Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Replaced a more environmentally friendly boiler with higher energy efficiency
• Reduced coal consumption by replacing new biomass boilers
• Implemented sound-absorbing, sound-insulating, and vibration-reducing measures to reduce noise
• Implemented waste-water processing system and regular maintenance work to maintain the efficiency of machines
• Implemented measures to reduce water consumption by 30%-50%
• Uses energy-saving lights and microcomputer to monitor equipment to avoid excess standards

Social Achievements

• Complied with all relevant labour and employment law and regulations
• Provided a full set of protective clothing for workers
• Provided in-house training, severance payment, accommodation, and canteen near manufacturing bases to its workers
• No reported incidents of non-compliance with regulations concerning employment, dismissal, anti-discrimination, diversity and equal opportunity
• No work-related fatalities
• Provided various training programs for employees based on job level and occupation
• Awarded as “Top 10 charitable organizations in Qingdao”

Governance Achievements

• All of the Group’s production, processing and distribution facilities have been accredited according to ISO9001, ISO14001, HACCP or other international certification standards
• Established a comprehensive vertical supply chain management system through supplier screening and management
• Implemented management and hazards prevention measures in accordance with the Production Safety Law of the PRC and the Regulations on Safety Supervision of Special Equipment
• Established a “whistle-blowing” policy
• Implemented anti-corruption measures

Climate Goals & Targets

Environmental Challenges

• Low growth and intense competition in the food industry
• Increasing pressure of higher production cost due to increasing labor cost
• Uncertainties in consumer market downturn
• Risks relating to maintaining livestock health status

Mitigation Strategies

• Focus on high value-added chicken related processed foods
• Safeguarding business relationship with major customers and proactively exploring new markets and new customers
• Leveraging on leading position in the rabbit segment and offer consumers with healthy and safe products
• Investing resources on innovation and application of biotechnology and information technology
• Broadening the products range and sales channels and upgrading the current facilities
• Establishing production automation system to reduce manpower per production unit
• Aligning production volume to market supply and demand and maintaining a large number of suppliers

Supply Chain Management

Responsible Procurement

• Maintaining two or more qualified suppliers of raw materials

Climate-Related Risks & Opportunities

Reporting Standards

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

Certifications: ISO 14001, ISO9001, HACCP

Awards & Recognition

• Top 10 charitable organizations in Qingdao

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced nitrogen oxides emissions by 7.7% and sulfur oxides emissions by 20% compared to 2020 (restated data). Implemented emissions standards for livestock and poultry breeding, medical waste incineration, and cooking fumes. Reduced domestic waste production intensity to 8.5 kg per RMB million of revenue.
• Implemented water-saving measures, energy-efficient appliances, and paperless office initiatives.

Social Achievements

• Developed human resources policies ensuring employee rights, equal opportunities, and annual performance evaluations.
• Implemented a factory sterilizing policy to enhance worker hygiene and product quality.
• Maintained a comprehensive occupational safety and hygiene management policy, resulting in only one work injury in 2021.

Governance Achievements

• Established a comprehensive vertical supply chain management system with supplier screening and annual performance reviews.
• Established product recall procedures and a product recall team.
• Implemented an anti-corruption mechanism and provided anti-money laundering and anti-corruption training to senior management.

Climate Goals & Targets

Environmental Challenges

• Increased costs of animal feed and decreased selling prices of raw chicken meat, resulting in a decreased gross profit margin.
• Decline in demand for other products in overseas markets due to the pandemic and increased ocean freight costs.
• Increasing pressure of higher production cost due to rising labor costs in the PRC.

Mitigation Strategies

• Proactive measures to reduce the production and sales volume of chilled and frozen chicken meat.
• Focus on high value-added processed foods, safeguarding business relationships with major customers, and exploring new markets and customers.
• Implementing production automation systems to reduce manpower per production unit.

Supply Chain Management

Supplier Audits: Annual reviews of 139 qualified suppliers (93% in PRC, 6% in EU)

Responsible Procurement

• Supplier screening based on history, reputation, quality control, and CSR performance.
• Requirement of applicable business and food safety licenses.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Main Board Listing Rules)

Certifications: ISO 14001, ISO 9001, ISO 22000

Environmental Metrics

ESG Focus Areas

• quality of the working environment
• environmental protection
• operating practices
• community participation

Environmental Achievements

• Reduced packaging material consumption from 764.8 tonnes in 2022 to 737 tonnes in 2023, resulting in a consumption intensity of 6.2kg/tonne of product (2022: 6.9kg/tonne of product).
• Food production facilities are ISO 14001 certified.

Social Achievements

• Provided accommodation and canteens near manufacturing bases to workers.
• Provided a package of benefits such as in-house training and severance payment.
• No reported incidents of non-compliance with regulations concerning employment, dismissal, anti-discrimination, diversity and equal opportunity.

Governance Achievements

• Adopted an updated anti-corruption policy on March 30, 2023.
• Held annual anti-corruption training for senior management.

Climate Goals & Targets

Environmental Challenges

• Increasing trade protectionism and downturn pressure of macroeconomic.
• Low growth rate and intense competition in the food industry.
• Changes in the market environment leading to decreased sales of pet food.
• Decrease in market price of breeder chickens.
• Increase in average balance of bank borrowings.
• Slow payment to suppliers.
• Potential regulatory change related to carbon reduction requirements.

Mitigation Strategies

• Adopting a stable operation strategy.
• Increased investment in research and development of new products.
• Focus on high value-added processed foods.
• Safeguarding business relationships with major customers.
• Proactively exploring new markets and new customers.
• Optimizing product portfolios.
• Enhancing cost management.
• Promoting brand building.
• Expanding new sales channels.
• Developed typhoon and rainstorm arrangements to safeguard employee safety.
• Constantly monitoring changes in relevant laws or regulations.
• Seeking compliance consultancy services to reduce legal risks.
• Taking comprehensive measures to protect the environment, including measures aimed at reducing GHG emissions.
• Actively negotiating with banks to seek renewal of outstanding bank borrowings.
• Actively exploring the availability of alternative sources of financing.
• Negotiating and setting out the settlement plan of a related party loan.

Supply Chain Management

Supplier Audits: 1,438 qualified suppliers from the PRC and 12 qualified suppliers are from the European Union.

Responsible Procurement

• Focus on environmentally friendly materials such as Forest Stewardship Council (“FSC”) paper and recycled plastics.
• Only starts a business relationship with suppliers who possess applicable business and food safety licenses.

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons and natural disasters

Transition Risks

• Higher operating costs due to potential regulatory change related to carbon reduction requirements.

Reporting Standards

Frameworks Used: Environmental, Social, Governance Reporting Guide (Appendix C2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited)

Certifications: ISO 14001, ISO22000, BRC, QS

Awards & Recognition

• Shandong Province's Advanced Agricultural Industrialization Leading Enterprise
• Weifang City's Top Ten Agricultural Industrialization Leading Enterprises
• One of the first 35 national poultry meat thermal processing plants exported to Japan