better toughness, and against the backdrop of long-term dominance
vehicle drive motors has continued
Silicon Steel by international players, LY Steel actively pursued independent innovation and collaboration among industry,
to expand and has achieved batch
Non-oriented silicon steel products academia, research, and application. It successfully developed the roller-type quenching equipment capable of
application by leading automakers.
processing plates as thin as 2 mm, high-precision tempering equipment operating at temperatures as low as 150°C,
Thin-gauge products of 0.20 mm, 0.15 mm, and 0.10 mm for emerging sectors such as
and ecological descaling technology and equipment for high-performance steel plates using high-pressure water-jet
the low-altitude economy were successfully rolled off the line in succession, with iron
shot blasting. It also developed a series of functional wear-resistant steels and built the heat-treatment production
loss reduced to below 10 W/kg, supporting the rapid development of emerging national
base for thin-gauge steel plate.
industries.
Innovative Thin-Gauge High-Strength, High-Toughness Wear-Resistant Steel Honored with
Case
the "Three Innovations Brand" Title
LY Steel completed the development of multiple grades, including high-magnetic-induction
series and refined magnetic domain LY Steel's project, Development and Application of Innovative Thin-Gauge High-Strength, High-Toughness
series. Leveraging its comprehensive and Wear-Resistant Steel, was awarded the "Three Innovations Brand" title. Through sustained technological
strengths in product quality, technical innovation and strong industry leadership, the project achieved outstanding results in promoting equipment
Grain-Oriented exchange, and commercial service, lightweighting and domestic substitution, delivering remarkable economic and social benefits. This honor
Silicon Steel it completed supply chain admission represents high recognition of LY Steel's more than ten years of dedication to high-end wear-resistant materials
procedures, and its products are now and its contribution to breaking international technological monopolies.
widely used by a number of benchmark
enterprises in the industry.
Grain-oriented silicon steel products
HYST
Guided by its strategy of moving upmarket and differentiating its offerings, HYST achieved a series of key technological
breakthroughs in core segments such as OCTG, line pipes, pressure vessel tubes, and tubes for machining. It successfully Gas-Tight Premium Connection Safeguarded the Safe Operation of China's First Underground
Case
Hydrogen Storage Facility
developed a number of domestically leading, and in some cases exclusive, products, including 165V-grade casing, ultra-low-
carbon line pipe, extra-large-diameter pressure vessel tube, and high-grade structural tube for construction, significantly
HYST tailored its HSTW gas-tight premium connection for China's first underground hydrogen storage facility,
enhancing its core competitiveness and overall profitability in high-end markets such as energy, construction, and storage.
Sinopec's Chongqing Banshan Ring Road Comprehensive Energy Station, providing critical support for the rapid
In 2025, the overall technology of HYST's project Development and Application of Key Manufacturing Technologies for Seamless development of domestic hydrogen storage technology through superior product quality. The facility incorporates
Steel Tubes for High-Temperature and High-Pressure Service reached an internationally advanced level, among which the the world's first 45 MPa high-pressure underground hydrogen storage well technology and is designed for a service
technology for controlling full-size performance uniformity in large-diameter products reached an internationally leading level. life of 25 years. To precisely meet the project's demanding gas-tight sealing requirements, HYST's technical team
The project Efficient, Low-Carbon Smelting Technology and Intelligent Model Application for High-Quality Seamless Tube Steel developed the HSTW gas-tight premium connection, which is easy to make up and offers strong operational
via the EAF Short Process also reached an internationally advanced level overall, with the intelligent coordinated control model stability. The product is capable of maintaining safe, reliable sealing performance under high-pressure and corrosive
for the EAF-LF-VD-CC section based on a mechanism-and-data dual-driven approach reaching an internationally leading level.
conditions, safeguarding the safe operation of the hydrogen storage facility.
OCTG Line Pipe
HYST "Golden Cup High-Quality Products"
HYST achieved the first production of 165V-grade casing, setting a HYST successfully developed ultra-
new record for the highest steel grade in the Company's history. It also low-carbon line pipe with a carbon
simultaneously developed its first direct-connect premium connection content of 0.05%–0.07%. It also
to pass the A-series sealability evaluation under API RP 5C5 / ISO 13679; developed reeled risers meeting the
developed the new N80-1 grade 33Mn2V, improving impact performance performance requirements for 1.5%
by 30%; successfully developed C125 sour-service casing and passed SSC strain and became the exclusive Seamless steel tubes for high-
testing; launched the new high-performance premium connection HSG4, supplier to develop and provide base pressure boilers: High in
technical content and value
which passed third-party CAL IV qualification testing; and completed the pipe for ultra-thin-wall clad pipe. Tubes for offshore engineering:
added, these products are
development of premium connections for salt cavern energy storage, These products meet the
widely used in utility boilers demand for high-quality steel
laying the foundation for expanding into the energy storage market. and chemical projects, strongly tubes from offshore oil and
supporting the development gas production platforms and
of the power boiler industry offshore wind power projects
and national infrastructure at home and abroad, and have
construction. been applied in more than 30
offshore engineering projects.
Pressure Vessel Tube Tubes for Machining
HYST completed the development of extra-large- HYST achieved batch supply of 50MnVS tubing for
diameter P-series products and obtained TS hydraulic cylinders, becoming the second company Seamless steel tubes for crane
certification, while successfully delivering medium- in China to master the production technology for booms: These products filled a Seamless steel tubes for rotary
diameter, extra-thick-wall P-series products. It also this high-sulfur asteel grade. It also successfully domestic gap, strongly supported drilling rig drill rods: These
successfully developed Gr10 steel tubes for service developed 690-grade high-end round tubes and the development of the crane products successfully replaced
at -70°C and completed factory trial production of rectangular hollow sections for construction, industry and national infrastructure imports, met the demand of
a new generation of ultra-high-strength and high- becoming the first manufacturer in the industry to construction, were recognized as China's high-end equipment
a Hunan Province Manufacturing manufacturing sector for
toughness gas cylinder tubes. enter the high-grade construction tube segment.
Single Champion, and have been premium seamless steel tubes,
applied in the world's largest 4,500- and have already been applied
ton crawler crane and the world's in the world's largest rotary
largest 4,000-ton all-terrain crane. drilling rig, setting records for
Case Development and Industrialization of High-Strength Special-Shaped Tubes for Construction maximum drilling diameter and
depth.
In response to the demand for lightweighting and cost reduction in steel building structures, HYST tackled the
technical challenges associated with forming and heat treatment for high-strength special-shaped tubes and
successfully developed a series of high-strength special-shaped tubes and round tubes for construction at steel
grades of 460 MPa and above, becoming the first manufacturer in China to enter this high-end segment. Among
them, the 690 MPa-grade special-shaped tube demonstrated stable performance, reached an internationally Steel pipes for casing used in oil and gas wells in the petroleum
and natural gas industry: These products have been successfully
leading level overall, and passed rigorous customer certification. These products have already been
applied in multiple major oil and gas development projects in
successfully applied in landmark projects such as the Shenzhen Opera House and Yuen Long Sports Centre China and overseas, received broad recognition from oilfield
in Hong Kong. A total of 6 invention patents have been filed under the project, 3 of which have already been users, and made a positive contribution to the development of
granted, forming an independent intellectual property portfolio. China's oil and gas industry and national energy security.
VAMA
Anchored in innovation, VAMA has delivered notable results in the R&D of specialty steels and continues to provide
customers with high-value-added automotive steel solutions. In 2025, VAMA launched a number of new automotive steel Yujian Won an Industry Award, Empowering the Upgrade of Automotive Manufacturing
Case
Through an Integrated Solution
products, including Usibor2000, CP980, and DP600DH, which combine high strength, high toughness, and good weldability
and are widely used in vehicle manufacturing. Through the innovative integration of multi-part integration, laser welded In December 2025, the Yujian Multi-Part Integration
blank, and hot forming technologies, together with the innovative application of related core components, VAMA has Solution jointly launched by VAMA and GONVVAMA
expanded beyond the traditional value boundaries of a conventional steel supplier. It has now built a broad specialty steel won the "2025 Automotive Industry Rotary Award".
portfolio covering advanced high-strength steel, ultra-high-strength steel, and aluminum-silicon-coated hot-forming steel. Built on ArcelorMittal's deep expertise in advanced
high-strength steel and hot-forming technology,
the solution delivers full-chain upgrading from
YujianTM Multi-Part Integration Solution
steel materials to forming processes. It has set a
In April 2025, VAMA and GONVVAMA jointly launched the Yujian Multi-Part Integration Solution. Its core objective is to benchmark in body lightweighting, safety, and
enhance automotive manufacturing efficiency and reduce manufacturing costs through advanced steel technologies and manufacturing efficiency. Verified in local projects,
integrated design, providing a full-chain competitive solution for integrated and lightweight vehicle manufacturing that the solution is adaptable to flexible production across
supports the green and intelligent transformation of the automotive industry. multiple platforms, helping automakers improve
manufacturing agility and providing reliable support
for the green and intelligent transformation of the The Yujian Multi-Part Integration Solution won the "2025
Automotive Industry Rotary Award".
automotive industry.
The solution is built on ArcelorMittal's latest technological achievements in automotive
◆
steels and is supported by two core steel grades that balance lightweighting, safety,
and formability.
Ductibor 1500: A new third-generation aluminum-silicon-coated hot-forming steel that
◆
pushes beyond the traditional trade-off between strength and toughness, combining
ultra-high strength with outstanding impact toughness and energy absorption
Core Enablers "YujianTM integration is not only a breakthrough in manufacturing technology, but also an innovation in
performance. design thinking, helping automakers achieve multiple goals in weight reduction, cost reduction, and
Fortiform series: a third-generation family of cold-forming advanced high-strength
◆
emissions reduction."
steels offering an excellent balance of strength and formability. With stamping ——Huang Qiang, Product Service Manager of GONVVAMA
performance superior to dual-phase steels of the same strength class, the series is well
suited to complex cold-formed structural parts and helps ensure vehicle structural
strength and durability.
◆
The application of hot-forming steel has been extended from occupant compartment
protection to power battery systems, offering steel solutions with stronger core
Expanding
performance and greater economic value. The solution can help reduce the overall
Applications
structural cost of battery packs by more than 40% while delivering a higher level of
safety protection.
Cost savings through optimization of materials, tooling, and welding; Outstanding
◆
safety through precise matching of steel grades and improved crash protection;
Key Part integration through fewer parts and simplified processes; Modular adaptability
Advantages across multiple platforms and steel grades; Sustainability through carbon reduction
VAMA is steadily expanding its vehicle body materials ecosystem and building a new "Hot Forming+" ecosystem centered on hot-
and material recycling; Lightweighting through optimized body-in-white weight and forming technology and extending toward whole-vehicle material solutions. With the continued integration of local R&D and global
improved vehicle performance. expertise, VAMA is providing more comprehensive, value-added solutions for the further development of automotive manufacturing
through its Yujian approach to simplifying complexity.
Advancing Intelligent Manufacturing Case VAMA | Building an Intelligent Computing Center to Empower Digital Development
The Company has continued to deepen its digital and intelligent transformation, strengthen the development of its digital VAMA established a modern computing center of medium scale featuring intelligent management and
systems, and coordinate the efforts of its steel plants in advancing digital and intelligent initiatives. It has continuously high efficiency, with 36 standard server racks deployed. Through the DCIM system, the center enables 24/7
implemented digital and intelligent projects, deployed a wide range of industrial robots, expanded the application of 5G+ intelligent monitoring and is equipped with automated operation and maintenance, automatic fault alerts, and
industrial internet technologies, and built large-model applications and full-process intelligent quality control centers for dual-power supply capability, ensuring stable and reliable system operation. The center primarily supports AI
the steel industry. Leveraging technologies such as big data and artificial intelligence, the Company has accelerated the R&D, big data analysis, cloud computing, and the operation of critical business systems. It also adopts high-
implementation of intelligent application scenarios, enabling intelligent upgrading in areas such as production, inspection, efficiency cooling and modular design to lower the PUE value, providing solid green-computing support for the
and operational control. These efforts have improved production efficiency and labor productivity, reduced production digital transformation and high-quality development.
costs and quality losses, and established a full-process intelligent control system, setting a benchmark for intelligent
manufacturing in the steel industry.
Deepening the Development of Digital Systems
The Company has systematically advanced the iterative upgrading of its digital systems, treating data governance and value
realization as priorities and reinforcing the foundation for digital development. The Company has preliminarily established
master data standards, data coding rules, data formats, and data quality standards, and is gradually standardizing its data
management system. We have also broken down data barriers between headquarters and subsidiaries and among different
business segments, enabling interconnection and interoperability of data and unlocking the value of data as a production
factor.
At the same time, the Company has accelerated the implementation of major digital projects in an orderly manner,
including the headquarters' financial information system, Xiangtan Steel's intelligent equipment process system, LY Steel's
integrated smart management and control system for energy and carbon, and HYST's energy management system. These
projects have further improved the Company's digital application framework and promoted coordinated enhancement of
intelligent capabilities across all business segments.
Case Xiangtan Steel | Establishing the Steel Industry's First Artificial Intelligence Large Model
Xiangtan Steel's Pangu large model consists of two components: the foundational model layer and the
large-model platform. The foundational layer comprises three parts: a resource scheduling platform, a data Case LY Steel | DeepSeek Empowering the Digital Future of Steel
integration platform, and an AI infrastructure platform. The platform layer includes a vision model and a
predictive model. Unified AI operations management is provided through the artificial intelligence large-model Amid the wave of intelligent transformation in the steel industry, LY Steel, together with Loudi Valin V Cloud
platform, which can also leverage platform capabilities to provide the resources and service support required and Institute of Engineering Technology, USTB, completed the localized private deployment of the DeepSeek
across the Company's production, operations, and management activities, with total computing capacity of 5.8P. large model by leveraging the high-performance computing capacity of its cloud data center. With the model's
Following the completion of the Xiangtan Steel Pangu large model, scenario-based models can be developed strong capabilities in data mining and intelligent prediction, the Company established a quality risk early-
using the workflow development toolkit on the large-model platform, supporting Xiangtan Steel's intelligent warning and intelligent process control system covering the entire production process, enabling intelligent
transformation, establishing an artificial intelligence large-model training center for Xiangtan Steel, and analysis of massive volumes of process data and precise prediction of production risks. This has provided
enabling large-scale deployment across the Company. strong support for quality control, process optimization, and intelligent management, creating a “smart
brain” for steel production and driving the effective implementation of digital and intelligent transformation.
Advance Advance
upgrades industrial robot
in basic deployment Advance the
Advance
automation development of
unmanned
transformation a large-model
platform
Accelerating the Application of Intelligent Scenarios
Supported by both the steel large model and the industrial internet, the Company has systematically advanced the
implementation of artificial intelligence across core business scenarios such as production management, optimal raw
material and fuel allocation, product R&D, and quality improvement. During the reporting period, the Company successfully
launched 46 artificial intelligence application scenarios, achieving deep integration of AI technologies with core production
Together with Institute of Engineering Technology
and operating processes. At the same time, the Company continued to increase investment in robotics, bringing the
of the University of Science and Technology
cumulative number of robots deployed in the core steel business to 261 units, effectively replacing labor-intensive manual
Beijing, Xiangtan Steel built a full-process quality
work and improving both production efficiency and operational safety.
control system for steelmaking and rolling based
on a quality big data platform, enabling real-
time monitoring of process data, precise push
notifications of abnormal information, and
Xiangtan Steel | Empowering All Areas to Build a Benchmark for Digital and Intelligent
Case product performance prediction.
Transformation in the Steel Industry
In 2025, Xiangtan Steel advanced enterprise-wide digital and intelligent upgrading with a focus on practical and
tangible results, and built a benchmark for digital and intelligent transformation through targeted investment
and ecosystem collaboration. Xiangtan Steel invested RMB 280 million in more than 30 core projects, including
the upgrade of the wire rod and bar MES and a full-process quality control system. The “Xiangtan Steel Pangu”
large model has now covered the full process from coking to rolling. Its flying shear system uses vision AI to
achieve millimeter-level defect identification and automatic cutting, saving from approximately RMB 100,000
to RMB 200,000 in costs per month. In the finished products workshop, 16 cameras automatically identify lifting
tag information, raising the efficiency of unmanned warehousing by more than 60%. In addition, Xiangtan
Steel strengthened upstream and downstream collaboration, achieving full-process information sharing in In November 2025, the intelligent factory optimization
production, dispatch, and after-sales service with enterprises such as COSCO Shipping Heavy Industry, building and upgrading project of Yangchun New Steel
a digital and intelligent marketing ecosystem. officially commenced. By introducing frontier
technologies such as big data, artificial intelligence,
In 2025, the “Xiangtan Steel 5G Digital and Intelligent Factory” was included in the National 5G Factory List and
and the industrial internet, the project aims to deeply
was recognized as one of the first “Optimization-Level” intelligent factories, in the steel industry nationwide.
optimize and upgrade the Company’s production,
Projects including the artificial intelligence large model were also included in Hunan Province's list of digital new
management, and operation and maintenance
infrastructure projects and typical application scenarios.
activities, and to build an intelligent benchmark
factory with advanced industry standards.
LY Steel advanced digital transformation and
intelligent upgrading, with its AI inspection system
identifying micron-level surface defects on steel plates
The “Xiangtan Steel 5G Digital and Intelligent Factory” was recognized as one of the first within 0.3 seconds, robotic dogs replacing manual
“Optimization-Level” intelligent factories in the steel industry nationwide inspections in high-temperature areas of up to 600°C,
production efficiency increasing by 39.2%, cost per
tonne of steel falling by 11%, and comprehensive
energy consumption declining by 3%.
ESG Management Stakeholder communication
Valin Steel has consistently adhered to the management philosophy of "forging ahead to shape the future", continuously
In line with its strategic development needs, Valin Steel has integrated the concept of sustainable development improved its ESG management, paid close attention to the needs and expectations of stakeholders, actively responded to
into corporate strategy and decision-making, continuously improved its ESG governance structure and operating their concerns, and adjusted its development strategy in a timely manner.
mechanisms, steadily enhanced its ESG management capabilities, and worked with stakeholders on the basis of mutual
At present, the Company has identified six major stakeholder groups that maintain close relationships with the Company and
benefit and harmonious development.
have decision-making authority or influence over it. The Company has established a normalized communication mechanism
to listen to the views of all parties and respond proactively through multiple channels.
ESG Governance Structure
The Company has continued to improve a top-down ESG governance structure with clearly defined responsibilities,
establishing a three-tier ESG governance framework consisting of the Board of Directors, the Strategy and ESG Stakeholders Topics of Concern Communication and Response
Committee of the Board, and the ESG Working Group. In 2025, in accordance with relevant laws, regulations, and the
Articles of Association, the 30th meeting of the Eighth Board of Directors approved the renaming of the former Strategy
Corporate governance hareholders' meetings / extraordinary
S
Committee as the Strategy and ESG Committee, providing a solid organizational foundation for advancing the Company's Compliance and risk management general meetings
sustainability and ESG-related work. Business ethics and anti-corruption Results briefings
Information security News releases / announcements /
Within this framework, the Board of Directors serves as the highest responsible body for ESG management, operation,
Shareholders / Investors ESG Management annual reports
and information disclosure. The Strategy and ESG Committee is responsible for formulating ESG objectives and related Product quality assurance Roadshows
systems. The ESG Working Group, composed of various functional departments and subsidiaries, serves as the principal Innovation-driven development Investor engagement activities
coordinating and execution body, responsible for coordinating and advancing the implementation of ESG-related
matters.
Protection of employee rights and
mployee representative congresses
E
interests
Employee satisfaction surveys
Occupational health and safety
Employee meetings
Review and approve the Company's ESG strategy, objectives, and policies Employees Career development and training
Employee activities
Employee care
Review and approve public disclosure relating to the Company's ESG performance and the
Company's ESG report
Board of Directors
Review major ESG-related risks with significant impact and response plans for major negative Sustainable supply chain
Decision-Making Supplier training
ESG events Intellectual property management
Level Supplier audits / site visits
Business ethics and anti-corruption
Suppliers / Partners Green products and technologies
Industry exchange conferences
Review and provide recommendations on the Company's ESG strategy and objectives,
organizational structure, and management systems; study major ESG matters and Product quality assurance
propose ESG governance-related recommendations or plans Green products and technologies Customer satisfaction surveys
Customer service Customer complaints
Identify, assess, and propose recommendations or solutions for the risks and opportunities Customers Privacy and security
Strategy and companies face in ESG
ESG Committee Identify and assess ESG-related risks and opportunities faced by the Company, and
Management propose recommendations or plans; Review the Company's ESG report/sustainability nvironmental compliance
E
Level report and related disclosure information, and provide recommendations management
S upervise and inspect the implementation of major ESG matters, and review the Water resources management
achievement of ESG-related strategies and objectives Circular economy
Energy Management n-site inspections / research visits
O
Pollutant emissions Regular communication
Government / Regulatory Waste disposal Periodic disclosures
Authorities Climate change and carbon
F
ormulate and implement work plans aligned with the management
Company's strategic plan and ESG objectives Ecosystem and biodiversity protection
M
anage ESG-related risks arising in the Company's day-to-day Business ethics and anti-corruption
operations
ESG working
C
oordinate and advance the implementation of ESG-related
Rural revitalization ews releases / announcements
N
group
matters
Execution Level Social contribution Volunteer services
C
ollect and compile publicly disclosed information relating to
the Company's ESG performance
Communities Ecosystem and biodiversity protection Regular / ad hoc communication
Identification of Material Topics Results of the Materiality Analysis
With reference to the requirements of the Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock
Exchange — Sustainability Report (For Trial Implementation) , and taking into account leading domestic and international
industry practices, the Company's ESG development strategy, business characteristics, and market positioning, the Materiality dimension No. Topic Category
Company extensively collected the needs of internal and external stakeholders, identified annual ESG topics, and
conducted a double materiality analysis to define the priorities and direction of its annual ESG work. Topics that are
financially material are addressed and responded to as key topics in this report.
Step 1: Background analysis and topic Topics that are material from
identification both a financial and an impact 4 Occupational health and safety Social
perspective
Based on the three dimensions of 5 Product quality assurance Social
environment, social, and governance, identify
the Company's ESG topic pool.
Step 2:
Topics that are financially
Impact materiality assessment:Assess material but not impact material
severity through stakeholder surveys and
assess likelihood through evaluations
conducted by internal and external ESG 1 Rural revitalization Social
experts.
Financial materiality assessment：Assess
the financial materiality of each topic from
Double Materiality
two dimensions by internal finance experts,
followed by review and confirmation by
Assessment 4 Circular economy Environment
multiple departments.
Process
Topics that are impact material
Step 3: Double materiality assessment and
analysis but not financially material
Based on the assessment data generated in 8 Customer service Social
Step 2, determine the ESG topics that are
material for the year. 9 Intellectual property management Governance
Information security and privacy
Step 4: Use the results to guide ESG
disclosure and practice protection
Review and confirm the analysis results by the 13 ESG Management Governance
Strategy and ESG Committee. Guided by these
results, the Company carries out targeted Topics that are neither 1 Green products and technologies Environment
disclosure and practice enhancement. financially material nor impact
material 2 Employee care Social
Material Topic3 Governance Strategy Impact, Risk, and Opportunity Management Metrics and Targets Material Topic1 Governance Strategy Impact, Risk, and Opportunity Management Metrics and Targets
At the Company level, the Strategy Following the dual approach Establish an innovation management Treat scientific and technological Risks: Core technology R&D cycles are long
Risks: Fluctuations in international energy structure led by the Science and innovation as a core corporate Continue increasing
Department establishes an energy of "energy conservation and prices may drive up production costs; and capital-intensive; the commercialization of
management benchmarking efficiency enhancement + Technology Committee. Set up an office strategy and focus on areas technological achievements may be slow and investment in core
regional energy supply shortages may affect under the Science and Technology such as green and low-carbon technology R&D; focus
system and coordinates efforts structural optimization", the production continuity; and energy-saving difficult to convert quickly into production capacity;
The Company will Committee within the Technology development, intelligent on innovation in key
to improve energy efficiency. Company promotes energy- upgrades for aging equipment require Innovation- and the accelerating pace of technological iteration
continue to improve Research Institute to take the lead in manufacturing, and new areas such as low-carbon
Each subsidiary has set up an saving technologies such as substantial investment and involve long driven in the industry requires sustained R&D intensity.
energy utilization implementing matters approved by the materials. Advance digital metallurgy and digital
energy management leading waste heat recovery to improve payback periods. development Opportunities: Breakthroughs in core technologies operations; and promote
efficiency, optimize the Committee and handling its day-to-day transformation; develop
group, with a dedicated energy utilization efficiency; can create technological barriers and strengthen
Energy Opportunities: Energy-saving upgrades energy consumption work; and enable each subsidiary to intelligent factories and the commercialization
Energy and Environmental gradually reduces dependence industry competitiveness; and digital and intelligent and application of R&D
Management can reduce unit energy consumption and mix, expand the use carry out independent scientific and industrial internet platforms; and
Protection Department / Energy on high-carbon energy sources upgrades can improve production efficiency and
deliver both cost reduction and efficiency of clean energy, and technological innovation under the enhance production efficiency achievements.
Section responsible for overall such as coal while expanding reduce operating costs.
enhancement; the use of green electricity can steadily reduce unit Committee's leadership. and manufacturing capability.
coordination, and energy the use of clean energy such as
provide advantages in electricity pricing and energy consumption
administrators assigned to each green electricity; and develops an
carbon reduction accounting; and improved per product.
process, forming a three-tier integrated Energy Management
energy management can help the Company Improve the corporate governance
management network covering System (EMS) to enable digitalized
obtain industry energy-efficiency benchmark structure comprising the shareholders'
the Company, plants, and work control across the full energy
certification and enhance brand influence. meeting, the Board of Directors, the
teams. management process.
board of supervisors, and management; Optimize the ownership Risks: An incomplete corporate governance
standardize decision-making procedures structure and protect the structure may lead to inefficient decision-making
in strict accordance with the Company Law rights and interests of minority or internal control failures. Tightening regulatory Improve corporate
Risks: Intensified environmental inspections and the Measures for the Formulation and shareholders. Integrate ESG requirements for state-owned enterprises may also governance structure
may lead to production suspension for Corporate Administration of Articles of Association into the corporate governance increase compliance pressure. and management
rectification or administrative penalties in governance of State-owned Enterprises; establish framework and strengthen standards; strengthen
Fully achieve the ultra- the Strategy and ESG Committee under sustainable development Opportunities: Standardized corporate compliant operations
Advance full coverage of ultra- the event of excessive emissions; improper
low emissions targets the direct leadership of the Board to governance capabilities. Advance governance can enhance investor confidence and and risk control.
Establish a full-process control low-emissions retrofits; upgrade disposal of solid waste may give rise to
for the steel industry set coordinate ESG strategic planning and digital transformation to improve reduce financing costs. A strong governance profile
system for pollutant emissions environmental protection environmental disputes; and the introduction
by the state and Hunan implementation; and improve the internal governance efficiency. can also strengthen brand reputation.
and strictly implement the facilities in sintering, ironmaking, of updated environmental regulations may
increase compliance costs. Province; ensure 100% control and compliance management
pollutant discharge permit and steelmaking processes;
Pollutant compliant disposal and systems while conducting regular internal
regime. Conduct real-time implement zero-wastewater- Opportunities: Once ultra-low emissions
emissions utilization of solid waste; audits and compliance inspections.
monitoring and regular testing discharge retrofits; and promote certification is obtained, the Company and advance zero-
of waste gas, wastewater, and the resource utilization of may benefit from policy incentives such pollution, enterprise- Risks: In the course of commercial dealings in
solid waste to ensure compliant steelmaking solid waste and the as tax reductions and transport priority; city integration, and the industry, there are risks of unfair competition
discharge. development of value-added the resource utilization of solid waste can Continue to strengthen
green and low-carbon and commercial bribery; internal employees may
products. create new profit growth drivers; and a green Establish and improve anti-commercial Incorporate integrity and organization-wide
development. abuse their authority for personal gain, giving
production profile can attract high-end bribery and anti-corruption management honesty into the Company's education on business
systems; define prohibited conduct and values; strictly enforce integrity rise to corruption incidents; and any corruption ethics and integrity in
customers with stringent environmental Business
accountability mechanisms; carry out admission requirements in uncovered may lead to administrative penalties professional conduct,
requirements. Ethics
regular integrity and warning education; supply chain cooperation, and reputational damage. standardize business
and Anti-
establish a conflict-of-interest declaration project tendering, and customer Opportunities: A corporate image of integrity and cooperation and internal
Corruption
Establish a Work Safety mechanism; and implement integrity cooperation; and ensure honesty can attract high-quality partners and help management processes,
Management Committee under risk controls for key positions and major openness and transparency in build a healthy business ecosystem; it can also and eliminate major
Risks: Steel production involves risks of projects. key business processes. incidents of commercial
the direct leadership of the Embed the principle of "safety support recognition from government authorities
mechanical injury, fire and explosion, falls bribery and corruption.
Chairman, with participation from first and prevention first" and industry associations as a benchmark for
from height, and occupational diseases; weak Effectively reduce
all subsidiaries. Sign Work Safety throughout the full production integrity.
safety awareness among employees may also the risk of work
Target Responsibility Statements and operations process; improve lead to non-compliant operations. safety accidents and Continue to improve its environmental
with each subsidiary; conduct working conditions; strengthen Treat environmental compliance
Occupational Opportunities: Improved work safety occupational diseases, governance structure and promote Risks: Increasingly stringent environmental
monthly assessments; effectively the provision of labor protection as a prerequisite for production
health and management can reduce accident losses and continuously the development of its environmental regulations and emissions standards may continue
implement the work safety equipment; and carry out and operations and embed it Establish and improve
safety and downtime costs; a sound occupational improve employees' governance system toward greater to drive up compliance costs; failure to keep pace
responsibility system; link safety regular work safety training and throughout project initiation, a sound environmental
health environment can enhance employees' safety protection and standardization and refinement. with regulatory updates may result in penalties
performance to monthly and emergency drills to enhance construction, and operation. compliance risk
sense of belonging and productivity; and emergency response Revise the Environmental Protection or production restrictions; and the normalization
annual performance appraisals; employees' safe operating Respond proactively to changes prevention and control
compliance with work safety standardization capabilities. Environmental Management Measures; further of environmental inspections may intensify
and build a vertically integrated skills and emergency response in environmental policies mechanism; ensure full-
and horizontally coordinated capabilities. requirements can bring government compliance clarify environmental protection compliance pressure.
recognition and market credibility. by planning ahead for the process environmentally
work safety management management responsibilities at all levels; strengthen Opportunities: Compliant operations can reduce
upgrading of environmental compliant operations;
network. the assessment and accountability the risk of production suspension for rectification
protection facilities and the and prevent any
mechanism for environmental incidents; and safeguard business continuity; and strong
optimization of production material environmental
link environmental performance to the environmental compliance performance can
processes, ensuring continued compliance violations.
remuneration of subsidiary management; establish the Company as an industry benchmark
Risks: Fluctuations in raw material quality compliance with the latest
and reinforce the red line for ecological and and enhance brand value.
may affect final product quality; substandard requirements.
Advance the national quality- environmental protection.
Establish a customer-oriented product quality may lead to customer Take "zero defects" as
strength strategy; adhere to the
quality management system complaints, order losses, and even legal the quality objective;
strategic direction of "becoming Build a green, safe, and
covering the full product claims; and intensifying product homogeneity continuously improve the
more specialized and stronger, Formulate and implement management responsible supply chain and Risks: Fluctuations in upstream raw material
life cycle and ensure the in the industry places greater demands on the stability and reliability of
and leading in the region" and systems including the Supplier prioritize partners with strong prices and supply shortages may affect production
continued effectiveness of ISO stability of product quality. product quality; optimize
Product the business philosophy of Management System; establish a full- ESG performance. Work with stability; and differences in environmental and
quality "deeply engaging in industries, Opportunities: Breakthroughs in high-end life-cycle supply chain management suppliers to develop a circular labor standards across international supply chains
leadership accountability through products; meet the chain stability and
assurance leading market in the region, products can generate price premiums and framework covering supplier onboarding, economy system and promote may create compliance challenges.
quality performance orientation; diversified and customized Sustainable resilience, and build
and staying half a step ahead"; improve profitability; a strong reputation evaluation, incentives, and exit; packaging recovery and resource
and implement mechanisms such needs of downstream supply chain Opportunities: Sustainable supply chain a green, resilient, and
and reinforce the principles of for product quality can enhance customer and incorporate indicators such as sharing. Support suppliers
as top executive accountability customers; and maintain certification can win recognition from high-end collaborative sustainable
prioritizing specialty steel quality loyalty and expand market share in high- environmental compliance, carbon in strengthening their ESG
for quality and the economic a strong reputation for downstream customers and expand market share; supply chain.
and optimizing alignment with end segments; and participation in industry management, and occupational health management capabilities and
responsibility system. quality. coordinated decarbonization across the supply
customer standards. standard-setting can strengthen the and safety into the supplier evaluation advance coordinated sustainable chain can reduce overall operating costs; and a
Company's market influence. system. development across the resilient supply chain can strengthen risk resistance.
industrial chain.
Change" in Chapter I of this report.
General Secretary Xi Jinping has emphasized that In 2026, the Company will remain closely aligned Enhancing Quality and Efficiency Through Lean Collaboration Deepening Reform to Unlock Vitality and Build Stronger
state-owned enterprises are an important force in with the strategic plan of Hunan Iron and Steel Group and Empowering Production Upgrading Through Digital and Overall Development Momentumc.
Future Outlook strengthening China's overall national strength, Co., Ltd., stay committed to its three strategic support Intelligent Technologies With the goals of ultimate efficiency
The Company will implement the requirements of state-
promoting economic and social development, and systems of lean production, integration of sales, and optimal cost performance.
safeguarding and improving people's well-being. Valin R&D, and production, and marketing and service, owned enterprise reform and further stimulate endogenous
Steel remains committed to the original mission of a and stay focused on high-end, green, intelligent, The Company will promote production transformation toward momentum for development. First, we will optimize
state-owned manufacturing enterprise. Leveraging the and lean development. The Company will continue lean and intelligent operations. First, we will deepen full-process control models and corporate governance mechanisms,
Group's collaborative strengths, the Company actively to strengthen efforts in scientific and technological lean management, implement production line competition deepen pilot reforms under the business division structure,
fulfills its responsibilities in serving national industrial innovation, production quality enhancement, green mechanisms, benchmark against the Company's best historical comprehensively carry out management benchmarking
upgrading and local economic development. transformation, and reform-driven empowerment, performance and industry-leading peers, strengthen lean and management enhancement, build a value-empowering
with the goal of building a world-class steel production and full-process management, continuously headquarters, effectively advance the governance model
At present, the external environment remains complex enterprise. optimize techno-economic indicators, and ensure that lagging for specialized committees in accordance with the new
and challenging. The steel industry is undergoing a units catch up while leading units move even further ahead. Company Law and regulatory requirements, and improve
period of deep adjustment characterized by "reduced Driving High-End Development Through Second, we will strengthen collaboration across the full chain, internal audit and compliance oversight systems. Second,
volume growth and optimization of existing capacity", Innovation and Strengthening Core Competitive establish coordinated mechanisms linking procurement, we will strengthen market-oriented mechanisms, adhere
while structural growth in downstream sectors such Momentum. production, logistics, and sales, improve full-life-cycle equipment to the principles of "hard constraints and strong incentives"
as automobiles and new energy continues to provide management, and enhance supply chain resilience. Third, we and the last-place elimination mechanism, continue to
solid support for high-quality development. From an The Company will continue to regard innovation will accelerate digital and intelligent transformation. Supported deepen reform of the labor, personnel, and remuneration
industry perspective, the broader pattern of "three as the primary driving force and build a full- by the steel large model and the industrial internet, the Company systems, explore the implementation of medium- and long-
highs and three lows" — high output, high costs, chain innovation system centered on "high-end will systematically plan the implementation path for lighthouse term incentive mechanisms, and build a diversified system of
and high inventories, alongside weak demand, low development + differentiation". First, we will factories and intelligent factories and promote the rollout of more incentives and constraints to stimulate innovation and value
prices, and low profitability —has not fundamentally improve collaborative platforms integrating industry, than 30 new artificial intelligence application scenarios. Fourth, creation across the workforce. Third, we will enhance capital
changed. Competition over existing market demand has academia, research, and application, pool internal we will advance major technical upgrading projects to ensure that operation capabilities, implement the new "State Council
intensified, and the basis of competition is shifting from and external resources, focus on forward-looking multiple product lines achieve designed capacity as quickly as Nine-Point Guidelines", consolidate strong profitability
scale toward quality, efficiency, and core capabilities. At and foundational technology research, build 10 core possible, while accelerating construction of key projects such as and sound development momentum, continue to improve
the same time, green and low-carbon transformation, patent clusters, and strengthen intellectual property Xiangtan Steel's rod, flat bar, and wire product upgrades, LY Steel's information disclosure and investor relations management,
digitalization, and intelligent upgrading are accelerating, protection and patent commercialization. Second, cold-rolled grain-oriented silicon steel project, HYST's extra-large- strike an effective balance between capital expenditure and
while demand for steel products is moving toward we will deepen integrated collaboration among diameter seamless steel tube project, and Yangchun New Steel's dividends, continuously enhance long-term shareholder
higher-end and more functional offerings. The industry sales, R&D, and production, use the IPD system as high-speed wire rod quality enhancement project, strengthening returns, and improve the investment value of the listed
is therefore transitioning from scale-based competition a foundation, focus on key products such as high- premium manufacturing capabilities. company.
to value-based competition. Valin Steel will proactively strength crack-arrest steel, high-grade silicon steel,
align itself with these trends, consolidate its strengths and high-performance premium connections,
in niche segments, and achieve new breakthroughs in strive to develop 10 to 15 sophisticated high-end Safeguarding the Bottom Line Through Green Development
serving national strategies. steel grades to replace imports, and cultivate a and Work Safety, and Demonstrating the Responsibility of a
Great Achievements Stem from Lofty Aspiration, and
number of flagship premium products. Third, we will State-Owned Enterprise.
Broad Success is Built Through Diligent Effort.
continue to deepen its presence in niche markets,
remain customer-centric, further strengthen the The foundation of manufacturing lies in steadfast
The Company will hold firm to the bottom line in work safety and
EVI and CTS service models, reinforce full-process commitment, and the responsibility of a state-owned
environmental protection and continue to practice the philosophy
quality management, target landmark projects, enterprise lies in practical action. Keeping the nation's
of green development. First, we will strengthen the work safety
benchmark customers, and leading downstream overarching priorities firmly in mind, Valin Steel will stay
defense line, implement the principle that responsibility for
enterprises, and pursue precise, high-quality market focused on four strategic directions for development, build
managing operations, industries, and business activities must
alignment so as to raise the share of high-end cohesion through Party leadership, tackle challenges through
include responsibility for work safety, improve information-based
specialty steel. Fourth, we will improve innovation innovation, improve quality and efficiency through lean
management platforms, strengthen hazard identification and
incentive mechanisms, link innovation outcomes to management, secure long-term development through green
rectification as well as oversight of outsourced contractors and
remuneration and professional titles, promote the transformation, and unlock vitality through reform. Amid
related parties, and firmly safeguard the work safety bottom line.
spirit of craftsmanship, and foster a stronger culture profound adjustment across the industry, the Company
Second, we will advance green and low-carbon transformation, use
of innovation. will shoulder its responsibilities with resolve, deepen value
digital and intelligent means to support the efficient, cost-effective,
creation, remain rooted in Hunan while looking to the
and stable operation of environmental protection facilities, reduce
world, and, with the steadiness of steel and the drive of
environmental operating costs per tonne of steel year on year, and
practical action, continue writing a new chapter in high-
ensure the long-term stable achievement of ultra-low emissions
quality development, contributing Valin Steel's strength to
standards. Third, we will implement dual-control requirements
building a manufacturing powerhouse, advancing regional
for carbon emissions, leverage the Green and Low-Carbon
revitalization, and strengthening China's national industry.
Research Center as a key driver, improve the carbon management
framework and the energy and carbon measurement system,
strengthen carbon asset management and green product
certification, participate actively in the national carbon market,
and reduce the cost of carbon compliance. Fourth, we will optimize
ecological governance, systematically rectify environmental issues,
improve ESG ratings, and build green steel plants, with LY Steel
striving to become a national Green Factory and HYST striving to
achieve Class A environmental performance.
Appendix
Key Performance Table
Indicator Name Unit 2023 2024 2025 Indicator Name Unit 2023 2024 2025
Economic Performance Gasoline consumption tonnes - - 8.58
Operating revenue RMB billions 163.897 144.112 121.138 Coal consumption tonnes - - 11,620,542.70
Total profit RMB billions 7.487 4.141 4.820 Natural gas consumption m3 - - 255,306,016.93
Net profit RMB billions 6.64 3.20 3.87 Total electricity consumption TWh 15.1 15.3 15.2
Technological innovation Self-generated electricity GWh 9,222.86 9,666.82 9,999.77
Installed self-owned clean energy generation capacity
R&D investment RMB billions 6.828 5.726 5.378 MW - - 64
(photovoltaic)
R&D investment as a percentage of operating
% 4.17 3.97 4.44 Annual self-owned clean energy generation
revenue GWh - - 25.52
(photovoltaic)
Number of R&D employees persons 3,260 3,300 3,308
Water resource utilization
Proportion of R&D employees % 13.77 14.09 14.30
Total water consumption million m3 4,653.13 4,203.36 4,383.69
Total number of valid patents item(s) 1,830 2,149 2,646 Total water consumption per RMB million of
m? / RMB million of revenue 28,400 29,200 36,200
revenue
Number of valid patents per RMB million of
item(s) 0.0112 0.0149 0.0218
revenue Freshwater withdrawal tonnes 95,337,685 91,150,352 91,508,559
Number of newly filed invention patent
item(s) 583 783 941 Circulating water consumption tonnes 4,557,787,501 4,112,211,237 4,292,181,001
applications during the year
Number of newly granted invention patents during Water recycling rate % 97.95 97.83 97.91
item(s) 116 120 242
the year
Pollutant emissions
Number of software copyrights item(s) 59 92 108
Wastewater discharge volume tonnes 26,007,761 25,806,847 26,732,136
Number of software copyrights per RMB million
item(s) 0.0004 0.0006 0.0009
of revenue Chemical oxygen demand (COD) emissions tonnes 354.77 299.71 282.65
Environmental Performance Ammonia nitrogen (NH3-N) emissions tonnes 18.03 14.50 14.50
Environmental compliance management Sulfur dioxide (SO2) emissions tonnes 5,740 4,537 3,769
Environmental protection investment RMB billions 1.9 3.9 2.8 tonnes / RMB million of
Sulfur oxide emissions per RMB million of revenue 0.04 0.03 0.03
revenue
Environmental protection investment as a
% 1.16 2.71 2.28
percentage of operating revenue Nitrogen oxides (NOx) emissions tonnes 15,867 14,437 9,111
Number of environmental pollution incidents item(s) 0 0 0 Nitrogen oxide (NOX) emissions per RMB million tonnes / RMB million of
of revenue revenue
Coverage rate of environmental training for
% 100 100 100 Particulate matter (PM) emissions tonnes 21,744 20,006 9,545
employees
Suspended particles and particulate matter (PM) tonnes / RMB million of
Proportion of sites certified to ISO 14001 0.13 0.14 0.08
% 100 100 100 emissions per RMB million of revenue revenue
Environmental Management System
Plant green coverage rate % - - Above 40 Resource utilization
Hazardous waste disposal volume tonnes 199,277 235,855 165,494
Energy utilization
Solid waste utilization volume tonnes 12,987,443 12,997,971 13,123,827
Total energy consumption tonnes of standard coal 14,297,053.76 14,081,213.51 13,913,196.85
tonnes / RMB million of
Total energy consumption per RMB million of tonnes of standard coal / RMB Solid waste utilization per RMB million of revenue 79.24 90.19 108.34
revenue million of revenue
Steam consumption tonnes of standard coal - - 1,650,105.73 Comprehensive utilization rate of solid waste % - - Above 98
Total fuel oil consumption tonnes - - 7,014.81 Comprehensive utilization rate of steel slag % 100 100 100
Diesel consumption tonnes - - 7,006.23 Dust and sludge recycling rate % 100 100 100
Indicator Name Unit 2023 2024 2025 Indicator Name Unit 2023 2024 2025
Social Performance Supply chain safety
Employment Number of suppliers suppliers 4,179 4,264 4,268
Total number of employees persons 23,676 23,419 23,130 Localization rate of procurement % 24.86 23.08 23.34
Number of female employees persons 2,811 2,720 3,195 Number of local suppliers suppliers 1,039 984 996
Percentage of female employees % 11.87 11.61 13.81 Social contribution
Ethnic minority employees persons 481 477 479 Total volunteer service hours hours 27,227 28,337 30,773
Percentage of ethnic minority employees % 2.03 2.04 2.07 Average volunteer service hours per volunteer hours 1.15 1.21 1.33
Number of employee departures persons 187 179 156 Funds invested in social contribution activities RMB million 15.69 16.40 24.62
Number of employees in difficulty receiving Participants in social contribution activities person-times 12,800 13,650 14,065
persons 913 1,094 950
assistance
Total investment in rural revitalization RMB million 9.42 5.01 10.22
Number of employees in difficulty receiving
persons 0.0056 0.0076 0.0078
assistance per RMB million of revenue Scope and number of beneficiaries of rural
persons 6,116 5,716 9,521
revitalization
Labor contract signing rate % 100 100 100
Governance Performance
Social insurance coverage rate % 100 100 100
Proportion of independent directors % 33.33 33.33 33.33
Average paid leave days per employee days 10.14 10.24 10.42
Proportion of independent and external directors % 44.44 44.44 44.444
Employee training coverage rate % 100 100 100
Proportion of female directors % 11.11 11.11 11.11
Total employee training hours hours 609,286 819,665 971,460
Standard deviation of the ages of directors,
Average training hours per employee hours 26 35 42 years 5.53 5.94 6.89
supervisors, and senior executives
Percentage of employees receiving vocational and Proportion of independent directors serving more
% 100 100 100 % 0 0 0
skills training than six years
Health examination coverage rate % 100 100 100 Proportion of independent directors serving more
% 0 0 0
than nine years
Number of employees with disabilities persons 335 327 304
Proportion of independent directors serving on the
% 0 0 0
Percentage of employees with disabilities % 1.41 1.40 1.31 boards of more than three listed companies
Proportion of independent directors serving on the
Occupational health and safety % 0 0 0
boards of more than six listed companies
Number of work-related fatalities persons 0 2 1 Average tenure of Board members years 3.02 3.62 3.57
Number of work-related fatalities per RMB billion Number of Board meetings meeting(s) 9 9 10
persons 0 0.00014 0.00008
of revenue
Attendance rate of Board members % 100 100 100
Work safety investment RMB million 250.31 284.45 232.42
Number of directors attending fewer than 75% of
Work safety investment as a percentage of persons 0 0 0
% 0.15 0.18 0.19 meetings
operating revenue
Number of Audit Committee meetings meeting(s) 5 6 4
Number of major and above accidents case(s) 0 0 0
Proportion of independent directors on the Audit
Fatality rate from major and above accidents % 0 0 0 % 66.67 66.67 66.67
Committee
Participants in work safety training person-times 271,025 246,585 252,940 Number of Nomination and Remuneration
meeting(s) 3 1 3
Committee meetings
Duration of Work Safety Training hours 203,140 190,396 197,428
Proportion of independent directors on the
% 66.67 66.67 66.67
Nomination and Remuneration Committee
Average Duration of Safety Training per Employee hours 8.58 8.13 8.54
Proportion of female senior executives % 33.33 33.33 33.33
Percentage of products withdrawn or recalled for
% 0 0 0
health and safety reasons Proportion of operational sites subject to
% 100 100 100
corruption risk assessment
Protection of customer rights and interests
Shareholding ratio of senior executives % 0.0017 0 0
Customer satisfaction % 93.93 95.43 94.39
Share pledge ratio % 0 0 0
Chapter III, "Standardizing Corporate Governance" of this report for details).
Indicator Index Feedback
Dear Readers,
Self-Regulatory Guidelines No. 17 for Companies
Contents GRI Standards Listed on Shenzhen Stock Exchange — Thank you for reading the Valin Steel 2025 Sustainability Report. To continuously improve our report preparation, we
Sustainability Report (For Trial Implementation) sincerely welcome your opinions and suggestions. We would appreciate your assistance in completing the questions set
About this Report GRI2-3 Article 4 out in the feedback form below and returning your feedback to us through one of the following channels.
Chairman's Message GRI2-22 - Company address: No. 222 Xiangfu West Road, Changsha, Hunan
GRI2-1, GRI2-2, GRI2-6, GRI2-9,
About Valin Steel -
GRI202 Postal code: 410004
Highlights 2025 - -
Responding to Climate Tel: 0731-89952811
GRI305 Articles 8, 14, 21, 22, 23, 24, and 27
Taking Change
Ecological Strengthening Email: valinsteel@163.com
Stewardship Environmental Protection GRI303, GRI305, GRI306 Article 20
as a Guiding Management
Principle and Advancing Energy
Advancing GRI301, GRI302, GRI303, GRI305,
Conservation and Articles 20, 24, 27, 28, 30, 31, 34, 35, 36, and 37
the Mission Emissions Reduction
GRI306 1. This report comprehensively and accurately reflects the Company's significant impacts on the economy, society, and
of Green
the environment.
Metallurgy Green and Eco-Friendly
GRI304 Articles 29 and 32
Operations
○Excellent???○Good???○Average???○Poor
Strengthening Quality
GRI416 Article 47
Management
Ensuring Work Safety GRI403 Article 50
Putting
Optimizing Customer ○Excellent???○Good???○Average???○Poor
Strivers GRI416, GRI417, GRI418 Articles 47 and 48
Service
First and
Empowering GRI2-7, GRI2-30, GRI401, GRI402, 3. The information, indicators, and data disclosed in this report are clear, accurate, and complete.
Growing Together with
the Co- GRI403, GRI404, GRI405, GRI406, Articles 49 and 50
Employees
Creation of GRI407,GRI408, GRI409
○Excellent???○Gooda???○Average???○Poor
Social Value
Working with Partners for
GRI204, GRI308, GRI414 Articles 44 and 45
Mutual Success 4. The readability of this report, including its logical structure, content design, language, and layout design.
Enhancing Public Well-
GRI203, GRI413 Articles 38, 39, and 40
Being ○Excellent???○Good???○Average???○Poor
Upholding the Leadership
- -
of Party Building
Building Standardizing Corporate
on Sound GRI2-10~2-14, GRI2-18, GRI405 Article 12
Governance ________________________________________________________________________________________________
Governance
to Safeguard Preventing and Controlling GRI2-15, GRI2-27, GRI205,
Articles 55 and 56
the Steady Compliance Risks GRI206 6. What other information do you think you are concerned about is not disclosed in this report?
Development
of the Steel Safeguarding Shareholder
- Article 53
Business Rights and Interests ________________________________________________________________________________________________
Deepening Digital and
- Articles 41 and 42 7. What suggestions do you have for our future preparation of sustainability reports?
Intelligent Innovation
GRI2-16, GRI2-26, GRI2-29, GRI3-
ESG Management
Articles 5, 11, 12, 13, 14, 15, 16, 18, 51, and 53 ________________________________________________________________________________________________
Future Outlook GRI2-23 Article 14
Key Performance Table GRI201, GRI301, GRI302 Articles 6 and 19
Indicator Index - Article 57
Appendix
Feedback - -
Valin Steel Honors in
GRI2-28 -
Previous Years
Scan to share your opinion
Valin Steel Honors in Previous Years (2022–2024) High-strength wear-resistant steel plates and strips for construction machinery were
awarded the title of Enterprise Standard "Leader"
Product Manufacturing
Awarded the title of National Demonstration Enterprise for Product and Service Quality
Awarded the title of "Strategic Partner" by Beijing China Railway Construction Engineering 2022 National Trustworthy Product in Quality Inspection LY Steel
Group
Recognized by LGMI as one of the Top 10 High-Quality Brands of State-Owned Construction
Steel among the 2022 National Gold Medal Suppliers
Cold-rolled continuous hot-forming steel sheet and strip for automotive use was recognized
Awarded the title of "Class A Excellent Supplier" by Dongfang Boiler Co., Ltd., Dongfang as a 2022 Standard Leader by the State Administration for Market Regulation
Electric Corporation
Received the honor of "High-Quality Cooperation Partner" from China Petroleum Technology
& Development Corporation
Awarded the title of "Tier-1 Strategic Supplier" by China Huanqiu Contracting & Engineering
Co., Ltd. 2023 Xiangtan Steel
pressure vessels
Awarded the title of "Tier-1 Strategic Supplier" by China Huanqiu Contracting & Engineering
Co., Ltd. 2023 Golden Cup High-Quality Product: Hot-rolled alloy tube billet for boilers and heat exchangers Xiangtan Steel
Received a commemorative plaque of appreciation from Dongfeng Honda for localization
and supply assurance under its import project
Awarded the title of "Annual Strategic Partner" by Guangzhou Branch of Materials Industry & Golden Cup High-Quality Product: Ultra-high-strength steel for shipbuilding and offshore
Trade Co., Ltd.of China Railway No. 4 Engineering Group engineering structures
Received the honor of "Annual Strategic Partner" from Sino-hydro Corporation Engineering Golden Cup High-Quality Product: Hot-rolled wire rod for prestressed steel wire and steel
Bureau 15 Co, Ltd. strand
Golden Cup High-Quality Product: High-strength wear-resistant steel plate for construction
machinery
"Import Substitution Development and Serialization of Crane Boom Steel" was recognized in Golden Cup High-Quality Product: Hot-rolled ribbed steel bars in straight lengths for
the project list of the 7th China Grand Awards for Industry reinforced concrete
Golden Cup High-Quality Product: Seamless casing pipes for oil and gas wells in the 2023 National Benchmark Enterprise for Quality Integrity LY Steel
petroleum and natural gas industry
Most Innovative Award at SERES's 3rd Lightweighting Conference and Advanced Technology
Exhibition
Class A Supplier (Nantong COSCO Shipping Shipyard Engineering Co., Ltd.; Qidong COSCO 2024 Golden Cup Premium Product: Weather-resistant structural steel plate for bridges Xiangtan Steel
Shipping Offshore Engineering Co., Ltd.)
Golden Cup High-Quality Product: Hot-rolled wire rod for steel used in cold heading and cold
extrusion
Science and Technology
Golden Cup High-Quality Product: Hot-rolled steel sheet and strip of quality carbon
structural steel
Golden Cup High-Quality Product: Continuously hot-dip galvanized high-strength interstitial- First Prize and Third Prize of the National Metallurgical Science and Technology Progress
free steel strip Awards
Protection
Golden Cup High-Quality Product: Steel pipes for casing used in oil and gas wells in the
petroleum and natural gas industry
Recognized as a Hunan Province Benchmark Enterprise for the "Three Products" Initiative in 2023 Second Prize of the Science and Technology Award of the China Steel Construction Society HYST
Raw Materials
Golden Cup High-Quality Product: Hot-rolled ribbed steel bars in straight lengths for 2023 Commendation Award of the 7th China Grand Awards for Industry LY Steel
reinforced concrete
Bronze Award of the 5th China Advanced Technology Transformation and Application
China Metallurgical News's "Searching for the Most Beautiful Green Steel City" campaign
Second Prize of the Science and Technology Award of the Chinese Society for Corrosion and
Protection
Second Prize of the Science and Technology Progress Award of the China Steel Construction Rated by the Guangdong Provincial Department of Ecology and Environment as a Green Brand
Society "Environmental Integrity Enterprise" for five consecutive years
obtained corresponding certification
Excellent Intelligent Manufacturing Scenario Case in 2022
The "Automatic Slab Transfer" case was selected as a Steel Industry Intelligent Manufacturing
Solution in 2022
Hunan Innovation Consortium for R&D and Application of Metallic Materials for Special and
Complex Marine Environments
Benchmark Enterprise for Green Development in the Steel Industry by China Metallurgical
News
The treatment and application of highly efficient reuse of circulating water in steel enterprises
Award
The steel smart energy management and control platform was awarded the title of "2024
Hunan Province Digital New Infrastructure"
The cold-rolled lean digital production system won the 2024 Steel Industry Intelligent
Manufacturing Solution Award from the China Iron and Steel Association
Included in the cultivation list for the industry's "Best Practice Energy Efficiency Benchmark
Demonstration Plant" for carbon peaking and carbon neutrality
The full-process quality control center was awarded the title of "Zhifu Wanqi Hunan Province
Benchmark Project for Digital Transformation"
The equipment intelligent operation and maintenance system project was recognized as a 2024 Corporate Governance / Investor Relations
Benchmark Informationization Project for Provincially Supervised SOEs
The Pangu Large Model won the 2024 International Telecommunication Union Global AI 2022 Ranked first on the 2022 Hunan A-share Listed Companies Scale Ranking Valin Steel
Innovation Excellence Award
Included among the top 10 on the 2022 Hunan A-share Listed Companies Innovation Capability
The "Intelligent Monitoring System Based on Digital Twins and Video Fusion" was recognized as Ranking
a 2024 Hunan Province Benchmark Project for Manufacturing Digital Transformation Included among the top 10 on the 2022 Hunan A-share Listed Companies Social Responsibility
Ranking
One of the first Excellence-Level Intelligent Factories in China (Cloud + AI Intelligent Factory for
the Full Process of Medium and Heavy Plate Manufacturing) 2022 Top 100 Growth Listed Companies in China (16th edition) Valin Steel
"Building a World-Class Smart Steel Plant for Steel Enterprises" won the First Prize for Included in the 2022 A-share Listed Companies Cash Dividend Ranking – Generous Shareholder
Modernized Management Innovation Achievements in National Enterprises Return List
The "Intelligent Belt Monitoring System Based on Machine Vision" was recognized as one of the 2022 Received the honor of "Investor Relations Pioneer Award" Valin Steel
Top Ten Typical Application Scenarios in Hunan Province's "Zhifu Wanqi" initiative in 2024
"R&D and Application of a Digital Twin-Based Visualized Centralized Control Platform for
Rolling Production Lines" won First Prize from the China Association of Plant Engineering
The "5G + AI Drone-Based Integrated Air-and-Space Inspection System" was recognized as a
Typical Application Scenario for AI-Empowered New Industrialization in Hunan Province in 2024
Included in the cultivation list for the industry's "Best Practice Energy Efficiency Benchmark
Demonstration Plant" for carbon peaking and carbon neutrality 2023 Included among the top 10 on the Hunan Listed Companies Scale Ranking Valin Steel
"Hunan University Business School – Twenty Years of Excellence, Creating Brilliance Together"
Award
Included among the top 10 Hunan listed companies by tax contribution and employment
contribution
Hunan Valin Steel Co., Ltd.
地址：湖南省长沙市湘府西路222号
Address: No. 222 Xiangfu West Road, Changsha, Hunan
邮编：410004
Postal code: 410004
传真：
Fax: 0731-89952811
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