亨通光电: 亨通光电2024年环境、社会及治理报告(英文版)

来源：证券之星

2025-12-31 19:08:09

Environmental, Social and
Governance Report
Hengtong Optic-Electric Co., Ltd.
Table of
Contents Compliance and Low-Carbon Global Cooperation:
Stability: Development: Demonstrating
The Foundation for Illuminating a Green Hengtong's
Corporate Governance 14 Environmental Protection and 56 Social Contribution and Rural 108
Stakeholder Engagement 19 Climate Change and Carbon Neutrality 59 Promoting Industrial Sustainable 111
Energy Efficiency and Transformation 70 Development
Risk Management 23
Business Ethics 26 Water-Saving Transformation and 78
Optimization
Emission Management and Recycling 80
Exchange Guidelines
Leading Innovation: Caring for Employees:
Creating Leading Promoting
Quality Inclusive Development
Sustainable Innovation 34 Talent Attraction and Retention 88
Supply Chain Management 36 Empowering Growth and Development 94
Quality Control 44 Promoting Communication and Care 98
Customer Service and Information 50 Occupational Health and Safety 100
Protection
Hengtong Optic-Electric Co., Ltd. About This Report
About This Report
Overview Reporting Time Scope Report Scope and Boundaries Report Language and Format
This is the third Environmental, Social, and Govern- This Report covers the Company's activities for the The policies and data provided in this report cover the This report is compiled in Chinese and English and
ance (ESG) Report (hereinafter referred to as the "Re- financial year from January 1, 2024, to December Company's headquarters and subsidiaries, and the is available in electronic format. In the event of
port") published by Jiangsu Hengtong Optic-Electric 31, 2024 (hereinafter referred to as the "reporting reporting scope is consistent with that of the Annual any discrepancy between the Chinese and English
Co., Ltd. (hereinafter referred to as "Hengtong Op- period"). Where relevant, certain information may Report. Unless otherwise specified, all currencies used versions, the Chinese version shall prevail. Please
tic-Electric," "The Company," "we," or "us"). Jiangsu also include data from earlier or subsequent years. in this report are CNY. visit the Hengtong Optic-Electric website at http://
Hengtong Optic-Electric Co., Ltd. is a listed subsidiary www.htgd.com.cn/ for more information.
of Hengtong Group Co., Ltd. (hereinafter referred to
We value the opinions of our stakeholders and wel-
Data Source and Reliability
as "Hengtong Group" or "the Group"). This Report
provides a transparent disclosure of the Company's
Basis for Preparation come readers to contact us through the following
responsibilities to ke y stakeholders -including
shareholders, customers, partners, employees,
Assurance contact information. Your feedback will help us
further improve this report and enhance our overall
the environment, and the community-as well as sustainability performance.
This Report was prepared primarily with reference to
its performance across environmental, social, and The data and case studies in this report are primarily
the Global Reporting Initiative (GRI) Standards and
governance (ESG) aspects. sourced from the Company's statistical reports
the Shanghai Stock Exchange Listed Company Self-
Regulatory Guidelines No. 14 – Sustainability Reporting and related documents, and have been reviewed
(Trial). It also takes into account and responds to by relevant departments. The Company's Board of
topics of concern identified in Morgan Stanley Capital Directors guarantees that this report contains no false Email:
International (MSCI) ESG Ratings and S&P Global or misleading statements and assumes responsibility htgd@htgd.com.cn
Sustainability Assessments (CSA Questionnaires). for the authenticity, accuracy, and completeness of its
contents.
The content of this Report was developed following
a structured process, which includes: identifying Tel:
Confirmation and Approval
and prioritizing key stakeholders; determining and 0512-63430985
prioritizing material ESG topics; defining the reporting
boundaries; collecting relevant data and information;
co m p i l i n g t h e Re p o r t ba s e d o n t h e co l l e cte d Address:
information; and reviewing the content for accuracy This report was confirmed by management and approved
N o. 2 2 8 8 , Z h o n g s h a n N o r t h Roa d ,
and completeness. by the Board of Directors on August 22, 2025.
Wujiang District, Suzhou City, Jiangsu
Province, China
Hengtong Optic-Electric Co., Ltd. Message from the Chairman
Message from the Chairman
Embracing Technological Change, Driving across the supply chain, and advocates for mutual trust
Green Development with Innovation and shared growth. Together, these efforts foster a resilient,
cooperative ecosystem that supports long-term value
Over the past year, Hengtong Optic-Electric has deepened creation. Beyond its business commitments, Hengtong
the integration of technological and industrial Optic-Electric actively fulfills its social responsibilities.
innovation. Building on its role as the creator of the The Company contributes to national poverty alleviation
world's first "Global Lighthouse Factory" in the optical programs and participates in initiatives such as "Ten
communications sector, the Company has applied Thousand Enterprises Revitalizing Ten Thousand Villages",
frontier technologies such as artificial intelligence to and is committed to delivering tangible benefits to society.
strengthen product R&D and intelligent manufacturing.
These efforts have generated breakthroughs in cost Strengthening Governance and Enhancing
optimization, energy efficiency, and product quality, Resilience
driving steady improvements in profitability and powering
the Company's high-quality development. In 2024, two To keep pace with the accelerating process of globalization,
companies were newly recognized as National Green Hengtong Optic-Electric continuously optimizes and
Factories, and one as a National Green Supply Chain upgrades its governance framework, working toward
Management Enterprise. Furthermore, the Company a world-class system that is compliant, transparent,
actively responded to the Science-Based Targets initiative and efficient.In response to increasing international
(SBTi), with two subsidiaries successfully passing the SBTi uncertainties, the Company has further strengthened its
validation. While the Company achieved an MSCI ESG comprehensive, organization-wide risk prevention and
rating upgrade-further strengthening its foundation for control mechanisms. By embedding risk awareness into
competing in the global marketplace. every stage of management-from strategy formulation to
operational execution-Hengtong Optic-Electric enhances
P ra ct i c i n g Re s p o n s i b i l i t y, B u i l d i n g a its resilience and safeguards the sustainable growth of its
Collaborative Ecosystem for Shared Growth business.
Cui Wei
Hengtong Optic-Electric firmly believes that the vitality Looking forward, Hengtong Optic-Electric will continue
of an enterprise lies in its ability to continuously create to work hand in hand with employees, partners, and
social value. For employees, the Company strives to align stakeholders to practice ESG values and unleash the
Hengtong Optic-Electric Co., Ltd. corporate growth with personal development, fostering industry's intrinsic momentum. Through its communications
an environment that is safe, inclusive, equitable, and networks and energy interconnection expertise, the
Chairman
sustainable-where individuals can fully realize their potential. Company will connect the world, empower development,
For partners, Hengtong Optic-Electric strengthens its quality advance sustainable cooperation, and contribute its strength
management system, promotes collaborative innovation to building a brighter and more sustainable future for all.
In 2024, a new round of technological revolution-led by artificial intelligence-is reshaping the global
innovation landscape at an unprecedented pace. Against this backdrop of rapid transformation and
global challenges, Hengtong Optic-Electric advances with strategic foresight. By integrating ESG
principles into corporate strategy, the Company is building a powerful engine for sustainable growth
and actively fulfilling its mission in this new era.
Hengtong Optic-Electric Co., Ltd. About Hengtong Optic-Electric
About Hengtong Optic-Electric The Energy Interconnection Transoceanic Communications
Business and Deepsea Technology
Company Profile Corporate Culture The Company is accelerating the development of
the entire offshore wind power industrial chain, with
The Company's transoceanic submarine cable system
delivery capability has reached a historical high, with
continuous improvements in its deep-sea and large- a cumulative delivery of over 106,000 kilometers. Its
Hengtong Optic-Electric delivers industry-leading products Hengtong Optic-Electric integrates traditional Chinese culture, scale wind turbine installation capabilities. Production deep-water main stations and network management
and solutions in optical communications, smart grids, local culture, contemporary characteristics, industry features, bases, including Sheyang in Jiangsu and Jieyang in systems are now independently controlled,
marine energy, and marine communications. With integrated and unique company attributes into its corporate culture. Guangdong, are expanding capacity for high-end demonstrating full technological autonomy. The
capabilities spanning design, R&D, manufacturing, sales, and This creates the "Hengtong Culture System" characterized by submarine cables, marine hoses, and other marine Company has also successfully won bids for major
services, the Company provides comprehensive support to "The highest virtue is like water—it benefits all things without energy products, supporting the Company's strategic national scientific projects, reflecting its leading
global customers. Leveraging an extensive global industrial contention," and "adapting to change in accordance with growth in the marine energy sector. position in the field.
and marketing network, Hengtong Optic-Electric has grown the Way." This cultural system is the source of Hengtong's
into a world-leading provider of information and energy enduring vitality.
interconnection solutions, driving digital transformation and
sustainable development worldwide.
Business Layout
Hengtong Optic-Electric has a nationwide industrial presence with three high-tech industrial parks in Suzhou (Hengtong Optic Comm.
Tech-Park, Hengtong International Marine Industrial Park, and Hengtong Wire and Cable Industrial Park). Our products and services
support major communication and energy internet system integration projects globally. In the context of economic globalization and
the implementation of the Belt and Road Initiative, Hengtong Optic-Electric continuously improves its global marketing network and
industrial layout in communication networks and energy interconnection. In recent years, Hengtong has expanded its industries to
Europe, South America, South Asia, Africa, Southeast Asia, covering all five continents. Hengtong Optic-Electric's overseas industrial Hengtong Sheyang Manufacturing Base
layout is continually improving, with a total of 12 overseas industrial bases, enhancing its global operations, market competitiveness,
and brand value.
Business Overview
In 2024, the Company focused on its two core businesses-communications networks and energy interconnection-while
advancing R&D and expanding its global industrial footprint in optical communications, marine communications, and
marine energy to drive high-quality growth. For the full year, the Company recorded operating revenue of RMB 59.984 billion,
representing a year-on-year increase of 25.96%, and achieved net profit attributable to shareholders of RMB 2.769 billion, up Hengtong Jieyang Manufacturing Base
System Project Site
The Communications
Network Business
Leveraging 5G, advanced computing infrastruc-
Global Submarine Cable
ture, and AI applications, Hengtong Optic-Electric Operations
continues to drive the evolution and upgrade of
optical communications technology. The Com- 400G DR4 Silicon 300G CXP2 AOC 50G Combo PON OLT The PEACE project has been fully commercialized,
pany's ultra-low-loss optical fiber has set new Photonics Module Optical Module connecting Singapore to France over a total length
records in domestic ultra-long-distance, ultra-low- of more than 22,000 kilometers. It establishes a
loss optical cable projects. In high-speed optical major information interconnection channel between
modules, 400G modules have been deployed Asia, Europe, and Africa, significantly expanding the
at scale, 800G modules have completed testing, Company's international submarine cable operations
and the 400G silicon photonic module has been capabilities.
upgraded and successfully tested. Overseas
production capacity is expanding rapidly, with
manufacturing bases put into production in
Egypt, Indonesia, India, and Mexico, establishing Hengtong's German Hengtong Egypt Hengtong's Mexican
a global supply network to support international Manufacturing Base Manufacturing Base Manufacturing Base
operations and market demand. j-fiber GmbH
Hengtong Optic-Electric Co., Ltd. About Hengtong Optic-Electric
Industry Awards and Recognition ESG Major Events and Honors
Award and "ESG Best Practices Award" Outstanding Corporate Governance Award"
Optical Communication Intelligent Manufacturing and
Sector Digital Transformation
In 2024, the Company won the bid for the first domestic During the reporting period, the Company's "Lean Digital
direct-to-data center backbone optical cable project Factory Based on 5G + Artificial Intelligence" project was
using G.654.E optical fiber. Its ultra-low-loss performance selected by the Ministry of Industry and Information
achieved new milestones in domestic ultra-long- Technology for both the "Digital Leadership" and "New
distance optical cable projects, setting a benchmark Generation IT–Manufacturing Integration Demonstration"
for long-distance, low-loss terrestrial optical cables. In lists. This recognition highlights the Company's industry-
addition, breakthroughs in key hollow-core optical fiber leading position in intelligent manufacturing and the
technologies have established a differentiated competitive integration of production digitalization with information
advantage in low-latency, high-bandwidth transmission technology.
materials, further strengthening the Company's leadership
in the optical communications sector.
Energy Interconnection and Transoceanic Communications
Offshore Wind and Deep-Sea Technology
The Company has successfully undertaken multiple The Company's annual delivery of transoceanic submarine
domestic and international offshore wind and marine cable systems reached a historical high, with a cumulative
oil & gas projects, maintaining a leading position in delivery exceeding 106,000 kilometers. Its independently
the full marine energy industry chain in China. In the developed deep-water main stations and network
smart grid sector, it continues to strengthen its market management systems were successfully applied in major
position and service capabilities in high-voltage power national scientific projects, comprehensively enhancing the Dun & Bradstreet and SMM "ESG Excellence Enterprise In September 2024, t he Company facilitated the
transmission, supporting the development of integrated autonomy and controllability of deep-sea communication Award" in the new energy sector establishment of the Suzhou Corporate Sustainable
and intelligent energy networks. equipment. Development Association and assumed the role of Executive
Vice President Unit, further strengthening its leadership in
advancing regional sustainable development practices
Hengtong Optic-Electric Co., Ltd. About Hengtong Optic-Electric
ESG Sustainable Development Value Management
Achievements
Project 2023 2024 Year-on-year Change
Green Manufacturing
National Green Factory 5 7 +2
National Green Product 7 7 /
National Green Supply Chain Enterprise 3 4 +1
Provincial Green Factory 7 8 +1
Industrial Product Green Design Demonstration Enterprise 3 3 /
WEF Global Lighthouse Factory 1 1 /
(Nearly) Zero Carbon Factory 1 2 +1
ISO 14068 Organizational Carbon Neutrality 4 4 /
ISO 50001 Energy Management System 6 10 +4
ISO 14064 Organizational Carbon Emissions System 7 9 +2 ESG-related Indices and Funds 2023 2024 Year-on-year Change
ISO 14067 Product Carbon Footprint 28 48 +20 Number of ESG-related Indices Included 13 15 +2
Science Based Targets (SBTi) Engagement 2（Committed) 2（Validated) +2
Number of ESG-related Fund Products Included 4 5 +1
R&D Innovation
Weight of ESG-related Indices 3.58% 4.30% +0.72%
National Enterprise Technology Center 1 1 /
National Postdoctoral Research Station 1 3 +2
ESG Sustainable Value Management Performance
Provincial Postdoctoral Innovation and Practice Base 4 4 /
Provincial Engineering Technology Research Center/Enterprise
Technology Center/Industrial Design Center
Project 2023 2024 Year-on-year Change
Academician Workstation 3 3 /
High-quality Development Self-built Photovoltaic Capacity 10.5 MW 53.7 MW +43.2 MW
High-tech Enterprises 25 25 / Purchased Green Electricity 227,100 MWh 220,600 MWh -6,500 MWh
National-level Specialized, Refined, Unique, and Innovative
"Little Giant" Enterprises
National Manufacturing Single Champion Enterprises 3 5 +2 767.44 tCO2e/100 million -42.74 tCO2e/100 million
GHG Emission Intensity 810.18 tCO2e/100 million RMB
RMB RMB
R&D Investment 2.101 billion RMB 1.895 billion RMB -0.206 billion RMB
International & Domestic
Standards (Cumulative)
Rating Agency 2023 2024 Year-on-year Change
Authorized Invention Patents
MSCI CCC B Upgraded by 1 level (Cumulative)
S&P Global Ratings 20 23 +3 PCT International Patents
(Cumulative)
Refinitiv 76 78 +2
Operating Revenue 47.622 billion RMB 59.984 billion RMB +12.362 billion RMB
SynTao Green Finance A- A- -
Operating Profit 2.311 billion RMB 3.301 billion RMB +0.99 billion RMB
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Compliance
and Stability:
The Foundation for
Steady Growth
Hengtong Optic-Electric firmly believes that
sustainable development is not only the
cornerstone of building long-term value and
enhancing our industry leadership, but also
the core driving force that propels us forward.
Guided by this conviction, we are committed
to embedding sustainability into our corporate
governance practices. We systematically establish
and continuously enhance our governance
structure, ESG m an age m e n t f ram e w or k ,
stakeholder engagement mechanisms, risk
management processes, and business ethics
standards. Through these practices, we strive to
create lasting shared value for our employees,
stakeholders, and the communities in which we
operate.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Corporate Governance
The Company strictly complies with the Company Law , the Securities Law , the Code of 4 In accordance with the relevant requirements and of insiders, standardizes the review process for
Corporate Governance for Listed Companies , the Shanghai Stock Exchange Listing Rules , regulations of the China Securities Regulator y external information disclosure, and clearly defines
Commission (CSRC and the Shanghai Stock Exchange, the obligations and responsibilities of personnel
the Basic Standards for Enterprise Internal Control , as well as the latest requirements on and based on its own operational circumstances, to maintain the confidentiality of undisclosed
corporate governance issued by the China Securities Regulatory Commission (CSRC) and the Company has continuously improved its internal information. These measures enhance the Company's
the Shanghai Stock Exchange. Taking into account the Company's actual circumstances, control system. As a result, the Company's risk awareness of information disclosure and effectively
prevention capabilities and standardized operational prevent violations related to improper disclosure.
we continuously improve our corporate governance structure, strengthen and implement management have been significantly enhanced.
the internal control system, and standardize corporate operations. The Company's
The Company actively collects and responds to
corporate governance practices are in full compliance with the Company Law and The Company strictly follows the requirements of
relevant provisions of the CSRC. The specific governance practices are as follows: the Information Disclosure Management System and opinions through regular reports, ad hoc
and the Insider Registration Management System . announcements, emails, phone calls, and the SSE
By implementing measures such as insider e-Interaction platform. It treats all shareholders and
registration and external information submission investors fairly and works to protect and safeguard
The roles and responsibilities of the General Meeting of Shareholders, the Board of Directors, the Board tracking, the Company strengthens the management their lawful rights and interests.
of Supervisors, and the management team are clearly defined. Each body performs its duties, exercises
its responsibilities, maintains checks and balances, and coordinates with one another. The Company's
governance practices-including those related to shareholders and the General Meeting of Shareholders,
controlling shareholders and the listed company, directors and the Board of Directors, supervisors and the
Board of Supervisors, performance evaluation and incentive mechanisms, stakeholders, and information
disclosure and transparency-fully comply with the requirements set forth by regulatory authorities. The
Board Committees Meeting Frequency
Company maintains independence in its business operations, personnel, assets, organizational structure, and
financial management.
Audit Committee Strategy and Development Committee
The Company strictly convenes and holds Directors strictly adhere to the Articles of
the General Meeting of Shareholders in Association , the Rules of Procedure for Board
accordance with the Company Law, the Meetings , and relevant CSRC and Shanghai
Articles of Association, the Rules of Procedure Stock Exchange regulations. They attend
for Shareholders' Meetings , and other relevant Board and shareholder meetings on time,
laws, regulations, and procedures. Lawyers are fulfill their duties, review proposals, and
engaged to witness the meetings on-site and provide opinions and recommendations on
issue legal opinions, ensuring that the rights of major decisions. The Company discloses
Nomination Committee Remuneration and Evaluation Committee
shareholders are fully protected. information in a timely manner based on the
decisions made at Board meetings.
The Company has completed the re-election
of the Board of Directors in strict accordance 3
the Board of Supervisors in strict accordance with
with the Company Law , the Articles of
the Company Law , the Articles of Association,
Association , and relevant regulations of the
and relevant regulations of the China Securities
China Securities Regulatory Commission
Regulatory Commission (CSRC) and the Shanghai
(CSRC and the Shanghai Stock Exchange, Environment, Social and Governance (ESG) Committee
Stock Exchange, resulting in the formation
resulting in the formation of the ninth
of the ninth Board of Supervisors. The Board
Board of Directors. The Board consists of 12
consists of 3 supervisors, including 1 employee
directors, including 4 independent directors,
representative supervisor, and its size and
and its size and composition comply with
composition comply with applicable laws and
applicable laws and regulations. The Board
regulations. The supervisors perform their duties
has established five specialized committees:
by overseeing the legality and compliance of
the Strategy and Development Committee, Audit By continuously improving its internal control system, the BDO China conducted an audit of the effectiveness of the
major daily operational matters, financial matters,
Committee, Nomination Committee, Remuner- Company has enhanced operational efficiency and effectiveness, Company's internal control over the 2024 financial statements
related-party transactions, and the performance
ation and Evaluation Committee, and Environ- supported the achievement of strategic objectives, and and issued an unqualified standard audit opinion. The 2024
of duties by directors and senior management.
ment, Social and Governance (ESG) Commit- protected the interests of the Company and all shareholders. Internal Control Audit Repor t issued by BDO China Shu Lun
This supervision helps protect the lawful rights
tee, all of which operate in accordance with the During the reporting period, the eighth meeting of the ninth Pan CPAs Certified Public Accountants LLP is available on the
and interests of the Company and its shareholders
Articles of Association and each committee's Board of Directors reviewed and approved the 2024 Internal Shanghai Stock Exchange website: http://www.sse.com.cn.
and ensures the standardized and compliant
Rules of Procedure . Control Evaluation Report , which is available on the Shanghai
operation of the Company.
Stock Exchange website: http://www.sse.com.cn.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
ESG Governance The Company has established a Hengtong Green and Low-Carbon Management Working Mechanism aligned with the
indicator system. The mechanism is coordinated and led by the ESG Sustainable Development Committee, with the ESG
Working Group taking the lead in implementation. Responsibilities for each key indicator are clearly assigned to the relevant
departments:
In 2023, Hengtong Optic-Electric established a three-tier ESG governance structure
consisting of the Board of Directors, the ESG Committee, and the ESG Working Group, Operations Management Strategic Management Supply Chain Management
ensuring seamless alignment between top-level decision-making, strategic planning, Department Department Department
and execution. Building on this foundation, in 2024 the Company further strengthened
its green and low-carbon governance capabilities. A green and low-carbon management Oversees carbon emission management Leads green innovation and policy Manages the green supply chain,
and resource efficiency, develops research, develops roadmaps for promotes ESG evaluation and
indicator system and operational mechanism were integrated into the ESG governance
emission reduction implementation green products and technologies, and improvement plans for suppliers, and
framework, creating a closed-loop governance model where objectives are quantifiable, plans, and organizes annual carbon analyzes domestic and international maintains a qualified supplier list.
responsibilities are clearly assigned, and implementation is measurable and assessable. inventories and energy/resource regulatory trends to propose responsive
statistics. measures.
Through a closed-loop mechanism of "departmental responsibility – indicator tracking – performance feedback", the Company
A Systematic Indicator Framework to Ensure
has institutionalized, normalized, and accountability-driven green and low-carbon governance, ensuring that all aspects of the
management framework are effectively implemented.
Measurable and Assessable Managemen
In 2024, the Company formulated the Hengtong Green and Low-Carbon Management Indicator System , which "Six Special Actions" to Accelerate the Implementation
of Dual Carbon Goals
is structured around five key dimensions: carbon emission management, resource efficiency, green innovation,
green supply chain, and policy compliance and impact. The system establishes scientific management
objectives and core indicators, ensuring that the Company's green development initiatives are evidence-based,
measurable, and verifiable through the setting and tracking of key indicators. Guided by its dual-carbon objectives, the Company has, building on its governance framework and indicator system, launched six
special initiatives to create a multi-dimensional and systematic pathway for low-carbon transformation:
Guided by the Science Based Targets initiative (SBTi), the Company manages
greenhouse gas emissions across Scope 1, Scope 2, and Scope 3. Key
performance indicators such as annual carbon inventory and carbon intensity per
unit of output are adopted to monitor and track progress, ensuring a scientific Establish a comprehensive management
Carbon and data-driven pathway toward emission reduction. Management system covering carbon emissions, resource
Emission System efficiency, green innovation, supply chain,
Managemen By monitoring the efficiency of energy, water, and raw material usage, Development and policy response, aligning management
the Company promotes waste management and resource recycling, and Gradually increase the use of renewable and capabilities with international standards.
Resource Energy
establishes an annual resource utilization assessment and improvement plan. clean energy, reduce reliance on fossil fuels,
Efficiency Structure
and promote cleaner, low-carbon energy Adjustment
The Company emphasizes the strategic importance of green
consumption.
products and technologies in its overall development. It integrates Continuously optimize production processes,
sustainability into its R&D efforts, developing a roadmap for green Process and improve workflows, and apply recyclable,
innovation and planning sustainable product lines to drive long- Technology degradable, and low-carbon raw and auxiliary
term environmental and business value. This approach ensures that Innovation materials, enhancing the green and low-
Green
environmentally friendly solutions and low-carbon technologies are carbon performance of products.
Innovation Promote the green transformation and iterative
central to the Company's growth strategy. Equipment
upgrading of production equipment, improving
Technology
overall operational efficiency and energy
Benchmarking against international standards, the Company Upgrade
consumption.
incorporates green, low-carbon, and ESG performance assessments into Build intelligent management platforms,
its supplier management. It has set a target to cover 100% of suppliers Digital leveraging big data and artificial intelligence
Green and established a qualified green and low-carbon supplier list to ensure Technology to enable dynamic monitoring and precise
Supply sustainable and responsible supply chain practices. Empowerment management of carbon emissions and
Chain Adjust industrial structure and investment energy efficiency.
The Company conducts systematic research and impact analysis of domestic and direction, accelerating expansion in new Industrial
Policy
international policies and regulations, develops actionable response plans, and energy, clean energy, and marine energy Layout
Compliance
ensures their implementation through internal communications and external sectors, and prioritize development in Optimization
and Impact
disclosures. This approach strengthens compliance management and enables regions abundant in renewable energy.
the Company to proactively address regulatory and policy requirements.
Five Key Dimensions of the Hengtong Green and Low-Carbon Management Indicator System
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Stakeholder Engagement
Throughout the implementation of these six initiatives, the Company has positioned energy management and efficiency
improvement as the core drivers of its green and low-carbon transformation, promoting practical actions across process
optimization, equipment upgrades, facility retrofitting, and energy structure adjustments, achieving substantial results.
Hengtong Optic-Electric has established regular communication and engagement
mechanisms with its stakeholders to timely and thoroughly understand their
expectations and concerns regarding the Company's sustainable development. By
fostering long-term, trust-based collaborative relationships, the Company effectively
creates value for all stakeholders.
Further Energy-Saving High-Efficiency Auxiliary Renewable
Breakthroughs in Equipment Motor Facilities Energy Hengtong Optic-Electric upholds a principle of integrity in business operations, strictly fulfilling its information
Investors disclosure obligations by providing comprehensive and accurate reporting on its operational performance
Process Technology Upgrades Replacement Optimization Deployment and and significant matters, thereby safeguarding the legal rights of shareholders and investors. By continuously
The Company continues The Company has The Company has The Company The Company continues regulators enhancing the market competitiveness of its products and services, the Company consolidates its industry-
to optimize its preform introduced high- fully implemented has implemented to optimize its energy leading position, achieving steady business growth. At the same time, Hengtong emphasizes sustainable
manufacturing speed dual-head the replacement of technological upgrades structure by accelerating development, actively implementing green practices and minimizing the environmental and social impact of
processes using drawing machines conventional motors on chiller units, chilled the construction of its operations, thereby creating long-term, stable economic value for investors. During the reporting period,
advanced techniques and implemented with high-efficiency, water systems, and distributed photovoltaic the Company held approximately 115 strategy seminars, online and offline research visits, investor meetings,
such as high-efficiency corresponding motor energy-saving motors, cooling towers, combined projects and participating roadshows, and earnings briefings, hosting a total of about 1,280 broker and institutional investors.
deposition, achieving and automation effectively improving with the application of an in green power and
greener, more efficient, upgrades, significantly operational efficiency. intelligent management renewable energy
and environmentally reducing energy This initiative has platform, significantly certificate trading. To
friendly production. consumption. These resulted in energy improving energy date, a total of 53.7 MW
These improvements measures have savings of approximately utilization efficiency. of photovoltaic projects
Hengtong Optic-Electric is committed to being a trusted global provider of information and energy
have resulted in energy achieved energy savings 1,180 tons of standard These measures have have been developed Partners interconnection solutions. Upholding a quality-first development philosophy, the Company offers integrated,
savings of approximately of approximately 650 coal and CO2 emission achieved energy savings (11.3 MW already
advanced solutions from customized demand analysis and R&D to production and manufacturing. By
promoting high-quality standards across the entire industry chain, Hengtong empowers its partners in the
coal and CO2 emission and CO2 emission 2,457 tons. tons of standard coal and MWh of green electricity
high-end manufacturing supply chain and contributes to the sustainable development of the industry.
reductions of around reductions of around CO2 emission reductions have been purchased.
contributed to cumulative
CO2 emission reductions
of approximately 145,000
tons.
Hengtong Optic-Electric actively fosters a shared-growth community with its employees, providing a high-
Employees quality working environment and broad career development opportunities. The Company encourages
employee engagement, creativity, and participation in corporate development while supporting each
individual to maximize their potential and realize personal value.
Through the above measures, the Company has achieved dual breakthroughs in energy saving and emission reduction, enhancing
both energy efficiency and environmental performance. These initiatives not only provide a practical model for green upgrading
across the industrial chain but also offer strong support for the realization of the dual-carbon goals. While achieving its own sustainable growth, Hengtong Optic-Electric promotes the coordinated development
Communities of surrounding regional economies. In its global operations, the Company consistently practices corporate
social responsibility, increasing investment in social welfare and deepening humanistic care. Key initiatives
include rural revitalization and educational support programs, which collectively contribute to the
Governance Moving Toward Refinement and Systematization harmonious and sustainable development of local communities.
In 2023, the Company set the goal of "turning conceptual plans into concrete capabilities". In 2024, through the integrated
implementation of the indicator system, working mechanisms, and special initiatives, the Company further translated its strategic
concepts into specific metrics, governance structures into assigned responsibilities, and long-term visions into annual action plans. Stakeholder Distribution of Hengtong Optic-Electric
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Double Materiality Assessment
During the reporting period, Hengtong Optic-Electric actively engaged with its key stakeholders on material topics and leveraged The identification of material topics is a key component of Hengtong Optic-Electric's ESG management, helping the Company
the insights gained to enhance its management practices. The Company's main stakeholder groups include employees, suppliers, focus on critical areas and clarify its ESG strategy and work priorities. In 2024, the Company referenced relevant standards from
customers and consumers, media, investors and shareholders, industry associations, and government and regulatory bodies. Their the Shanghai Stock Exchange and the Global Reporting Initiative (GRI) to establish a sustainability topic inventory. Each topic was
key concerns and the corresponding engagement approaches are summarized as follows: assessed for its financial impact on the Company, as well as the actual and potential impacts of the Company's performance on
the economy, society, and the environment.
Distribution of
Stakeholder Group Key Concerns Engagement Channels
Stakeholders
Understanding the Company's Activities and Business Establishing a Topic List
B
usiness Ethics G
eneral Meetings Context
roduct and Service Safety
P I dentify company-specific ESG topics
Diversity, Equality & Investor Engagement
Investors & & Quality
Inclusion Activities
Analyze internal activities and business relationships, including by referencing macro and industry
Shareholders Innovation sustainability impacts across the value chain;
Employee Health & Earnings Releases & policies, international sustainability
Corporate Governance
Safety Announcements A ssess external environment, including 2024 macro policies, standards, benchmarking leading ESG
Investors and
E
mployee Health & industry regulations, and key trends, to identify potential impacts; reports, and aligning with strategic
Regulators
Pollutant Management Safety O
n-site Interviews & Identify and categorize key stakeholders, both internal and priorities. A total of 20 ESG topics were
Government & Climate Change Response P
roduct and Service Research external. identified in 2024.
Regulators Biodiversity & Ecosystems Safety & Quality Regular Meeting
Environmental Compliance B
usiness Ethics
C
orporate Governance
S
upplier Development &
Product and Service Safety
Audits
& Quality C
orporate Governance
Supplier Conferences
Suppliers Employee Health & Safety Business Ethics
Regular Supplier Visits &
Data Security & Privacy
Assessments Materiality Assessment:
Protection
Surveys
Review and Validation
Impact Assessment
I ntegrate impact and financial
Energy Management I nnovation Define impact materiality assessment factors, including likelihood,
Waste Management D ata Security & Privacy materiality results, apply
I ndustry Meetings & scale, scope, and irreversibility;
Water Management Protection threshold standards, and
Industry Exchanges develop a Double Materiality Conduct stakeholder engagement and surveys to preliminarily assess
Cooperative Employee Care & Welfare S upply Chain
Associations I ndustry Exhibitions & R&D the impacts of each topic;
Partner Employee Health & Safety Management Matrix;
Collaborations
Product and Service Safety B usiness Ethics Consolidate stakeholder feedback and expert opinions, set thresholds
esults reviewed and
R
& Quality C orporate Governance and prioritize topics;
approved by the Board of
Directors, with material ESG Generate the impact materiality assessment results.
E
mployee topics for 2024 disclosed as
Product and Service Safety C
ustomer Satisfaction
Development & reporting priorities.
& Quality Surveys
Training
Innovation CRM Platforms
Customers & S
upply Chain
Business Ethics Customer Hotlines
Consumers Management
Employee Health & Safety Company Media
E
mployee Care & Financial Materiality Assessment:
Diversity, Equality & Communications
Welfare D
efine financial materiality assessment factors, including
Inclusion
C
orporate Governance
likelihood and magnitude of financial impacts (analyzed from
Internal
Meetings the perspective of resource and relationship dependency and
C
orporate Governance
Employee Health & Safety I nternal Publications influence);
B
usiness Ethics
Product and Service Safety E
mployee Interviews &
Employee Conduct
surveys with internal departments, management,
& Quality Activities
Employees Employees Development & shareholders, and investors to preliminarily assess financial impacts;
Employee Care & Welfare S
urveys
Training
Data Security & Privacy
Diversity, Equality &
E
mployee Feedback (Email, C
onsolidate stakeholder feedback and expert opinions, set
Protection Platform, Hotline, etc.) thresholds and prioritize topics;
Inclusion
G
enerate the financial materiality assessment results.
D
ata Security & Privacy
Energy Management M
edia Briefings
Protection
Pollutant Management P
ress Releases &
S
upply Chain
Communities Media Employee Health & Safety Announcements
Management
Product and Service Safety C
ompany Media
S
ocial Contribution
& Quality Communications
R
ural Revitalization
Hengtong Optic-Electric Double Materiality Assessment Process
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Hengtong Optic-Electric identified 20 material topics for 2024 and prioritized them according to both impact and financial
significance, resulting in the development of the Company's 2024 Double materiality matrix. Among these, product and service
Risk Management
safety and quality as well as supply chain management were assessed as having high financial importance for the Company.
Hengtong Optic-Electric has established a comprehensive risk management framework,
with the Board of Directors and its Audit Committee providing overall leadership for risk
management across the Company.
Board of Directors
Impact Materiality
Plan and establish the risk management framework, develop risk management policies and guidelines,
Product and Service and oversee the implementation of risk management measures
Safety & Quality
Audit Committee
Supply Chain
Employee Health and Safety Management Implement Board policies, receive reports from the Internal Audit Department, and oversee overall risk
management
Corporate Governance
Climate Change Response
Business Ethics
Risk Management Committee Internal Audit Department
Environmental Compliance Management Conduct risk identification, assessment, Regularly audit risk management controls
Water Resource Management and mitigation in accordance with policies and procedures, and report periodically to
Bio-diversity and Ecosystem approved by the Board the Audit Committee
Social Circular Economy Hengtong Optic-Electric's Risk Management Structure
Contribution Diversity, Equality and Inclusion
Innovation Hengtong Optic-Electric has established a comprehensive risk management and supervision mechanism,
Waste Management
Pollutant Management fully leveraging the "three lines of defense" approach. The Board of Directors and the Audit Committee
serve as the leading and responsible bodies for risk management. The Internal Audit Department, under the
Energy Management Audit Committee, conducts annual audits across all subsidiaries of Hengtong Optic-Electric, covering areas
Rural Revitalization such as business ethics and anti-corruption practices. All business units comply with the Company's risk
management standards and implement preventive measures, promptly identifying and controlling risks to
Employee Care and Welfare prevent major risk events.
Employee Development & Training
Risk The risk management working group and various business departments
Data Security and Privacy Protection
Identification regularly collect information, inventory and identify possible risk sources,
and classify them according to risk attributes, and assess the risk level based on the
Assessment likelihood and severity of occurrence.
Based on the results of risk identification and assessment, we establish risk
response and prevention measures to avoid related risks and enhance our
Risk Response
risk response capabilities. At the same time, the Company conducts regular
and Prevention reviews through risk management controls and procedures, and diversifies its
investments and business portfolios to spread risk.
Environmental Issues Social Issues Governance Issues Financial Materiality
The Company actively conducts timely reviews of risk management and
Hengtong Optic-Electric 2024 Double Materiality Matrix Improved Risk response situations, coordinates with relevant departments and personnel
Management to promote risk management actions, and enhances employees' risk
Capabilities management capabilities through training to ensure a closed loop of internal
risk management.
Hengtong Optic-Electric Risk Management Process
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Hengtong Optic-Electric places great emphasis on cultivating a risk-aware culture. Each year, the Company organizes training for
directors, supervisors, and senior management as arranged by regulatory authorities to enhance risk awareness and identification
Case Conduct CSRD Training to Enhance Compliance Capabilities in International Business
capabilities. Meanwhile, emerging regulations and policies are promptly studied, and risk-related training is provided to employees
to ensure compliance in business operations and maintain risks within acceptable levels. In the development of new products
and business relationships, financial, regulatory, and operational risks are fully considered, strengthening risk management
capabilities. Furthermore, risk management indicators are integrated into the performance evaluation of senior management, Risk Identification:
and personnel making significant contributions to risk identification and management are rewarded, fostering continuous
In response to the compliance requirements of the EU Corporate Sustainability Reporting Directive (CSRD) for cross-border
improvement in the Company's risk management capabilities.
operations and international subsidiary management, the Company, through internal research and support from external
professional institutions, has identified potential risks for Hengtong Optic-Electric and its subsidiaries, Cablescom in Spain
and Alcobre in Portugal, in ESG information disclosure, data collection, and reporting system development.
Risk Type Risk Description Mitigation Measures Response Measures:
The Company organizes dedicated CSRD training sessions and workshops, inviting external professional institutions
Strategic risk refers to the to provide instruction, and integrating internal research outcomes. This offers systematic guidance to personnel at the
potential risks encountered by Market monitoring: Regularly track market trends, policy changes, and domestic headquarters and relevant international business and management departments. The training covers regulatory
the Company in formulating competition to align strategy with the external environment. requirements, reporting processes, data collection, and internal management standards, enhancing each business unit's
and implementing its understanding and implementation of the directive's requirements.
Technology investment: Increase investment in emerging technologies
long-term strategic plans,
Strategic to maintain industry-leading position, especially in 5G, smart grids, marine
including market competition,
Risk communications, and renewable energy.
technological changes, Management Outcomes:
policy shifts, and industry Diversification: Diversify business and expand regions to mitigate market and
trends. Rapid technological Through systematic training and internal workshops, the Company has significantly enhanced the awareness and
policy risks.
advancement in the industry execution capability of CSRD compliance requirements among cross-border operations and international subsidiaries,
Regular review and adjustment: Implement rolling strategic planning to
and global energy policy established a unified ESG information management process, laid a foundation for the standardization, accuracy, and
adjustments may affect the continuously evaluate and adjust strategy.
timeliness of future reporting, reduced potential compliance risks, and strengthened sustainable development capabilities
Company's long-term strategy. in international markets.
Legal and compliance risk Compliance system: Establish a robust compliance framework to ensure all
involves whether the Company operations comply with laws.
Legal &
complies with applicable laws Regular training: Conduct legal and compliance training for employees.
Compliance
and regulations, including IP,
Internal audit and monitoring: Set up independent internal audit to
Case Systematic Response to CBAM Risks by Jiangsu Hengtong Electric Power Special Wire Co.,Ltd.
Risk
environmental, labor, and data
privacy laws. Non-compliance regularly assess and monitor risks.
may result in fines, litigation, or Legal consultation: Collaborate with legal advisors for updated compliance
Risk Identification:
reputational damage. guidance.
The Company conducted an in-depth study of the European Union's Carbon Border Adjustment Mechanism (CBAM),
clarifying the policy background, implementation timeline, and reporting requirements. Through internal workshops, the
Company identified potential compliance, emission reduction, and market access risks across its business and production
Operational risk includes processes. During these workshops, specific issues related to carbon emission management, data collection, and the
risks from natural disasters, Business continuity plan: Ensure rapid recovery in case of incidents.
implementation of emission reduction measures were further identified, providing a basis for adjusting response plans and
Operational equipment failures, or human Equipment maintenance and upgrade: Regularly maintain and update operational arrangements.
Risk errors that disrupt business, equipment to prevent downtime.
reduce service quality, or
Emergency response team: Establish teams for prompt action.
cause safety incidents. Response Measures:
Business continuity and Risk transfer: Use insurance to transfer certain risks.
safety are critical. The Company formulated the "CBAM Emission Reduction Action Plan and Implementation Measures" and established an
ESG Working Group, led by the General Manager as Group Leader, with a Management Representative serving as Deputy
Leader to coordinate overall efforts. The system manager oversees project progress. Members of the group include heads
of various business modules, system engineers, and EHS (Environment, Health, and Safety) engineers, enabling cross-
Financial risk involves risks Cash flow management: Ensure sufficient liquidity for operations and departmental resource integration and collaboration. This structure ensures the implementation of emission reduction
in capital management, plans and the closure of management processes, with clearly defined responsibilities and timelines for each module.
contingencies.
investment decisions, foreign
Financial Diversified financing: Reduce reliance on single funding sources.
exchange fluctuations,
Risk
and financing activities. Financial audit: Conduct regular audits and risk assessments to ensure Management Outcomes:
The capital-intensive and transparency.
long-cycle nature of the Through systematic organization and cross-departmental collaboration, the Company has enhanced its ability to identify
Foreign exchange hedging: Apply hedging strategies in international business
industry makes financial risk and respond to external carbon policy changes, steadily advanced emission reduction actions, ensured closed-loop
to reduce FX volatility.
management essential. internal management, mitigated potential compliance and trade risks, and strengthened its sustainable competitiveness
and resilience in international markets.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Business Ethics
As an industry-leading enterprise, Hengtong Optic-Electric consistently integrates high
standards of business ethics into its daily operations and management. Throughout its
global business activities, the Company adheres to principles of integrity, transparency,
and fairness, ensuring that all business decisions and operations comply with
internationally recognized business ethics standards as well as applicable laws and
regulations.
Business Code of Conduct
Hengtong Optic-Electric has established a systematic and comprehensive code of conduct, providing
employees with clear and explicit guidance on professional behavior and ethical standards, covering multiple
key management areas.
Anti-corruption and Anti-bribery
Proper Use of Company Assets
Employees should use the Company's tangible and intangible assets, such as production Hengtong Optic-Electric strictly adheres to relevant international conventions and domestic laws and regulations, including the
equipment, information systems, and intellectual property, responsibly. Using these assets for United Nations Convention against Corruption , the Convention on Combating Bribery of Foreign Public Officials in International
personal purposes or illegal activities is strictly prohibited. Business Transactions , the Criminal Law of the People's Republic of China, the Anti-Unfair Competition Law of the People's
Republic of China , and the Interim Provisions on the Prohibition of Commercial Bribery . The Company consistently upholds
fairness, transparency, and competition as core principles, continuously improves its internal anti-corruption, anti-bribery, and
Prohibition of Fraud and Misrepresentation anti-commercial bribery management mechanisms, and establishes a comprehensive and effective system of rules and standards
to firmly safeguard compliant business operations.
Employees must accurately reflect the Company's actual operations when submitting business The Company maintains a zero-tolerance stance toward all forms of bribery and corruption and strictly enforces its anti-bribery
records and financial data. Any false statements, concealment of information, or fabrication of policy. Employees are explicitly prohibited from directly or indirectly offering or accepting any form of bribe through third parties to
records will be strictly addressed. gain commercial benefits. Moreover, all individuals or entities representing Hengtong Optic-Electric in business activities-including,
but not limited to, employees, agents, contractors, subcontractors, and suppliers-are required to conduct their work legally and
in compliance with regulations. The Company adopts a zero-tolerance approach toward acts such as embezzlement, bribery,
Avoidance of Conflicts of Interest corruption, extortion, misappropriation of funds, occupational embezzlement, and any behavior harming the Company's interests.
During the reporting period, no violations or illegal incidents occurred that had a significant impact on the Company's operations.
The Company emphasizes managing conflicts of interest. Employees are required to remain
objective in any decision involving personal interests, regularly disclose personal relationships
and financial interests related to the Company, and avoid situations that could compromise fair
decision-making.
An integrated modern governance system ensures the Company's steady and sustainable development
Prohibition of Improper Payments
The Company strictly prohibits bribery and corruption, forbidding employees from offering or
accepting any form of improper benefit to or from third parties, including cash, gifts, travel, or A systematic compliance management mechanism ensures coordinated oversight and emphasizes
entertainment. cross-functional collaboration
Information Protection
The Company places high importance on the confidentiality of employee and customer information. Pursuing integrity in international operations, the Company serves as a model of Chinese enterprises
Employees must not disclose internal company information in public or unauthorized settings. Strict
confidentiality agreements and information protection measures ensure that all sensitive information is
effectively safeguarded.
Hengtong Optic-Electric's Anti-Corruption and Anti-Bribery Compliance Development Plan
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
To effectively implement its vision for business ethics and anti-corruption, Hengtong Optic-Electric has established the following
management framework:
Building a Culture of Integrity
Hengtong Optic-Electric continuously promotes the development of an integrity culture, regularly providing anti-bribery and anti-
corruption training to all employees, including part-time staff and contractor personnel. This ensures that all employees are aware
of relevant policies and are able to identify and prevent potential corrupt practices.
The Company has established comprehensive governance rules, clearly defining business
Governance
ethics and anti-corruption standards to be followed by all parties across the value chain.
Rules
These rules cover all stages from contract initiation to execution. Index Unit 2024 Reporting Data
Director % 100
The Company has designed and implemented an internal control system to ensure effective Percentage of Employees Covered
oversight and compliance across the value chain: by Anti-Bribery and Anti-Corruption Senior Management % 100
Training

Code of Conduct: Detailed guidelines on business ethics and anti-corruption behavior;
Internal
Control
Contractual Clauses: Inclusion of business ethics and anti-corruption clauses in value Other employees % 100
System chain contracts, requiring partners to comply with Company standards;

Monitoring & Enforcement: Dedicated oversight team monitors ethical and compliance
performance, taking timely corrective actions when issues arise.
Transparency
The Company has established a systematic accountability framework to investigate
any violations of business ethics and ensure proper corrective action. Comprehensive
Compliance Management and Oversight Mechanism
& investigation procedures for all ethical violations. Graded responses based on investigation
Accountability outcomes, including termination of employment, civil liability, or referral to judicial Hengtong Optic-Electric has established a comprehensive business ethics management and oversight mechanism. The Board of
Mechanisms authorities. Directors and the Audit Committee serve as the leading and responsible bodies for business ethics. The Internal Audit Department,
under the Audit Committee, conducts at least two audits annually on business ethics and anti-corruption practices across
Hengtong Optic-Electric, including its overseas subsidiaries. Through internal audits and external reviews, potential corruption
The Company actively promotes employee participation in optimizing the business ethics risks are continuously monitored, with focused inspections conducted in key business areas and critical positions to ensure that
management system. Through regular collection of feedback and periodic evaluation of business ethics standards are effectively implemented in the Company's operational and management activities.
policy effectiveness, management policies and practices are dynamically refined to align
with the Company's global strategic development, continuously enhancing governance
Continuous effectiveness and compliance.
Improvement
& Employee Suggestion Channels: Dedicated channels allow employees to submit improvement
Development
Engagement suggestions anonymously or openly, which are assessed and implemented by the Internal Regularly review and update the Company's compliance policies to ensure alignment with
and Updating of
Audit Department; the latest laws, regulations, and industry standards.
Policies

Global Consistency: Ensures uniform implementation of business ethics policies across all
business units and subsidiaries, with adjustments as necessary to comply with local laws
and regulations. Management The Company provides employees and third parties with a global, multilingual, anonymous
of Reporting reporting channel, ensuring a high level of confidentiality and security. Dedicated personnel
Channels are assigned to handle reports, safeguarding the privacy and safety of whistleblowers.
Anti-unfair Competition and Anti-money Laundering Upon receiving a report, the Internal Audit Department will initiate an investigation within
Investigation three days and report the findings to the Audit Committee upon completion. The Company
Process takes strict disciplinary actions against any individuals found to have violated business
Hengtong Optic-Electric strictly implements the requirements of the Anti-Unfair Competition Law of the People's Republic of China
ethics and, when necessary, refers cases to judicial authorities.
and the Anti-Money Laundering Law of the People's Republic of China , establishing an internal management system, committing
to adhere to business ethics, and fully respecting the legitimate rights and interests of market peers. At the same time, we
rigorously implement anti-money laundering regulatory requirements, remain highly vigilant against any illegal activities such as
money laundering or handling of illicit funds through the Company, and have established routine preventive mechanisms. During Hengtong Optic-Electric's Business Ethics Supervision Mechanism
the reporting period, the Company did not encounter any publicly reported litigation cases involving unfair competition.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Integrity and Transparency Management in the Value Chain
Hengtong Optic-Electric has established the Disciplinary and Supervisory Management Measures , actively encouraging employees,
external stakeholders, and the public to report business ethics violations either anonymously or openly. The policy clearly
Hengtong Optic-Electric actively upholds high standards of business ethics and anti-corruption practices across its global value
stipulates that everyone has the right to supervise and report any disciplinary or ethical misconduct, negligence, or dereliction of
chain, striving to ensure that all partners and stakeholders adhere to the core principles of integrity, transparency, and fair
duty by management personnel and employees.
competition in their business activities. The Company has established a systematic governance framework and robust internal
control systems to effectively ensure the legality and compliance of its operations. In practice, the Company signs a Supplier
Integrity Agreement with all suppliers, clearly specifying anti-corruption and anti-bribery compliance requirements. Suppliers who
violate these provisions are subject to classified disciplinary actions, such as suspension of cooperation or inclusion on a blacklist,
thereby strengthening compliance management and risk prevention across the entire supply chain.
Hengtong's business ethics reporting channels:
To achieve business ethics and anti-corruption objectives across the value chain, the Company actively implements the following
management measures:
Email:
htjubao@htgd.com.cn(Chinese) Comprehensive Conduct regular risk assessments across the value chain to identify potential business ethics and
Risk Assessment corruption risks, with particular focus on high-risk regions and partners.
htgjsj@htgd.com.cn(other languages)
Supply Chain Conduct regular ethics and compliance audits on key nodes within the value chain to ensure that
Audits all partners adhere to the Company's business ethics standards.
To protect the legal rights and personal safety of whistleblowers, the Company strives to ensure that no employee suffers adverse
consequences for expressing concerns or reporting non-compliant or illegal behavior. Any individual or group retaliating against a Training and Provide training on business ethics and anti-corruption to suppliers and partners to ensure they
whistleblower will be subject to the Company's disciplinary measures. Education understand and comply with the Company's policies and regulatory requirements.
Establish transparent and secure reporting channels that encourage employees and value
Reporting
Hengtong whistleblower protection measures: chain partners to report any unethical or potentially corrupt behavior, while ensuring the
Mechanism
privacy and safety of whistleblowers.
Hengtong's Value Chain Business Ethics Management Initiatives
Personnel who have access to Personnel who improperly disclose
Hengtong Optic-Electric continuously strengthens anti-corruption oversight within the supply chain by establishing a routine audit
whistleblower information must not whistleblower information or retaliate
mechanism to conduct end-to-end supervision. During the reporting period, targeted audit issues were raised focusing on key
disclose any details externally, including against whistleblowers will be subject to
areas such as OEM management, supplier performance evaluation, procurement bidding and quotation comparison processes,
the identity of the whistleblower, the disciplinary actions depending on the
and the acceptance of raw and auxiliary materials, thereby promoting the enhancement of supply chain compliance management.
content of the report, or any related severity of the case, up to removal from
individuals and materials. They are also office or termination of employment. In
prohibited from alerting the involved serious cases involving legal violations,
departments or individuals in advance. the matter will be referred to judicial
authorities for lawful handling.
We continuously monitor fraud risks within the Company and its core business units through the corporate business ethics
reporting channels. During investigations, we focus on identifying, correcting, and preventing operational risks, aiming to hold
responsible parties accountable, recover losses, and close loopholes. During the reporting period, the Company received a total
of 12 anonymous reports, conducted detailed investigations on each, and took appropriate disciplinary actions against confirmed
violations.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Leading
Innovation:
Creating Leading
Quality
Hengtong Optic-Electric continuously enhances
its technological innovation capabilities,
strengthens its quality management system,
and reinforces supply chain integration and
collaboration to consolidate the technological
foundation for high-quality development. At
the same time, the Company adheres to a
customer-first philosophy, practices responsible
marketing, and consistently improves customer
experience and satisfaction, striving to deliver
industry-leading product and service quality.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Sustainable Innovation In 2024, the Company continued to deepen the development of its R&D management system, with a particular focus on
strengthening technical management functions, enhancing the standardization of external testing, and building R&D team
capabilities. At the same time, the Company optimized and refined its existing policies, covering areas such as patent and
intellectual property management, R&D incentive mechanisms, industry-university-research collaboration, trademark
Hengtong Optic-Electric upholds innovation as a guiding principle and regards it as a management, and new product sales reporting standards. These efforts further advanced the streamlining, standardization, and
cornerstone of corporate development. We have established a sound R&D management efficiency of R&D processes, resulting in a more comprehensive and robust R&D management support system.
system, strengthened R&D mechanisms and capacity building, and promoted
collaborative innovation through industry-university-research partnerships to drive
breakthroughs and lead industry development. At the same time, the Company R&D Capacity Building and Talent Development
reinforces intellectual property management to consolidate its R&D advantages
and technological barriers, thereby enhancing the competitiveness of its innovative In 2024, the Company defined the positioning of 11 R&D
products. centers and completed the development of core R&D
platforms, including high-end optics, specialty fibers, fiber
coatings, and deep-sea integrated testing. To strengthen R&D
talent development, the Company organized more than 10
series of training sessions, covering over 260 participants,
with topics ranging from R&D management, key decision-
Development and Upgrade of the R&D
making and review processes, and market collaboration to
fostering an R&D-driven culture. In addition, a dedicated
Management System
Group task force for R&D talent development was established
to conduct talent mapping and formulate annual training
plans, thereby promoting the systematic development of the Inauguration of the Postdoctoral Research Station at Hengtong
core engineering team. Submarine Power Cable Co., Ltd.
During the reporting period, we focused on advancing the implementation of IPD 3.0 across 14 subsidiaries,
incorporating process adaptation and tailoring rules. Dynamic adjustments were made in line with each
industry's development stage, product characteristics, and management model, resulting in a more flexible
and efficient R&D management approach. At the same time, we established two core decision-making
Standards Development and Industry–University–Research
Collaboration
mechanisms-Business Decision (DCP) and Technical Review (TR1–TR6)-along with their evaluation elements,
to ensure quality and efficiency throughout the entire project lifecycle, from market research to product
delivery.
The IPD methodology emphasizes market-driven cross-functional collaboration and full lifecycle Hengtong has strengthened industry–university–research collaboration, integrating innovative resources from universities and
management. At Hengtong Optic-Electric, we exercise strict quality and risk control across all stages-including research institutions to promote technological advancement and industrial upgrading within the sector. This collaborative model
product concept, design, development, validation, and delivery-while integrating sustainable principles not only accelerates the transformation and application of scientific and technological achievements but also injects strong
such as energy conservation, green design, and environmentally friendly manufacturing. This ensures a high momentum into the Company's sustainable development. During the reporting period, the Company conducted a total of 40
degree of alignment between R&D activities and the Group's sustainable development goals. joint innovation projects, involving 22 universities and research institutes, of which 9 were industrialized, 4 received support from
provincial or ministerial-level research programs, and 2 achieved preliminary breakthroughs in frontier technologies. In addition,
the Company actively participated in the development of international and domestic industry standards, and by the end of the
reporting period, Hengtong had published a total of 457 international and domestic standards.
Intellectual Property Management and Protection
Hengtong Optic-Electric strictly complies with laws and regulations such as the Patent Law of the People's Republic of China,
the Trademark Law of the People's Republic of China , and the Copyright Law of the People's Republic of China . The Company
has established management systems including the Supplementary Provisions on Industry–University–Research Management
and the Hengtong Trademark Management Measures to standardize the creation, utilization, protection, risk prevention, and
dispute resolution of intellectual property, strengthening the management of trademarks, patents, copyrights, and other IP assets.
During the reporting period, Hengtong upgraded its internal patent database, importing over 3,000 historical patent records,
including Chinese and English descriptions and certificate images, and compiled more than 1,200 patent certificates. By the end
of the reporting period, the Company held 1,417 authorized invention patents and 145 PCT international patents. In addition,
to enhance employees' awareness of intellectual property protection, the Company organized six IP training sessions covering
management and core R&D personnel, with content including international standards, compliance management, and patent
quality improvement.
IPD 3.0 Training
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Supply Chain Management To continuously enhance its supply chain management capabilities, Hengtong Optic-Electric systematically identifies potential
risks and opportunities, comprehensively implements responsible supply chain initiatives, and constantly strengthens its ability to
deal with supply chain risks.
Hengtong Optic-Electric is committed to building a stable, green and sustainable supply
Risk Risk Description Corresponding Solution Time Dimension1
chain, and deeply integrates sustainable development elements into the entire process
of supplier access standards, cooperation evaluation and dynamic management. The I nclude issues related to sustainable
development into the evaluative criteria of
Company assesses potential sustainable development risks in the supply chain and suppliers, and implement them throughout
urges improvements to ensure its compliance and stability, striving to build a sustainable the entire life cycle management of
suppliers, making them an important
supply chain ecosystem with commercial resilience, environmental friendliness and The EU's increasingly strict policies, such as assessment standard for supplier access,
social value. Corporate Sustainability Due Diligence Directive d a i l y m a n a ge m e n t , e va l u at i o n a n d
(CSDDD), Corporate Sustainability Reporting elimination;
Directive (CSRD), Prohibiting Products Made with
Supply
Forced Labor on the Union Market and Amending Sign the Social Responsibility and Ethics
Chain ESG
Governance
Directive/ EU Forced Labour Regulation (EUFLR), Standard Agreement with the supplier, Medium-term
Compliance
may lead to non-compliance in supplier's which clearly requires the supplier to
Risks
environment and social responsibility, causing promise not to hire child labor, not to use
supply chain disruptions and reputation losses. forced labor, not to discriminate against
Hengtong Optic-Electric has established a three-level supply chain management structure consisting of The stricter regulations will result in an increase in employees, respect employees, ensure
the Board of Directors, the ESG Committee and the Company's Supply Chain Management Department. the Company's compliance costs. employees' health and safety, guarantee
The Board of Directors serves as the highest responsible body for supply chain management and supplier's employees' salary and benefits, etc;
ESG development, leading the subordinate ESG Committee and relevant functional departments to eview and confirm environmental and
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jointly promote the sustainable development management of the supply chain and systematically build a social responsibility during the supplier
responsible supply chain in a standardizes manner. audit and on-site visit.
Some suppliers have a high risk of irreplaceability
due to technical barriers or resource exclusivity.
When the supplier fails to provide raw materials
that meet the Company's requirements in a
timely manner because of product quality  E
xpand the resource of alternative suppliers
defect, violations of law or force majeure, the on a broad scale and systematically cultivate
Supply Chain Company, constrained by the objective condition potential partners to reduce reliance on a
Monopoly of insufficient substitutability of suppliers, may single supplier; Short-term
Risks encounter the risk of weakened execution romote localized alternatives for materials
P
ability when promoting the implementation and accelerate the process of independent
of the rectification plan. Therefore, when such control over key technologies.
risks occur, the Company's production may be
disrupted, leading to failure in timely product
deliver y and subsequent impacts on t he
Company's financial performance.
Supplier management
Hengtong Optic-Electric attaches great importance to business Optic-Electric Logistics Management Regulations, etc., so as to
cooperation with supplier, continuously optimizes the supplier standardize the full-life cycle management of suppliers, which
management system, and strengthens the supplier audit covers supplier onboarding and audit, classification and
process. The Company formulates and implements a series grading management, as well as evaluation and elimination.
of management systems, including Hengtong Optic-Electric
Supplier Access Specifications, Hengtong Optic-Electric In our cooperation with small and medium-sized enterprises,
Supplier Management Regulations, Hengtong Optic-Electric we always adhere to the principles of fairness, impartiality
Material Supplier Performance Appraisal Specifications, and transparency, providing them with the same business
Hengtong Optic-Electric Procurement Bidding Management opportunities and respect as large enterprises to create a fair
Regulations, Hengtong Optic-Electric Procurement Contract competition, mutual beneficial market ecosystem. During the
M a n a ge m e n t Reg u l at i o n s , H e n g to n g O pt i c- E l e ct r i c reporting period, Hengtong Optic-Electric did not have any
Procurement Execution Management Regulations, Hengtong overdue payments to small and medium-sized enterprises.
Time dimension: Short-term refers to within one year, medium-term refers to one to five years, and long-term refers to more than five years.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Supply Chain ESG Management
Hengtong Optic-Electric continues to deepen supply chain access phase, Hengtong Optic-Electric conducts inspections in
Onboarding and Audit ESG management, fully integrating ESG factors into the accordance with the Company's basic ESG-related requirements
supplier access and assessment system, and works to build a for key suppliers, identifies potential ESG risks, and provide
supply chain ecosystem featuring shared responsibilities and a basis for judgment on supplier access. The inspection and
Onboarding standards: It is clearly stipulated in all regulation that suppliers can only apply for introduction sustainable development. During the reporting period, the analysis dimensions include: ESG risks related to the supplier's
after reaching the access standards for their respective product categories, covering dimensions including but coverage rate of suppliers certified by ISO 14001 Environmental region, industry and commodities, procurement expenditure,
not limited to corporate credit, production and delivery capabilities, product quality, environmental protection, Management System reached 100%. and business relevance. We conduct a comprehensive
occupational health and safety, commitment to not using conflict minerals, business ethics, and fulfillment of social assessment of the performance of Hengtong Optic-Electric's
responsibilities. We implement full-process management and control over key suppliers2 in terms of environment, social responsibility,
suppliers' ESG management and risk assessment. In the governance, and business relevance.
Audit process: After gaining access, a small batch of samples will be made to conduct on-site audit of all suppliers.
Only after passing the audit will a procurement framework agreement be signed, clearly stipulating a series of
requirements such as integrity guarantee, product quality, intellectual property rights, and supplier assessment.
Only then can a supplier be regarded as a qualified supplier. Environmental Standards Social Standards
Performance assessment: For qualified suppliers, monthly or quarterly performance assessments are conducted
hall obtain certificates such as ISO 14001 Environmental
S hall obtain certificates such as ISO 45001 Occup
S
based on the classification of supplied materials. If a supplier is not qualified as a result of the assessment, a series of
Management System certification; ational Health and Safety Management System
rectification requirements and corresponding measures will be imposed, followed by regular review and evaluation. certification;
hall establish environmental emergency response plans
S
and monitoring systems for major environmental factors; hall establish mechanisms for occupational
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health hazard identification and occupational
hall establish effective management mechanisms for
S
safety training;
Classification and Grading Management environmental protection, waste management and other
related aspects. hall sign the Agreement on Social Responsibility
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and Ethical Standards and effectively safeguard the
labor rights and welfare benefits of employees;
Grading management: Different assessment frequencies and management mechanisms are adopted for suppliers
of varying importance. Suppliers are divided into four importance levels (Level A to Level D) based on factors such hall require suppliers to responsibly use mineral
S
Governance Standards
as supplier irreplaceability, procurement amount and sustainable development risks. The frequency of performance resources in every link from mining to processing,
appraisals and system audits is carried out according to the importance level. transportation, and sales, and explicitly specify
hall have a good business reputation and no records of
S that minerals and raw materials from conflict-
Classification management: Different assessment frequencies and management mechanisms are applied major illegality or accidents; affected areas are not accepted.
based on different categories and properties of materials: regular materials are subject to flexible and normalized hall sign the Integrity Co-construction Agreement and abide
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management; for key materials or dominant suppliers, targeted annual negotiations are conducted and annual by the business ethics of integrity and honesty.
strategic agreements are signed to enhance cooperation stickiness and supply stability.
Hengtong Optic-Electric's Requirements for Suppliers' Sustainable Development Standards
Evaluation and Elimination In terms of anti-corruption, Hengtong Optic-Electric explicitly and our suppliers comply with the Agreement on Social
requires suppliers to prohibit any abuse of power for personal Responsibility and Ethical Standards and the requirements
gain, whether by individuals or organizations, including acts of sustainable development standards set by Hengtong
Continuous evaluation: The suppliers will be continuously evaluated. If the performance assessment score of their such as bribery, facilitation fees, fraud, extortion, collusion, and Optic-Electric for suppliers, and to prevent any ESG-related
supplied products is below 70 points for more than three times within a valid six-month assessment period, the money laundering. It is prohibited to accept gifts, loans, fees, violations. In addition, in the selection of suppliers and
supply of this material will be suspended. rewards, or other benefits of any form from any individual in the awarding of contracts by Hengtong Optic-Electric, ESG
business activities to induce or be induced to engage in any performance will be given significant weight. When suppliers
Elimination and Blacklisting: Suppliers will face suspension, elimination or inclusion in the blacklist based on dishonest, illegal, or breach-of-trust conduct. Regarding conflicts meet the same conditions, we will give priority to choosing
the severity of their violations in the following circumstances: ① Providing false information; ② Bid rigging and of interest, we prohibit any situation that may lead to a conflict partners with outstanding ESG performance. If any violations
collusion; ③ Breaching contracts during the term; ④ Causing severe impacts due to major quality accidents; ⑤ To be between personal interests and corporate interests. Suppliers or negative incidents in the ESG performance of suppliers
suspended for having no business transactions for more than two years; ⑥ Violating three agreements; ⑦ Violating must ensure that their decisions and actions are consistent with are identified during the review process, we will require the
relevant national laws and regulations; ⑧ To be suspended, eliminated, or blacklisted by other companies within corporate interests, and avoid harming corporate interests or suppliers to complete rectification within a prescribed time
Hengtong Group; ⑨ Falling under the circumstances specified in Hengtong Optic-Electric Management Measures for violating corporate regulations due to personal gain. limit. For suppliers with deficiencies, we will provide them
"Blacklist" of External Companies or Natural Persons. with ESG capacity building and support to help them meet
In order to promote the sustainable development and shared Hengtong Optic-Electric's ESG standards. If a supplier fails to
Continuous optimization: The Company will continue to cooperate with suppliers ranked in the top two levels responsibility of the supply chain, we continuously review meet the Company's minimum ESG requirements within the
based on appraisal results. For suppliers at Level C, supervision for improvement, support, and re-assessment will be the procurement practices and business behaviors of our specified time, it will be removed from the supplier list until it
conducted; suppliers at Level D will be classified as unqualified and the cooperation will be terminated. suppliers to ensure that all business activities between us meets the ESG requirements.
Hengtong Optic-Electric defines key suppliers as those that have a significant impact on the Company's product quality, maintain a large supply
scale, and demonstrate outstanding performance and industry-leading status in aspects such as quality, cost, delivery, technology, service, green
Hengtong Optic-Electric Supplier Management Measures and sustainable development.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Case Green and Low-Carbon Promotion of the Supply Chain of Jiangsu Hengtong Electric Case Hengtong Submarine Submarine Cable Co., Ltd. Was Awarded the Title of "National-
Power Special Wire Co.,Ltd. Level Green Supply Chain Management Enterprise"
Background and Risk Identification:
The Company has realized real-time monitoring of processes such as procurement management, sales management,
In the design and manufacturing of overhead stranded wires (including special conductors), aluminum rods, aluminum alloy rods, cable
inventory management, and logistics information. It has established an MES supply chain system, a TMS logistics
conductors, and copper alloy materials, Jiangsu Hengtong Electric Power Special Wire Co.,Ltd. has identified high carbon emissions
in the supply chain, outdated production processes, and potential social responsibility risks. The Company has formulated external
platform, and an SRM supplier relationship management system, optimized the raw material inspection process,
codes of conduct, requiring suppliers to commit to complying with business ethics, social responsibility, environmental protection, and enhanced supplier management and control capabilities, and set up complete supplier quality files to achieve full
employee rights protection, thereby providing direction for supply chain management and green low-carbon transformation. product traceability. Meanwhile, the Company releases process information such as green procurement, green
production, and green recycling, realizes intelligent supply chain management, promotes online collaboration and
interaction between the enterprise and suppliers, effectively improves the overall level of supplier management, and
Response Measures: lays a solid foundation for being awarded the title of "National-Level Green Supply Chain Management Enterprise".
Promote key raw material suppliers to adopt renewable energy, optimize energy structures, and reduce the use of fossil energy;
I mprove production processes and technologies, enhance energy efficiency, establish waste recycling systems, and reduce raw material
consumption and waste gas emissions;
equire suppliers to implement energy-saving and low-carbon planning schemes, use high-energy-efficiency equipment, obtain energy
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management system certification, and build green factories and zero-waste factories.
Management Outcomes:
Through systematic green and low-carbon management, the Company has achieved carbon emission reduction and recycling in the
production of overhead stranded wires, aluminum rods, aluminum alloy rods, and copper alloy materials. This has enhanced supply
chain sustainability, effectively reduced environmental and social responsibility risks, and provided support for competitiveness in
domestic and international markets.
Case Implementation Measures for Green Supply Chain Management of Jiangsu Hengtong
Electric Power Cable Co., Ltd.
Background and Management Planning:
Jiangsu Hengtong Electric Power Cable Co., Ltd. has formulated the Medium- and Long-Term Development Plan for Green Supply
Chain Management , which clearly outlines the promotion of supply chain greening from aspects such as green supplier management,
green production, green recycling system construction, and the establishment of green information collection, monitoring, and release
platforms. The Company has also set annual target indicators and specific work plans.
Organization and Implementation:
The Company has established a Green Supply Chain Management Group and a Green Supply Chain Management Office, which are
responsible for conducting irregular inspections and evaluations of suppliers, supervising the achievement of green supply chain
management targets and indicators, and promoting management closed-loop and continuous improvement.
Management Outcomes:
Core suppliers are connected to the carbon management platform to achieve traceability and collaborative optimization of raw material
carbon emissions. Through systematic management, the greening level of the Company's supply chain has been significantly improved, Hengtong Submarine Submarine Cable Co., Ltd.
which helps achieve the dual carbon goals and enhances the enterprise's sustainable development capability.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Conflict Minerals Management Impact, Risk and Opportunity Management
Hengtong Optic-Electric recognizes that the transparency of the mineral supply chain is crucial for ensuring the sustainable
development of the industrial chain and gaining customer trust. Hengtong Optic-Electric has established a supply chain risk management mechanism covering three modules: risk identification
and assessment, risk response and prevention, and risk management capability improvement, effectively implementing regular
Hengtong Optic-Electric strictly complies with the requirements of the China Guidelines for Responsible Management of Mineral risk control and supply chain risk response.
Supply Chain and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-
Risk Areas . It strengthens traceability requirements for suppliers of materials containing tin, tantalum, tungsten, and gold, and is
committed to not purchasing conflict minerals whose raw materials originate from conflict-affected and high-risk areas. During the
reporting period, we continued to implement relevant measures to improve and enhance Hengtong Optic-Electric's responsible
procurement management capabilities.
Risk Identification and Risk Response and Prevention Risk Management
Assessment Capability Improvement
Strengthen Supply Chain Due Diligence Processes
We continue to strengthen the supply chain due diligence mechanism to ensure compliance Hengtong Optic-Electric has esta iversification of Supplier Sources: Expand the alternative
D Organize special training on
with conflict minerals regulatory requirements and industry standards. By strictly implementing blished a dynamic monitoring mec supplier resource extensively, systematically cultivate potential procurement systems, safety
the Conflict Minerals Reporting Template (CMRT), we systematically collect and verify supply ha nism featuring regular on-site partners, and reduce reliance on a single supplier. regulations, and environmental
chain information, fully grasp the origin countries of minerals and the sources of smelteries audits and irregular supplier visits, sta n d a r d s f o r p r o c u r e m e n t
and refineries, and strictly check the traceability path of minerals used in products and the enabling it to fully grasp the actual echnological Independence: Accelerate the process of
T personnel to systematically
compliance of the regulatory chain. operational status of suppliers and independent and control of key technologies by promoting enhance the risk response
systematically identify and predict PCN (Porous Coordination Network) technical changes and capability of the procurement
Minerals Management
localization alternative solutions of materials.
Electric's Conflict
potential risks. team.
Hengtong Optic-
Measures
Invest in the Procurement of Alternative Materials The Company continuously trategic Supply Relationships: Establish long-term and
S Conduct regular policy promotion
conducts real-time monitoring stable strategic synergy relationships with core suppliers, and compliance training for
We actively seek alternative sources of minerals and promote supply chain diversification to and analysis of the global political simultaneously optimize the risk management mechanism suppliers, and effectively drive
reduce dependence on conflict-affected areas. and economic environment and for supplier irreplaceability, and build a supply chain security the advancement of suppliers'
market change trends to ensure system with both resilience and sustainability. sustainable development capa
supply chain resilience and business bilities through targeted technical
continuity. guidance and designated support
Establish Non-Conflict Mineral Product Labels mechanisms.
To safeguard the right to information of customers and stakeholders as well as their
sustainable development demands, we have implemented and promoted conflict-free
mineral product labels for relevant products. Hengtong Optic-Electric's Risk Management Mechanism
In addition, to ensure the effective implementation of the rights and interests protection system for supply chain employees, Hengtong
Optic-Electric signs the Social Responsibility and Ethics Standard Agreement with all suppliers. The agreement clearly requires suppliers
to commit to not employing child labor, not using forced labor, not discriminating against employees, respecting employees, ensuring
Raw Material Sustainability employees' health and safety, and guaranteeing employees' salary and benefits. Meanwhile, during supplier onboarding audits and
regular on-site visits, we conduct special inspections on the implementation of labor rights protection clauses to ensure that the binding
In the procurement of raw material, Hengtong Optic-Electric of authoritative third-party test reports, the Company achieves force of the agreement is translated into practical management effectiveness.
takes the environmental performance and sustainability closed-loop verification of the environmental attributes of raw
Indicators and Targets
of materials as core considerations, and gives priority to materials and establishes a dual guarantee mechanism.
selecting environmentally friendly materials and components
that meet internationally authoritative sustainability Hengtong Optic-Electric earnestly fulfills its responsibilities
certification standards such as ISO 14001, Forest Stewardship as the "chain leader" in the industrial chain during the Hengtong Optic-Electric attaches great importance to the sustainable and responsible development of the supply chain. Aligning
Council (FSC) certification, and Cradle to Grave. Currently, supplier selection stage, establishing a multi-dimensional with international standards, it promotes the inclusion of green, low-carbon and ESG performance assessments for suppliers, sets
the Company has achieved 100% use of environmentally environmental access evaluation system to ensure that the target of "covering 100% of suppliers", and continuously tracks indicators related to supply chain management.
friendly materials certified by the ISO 14001 Environmental partners fully meet sustainable development requirements.
Management System. Through audits, on-site inspections, and third-party
evaluations, we verify suppliers'environmental declarations Indicators Unit 2024
Hengtong Optic-Electric strictly adheres to the EU RoHS 3.0 and collect detailed information about their environmental
standard and the latest version of the REACH Regulation p o l i c i e s , p ra c t i c e s , a n d p r o d u c t s , i n c l u d i n g t h e i r Total number of suppliers / 1,212
for the environmental performance requirements of raw environmental management systems, raw material sources, Among them, Asian suppliers / 141
materials. During the reporting period, a total of 150 types of energy consumption and waste disposal in production
raw materials that comply with RoHS 3.0 standard certification processes, as well as inspect environmental protection Among them, suppliers from other regions / 71
were used in products at a 100% rate. At the procurement measures in their production facilities and processes. For Total number of suppliers certified by ISO 14001 / 1,212
stage, the Company requires suppliers to provide test reports key materials, the Company actively conducts Life Cycle
issued by third-party testing institutions and takes them Assessment (LCA) to evaluate the environmental impact Number of new suppliers undergoing on-site audits / 119
as the core basis for raw material screening. Meanwhile, throughout the entire cycle from raw material collection, Percentage of new suppliers screened using environmental standards % 100
before product delivery, the Company needs to conduct production, use to disposal.
environmental standard testing on finished optical cables and Percentage of new suppliers screened using social standards % 100
issues qualified third-party test reports. Through the issuance
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Quality Control Strategy
To further ensure product quality and enhance product safety and reliability, Hengtong Optic-Electric actively identifies potential
risks and opportunities related to quality.
In the context of the digital and information age, Hengtong Optic-Electric will continue
to forge ahead in the course of high-quality development with independent and self-
Risk/ Time
reliant science and technology. It will establish a sound quality management system and Risk/Opportunity Description Response Method
Opportunity Dimension
comprehensive quality control procedures, continuously foster awareness of quality and
responsible marketing culture, and provide customers with high-quality products and
In the production process, the Com- he Company has established clear and definitive
T
services. pany's products may fail to fully meet standardized processes, which are regularly reviewed and
established standards or expected updated;
requirements due to factors such
Risk of he production department conducts regular patrol
T
as human error, equipment issues,
Governance
Deviation in inspections and preventive maintenance; Short and
materials, environment, or methods.
the Production medium-term
The risk of deviation in the produc- uality inspections are carried out on products to ensure
Q
Process tion process may lead to quality compliance with product quality standards;
defects, reduced efficiency, increased
Hengtong Optic-Electric has established a sound quality governance structure, mainly composed of the Board costs, delayed deliveries, and even he Company organizes regular training and assessments
T
of Directors, the ESG Committee, the Quality Management Department and other functional departments. safety or compliance problems. to ensure employees are proficient in operating standards.
The Quality Management Department is responsible for the overall planning and implementation of the
Company's quality work, and has three subordinate modules: the Quality Technology Center, the Testing
Center and the Laboratory. These modules cover quality system construction, quality target formulation,
capability building (laboratory, testing capability, quality team and digital construction), quality culture and In the global supply chain system, stablish strict supplier screening criteria, and take quality
E
the Company may face product qual-
education, and quality honor management, ensuring the efficient and comprehensive implementation of the as the key point of assessment;
ity risks caused by insufficient quality
quality management system.
control of suppliers, raw material learly specify quality requirements, liability for breach of
C
Supply Chain defects, and other factors. Such risks contract, and rectification clauses in contracts, and require Short and
Hengtong Optic-Electric has established a multi-level quality management system covering core business
Quality Risk may lead to customer complaints, suppliers to provide compliance certifications; medium-term
segments such as optical fiber and cable, and submarine cable, with ISO 9001 and TL 9000 as the core. In product recall incidents, and may
A
meeting customized quality requirements, the Company continued to strengthen certification management, bilities, customer trust, and market alternative suppliers; formulate emergency procurement
plans for high-risk materials.
ensured that suppliers' systems meet the standards simultaneously and support the certifications required competitiveness.
for new product and new market expansion.
Identify the core needs of customers through research,
There is a possibility that the Com-
interviews or data analysis;
pany's products may fail to meet
customer expectations in terms of void exaggerated promotions and ensure that the
A
Customer quality, leading to customer dis- products are consistent with the promotion; Short and
Satisfaction satisfaction, complaints, churn, or
stablish a complaint handling mechanism to ensure that
E long-term
Risk damage to brand reputation. Such
risks may directly affect the Compa- complaints are resolved promptly and professionally;
ny's revenue, market share, and long-
ctively translate customer feedback into specific
A
term competitiveness.
improvements in products and service processes.
If the Company leverages technolo- he Company has introduced advanced technologies such
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gies such as industrial internet and as 5G, F5G, industrial internet, and artificial intelligence,
Opportunity built digital factories, and realized automation, intelligence,
artificial intelligence, it can achieve
for and high efficiency in the production process;
automation, intelligence, and high
Technological Medium and
efficiency in the production process. he Company actively promotes digital transformation
T
Upgrading long-term
Such technological upgrading can and has explored a new path of relying on independent
and Digital help the Company improve produc-
Empowerment research and development innovation to drive the digital
tion efficiency, product quality, re- transformation and upgrading of the manufacturing
source utilization and other aspects. industry and achieve high-quality development.
Awarded as "2024 Best Organization" from Quality Control Team of SOECC
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Product Lifecycle Management System Responsible Sales
Adhering to the previous quality management model, the Company has built a comprehensive, systematic, and highly digital Hengtong Optic-Electric integrates responsible marketing throughout the entire sales and service process, aiming to provide
quality management system, covering the full-lifecycle management and control from research and development, design, customers with more standardized and transparent services. The Company strictly complies with the requirements of laws and
raw material procurement, production and manufacturing to logistics and services. The system has improved the reliability of regulations such as the Advertising Law of the People's Republic of China and the Consumer Rights Protection Law of the People's
products and services, significantly optimized the operational efficiency of the value chain, and fully demonstrated the Company's Republic of China , formulates systems related to responsible marketing, and standardizes advertising and marketing behaviors.
technological leadership and market competitiveness in the global marine communication field. During the reporting period, Hengtong Optic-Electric did not have any incidents of violating product promotion and service
information norms.
Quality Management Infrastructure Construction
The Regulatory Requirements for Product Promotion and Service Information
Hengtong Optic-Electric has built the largest ultra-high voltage testing and research and development center in China. During the The Company has established a joint review mechanism involving multiple departments to
reporting period, it promoted 53 laboratory capability enhancement projects, expanding the scope and accuracy of testing items. ensure the accuracy of technical parameters, product functions, and application scenarios in
promotional materials, and to eliminate misleading information. For the international market,
Hengtong Optic-Electric also complies with local regulations, providing global customers with
Digital and Intelligent Quality Control
true and consistent product and service information to maintain corporate credibility.
Hengtong Optic-Electric continues to advance digital transformation and has explored a new path of relying on independent
research and development innovation to drive the digital transformation and upgrading of the manufacturing industry and achieve Handling Mechanism for Violations of the Regulatory Requirements for
high-quality development. Through technologies such as 5G, artificial intelligence, digital twin, and industrial internet, we have Product Promotion and Service Information
realized the automation, precision, and continuous optimization of the production process, and built the first "World Lighthouse
Factory" in the global optical communication industry. The Company has established a compliance supervision mechanism to promptly handle
violations related to product promotion and service information. Upon receiving complaints,
Meanwhile, the digital factory has realized digital twin of the production and manufacturing process and full-lifecycle quality we immediately initiate investigations, assess the severity, take corrective measures, and
traceability. By leveraging MES and QMS systems, we have achieved full traceability of batches and orders from raw materials pursue accountability in accordance with regulations. The Company also regularly reviews and
to finished products, enabling rapid identification of problems and their scope of impact. Through the "one item, one code" updates compliance policies to ensure alignment with legal requirements and market changes.
management mechanism, the Company has realized full-process traceability from raw material supply to product delivery,
significantly improving management efficiency and reducing resource waste and environmental pollution.
Hengtong Optic-Electric's Compliance Marketing Management Measures
In addition, we have developed a quality big data early warning and monitoring platform and quality digital employee applications,
deepened data-driven quality prediction and closed-loop improvement, and strengthened collaborative management of supply In addition, Hengtong Optic-Electric regularly conducts internal compliance promotion and education, requiring employees to
chain quality. adhere to responsible marketing practices when representing the Company's brand and services, and to ensure the transparency,
accuracy, and comprehensibility of sales information.
Case Hengtong Optic-Electric has been selected as an Outstanding Intelligent Factory
Hengtong Optic-Electric has built a digital factory based on "all-optical network + AI" by introducing advanced
technologies such as 5G, F5G, industrial internet, and artificial intelligence, realizing automation, intelligence, and high
efficiency in the production process. The project includes a total of 10 digital and intelligent application scenarios,
including 3D digital twin factory construction, F5G + 5GA fixed-mobile convergence industrial network application,
discrete process digital design, and intelligent visual online inspection. The implementation of these application Training and Management and Performance Assessment
scenarios has achieved a 100% numerical control rate and 100% networking rate for key equipment. A significant Continuing Education Supervision Mechanism and Incentives
reduction in carbon emissions per unit of output enabled he Company provides systematic
T he Company has implemented a
T engtong Optic-Electric incorporates
H
the enterprise to achieve remarkable improvements training for all sales staff, covering comprehensive management and compliance performance into the
in production efficiency, product quality, resource relevant laws and regulations, super vision mechanism to ensure performance assessment of sales
utilization, and other aspects. compliance policies, and industr y that sales staff strictly comply with staff, and compliance directly affects
best practices. The training includes compliance requirements in their daily employees' assessment results. This
On Januar y 9, 2025, the public announcement of a variety of learning formats to help work. The compliance behaviors of mechanism not only strengthens the
the first batch of the list of Outstanding Intelligent s a l e s sta f f u n d e r sta n d a n d a p p l y the sales team are supervised by their compliance awareness of the sales
Factories by the Ministry of Industry and Information compliance requirements. In addition directors. Additionally, the Company team but also helps the Company
to onboarding training, the Company h a s e sta b l i s h e d a n a n o n y m o u s maintain a good reputation in the
Technology of the People's Republic of China concluded.
also regularly provides continuing re p o r t i n g c h a n n e l to e n co u ra ge market.
Hengtong Optic-Electric was included in the list due education for in-service sales staff to employees to report any potential
to its outstanding intelligent manufacturing level ensure they are aware of the latest violations. Regular internal audits
and remarkable achievements in transformation and market developments and compliance further ensure the implementation of
upgrading. requirements. the Company's compliance policies.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Impact, Risk and Opportunity Management Indicators and Objectives
Hengtong Optic-Electric has established a quality control process covering three core modules: risk identification and assessment,
risk response and prevention, and improvement of risk management capabilities, effectively implementing regular quality control
and quality risk response.
Quality Objectives:
Risk Identification and Assessment Continuously improve product yield rate and customer satisfaction, strengthen full-process quality management
capabilities, and promote the building of quality culture for all employees
hrough full-process monitoring and digital platforms, quality risks in production, supply chain, and product
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usage links are identified and assessed, and potential business and financial impacts are analyzed.
Risk Response and Prevention Hengtong Optic-Electric attaches great importance to quality control, sets and adheres to quality objectives, and continuously
monitors quality indicators such as yield rate of key processes, qualification rate of laboratory testing, and reduction range of
uality Incident Response Mechanism: Establish a rapid response and handling process to ensure timely
Q
customer complaint rate, so as to ensure the effective implementation and continuous optimization of quality management.
rectification of problems;
During the reporting period, Hengtong Optic-Electric had no major product recall incidents.
Quality Risk Prevention Measures: Continuously improve processes using Six Sigma, lean management, and
digital tools to prevent quality incidents;
Product Maintenance and Recall Mechanism: Conduct full-lifecycle monitoring of products to ensure timely
recall and maintenance of defective products.
Risk Management Capability Improvement
onduct internal and supplier quality training, during the reporting period, the number of training participants
C
reached 5,407, with a total of 86,630 class hours;
egularly organize quality monthly activities, excellent quality project selection, and quality sharing activities
R
to strengthen quality awareness among all employees.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Customer Service and
Information Protection
Hengtong Optic-Electric is committed to creating a professional, responsible, and high-
quality customer service experience. Based on a sound service system, we always
earnestly listen to customers' voices, promptly respond to their demands, effectively
protect their privacy, and strive to create the best service experience for every customer.
Customer Service and Satisfaction
Hengtong Optic-Electric adheres to the service With after-sales service and engineering service as
idea of "Full-staff Service, Touching the Customers, the core business pillars, our company continuous-
and Sincere Forever", and has formulated internal ly strengthens the rapid response and emergency
systems to systematically standardize the infor- handling mechanism for customer complaints To accurately identify customer pain points and actively help resolve their practical difficulties, Hengtong Optic-Electric conducts
mation transmission of customer complaints and and market emergencies, and has established a customer satisfaction surveys every six months, covering all customers' companies. During the reporting period, based on an in-
the customer complaint handling process, such strict standard that major customer complaints depth analysis of detailed survey results, Hengtong Optic-Electric achieved a customer satisfaction score of 96.39, which reflects
as the Regulations on Customer After-sales Ser- must be responded to within 12 hours. During the the Company's continuous efforts and value in understanding customer needs, improving service response, and enhancing
vice Management System, Management System reporting period, the Company received a total of problem-solving capabilities.
for Emergency Handling, Measures for Customer 38 complaints related to products and services, all
Complaint Management , and Special Process for of which were answered 100% and successfully re-
Customer Complaints, Returns and Exchanges . solved.
Case Collaboration to Enhance Customer Experience
After-sales Service - Engineering Services -
Global Service Network Professional Engineer Team The Company fully understands that customer service is closely linked to product quality. During the reporting period,
we continued to strengthen exchanges with various partners in terms of product quality and technology to ensure the
o ensure customers can consult product information
T he Engineering Services Department of Hengtong
T advancement of technical solutions and rapid response to quality issues, so as to more accurately meet customer needs
and feedback product usage without barriers, all Optic-Electric is composed of professional and provide excellent product and service experiences.
service organizations of Hengtong Optic-Electric have engineers, ensuring that engineering failures are
regional managers and customer managers, and repaired and resolved promptly, and providing
provide 24-hour free services; strong technical service support to customer in
various regions;
he Company provides in-depth services such as
T
customer follow-up visits and customer training. It uring the product quality guarantee period,
D
conducts surveys on customers' service needs and the Company dispatches technical personnel
consumption needs every quarter, designs targeted to the site in a timely manner to handle quality
training systems for customers, assigns technical issues; after the product quality guarantee
experts with professional theoretical and practical period, technical personnel will be dispatched
operation experience to conduct training, and immediately to the site for handling. A response
provides on-site installation guidance and technical will be made within 0.5 hours based on the
training for customers' technical personnel. actual situation to assist in resolving the issues.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Information Security Protection
Case Recognition, Reputation, and Awards from Key Customers Hengtong Optic-Electric attaches great importance to network security Regulations and the Hengtong Trade Secret Management Regulations ,
management. It comprehensively improves information security level continuously building a solid information network security barrier.
through a series of measures, including strengthening the construction During the reporting period, all the Company's information security
During the reporting period, the Company's service quality has been highly recognized by customers. In the future, the of information security systems, enhancing technical protection frameworks have obtained ISO 27001 certification.
Company will continue to strengthen the improvement of customer service capabilities, accelerate service response capabilities, and optimizing emergency response mechanisms. We
strictly comply with laws and regulations of the operating location, Hengtong Optic-Electric has established a sound information security
speed, and provide customers with excellent products and services.
such as the Data Security Law of the People's Republic of China and protection system. Under the supervision and management of the ESG
the Personal Information Protection Law of the People's Republic Committee at the Board of Directors level, the Company has set up a
of China. Guided by the Hengtong Group Information Security and special Information Security and Confidentiality Committee to ensure
Confidentiality Management Regulations , we have formulated internal the effective implementation of information security and privacy
systems including the Hengtong Technical Data Confidentiality Control management. During the reporting period, Hengtong Optic-Electric did
not experience any information leakage or cybersecurity incidents.
Implement the policies, Review and approve Provide resources Review and supervise Supervise the
laws and regulations the Company's for the Company's major matters related operation of
on confidentiality confidentiality work confidentiality system, to the Company's confidentiality work in
issued by the state and plans and annual work support and promote confidentiality work each centers/business
the industry arrangements the implementation divisions and modules
of the Company's
confidentiality work
Main Responsibilities of Hengtong Optic-Electric's Confidentiality Committee
"Outstanding Partner" from Dongfang Electric "2024 Outstanding "2024 China Mobile Tier-1 Centralized Purchasing In terms of operational processes and supplier information security and encryption mechanism for super administrator accounts. Through the
Wind Power Co., Ltd. Supply Chain Partner" Outstanding Supplier (Grade A)" from China privacy management, Hengtong Optic-Electric implements information synergy of system construction and technical control, the Company
from China Energy Mobile Communications Group Co., Ltd. management for processes such as business order placement and has significantly improved the information security management level
Engineering Co., Ltd. contracts. During the management process, dedicated accounts are and overall protection resilience.
assigned for operations, and different account permissions are set
according to different levels. Employees in key confidential positions In 2024, Hengtong Optic-Electric continued to improve its data security
are required to sign confidentiality agreements with the Company to and privacy protection system. On the basis of the existing Technical
earnestly fulfill their responsibilities for data and information security Data Confidentiality Control Regulations , and in line with the Personal
Information Protection Law and industry regulatory requirements,
protection. In the event of any breach of the agreement, the Company
can further verify through internal and external resources and provide the Company focused on strengthening customer privacy protection
relevant evidence to hold the responsible personnel liable for breach clauses and clarified the full-lifecycle management standards for
of contract. During the reporting period, Hengtong Optic-Electric did data collection, storage, transmission, and destruction. The Company
not have any cases involving violations of customer privacy or loss of ensured customer data security through encryption technology,
customer data. anonymization processing, and strict access control mechanisms,
and has established real-time monitoring and emergency response
We adhere to the principle of transparency and openness, and maintain mechanisms. It conducted regular cyber security drills to ensure the
full communication with customers regarding information security and rapid identification and handling of information security threats,
privacy protection mechanisms to ensure that customers are aware continuously improving the information security management
of the nature and purpose of the information we obtain, as well as the level. During the reporting period, the Company carried out special
retention period of relevant information. We inform customers that drill activity for phishing emails for all employees in the middle and
they have the right to decide on the extent and manner in which their the end of 2024, sending more than 10,000 phishing emails to test
relevant information is collected, stored, and used. Meanwhile, we employees' cyber security awareness and protection capabilities.
clearly specify that when collecting information, customers have the The Company also provided internal security training for employees,
right to choose the "agree" or "opt-out" option. Additionally, customers effectively enhancing their self-protection awareness and reducing
retain the relevant right to apply for access to the data held by the related risks. Hengtong Optic-Electric irregularly organized company-
Company at any time, to apply for the transmission of their data to wide information security training to foster a company-wide culture of
other service providers at any time, and to apply for the correction or information security and privacy protection. In addition, it conducts
deletion of their data at any time. annual company-wide training on required knowledge and skills in
areas such as information management, software management, IT
To ensure the overall information security of Hengtong Optic-Electric, management, and security management. This training strengthens
"2024 Group-Level Outstanding Supplier" from China "2024 Gold Supplier" from JONHON Optic-Electric t he Company has established an incident response procedure. It employees' familiarity with information systems, personnel
conducts response tests semi-annually, and carries out penetration management systems, and IT outsourcing supplier management,
Telecom Group Co., Ltd. Technology Co., Ltd.
tests and vulnerability analysis irregularly to continuously strengthen raises awareness of software copyright security, helps employees
the information security protection capabilities. master relevant IT processes, and comprehensively improves the
information security protection capabilities of all staff.
In 2024, the Company entrusted a third-party institution to conduct
penetration testing on the internet-side business systems, actively Meanwhile, the Company has gradually strengthened the reporting
identifying and promptly addressing security vulnerabilities. In management of security incidents, established an information security
response to these issues, t he Company has taken the following risk reporting channel for all employees, and taken information
measures: first, it has improved its password management system, security incident responsibilities as an important reference for
strictly implemented regular inspections, and required the use of employee performance evaluation. It has built a corporate culture and
complex password combinations; second, it has formulated interface mechanism that values and protects information security, effectively
security inspection standards to prevent unauthorized access; safeguarding customers' privacy against being leaked.
meanwhile, it has implemented a whitelist login and password
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Low-Carbon
Development:
Illuminating a
Green Future
To actively respond to the national strategic
goals of "carbon peaking and carbon neutrality",
Hengtong Optic-Electric unswer vingly
integrates sustainable development and green
development into the Company's long-term
strategic planning. We are well aware that
while pursuing technological leadership and
capacity improvement, ensuring environmental
friendliness and efficient use of resources is
an important cornerstone for the Company to
achieve sustainable development goals and
lead the industry's green transformation. As a
leading enterprise in the industry, Hengtong
Optic-Electric actively implements the Science
Based Targets initiative (SBTi), promotes the
construction of near-zero-carbon factories, and
realizes intelligent monitoring and data-driven
carbon emission management relying on a digital
energy management platform. In the process of
green transformation, Hengtong Optic-Electric
keeps up with global policy and technological
upgrading trends, continuously strengthens
cooperation and exchanges with leading domestic
and foreign enterprises in the fields of green
innovation, clean energy and energy-saving
technologies, comprehensively improves green
manufacturing capabilities, assists the Company's
upgrading towards high-end, intelligent, and
green development, and achieves the coordinated
development of enterprise operations and
environmental protection.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Environmental Protection and
Management
Environmental protection is not only a social responsibility of an enterprise, but also an
inevitable choice to ensure its long-term development. Hengtong Optic-Electric regards
environmental protection as the cornerstone of its survival and development, actively
undertakes the responsibility of reducing environmental pollution, strictly complies with
environmental laws and regulations, proactively seeks innovative solutions that exceed
standards, and strives to minimize the negative impact on the natural environment
during production activities.
Environmental Management System We attach importance to the development and management of the environmental compliance system, actively participate in the
development of environmental compliance for projects, and continuously strengthen the full-process compliance management of
In conducting business activities, we strictly comply with relevant operation and eligible for certification have obtained a certificate the Company's new, reconstructed and expanded projects.
laws and regulations and strive to minimize environmental of ISO 14001.
impact. Hengtong Optic-Electric strictly adheres to domestic
laws and regulations such as the Environmental Protection Law Hengtong Optic-Electric has established a three-level
Before project During project After project
of the People's Republic of China, the Environmental Impact environmental management and governance structure construction construction construction
Assessment Law of the People's Republic of China , and the consisting of the Board of Directors, the Environmental, Social
Environmental Protection Tax Law of the People's Republic of and Governance (ESG) Committee, and the ESG Working Group.
China , as well as global environmental laws and regulations With the Board of Directors as the supreme responsible body, Conduct feasibility studies Adhere to the priority of Before putting into formal
in overseas operating locations, including the International it holds the final decision-making power on matters related to and environmental impact environmental assessment production, independently
Environmental Law , the Environmental Liability Directive , environmental policy formulation, target setting, and review of assessments for new projects and strictly comply with the complete relevant procedures
and the Industrial Emissions Directive . We have established a environmental work progress. Meanwhile, we have formulated pollution prevention and such as the acceptance
management system in accordance with the requirements of green incentive mechanisms and accountability mechanisms After confirming feasibility, control measures specified in inspection of environmental
the ISO 14001 Environmental Management System standard to around indicators such as resource consumption, environmental prepare environmental impact environmental assessment protection facilities
guide the standardized environmental management work at impact, and ecological benefits, linking the performance statements, environmental documents
various operating locations. During the reporting period, 100% of of relevant management personnel to the achievement of impact reports, and fill
Hengtong Optic-Electric's production bases that were in stable environmental indicators. in environmental impact During the construction process,
registration forms in accordance the "Three Simultaneities"
with relevant regulations system is strictly implemented,
which means that pollution
Supreme Responsible Body for Environmental Matters Obtain environmental impact prevention and control facilities
assessment approval for new are designed, constructed, and
projects after ensuring feasibility put into use simultaneously with
Responsible for overseeing the implementation of environmental and compliance the main project
management work
Board of
Directors Responsible for formulating and reviewing the progress in achieving Hengtong Optic-Electric Environmental Compliance Construction Management Process
environmental management objectives and the environmental
performance of subordinate companies, and reports to the Board of To further ensure environmental compliance, we regularly Hengtong Optic-Electric did not have any incidents of
Environmental, Social Directors regularly engage qualified third-party institutions to conduct regular violating environmental laws and regulations.
and Governance (ESG)
Committee
external environmental audits on environmental impact
aspects such as the Company's environmental legal In addition, Hengtong Optic-Electric has always adhered to
Responsible for coordinating the specific implementation of compliance, implementation of environmental management the concept of environmental protection, persisted in green
policies, and risk control measures in accordance with the operations, continuously promoted the construction of green
environmental management in various departments, with relevant
ESG Working Group ISO 14001 standard every year. Through a combination of factories, and strived to achieve resource conservation and
functional departments specifically implementing environmental
internal self-inspections and external supervision, we audit environmental protection in daily operations. We advocate
management matters related to frontline production
all operating locations, covering 100% of all main businesses, low-carbon office and green lifestyles, encourage employees
Execute environmental pollution risk inspections, emergency response to ensure the effectiveness of the Company's environmental to practice the concept of environmental protection in
procedures for unexpected incidents, and reporting work management system and earnestly fulfill our commitment work and life, aiming to reduce environmental impact while
to environmental protection. During the reporting period, improving operational efficiency.
Hengtong Optic-Electric Environmental Management Structure
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Environmental Risk Management 3.2
Hengtong Optic-Electric proactively identifies environmental We have formulated the Enterprise Emergency Plan for
Climate Change and Carbon
Neutrality
impacts related to its own production and operations, Environmental Pollution Accidents to ensure that emergency
and has established an environmental emergency risk response measures are carried out in an orderly manner
management system featuring coordinated cooperation and when major sudden environmental accidents occur, so as to
clear division of responsibilities among the Control Group, mitigate and eliminate the hazards caused by such accidents.
Rescue Group, Fire-Fighting Group, Evacuation Group, Alert In daily operations, we also regularly conduct supervision
Group, and Monitoring Group to respond to environmental and inspection of environmental hazards in each production Against the background of global climate change and the national strategic goals of
risks in a timely manner. The Company regularly conducts workshop. We register the problems found and rectify them "carbon peaking and carbon neutrality", Hengtong Optic-Electric has always adhered to
environmental pollution risk inspections to identify potential in a timely manner. After rectification, we recheck to confirm a sustainable development strategy, actively promoted low-carbon operations and green
environmental risks and implements effective management that the rectification is in place, ensuring the implementation
measures to continuously reduce the environmental impact of the safety and environmental quality responsibility system innovation. We striving to optimize resource utilization, reduce carbon footprint, and drive
of its business operations. for all projects. environmental protection technology innovation to contribute to the achievement of carbon
neutrality goals. With reference to the framework of the Task Force on Climate-related
Financial Disclosures (TCFD) and the requirements for preparing sustainability reports of
Case Hengtong Optic-Electric Emergency Drill for Chemical Leakage the Shanghai Stock Exchange, we carry out climate risk management from four dimensions:
"Governance - Strategy - Management of Impacts, Risks and Opportunities - Indicators and
In 2024, Hengtong Optic-Electric conducted an emergency drill for chemical leakage, simulating the handling of a sudden Targets".
environmental incident in the chemical intermediate warehouse. The drill covered response procedures including leakage
control, personnel evacuation, and pollution isolation, and invited third-party experts to conduct on-site assessment
Governance
and guidance. Based on the results of the drill and assessment, the Company strengthened the cross-departmental
cooperation mechanism, improved the emergency plan and emergency measures for chemical storage areas, and further
enhanced the level of environmental emergency management.
A sound management structure is the fundamental guarantee for addressing climate risk issues. To advance the implementation
of climate-related strategies and risk management matters, and to execute work in response to climate change, Hengtong Optic-
Electric has established a three-tier climate change governance structure: "Board of Directors – Environmental, Social and
Biodiversity and Ecosystem Conservation
Governance (ESG) Committee – ESG Working Group".
While pursuing technological innovation and industrial The Company continues to advance biodiversity assessments Board of Directors
development, Hengtong Optic-Electric is committed to in certain regions, particularly in areas where its production
protecting the ecological environment and biodiversity, bases are located, by leveraging scientific data, Geographic Overall responsibility for formulating and reviewing systems
avoiding damage to forests, ensuring that the wood and Information System (GIS) tools, and collaborating with and policies related to climate change issues, as well as leading
packaging materials used in its production come from local environmental organizations, to analyze the potential and supervising matters concerning climate change
sustainably managed forests, and reducing the negative impacts of its operations on ecosystems and species. In
impact of its business activities on biodiversity. We adopt addition, we are committed to adopting environmentally
more sustainable resource management and operational friendly technologies to reduce reliance on and consumption
strategies, integrate ecological protection needs into of natural resources. Meanwhile, we actively participate
project planning and expansion processes, and also require in biodiversity conservation projects, promote ecological
Environmental, Social and Governance (ESG) Committee
our suppliers to comply with the same environmental restoration and species protection, and contribute our efforts
standards. to building a beautiful future where humans and nature Responsible for researching strategies related to climate
coexist in harmony. change, formulating goals and evaluation mechanisms, making
recommendations to the Board of Directors, and reporting to the
Board of Directors on a regular basis
ESG Working Group
Responsible for formulating climate change response measures
and coordinating the specific implementation of various
departments
Hengtong Optic-Electric Three-Tier Climate Change Governance Structure
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
To ensure the performance skills and competence of Board of and development trends related to climate-related risks Hengtong Optic-Electric has established a climate change reduction, carbon management tools, and intelligent energy
Directors members, the Company as needed invites external and opportunities, and enhance their ability to perform response strateg y guided by a sustainable strateg y, and carbon management platforms, continuously improving
experts to conduct training and knowledge dissemination duties on climate change issues. We have incorporated the supported by sustainable technologies, and centered on the energy efficiency and resource utilization level of the
related to climate change for the board members and the performance targets of climate change into the performance green mechanism guarantees, providing solid support for industrial chain. Meanwhile, Hengtong Optic-Electric has
heads of the relevant functional departments responsible for appraisal system of relevant management personnel to drive the coordinated advancement of high-quality development established a carbon emission accounting mechanism,
sustainable development matters. In the future, Hengtong the continuous improvement of climate-related management and global climate governance goals. Hengtong Optic- carried out climate scenario analysis, and has gradually
Optic-Electric will further formulate detailed training plans work and performance. Electric continues to increase investment in new energy, explored the path of internalizing carbon price management.
to ensure that relevant members understand knowledge clean energy, and green manufacturing, promotes the low- In addition, the Company actively participates in the
carbon transformation of the energy structure, and gradually formulation of domestic and international green standards,
reduces reliance on traditional fossil energy. At the technical promotes green finance and low-carbon investment, and
Strategy
level, relying on the independent research and development works with upstream and downstream partners to build a
advantages, the Company actively develops and promotes green supply chain ecosystem.
key technologies related to energy conservation and emission
Hengtong Optic-Electric adheres to the principle of "Leading high-quality development with technology, driving low-carbon
transformation through innovation" and is committed to building a world-leading enterprise in communications and energy
interconnection. The Company focuses on areas such as green manufacturing, green products, green supply chains, green stablish and improve
E ptimization and
O I ntensify the dual control of trengthen energy
S
operations, green power, natural carbon sinks, and CCUS. We accelerate in-depth layout in fields including marine energy, clean the management system upgrading of industrial energy consumption intensity conservation, emission
energy, and strategic emerging industries, and systematically build diversified solutions to tackle climate change. Meanwhile, and mechanisms structure and total amount reduction, and energy
the Company has established an ESG sustainable development system, a carbon management system, a digital and intelligent nhance the capability
E rioritize the
P I mprove energy utilization efficiency, and enhance
management platform, and a professional team, providing solid support for the efficient implementation and long-term evolution of carbon management, development of efficiency basic research
of climate-related strategies. statistics, and green and low-carbon ontrol fossil energy
C romote the industrial
P
monitoring industries consumption application of cutting-
trengthen the
S edge technologies
Develop non-fossil energy
development of esearch and develop
R
eepen the reform of energy
D
professional teams advanced and
systems and mechanisms
applicable technologies
and processes
Building a world-leading optical communication and new energy
enterprise with high-quality development led by technology and low-
Green Energy
carbon transformation driven by innovation Industry Optimization
Deepen green strategy and forge green Accelerate low-carbon transformation Strengthen
premium of traditional businesses and drive the high-quality Governance Low-Carbon
development of new businesses Technology
Green Green Green Action
Manufacturing Products Supply Chain
Strategic
Green Goals Green and
Marine Clean Building Low-Carbon
Emerging
Energy
Industries
Energy Investment
Green Operation Green Natural Carbon
Power Sink/CCUS
Low-Carbon Green
Transportation Development
I mplement full-scale
low-carbon design for
new buildings
ontinuously optimize
C
Carbon Management Digital and Intelligent Professional evelopment of low-
D trengthen planning
S
ESG Sustainability System the energy consumption
System Management Platform Team carbon logistics guidance
structure of buildings
ontinuously strengthen
C uidance on low-carbon
G ptimize the regional
O
the renovation of travel methods layout of industries Develop green finance
energy-saving and low- tilization of low-carbon
U uidance on green
G I mprove low-carbon
Hengtong Optic-Electric Green, Low-Carbon and Sustainable Development Strategy carbon buildings transportation tools production and lifestyle investment policies
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Climate-Related Risks and Opportunities
Risk
Risk Category Risk Description Duration Strategic Response Measures
Parameters
To combat climate change, low-carbon
Referring to the Task Force on Climate-related Financial Emissions by 2050 (NZE)" and "Stated Policies Scenario
Disclosures (TCFD) framework and taking into account its (STEPS)" were used as references. These risks were then materials will gradually replace existing
products, while low-energy equipment and
operational realities, Hengtong Optic-Electric has identified prioritized based on their likelihood and potential impact Explore pathways for low-carbon
more advanced energy-saving technologies
a list of climate risks and opportunities and carried out across different time horizons: short-term (0–1 year), medium- Low-carbon material and technological
and processes will gain broader investor Medium and
corresponding risk identification work. To assess physical term (1–5 years), and long-term (beyond 5 years). Tailored Technology technology
attention and policy support. This may lead long term
transformation, introducing highly
climate risks, representative concentration pathway (RCP) response measures have been developed and implemented transition efficient energy-saving technologies
to risks such as reduced liquidity of existing
greenhouse gas emission scenarios were applied. For according to the specific characteristics of each type of or production equipment
assets and increased costs associated with
transition risks related to climate change, the "Net Zero climate risk. the transition to low-carbon materials and
technologies
With customers' increasing attention and Closely track and investigate
preference for the impact of climate change changes in customer demand for
and low-carbon living, Hengtong Optic-Electric energy-saving and green product
will face accelerated deployment of low- services, and promptly adjust the
Representative Concentration Pathway RCP8.5: A scenario in which the global average temperature rises by more than Shift in customer Medium and industrial layout
carbon transformation progress, resulting in
risks such as increased budget, threats from
long term
Increase the budget for providing
competitors offering low-emission products,
Representative Concentration Pathway RCP4.5: A scenario in which the global average temperature rises by less than 2℃ transformational product services to
reduced market share, and decreased demand meet customer needs, and actively
above pre-industrial levels by 2100, i.e., the "2℃ or below warming" scenario; Transition for goods and services analyze price fluctuation trends
Risk Market
Stated Policies Scenario (STEPS): A scenario based on the current policies in place across various industries and Actively explore energy-saving and
countries, including announced policy plans that are already being implemented worldwide; consumption-reducing measures in
The prices of resources such as energy,
the production process, and strive
Net Zero Emissions by 2050 Scenario (NZE): A scenario in which the global energy sector reaches net zero carbon water, and equipment will increase due to to achieve the recyclable utilization
Rising raw the impact of climate change, which will Medium and of resources as much as possible
dioxide emissions by 2050, without relying on emission reductions from outside the energy sector to achieve this goal. material costs subsequently affect the procurement costs long term
Reach a consensus with
of production raw materials and increase the
transportation costs in the supply chain partners on low-carbon supply
chain transportation to reduce
procurement costs
Strengthen disclosure requirements
Stakeholders are paying increasing attention related to sustainable development
Risk Investors are and climate change to ensure
and importance to climate change issues. If
Risk Category Risk Description Duration Strategic Response Measures increasingly compliance
Parameters Hengtong Optic-Electric fails to meet investor Medium and
Reputation concerned
expectations, it may face divestment and a long term Closely track feedback from
Frequent extreme weather events will Implement a management on-call about negative
downgrade in ESG-related index ratings in customers and other stakeholders
cause employee commuting difficulties, system, enhance weather forecast feedback
the capital market regarding their requirements related
Extreme weather disrupt supply chain transportation, monitoring, issue early weather
and lead to equipment malfunctions, warnings, and promptly open to addressing climate change
events such as Short and
Acute typhoons, floods, impacting operational continuity and medium company guest accommodations
extreme heat, and resulting in reduced revenue term for free use by employees during
cold waves Typhoons and extreme cold may damage
extreme weather events Chance Category Chance Description Duration Impact on Hengtong Optic-Electric
communication equipment such as laid Develop emergency response Hengtong Optic-Electric can establish a distributed
cables plans for extreme weather events Against the backdrop of carbon peak and photovoltaic revenue model centered on "self-
(severe typhoons, torrential rains/ neutrality goals, clean energy production generation for self-consumption with surplus
Physical
flooding, freezing rain/snow, etc.), Resource Energy and storage technologies are maturing. Short-term and power fed into the grid" by increasing its holdings in
Risk
and prepare emergency facilities Efficiency efficiency Increasing holdings in new energy assets medium-term new energy assets such as distributed photovoltaic
Slow changes in temperature and rainfall
in advance such as distributed photovoltaics can help projects. This approach enables the Company
The Impact of may lead to the relocation of some
potentially affected operational sites, Prior to the flood season and continuously enhance energy efficiency to meet its own energy needs while generating
temperature, additional revenue
thereby increasing operational costs typhoon season, ensure all
Chronic precipitation, Long term
typhoon and flood prevention China has added approximately 50% of the To achieve the dual carbon goals, China's ongoing
and sea level rise The gradual rise in sea level may cause
supplies and related preparations Low-
variations submarine optical cables to malfunction world's new renewable energy generation energy structure transformation has created a
are completed according to the Energy emission
due to changes in pressure capacity in recent years, with annual additions Long term favorable environment for Hengtong Optic-Electric
Company's emergency plan, while Sources energy
reaching about 140 GW. The grid's emission to advance its own energy transition and enhance
conducting tabletop exercises in sources
factor has been declining year by year energy conservation and emissions reduction
advance
Stay informed about and comply The EU's "Fit for 55" legislative package outlines
In order to achieve the climate and
As national carbon reduction policies and with laws and regulations development targets for alternative fuel
issued by relevant domestic and environmental goals of reducing greenhouse
international carbon emission requirements infrastructure, renewable energy, hydrogen,
international regulatory bodies, gas emissions by 55% and saving 32.5% of
Stricter emissions become increasingly stringent, Hengtong and decarbonized gas markets. These initiatives
regularly identify applicable Customer energy by 2030 compared to 1990 levels, the
disclosure Optic-Electric faces growing demands from Products present new market opportunities for Hengtong
Transition Regulations Medium carbon emission policies demand European Commission has proposed a "Fit for
management regulators and investment institutions to and Long term Optic-Electric in communications, offshore wind
Risk and policies term for green 55" legislative package. The proposal covers
and compliance disclose corporate emission reduction Strengthen internal carbon Services power, and new energy facilities. Hengtong Optic-
products multiple areas such as renewable energy,
requirements targets, measures, and outcomes. This may accounting management and Electric will actively invest in clean technology R&D,
energy efficiency, buildings, land use, and the
lead to potential risks such as project delays, enhance the carbon emission enhance relevant production capacity and supply
carbon emissions trading system, involving 13
substantial fines, and compliance costs accounting system for production capabilities, and provide customers with superior
specific legislative proposals
processes green products
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Highlights of Implementation Measures Additionally, Hengtong Optic-Electric continues to advance its digital product lifecycle assessment (LCA) practices. Leveraging
its self-developed digital platform, the Company has achieved management across dimensions including resource utilization,
ecological impacts (including carbon emissions), and human health risks. Particularly in strategic sectors such as deep-sea and
Hengtong Optic-Electric remains committed to driving green transformation through technological innovation, focusing on clean energy, Hengtong Optic-Electric has prioritized LCA evaluations, driving green innovation and sustainable development. The
energy, energy conservation, consumption reduction, and low-carbon product design to continuously enhance environmental Company's digital platform has implemented the following innovative measures in carbon emissions and carbon footprint
performance throughout the entire product lifecycle. By the reporting period, the Company has been recognized with 7 National management:
Green Factories, 4 National Green Supply Chain Enterprises, 3 Industrial Product Green Design Demonstration Enterprises, and 8
Provincial Green Factories. It has accumulated 7 National Green Products, with 9 subsidiaries completing ISO 14064 organizational
carbon emissions verification and 48 products achieving ISO 14067 product carbon footprint certification. Comprehensive Coverage of Core Products
Hengtong Optic-Electric applies LCA to high-value, environmentally sensitive core products such as submarine cables
Clean Energy Technology Energy-saving Technology Low-carbon Product Design and ultra-high voltage equipment. By focusing on their environmental impact throughout the entire lifecycle, Hengtong
has enhanced its competitiveness in the global market and met international environmental requirements.
The Company actively develops Continuously advance energy- Launch low-carbon design
and applies clean energy saving technology research and initiatives, utilize low-carbon
technologies to reduce energy development and application, materials, optimize product
Simplified Application
consumption and achieve energy enhance the energy efficiency designs, and reduce the carbon
structure transformation of production equipment, and footprint throughout the product
reduce energy consumption lifecycle For conventional mass-produced products, Hengtong Optic-Electric has streamlined the LCA implementation process by
integrating digital tools, driving the green transformation of its supply chain.
Hengtong Optic-Electric is comprehensively advancing its digital transformation by deeply integrating smart manufacturing,
industrial internet, and artificial intelligence technologies. This initiative builds an efficient, intelligent, and green modern factory Integrating Ecological Footprint and MIPS into the LCA Framework
system, driving improvements in green production efficiency and operational management effectiveness, thereby laying a solid
foundation for its smart manufacturing ecosystem.
As complementary metrics to LCA, Hengtong Optic-Electric has integrated the ecological footprint and resource consumption
rate (MIPS) into its comprehensive LCA assessment framework. This approach enhances resource utilization efficiency, reduces
resource consumption in products and production processes, and advances the circular economy.
Digital Factory Construction Industrial Internet Applications Artificial Intelligence Applications
Smart Manufacturing: The
Industrial Internet Platform: The Intelligent Decision-Making: Impact, Risk, and Opportunity Management
Company actively advances Company leverages an industrial Hengtong Optic-Electric leverages
the construction of smart internet platform to achieve artificial intelligence technology To address the long-term impacts of climate change on its business operations, Hengtong Optic-Electric has integrated climate
manufacturing production lines. equipment networking, data to conduct in-depth analysis change response into its overall risk management system. We have established a robust three-tier risk prevention and control
By introducing automation collection, and data analysis, of production data, providing mechanism for climate change, implementing systematic identification, assessment, and response to climate-related risks and
equipment, robotics, and providing robust support for intelligent decision support opportunities. This ensures the Company can maintain long-term stable operations while confronting the challenges posed by
other technologies, it achieves production management, for production management, climate change.
automated and intelligent equipment maintenance, and equipment maintenance, and
production processes, enhancing energy management. energy management.
production efficiency and product Board of Directors Audit Committee Risk Management Committee
quality.
Remote Equipment Monitoring: Intelligent Inspection: The
The Company utilizes the Company has introduced AI-
Production Management The Board of Directors regularly The Internal Audit Department, Physical Risks: The Risk
industrial internet platform to powered inspection technology to
Platform: Hengtong Optic-Electric remotely monitor equipment, automate product quality checks, evaluates the effectiveness of under the leadership of the Management Committee
has established a production enabling real-time tracking enhancing inspection efficiency risk management measures to Audit Committee, conducts coordinates relevant functional
management platform to monitor of operational status, prompt and accuracy. enhance climate change risk regular audits of climate departments to identify, prevent,
production processes in real time, detection and resolution of management, internal controls, change risk management and respond to physical risks
optimize production schedules, equipment failures, and enhanced Intelligent Logistics: Utilizing and governance processes controls across all company associated with climate change,
and improve production equipment utilization rates. AI technology, the Company departments and processes. such as extreme weather events
efficiency. optimizes logistics transportation It assists and oversees the
Transition Risks: The Risk
Energy Management Platform: routes to reduce costs and implementation of risk
Data Analysis Platform: The The Company has established an improve operational efficiency. management systems by Management Committee
Company has built a data analysis energy management platform that each department, promptly coordinates relevant functional
platform to conduct in-depth facilitates real-time monitoring, identifies risk vulnerabilities, departments to analyze
mining and analysis of production analysis, and optimization of and reports findings to the and assess climate-related
data. This identifies bottlenecks energy consumption data, Audit Committee regulations, policies, disclosure
and issues within production effectively reducing energy usage. guidelines, and market trends to
processes, enabling targeted proactively address associated
improvements and optimizations. risks
Climate Change Tiered Risk Prevention and Control Mechanism
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Indicators and Targets Case Jiangsu Hengtong Power Cable Co., Ltd. Carbon Targets Approved by the Science Based
Targets Initiative
Hengtong Optic-Electric comprehensively assesses its current carbon emissions status, scientifically plans, and systematically Concurrently, reduce Scope 3 GHG emissions (covering
Jiangsu Hengtong Power Cable Co., Ltd., a subsidiary
advances the process of its subsidiaries joining the Science Based Targets initiative (SBTi). Based on reasonably set reduction
of Hengtong Optic-Electric, formally applied to join the purchased goods and services, upstream/downstream
targets, the Company fully considers each subsidiary's business development, emission trends, and reduction pathways to
Science Based Targets initiative (SBTi) in November 2023. transportation and distribution, use of sold products,
formulate and implement phased carbon reduction plans. Concurrently, through regular tracking of key performance indicators,
In July 2024, the Company successfully passed the SBTi and end-of-life disposal of sold products) by 61.1% per
the Company dynamically evaluates the effectiveness of its green and low-carbon manufacturing system, ensuring orderly progress
verification for its net-zero targets. million RMB of added value.
and continuous improvement in carbon reduction efforts.
SBTi ID: 40006437 Long-Term Emissions Reduction Targets (by 2045):
Relevant Management Index
Temperature alignment
Reduce absolute Scope 1 and Scope 2 greenhouse gas
(based on scope 1 and 2 targets): 1.5° C
Comprehensive energy consumption, energy consumption per 10,000 yuan of output value, and total emissions by 90% compared to 2022 levels;
Energy
Consumption electricity consumption are used to assess energy consumption levels and drive improvements in energy Overall Net-Zero Target:
Achieve a 90% absolute reduction in Scope 3
efficiency
Jiangsu Hengtong Power Cable Co., Ltd. solemnly greenhouse gas emissions (covering purchased goods
commits to achieving net-zero greenhouse gas emissions and services, upstream and downstream transportation
Carbon Carbon emissions, carbon emissions per 10,000 yuan of output value, and other indicators are used to across its entire value chain by 2045, actively fulfilling and distribution, use of sold products, and end-of-life
Emission assess carbon emission levels and drive emission reduction efforts corporate responsibility in addressing climate change. disposal of sold products) over the same period.
Near-Term Emissions Reduction Targets (by 2033): The Company will advance green manufacturing,
Indicators such as green electricity consumption, green electricity usage share, and total self-built supply chain decarbonization, and product lifecycle
Reduce absolute Scope 1 and Scope 2 greenhouse gas
Green Energy photovoltaic capacity are used to evaluate green energy utilization and promote the substitution of traditional management through clear phased objectives and
energy sources with green energy emissions by 54.6% compared to the 2022 baseline long-term commitments, and establish a systematic
year; decarbonization pathway to achieve carbon neutrality
and sustainable development.
Indicators such as the reduction rate of energy consumption per unit of output and the reduction rate of
Efficiency
Enhancement carbon emissions per unit of output are used to evaluate the effectiveness of energy conservation and
emission reduction efforts and drive continuous improvement
Green Promote the research, development, and application of green and low-carbon technologies, such as high-
Technology efficiency energy-saving technologies, clean energy technologies, and recycling technologies, to enhance
green manufacturing standards
Green Supply Establish a green supply chain management system to encourage suppliers to adopt green and low-
Chain carbon production methods, thereby achieving a greener supply chain
Green Develop green and low-carbon products to meet market demand and lead the trend toward green
Products consumption
Hengtong Optic-Electric's subsidiaries have developed and submitted carbon reduction and net-zero targets in batches,
referencing the Science Based Targets initiative (SBTi) framework while aligning with their operational realities and strategic
development. The first batch of subsidiaries to pass the review process fully met SBTi's stringent requirements, accumulating 2022（Base 2024Change vs. Annual
Project Scope and Unit 2023 2024
valuable implementation experience that provides replicable pathways and practical references for subsequent subsidiaries. Year) Base Year (%) Achievement
By the end of the reporting period, two subsidiaries had received formal SBTi recognition for their carbon reduction and net-zero
Scope1+Scope 2
targets. This significant improvement in overall implementation efficiency demonstrates the effectiveness of the ESG Committee 26,765.01 3,267.54 3,535.47 -86.79% Finished
（tCO2e)
and its working mechanisms in coordinating planning and driving systematic progress.
Greenhouse
Gas
Scope 3 Intensity
Emissions
Target (tCO2e/
million RMB
Profit)
Achievement Status of SBTi Science-Based Target
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Greenhouse Gas
Case Hengtong Submarine Power Cable Co., Ltd. Carbon Targets Approved by the Science Unit 2022 2023 2024
Emissions3
Based Targets Initiative
Total greenhouse gas
Hengtong Submarine Power Cable Co., Ltd., a subsidiary SBTi ID: 40000900
emissions (Scope 1 + tons CO2 equivalent(tCO2e) 339,189.14 385,822.96 460,343.01
of Hengtong Optic-Electric, formally applied to join the Temperature alignment
Scope 2)
Science Based Targets initiative (SBTi) in June 2023. On (based on scope 1 and 2 targets): 1.5° C
September 26, 2024, the Company successfully passed
the SBTi verification for its net-zero targets. Scope 1 greenhouse gas
tons CO2 equivalent(tCO2e) 80,297.40 78,606.87 92,377.46
emissions
Overall Net-Zero Target: Long-Term Emissions Reduction Targets (by 2045):
Scope 2 greenhouse gas
Hengtong Submarine Power Cable Co., Ltd. solemnly Reduce absolute Scope 1 and Scope 2 GHG emissions tons CO2 equivalent(tCO2e) 258,891.74 307,216.08 367,965.55
emissions4
pledges to achieve net-zero greenhouse gas emissions by 90% compared to 2022 levels;
across its entire value chain by 2045, fully fulfilling its tons CO2 equivalent
corporate responsibility in global climate governance. Reduce absolute Scope 3 GHG emissions by 90% over Greenhouse gas
(tCO2e)/RMB 100 million in 730.00 810.18 767.44
the same period. emissions intensity
Near-term Emissions Reduction Targets (by 2033): revenue
By establishing clear near-term and long-term targets,
Reduce absolute Scope 1 and Scope 2 greenhouse gas the Company will continue to drive energy transition and
emissions by 54.6% compared to 2022 levels; green low-carbon innovation, progressively achieving The Company's primary greenhouse gas emissions originate from direct sources (Scope 1) and indirect energy sources (Scope 2).
emissions reductions across the entire value chain he Company conducts carbon inventories based on ISO 14064-1:2018 the Specification with Guidance at the Organization Level for Quantification
T
Concurrently, reduce Scope 3 greenhouse gas emissions and advancing toward net-zero pathways, thereby and Reporting of Greenhouse Gas Emissions and Removals. The greenhouse gas categories primarily include carbon dioxide, methane, and nitrous
per million RMB of added value by 61.1%. contributing to global sustainable development. oxide. Calculations utilize the 2022 national average power sector carbon dioxide emission factor (excluding non-fossil energy electricity traded
in the market) from the Ministry of Ecology and Environment and National Bureau of Statistics' the Announcement on Issuing the 2022 Carbon
Dioxide Emission Factors for Electricity , alongside emission factors from the IPCC Sixth Assessment Report published by the United Nations
Intergovernmental Panel on Climate Change.
The electricity emission factor for 2024 is 0.5856 tCO2/MWh, for 2023 it is 0.5942 tCO2/MWh, and for 2022 it is 0.5703 tCO2/MWh.
Project Scope and Unit 2023 2024 vs. Base Year
Year) Achievement
(%)
Scope1+Scope 2
（tCO2e)
Greenhouse
Gas
Scope 3 Intensity
Emissions
Target (tCO2e/
million RMB
Profit)
Achievement Status of SBTi Science-Based Target
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Energy Efficiency and In our production and operational processes, we actively implement multiple measures to enhance energy efficiency and reduce
energy consumption per unit, while vigorously promoting the use of clean energy.
Transformation Case Hengtong Submarine Power Cable Co., Ltd. Annual Energy Saving and Emission Reduction
Case Study
Hengtong Optic-Electric actively fulfills its corporate social responsibilities, striving to
establish a green and low-carbon production and operation model. We recognize the critical In 2024, the Company continued advancing its green and low-carbon
importance of energy management for achieving sustainable development and continuously transformation, deepening energy management to unlock factory energy-saving
enhance our company's energy management capabilities. potential through multiple retrofit projects:
Workshop Corridor Lighting Upgrade: Replaced with low-power energy-
Energy Management System
saving lamps, achieving annual electricity savings of 57,816 kWh and reducing
CO2 emissions by 33.9 tons;
Visitor Corridor Lighting Upgrade: Annual electricity savings of 30,660 kWh,
Hengtong Optic-Electric strictly complies with laws and reducing CO2 emissions by 18.0 tons;
regulations such as the Energy Conservation Law of the Tower Chiller Energy Efficiency Improvement: Newly purchased variable-
People's Republic of China , continuously strengthening energy Energy Saving Targets frequency screw chillers and supporting equipment achieved annual
management while driving technological innovation, equipment electricity savings of 62,928 kWh, reducing CO2 emissions by 36.9 tons;
upgrades, and digital management practices. We proactively Reduce energy consumption
conduct internal and external audits throughout production Annealing Process Upgrades for Extruding Machines: Implementation of
intensity by annually
operations, linking energy management performance to DC power cabinets increased production rates while achieving approximately
responsible personnel evaluations to drive improvements 15% energy savings.
in energy utilization efficiency. During the reporting period,
Through these measures, the Company significantly enhanced energy utilization
efficiency and carbon reduction performance, accumulating over 150,000 kWh
in annual electricity savings and reducing CO2 emissions by nearly 90 tons. ISO 50001 Certificate for Hengtong
Company's product lines including optical cables, optical fibers,
Submarine Power Cable Co., Ltd.
medium- and low-voltage cables, high-voltage cables, high-
voltage submarine cables, conductors, railway signaling cables,
flexible cables, and industrial cables.
Case Jiangsu Hengtong Electric Power Special Wire Co., Ltd. Annual Energy Saving and Emission
Reduction Case Study
In 2024, the Company actively advanced energy conservation, consumption reduction, and intelligent upgrades. By
implementing multiple energy-saving initiatives focused on workshop lighting, fan control, equipment management, and
process optimization, we significantly enhanced energy utilization efficiency:
Smart Lighting: The conductor workshop introduced an intelligent lighting control system. Through regionalized and
automated time-based controls, annual electricity savings reached 96,352 kWh;
Intelligent Fan Control: Connecting aluminum workshop fans to the Company's main network enabled equipment
interconnection and smart control, saving 922,642 kWh annually;
Production Management Optimization: Enhanced stranded wire production continuity through power management
and optimized production scheduling, projected to save 621,610 kWh annually;
Wire Drawing Energy Efficiency Improvements: Optimized production scheduling, enhanced skill coordination, and
equipment maintenance are projected to save 1,174,810 kWh annually;
Laser Equipment Retrofit: Replacing gas lasers in tube production lines with solid lasers, reducing power consumption
from 37.5 kW to 12.5 kW, yielding annual savings of 125,670 kWh;
Cooling System Optimization: Integrating cooling pump stations into water supply pipelines, eliminating circulation
pumps, and utilizing direct return water connections to cooling towers, achieving annual savings of 216,379 kWh;
Wire Drawing Equipment Upgrade: Replacing outdated single-head machines with dual-head wire drawing machines
equipped with fully automatic take-up systems (servo motors), achieving annual electricity savings of 768,000 kWh.
Through these measures, the Company achieved cumulative annual electricity savings exceeding 4.2 million kWh,
effectively reducing production energy consumption and carbon emissions while providing robust support for green
manufacturing and low-carbon transformation.
Hengtong Optic-Electric Smart Industrial Park Energy Management System
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Case
Jiangsu Nanfang Optic-Electric Technology Co., Ltd. Annual Energy Saving and Emission Clean Technology and Energy Transition
Reduction Case Study
Hengtong Optic-Electric regards clean technology and energy transition as core corporate strategies, setting greenhouse gas
With the rapid advancement of fiber optic communication technology, demand for optical fibers continues to grow. Fiber emission intensity reduction as a management objective. We continuously advance carbon reduction across the entire production
drawing is a critical manufacturing process, and induction furnaces represent one of the primary energy consumption process, focusing on increasing clean energy usage to achieve an optimized energy structure transformation. Our clean energy
points. To reduce energy consumption, enhance production efficiency, and strengthen competitiveness, the Company utilization encompasses multiple types, primarily including renewable sources such as solar and wind power. In recent years, we
initiated a specialized energy-saving retrofit project based on the working principles and actual operating conditions of have continuously advanced the construction of photovoltaic power stations and green cables, deeply implemented energy-saving
the induction furnaces. upgrades, and promoted the development of green energy sources such as marine energy and offshore wind power equipment. By
establishing a clean energy operation and service system covering the entire industrial chain, Hengtong Optic-Electric continuously
enhances its overall energy management capabilities, achieving the optimization and upgrading of its energy structure.
Before Improvement After Improvement
Issue: The total power Measures: Implemented an energy-saving optimization plan
consumption across all through in-depth analysis of furnace operating principles Green Design and Low-Carbon Product Innovation: Recycled and Pure Green Cable Case
Case
drawing lines reached combined with production applications; Studies
Results: Total power consumption was reduced to 44.8 kW,
energy costs and significant In 2024, Jiangsu Hengtong Power Cable Co., Ltd. actively responded to the "Carbon Peak by 2030 and Carbon Neutrality
electricity expenses. yielding substantial economic benefits. by 2060 " goals, advancing green, low-carbon, and sustainable development strategies. Through technological innovation,
the Company launched two categories of green, low-carbon products: Recycled cables and Pure Green cables.
Recycled cables: Both conductor and sheath materials utilize recyclable, renewable raw materials. The conductor
contains over 10% recycled content, with performance meeting HD and IEC standard requirements. This product
Meanwhile, Hengtong Optic-Electric has established and continuously refined its digital energy management platform. By reduces the carbon footprint through raw material recycling and reuse, promoting sustainable economic development;
integrating IoT, big data, and artificial intelligence technologies, it enables real-time monitoring, data collection, and dynamic
Pure Green Cable: The sheath material utilizes plastics derived from biomass extracts (such as sugarcane and corn),
analysis of energy-consuming equipment, processes, and scenarios. This not only enhances energy consumption visualization
but also provides data support for energy efficiency diagnostics and carbon emissions accounting. The platform also features offering durability, mechanical properties, and UV resistance comparable to traditional petroleum-based materials.
predictive analytics and optimized scheduling capabilities, propelling the Company's energy management toward intelligent and It complies with HD 605 and IEC 60502 standards. The product employs aluminum-plastic composite tape shielding
low-carbon practices. This provides robust technical support for achieving carbon peak and carbon neutrality goals. technology to optimize electric field distribution, offering short-circuit carrying capacity and excellent longitudinal
water-blocking performance. It delivers corrosion resistance up to 3,000 hours while combining high reliability with
environmental attributes.
Case Practices for Digital Verification of Product Carbon Footprint Certificates Through these innovative designs, Jiangsu Hengtong Power Cable Co., Ltd. has not only achieved greener and lower-
carbon cable products but also enhanced material utilization efficiency and environmental performance, making positive
contributions to corporate sustainability and global environmental protection.
Hengtong has successfully established a digital carbon footprint verification model and collaborated with the China
Quality Certification Center, market regulatory authorities, and major testing institutions to jointly build a factor database,
achieving mutual data trust and unified certification standards. Leveraging its carbon footprint management platform, the
Company has enabled automated data collection from information systems to edge devices. Combining the platform's
modeling and analytical capabilities with blockchain technology for secure data storage, Hengtong collaborates with
the China Quality Certification Center to conduct online calculations and reviews, significantly streamlining the carbon
footprint certification process. Based on this innovative practice, CQC awarded Jiangsu Hengtong Power Cable Co., Ltd.
the first product carbon footprint certificate verified through digital means in the wire and cable industry, establishing a
key demonstration case for the Company's ESG data management.
First Digital Verification of Product Carbon Footprint Certificates in the Wire and Cable Industry with CQC Test Report for Biomass Extracts Usage in Product
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Green Design and Low-Carbon Product Innovation: Case Studies of Floating Offshore Wind Hengtong Submarine Power Cable Co., Ltd. Scope 1 + Scope 2 Carbon Neutrality
Case Case
Farms and Eco-Friendly Submarine Cables Achievement
In 2024, Hengtong Submarine Power Cable Co., Ltd. achieved significant milestones in clean technology, driving During the reporting period, Hengtong Submarine
continuous innovation in dynamic cables for floating offshore wind turbines, eco-friendly cables, and aluminum-core Power Cable Co., Ltd., a subsidiary of Hengtong
submarine cables. This solidified clean technology as the Company's core strategic focus. Optic-Electric, purchased 37,078 China Green
Floating Offshore Wind Dynamic Cable Technology: Developed a leading 66kV floating offshore wind dynamic cable Certificates (equivalent to 37.078 million kWh)
and 655.26 metric tons of international carbon
system, addressing critical issues such as low fatigue resistance in marine environments and providing reliable technical credits (VCUs), achieving carbon neutrality (Scope
support for dynamic cable applications in large offshore wind farms; 1 + Scope 2). This signifies zero carbon emissions
Recyclable Polypropylene Submarine Cable Technology: In the eco-friendly cable sector, developed copper-core at the energy level. All transactions have been
verified by third-party inspection agencies,
polypropylene-insulated welded aluminum-sheathed and polyethylene-sheathed cables, achieving full lifecycle
which issued organizational carbon neutrality
recyclability for submarine cable products and providing an effective technical solution for circular economic
verification statements.
development;
Aluminum-Core Submarine Power Cable Technology: Launched 66kV aluminum-core submarine cable products,
optimizing resource utilization structures. This initiative promotes reduced copper usage within the cable industry and
elevates green manufacturing standards.
Through these technological innovations, Hengtong Optic-Electric has not only enhanced the reliability and durability of
offshore wind power and submarine cable products, but also provided strong support for marine energy development and Hengtong Submarine Power Cable Co., Ltd. Obtains Carbon
circular economy construction, demonstrating the Company's leading advantages in the fields of clean energy and green Neutrality Verification Statement Certificate
technology.
Case Jiangsu Hengtong Electric Power Special Wire Co., Ltd. Scope 1 + Scope 2 Carbon
Neutrality Achievement
Continuous Development of Indurstrial Park Photovoltaics and Advancement of the Low-
Case
Carbon Energy Strategy
Jiangsu Hengtong Electric Power Special Wire Co., Ltd. conducted a greenhouse
gas verification in 2024, which was certified by a third-party testing agency and
The Company's three major industrial parks and nine domestic and international industrial subsidiaries are actively resulted in the issuance of a verification statement certificate. Concurrently,
advancing distributed photovoltaic projects, with a cumulative planned installed capacity of 53.7 MW. Currently, 11.3 MW Hengtong Electric Power Special Wire purchased 11,680 green certificates and 6,568
has been put into operation. The operational projects generate approximately 5.0674 million kWh of electricity annually, tons of carbon credits (VCU) in 2024, achieving carbon neutrality for Scope 1 and
reducing carbon dioxide emissions by about 2,846.4 tons per year. Through self-built photovoltaic projects, the Company Scope 2 emissions. The Company also obtained a carbon neutrality verification
has effectively increased its renewable energy usage ratio, lowered carbon emission intensity, and promoted the green statement certificate from TÜV SÜD.
and low-carbon transformation of industrial parks and supply chains, achieving sustainable development in energy
utilization.
Jiangsu Hengtong Electric Power Special Wire Co., Ltd. Obtains Carbon Purchase of Green Electricity and
Neutrality Verification Declaration (ISO 14068) Certificate Carbon Credits
Jiangsu Hengtong Huahai Technology Co., Ltd. Self-Built Photovoltaic Project
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
In 2024, subsidiaries under Hengtong Optic-Electric actively promoted the use of clean energy in their products and operations,
Jiangsu Hengtong Huahai Technology Jiangsu Hengtong Power Cable Co.,
actively adopted low-carbon technologies and energy-saving measures, and achieved significant carbon reduction benefits.
Case Co., Ltd. Conducts Scope 1 + Scope 2 Case Ltd. has been Honored as a "Suzhou
Carbon Inventory (Near) Zero-Carbon Factory"
In 2024, Jiangsu Hengtong Huahai Technology Co., The Company has established a greenhouse gas Green Factories and Photovoltaic Applications
Ltd. conducted a greenhouse gas inventory covering management system and a near-zero carbon factory
Scope 1 and Scope 2 emissions and obtained third- initiative, actively promoting green design and energy Factory PV generation: The system has a design lifespan of 25 years, with an average annual effective generation of
party verification certification. efficiency improvements. The Company continuously about 1,480 hours and an average annual power generation of about 137MWh
implemented green production line upgrades,
achieving a 7.4% increase in production efficiency,
a 23% reduction in energy consumption per unit,
annual electricity savings of 4.533 million kWh, and CO2
Energy Saving and Consumption Reduction in Highlighted Products
emissions reductions of 2,692 tons. Through systematic
carbon reduction initiatives, the Company significantly
By optimizing factory logistics routes and expanding the logistics system, the Company can reduce the need for three
enhanced its green manufacturing capabilities and was
recognized as a "Suzhou (Near) Zero-Carbon Factory" forklifts annually, thereby decreasing fossil fuel consumption and lower carbon emissions
in 2024.
Aberdare's Highlighted Initiatives in Clean Technology and Energy Transition in South Africa
The following table presents the energy consumption metrics for Hengtong Optic-Electric over the past three years:
Energy Consumption5 Unit 2022 2023 2024
Direct Energy
Gasoline liter 157,017.59 321,840.10 308,707.00
Disel liter 5,742,733.62 6,067,596.95 4,233,370.00
Natural Gas ten thousand cubic meters 2,667.76 2,624. 67 3,783.17
Jiangsu Hengtong Huahai Technology Co., Ltd.
Greenhouse Gas Verification Statement Certificate Announcement of Suzhou (Near) Zero-Carbon Factory Hydrogen ten thousand cubic meters 29.46 27.35 268.05
Propane ton 75.19 15.3 13.89
Biomass Pellets ton 2,367.00 3,070.00 3,667.06
Indirect Energy
Purchased Electricity kWh 701,999,126.00 727,744,962.00 848,855,089.00
Purchased Green
kWh 250,435,000.00 227,142,770.00 220,579,100.00
Electricity
Purchased Steam ton 15,358.55 8,883.66 20,088.70
Total Energy Consumption
Total Energy ton of standard coal
Consumption equivalent
Energy Consumption ton of standard coal
Intensity equivalent /100 million RMB
The comprehensive energy consumption is calculated based on the consumption volumes of gasoline, diesel, natural gas, hydrogen, electricity
and steam, as well as the conversion coefficients specified in China's national standard General Principles for Calculating Comprehensive Energy
Consumption (GB/T 2589-2020).
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Water-Saving Transformation
and Optimization
Water resource management is not only an indispensable part of daily operations but also a
cornerstone for achieving sustainable development and fulfilling environmental responsibilities.
Hengtong Optic-Electric strictly adheres to relevant laws and regulations such as the Water Law
of the People's Republic of China and the Measures for the Administration of Water Withdrawal
Permits . We have established and follow internal water management systems, including the
Regulations on Water Conservation and Recycling Management . Our goal is to efficiently operate
and maintain water-saving facilities while exploring further water-saving potential, thereby
promoting the sustainable use of water resources in our operations and enhancing water
efficiency. During production and operations, we regularly conduct water risk assessments and
scenario analyses for our direct operations and other value chain segments, alongside water
balance testing and water price monitoring. Concurrently, we allocate financial expenditures to
address water-related risks, invest in R&D to upgrade facilities and equipment, strive to reduce
water consumption in our own production and operations, and protect water resources in the
regions where we operate.
We place high importance on water recycling, establishing centralized water recycling systems for workshops and rainwater
harvesting systems. These measures effectively enhance water recycling rates and reduce the withdrawal of fresh water.
Case Jiangsu Hengtong Huahai Technology Co., Ltd. Upgrades Water-Using Equipment
Recycled Water Use in 2024 Water Conservation in 2024
In 2024, Jiangsu Hengtong Huahai Technology Co., Ltd. comprehensively upgraded its water-using equipment, uniformly
adopting water-saving fixtures such as instant-on/off faucets and smart-controlled toilets. Concurrently, the Company
Water use intensity decreased by strictly required suppliers to provide water-saving product inspection reports during procurement to ensure product
performance met water-saving standards. Through these measures, the Company achieved a 20% to 30% improvement
in water efficiency compared to traditional fixtures.
million tons %
Meanwhile, Hengtong Optic-Electric places high importance on cultivating and enhancing employees' water conservation
awareness. Through multi-tiered, various training programs and promotion activities on water-saving knowledge, the Company
strengthens the sense of responsibility and environmental awareness among all staff members.
Case Jiangsu Hengtong Electric Power Special Wire Co., Ltd. Water Conservation and Water
Resource Utilization Efficiency Enhancement
Use of Water Unit 2022 2023 2024
In 2024, Jiangsu Hengtong Electric Power Special Wire Co., Ltd. completed the optimization and renovation of its
workshop cooling pump station system, aligning with resource conservation and green production objectives. The Total Water
project centralized water supply by integrating inlet pipelines, eliminated cooling tower circulation pumps, and ten thousand tons 285.18 250.80 290.58
Consumption
established a pressure return water circulation system by directly connecting equipment return pipes to cooling towers.
This initiative not only streamlined the cooling water system workflow and reduced pump energy consumption but also
enhanced water resource recycling efficiency, effectively minimizing losses during cooling water transportation. Water Use Intensity ton/100 million RMB 6,137.61 5,401.10 4,844.28
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Emissions Management and Case
Case Study on Atmospheric Waste Gas Emission Management and System Implementation
Recycling
at Hengtong Submarine Power Cable Co., Ltd.
Hengtong Submarine Power Cable Co., Ltd. strictly implements its atmospheric pollutant management system to ensure
factory emission concentrations and rates comply with national, local, and industry standards. Through comprehensive
institutional management and operational protocols, the Company ensures the operation and daily management of
The Company strictly adheres to the Environmental Protection Law of the People's Republic of
waste gas treatment facilities, achieving full control over the entire waste gas emission process.
China and relevant laws and regulations in its operational regions. It has established an internal
Comprehensive Management System for Hazardous Waste based on the principles of reduction, According to the Environmental Impact Report Form (Chang Huan [2009] No. 144) approved by the Changshu
Environmental Protection Bureau in 2009, the factory's lead-containing exhaust gases are treated through baghouse
harmless treatment, and resource utilization to comprehensively control the discharge and
dust removal and water curtain dust removal systems before discharge. The treated exhaust gas meets the following
treatment of pollutants and waste. Under the unified system and management framework of the standards: - Lead dust concentration complies with Level 2 standards of Table 2 in the "Emission Standard for Air
Group, environmental management requirements and assessment standards for subsidiaries Pollutants from Industrial Furnaces" (GB9078-1996) - Asphalt fume concentration meets Level 2 standards of Table 2 in
the "Integrated Emission Standard for Air Pollutants" (GB16297-1996).
have been formulated to ensure strict implementation of source reduction and discharge control
for "three wastes" (wastewater, waste gas, and solid waste) in their production operations. The Company regularly commissions third-party testing agencies for monitoring. The latest test results from October
Through measures such as policy guidance, technical support, supervision and inspection, and 2024 show that emission indicators remain compliant, demonstrating the effective implementation of management
systems and operational requirements at the subsidiary. Through the integration of institutionalized management,
performance evaluation, the Group drives subsidiaries to establish standardized, traceable
technical measures, and monitoring verification, the Company has established a standardized, traceable air pollutant
pollutant management systems, minimizing the potential environmental impact of production emission management system, providing a practical model for green production and environmental compliance.
activities.
During the reporting period, Hengtong Optic-Electric and its subsidiaries achieved a 100%
compliance rate for both exhaust gas and noise emissions, along with a 100% qualified disposal
rate for waste. This demonstrates the Company's overall effectiveness in implementing
environmental management systems, process control, and green operations, providing a
Wastewater Management
foundational framework of both policy and practice for subsequent case studies showcasing Hengtong Optic-Electric's wastewater discharge primarily consists of domestic sewage and industrial wastewater, containing
specific management practices at subsidiaries. pollutants such as COD, SS, total phosphorus, and ammonia nitrogen. We strictly adhere to the Water Pollution Prevention
and Control Law of the People's Republic of China , international wastewater discharge standards, and other relevant domestic
Exhaust Gas Management
and international laws and regulations. We continuously optimize wastewater discharge management practices and upgrade
wastewater treatment facilities.
Hengtong Optic-Electric's exhaust emissions primarily consist of sulfur oxides generated during production processes such as
extrusion, lead extrusion, and asphalt coating, as well as from administrative office areas during operational hours. The Company
strictly adheres to relevant domestic and international laws, regulations, and exhaust gas disposal ordinances, including the Air Wastewater Treatment System Wastewater Treatment Facility Industrial Wastewater Treatment
Pollution Prevention and Control Law of the People's Republic of China. It has established the Exhaust Gas Emission Control
Procedure, which sets forth stricter standardized requirements and treatment measures for exhaust emissions, continuously
strengthening exhaust gas control processes. Additionally, we regularly engage professional third-party testing agencies to monitor Configure a wastewater Install treatment facilities such All discharged into the municipal
pollutants, ensuring our operations and production meet stringent environmental standards. treatment system for centralized as collection pits, sedimentation sewer system for treatment
processing to meet standards tanks, drainage ditches, septic
before unified discharge. tanks, and grease traps at
Conduct self-monitoring of water the production site. After
Waste gas treatment is conducted through methods such as activated carbon adsorption (extrusion and asphalt quality pollutants and third-party implementing sedimentation
processes) and water spray + baghouse dust collection (lead extrusion process) spot checks treatment and degradation
separation measures, recycle the
treated wastewater
Real-time monitoring of waste gas emissions is implemented, while qualified third-party testing agencies are
commissioned for periodic indicator monitoring
Hengtong Optic-Electric Wastewater Management Initiatives
In accordance with relevant requirements, high-efficiency waste gas collection and treatment equipment has been
installed to enhance management of volatile organic compounds generated during production
During the reporting period, our wastewater testing averages complied with GB8978-1996 and were incorporated into pipeline
network requirements. In 2024, the Company experienced no non-compliance incidents exceeding discharge limits.
Strict control is exercised over the waste gas facility treatment process
Hengtong Optic-Electric Exhaust Gas Emission Treatment Measures
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Case Study on Water Pollutant Management and System Implementation at Hengtong
Hazardous Waste
Case
Submarine Power Cable Co., Ltd.
The primary sources of hazardous waste at Hengtong Optic-Electric are waste emulsions, activated carbon, and other toxic and
hazardous substances generated in factory and administrative office areas. We strictly adhere to the Pollution Control Standard
Hengtong Submarine Power Cable Co., Ltd. strictly enforces its water pollutant management system to ensure factory
for Storage of Hazardous Waste (GB18597-2001) and other regulatory requirements, including the Hazardous Waste Management
discharge concentrations comply with national, local, and industry standards. Currently, the facility has no total discharge
Plan. Hazardous waste generated during operations is collected and stored in a temporary hazardous waste storage area. It is then
quota indicators. Through institutionalized management and standardized operations, the Company implements domestic
transferred and disposed of through the "Jiangsu Province Hazardous Waste Full Life Cycle System" and regularly entrusted to
sewage discharge and wastewater treatment measures, achieving full-process control over water pollutant emissions.
qualified third-party waste disposal agencies for unified treatment.
According to the Environmental Impact Report Form (Chang Huan [2009] No. 144) approved by the Changshu Environmental
Protection Bureau in 2009, the factory's production processes must not generate wastewater discharge. Domestic sewage
is connected to the development zone's sewage pipeline network and centrally treated by Changshu Binjiang New District
Sewage Treatment Co., Ltd. Domestic sewage discharge points strictly comply with the "Quality Standards for Sewage Case Case Study on Solid Waste Classification Management and Resource Utilization at
Discharged into Urban Sewers" (GB/T 31962-2015), ensuring discharge water quality meets regulatory requirements. Hengtong Submarine Power Cable Co., Ltd.
The Company regularly commissions third-party agencies for monitoring. The latest test results from October 2024 indicate Hengtong Submarine Cable Co., Ltd. generates solid waste primarily consisting of industrial waste, general industrial waste,
that water pollutant discharge indicators consistently meet standards, validating the effective implementation of management and hazardous waste. By establishing a comprehensive solid waste classification management system and implementing
systems and operational requirements at the subsidiary. Through the integration of system implementation, technical differentiated disposal methods for each category, the Company has achieved institutionalized, streamlined, and
measures, and monitoring verification, the Company has established a standardized, traceable water pollutant management transparent solid waste management. This approach not only effectively reduces environmental risks but also enhances
system, providing a practical model for green production and environmental compliance. waste resource utilization rates, creating an exemplary annual management case. Specific measures include:
Industrial waste: It is uniformly recycled and disposed of by qualified professional recycling agencies, with whom the
Company signs a commissioned disposal agreement to ensure the disposal process is legal and compliant;
Waste Management General industrial waste: It shall be handed over to qualified renewable resource utilization units for recycling and
disposal, and the resource utilization shall be promoted through the signing of contracts;
Hengtong Optic-Electric strictly adheres to relevant domestic and international laws and regulations, including the Law of the Hazardous waste: For hazardous waste such as waste activated carbon and waste emulsion, we strictly adhere to
People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste and the Law of the People's national regulations and entrust it to environmental protection enterprises with hazardous waste disposal qualifications
Republic of China on the Prevention and Control of Soil Pollution . The Company has established a Waste Control Procedure to for harmless disposal. Meanwhile, we keep full records and tracking on the hazardous waste management platform of
comprehensively manage non-hazardous and hazardous waste, standardize the collection, storage, transportation, and disposal of the government authorities to ensure compliant, safe, and controllable transfer.
waste, and advance full-process compliance management of waste throughout production and operations.
Non-Hazardous Waste
Hengtong Optic-Electric's non-hazardous waste primarily includes packaging materials (fiber optic shells, cardboard boxes, etc.),
raw and auxiliary materials (steel and aluminum strips, steel wires, etc.) generated during factory production, as well as office
waste and employee household waste. The Company actively optimizes management across product manufacturing, testing,
transportation, and delivery phases. It focuses on reducing consumption of raw materials, auxiliary materials, and packaging
materials to minimize waste generation while promoting material recycling. This approach enables a gradual annual reduction in
total non-hazardous waste volume. Concurrently, the Company actively practices circular economy principles by implementing
comprehensive recycling and reuse programs for certain non-hazardous wastes, continuously enhancing the resource utilization
rate of waste materials.
Employee household waste
Packaging material waste is Raw and auxiliary material is bagged and stored in
recycled directly waste is reused after secondary designated areas for regular
processing removal and disposal by
local sanitation authorities
Hengtong Optic-Electric's Non-Hazardous Waste Disposal Measures
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Circular Economy
Hengtong Optic-Electric adheres to green development principles, positioning circular economy as a key driver in production
operations to comprehensively advance resource conservation and material recycling. Under Hengtong Optic-Electric's unified
Case Hengtong Optic-Electric Case Study on the Management of Raw Material and Solid
system and management framework, circular economy management requirements and assessment standards for subsidiaries
have been established and implemented. This ensures strict adherence to policies on recycling raw materials, auxiliary materials,
Waste Recycling
and waste throughout production processes at all subsidiaries. Through measures including system guidance, technical support,
supervision and inspection, and performance evaluation, subsidiaries are driven to establish standardized, traceable resource The recyclable raw materials (such as copper, aluminum, steel, etc.) and solid waste generated in the production and
management systems. This achieves reduction, reuse, and resource recovery of raw materials and waste. operation of subsidiaries under Hengtong Optic-Electric are recycled through both internal and external channels of
the parent company. Jiangsu Hengtong Precision Engineering Metal Materials Co., Ltd., serving as the primary internal
During the reporting period, subsidiaries achieved significant results in helium recovery, metal material recycling, and solid waste recycling contractor, centrally manages and processes recyclable materials from subsidiaries. Simultaneously, certain
resource utilization: helium recycling efficiency notably improved, while recovery rates for raw materials like copper, aluminum, waste materials are recycled through external suppliers, establishing a closed-loop system integrating internal recycling
and steel, along with solid waste resource utilization volumes, reached industry-leading levels. These practices not only reduced with external recovery.
production costs but also effectively minimized environmental impact. They demonstrate Hengtong Optic-Electric's overall
effectiveness in implementing circular economy management systems, process control, and green operations, providing a model
and foundation for experience sharing among subsidiaries and future green management initiatives.
Measures and Management Results
Establish a recycling ledger for raw materials and Subsidiaries achieve substantial recycling volumes
solid waste, clearly defining classification standards, of raw materials and solid waste with high circular
Case Jiangsu Hengtong Optical Material Co., Ltd. Circularity Efficiency Improvement Case Study responsible personnel, and disposal procedures; utilization rates;
Through the parent company's (Hengtong Optic- Effectively reduce production costs and environmental
The helium recovery efficiency in the front-end sintering process was low, primarily due to reduced energy recovery Electric) institutional guidance and technical support, impact, delivering benefits of economic and
treatment efficiency, butterfly valve blockages, and insufficient exhaust hood pressure. This resulted in prolonged ensure all subsidiaries strictly implement recycling, environmental gains;
processing times and resource wastage. To enhance process efficiency and reduce energy consumption, the Company storage, and disposal management to achieve a
initiated a dedicated improvement project. traceable and quantifiable circular utilization system; stablish a closed-loop resource recovery system
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within the parent company, driving comprehensive
Conduct regular tracking and evaluation of recycling implementation of circular economy management
Before Improvement After Improvement effectiveness to ensure the efficiency and safety of across subsidiaries and demonstrating the effectiveness
resource utilization. of integrated parent-subsidiary coordination.
Issue: Low helium recovery Measures: Through process optimization, equipment
efficiency, extended troubleshooting, and enhanced control procedures, metrics
processing times, and gradually recovered after a temporary decline.
inadequate resource
utilization. Results: Helium recovery efficiency increased to 80.85%,
achieving significant raw material savings and economic
benefits.
Emissions Unit 2022 2023 2024
Exhaust Emissions
This project effectively boosted helium recycling efficiency, delivering both economic and environmental benefits. It Sulfur Oxides ton 0.05303 0.048 1.97
provides replicable experience for circular economy management.
Wastewater Discharge
Domestic Sewage Discharge Volume ton 36,180.72 31,099.93 178,843.31
Hazardous Waste
Waste Emulsion ton 251.09 287.28 438.10
Activated Carbon ton 1.40 8.106 23.81
Total Generation of Hazardous Waste ton 586.60 322.98 832.99
Non-hazardous Waste
General Solid Waste Generation (Recyclable) ton 117,586.80 115,016.46 14,845.82
Total Amount of Packaging Materials Recycled for Reuse ton 70,894.86 77,984.35 7,934.60
Total Amount of Other Waste Materials Recycled for Reuse ton 46,691.94 37,032.11 6,911.22
Total General Solid Waste (Non-Recyclable) ton 49,939.22 43,946.52 3,073.34
Total Generation of General Solid Waste ton 167,526.02 158,962.98 17,919.15
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Caring for
Employees:
Promoting Inclusive
Development
Talent is the core driving force and competitive
edge for an enterprise's long-term development.
Hengtong Optic-Electric upholds a people-ori-
ented philosophy, places high value on employ-
ee worth, and is committed to fostering a fair,
equitable, diverse, equal, healthy and safe work
environment. Through transparent hiring pro-
cesses, comprehensive employee development
systems, generous benefits packages, open
communication channels, and scientific safety
management practices, the Company maximizes
the protection of employee rights and interests,
enabling mutual growth between employees
and the enterprise.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Talent Attraction and Retention Trade Unions and Collective Agreements
Hengtong Optic-Electric consistently regards the protection of employee rights and the development of harmonious labor relations
as integral components of sustainable development. Referencing relevant laws, regulations, and International Labour Organization
Hengtong Optic-Electric strictly adheres to the requirements of national laws and (ILO) requirements, we have established and implemented internal systems such as the Management Control Procedures for
regulations, including the Labor Law of the People's Republic of China , the Labor Freedom of Association and Collective Bargaining Rights . We actively support employees' freedom to form associations and
Contract Law of the People's Republic of China , the Trade Union Law of the People's participate in collective bargaining, safeguarding their rights to information, participation, and expression regarding working
conditions, compensation and benefits, occupational health, and safety. This ensures every employee enjoys the lawful rights to
Republic of China , the Law of the People's Republic of China on the Protection of Minors, freedom of association and participation in collective bargaining. During the reporting period, the collective agreement signing
and the Provisions on the Prohibition of Using Child Labor. We have established internal rate reached 100%, with 100% union coverage.
rules and regulations such as the Hengtong Optic-Electric Recruitment Management
Measures to standardize the management of employee hiring, compensation, benefits,
working hours, and leave. This ensures fairness and impartiality in the recruitment
process and work environment, safeguarding the rights and interests employees are
Employee Compensation
entitled to.
The Company is committed to attracting, retaining, and fostering the continuous growth of talent. We adhere to the
principle of "equal pay for equal work and distribution according to labor," building a fair, just, scientific, and reasonable
compensation management mechanism while continuously improving a competitive compensation system. The Company
strictly complies with laws and regulations including the Company Law of the People's Republic of China , the Labor Law
of the People's Republic of China , the Social Insurance Law of the People's Republic of China , the Provisions on Minimum
Prohibition of Child Labor and Forced Labor
Wages , the Paid Leave Regulations for Employees , and the Medical Leave Regulations for Employees Suffering from Illness or
Non-Work-Related Injuries . It references the statutory minimum wage and living wage6 standards in each operational location
to ensure all employees, including part-time staff, receive compensation that meets or exceeds the living wage standard.
Hengtong Optic-Electric explicitly prohibits the employment of child labor and forced labor. We have
developed and implemented the Management and Control Procedures for Prohibiting Forced Labor ,
rigorously screening during the recruitment phase to prevent the hiring of minors. Should any violations of Management I mplement rank-based management, where employee ranks are determined by
employment regulations be discovered, we will conduct thorough investigations immediately and impose and Technical qualification assessments. Position coefficients are assigned according to rank
strict disciplinary measures on those responsible for non-compliant hiring practices. During the reporting Positions Compensation standards are set based on employee capability and performance
period, Hengtong Optic-Electric did not experience any incidents involving child labor or forced labor.
Diversity and Inclusion
onthly compensation is calculated using rank-based wages supplemented by business
M
settlement pay, enhancing compensation security
Marketing
Positions nnual total income is determined by performance metrics such as sales volume and
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market expansion. Key incentives are provided to sales personnel who significantly
We consistently uphold a workforce philosophy of diversity, equality, and inclusion. We actively implement
exceed targets, ensuring performance and income grow in tandem
diversity policies and oppose any form of harassment, sexual harassment, discrimination, or differential
treatment. This ensures employees of all genders, ages, regions, ethnicities, family statuses, marital statuses,
religions, disabilities, sexual orientations, and social backgrounds enjoy equal development opportunities.
For workplace discrimination and harassment incidents, the Company has established comprehensive
reporting procedures. If an incident is verified and confirmed, we will take appropriate actions against Determine employees' skill levels and job grades based on competency assessments
involved employees based on the nature of the incident, including warnings, disciplinary actions, or Operational
Positions Implement piece-rate and hourly compensation models, setting pay levels according to
termination. The Company regularly conducts diversity-themed training and awareness campaigns to local market conditions
continuously enhance employees' understanding of diversity and inclusion, promote mutual respect,
and jointly foster an open, inclusive, harmonious, and friendly workplace environment. Additionally, we
consistently provide quality employment opportunities for disadvantaged groups, including individuals with
disabilities, and ensure equal treatment for all based on the principle of equal pay for equal work.
Logistics Support
Aligned with our talent strategy and business needs, we have established diverse, global recruitment plans stablish compensation standards at local market averages, ensuring alignment with
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and Administrative
and targets that define the direction, scale, and structure of talent development. These plans undergo capability and performance through rank management and qualification evaluations
Positions
dynamic annual adjustments and updates. We continuously strengthen our employer brand, optimize
recruitment processes, enhance job-candidate matching rates, and attract and retain top talent resources.
Hengtong Optic-Electric Job Grade Compensation Model
iving wage: The minimum wage for basic working hours, ensuring the basic needs of employees and their families are met; The living wage includes
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basic wages but excludes bonuses and overtime pay.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
The Company's compensation structure comprises fixed and variable components. Variable compensation includes bonuses
and performance-based incentives designed to motivate employees, with portions directly tied to the Company's operational Multi-dimensional
Goal Management
performance. We integrate environmental management performance, health and safety metrics, and other relevant indicators Performance Evaluation
into the compensation assessment system for management, aligning the interests of executives with the Company's sustainable (360 Degree Feedback Method)
development to promote long-term growth. Concurrently, we have established an employee compensation growth mechanism
Develop an annual comprehensive employee
that effectively links performance outcomes, output value enhancement, and compensation optimization. This approach lays a
evaluation plan, specifying the scopr of assessment, Employee performance levels are determined by
solid foundation for Hengtong Optic-Electric's compensation strategy, talent development, and retention efforts.
evaluation methods, metrics and content and comprehensively evaluating multiple dimensions,
performance goals. Evaluate and incentivize employees including work performance, contributions, rewards
based on their achievement of these goals and penalties, and other relevant factors
Compensation Strategy Growth Mechanism Incentive Orientation
Establish a high-quality Hengtong Optic- Focusing on work
compensation management Electric integrates performance (outcomes),
strategy featuring output value into its enhance the market Further increase the autonomy of departmental teams Build a leadership feedback and employee
"performance evaluation- compensation growth competitiveness of in performance allocation, conduct comprehensive confirmation mechanism. Through regular reviews
driven adjustments, mechanism to achieve compensation for high- evaluations by integrating team performance with of individual and team performance goals, maintain
company-autonomous dual improvements performing employees to individual performance, and provide preferential treatment communication and feedback between employees
distribution, and group in efficiency and strengthen incentives. for outstanding talents with exceptional contribution and management
oversight and guidance". compensation levels.
Team Performance
Agile Conversation
Evaluation
Hengtong Optic-Electric Performance Evaluation Types
Hengtong Optic-Electric Employee Compensation Growth Mechanism
To ensure fairness throughout the performance evaluation process, we provide employees with transparent channels to promptly
discuss assessment results with their supervisors or HR department. This facilitates reflection on past performance, offers feedback
and suggestions, and allows ongoing communication regarding goal setting and evaluation issues. Should employees disagree
with their assessment outcomes, they may follow the appeal process to submit feedback and requests for reconsideration. During
the reporting period, our regular performance and career development reviews covered all employees.
Average Ratio of Male to Female Average Ratio of Male to Female Average Ratio of Male to
Compensation in Senior Compensation in Management Female Compensation Among
Management General Staff
If employees have objections to performance evaluation results or other matters,
Manager
they may talk directly with their supervisor to resolve the issue
communication
Appeal to indirect If the dispute remains unresolved after communicating with the supervisor, the
Ratio of Female Employees' Ratio of Male Employees' Standard
supervisor/HR employee can appeal to the indirect supervisor or file a complaint with HR
Standard Starting Salary to Local Starting Salary to Local Minimum Wage
Minimum Wage
&coordination
ccording to the appeal, HR is responsible for investigating and coordinating and
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keep the employee known of the final result
Employee Motivation Hengtong Optic-Electric Employee Performance Appeal Process
Hengtong Optic-Electric steadfastly adheres to the principle of "evaluating based on work performance," ensuring fairness and Hengtong Optic-Electric has launched an employee stock their initiative and creativity, align their interests more
transparency in our performance appraisal and promotion systems. We believe that a fair, impartial, and transparent performance ownership plan covering 246 individuals, including certain closely with the Company's long-term development, and
evaluation system demonstrates our appreciation and respect for employees' outstanding contributions, effectively attracting and directors, senior management, core technical personnel, achieve sustainable growth, the Company formulated and
motivating them to drive company growth. and key technical and operational staff. This initiative aims implemented the 2024 Restricted Stock Incentive Plan,
to stimulate the motivation and creativity of managers and marking Hengtong Optic-Electric's first equity incentive
We conduct regular, multidimensional performance evaluations to comprehensively and objectively assess employee employees, thereby promoting the Company's long-term, program. The plan grants up to 21,553,532 restricted A-shares
contributions. As a key component of performance management, we perform quarterly comprehensive reviews of employee sustainable, and healthy development. to eligible participants. These shares originate from the
work and performance, helping individuals clearly identify their strengths and areas for improvement across dimensions such as Company's repurchased shares on the secondary market.
learning ability, leadership, execution, knowledge, and experience. Annual assessment results are issued at year-end to ensure the In 2024, to further implement long-term incentives and The recipients comprise 529 core personnel, including key
fairness, objectivity, and reasonableness of the performance evaluation process. constraints for the Company's core personnel, fully mobilize technical experts and core market specialists.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Talent Retention
Hengtong Optic-Electric consistently regards talent as the core scientific salary growth mechanisms. This fosters a stable and Number of employees by hierarchical level Number of employees by region
driving force behind the Company's sustainable development. efficient talent pool, supporting the Company's leadership in (Person) (Person)
Adhering to the philosophy of "people-oriented, co-creation intense market competition.
and sharing," we have established a long-term platform for 284 447
mutual growth between employees and the Company through To establish a long-term incentive and accountability mechanism 3,376 12,827
comprehensive career development pathways, a highly that fully mobilizes the initiative and creativity of directors,
competitive compensation and benefits system, and diversified senior management, R&D and core technical personnel, and key
incentive mechanisms. The Company emphasizes aligning operational staff, the Company has implemented four phases of
individual development goals with corporate strategy. Beyond an Employee Reward Fund. This fund recognizes mid-to-senior 15,472
providing a broad career stage, it enhances employees' sense management, core technical personnel, outstanding frontline
of belonging and achievement through training empowerment, marketing personnel both domestically and internationally, and
long-term equity incentives, variable compensation, and individuals with exceptional contributions.
Ordinary Employees Middle Management Mainland China Overseas and Hong
Employees Kong, Macau, and
Senior Management
I nclude employee turnover rate rovide effective incentive
P rovide professional
P Taiwan Employees
in the performance evalution mechanisms and award development support such as
for management bonuses or rewards to who career development plan, tutor
have outstanding performance guidance and regular feedback
Number of employees by educational attainment Percentage of female employees at each level
(Person) (%)
arry out salary
C I mplement flexible working onduct interviews with
C
competitiveness evaluation hours, allowing employees to departing employees to
regularly and ensure salary choose remote work, flexible understand their primary 22.17 12.68
and bonus have good working as needed reasons for leaving and gather 800 44
competitiveness improvement measures
Employee Retention Measures for Hengtong Egypt 4,433 10,926
Master's Degree Doctorate or Above Middle Management
Total Number of Employees New Hires
Indicator Unit 2024
Employee Turnover Rate Total Turnover Rate % 18.46
Number of employees by gender (Person) Number of employees by age group (Person)
Male % 14.17
Employee Turnover Rate by
Female % 4.29
Under 30 % 7.36
Employee Turnover Rate by
Age Group
Over 50 % 1.47
Male Female Under 30 30–50
Over 50
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Empowering Growth and
nline Training: Established an online learning platform serving over 10,000 employees
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worldwide, adding more than 400 new courses
Development
I n-Person Training: Regularly organize offline training sessions with senior executives serving
Diverse
as resident instructors to ensure knowledge transfer and management experience sharing
Learning
Approaches In 2024, the Company innovatively implemented a mentor-apprentice system, transforming
production workshops into training classrooms and work sections into practical learning
environments. By appointing chief engineers as mentors and cultivating "red craftsmen," this
Hengtong Optic-Electric consistently upholds the development philosophy that "talent is initiative effectively enhances employees' technical skills and hands-on experience
the foremost resource, capital, and strategy." By establishing a "three-in-one" talent system
and adhering to a talent-first strategy, the Company creates diverse career pathways and
practical growth platforms for employees. This commitment fosters a continuous cultivation everaging the Company's talent development platform, we have established a dual-track
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cultivation system integrating management and technical expertise. This includes a team of over
of a high-caliber, highly skilled workforce, providing an uninterrupted source of internal Precision
Training
momentum for the Company's sustainable, high-quality development. We have created premium training programs such as "Executive Lectures," "Senior Management
Programs
Seminars," "High-Standard Study Tours," and "Advanced Workshops," enabling the coordinated
development of both managerial and technical talent
Operation Management Professional Technology Occupational Expertise
hrough the "iron triangle" transformation model involving mentors, supervisors, and HR
T
University
Develop management Cultivate specialized talent Cultivate talents of high coaches, alongside the four-stage reserve talent development program-"Launch, Escort, Lead,
Talent
talents with international focusing on cutting-edge skilled professionals and and Voyage"-we annually assist over 50 technical professionals in successfully transitioning
Succession
experience and itegrity and industry developments pursuing excellence to management roles. This comprehensively builds sustainable career pathways covering the
Development
competence and innovation research entire employee lifecycle
Hengtong Optic-Electric "Three-in-one" Talent System Hengtong Optic-Electric Talent Cultivation Mechanism
Employee Training
While refining its internal training system, Hengtong Optic-Electric comprehensively supports employees in advancing
their education and obtaining professional certifications through diverse policies. These include providing external training
opportunities, reimbursing related expenses, and offering incentives for academic advancement, thereby fostering employees'
Hengtong Optic-Electric continuously refines its employee training management system. The Company career development.
has formulated and implemented relevant management systems, including the Hengtong Optic-Electric
Training Management Measures , establishing an online and offline training system covering all employees.
It persistently optimizes talent development mechanisms to enhance employees' professional competence. ncourage relevant skilled personnel within the Company to participate in external training and
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During the reporting period, a total of 7,044 training sessions were conducted, reaching 136,703 participants, External obtain certifications (e.g., welder certification, electrician certification, PMP, project manager,
with an average of 54.01 training hours per employee. Training etc.). Upon certification, employees may submit approved external training application forms
and payment records through the Company's reimbursement system to claim training expenses
Internal offline training External online training pecialized seminar, skill
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ollaborate with multiple vocational colleges to implement "work-study alternation and on-
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knowledge sharing session,
the-job training" models, promoting two-way job rotations and personnel exchanges between
case study and policy
enterprises and institutions to establish a mutual industry-education cultivation mechanism
dissemination session
University artner with Shanghai Jiao Tong University to organize training for Company general
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Hengtong Optic-Electric Employee Training Channel
Cooperation managers in the Advanced Executive MBA Program
ollaborate with Zhejiang University to organize training for executive succession candidates
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in the Advanced Business Management Program
Academic ollaborated with Wuxi Vocational Institute of Arts & Technology and other institutions to
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Advancement implement associate degree programs for frontline employees
ablescom (a subsidiary of Hengtong Optic-Electric in Spain) provides training scholarships for
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Training and
all full-time employees and their children
Educational
Advancement
engtong offers tuition reimbursement or leave support for employees obtaining industry-
H
Awards
relevant professional certifications
Hengtong Optic-Electric Employee External Training and Academic Advancement Support
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
To further help employees integrate theoretical knowledge with practical operations, the Company has meticulously organized a
series of professional skill competitions. This initiative establishes a mechanism where "competition drives learning, and learning Indicator Unit 2024
drives application," fostering exchange and learning among employees. It enhances teamwork and problem-solving capabilities
while cultivating a positive atmosphere of mutual learning and friendly competition. Simultaneously, competition results provide Total Number of Training Participants People 136,703
a scientific basis for the Company to accurately assess employee skill levels and identify high-potential talent. This effectively
supports the Company in developing targeted talent development plans and career advancement pathways.
Total Number of Training Sessions Number 7,044
Average Training Hours per Employee Hours 54.01
Average Training Hours per Female Employee Hours 54.96
Average Training Hours per Male Employee Hours 50.66
Employee Development
Hengtong Optic-Electric has established a systematic talent development framework and a dual-track career path combining
management and professional sequences. This is complemented by a rank system centered on self-assessment, breaking the
traditional evaluation models focused solely on academic credentials and seniority. The system emphasizes "ability, performance, and
contribution," prioritizing employees' capacity to solve practical problems. A specialized evaluation scheme has been designed for
positions handling confidential information, effectively broadening employees' career development opportunities.
Concurrently, the Company has implemented a scientific internal cross-position mechanism. Guided by the Hengtong Optic-
Electric Job Rotation Management Measures, it provides cross-position practical opportunities for employees at all levels. This
approach cultivates versatile talents through exposure to diverse roles.
Professional Skills Competition
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Promoting Communication and Care
Additionally, the Company continues to conduct satisfaction surveys and analysis. Among these, Jiangsu Hengtong Electric Power
Special Wire Co., Ltd. achieved an overall employee satisfaction rate of 89.7% in 2024, fully reflecting employees' recognition of the
Company's current management practices. The survey indicates that employees generally maintain a positive work attitude and
demonstrate a strong willingness to grow with the Company. The Company will further optimize relevant management measures
in a targeted manner to continuously enhance employee satisfaction and sense of belonging.
Hengtong Optic-Electric strives to foster a warm and
harmonious environment for talent development,
safeguarding employees' rights and interests. We
Employee Care
actively listen to employee voices by establishing diverse
The Company has established a non-salary benefits system in compliance with laws and regulations. Beyond providing
communication and feedback channels to ensure their statutor y benefits such as pension, medical, unemployment, work-related injur y, maternity insurance, housing
opinions and suggestions are promptly conveyed. provident fund, and annual leave, it offers diverse additional benefits and care initiatives to all employees, ensuring
Simultaneously, the Company continuously refines its comprehensive protection of their rights and interests.
compensation and benefits system while proactively
organizing employee care initiatives, enabling staff to Statutory Benefits Additional Benefits
experience a sense of fulfillment, belonging, and happiness.
ndowment insurance, medical
E oliday and birthday gifts, high-temperature allowance, apartment
H
insurance, unemployment accommodation, meal subsidies, Spring Festival round-trip
Employee Communication
insurance, employment injury transportation reimbursement
insurance, maternity insurance
Complimentary health checkups, sports facilities and equipment
and Housing Provident Fund;
nursing leave, annual leave, Flexible working hours
To effectively promote two-way communication and positive The Company also actively promotes activities such as and other statutory holidays
interaction between the Company and its employees, micro-innovation initiatives, rationalization suggestions, and Paternity leave (available to all employees)
Hengtong Optic-Electric has established a comprehensive "Golden Idea" proposals. These efforts ensure open channels
employee communication and consultation mechanism. for employees to voice concerns and suggestions, creating a
This includes a multi-channel communication platform robust communication feedback loop. This approach provides The Company organizes a diverse array of employee cultural activities, establishing ten major cultural clubs including the Dance
that includes company email, hotline, manager interviews, strong support for building harmonious labor relations. Club, Singing Club, Study Group, Micro-Video Creation Club, Calligraphy and Painting Club, Poetry Club, Storytelling Club,
democratic forums, and direct employee feedback channels. Craftsman Club, Warm e-Home Club, and Literature Club. Through actively organizing cultural events, holiday celebrations,
and team-building activities, we help employees achieve work-life balance, alleviate job stress, enhance communication and
collaboration among colleagues, and strengthen team cohesion and a sense of belonging.
epartment heads conduct regular meetings with employees to promptly understand
D
their work and personal circumstances, address challenges and needs, and provide
Face-to-face
compassionate support
Consultation
Mechanism
he Human Resources Department organizes quarterly forums for young graduates to assess
T
their work and life status, gather constructive feedback and concerns, and ensure timely
resolution through relevant departments
Establish a direct suggestion channel accessible to all employees
or suggestions concerning internal company processes, the Administration Department
F
conducts an initial review, then forwards the suggestion to the relevant department based on Basketball Game Women's Day Activity Children's Day Activity
Direct Access its type for handling and tracking implementation
Mechanism
or suggestions concerning external company processes, the Organization and Performance
F
Department conducts an initial review, then forwards the suggestion to the relevant
department based on its type for handling and implementation
old annual employee representative conferences
H
to actively hear and deliberate work reports, recognize
Employee outstanding employees, and track, implement, and
Representative publicly disclose employee proposals
Conferences
isclose and explain new policies affecting employees'
D
vital interests and matters of widespread concern,
promptly address reasonable suggestions raised by
employees, and publicly announce the outcomes
of such actions Health Screening Professional Skills Training
Hengtong Optic-Electric Employee Communication Channel
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Occupational Health and Safety The Company regularly organizes occupational health examinations for employees, establishes individual occupational health
records, and provides comprehensive safety protective equipment for all positions to ensure key health indicators remain within
controlled ranges. By continuously tracking core safety performance metrics such as the Lost Time Injury Rate (LTIR) and Lost
Work Time Injury Rate (LWIR), and comparing them against industry benchmarks, the Company effectively evaluates management
Hengtong Optic-Electric steadfastly advances occupational health and safety initiatives, strictly effectiveness and drives continuous improvement in occupational health and safety management standards.
adhering to 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 regulatory requirements in its Quarterly or Every 6 Months Annually Every 3 Years
operational regions. The Company has enhanced its occupational health and safety management
system, prioritizing employee well-being to ensure a secure and healthy environment for work and Conduct occupational health and Engage third-party agencies to Conduct an occupational safety
safety risk assessment conduct safety monitoring of assessment report
development. The Company continuously advances the implementation of the ISO 45001 system
noise, temperature, lighting and
and ensures its effective operation, focusing on deepening system implementation, promoting other factors
multi-system integration, and driving the application of intelligent safety management. It has also
successfully passed the annual surveillance audit. During the reporting period, multiple subsidiaries Frequency of Occupational Health and Safety Risk Assessments at Hengtong Optic-Electric
of Hengtong Optic-Electric have obtained ISO 45001 Occupational Health and Safety Management
System certification.
Safety Management
Safety
rovide employees with safety equipment including earplugs, masks, safety goggles, and high-
P
Protection
temperature protective clothing
Equipment
Hengtong Optic-Electric continuously improves its safety management mechanisms, establishing a safety production responsibility ollaborate with manufacturers to pioneer an industry-first fully enclosed sealed protective cover,
C
system with the Board of Directors as the highest accountability body. The Company strictly implements the safety production effectively preventing wire-drawing components from flying off. Acoustic insulation material added to
responsibility system, clearly defining the safety duties and authority of personnel at all levels. Comprehensive safety management the inner surface significantly reduces noise and suppresses dust dispersion
measures are implemented across four dimensions: procedural management, target management, information management,
and supplier and contractor management, providing a solid foundation for the Company's sustainable development. In 2024, the I nstalled duct-type flame arresters to prevent fire spread caused by ignition of dust collection ducts
Company was elected as Vice President Unit of the Changshu Work Safety Management Association, and multiple subsidiaries from oil-containing aluminum powder generated during wire drawing
were recognized as Outstanding Enterprises in Work Safety Management.
dded full-enclosure protective screens to the take-up reel rotor bodies, supplemented with safety
A
light curtains to establish a dual-protection mechanism
Implement safety management for suppliers and contractors
to ensure their products and services meet the Company's
Safety Install safety warning signs around areas with potential hazards
safety production requirements
Warning Signs
and Facilities Affix warning labels to high-temperature production equipment and install protective barriers
stablish a safety production information management system
E
to collect and analyze relevant data and information, providing Safety
support for safety production decision-making All high-speed machinery equipped with infrared alarm systems
Inspection
Devices Online environmental monitoring devices installed at workshop noise and dust exposure points
AI cameras deployed for workshop hardhat compliance detection
ormulate clear safety production objectives and oversee
F
and evaluate the implementation of these objectives IoT gateways utilized for substation temperature and humidity monitoring
ISO 45001 Occupational Health and Safety
Management System Certification
Hengtong Optic-Electric Safety Production Management Mechanism Flame detection alarm systems established for both domestic and imported furnaces
urveillance cameras capable of detecting human presence (e.g., entry or fainting) to ensure confined
S
Hengtong Optic-Electric fully implements the safety production responsibility system, strictly adheres to the "dual responsibilities for space operation safety •Sensors collect real-time data on power distribution room temperature,
each position" and "three managements and three musts" safety management requirements, and establishes a comprehensive safety humidity, voltage, current, and transformer three-phase temperatures with sub-second precision. A
performance evaluation system for all employees. The Company enforces a "veto" system for major safety incidents and incorporates cloud-based platform builds equipment performance early-warning models and establishes multi-
safety production indicators into the performance evaluations of all staff. For department heads and senior management teams, the tiered response mechanisms. A mobile app provides triple-alert functionality via WeChat, SMS, and
Company has established an annual safety performance point management system and developed a mechanism linking accident severity phone calls, significantly enhancing power distribution room operational safety
levels to corresponding point deduction standards, ensuring effective implementation of safety production responsibilities.
echnical prevention measures are implemented for hazardous positions, including protective covers
T
In 2024, the Company continues to advance systematic occupational health and safety (OHS) risk management. Potential hazards are and interlock devices for rotating machinery, speed limiters and blue light alarms for forklifts, and
comprehensively identified through job safety analysis, on-site inspections, employee reporting, and industry benchmarking. A risk smart forklift early-warning systems
assessment matrix is used to quantify and classify risks, enabling the formulation of targeted control measures. Simultaneously, the Company
upgraded its safety monitoring system, implementing real-time surveillance of critical risk points through IoT sensors and video monitoring
systems. Regular safety audits, specialized inspections, and management walkthroughs ensure effective implementation of all control measures. Hengtong Optic-Electric Safety Production Measures (Partial)
A digital platform tracks and analyzes incidents and hazards, enabling continuous optimization of the management system.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Safety Culture
Hengtong Optic-Electric consistently undergoes and successfully passes specialized inspections from government departments Based on safety monitoring and occupational health and safety assessments, the Company continuously improves its safety
including emergency management, environmental protection, health and wellness, and fire safety, as well as rigorous supplier culture, dynamically optimizes safety procedures, training content, and emergency response plans. Through safety-themed
system audits by major clients. The Company also undergoes regular professional assessments by third-party certification bodies. activities such as "Work Safety Month" and "Safety Consultation Day" for all employees, along with regular safety knowledge
These multidimensional, high-intensity, and routine occupational health and safety audits cover both management systems and training, it comprehensively enhances employee safety awareness and skills. The Company has established an emergency
on-site execution, serving as a critical mechanism for evaluating the Company's occupational health and safety management response mechanism encompassing contingency planning, specialized rescue team development, and practical drills.
operations and performance. Additionally, a detailed annual safety training plan is formulated at the beginning of each year. Through multiple measures, the
Company continuously strengthens employees' emergency response capabilities, committed to building a healthier and safer
Furthermore, we require suppliers to strictly adhere to occupational health and safety standards equivalent to those of Hengtong working environment for all staff.
Optic-Electric, ensuring a safe working environment for employees and implementing effective measures to prevent workplace
accidents, occupational health hazards, and work-related illnesses.
No. Training Course Training goal Trainee Time
Strengthen employees' awareness
of safety during commuting
Resumption of Work and Enhance employees' safety
Production Training awareness after returning to work
uppliers shall obtain safety management system certification and establish a safety production management team led by
S
a company-level executive, with at least one worker representative included. This team shall assess and control potential Strengthen safety management
hazards related to waste materials, chemicals, special equipment, production machinery, and other factors, developing and enhance the knowledge and
appropriate procedural documents and preventive measures to mitigate risks and improve the working environment. proficiency of volunteer firefighters Volunteer Firefighters,
awareness of self-defense and self- Employees
rescue in fire prevention and their
ability to resist fires
Hazardous Chemicals Strengthen the safety awareness of
Management Training chemical administrators
uppliers shall conduct regular, formal safety training for employees, maintain occupational safety training records, and
S
document corrective and preventive measures in a manual for proper retention. Specialized personnel must undergo Strengthen the safety awareness
professional training and obtain certification before formal employment. of personnel engaged in special
Special Operations Safety operations such as forklift Special Operations
Training operation, pressure vessel Personnel
maintenance, electrical work, and
work at heights
Strengthen employees' common
sense of safe production in summer
uppliers shall provide appropriate personal protective equipment free of charge to employees and establish emergency
S
response plans. In case of workplace injuries, emergency medical care shall be provided, and employees shall be assisted Incorporate optimized and updated
in obtaining follow-up medical treatment. Safety Operating Procedures safety operating procedures
Training for Each Process to enhance employees' safety
operation skills
Strengthen employees' safety
awareness during the National Day
holiday and safety requirements for
resuming work after the holiday
uppliers shall provide all employees with free access to clean toilet facilities, potable water, and suitable spaces for meals
S
and rest. Regardless of the nature of employee dormitories, all provided dormitory facilities must be clean, safe, and meet
Strengthen employees' awareness
employees' basic needs. 9 Anti-Fraud Awareness Training All Employees November 2024
of anti-fraud
Strengthen employees' awareness
Hengtong Optic-Electric Supplier Health and Safety Standards of safe production
Hengtong Optic-Electric 2024 Safety Training Plan
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
CASE 2024 Hengtong Optic-Electric Safety Theme Activities CASE Safety Culture Activities at Hengtong Optic-Electric's Indian Subsidiary
During the reporting period, the Company conducted a variety of safety-themed activities, including signing safety Hengtong Optic-Electric's Indian subsidiary continues to promote employee safety culture initiatives. During National
responsibility agreements, holding five-minute pre-shift and post-shift safety briefings, launching the "Safety Month in Action" Safety Week, the subsidiary organized first-aid training sessions to enhance employees' safety awareness and
initiative, and organizing the Work Safety Month theme event alongside the second-quarter Safety Committee meeting and emergency response capabilities. Additionally, on International Yoga Day, the subsidiary hosted yoga activities to help
third-quarter Work Safety Committee meeting. These efforts effectively enhanced safety awareness among all employees. employees alleviate work-related stress and foster holistic physical and mental well-being.
Additionally, the Company organized a series of safety-related competitions, such as the Jiangsu Provincial Skills Competition,
Red Card Campaign, Forklift Skills Competition, and Equipment Skills Competition. These initiatives continuously improved
employees' operational safety skills, solidifying the foundation for the Company's safe development.
National Safety Week First-aid International Yoga Day Celebration
Training
The Company organizes diverse safety emergency drills and training sessions covering all employees to comprehensively enhance
their emergency response capabilities.
In 2024, the Company continued to strengthen occupational safety protections for employees, investing 7.1262 million yuan in
workers' compensation insurance throughout the year to achieve 100% coverage. Concurrently, 1.0629 million yuan was allocated
for production safety liability insurance, ensuring comprehensive coverage for all employees. In safety management, the Company
CASE Jiangsu Hengtong Electric Power Special Wire Co., Ltd. Safety Emergency Drill recorded zero work-related fatalities. Through safety drills and training programs, it comprehensively enhanced employees' safety
awareness and emergency response capabilities, providing robust support for ensuring the safe and stable operation of production
Jiangsu Hengtong Electric Power Special Wire Co., Ltd. invited the Qidu Fire Brigade to conduct fire drill training, activities.
educating employees on fire safety knowledge. The session demonstrated how to extinguish fires using fire hydrants,
hoses, and nozzles in the workshop, and organized simulated emergency evacuation drills.
Indicator Unit 2022 2023 2024
Additionally, the Company conducted specialized drills tailored to its production processes, including emergency
response exercises for upper drawing operations and natural gas leak scenarios. By simulating real-world situations,
these drills enhanced employees' emergency response capabilities, ensuring they can swiftly self-rescue during crises.
Number of work-related fatalities People 0 0 0
This initiative significantly strengthened employees' safety awareness and self-rescue/mutual-aid skills, providing
robust safeguards for the Company's production safety.
Number of safety emergency drills
Number 392 407 142
conducted
Number of safety training sessions
Number 182 211 725
conducted
Total hours of safety training Hour 364 422 1,650
Fire Drill Upper Drawing Process Emergency Natural Gas Leak Emergency
Drill Response Drill
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Global
Cooperation:
Demonstrating Hengtong's
Responsibility
Hengtong Optic-Electric maintains a global
development perspective, striving to establish
a sustainable development framework that
integrates domestic and international efforts.
Through continuous investment in public
welfare, charitable initiatives, volunteer services,
and industrial assistance, the Company has
fostered a virtuous cycle between corporate
growth and societal progress. Furthermore,
guided by ESG principles, Hengtong Optic-
Electric promotes collaborative advancement
across the entire industrial chain, contributing
its expertise to global sustainability. This fully
demonstrates the Company's commitment
to responsibility and its leadership within the
industry.
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Additionally, the Company is deeply committed to ecological conservation and green public welfare initiatives, integrating
Social Contribution and Rural
environmental protection principles into its corporate practices. For years, we have consistently organized tree-planting campaigns
and volunteer tree-planting activities, taking concrete actions to build ecological barriers and contribute green energy to the
construction of a Beautiful China. Simultaneously, the Company actively promotes green commuting and energy-saving, low-
Revitalization
carbon concepts, fostering a positive atmosphere where all employees participate in green living.
Hengtong Optic-Electric continues to make efforts in the fields of social contribution
and rural revitalization, persistently fostering a virtuous cycle between enterprise
development and social progres.
Social Contribution
Eighth Phase of the Hengtong Forest
The Company continuously advances in social contribution and rural revitalization, fostering a virtuous cycle between corporate Initiative
development and societal progress. Employees are organized into volunteer service teams and encouraged to participate in
public welfare activities such as blood donation, Lei Feng-inspired volunteer services, senior care visits, and community assistance
programs, demonstrating social care through concrete actions. These sustained volunteer initiatives effectively promote
community harmony and strengthen social trust. During the reporting period, the Company and its subsidiaries contributed over 5
million yuan through charitable foundations.
Hengtong Changshu International Marine
Industrial Park and Dongzhang Central
Primary School Arbor Day Special Event
Certificate of Honor for Supporting Lei Feng Day Volunteer Activities Volunteer Service Team of Jiangsu
Elderly Care Hengtong Power Cable Co., Ltd.
Double Ninth Festival Greeting Event Voluntary Blood Donation Drive 2024 Wujiang District Youth Tree-Planting and
Greenery Protection Volunteer Activity
Hengtong Optic-Electric Co., Ltd. Compliance and Stability: Leading Innovation: Low-Carbon Development: Caring for Employees: Global Cooperation:
Growth Quality Future Development Responsibility
Rural Revitalization 5.2
Promoting Industrial Sustainable
Development
The Company fully leverages its industrial strengths and
draws on social resources to promote balanced urban-
rural development. Its assistance initiatives span multiple
domains including industrial development, educational
support, healthcare services, and grassroots governance.
During the reporting period, as a long-term recognized Hengtong Optic-Electric remains steadfastly committed to sustainable development as
outstanding supplier of China Mobile, the Company was its guiding principle, closely aligning with customer needs and national green policy
awarded the "China Mobile Partner Rural Revitalization directives to comprehensively deepen its green strategic deployment. In 2024, the
Contribution Gold Award" for its sustained investment
Company centered its efforts on green manufacturing, extending the concept of green
and achievements in rural revitalization efforts. This
accolade fully demonstrates the Company's outstanding
development across all business domains-including green products, green supply
contributions to advancing shared development and chains, green power, and digital-intelligent management platforms. This approach
sustainable progress between urban and rural areas. has driven green premium pricing and low-carbon transformation across operations,
effectively enhancing value creation in existing industries while injecting sustained
momentum into the high-quality development of new business ventures.
China Mobile Partner Rural Revitalization
Contribution Gold Award
As an active promoter in the ESG field, Hengtong spearheaded Hengtong Optic-Electric has achieved remarkable results in
the establishment of the Suzhou Enterprise Sustainable sustainable development, with continuous improvements in
Development Federation and serves as its Executive Vice corporate governance standards and practical capabilities. In
President unit. It actively plays a leading and exemplary role, 2024, the Company secured an upgraded MSCI rating and saw its
collaborating with local governments and corporate partners to EcoVadis score increase by 11 points, earning the "Rapid Progress
explore sustainable development pathways. Simultaneously, as Award." Meanwhile, the Company received prestigious honors
Case 2024 Rural Revitalization Assistance and Donations an expert judge for the China Federation of Industrial Economics' including the "Annual Corporate Governance Excellence Award"
Program, the Company actively engages in technical exchanges and "ESG Best Practice" awards from New Fortune Magazine, as
ctively participated in China Telecom's supplier industry assistance program, donating 300,000 yuan to consolidate
A with domestic and international rating and certification bodies well as the "ESG Excellence Enterprise" award in the new energy
poverty alleviation achievements; such as MSCI, S&P, CTTL, SGS, Dun & Bradstreet, and CITIC sector from Dun & Bradstreet & SMM. These accolades validate
Securities. This commitment aims to build an ESG system that t he Company's substantial progress in ESG management
onated 200,000 yuan to the Hanbin District Charity Association in Ankang City, Shaanxi Province, supporting local
D better aligns with China's national conditions while meeting and further highlight its exemplary role in advancing industry
poverty alleviation and rural revitalization efforts; international standards. By leading industrial parks, industry standardization, transparency, and replicability.
platforms, and SMEs in collective participation, we leverage ESG
upported China Mobile's targeted assistance and poverty alleviation projects, cumulatively donating nearly
S
as a catalyst to continuously advance the healthy and sustainable
one million yuan in areas including Huanan County, Heilongjiang Province; Shule County, Xinjiang; and Baisha Li
development of the business community.
Autonomous County, Hainan Province;
In external engagement and industry promotion, the Company
engtong Optic-Electric's subsidiary in South Africa, Aberdare, also spared no effort in fulfilling corporate
H
deepens the dissemination and application of ESG practices,
responsibilities, continuously investing in the "Abercare" and "Aberschool" initiatives. Total related donations from
expanding its social and industry influence. Hengtong Optic-
Electric actively shares ESG innovation achie vements,
showcasing ESG case studies at the "2024 Suzhou Global
T Maju Bersama Gemilang, Hengtong Optic-Electric's subsidiary in Indonesia, provided fund support for Indonesia's
P
Investment Conference," and participating in high-level forums
local livestock industry;
including EY's 3rd Sustainability Officers Summit for Listed
T Cabos E Tecnologia LTDA, Hengtong Optic-Electric's subsidiary in Brazil, held a donation event for the Hope
H Companies, CITIC Securities Green Finance and Sustainable
Primary School in a São Paulo favela. Development Conference, the Yangtze River Delta Green
Enterprise Overseas Expansion Seminar, and the 2024 China
International Import Expo. We advocate an ESG model that
"transitions from individual enterprises to value chains and
industrial clusters," encouraging more companies to integrate
social responsibility into their commercial value creation.
Hengtong Optic-Electric Co., Ltd. Annex
Annex Disclosure Item Disclosure Topic Topic Corresponding Section
Compliance and Stability: The Foundation for
Appendix I: GRI Standards Index 2-23 Policy Commitments Steady Growth-ESG Governance, Stakeholder
Engagement, Business Ethics
Compliance and Stability: The Foundation for
Disclosure Item Disclosure Topic Topic Corresponding Section Engagement, Business Ethics
GRI 2: General Disclosure 2021 Compliance and Stability: The Foundation for
Steady Growth-Business Ethics
The Organization and Its Reporting Practices
Global Cooperation: Demonstrating Hengtong's
Activities and Workers Compliance and Stability: The Foundation for
Steady Growth-Stakeholder Engagement
Caring for Employees: Promoting Inclusive
Development-Talent Attraction and Retention
Caring For Employees: Promoting Inclusive
Development-Talent Attraction and Retention
Governance Compliance and Stability: The Foundation for
Steady Growth-Stakeholder Engagement
Compliance and Stability: The Foundation for
Steady Growth-Corporate Governance 3-2 List of Material Topics
Steady Growth-Stakeholder Engagement
Nomination and Selection of the Highest Governance Compliance and Stability: The Foundation for
Body Steady Growth-Corporate Governance 3-3 Management of Material Topics
Steady Growth-Stakeholder Engagement
Role of the Highest Governance Body in Overseeing the Compliance and Stability: The Foundation for
Management of impacts Steady Growth-Corporate Governance
Compliance and Stability: The Foundation for 201-1 Direct Economic Value Generated and Distributed About Hengtong Optic-Electric
Steady Growth-Corporate Governance
Financial Implications and Other Risks and Opportunities Low-Carbon Development: Illuminating a Green
Role of the Highest Governing Body in Sustainability Compliance and Stability: The Foundation for Due to Climate Change Future-Climate Change and Carbon Neutrality
Reporting Steady Growth-ESG Governance
GRI 202: Market Presence 2016
Compliance and Stability: The Foundation for
Ratio of Standard Entry Level Wage by Gender Compared Caring for Employees: Promoting Inclusive
Steady Growth-Business Ethics 202-1
Leading Innovation: Creating Leading Quality-
Supply Chain Management GRI 203: Indirect Economic Impacts 2016
Compliance and Stability: The Foundation for Global Cooperation: Demonstrating Hengtong's
Steady Growth-Corporate Governance Responsibility
Compliance and Stability: The Foundation for GRI 204: Procurement Practices 2016
Steady Growth-ESG Governance
Leading Innovation: Creating Leading Quality-
Caring for Employees: Promoting Inclusive Supply Chain Management
Development-Promoting Communication and Care
GRI 205: Anti-corruption 2016
Caring for Employees: Promoting Inclusive
Development-Talent Attraction and Retention 205-1 Operations Assessed for Risks Related to Corruption
Steady Growth-Business Ethics
Strategy, Policies, and Practices
Communication and Training about Anti-corruption Compliance and Stability: The Foundation for
Compliance and Stability: The Foundation for Policies and Procedures Steady Growth-Business Ethics
Steady Growth-ESG Governance
Hengtong Optic-Electric Co., Ltd. Annex
Disclosure Item Disclosure Topic Topic Corresponding Section Disclosure Item Disclosure Topic Topic Corresponding Section
GRI 206: Anti-competitive Behavior 2016 Low-Carbon Development: Illuminating a Green
Future-Emission Management and Recycling
Legal Actions for Anti-competitive Behavior, Anti-trust, Compliance and Stability: The Foundation for
and Monopoly Practices Steady Growth-Business Ethics Low-Carbon Development: Illuminating a Green
Future-Emission Management and Recycling
GRI 302: Energy 2016
GRI 308: Supplier Environmental Assessment 2016
Low-Carbon Development: Illuminating a Green
Future-Energy Efficiency and Transformation New Suppliers that were Screened Using Environmental Leading Innovation: Creating Leading Quality-
Criteria Supply Chain Management
Low-Carbon Development: Illuminating a Green
Future-Energy Efficiency and Transformation GRI 401: Employment 2016
Low-Carbon Development: Illuminating a Green Caring for Employees: Promoting Inclusive
Future-Energy Efficiency and Transformation Development-Talent Attraction and Retention
Reductions in Energy Requirements of Products and Low-Carbon Development: Illuminating a Green Benefits Provided to Full-Time Employees that are not Caring for Employees: Promoting Inclusive
Services Future-Energy Efficiency and Transformation Provided to Temporary or Part-time Employees Development-Promoting Communication and Care
GRI 303: Water Resources and Wastewater 2018 Caring for Employees: Promoting Inclusive
Development-Promoting Communication and Care
Low-Carbon Development: Illuminating a
Optimization
Caring for Employees: Promoting Inclusive
Low-Carbon Development: Illuminating a Development-Occupational Health and Safety
Hazard Identification, Risk Assessment, and Incident Caring for Employees: Promoting Inclusive
Optimization 403-2
Investigation Development-Occupational Health and Safety
Low-Carbon Development: Illuminating a Green
Future-Emission Management and Recycling 403-3 Occupational Health Services
Development-Occupational Health and Safety
Low-Carbon Development: Illuminating a
Caring for Employees: Promoting Inclusive
Development-Occupational Health and Safety
Optimization
Caring for Employees: Promoting Inclusive
GRI 305: Emission 2016 403-6 Promoting of Worker Health
Development-Occupational Health and Safety
Low-Carbon Development: Illuminating a Green
Future-Climate Change and Carbon Neutrality 403-7
Safety Impacts Directly Linked by Business Relationships Development-Occupational Health and Safety
Low-Carbon Development: Illuminating a Green
Future-Climate Change and Carbon Neutrality 403-8
Management System Development-Occupational Health and Safety
Low-Carbon Development: Illuminating a Green
Future-Climate Change and Carbon Neutrality 403-9 Work-Related Injuries
Development-Occupational Health and Safety
Low-Carbon Development: Illuminating a Green
Future-Climate Change and Carbon Neutrality 403-10 Work-Related Ill Health
Development-Occupational Health and Safety
Nitrogen Oxides (NOx), Sulfur Oxides (SOx), and Other Low-Carbon Development: Illuminating a Green
Significant Air Emissions Future-Climate Change and Carbon Neutrality
Caring for Employees: Promoting Inclusive
GRI 306: Waste 2020
Low-Carbon Development: Illuminating a Green Development
Future-Emission Management and Recycling
Caring for Employees: Promoting Inclusive
Programs for Upgrading Employee Skills and Transition
Low-Carbon Development: Illuminating a Green 404-2 Development-Empowering Growth and
Future-Emission Management and Recycling Development
Caring for Employees: Promoting Inclusive
Percentage of Employees Receiving Regular Performance
and Career Development Reviews
Development
Hengtong Optic-Electric Co., Ltd. Annex
Disclosure Item Disclosure Topic Topic Corresponding Section Appendix II: Index of Shanghai Stock Exchange Guidelines
GRI 405: Diversity and Equal Opportunity 2016
Caring for Employees: Promoting Inclusive
Development-Talent Attraction and Retention
Disclosure Items Corresponding Chapters
Ratio of Basic Salary and Remuneration of Women to Caring for Employees: Promoting Inclusive
Men Development-Promoting Communication and Care Climate Response
Carbon Neutrility
GRI 406: Non-discrimination 2016
Low-Carbon Development: Illuminating a Green Future-Emission Management
Pollutant Discharge
Compliance and Stability: The Foundation for and Recycling
Steady Growth-Business Ethics Low-Carbon Development: Illuminating a Green Future-Emission Management
Waste Disposal
and Recycling
GRI 407: Freedom of Association and Collective Bargaining 2016
Low-Carbon Development: Illuminating a Green Future-Environmental
Operations and Suppliers in which the Right to Freedom Caring for Employees: Promoting Inclusive Ecosystem and Biodiversity Protection
Protection and Management
of Association and Collective Bargaining may be at Risk Development-Talent Attraction and Retention
Low-Carbon Development: Illuminating a Green Future-Environmental
Environmental Compliance Management
GRI 408: Child Labor 2016 Protection and Management
Operations and Suppliers at Significant Risk for Incidents Caring for Employees: Promoting Inclusive Low-Carbon Development: Illuminating a Green Future-Energy Efficiency and
Energy Utilization
of Child Labor Development-Talent Attraction and Retention
Low-Carbon Development: Illuminating a Green Future Water-saving
GRI 409: Forced or Compulsory Labor 2016 Water Resource Utilization
Transformation and Optimization
Operations and Suppliers at Significant Risk for Incidents Caring for Employees: Promoting Inclusive Low-Carbon Development: Illuminating a Green Future-Emission Management
of Forced or Compulsory Labor Development-Talent Attraction and Retention and Recycling
GRI 413: Local Communities 2016 Global Collaboration: Demonstrating Hengtong's Responsibility-Social
Rural Revitalization
Contribution and Rural Revitalization
Operations with Local Community Engagement, Impact Global Cooperation: Demonstrating Hengtong's
Assessments, and Development Programs Responsibility Social Contributions
Contribution and Rural Revitalization
GRI 414: Supplier Social Assessment 2016
Innovation Leading Innovation: Creating Leading Quality-Sustainable Innovation
Leading Innovation: Creating Leading Quality-
Supply Chain Management Ethics of Science and Technology Leading Innovation: Creating Leading Quality-Sustainable Innovation
GRI 416: Customer Health and Safety 2016
Supply Chain Security Leading Innovation: Creating Leading Quality-Supply Chain Management
Assessment of the Health and Safety Impacts of Product Leading Innovation: Creating Leading Quality-
and Service Categories Supply Chain Management and Quality Control
Equal Treatment of SMEs Leading Innovation: Creating Leading Quality - Supply Chain Management
Incidents of Non-Compliance Concerning the Health and Leading Innovation: Creating Leading Quality-
Safety Impacts of Products and Services Supply Chain Management and Quality Control Leading Innovation: Creating Leading Quality - Quality Control, Customer
Product and Service Safety and Quality
Service, and Information Protection
GRI 417: Marketing and Labeling 2016
Leading Innovation: Creating Leading Quality - Customer Service and
Data Security and Customer Privacy
Requirements for Product and Service Information and Leading Innovation: Creating Leading Quality- Information Protection
Labeling Quality Control
Employees Caring for Employees: Promoting Inclusive Development
Incidents of Non-compliance Concerning Product and Leading Innovation: Creating Leading Quality-
Service Information and Labeling Quality Control
Due Diligence Leading Innovation: Creating Leading Quality - Supply Chain Management
Incidents of Non-compliance Concerning Marketing Leading Innovation: Creating Leading Quality-
Communications Quality Control Stakeholder Engagement
Engagement
GRI 418: Customer Privacy 2016
Anti-commercial Bribery and Anti-corruption Compliance and Stability: The Foundation for Steady Growth - Business Ethics
Substantiated Complaints Concerning Breaches of Leading Innovation: Creating Leading Quality-
Customer Privacy and Losses of Customer Data Customer Service and Information Protection
Fair Competition Compliance and Stability: The Foundation for Steady Growth - Business Ethics

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