Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental sustainability
• Emissions reduction

Environmental Achievements

• Reduced undesirable emissions in the form of industrial waste through oil refining agents
• Aided customers in complying with evermore stringent mandatory emissions regulations

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Most of our revenue is derived from a concentrated customer base
• May be unsuccessful in researching and developing new products or in improving the quality of our existing products
• May experience shortages of supply or price fluctuations in our raw materials
• May fail to maintain our existing supplier relationships on favorable terms or at all
• Had negative net operating cash flow for the nine months ended 30 September 2017 and are subject to credit and liquidity risk in relation to account receivables
• May experience inventory obsolescence
• Unexpected catastrophic events may affect our Yixing Plant
• Sales volumes are affected by, among other factors, the conditions of the PRC and global economy and the quantity and nature of the contracts we are awarded through participating in tenders
• Yixing Plant may be relocated due to water environmental protection regulations
• May not be able to effectively manage our employees and affiliates to comply with anti-corruption measures related to tendering
• Demand for our products may decrease as electric vehicles grow in popularity
• Subject to risks associated with conducting business overseas
• Industries in which we and our customers operate are influenced by policies and measures of the PRC Government, governments of other countries where we export our products and international and regional organizations, as well as by public opinion
• May not be able to promptly react to changed standards and codes
• Business operations are subject to various environmental, health and safety laws and regulations and we may fail to control the costs associated with more stringent standards of these laws and regulations
• Insurance may not be sufficient to cover the risks connected with our operations and potential losses
• May be liable for damages based on product liability claims
• May be unable to obtain, retain, or renew required permits, licenses, registration or certificates for our business
• Patents, trademarks and confidentiality agreements may not be sufficient to protect our intellectual property
• May be subject to claims of infringement of third-party intellectual property rights
• Success depends on our ability to attract and retain experienced professionals
• May be involved in litigation or legal proceedings
• May experience failures in our information systems
• Performance depends on favorable labor relations with our employees, and we may experience deterioration in labor relations, labor shortages or a material increase in labor costs
• Risk management, quality control and internal control systems may not be able to completely eliminate non-compliance matters or product defects
• Subject to risks beyond our control relating to epidemics, acts of terrorism, wars or other natural or man-made calamities in China and globally
• Vulnerable to adverse changes in economic, political and social conditions and government policies in China
• Uncertainties with respect to PRC legal system could materially and adversely affect us and may limit the legal protection available to you
• May experience difficulties in effecting service of process or enforcing foreign judgments against us, our Directors or senior management residing in China
• PRC Government’s control over currency conversion may limit our foreign exchange transactions, including dividend payments on our Shares
• Fluctuations in exchange rates may have a material and adverse impact on your investment
• May be subject to PRC income tax on dividends from us or on any gain realized on the transfer of our Shares under PRC law
• May be deemed a PRC resident enterprise under the EIT Law and be subject to PRC taxation on our global income
• Rely on dividends paid by our PRC subsidiary for our cash needs, and any limitation on the ability of our PRC subsidiary to make payments to us could have a material and adverse effect on our ability to conduct our business operations
• Current PRC regulations of loans and direct investments by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of the Share Offer to make loans or additional capital contributions to our PRC subsidiary
• Inflation in China could negatively affect our profitability and growth
• PRC laws and regulations establish more complex procedures for some acquisitions of PRC companies by foreign investors, which could make it difficult for us to pursue growth through acquisitions in China

Mitigation Strategies

• Expanding customer base to diversify revenue sources
• Investing in research and development to create new products and improve existing ones
• Upgrading Yixing Plant to increase production capacity
• Extending upstream reach to produce key raw materials
• Implementing risk management, quality control, and internal control systems
• Maintaining strong relationships with suppliers
• Seeking to mitigate risks associated with overseas business
• Complying with PRC laws and regulations

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Selection of suppliers based on factors such as availability and quality

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: High and New Technology Enterprise

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Oil refining agents and fuel additives to reduce emissions

Awards & Recognition

• 2011 Excellent Supplier Award from CNPC Dalian Petrochemical Co., Ltd.
• 6th Project Excellent Supplier Award in 2013 from SINOPEC Shanghai Petrochemical Co., Ltd.
• 2014-2016 Excellent Supplier Award in 2017 from SINOPEC Shanghai Petrochemical Co., Ltd.

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Energy conservation
• Carbon reduction

Environmental Achievements

• Developed various waste processing and green production technologies, such as Huaxin Technology and Application of Effective and Ecological Co-processing of Solid Wastes in Cement Kiln, Cement Kiln Pure Low-Temperature Residual Heat Power Generation Technology, and Nitrogen Oxide Emissions Reduction by Combination of ‘Low-NOx Combustion+Staged Combustion+Selective Non-catalytic Reduction (SNCR) + Cement Kiln Biomass Co-processing’ Technology.
• Target to improve energy consumption efficiency and reduce fuel consumption for clinker production to 117 kgce/t by the end of 2022 and improve the energy efficiency of kiln lines with a production capacity of 2,500 tons or less to 100 kgce/t.

Social Achievements

• Achieved continuing growth from overseas business; employment localization in overseas factories exceeded 80% by September 30, 2021.
• Numerous awards and recognitions for renowned brands.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Cyclical nature of the macroeconomy and global economic and financial markets.
• Fluctuations in cement prices.
• Increase in prices of coal and electricity or shortages of coal and electricity supplies.
• Stringent regulations by the PRC government.
• Low utilization rate of production facilities.
• Intense competition and continuing overcapacity in the cement industry.
• Failure to comply with environmental laws and regulations.
• Failure to comply with health and safety laws and regulations.
• Impacts of the COVID-19 pandemic.
• Recent electricity power shortage in China.
• NDRC Notice Regarding Electricity Prices.

Mitigation Strategies

• Proactively cooperated with logistics service providers and increased inventory level of key production raw materials to ensure stable production and operation during COVID-19 pandemic.
• Implemented stringent price management measures to offset impacts from rising operating costs.
• Adopted short-term, flexible procurement strategies for coal.
• Closely monitor any measures the local governments may take regarding adjustment of electricity prices and make adjustment plans.
• Contingency measures to mitigate potential impact of NDRC’s notice: purchasing electricity directly from power generation companies, reducing energy consumption, improving waste heat power generation, developing green energy projects.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions, floods

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: CASBE

Certifications: GB/T19001-ISO9001

Third-party Assurance: Deloitte Touche Tohmatsu CPA LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Tile adhesive, putty powder, permeable concrete, colored concrete, wear-resistant concrete, wear-resistant anti-corrosion flooring, ultra-high-performance roof tiles, wall panels and precast components, grout products, anti-corrosion sprays and shaft reinforcement products.

Awards & Recognition

• National Science and Technology Progress Award (2009, 2016)
• 20th China Patent Merit Award (2018)
• First Prize of Technology Improvement by China Building Materials Federation (2019)
• First Prize in the 13th National Building Material and Machinery Industry Technological Innovation “Zhongjiancai Fenti Cup” (2019)
• Second Prize in National Building Materials and Machinery Industry Technological Innovation (2020)
• Intelligent Manufacturing Demonstration Enterprise by China Building Materials Federation (2020)

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Impact of COVID-19 pandemic resulting in delays in construction projects and slower customer payment cycles.
• Concentration of business operations in Maoming, Guangdong Province, making the company susceptible to regional economic fluctuations and government policies.

Mitigation Strategies

• Expansion plans to diversify service offerings and expand into new geographic areas.
• Implementation of a credit term policy to standardize procedures for granting credit periods to customers.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: CMA (China Inspection Body and Laboratory Mandatory Approval)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed