Climate Change Data

Environmental Metrics

ESG Focus Areas

• Emissions Control
• Efficient Use of Resources
• Environment and Natural Resources
• Labour Practices
• Health and Safety
• Employee Development and Training
• Product Responsibility
• Supply Chain Management
• Ethics and Anti-corruption
• Community Involvement

Environmental Achievements

• Reduced hydrogen chloride emissions by 79% compared to 2016.
• Implemented energy saving plan under the "13th Five-Year Plan", including energy audits and energy-saving technology modifications.
• Acid washing energy saving technological upgrade estimated to cut down comprehensive energy consumption by 88 tonnes of standard coal.
• Replacement of annealing furnace inner cover estimated to cut down electricity consumption by approximately 2,534,400 kWh.
• Expanded wastewater treatment facilities by adopting chemical and physical processes in waste acid recycling projects. A large proportion of wastewater is reused.

Social Achievements

• Fair, equal and open system for internal employee promotions.
• Established Safe Production Responsibility Management System and Protective Labour Equipment Management System.
• Implemented safety education and training management system.
• Comprehensive employee development and training programs to increase employee knowledge of operational and safety practices.
• Donated RMB510,000 to the educational fund for teachers and students of Muzhou Town and RMB280,000 to Muzhou Hospital.

Governance Achievements

• Implemented stringent monitoring and quality control systems to eliminate the possibility of any consumers’ injury or property damage caused by any defect from our metal products.
• Established processes for evaluating and selecting suppliers.
• Implemented a Code of Business Ethics and anti-corruption measures.
• Regular review of operational procedures and guidance to enhance internal controls and compliance audit.

Climate Goals & Targets

Environmental Challenges

• Severe Typhoon Hato caused damage to a limited part of factory roofs.

Mitigation Strategies

• Received a fair insurance claim for typhoon damage.

Supply Chain Management

Supplier Audits: 40 suppliers in China

Responsible Procurement

• Supplier evaluation mechanism based on operational scale, quality control, delivery time and reputation.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons

Reporting Standards

Frameworks Used: Hong Kong Stock Exchange's Environmental, Social and Governmental Reporting Guide

Certifications: ISO 9001:2008 (Jiangmen Huajin and Jiangmen Huamu)

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Sustainable Development
• Community Investment
• Environmental Protection

Environmental Achievements

• Implemented measures such as neutralising wastewater before disposal and recycling wastewater.
• Did not receive any complaints regarding environmental protection issues and experienced no material environmental incidents.

Social Achievements

• Encouraged staff participation in community services with non-profit organizations, social enterprises, and governments.
• Maintained a good relationship with employees and maintained a relatively low turnover rate.
• Provided in-house training to enhance employee knowledge in operation and safety practices.

Governance Achievements

• Adopted the code provisions set out in the Corporate Governance Code.
• Established an Audit Committee, Remuneration Committee, and Nomination Committee.
• Complied with the Model Code for Securities Transactions by Directors of Listed Issuers.

Climate Goals & Targets

Environmental Challenges

• Decrease in the average processing fee per tonne of products.
• Decrease in sales volume of processed steel products and galvanized steel products.
• Low utilization rate for the zinc coating process due to decreased average processing fee and temporary suspension of the galvanizing line.
• PRC subsidiary required to settle additional value-added tax, surcharges, real estate tax, and stamp duty.

Mitigation Strategies

• Substantial investment in property, plant, and equipment to strengthen the scale and processing capacity of the existing production base and facilities to decrease unit production cost.
• Acquisition of Gujing Town Land Use Rights for expansion of production capacity.
• Demand notice served to indemnifiers for additional taxes and surcharges.
• Application for additional long-term borrowings to meet current liabilities and expand operations.

Supply Chain Management

Responsible Procurement

• Assessment and selection procedure for suppliers, including background assessment of scale of operation, quality control, delivery time, and reputation.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Pollution Control
• Resource Management
• Green Operations
• Climate Change
• Employee Growth and Well-being
• Health and Safety
• Employee Development
• Labor Standards
• Product Responsibility
• Supply Chain Management
• Ethics and Anti-corruption
• Community Engagement

Environmental Achievements

• Reduced NOx emissions by 14.5% and SOx emissions by 31.5% from 2018 to 2019.
• Generated approximately 3 million kWh of solar power in 2019, equivalent to 2672.85 tonnes of carbon dioxide emissions.
• Reduced water consumption from 596,762 m3 in 2018 to 486,553 m3 in 2019.
• Recycled 79,236 cloth tapes, 31,043 paper tubes, 26,206 wood frames for coils, 45,363 wood frames for sheets, 1,230 iron frames and 489 iron drums.
• Planted 334,728 trees, estimated to reduce carbon footprint by 7.45% annually.

Social Achievements

• Maintained a low employee turnover rate (4.29%).
• Provided 60 average training hours per employee.
• Achieved 100% training participation rate for all employees.
• No work-related injuries or fatalities reported.
• Donated RMB150,000 and provided 223 hours of volunteer services for community engagement.

Governance Achievements

• Established an internal audit mechanism to combat corruption and fraud.
• Implemented whistle-blowing procedures and channels.
• Complied with all relevant laws and regulations on the prevention of bribery, extortion, fraud and money laundering. No cases of prosecution or conviction for corruption.

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: 507 suppliers (all from PRC)

Responsible Procurement

• Qualification review, inspections, and factory visits before supplier approval.
• Preference given to suppliers with ISO 14001 and ISO 9001 certifications.
• Annual assessment of supplier performance.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: ISO 14001, ISO 9001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Zhongjian Company Award
• Leading Group of High-tech Enterprises (Jiangmen Huajin and Huamu)
• Key Client of Bank of China Jiangmen Branch
• Gold Client of Agricultural Bank of China Jiangmen Branch
• Strategic Client of China Construction Bank Jiangmen Branch

Environmental Metrics

ESG Focus Areas

• Environmental preservation
• Employee well-being
• Supply chain management
• Ethics and anti-corruption
• Community investment

Environmental Achievements

• Reduced carbon dioxide emissions by approximately 2,300 tonnes through solar power generation.
• Recycled about 22,000 tonnes of scrap materials, saving production costs.
• Reduced surface treatment sludge by about 50-75% through installation of surface sludge low-temperature drying equipment.
• Obtained ISO 14001 environmental management system certification.

Social Achievements

• Established an emergency team for prevention and control of COVID-19, ensuring normal production and safeguarding employee health and safety.
• Provided comprehensive employee development and training programs.
• Organized recreational activities for employees.
• No major employee or labor disputes.

Governance Achievements

• Established an internal audit mechanism to crack down on corruption, fraud, and other irregularities.
• No legal cases regarding corrupt practices brought against the issuer or its employees.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting charitable and environmental activities.
• Potential challenges in sourcing water (although none encountered during the reporting period).

Mitigation Strategies

• Maintained close communication with government departments and community organizations.
• Implemented energy-saving measures to reduce water consumption.
• Developed emergency response plans for extreme weather.

Supply Chain Management

Supplier Audits: 395 suppliers, annual assessment of quality, safety, environmental performance, labor standards, and financial status.

Responsible Procurement

• Prioritizing local suppliers
• Giving preference to organizations with ISO 14001 and ISO 9001 certifications
• Signing an integrity responsibility agreement with each supplier

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (typhoon, rainstorm, extreme heat)

Opportunities

• Use of renewable energy (solar power)

Reporting Standards

Frameworks Used: Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Certifications: ISO 14001, ISO 9001:2015

Awards & Recognition

• Jiangmen Industry and Information Technology Bureau Award for Clean Production Enterprise
• ROHS and REACH certifications
• Intellectual Property invention patent certificate
• Title of Top 100 Jiangmen Enterprises

Environmental Metrics

ESG Focus Areas

• Green Production
• Employee Care
• Responsible Operation

Environmental Achievements

• Reduced GHG emissions intensity by 32% (3-year target achieved)
• Reduced non-hazardous waste intensity by 63% (3-year target achieved)
• Reduced electricity consumption intensity by 46% (3-year target achieved)
• Reduced water consumption intensity by 31% (3-year target achieved)
• Generated approximately 10,450,000 kWh of electricity by solar power, equivalent to a reduction of about 8,403.89 tons of carbon dioxide emissions.

Social Achievements

• No work-related fatalities in the past three years
• Provided various statutory social insurances and paid leave to employees
• Organized on-the-job training, including induction training and job skills training

Governance Achievements

• Established a risk management and internal control system
• Established anti-corruption management system, whistle-blowing procedures and channels, and conflict of interest policy
• Completed relevant review of all suppliers

Climate Goals & Targets

Environmental Challenges

• Hazardous waste intensity increased by 216% (3-year target not achieved)
• Increased hazardous waste due to higher customer requirements for product quality
• Increased diesel consumption due to new equipment testing and modifications
• Increased packaging material consumption due to increased production volume and difficulty recycling materials from some customers
• Climate change related risks: typhoons, tightening regulations, reduced rainfall, and potential health impacts on employees
• Market risk: increasing customer demand for green products, which the company has not yet fully addressed
• Reputational risk: lack of effective climate change response

Mitigation Strategies

• Implementing energy-saving and emission-reduction measures
• Complying with environmental-related laws and regulations
• Following the “National 14th Five-Year Plan” energy conservation goals
• Improving wastewater treatment process
• Developing emergency response plans for extreme weather
• Implementing clean production, reducing pollutant discharge, saving energy and water
• Seeking to improve product design and use environmentally friendly materials
• Carrying out green certification for products
• Enhancing disclosure of ESG performance

Supply Chain Management

Supplier Audits: All suppliers audited annually

Responsible Procurement

• Supplier evaluation, screening, and monitoring procedures
• Prioritizing local suppliers
• Preferential consideration for suppliers with ISO 14001 and ISO 9001 certifications
• Integrity statements signed with all suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons

Transition Risks

• Tightening climate change related regulations

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Listing Rules from the Stock Exchange of Hong Kong)

Certifications: ISO 14001:2015 (Jiangmen Huajin and Jiangmen Huamu), ISO 9001:2015 (Jiangmen Huajin and Jiangmen Huamu)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Green Production
• Employee Care
• Responsible Operation

Environmental Achievements

• Reduced greenhouse gas emission intensity by 16% to 101.15 tCO2e-/kiloton of production volume.
• Reduced non-hazardous waste intensity by 16.7%
• Generated about 6,700 MWh of electricity from solar energy, equivalent to reducing carbon dioxide emissions by about 4,000 tons.

Social Achievements

• No work-related fatalities in the past three years.
• Implemented various policies and systems to prevent fraud and corruption.
• Provided training to 80.26% of male employees and 19.74% of female employees.

Governance Achievements

• Established various policies and systems, such as the “anti-fraud management system”, “whistle-blowing procedures and channels” and the “conflict of interest policy”, to ensure its business procedures are in compliance with applicable local and international laws on prevention of bribery, extortion, fraud and money laundering.

Climate Goals & Targets

Environmental Challenges

• Increase in total greenhouse gas emissions due to a 21% increase in production volume.
• Hazardous waste target not achieved as scheduled.
• Increase in total energy consumption due to increased production capacity.
• COVID-19 pandemic restricted charitable and environmental activities.

Mitigation Strategies

• Implemented energy efficiency measures, resulting in a decrease in greenhouse gas emission intensity.
• Conducting in-depth evaluation and research to set effective and feasible targets and management plans for hazardous waste reduction.
• Implemented technical modifications to reduce electricity consumption.
• Maintained close communication with government departments and community organizations, providing assistance where possible.

Supply Chain Management

Supplier Audits: All suppliers reviewed annually.

Responsible Procurement

• Supplier audits assessing quality, environment, and safety performance.
• Termination of cooperation with suppliers violating contractual obligations.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons

Transition Risks

• Technological risks related to climate change and energy transformation.

Opportunities

• Development of low-carbon and low-pollution production models.

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 to the Rules Governing the Listing of Securities on the Stock Exchange)

Certifications: ISO 14001:2015, ISO 9001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Responsible Consumption and Production
• Climate Action
• Peace, Justice and Strong Institutions
• Partnerships for the Goals
• No Poverty
• Gender Equality
• Decent Work and Economic Growth
• Reduced Inequality
• Good Health and Well-being

The Group actively integrates the Sustainable Development Goals (“SDGs”) proposed by the United Nations in its measures.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Sustainable Development
• Corporate Governance

Environmental Achievements

• Implemented measures such as neutralising wastewater before disposal and recycling wastewater.
• Did not receive any complaints regarding environmental protection issues and experienced no material environmental incidents.

Social Achievements

• Encourages staff participation in community services with non-profit organizations, social enterprises, and governments.
• Maintains a good relationship with employees and maintains a relatively low turnover rate.
• Provides in-house training to enhance employee knowledge and identify talent.

Governance Achievements

• Complied with the applicable code provisions in the Corporate Governance Code throughout the year.
• Established an Audit Committee, Remuneration Committee, and Nomination Committee.
• Adopted a board diversity policy.

Climate Goals & Targets

Environmental Challenges

• Maintaining a balance between earnings and sustainable development.
• Managing liquidity and financial resources given current liabilities exceeding current assets and capital commitments.

Mitigation Strategies

• Obtaining short-term borrowings to finance capital expenditures.
• Securing personal guarantees from Mr. Xu Songqing and Mr. Luo Canwen for certain borrowings.
• Mr. Xu agreed to provide financial support to meet financial obligations.

Supply Chain Management

Responsible Procurement

• Assessment and selection procedure for suppliers.
• Procurement policy to purchase raw materials only from approved suppliers.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Corporate Governance Code (Appendix 14 to the Listing Rules)