MGI Tech Co., Ltd.
Environmental, Social andGovernance (ESG) Report
contents
Establishing the Systematic and Standardized Systemtowards Intelligent Manufacturing
About MGI Tech
Company ProfileCompany Development MilestonesCompany Awards
Sustainable DevelopmentTransform
Sustainable Development ManagementKey ESG Risks and OpportunitiesTools for Measuring Sustainable DevelopmentSustainable Development Strategy
Leading Life ScienceInnovation
Enhancing the Accessibility of GenomicsExpanding Diverse Application ScenariosSupporting the Advancement of Precision MedicineEmpowering Industry Ecosystem Development
Advancing Life ScienceTools for Future Healthcare
R&D InnovationLean ManufacturingQuality ServiceSustainable Supply Chain
Leader in ComplianceGovernance
Corporate GovernanceCompliance OperationsRisk ManagementResponsible Business Operations
Value Growth Partner
Talent Team BuildingEmployee Care EnhancementOccupational Health and SafetyFulfilling Social Responsibility
Strengthening Information Security for FosteringHealthy Development
Nurturing the “Three Good” Culture for anEnriched Life
Developing Low-Carbon, Eco-Friendly Products inResponse to Climate Change
Guardian of Our Environment
Environmental ManagementResource UtilizationWaste ManagementGreen Operations
Outlook for 2024
Message From Chairman
Appendices
Appendix I: About the ReportAppendix II: Sustainability PerformanceAppendix III: Index of ESG Reporting IndicatorsAppendix IV: List of Laws and RegulationsAppendix V: Key Annotations
About MGI Tech
Sustainable DevelopmentTransform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Feedback
About MGI Tech
Sustainable Development
Transform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Message From Chairman
We have diligently worked on ecological conservation, carbon reduction, desert reclamation, and perennial crops among otheraspects by providing advanced biotechnology, striving to answer the questions “What is life?” and “What is the meaning of life?”Driven by the mission to develop and promote advanced life science tools for future healthcare, we endeavor to contribute to thesustainable and healthy development of human life, ultimately meeting human beings’ demands for health, longevity, beauty, wisdom,and happiness.In 2023, guided by the vision of “Leading Life Science Innovation”, we have achieved remarkable milestones in product innovation,social responsibility, and environmental protection. A particularly noteworthy accomplishment is the launch of our ultra-high-through-put gene sequencer, the DNBSEQ-T20x2, which reduces the cost of whole genome sequencing to sub $100 per 30x human genomewith up to 50,000 samples running per year. This breakthrough not only establishes a new global standard for gene sequencing, butalso makes this cutting-edge technology accessible to a wider range of research institutions and individuals globally.Furthermore, our dedication to excellence has also earned us prestigious awards such as the China Patent Gold Award and theEdison Award, underscoring our global influence in life sciences. Through initiatives like the DCS Lab Initiative, which sets to empow-er global research in frontier science, we’ve been actively engaged in cutting-edge life science research and contributing to areas likeremote medical surgery and early breast cancer screening. These efforts have demonstrated the pivotal role played by MGI in drivinginnovation within medical technology and fostering enhancements in public healthcare practices.In terms of sustainable development, we have actively supported the United Nations Sustainable Development Goals. We collaborat-ed with Indonesia's National Research and Innovation Agency (BRIN) to enhance the preservation of marine biodiversity. Further-more, we also applied high-throughput gene sequencing technology to agricultural molecular breeding and disease prevention andtreatment, accelerating to achieve the objective of sustainable development.Looking into the future, we are committed to upholding our aspiration of confronting research challenges while remainingdown-to-earth in addressing the intricate complexities of life sciences. We will continue to enhance our capabilities in supportinghuman health, agricultural breeding, and environmental protection, exploring the endless possibilities of life sciences.
0102
Chairman of the Board
MGI Tech Co., LtdWang Jian
InternationalR&D and Production
Center
USALatviaWuhan, ChinaChangchun, ChinaKunshan, ChinaQingdao, China
上海BrazilMexico
Canada
UK
Sweden
Saudi Arabia
AustraliaSingaporeMalaysiaTurkeySpainFrance
Germany
IndiaThailand
Shanghai
InternationalProduction and Sales
DomesticProduction
Technical Supportand Part Production
New BusinessDevelopment
Future Businessand Production
InternationalProduction and SalesDomestic R&D,Production and Sales
JapanHong Kong,China
InternationalProduction and Sales
Taiwan
APACCommercial Center
HeadquarterShenzhen, China
Netherlands
South Africa
South Korea
Singapore
Guangzhou
BeijingVietnam
0304
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life Science
Innovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Company ProfileMGI Tech Co., Ltd. (referred to as “MGI”, stock code: 688114.SH)was established in 2016, with a vision to “Leading Life ScienceInnovation”. We are committed to developing and promotingadvanced life science tools for future healthcare. Our primaryfocus lies in the R&D, production, and sale of instruments,reagents, and consumables in the sectors of life sciences andbiotechnology. By offering real-time, whole picture, and life longdigital equipment and systems, we provide invaluable support toindustries such as precision medicine, precision agriculture, andprecision healthcare.The Company’s main business covers three major segments:
genetic sequencers, laboratory automation, and new business.Leveraging core technology, we provide customers with core tools
for life science research and applications, committed to building anopen, cooperative, and win-win industrial ecosystem. We advocatefor collaborative innovation with partners to expand the industrialvalue of life science. The Company is headquartered in Shenzhen,China, with 23 branches and subsidiaries in Wuhan, Changchun,Qingdao, Kunshan, Hangzhou, etc. in China, as well as 24overseas subsidiaries in Hong Kong (China), the United States,Japan, Latvia, Germany, Singapore, the Netherlands, Serbia,Australia, etc. To achieve business segment and industry synergy,market accessibility, and optimal resource allocation we haveestablished nine global R&D centers located in Shenzhen, Wuhan,Qingdao, Changchun and Kunshan, the United States and othercountries and regions.
About MGI Tech
Genetic SequencersLaboratory AutomationNew BusinessFounding of MGI Business presence in more than 100
countries and regions on six continents
More than 2,800 users worldwide
2016100+2,800+
The Global Reach of MGI
Company Milestones
2013Acquisition of US-based CompleteGenomics
2023DNBSEQ-G99 genetic sequencer obtained the MedicalDevice Registration Certificate from NMPAMGI was awarded the 24th China Patent Gold Award, thefirst gold award in the gene sequencing industry.Release of the DNBSEQ-T20×2, an ultra-high-throughputsequencer that sets new records for throughput andper-sample costRelease of MGICLab-LN series automated liquid nitrogenstorage systemsRelease of DNBelab C-TaiM 4 single-cell droplet generatorThe European Patent Office declared the Illumina patentinvalid, enabling MGI sequencers to be sold in multiplecountries.Launch of the DCS Lab 2023 Global Scientific ResearchEmpowerment Program, with plans to establish the firstbatch of ten facilities.Launch of the first CEC in South KoreaEstablishment of the first αLab in Hong Kong (China)MGI’s subsidiary Complete Genomics announced theconstruction of a production base in the United States.
Launch of HotMPS high-throughput sequencing reagents in theEuropean marketLaunch of TQ01, our independently developed magnetic beadproduct that has successfully achieved mass productionRelease of the first digital sample preparation system DNBe-lab-D4 that adopts the innovative digital microfluidic technologyLaunch of the new generation miniaturized genetic sequencerDNBSEQ-E25Release of the medium-to-low throughput genetic sequencerDNBSEQ-G99Launch of genetic sequencers compatible with HotMPS sequenc-ing reagents in the UK marketA settlement with Illumina for all lawsuits in the United States,resulting in the subsidiary CG being awarded $325 million indamages, and marking the official commencement of “GlobalAccess Mode”Opening of the first Customer Experience Centers (CECs) in theUK, Germany, Latvia, Japan and other locationsListing on the Science and Technology Innovation Board of theShanghai Stock Exchange with the stock code 688114.SH
2021DNBSEQ-T7 genetic sequencer,DNBelab D & DNBSEQ E “benchtop”sequencing laboratory, won theGerman iF Industrial Design AwardRelease of the high-throughputautomated nucleic acid extractionsystem MGISP-NE384Release of the automated samplepreparation system MGISP-Smart 8and MGICLab-LT series of ultra-lowtemperature automated biobankLaunch of the reagent production lineat the Qingdao production baseLaunch of MGI CEC Australia
2020
The ultra-high-throughput genetic sequenc-er DNBSEQ-T7 passed the emergencyapproval procedure of China’s NationalMedical Products Administration (“NMPA”)and became one of the first medical devicesofficially approved to be marketed for publichealth prevention and controlGenetic sequencers, the high-throughputautomated virus nucleic acid extraction kitand robotic ultrasound systems all assistedthe frontline of domestic and internationalpublic health prevention and control efforts.The automated sample transfer processingsystem MGISTP-7000 received the MedicalDevice Registration Certificate from NMPA.Launched the DNBSEQ-Tx large-scalegenomics one-stop patformThe MGI Wuhan “Intelligent Manufacturingand R&D Base” broke ground.
2019Launch of the Global SequencerUser ProgramRelease of DNBelab C Cellomics,digital sample preparation systemDNBelab D series, portablesequencer DNBSEQ E series, andother productsOfficial launch of the Latviaproduction base
2018The gene sequencer BGISEQ-50 and robotic ultrasoundsystem MGIUS-R3 won the iF Design AwardLaunch of the ultra-high-throughput genetic sequencerDNBSEQ-T7Launch of the high-throughput automated sample prepara-tion system MGISP-9602016Official founding of MGI TechLaunch of genetic sequencer BGISEQ-50
2017
ISO13485 certification for medical device quality managementsystemLaunch of the high-throughput gene sequencers MGISEQ-2000and MGISEQ-200Launch of the automated sample preparation system MGISP-100Launch of the robotic ultrasound system MGIUS-R32015Launch of the fully integrated “supersequencer” RevolocityLaunch of the high-throughput “benchtop”genetic sequencer BGISEQ-500
0506
2022
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Corporate AwardsProduct and Technology Honors
0708
Company
Awards
2019 “Mass Entrepreneurshipand Innovation” Pilot Demon-
stration Enterprise in theManufacturing Industry
Listed in 2020 MIT TechnologyReview “50 Smartest Compa-
nies”
Ministry of Industry andInformation Technology (MIIT)
Department of Economy andInformation Technology of Hubei
ProvinceDepartment of Economy andInformation Technology of Hubei
ProvinceNational-level Specialized and
Innovative “Little Giants”Enterprise
Second Prize of 2021 Science
and Technology Awards of
Hubei Province
Hubei Province Manufacturing
Leading Model Enterprise(2022-2024)
MIT Technology ReviewHubei Provincial People's
Government
Key Industry “Chain Leader”Enterprise of Strategic IndustryCluster in Guangdong ProvinceDepartment of Economy andInformation Technology ofGuangdong Province
Listed in GlocalIN Top 50
Technology Faces of Chinese
Global Enterprises
MIT Technology Review, DeepTech,
LinkedIn China
Included in the 9th InternationalPrestige Brand and the 20thWell-known Brand in Shenzhen
United Nations Industrial Develop-ment Organization and Shenzhen
Well-known Brands Evaluation
Committee
Included in 2023 AnnualRankings of Chinese Listed
CompaniesNational Business Daily
Listed Among China's Top 100ESG Pioneer Listed Companies
in 2023Times Media Group
2023 Annual Outstanding
CSR Award
Thinking Finance, Investor China
Included in China Global Next
50 List 2023
Equa LOcean
Included in National-levelSingle-product ChampionEnterprises (The Sixth Batch)
Ministry of Industry and InformationTechnology (MIIT) of the People’sRepublic of China
Outstanding Achievement Award inScientific Research in HigherEducation - First Prize for Innova-tions in Science and TechnologyMinistry of Education of the People’s
Republic of China
Ministry of Industry and InformationTechnology (MIIT) of the People’s
Republic of China, and NationalHealth Commission of the PRC
China National Intellectual PropertyAdministration, and United NationsWorld Intellectual Property Organiza-
tion (WIPO)
2018, 2021, and 2023 GermaniF Industrial Design AwardiF Iudustrie Forum Design
First Prize in the 4th “BlossomCup” 5G Application Competition
2023 American National Medal of
Science and National Medal ofTechnology and Innovation RD
100 Awards
Ministry of Industry and InformationTechnology (MIIT) of the People’sRepublic of China, and ShenzhenMunicipal People’s Government2022 China Excellent IndustrialDesign Award - Bronze AwardMinistry of Industry and InformationTechnology (MIIT)
2022 and 2023 Golden BridgeAwards for Business Innovation
Globee? Awards
R&D World
The 3rd US BioTech Breakthrough Awards - 2023“High-throughput Sequencing Platform of the Year” Award
BioTech Breakthrough Awards2023 MUSE Design Awards
MUSE CREATIVE AWARDS, American Alliance ofMuseums (AAM), and International Awards Association
(IAA)
The 20th, 22nd China Patent
Excellence Awards, the 24thChina Patent Gold Award and theExcellence Award
25 Excellent Applications ofRobots in the Medical Field
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
0910
As a leading high-end medical device company in China, MGI hasalways integrated the vision of “To Develop and PromoteAdvanced Life Science Tools for Future Healthcare” into its corpo-rate DNA. With the vision of “Leading Life Science Innovation”, wefirmly support the United Nations’ 2030 Agenda for SustainableDevelopment. By integrating the concept of sustainable develop-ment into our corporate strategy and operations, we aim tocomprehensively enhance the Company’s sustainable develop-ment capabilities and business resilience, thereby contributing tothe realization of long-term value creation. At the same time, theCompany is dedicated to meeting the needs of its stakeholders inthe ecosystem, including employees, supply chain partners,customers, as well as the local community and institutions,promoting sustainable development of the ecosystem and society.MGI's short-term roadmap, spanning from 3 to 5 years, is centeredaround an evaluation process for material topics that involves both
internal and external stakeholders. This is complemented by theestablishment and improvement of a special internal governanceframework that encompasses the sustainable development team,employees, in-house experts, and the board of directors.Moving towards the midterm (5 to 10 years) and long-term (10 to30 years) strategies, MGI will focus on the critical issues highlight-ed in the United Nations Sustainable Development Goals (SDGs)and pertinent global climate scenarios, ensuring alignment with itsbusiness model and global presence.This comprehensive approach to sustainable developmentenables MGI to significantly reduce risks, and generates tangiblevalue by appealing to customers, new talents, and investors, whilefostering innovation.
Sustainable DevelopmentTransform
Vision: Leading Life Science Innovation
Mission: To Develop and Promote Advanced Life Science Tools for Future Healthcare
Values: Curiosity, Application of Knowledge, Working for the Betterment of Mankind
“Three Good” Culture: Stay Healthy, Study Well and Work Hard
Sustainable Development ManagementSustainable development has become a global focal point and a shared pursuit among governments, businesses, and the public. In 1987, the themereport Our Common Future, submitted by the World Commission on Environment and Development to the United Nations General Assembly, firstsystematically expounded the concept of sustainable development and derived from it the “three principles of sustainable development” - sustain-ability, fairness, and commonality. In 2015, the United Nations proposed 17 Sustainable Development Goals (SDGs), fostering a global consensuson sustainable development that can be universally embraced.We firmly believe that a complete ESG (Environmental, Social, and Governance) management mechanism is of great significance for the top-downimplementation of sustainable development strategies throughout all levels of the organization. In alignment with pertinent laws, regulations, andrequirements for listed companies’ governance, the Company will constantly improve its corporate governance structure, optimizing internalmanagement, establishing a comprehensive risk control mechanisms, and proactively fostering the construction of a responsible business ecosys-tem.
MGI Tech places a high priority on addressing the diverse needs of stakeholders. By establishing multiple communication channels, we activelylisten to a range of perspectives on the Company’s sustainable development. These channels serve as a crucial foundation for refining our opera-tional policies and sustainable development strategies. Our approach to meeting the expectations and requirements of all stakeholders is outlinedas follows:
Stakeholder CommunicationAdvance the implementation and executionof ESG initiatives
Collect and compile data required for theannual ESG report
Drive and monitor theimplementation of ESG-re-lated tasks, coordinatingwith the executive team
Verify the accuracy ofcontent and performancedata in the annual ESGreport
Regularly report theprogress of sustainabledevelopment efforts to theBoard of Directors
Lead and supervise the Company’s sustainabledevelopment efforts, including the approval of ESG-re-lated plans, objectives, and systems
Review the annual ESG report
MainStakeholders
Expectationsand Demands
Company’sResponseApproaches
Value creationSteady operationsStandardized governanceSustainable developmentDrive business growthImprove corporategovernanceEnsure timely informationdisclosureDevelop sustainablebusiness strategies
Protection of rights andinterestsOccupational health andsafetyTraining and promotionCompensation and benefitsSign labor contractsEnsure safe productionEnhance training systemsand promotion mechanismsImprove compensationincentives and welfaresystems
Honest fulfillment ofcontractsOpen, fair and justprocurement
Perform contracts inaccordance with the lawEstablish standardmanagement systemsBuild a responsible supplychain
Compliant operationsLegal taxationAdherence to business ethicsEconomic development andemployment
Community developmentEnvironment protectionRational resource utilizationSocial contributionAbide by laws and regulationsPay taxes honestlyStrengthen supervisionHire locally
Honest fulfillment of contractsBusiness ethics andtransparencyInnovative R&DOccupational health andsafetyConduct project cooperationFocus on building businessethicsIncrease R&D and collabora-tive effortsEnhance occupational healthand safety management
Engage in community exchangesOperate with environmentalresponsibilityManage resources transparentlyParticipate in public welfareactivities and charitabledonations
Company businessprogressRights and interests ofemployeesEnvironmental and socialresponsibilityRelease company newsOrganize company opendaysFacilitate media interviews
Product qualityInnovative R&DCustomer serviceStable supplyTest product qualityIncrease R&DinvestmentOptimize customerserviceSign long-termagreements
Shareholders and investorsPartners
Government andregulatory bodiesEmployeesCommunityPublic and mediaCustomersSuppliers
Board of Directors andSenior Management
Sustainable Develop-ment Working Group
Executive Team
1112
About MGI Tech
Sustainable Development
Transform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
To clarify the focus areas of our ESG initiatives at MGI, we have identified relevant ESG topics by integrating global sustainable development trends,the current development stage of MGI, material topics within the medical device sector, and insights from research on potential topics gathered fromboth internal and external stakeholders.
Material Topics Identification
Identification, Assessment, and Review Process of Material Topics
Material Topics
Topics identificationTopics assessmentTopics review
MGI ESG topics identification matrix
Analyze the sustainable develop-ment context in which theCompany operates;Align stakeholder expectationsand demands with the Company’sbusiness development;Refer to standards and guidelinessuch as MSCI (Morgan StanleyCapital International), SASB(Sustainability AccountingStandards Board), and the UnitedNations Sustainable DevelopmentGoals (SDGs); andExamine the sustainable develop-ment/corporate social responsibili-ty strategies, management, andmaterial topics reflected in thereports of peer companies.
The Company ’s leadershipreviews the assessment results ofthe topics in line with the Compa-ny’s development strategy, whilefunctional departments reviewthem based on managementpractices. Together, they ultimatelyconfirm the core topics and theirsignificance for MGI, taking intoaccount external expert advice.
Develop the MGI Material TopicsQuestionnaire and conduct opinionsurveys among the eight internaland external stakeholder groups,including shareholders, investors,customers, employees, and others;andSelect core topics throughquestionnaire results analysis,interview with internal and externalstakeholders, and expert assess-ments, rank their importance, andprovide detailed disclosure in theReport.
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?
Social?
Environmental?
Governance
?
Biodiversity
?
Genomic accessibility?
R&D innovation
?
Precision medicine?
Genomic Sequencing?
Product quality
?
Talent team building
?
Customer service
?
Promoting industry development
?
Employee training and development
?
Employee rights and interests protection
?
Employee compensation and benefits
?
Waste management
?
Rural revitalization?
Community relations
?
Public welfare and charity
?
Occupational health and security
?
Diversity and inclusiveness
?
Responsible business operations?
Supply chain management
?
Carbon emissions
?
Environmental management
?
Resource management
?
Chemicals management
?
Data security and privacy protection
?
Corporate governance
?
Compliance operations
?
Risk management
?
Intellectual property rights management
high
highlow
Importance to Stakeholders
Importance to the Growth of MGI
About MGI Tech
Sustainable Development
Transform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Tools for Identifying Key ESG Risks and Opportunities
MGI’s products are sold worldwide andare subject to national and supranationalcompetition laws and anti-monopolyrules. Non-compliance can lead to finesand affect the Company’s reputation.
Corruption is defined as the misuse ofauthority for personal benefit. It maymanifest through the actions of thirdparties, including partners, suppliers,agents, and customers, and can exert arange of detrimental effects on theCompany:
? Reputation? Legal? Financial? Company development? Employer brand
By having compliance officers provideadvance warnings for market monopolisticbehaviors, as well as conducting mid-pro-cess and post-event reviews, and offeringemployees compliance advice and guidanceon anti-unfair competition, ensure that allcorporate operations, decisions, externalcooperation, and development plans complywith anti-unfair competition laws.Establish an integrity portal to strengthen aculture of integrity; enhance internalcommunication and training;Establish an internal complaint and reportingmechanism;Participate in organizations such as theAnti-fraud Alliance and the Trust andIntegrity Enterprise Alliance, among others,and establish a comprehensive blacklistsystem;Regularly communicate with stakeholderssuch as agents, customers, investors, andsuppliers, and sign integrity commitmentletters.
Elaboration of Risks and Their Impacts
BusinessConduct
Competition Law
Corruption and Bribery
Non-competitive behaviorsCompetition Compliance
Management System
Internal SupervisionManagementProcedures,Red Line ManagementRegulationsIncentive Measures forIntegrity and Self-Dis-cipline
PoliciesKey Actions
Key ESG Risks and OpportunitiesIdentifying key ESG risks and opportunities is essential not only for managing current business risks but also for seizing future development oppor-tunities, fostering continuous innovation, and enhancing competitiveness. MGI Tech conducted a comprehensive analysis of the Company’s entirevalue chain and its stakeholders, utilizing a range of internal and external tools. Following the “dual importance” principle, the Company evaluatedmajor risks based on their likelihood of occurrence and impact level to meet stakeholder expectations as much as possible.
Through the procedures outlined above, we havedelineated seven principal categories of ESG risks andfive principal categories of ESG opportunities, which areelaborated upon in the following sections:
ESG Oppor-tunities
Opportunities in Clean TechnologyContributions to Health andWellnessComprehensive Support for LifeSciences Big Data InfrastructureDiversification of IndustrialApplicationsCollaborative Ecosystems andEmpowerment
ESG Risks
Business ConductCorporate GovernanceInformation Security
ProtectionEnvironmentallySustainable OperationsProduct ReliabilityEthical WorkplaceTalent Development and ProficiencyInternal assessment
Organizational Self-Review: Review the poten-tial environmental, social, and governanceimpacts of our business activities;Employee and Management Surveys: Conductsurveys or interviews with employees atvarious levels and functional departmentswithin the Company.
External research and benchmarkingIndustry Comparison: Analyze the ESG reportsand practices of peers and competitors;Standards and Frameworks: Refer to interna-tional and industry-specific ESG standards,guidelines, and frameworks, such as GRI(Global Reporting Initiative) standards andSASB (Sustainability Accounting StandardsBoard) standards;Legal and Regulatory Requirements: Compli-ance with relevant laws and regulations is afundamental requirement for businesses.
Continuous monitoring and learning
Track Industry Trends and Policy Changes:
Changes in industry trends, policies, andregulations will continuously affect ESG risksand opportunities;Training and Education: Improve internal aware-ness and response capabilities regarding ESGissues through ongoing training and education.
Stakeholder engagement
Customer Feedback: Collect opinions andneeds from customers;Suppliers and Partners: Strengthen supplychain management and communication withpartners.
Risk and opportunity assessment tools
SWOT Analysis: Conduct an analysis ofstrengths, weaknesses, opportunities, andthreats;Scenario Analysis: Use different assumptionsand scenarios to assess how potential futuretrends might impact the Company’s ESGperformance and strategy;Materiality Assessment: Determine the mostcritical ESG topics for our business andstakeholders through materiality assessment.
1516
About MGI Tech
Sustainable Development
Transform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools for
Future HealthcareMessage From Chairman
The quality of informationdisclosure directly affectsinvestors’ confidence in theCompany, as well as theCompany's market image andstock price performance.Referring to the process of acompany complying with allrelevant laws, regulations,industry standards, companypolicies, and ethical guidelinesin its daily operations.
Establish a sound information disclosure system and processto ensure the authenticity, accuracy, and timeliness ofinformation;Strengthen communication with investors and potentialinvestors through various means.
Implement a multi-stage internal control managementprocess, including prevention, auditing, rectification, andreporting, with the aim of progressively improving compliancestandards;Organize training sessions on compliance operations andperform regular audits.
CorporateGovernance
Transparency
Compliance Operations
Information disclosure
Resource ScarcityInternal ControlManagement Proce-dures,Daily Internal ControlInspection andReporting Standards
A sound informationdisclosure system andprocess
Balancing the confidentiality,integrity, and availability ofinformation assets to ensuresecurity and businessefficiency.
Ensuring the protection of datasubjects’ rights and upholdingthe legality, fairness, andtransparency in the manage-ment of privacy data through-out the data processing
Continuously refine the information security organizationalstructure and management system, and perform routinesecurity audits to ensure that all measures adhere to industrystandards;Conduct comprehensive information asset identification, riskassessments and mitigation across all business units,processes, and personnel;Bolster employees’ information security awareness byproviding annual online training and assessment programs,and fortify the security team’s operational readiness throughperiodic phishing exercises and simulated attack scenarios.Sequencers DNBSEQ-G99, DNBSEQ-T20×2, DNBSEQ-T7,and MGISEQ-2000 (DNBSEQ-G400) have passed indepen-dent evaluations by a legal and technical team led by Dr.Jan-Peter Ohrtmann (EuroPriSe Accredited) who is a lawyer atPricewaterhouseCoopers in Germany, as well as the securitytest of the China Academy of Information and CommunicationsTechnology;Engage third-party organizations to conduct security capabilityassessments, vulnerability scans, and to award certificationsfor product security, ensuring that multiple products meet thestandards required for registration review and GDPR compli-ance.FTI Consulting, a leading US-based consultancy specializingin information security, conducted a comprehensive review ofthe Company’s DNBSEQ-T7 (“T7”), including network monitor-ing,vulnerability assessment, hardware evaluation, and sourcecode analysis. The findings revealed that T7 poses no risk ofprivate data leakage during outbound and external IP commu-nications during genome sequencing and functional analysis,and has no source code or network vulnerabilities.
Information
SecurityProtection
Operational Security
Product Security
Established proce-dures for product dataand privacy protection,processes forresponding to datasubjects’ rights,confidentiality systems,and comprehensiveprivacy policies
Information AssetIdentification and RiskAssessment Guide,Information SecurityOperations andMaintenance Manage-ment Procedures
Improper handling of “three wastes”(i.e., wastewater, emissions, and solidresidues) can result in substantialenvironmental harm, impact neighbor-ing communities, and endanger publichealth.
Price fluctuations, availability ofmaterials and resources? Increase in raw material and energycosts? Supply interruptions
Allocate fund and technology to introducecutting-edge waste treatment equipment andtechnologies;Engage third-party organizations for routineenvironmental monitoring services;Ensure a comprehensive and efficient wastedisposal system by entrusting the recycling anddisposal of waste to qualified environmentalcompanies, adhering to rigorous standards.Establish clear performance indicators andchallenging goals to motivate suppliers tocontinuously improve their delivery quality; andConduct quarterly performance evaluations ofsuppliers, with assessment criteria including, butnot limited to, quality, delivery time, service, andcost.
Environ-mentallySustain-ableOpera-tions
Waste Management
Resource Utilization
Supplier ManagementProcedure,Supplier Material ChangeManagement Specifica-tion,Supplier Quality Manage-ment Specification
Energy ConsumptionThe impact of energy consumption onbusinesses is primarily reflected in cost,competitiveness, environmental impact,and sustainable development. It iscrucial to emphasize energy conserva-tion and emission reduction, enhancethe efficiency of energy use, and reduceoverall energy consumption.
Actively implement systematic monitoring, control,and optimization of energy consumption toconserve energy and lower energy costs;Develop energy-saving and consumption reductionplans, introduce high-efficiency benchmarks andenergy management platforms, and adoptmeasures such as renewable energy and photovol-taic power to support the carbon verificationprocess and help achieve the dual carbon goals.
Improved systems andprocesses for manag-ing energy consump-tion
A stringent wastemanagement systemthat oversees wastegeneration, handling,and disposal at everystage
Malfunctions or failures in products maylead to:
? Liability for both tangible andintangible damages to partners andindividuals;? Costs associated with product recalls,new development expenditures, and theutilization of technical and economicresources; and? Expenses related to new or morestringent quality and safety controlstandards or regulations, which mayrequire capital investments or specificcompliance measures.
Establish a well-defined and efficient qualitymanagement organizational structure with theCEO as the primary responsible person forquality and safety, the Executive ManagementTeam (EMT) as the operational decision-makingbody, and the Global Quality System VP as thecoordinator;Promote continuous improvement and leanproduction by establishing the MBS MGI LeanSystem, which focuses on enhancing andinnovating in lean research and development,logistics, production, quality, assembly, andsupply chain; andDesign and implement a series of specializedquality management training programs.
Safety Issues with Defective Products
Medical Device ProductDesign and DevelopmentManagement Procedure,Production ManagementProcedure,Customer ServiceManagement Procedure,Quality Control Proce-dure,Nonconforming ProductControl Procedure, andRecall ManagementProcedure
1718
Elaboration of Risks and Their ImpactsPoliciesKey ActionsElaboration of Risks and Their ImpactsPoliciesKey Actions
ProductReliability
About MGI Tech
Sustainable Development
Transform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
As its application expands and technologicalbreakthroughs occur, the market for geneticsequencers and consumables continues toexperience rapid growth. This brings MGI Techincreased market demand, opportunities fortechnological innovation and research anddevelopment, advancements in data analysisand bioinformatics, as well as opportunities forcollaborations in the medical and health fields.
Relying on core technology and closely following the trends of “minia-turization” and “ultra-high throughput” in genetic sequencers, MGIhas laid out its sequencing instrument products into three majorseries: the T series, G series, and E series. This is to build a high/me-dium/low throughput comprehensive ecosystem that covers multiplescenarios, meeting users' diverse needs in various applicationscenarios.Compre-hensiveSupport for
LifeSciencesBig DataInfrastruc-
ture
Deepening Innovation in Genetic Sequencing Technology
Through independent research and develop-ment and strategic partnerships, we provideone-stop equipment and system platform forthe digitization of life, which can bring moremarket opportunities and higher brand value toMGI Tech.
Continuously advance our laboratory automation business, with astrategic focus on developing a comprehensive suite of digital equip-ment and systems for digitization of life. This includes the introduc-tion of innovative products such as the BIT product line, single-cellplatform, remote ultrasound robot, and ultra-low temperatureautomated biological sample libraries.
Causing harm or illness to employees:
? Loss or impact on employees? Loss of productivity? Property damage? Impact on company image? Impact on customer confidence? Fines
Regularly conduct activities such as SafetyProduction Month, Fire Safety Month, and onlinesafety training, and utilize official WeChat publicaccounts and video platforms to disseminatesafety knowledge, fostering a safety culture;Organize annual fire drills, chemical emergencyresponse drills, and biological spill drills toenhance employees’ emergency awareness andprotective skills.EthicalWorkplace
Health and Safety
EHS CommitteeManagement Procedures,EHS Objective Manage-ment Procedures,Hazardous ChemicalSafety ManagementProcedures,Chemical LaboratorySafety ProductionManagement Regula-tions, andEmergency Preparednessand Response ControlProcedures
The inability to attract, develop, andretain top talent in the market, particu-larly in areas with critical skills, maylead to:
? Recruitment and onboarding costs? Gaps in key skills? Undesired perception on talent brand
Conduct regular talent assessments and formu-late targeted development plans, which includeoffering a diverse range of training programs,cross-departmental job rotation opportunities,and cross-departmental job rotation opportuni-ties;Provide employees with comprehensive benefitsand support; andFoster the “Three Good” cultural ethos, demon-strating respect for individual lives and a commit-ment to the practice and pursuit of life sciences.
CompensationManagement Proce-dure,Talent DevelopmentManagement Process
Standardize the employee recruitment and entryprocesses to eliminate all forms of discriminationand bias;Facilitate cross-cultural exchanges to foster theintegration of global teams;Implement the “Female Employee Care andSupport Program”, offering comprehensivecareer development opportunities, and institutingholiday and subsidy policies tailored for femaleemployees, all while prioritizing their health andwell-being.
Recruitment Manage-ment Process,Position CompetencyCertification Manage-ment Standards
Fairness, Diversity, and InclusivenessFailing to provide equal opportunitiesfor all can limit our ability to attract andretain top talent.? Turnover costs? Loss of female executives? Legal issues? Company image
Inclusive Workplace
Recruiting and Retaining Talent
TalentDevelop-ment andProficien-cy
Design and manufacture low-carbon, environmentally genetic products,and conduct carbon footprint assessments on certain gene sequencers;Integrate the concept of green innovation into product development,striving to make positive contributions to environmental protection atevery stage of realizing product value;Establish the “eDNA metabarcoding” technology associated withhigh-throughput sequencing and eDNA sequences, and release environ-mental eDNA metabarcoding sequencing combination products based onthe ATOPlex multiplex PCR technology and the DNBSEQ sequencingplatform. These products will offer a comprehensive, end-to-end monitor-ing platform for environmental DNA, encompassing the entire workflowfrom sample collection to the delivery of final analysis results.
Increased global attention to climate changehas led to a growing demand for low-carbon,environmentally friendly products fromconsumers and businesses. The opportunitiesbrought by MGI in the development andproduction of low-carbon products include:
? Meeting market demand and seizing growthopportunities? Accessing funding and technical support? Enhancing the image in sustainable develop-ment and corporate social responsibilityPrecision medicine marks a significant revolu-tion in the medical field, providing patients withmore precise, efficient, and safe medicalapproaches by utilizing modern technologies,particularly genetics, bioinformatics, and dataanalysis techniques.
Leveraging the strengths of DNBSEQ technology, we are dedicatedto consistently meeting the needs of various application scenariossuch as whole-genome sequencing, targeted sequencing, andmetagenomics sequencing workflows. We aim to offer more automat-ed, user-friendly, and efficient core tools for the monitoring, earlydetection, diagnosis, and management of public health events.
Elaboration of Opportunities and Their Impacts
Opportuni-ties inCleanTechnology
Low-carbon Products
Precision Medicine
Key Actions
A Comprehensive Deployment of Digital Equipment and Systems for Life Sciences.
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Elaboration of Risks and Their ImpactsPoliciesKey Actions
Contribu-tions toHealth and
Wellness
About MGI Tech
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Advancing Life Science Tools forFuture HealthcareMessage From Chairman
The development of genetic sequencing technologyhas provided deeper and more comprehensivegenetic information, bringing forth greater possibili-ties and opportunities in fields such as personalizedmedicine, novel drug development, crop improve-ment, disease prevention and control, as well asenvironmental protection and ecological research.
Beyond the relatively mature healthcare sector, we have introducedthe “New Ten-Ten” research and development initiative, aiming todevelop ten specific segments and create ten exemplary applica-tions, thereby expanding the scope of new industrial applications.
This approach presents opportunities acrossmultiple dimensions, including partnership, marketprospects, technological innovation, serviceenhancement, and resource integration, contribut-ing to the enhanced competitiveness and brandreputation.
We are committed to fostering an environment of open collaboration,empowering the downstream ecosystem, and championing partner-ships with innovative enterprises both domestically and international-ly. Our efforts are directed towards driving industry technologicalinnovation, facilitating the application of research findings, ensuringcompliance with qualifications, and advancing educational outreach.
Diversifi-cation ofIndustrialApplica-tions
Collabo-
rativeEco-sys-tems andEmpow-erment
Diverse Application Scenarios
Industry Ecological Construction
This initiative presents opportunities for technologyintroduction, international collaboration, talentacquisition, market expansion, and financialsupport, collectively contributing to strengtheningdeveloping talents research capabilities, broaden-ing market reach,developing talents and accelerat-ing innovation.
We are launching the DCS Lab 2023 Scientific Research Empow-erment Program, aimed at global top-tier scientific experiments;and introducing the next generation of sequencing reagents,StandardMPS 2.0, which inaugurates the era of Q40 quality ingenetic sequencing.
Global Scientific Research Empowerment
Omics research offers a novel research perspectiveand technological means, providing extensiveopportunities to delve deeper into the fundamentalunits and regulatory mechanisms of life. It serves asa scientific foundation for sustainable societaldevelopment.
To meet diverse customer demands, a comprehensive sequencingproduct line has been developed, covering a range from low-through-put to ultra-high-throughput data production capabilities. Thiscomprehensive line supports the research and development ofomics.
Development and Application of Omics Research
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Elaboration of Opportunities and Their ImpactsKey ActionsTools for Measuring Sustainable DevelopmentIn 2023, we undertook a thorough review of our company's ESG efforts. We utilized two complementary tools for this assessment: the SustainableDevelopment Impact Index and the Sustainable Development Basic Element Index. These tools helped us establish a baseline for our company'ssustainable development, providing a foundation for the comprehensive development of quantifiable performance indicators and for tracking theprogress of our sustainable development strategies. The Sustainable Development Impact Index operates on the dual principles of financial andimpact importance. It integrates a range of indicators and assessment methods to gauge the extent of a company's influence on environmental,social, and governance (ESG) issues. Meanwhile, the Sustainable Development Basic Element Index places greater emphasis on foundationalaspects, pinpointing key indicators that measure the Company’s performance in these crucial areas. Moreover, our tools are designed to align withthe SDGs, facilitating the tracking of sustainable development performance and the disclosure of reporting. MGI remains dedicated to upholding itssustainable development goals, reinforcing the implementation of corporate social responsibility
Focus on risk exposuresand risk mitigation
actions
Address forward-look-ing issues
Balance the needs ofstakeholders
Transparent reportingand disclosure
mechanisms
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Sustainable Development StrategyIn response to numerous environmental and social challenges arising from climate change, health crises, and poverty, MGI actively assumescorporate citizenship responsibilities. We firmly integrate the concept of sustainable development into every aspect of its business value chain,aiming to strike a balance between commercial success and sustainable development. Meanwhile, MGI aligns its ESG management strategy withthe United Nations Sustainable Development Goals (SDGs), pursuing to generate sustainable value for employees, customers, and communities.
ESG ManagementStrategiesObjectives andCommitments
2023 Development
Highlights
Leading Life Science InnovationAdvancing Life Science Tools for Future HealthcareLeader in Compliance GovernanceValue Growth PartnerGuardian of Our EnvironmentInnovation in intelligent manufacturing,leading life sciences and technology
2023 Goal: To continuously invest in core technolo-gy research and development to provide globally
leading technology products.
Promoting biodiversity conservation and
green and low-carbon developmentTo operate responsibly and improve the
business environment
To embrace diversity and inclusiveness,and practice social responsibility
The release of DNBSEQ-T20x2 marks themilestone: the cost of per 30x whole genomesequencing has dropped from over US$3 billion
to below US$100.The Company supported the early launch andexecution of 47 large population cohort projectsworldwide.Modular, automated, and storage productportfolio were provided, with an annualthroughput capacity of 10,000 cases.The Company supported the Million Microbi-omes from Human Project (MMHP), supportingsequencing for over 130,000 samples.The DCS Lab 2023 Scientific ResearchEmpowerment Program was launched, initiallyallocating resources to support 10 cutting-edgeomics laboratories worldwide.Nearly 100 products from more than 20third-party international brands have joined theLIFE2GETHER online information sharingplatform.
Investment in R&D amounted to RMB0.91 billion,an increase of 11.74% year-on-year, accounting for
31.26% of the operating income
We have applied for 461 new patents and softwarecopyrights, successfully obtaining 283 patentauthorizations and software copyright registrations,among which 118 are invention patents.Annual new sales of genetic sequencers reached854 units, a year-on-year increase of 41.39%
The overall customer satisfaction for MGI reached
95.1 scores.
Our business has spanned across more than 100countries and regions worldwide, serving over2,800 users.We have acquired 142 new product qualificationcertificates, with a total of 329 qualificationcertificates obtained worldwide.
A total of nine legal entities haveobtained ISO 27001 informationsecurity management system certifica-tion issued by SGS, an internationallyrecognized certification body.The exam rate for information securityand data protection reached 98%.Our products are registered andcertified in over 20 countries and haveaccess to more than 90 markets.The Company organized and conductedfour internal control inspections and fiverisk-specific optimizationsA total of 1,440 employees receivedintegrity training.The total amount of taxes paid was
RMB 286.88 million
The Company created job opportunitiesfor 2,867 people, including 536overseas employees and 1,224 femaleemployees.Total social donations reached RMB
1,929,853.84throughout the year.
Employees received a total of 126,680
hours of training.
There was zero recorded cases ofoccupational diseases or accidents ofLevel III and above involving account-abilityWe conducted genetic sequencingbenefiting nearly 10,000 people.
Three core products were verified under ISO14067 for their carbon footprint.The Company implemented multiple energy-sav-ing measures, resulting in an annual cumulativesaving of 1.4 million kWh in electricity.New R&D centers in Shenzhen and Wuhan weredesigned with a focus on energy efficiency, andthe Qingdao base was awarded a clean produc-tion certification.
Pollution control product portfolio were optimized,saving approximately RMB 1 million annually inrelated costs and ensuring compliance withreduced pollutant discharge permit levels.
All global research and production basesmaintained a 100% environmental compliancerate.Cumulatively supported over 3,000 studies of thecomprehensive DNA sequences of the humangenome, as well as those of other animal, plantand microbial species.
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The Human Genome Project, one of the most impactful science research initiatives of the 20th century, aimed to determine the sequence ofthe human genome and explore the functions and interrelationships of human genes.To excel in any endeavor, it is essential to have the right tools. As a crucial instrument in genetic sequencing, each significant breakthroughin sequencing technology brings progress to the industry. In the 1990s, scientists worldwide initiated the "Human Genome Project" with thegoal of sequencing the 3 billion base pairs of human genome DNA to decipher genetic information. After relentless efforts, the project wasdeclared complete in 2003. Building upon this achievement, research institutions and technology companies continued to push the boundar-ies, continuously improving the performance of genetic sequencing instruments. Today, sequencing devices have gradually expanded intovarious fields of research and clinical applications. They have contributed to advancements in agriculture and played a pivotal role in advanc-ing precision medicine, offering broader possibilities for genomic research and diverse applications.
Leading Life Science Innovation
Enhancing the Accessibilityof Genomics
Expanding Diverse ApplicationScenarios
Empower Industry EcosystemDevelopmentSupporting the Advancement ofPrecision Medicine
2023-2035 Plan
Status of GoalAchievementDriving down the cost of genetic sequencing product toUS$100Supported the initial launch and execution of 60 large popu-lation cohort projects worldwideDeveloped 10 exemplary applicationsCollaborated with 1,500 medical institutionsLaunched an information sharing platform for the cohesivedevelopment of industry ecosystemSupported the “Million Microbiome” research program withover 200,000 sample sequencingSupported the implementation of 10 DCS Lab, cutting-edgeomics laboratories, around the world
Successful CompletionSteady progress
Long-term CommitmentAligned with UN SDGs
Main Objectives and Outcomes
“Upholding the vision of ‘Leading Life Science Innovation’, we will focus on expanding the accessibility of genomics, exploring new industrial applica-tion spaces, and continuously meeting the emerging demands of life and health. Meanwhile, based on our industrial advantages, we actively empowerthe construction of industry ecosystems.”
Leading Life Science Innovation
Progress of Actions
2728
Status of Goal Achievement:
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Enhancing the Accessibility of Genomics
Since its establishment, MGI Tech has adhered to the vision of “Leading Life Science Innovation”, and worked continuously to develop and promoteadvanced life science tools for future healthcare. In response to a variety of customer needs, the Company has developed a comprehensive sequenc-ing product line covering a wide range of throughput capacities, from low to ultra-high.In February 2023, MGI launched the DNBSEQ-T20×2, anultra-high throughput gene sequencer. By completing 50,000 whole genome sequencing cases annually and reducing the cost of per-person wholegenome sequencing to less than US$100, we have set a new global record in terms of sequencing instrument throughput and per-person sequencingcost. This achievement has significantly lowered the cost and accessibility barriers associated with sequencing instruments and accompanyingreagents, enhancing the availability of our products.
As genomics and sequencing technologies advance rapidly, we are on the cusp of an era that promises revolutionary transformations in our under-standing and application of life sciences. MGI has leveraged its proprietary DNBSEQ sequencing technology to develop a high-throughputsequencing platform that meets the needs for ultra-high-throughput sequencing, low costs, and complete automation from sample preparation toreport generation, thereby accelerating the progress and application of omics research.
In November 2023, the third annual BioTech Breakthrough Awards announced its winners, with MGI Tech’s ultra-high throughput sequenc-er, the DNBSEQ-T20×2 (hereafter referred to as “T20”), being selected as the “High Throughput Sequencing Platform of the Year” for2023. The introduction of the T20 not only represents cutting-edge genetic sequencing technology and advanced biotechnological produc-tivity but also signifies that the democratization of genetic technolog has become a reality, offering more possibilities for the future of genet-ic science. To date, the T20 has received five international awards, including the BEYOND Awards for Life Science Innovation, theGlobee? Awards for Business Innovation, the prestigious R&D 100 Awards in the United States, the VB-Find Award for the Top 100 MostInnovative Medical Device Products of 2023, and the BioTech Breakthrough Award. The recognition from these numerous awards reflectsthe efforts and contributions made by MGI Tech in the field of innovation technology.
DNBSEQ-T20×2 Wins Multiple International Honors
In December 2023, the first Future of Omics Summit, organized by MGITech, successfully concluded in Dubai. Themed “Leading Innovation in LifeSciences”, the summit spotlighted key topics such as metagenomics, largepopulation genomics, and precision medicine. It brought together over 100distinguished leaders from the life sciences industry to discuss and shareinsights on genomics trends and future directions, aiming to expedite thedemocratization of genomics for all. A lineup of 25 esteemed scientists andentrepreneurs from across the globe delivered keynote speeches, present-ing their groundbreaking research and perspectives in the realms of metag-enomics, large population genomics, and precision medicine.Through this summit, MGI Tech has fostered a dynamic platform for opendiscussion and interdisciplinary collaboration. It has inspired both academicand industrial sectors to pool their efforts and innovations, unlocking the fullpotential of genomics. This initiative has broken down the technical barrierswithin life sciences, steering the field of genomics toward a prosperousfuture.
Over 100 Industry Leaders Convene at MGI Tech’s First Future of Omics Summit
Mr. Duncan Yu, President of MGI Tech
Population GenomicsMGI has facilitated the initiallaunch and execution of 47 largepopulation cohort projectsworldwide. Internationally, theCompany has contributed to theinitiation of Indonesia’s first Nation-al Genome Program, Thailand’sGenomics - Thailand IntegratedAction Plan and Brazil’s nationalgenome program. In China, MGIhas supported several large-scalecohort studies involving tens ofthousands of participants, includ-ing the China Metabolic AnalyticsProject (ChinaMAP) and thepioneering STROMICS GenomeStudy, which involves deepwhole-genome sequencing andanalysis of 10,000 Chinesepatients with ischemic stroke. Bythe end of the reporting period, thecumulative data output of largepopulation cohort projects partici-pated in or supported by MGITech's T series sequencers hadexceeded 60Pb.
Cell Omics
Single-cell sequencing technology addressesthe issue of cellular heterogeneity, significantlyenhancing our ability to resolve andunderstand the intricacies of biologicalsystems. It has become a standard tool in lifescience research. Leveraging its large-scalecapabilities in raw material production andprocessing, MGI Tech has substantiallyreduced the costs associated with single-cellsequencing. This advancement allowsresearchers to more easily engage in thesingle-cell field. With MGI Tech’s strategicemphasis on high-throughput sequencing,automated sample processing and biobanking,and BIT data processing products, along withits advanced technology in spatiotemporalomics, a comprehensive one-stop platform forcellular omics have been developed. Thisenables a broader range of researchers toproduce single-cell data on a large scale and ina standardized manner. Based on thesingle-cell sequencing technology, the usershave published more than 50 scientificresearch articles, including two articlespublished in Nature and one in Cell; the totalsample data produced exceeds 30,000,spanning nearly 40 species and over 300different tissue types.
Spatial Omics
MGI, leveraging the DNBelab C4single-cell library preparationplatform and DNBSEQ sequencingplatform, has played a pivotal rolein the release of the first multi-om-ics cell atlas of the macaque braincortex. In June 2023, in collabora-tion with institutions such asZhongshan Hospital affiliated withFudan University, MGI utilized theDNBelab C4 single-cell librarypreparation platform to uncovercellular changes during tumorinvasion, which will contribute tothe development of noveltherapeutic strategies for livercancer.
Case Study
Case Study
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Expanding Diverse Application Scenarios
MGI Tech is dedicated to addressing the advanced needs of the public in areas such as medical health, food consumption, green and low-carbonliving, and biosafety, while vigorously promoting the bio-economy. In addition to the established medical health industry, the Company hasdeveloped ten specialized segments and ten exemplary applications, thereby expanding the horizons of industrial applications to meet the growingdemands for advancements in life and health.
The sequencing capabilities of the DNBSEQplatform have played a crucial role in tracingthe origin of the first imported case of monkey-pox virus in Chinese mainland, and in trackingthe dengue virus across three cities in easternGuangdong, providing essential tools tosupport the public health protection network.
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Disease Control
With our technical strength, we have estab-lished a global agricultural presence acrossthe Asia-Pacific, Australia and New Zealand,Europe and Africa, and the Americas regions,supporting various scenarios in moleculargenetic breeding, immunity and disease,environmental studies, and animal nutrition.
Agriculture
The development of high-throughput sequenc-ing education and training products tailored foreducational scenarios enables students toengage in both wet and dry lab experiments inmolecular biology and bioinformatics throughhands-on, project-based learning experiences.
Education
Our proprietary PCR-free library constructiontechnology streamlines the process byeliminating PCR amplification, thus avoidingPCR-induced biases. Coupled with theunbiased amplification sequencing technolo-gy of the DNBSEQ platform, it ensures thehighest accuracy in template preparation andsequencing, providing the most accuraterepresentation of synthetic product conditions.
Synthetic Biology
The 2022 White Paper on the Development of China’s Agricultural Molecular Breeding Industry, jointly released by MGI Tech andEO Intelligence, explores the current state and future potential of the molecular breeding field in China. The Report underscoresthe innovative nature of molecular breeding technology and the challenge of integrating this technology with the industry, oftenreferred to as the “last mile” challenge.MGI Tech plays a pivotal role in tackling this challenge, offering significant support for innovation and development in China’s seedindustry through its cutting-edge gene sequencing technology and molecular breeding platform. The Report also stresses thecritical importance of enhancing collaboration between research institutions and businesses to advance the industrialization ofmolecular breeding. MGI Tech’s professional technology platforms provide robust resources and expertise to facilitate thisprocess. With the backing of supportive policies and industry consolidation, MGI Tech is contributing to the evolution of China’smolecular breeding industry towards a more advanced and efficient future.
The Rise of China’s Molecular Breeding Industry: Overcoming the “Last Mile” Challenge
October 16, 2023 was the 43rd World Food Day, with the theme “Water is life, Water is food. Leave No One Behind”. This themeencourages countries to collaborate in protecting water resources for a better and more sustainable food future for all, focusingon the future of food, humanity, and the planet.MGI Tech, in collaboration with the University of Queensland and the University of Adelaide in Australia, launched a globalresearch project for doctoral students. The project will utilize MGI Tech’s ATOPlex and sequencing platforms to monitor antimicro-bial drug resistance in aquatic environments. The goal is to assess the environmental impact of sewage discharge by tracking thespread of antibiotic-resistant bacteria (ARB) and antibiotic-resistant genes (ARG) in wastewater. This monitoring will provide afoundation for pollution management and ecosystem conservation efforts. Additionally, the project aims to develop anomics-based analytical framework to evaluate the risks associated with ARG.
World Food Day | Jointly Initiating “Research Project on Monitoring Antimicrobial Drug Resistance” with Two AustralianUniversities
In June 2023, the Shenzhen Center for Disease Control and Prevention (Shenzhen CDC) successfully traced the origin ofShenzhen’s first monkeypox case using a suite of MGI Tech’s targeted sequencing products for pathogenic microorganisms. Thistracing employed a monkeypox virus-specific sequencing panel developed with MGI Tech’s ATOPlex multiplex PCR technology,which facilitated the enrichment of the monkeypox virus genome and the construction of sequencing libraries. The process wasintegrated with the MGISP-960 high-throughput automated sample preparation system, streamlining the experimental workflow.The sequencing data were analyzed using MGI Tech’s MPXV software package, enabling the identification of mutation sites,consensus sequences, and monkeypox virus lineages. This approach yielded highly credible full-length virus strain sequences ina short timeframe.
Shenzhen’s First Monkeypox Virus Origin Tracing: Application of MGI TechnologyCase Study
Expanded 7 innovative applicationsin the year, facilitating to expand the fieldKey Performance
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Supporting the Advancement of Precision MedicineWith the rapid advancement of human genome sequencing technology, the swift development of biomedical analysis techniques, and the increasingsophistication of big data analysis tools, we are entering a new era of healthcare known as precision medicine. Leveraging the advantages ofDNBSEQ technology, MGI Tech is continuously dedicated to fulfilling the needs of various applications, including whole genome sequencing,targeted sequencing, and metagenomic sequencing. This commitment provides more automated, convenient, and efficient core tools for themonitoring, early warning, diagnosis, and management of public health events.
In the new era of precision oncology, Dr. Marie-Laure Yaspo, co-founder and chief scientist of the German biotechnology companyALACRIS Theranostics, along with Chinese researchers such as Dr. Gao Xuan and Dr. Fang Huan, Assistant Directors of the GeneResearch Institute at GenePlus, are diligently working to bridge the healthcare gap through evidence-based cancer strategies. With thesupport of advanced life science technologies from MGI Tech, they aim to enhance the entire healthcare process for patients, fromprevention to treatment.The molecular landscape of tumors is intricate and distinct, and only by gathering comprehensive tumor mutation data can personalizedtreatment be significantly improved. To capture the unique characteristics of each tumor type, the research team initiates their analysiswith tumor biopsies, using MGI Tech’s highly accurate sequencing platform to generate sequencing data. This data is then integratedwith other tools to produce a comprehensive tumor analysis report. The platform’s high flexibility and rapid turnaround time facilitatereliable diagnoses for a wide range of patients.
The Road to Conquering Cancer
In October 2023, the Department of Urology at the People’s Hospital of Qijiang District, Chongqing, successfully completed threechallenging cases of percutaneous nephrolithotomy with 5G remote robot-assisted technology. This was achieved under the remoteguidance of experts from the People’s Hospital of Jiangsu Province and with the support of 5G technology.This groundbreaking initiativespanned a distance of more than 1,500 kilometers, with Professors Ye Xinhua and Song Ninghong providing remote guidance fromJiangsu, while Professor Yang Jie, Professor Wei Xiyi, and Director Wu Wenqiang operated on site. The precise control of the remoteultrasound robot manipulator for positioning and renal puncture demonstrated not only enhanced surgical efficiency and accuracy butalso the significant potential of 5G technology in the field of remote surgical procedures.
5G Remote Robot-Assisted Ureteroscopy Surgery: Overcoming Geographical Barriers
In 2023, the DNBSEQ sequencing platform from MGI Tech played a pivotal role in a study conducted at Ruijin Hospital, affiliated with Shang-hai Jiao Tong University. The study successfully completed a multi-omics analysis of G6PD (glucose-6-phosphate dehydrogenase)deficiency in the Chinese population, an X-linked genetic disease affecting over 400 million people globally. By leveraging the high-through-put sequencing capabilities of MGI Tech’s platform to analyze deep whole-genome sequencing data from 10,588 Chinese individuals in theChinaMAP project, the study not only provided extensive data support for understanding the spectrum of G6PD mutations and multidimen-sional functional annotations in the Chinese population but also established a crucial scientific foundation for early screening and functionalresearch of G6PD deficiency.
Assisting ChinaMAP in Revealing G6PD Deficiency Variants in the Chinese Population
The MGI DNBSEQ-T7 genetic sequencer located in theGenePlus Laboratory
MGI Tech Respiratory Microbiome Genomic Sequencer Portfolio
In October 2023, as influenza and Mycoplasma pneumoniae infections increased in the Guangzhou area, the Infectious Disease ResearchInstitute at the Eighth Affiliated Hospital of Guangzhou Medical University utilized a respiratory microbiome genomic sequencer portfoliofrom MGI Tech to conduct precise identification of influenza virus subtypes of samples. They obtained complete genomic sequences of theinfluenza virus and successfully sequenced and traced the virus. This contribution aids in the efficient and rapid tracking and tracing of theinfluenza virus by disease control departments and research institutions.
Combating Influenza: Respiratory Microbiome Genomic Sequencer Portfolio Aids in Precise Tracing
Respiratory Microbiome
Genomic SequencerPortfolio
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MGIEasy RespiratoryMicrobiome GenomeAmplification Reagent
Kit MGIEasy Fast PCR-FREEFS Library Prep Set
MGl FluTrackDNBSEQ SequencingPlatform
RNAIdentification
Results
Case Study
Key PerformanceBy the end of the reporting period, MGI's products havecovered762 hospitals in China, supporting the accuratediagnosis of diseases in the fields of reproductive health,oncology and infection based on MGI's core technology
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Empower Industry Ecosystem DevelopmentAs a pioneer in the upstream of China’s gene sequencing industry, MGI Tech has established robust and diverse industrial ecological cooperationwith its three core product lines, spanning the entire industrial chain from upstream to downstream. This cooperation promotes the application ofgenomics across various fields and the transformation of research achievements. The Company consistently empowers partners in scientificresearch, clinical settings, and emerging fields, driving breakthroughs in basic research, the development of new clinical diagnostic technologiesand products, and the continuous expansion into new areas. In collaboration with the IDG Innovation and Investment Research Institute andShenzhen Rainbow Technology Co., Ltd., MGI Tech provides comprehensive support for startups through a model that includes incubation,industrial empowerment, and investment. By actively participating in industry academic conferences, technical forums, and significant domesticand international exhibitions, MGI Tech enhances the promotion and publicity of its products features, usability, and applicable scenarios, therebyincreasing the Company’s influence and attention within the industry.
The Million Microbiome of Humans Project (MMHP) has revealed the latest progress of the largest global international microbiomeresearch project, which is a joint effort of 21 institutions and more than 10 participating countries. The sequencing platform of MGI Techsupports the sequencing of over 130,000 samples, representing doubled growth compared to the first half of 2023.The MMHP was official-ly launched at ICG-14 in 2019, with the aim to sequence and analyze microbial DNA from one million human samples within three to fiveyears, focusing on feces and saliva, and with the goal of building the largest human microbiome database in the world. MGI Tech offerssequencing and automation products, implements standardized technical workflows, and fits the key points involved in sequencing experi-ments to ensure the quality and reliability of the data. Compared with conventional DNA sequencing arrays, the DNBSEQ sequencingtechnology offers technical advantages such as low duplicate sequences, improved tag retention, high signal density, and achieves abalance between high throughput and high-quality data. These advancements have greatly promoted microbiome research in humanhealth and disease, contributing to global health improvements.MGI Tech places great emphasis on synchronizing research with standardization efforts. To this end, it has established a “Standardization Manage-ment Committee” to develop robust management systems and processes for standardization, thereby advancing the construction of a globallyleading standardization framework. Addressing the lack of standards in various areas, the Company has filled the standard gaps across multipleindustries, including sequencers, test reagents, sample storage systems, and tele-ultrasound technology. It has collaborated with partners through-out the industry chain, both upstream and downstream, to explore international markets. Moreover, the Company has actively participated instandard-setting activities to provide crucial support for the standardization, regularization, and high-quality development of the life sciencesindustry. In 2023, the Company contributed to the release of two international standards, four national standards, one industry standard, and sixteengroup standards; the project of “National Hi-tech Industry Standardization Pilot Project for Gene Sequencing Industry” submitted was successfullyselected as the 2023 National Hi-tech Industry Standardization Demonstration Project.
Advancing the Million Microbiomes from Human Project (MMHP) to a New Phase of Cooperation
Standard NameStandard ClassificationGenomics informatics — Description rules for genomic data forgenetic detection productsBiotechnology — Massively parallel DNA sequencing — Gener-al requirements for data processing of shotgun metagenomicsequences
International StandardInternational Standard
National StandardNational StandardNational StandardNational Standard
Information technology—Biometric sample quality—Part 14: DNA dataGeneral Principles for Performance Evaluation of Real-timeFluorescent Quantitative PCR InstrumentInformation technology—Biometric—Specification forHigh-throughput Sequencing Genotyping SystemBlockchain and Distributed Ledger Technology—ReferenceArchitecture
MGI have collaborated with Miracle Light Life Sciences Acceler-ator to establish the Life Health Accelerator Camp, aiming toleverage the aggregation advantages of industry, capital, andtechnology. This initiative aims to provide comprehensiveinnovation support to outstanding early-stage companies andentrepreneurial teams in the life health sector, accelerate thedevelopment and application of cutting-edge technologies,support the transformation and implementation of innovationachievements, and contribute to the cause of human health.During this time, the Accelerator Camp had hosted more than130 core entrepreneurship courses and 50 on-site events,facilitating rapid growth for over 48 start-ups in their early stagesand achieving significant success in incubating projects.
Building the Life Health Accelerator Camp to Empower the Industrial Ecosystem
From July 16 to 21, 2023, the 23rd International Congress ofGenetics took place at the Melbourne Convention and ExhibitionCenter in Australia. MGI Tech officially launched the “What If”global empowerment campaign in the Australia and New Zealandregion for the first time and unveiled the “What If” website(http://mgi-whatif.com/). This initiative was designed to focus onusers, targeting the pressing needs and challenges of researchersand industry professionals, with the goal of empowering industrypractitioners on a global scale.The International Congress of Genetics, a landmark industryevent, brings together leading geneticists from around the world toshare their professional insights and knowledge. Through the“What If” campaign, we aimed to advance and promote thewidespread adoption of genetic technology globally by providingusers with a diverse suite of innovative technologies and products,customized to address various scenarios and cater to individualsequencing requirements.
“What If” Offers the World More Possibilities!
Closing ceremony of the Accelerator Camp
Case Study
Case Study
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A Yearly Overview of Articles Published on the DNBSEQ? Platform
The genetic sequencing and laboratory automation sectors are at the forefront of high-tech industries, characterized by their knowledge-intensiveand interdisciplinary nature. These fields demand a profound understanding from industry participants. The advancement of groundbreakingtechnologies, coupled with a comprehensive patent strategy, establishes significant technical barriers to entry. MGI Tech’s high-throughputsequencer is a sophisticated system that integrates various disciplines, including optics, mechanics, electronics, fluidics, software, and algorithms.The production and ongoing research and development of this system involve patents and technologies from a range of fields. Continuous techno-logical upgrades and refinements have positioned it at a leading global level.
In 2023, following the Management Measures for the Selection of Key Indus-try “Chain Leader” Enterprise of Strategic Industry Cluster in GuangdongProvince, issued by the Guangdong Provincial Government, MGI Tech wasrecognized as a “Chain Leader” enterprise within the gene sequencerindustry chain of the precision instrument industry cluster. This designationcame after a rigorous expert review and selection process. MGI Tech active-ly collaborates with the “chief-general” to expedite the growth of industrialclusters and enterprise groups in Guangdong Province, aiming to enhancetheir international competitiveness.
As the designated “Chain Leader” enterprise within the genetic sequencer industry cluster, MGI Tech has played a pivotal role. In April 2023, theCompany supported the Provincial Department of Industry and Information Technology by completing the compilation of the overview form for thecluster’s key industry chain, the creation of a panoramic map of the industry chain, and the organization of data pertaining to the various nodes alongthe industrial chain. MGI Tech fully leverages its “Chain Leader” status to stabilize and optimize the industry and supply chains, foster the integrateddevelopment across enterprises of all sizes and nurtures the industry cluster. These efforts greatly enhanced the resilience of the key industry andsupply chains, playing a crucial part in the advanced development of the industrial base and the modernization of the industry chain.
Driven by demand pull, output management, and resource support, the Company’s upstream suppliers include not onlyearly-introduced internationally renowned suppliers but also newly listed companies and those on the verge of an IPO. Inthe past year, these suppliers have achieved a notable scale and have continued to improve their capabilities and manage-ment standards.
The maturity, market size, and future prospects of the various sub-sectors differ based on the coverage ofdownstream scenarios by the testing product providers. The Company primarily focuses on deep cooperation andleveraging complementary strengths with sequencing product providers, national institutions, universities, andresearch institutions.MGI Tech leverages its core technologies and products to actively promote the advancement of genomics research, as wellas the growth of the agriculture, forestry, animal husbandry, and fisheries industries. The Company also engages in directcollaboration with specialized sectors, including disease control and customs, to facilitate the widespread adoption of domes-tic genetic sequencers. This approach addresses the downstream sector’s reliance on imports and concerns over datasecurity, thereby delivering substantial social value.
Upstream
20162017201820192020202120222023.09
1083
1266
1720
Optics: lens/camera
Ultra-high-resolution optical systemUltra-weak-signal high-precision detectionAuto-focus and auto-image-registration
ElectronicsPrecise system component controlHigh-precision fast-response low-overshootingtemperature control systemMechanicsHigh-speed high-precision and high-reproducibilitymobile closed-loop control systemVibration-proof design and temperature fieldsimulationFluidicsAccurate liquid handling system transferringreagent onto flow cellLow-substitution-error-rate and high-uniformityflow distribution
Flow Cell
Photolithographic nano flow cells, with an evenly spacedpattern of DNA binding spots on the surfaceSurface chemical treatment, 98%+ effective DNAnanoballs binding
Software and Algorithm
Real-time and high-speed image-data-process-ing and base-callingSystem sequence control and intelligent errorcorrection
Biochemistry
Core technology DNBSEQ? to ensuresequencing accuracyFluorescent nucleotide labeling to accuratelyidentify each baseCore enzyme modification to improve readlengths, accuracy and speed
Midstream
Downstream
Driving the Development of Life Science Industry
Empowering Cutting-edge Scientific ResearchEmpowering the Clinical Research
GenomicsCellomicsSTOmics
Public HealthFood SafetyConsumer GenomicsAncient GenomicsAgriculture,
Forestry & Fishing
Reproductive HealthPrecision OncologyDiseases Control and
Prevention
Empowering Emerging Application Areas
“Chain Leader” enterprise within the genetic sequencer industry chain
About MGI Tech
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Leading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
3940
MGI Tech is dedicated to developing and promoting advanced life science tools for future healthcare, and providing real-time, panoramic,and comprehensive digital equipment and systems throughout the life cycle for industries like precision medicine, precision agriculture, andprecision health. We adhere to the vision of “leading life sciences through intelligent innovation”. Not only have we achieved remarkablesuccess in research and development innovation, intellectual property protection, industry-university-research collaboration, supply chainmanagement, and quality services, but we have also collaborated with global partners to delve into the mysteries of life and enhance humanhealth.
Advancing Life Science Tools forFuture Healthcare
Establishing the Systematic andStandardized System towardsIntelligent Manufacturing
R&D Innovation
Lean Manufacturing
Quality Service
SustainableSupply Chain
2023-2035 Plan
Status of GoalAchievementEstablished an independent and controllable core technologysystemAnnual patent authorization and software copyright registrationmore than 200Annual new sales of genetic sequencer increased by 30%year-on-yearAchieved a sequencing data quality of Q40 (99.99% accuracy)for over 85% of reads on the DNBSEQ platformBenefited more than 3,800 usersObtained more than 500 international certificates
Long-term CommitmentAligned with UN SDGs
Main Objectives and Outcomes
“In order ‘to develop and promote advanced life science tools for future healthcare’, we will constantly leverage our advantages in the R&D and manu-facturing of high-end tools in life science, understand the needs and pain points of midstream and downstream enterprises, and provide the industrywith more innovative, advanced, and intelligent platform equipment.”
To continuously invest in core technology research and development toprovide globally leading sci-tech products
Progress of Actions
4142
Progress Update:
Successful CompletionSteady Progress
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Indonesia
JapanSouth Korea
Peru
United StatesCanada
Colombia
Brazil
UnitedKingdom
European Union
Serbia
Chinese MainlandKazakhstanIVDIVD&MDIVD&RUORUOOther
4344
Major countries around the world are actively seizing the opportunities presented by a new round of technological and industrial revolution, withintelligent manufacturing being chosen as a strategic imperative to gain new competitive advantages. In May 2015, the State Council issued the Madein China 2025 plan, designating intelligent manufacturing as the primary focus for strengthening China's position as a manufacturing powerhouse.MGI Tech is actively constructing intelligent factories based on the “Four + Six ” benchmark (“Four” refers to “Digitalization, Digital Intelligence, DigitalGovernance, and Numericalization”, and “Six” refers to “Compliance, Standardization, Informatization, Automation, Intelligence and Scalization”).Supported by a legal, compliant, and robust quality system, the Company facilitates standardized production management. At the same time, MGITech advocates for modular construction in production and the physical flow of materials. By leveraging informatization, the Company enhances theapplication and development of automation technologies, leading to intelligent management of key elements such as personnel, machinery, materi-als, methods, and the environment. Moreover, the Company digitizes the entire production and delivery lifecycle, ensuring a seamless and integratedprocess.
Vision: Leading Life Science InnovationMission: To Develop and Promote Advanced Life Science Tools for Future Healthcare
Digitalization
Ensuring legalityand compliancein scientificresearch,medical devices,as well as relatedreagents,consumables,and equipment.
Digital IntelligenceDigital GovernanceNumericalization
Establishingstandardizedbusinessprocesses frommaterial procure-ment and orderreceipt to onlineproduction andproduct delivery.
By improvingproduction informati-zation from afragmented to anintegrated state, wefacilitate innovationand the transforma-tional upgrade ofproduction opera-tions.
By integratingautomatedproductionequipment and lines,we replace manuallabor with machineryto achieve costreduction andefficiency enhance-ment.
Utilizing new OT(OperationalTechnology), ICT(Information andCommunicationTechnology), andintegrated technolo-gies, we integrateprevious constructionachievements torealize unmannedproduction.
ComplianceStandardizationInformatizationAutomationIntelligence
Compliance
MGI Tech adheres strictly to global product access requirements and has established a rigorous product registra-tion and certification system, providing a robust foundation for compliant operations and steady businessdevelopment. As of the end of 2023, the Company has obtained a total of 47 global system certificates/licens-es/records covering production/operation quality management, ensuring compliance for our products in theglobal market and bolstering our business globalization efforts. Besides, we have added 142 new product qualifi-cation certificates, bringing our global total to 329. These certificates cover registration/certification in over 20countries/regions such as China, EU, Japan, Korea, Australia, Brazil and Malaysia, and access qualification inmore than 90 markets in Asia-Pacific, America, Europe, Africa and Central Asia. Furthermore, MGI Tech remainscommitted to trade compliance, prioritizing adherence to laws and policies, effective management of businesspartners, and customs certification management in its import and export activities. These endeavors have laid asolid foundation for the global expansion of the Company’s intelligent manufacturing products.
Covering the fullrange of productsGene Sequencers: DNBSEQ-T20×2,DNBSEQ-T10×4, DNBSEQ-T7,MGISEQ-2000, MGISEQ-200,DNBSEQ-G99, DNBSEQ-E25, etc.;Laboratory Automation:
MGISTP-3000, MGISTP-7000,MGISP-NE32, MGISP-NE384,MGISP-100, MGISP-960, etc.New Businesses: MGIUS-R3,MGICLab-LN55K Pro, ZTRONall-in-one machine, etc.
Possessing 206 medical device
qualification certificates
Among them, we have obtained 29domestic medical device productqualification certificates and 177 foreignproduct qualification certificates,covering Asia-Pacific, the US, Europe,Africa, Central Asia, and other countriesor regions.
Sound systemsISO 13485: Medical Device Single Audit Program quality managementsystemISO/IEC 27001: Information security management systemISO/IEC 27701: Privacy information management systemISO/IEC 20000: Information technology service management systemISO 14001: Environmental management systemISO 45001: Occupational health and safety management systemQC 08000: Hazardous substance process management system
Establishing the Systematic and Standardized Systemtowards Intelligent Manufacturing
The process ofreducing costs andenhancingefficiency throughthe expansion ofproduction scales.
Scalization
Indonesia
9916
VietnamSingaporeThailandAsia PacificJapanMalaysiaAustraliaSouthKoreaPeruUnitedStatesAmericaCanadaColombiaBrazilUnitedKingdomEurope and AfricaEuropean
Union
SerbiaChinaChinamainland
Kazakhstan
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Future HealthcareMessage From Chairman
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StageMaterial Sortingand Preparation
MaterialDeliveryProduction
ModeMaterial
PickingMethodProcessOperations
Before Automation
Manual sortingRandom placement,wholesale distributionIsolated, discrete, andbatch-based operationsMaterials laid out flaton the workbenchPure manual work
Current AutomationImplementationResultsUnordered automaticmaterial sortingBatch delivery toworkstationsContinuous single-pieceflow productionThree-dimensionalstorage system withworkstation-specificpickingWork assisted by jigsand tools
A total of 69 automated jigs and tools have been introduced across variousmodels, including 10 for the DNBSEQ-G400, 8 for the DNBSEQ-G50, 17 forthe DNBSEQ-T7, 12 for the DNBSEQ-G99, 2 for the MGISP-NE384, 7 for theMGISP-960, 7 for the MGISP-Smart8, and 6 for the MGISP-NEX.
Products covering DNBSEQ-G99, DNBSEQ-G400, DNBSEQ-G50,
DNBSEQ-T7, MGIDL-T7loader, MGISP-Smart8Products Covering DNBSEQ-G99, DNBSEQ-G400, DNBSEQ-G50,
DNBSEQ-T7, MGIDL-T7loader, MGISP-Smart8Achieved intelligent sorting for 2,254 types of materials, accounting for 48.2%
of the total materials
Materials and tools are managed through a three-level coding system thatincludes workstation, height, and natural sequence. This system operates on thePoint of Use (POU) principle, streamlining the picking process for production and
significantly reducing the time spent searching for materials.
Capability Requirements
Improve business performance and transform organizational operational models; andAchieve situational awareness on the “battlefield”, enable intelligent alerts, and facilitateinformed decision-making.Internally, reshape work patterns and enhance digital experiences; andExternally, aim for streamlined, efficient, and user-friendly transactions.Digital fulfillment of orders with complete visibility at every step of the process; andIntegrated collaborative planning fostering seamless efficiency across production, supply,and sales.
Core CapabilitiesDigital Operations
Supply ChainCollaborationIntegrated Supply
SystemsSRM and APS
WMSTMSWMS and TMCRM and OMS
MGI Tech leverages data-driven insights and robust business logic to harness information systems aspowerful tools. This approach facilitates agile interactions between business processes and informationflows, thereby enhancing three core capabilities: digital operations, supply chain collaboration, andintegrated supply management. This strategic approach leads to optimized costs and superior supplychain efficiency. By the close of 2023, MGI Tech had successfully implemented a suite of systems, includ-ing ERP, SRM, WMS, TMS, and MES, which have markedly enhanced our ability to integrate IT technologyinto our day-to-day operations.
Informatization
MGI Tech has actively promoted lean automation and maximize labor efficiency using mechanical power.Simultaneously, we are advancing the automation of production for a diverse range of products, includinginstruments, reagents, chips, enzyme engineering platform, and dNTPs.Automation
MGI Tech leverages informatization to drive increased automation utilization, achieving intelligent manage-ment of personnel, machinery, materials, methods, and the environment. The Company also ensures digitaltracking throughout the entire lifecycle of production and delivery. Looking forward, MGI Tech plans toadopt advanced technologies such as 5G, robotics, remote real-time control, and AI-powered analytics toestablish a state-of-the-art lighthouse factory.
Intelligence
MGI Tech’s production model is guided by the “Four + Six” concept, which emphasizes the ongoing integra-tion of information technology with the real economy to accelerate the transition to intelligent manufactur-ing. We use key production data to support the optimization of production process and the improvement inquality and efficiency, enhance the market competitiveness and commercial value of our products, andreach customers in real-time.To foster the R&D and industrialization of our products, we have achieved cost savings and efficiency gainsthrough mass production. Additionally, we have established multiple support paths designed to improveproduct accessibility and support the growth of the life sciences sector.
Scalization
MGI Tech is dedicated to the principles of “safety, quality, delivery, cost, and innovation” across its opera-tions. We adhere to a philosophy of “adhering to standards, maintaining meticulous records, ensuringvigilant monitoring, and enabling full traceability of all actions”. To achieve this, we have established theMBS lean system, which covers twelve specific segments across three key areas, spanning from manufac-turing technology to production management and operations. This system implements comprehensive,in-depth, and multifaceted manufacturing standards, thereby enhancing our organizational capabilitiesthrough a robust lean framework.
Standardization
PersonnelComprehensive job skillmanagement standardsEmployee skill training andassessment processes,with 100% certificationupon employmentA multi-skill workerdevelopment managementsystem, with over 30% ofour workforce achievingmulti-skill proficiency
Full lifecycleequipment manage-mentEquipment informa-tion managementcontrol systemIntegrated automa-tion management ofproduction equip-ment
Equipment
PLC/SCADA/DCSInternet of Things (IoT)terminal module technologyIndustrial IoT secondaryidentificationRFID, barcodes, andhuman-machine interactionIntelligent gateways/indus-trial sensorsPLC/SCADA/DCS
Materials
Standardizationof productionprocessesStandardizationof productionoperations
Methods
Plant and laboratorymanagement:
Environmentalquality systemmanagementregulationsEstablishment ofsafety productionwork systems
Environment
With a solid foundation in the domestic market, we aim to expand globally,continuously implement internationalization strategies, enhance marketcoverage and increase product accessibility.With our worldwide R&D and production bases as the cornerstone of ouroperations, we are committed to continuously adjusting and optimizingproduct structures. We also promote product upgrades and invest in R&Dfor new products and technologies, with the aim of driving the R&D andindustrialization of innovative products.
Adhering to a life-centered principle, we focus on the underlying technologyR&D and product innovation of the core tools that form the “read, write, andstore” systems. We are dedicated to continuously providing users withcomprehensive, lifecycle system product portfolio that cover the entirespectrum of life science research and application fields.We also centered our efforts on improving the accessibility and adoptionof advanced sequencing technology and automation in the downstreamindustry around the study areas including:
As a pioneer in China’s genetic sequencing industry, MGI Techconsistently advocates for open cooperation and seeks to empower thedownstream ecosystem. We actively promote collaboration with innova-tive companies both domestically and internationally, intending to drivetechnological innovation, application transformation, qualification compli-ance, and popular science education within the industry.
To address the potential new demands and disruptive changes thatfuture technological upgrades and industry trend adjustments maybring, it is crucial to engage proactively in forward-looking research anddevelopment, as well as strategic resource allocation. Achievingearly-stage technological breakthroughs and accumulating R&Dexperience can position us at the forefront of industry trends, therebyaccelerating the process of industrial transformation.
Support Path 1: Global Business Strategy
Support Path 3: Fostering a Mutually Beneficial Industry EcosystemSupport Path 4: Proactive Strategic Positioning
Support Path 2: Sustained Innovation in Research and Development
- DCS: DNA genomics, cell omics and STOmics- Ten specialized segments and ten exemplary applications.- Genetic diseases, infectious diseases and cancer
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R&D InnovationMGI Tech is committed to fostering a culture of innovation rooted in originality and self-reliance. We champion breakthroughs in pivotal core technol-ogies and seamless integration of interdisciplinary systems. Our approach encompasses the full spectrum of industry-academia-research collabo-ration, driving the creation of innovative new models. This commitment has shaped a robust system of technological innovation, propelling themanufacturing industry’s innovation strategy forward. We lead and support innovation and research across the board, cultivating an open, interoper-able, inclusive, and equitable R&D environment. MGI Tech is building a supportive R&D framework that champions extreme thinking, fosters innova-tive breakthroughs, and encourages bold advances in cutting-edge territories.
MGI Tech has developed and continuously optimized a technology assessment and planning system tailored to its unique needs. We have crafteda distinctive “four-level R&D hierarchical management model” aligned with our various developmental phases. This model encompasses X-Explor-atory Research, R-Technical Research, D-Product Development, and P-Online Upgrades. This structured approach ensures that our technologicalinnovation and core competencies remain dynamic, positioning us as industry leaders.
The Company has established a model for enhancing autonomous innovation capabilities, focusing on four key areas: products, disciplines, talent, and evaluation. Thismodel is designed to help the Company develop a distinct innovation advantage and drive progress within the industry. Product development is guided by a scientificand technological orientation, with a focus on addressing specific issues in customer applications. This is achieved by identifying and prioritizing technical improve-ments that directly address major application needs. In the realm of disciplines, the Company follows a problem-driven approach, extracting common scientific issuesfrom real-world problems. This approach spans across various fields, including physics, chemistry, mathematics, and optics. Regarding talent development, theCompany has implemented a “mentorship model” for talent training, which aims to strengthen the innovative capacity of the team and ensure a sustainable pipeline ofinnovation. The evaluation process is tailored to the different stages of achievement, with a particular focus on the practical application of those achievements andcustomer satisfaction. By the end of 2023, the Company had successfully developed 25 significant independent technological innovations.
R&D Management System
Core CompetitivenessX-Exploratory ResearchR-Technical Pre-researchD-Product DevelopmentP-Online Upgrades
MGI Four-level R&D Hierarchical Management Model
Integrated model for building independent innovation capabilities
Technological leadership and driven by majorapplications
Customized evaluation systems for preliminaryresearch, active R&D, and online products
Problem-oriented scientific research model:
Emphasizing innovation through a foundationaldisciplinary approachMentorship Model: Cultivating talent throughguidance from seasoned experts to novices
Independent
Innovation
Products
EvaluationTalents
Disciplines
MGI Tech strictly adheres to the legal frameworks governing its operations, including the Patent Law andTrademark Law of the People’s Republic of China, as well as Enterprise Intellectual Property Managementstandards in the relevant countries and regions. To enforce this commitment, the Company has establisheda dedicated intellectual property and legal department and implemented comprehensive internal systems.These systems, such as the Intellectual Property Incentive Management Procedure, Patent ManagementProcedure, and Technology Secret Management Procedure, cover the entire lifecycle of intellectual proper-ty management, from project inception and development to product launch and withdrawal from the market.Furthermore, MGI Tech consistently emphasizes the significance of independent and controllable procure-ment of upstream core raw materials. The Company is dedicated to achieving in-house production andsupply of critical core materials, including sequencing enzymes and sequencing dNTPs. Additionally, MGITech has developed a range of proprietary technological platforms and is equipped with state-of-the-artbiotechnology instruments. This infrastructure attracts internationally renowned scientists and technicalexperts, specializing in genomics, bioinformatics, molecular biology, and related fields, all dedicated topioneering research within the life sciences sector.MGI Tech has successfully established an independent and controllable core technology system, leadingto the development of several pivotal technologies within the domain of genetic sequencing. These includethe “DNBSEQ sequencing technology”, “regular array chip technology”, and “sequencer opto-electricsystem technology”, all of which have achieved a level of excellence comparable to international standards.Concurrently, the Company is expanding its expertise in the life science arena, progressively refininginnovative life science digitalization technologies such as “key library preparation technology”, “automatedsample handling technology”, and “remote ultrasound diagnosis technology”. These advancements providea robust foundation, enabling the Company to remain at the forefront of cutting-edge research in life scienc-es. The core technologies developed by MGI Tech are the result of our in-house research and developmentefforts. These technologies are continuously refined and augmented throughout the production andapplication processes, ensuring their integration into the Company’s principal products.MGI Tech strictly adheres to the legal frameworks governing its operations, including the Patent Law and Trademark Law of the People’s Republic of China, aswell as Enterprise Intellectual Property Management standards in the relevant countries and regions. To enforce this commitment, the Company has establisheda dedicated intellectual property department and implemented comprehensive internal systems. These systems, such as the Intellectual Property IncentiveManagement Procedure, Patent Management Procedure, and Technology Secret Management Procedure, cover the entire lifecycle of intellectual propertymanagement, from project inception and development to product launch and withdrawal from the market.The Company possesses an independently controllable, internationally advanced core technology system, which spans various fields such as gene sequencing,library preparation, laboratory automation, and remote ultrasound diagnostics, offering significant advantages in quality and cost. MGI Tech highly values itsintellectual property (IP) efforts, having established a medium- to long-term patent strategy that emphasizes both defensive and offensive measures. Thisstrategy involves strengthening the global positioning of its core technologies and trademarks, establishing a system for nurturing high-value patents, promotingpatent standardization, avoiding infringement of others’ IP rights, and safeguarding its own IP rights from potential infringement.
Intellectual Property Rights Strategy Framework
R&D Resources
Intellectual Property Protection
2023 Data
R&D personnel ratio959personR&D personnel ratio
33.4%
Educational attainment of R&Dpersonnel (percentage holdingMaster’s Degrees or higher)
58.6%
KeyPerformance
Intellectualproperty rightsstrategyDefensive andoffensive
IPcommercial-ization
Standardization ofpatent-relatedtechnologyStandard-
ization
LicensingTransferProducts
Trademarks
Strengthening the globalpositioning of coretechnologiesBuilding a system fornurturing high-value patentsStrengthening the globalpositioning of trademarks
Patents
Long-term Development: Focus on BasicTheory ResearchMedium-term Development: Focus oncore technology breakthroughShort-term Development: Focus on new productdevelopment and application technologyPresent Development: Focus on functionalperformance improvement of existing products
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Number of invention
patents granted
118Pieces
Through joint innovation with partners across various fields, MGI Tech has not only enhanced its R&D capabilities in specific areas but also fostered interdis-ciplinary and inter-sectoral technological integration and innovation, yielding a positive impact on societal innovation. As technology continues to advanceand our collaboration network expands, we anticipate even more significant breakthroughs and achievements in our joint innovation endeavors.Joint Innovation
MGI Tech has entered into a strategic cooperation agreement withJianghan University to co-develop and promote the MNP novelmolecular marker detection technology and the DNBSEQhigh-throughput sequencing platform. This partnership concentrateson technological research and development, talent cultivation, and theapplication of MNP marker technology across various emerging fields,including agriculture, disease control, and forensic identification. Thecollaboration has led to the establishment of national standards MNPMarker Method for Plant Variety Identification based on the MGIplatform, as well as new standards for microbial multiple identification.Moving forward, both parties aim to jointly advance the application ofMNP technology in areas such as DNA evidence preservation andgermplasm resource identification. MGI Tech will continue to offercritical technical support to foster innovation in scientific research andcontribute to industry growth.
MGI Tech and Jianghan University Collaborate to Advance Gene Sequencing Innovation
Microfluidic chip for detectingthe base sequence of DNA
fragments
20th China Patent Excellence
Award
Sample pretreatment devicefor gene sequencing system22nd China Patent Excellence
Award
An optical system for gene
sequencer24th China Patent Gold Award
24th China Patent Excellence
Award
Camera calibration method,image registration method,gene sequencer and system
2023 Shenzhen Science and
Technology Award Patent
Award
10th Guangdong Patent
Excellence Award
As of 2023Key Performance
Number of inventionpatent applications
289Pieces62Pieces
Number of utilitymodel patentsgranted50Pieces
Number of designpatents granted30Pieces
Number of designpatent applications39Pieces
Number of softwarecopyright applications
71Pieces
Number of softwarecopyrights registered85Pieces
Award-winning Patents
Guests Visiting MGI Tech’s αLab
Strategic cooperation signing ceremony
αLab’s Inauguration at Hong Kong Science Park Marks a New Chapter in Global Empowerment Cooperation
In September 2023, MGI Tech declared the official launch of its αLab atthe Hong Kong Science Park. This laboratory encompasses a range offunctions, including AI research and development, application transfor-mation, and incubation platforms. Leveraging Hong Kong’s distinctiveadvantages in technological innovation and international connectivity,as well as the strategic prominence of the Guangdong-Hong Kong-Ma-cao Greater Bay Area, MGI Tech aims to further strengthen its globalR&D network, expedite international collaboration, and empowerhigh-quality development in the life sciences and technology sectors.The Hong Kong Science Park stands as the preeminent research anddevelopment and enterprise incubation hub in the region, and it ispivotal in Hong Kong’s quest to become a world-class innovation andtechnology center. This collaboration presents a significant opportunityfor both parties to capitalize on their respective strengths and generatesynergistic value. Equipped with advanced systems such as laboratoryinformation management, environmental monitoring, robotic transpor-tation, and Ztron Pro data storage and analysis servers, αLab hassuccessfully implemented the “Smart Lab” initiative, enhancingoperational efficiency. Additionally, it has deployed the first AI-integrat-ed laboratory, advancing the convergence of artificial intelligence andbiological intelligence.
Separation of oligonucle-otides and their applicationsin nucleic acid sequencingBubbly connector componentsand method for constructingsequencing libraries using them
Number of utilitymodel patentapplications
Case Study
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Comprehensive Support for Life Sciences Big Data InfrastructureWith the rapid advancements in biotechnology and information technology, particularly the breakthroughs in gene sequencing and enhancementsin data processing capabilities, the establishment of big data for life sciences has become feasible. MGI Tech is dedicated to the independentresearch and development of advanced life science tools, driven by a spirit of innovation. The Company has established a platform that integrates“reading, writing, and storage” functions for core life science and technology tools, offering comprehensive support for the development of big datafor life sciences.
Grounded in core technology, MGI Tech has established a leading position in the industry for the research and production of gene sequencers. TheCompany has now become one of the few companies in the world capable of mass-producing clinical-grade sequencers. Concurrently, MGI Techis closely monitoring and adapting to the industry’s trend toward “miniaturization” and “ultra-high-throughput” with its T series, G series, and E seriessequencing instruments. This strategy has resulted in a comprehensive multi-scenario application ecosystem matrix that caters to high, medium,and low throughput requirements across different scenarios.The small and medium-sized “benchtop” sequencers are primarily utilized for mediumand low-depth whole genome sequencing, exome sequencing, tumor gene sequencing, and metagenomic sequencing projects. In contrast, thelarge and super-large sequencers are deployed in extensive gene sequencing initiatives such as National Genome Projects, consumer genomics,and population cohort research. Regarding sequencing consumables, MGI Tech has developed a diverse range of library preparation and genesequencing consumables tailored to customer needs.
Deepening Innovations in Genetic Sequencing Technology
MGI Tech has meticulously devised a comprehensive strategy centered around the digitization of life sciences. Through independent research andstrategic collaborations, the Company is building a complete spectrum of technological and ecological resources, aiming to provide comprehensiveproduct portfolio for digital life equipment and platforms. Leveraging state-of-the-art digital life science technologies, MGI Tech has developed a multifacet-ed range of products covering scales from the genetic to individual levels, solidifying a robust foundation for cutting-edge research in the life science realm.
A Comprehensive Strategy for Digital Equipment and Systems in Life Sciences
Sample pre-processing workstation, transferring samplesfrom sampling tubes to standard microplate wellsHigh-throughput automated sample processing bypipetting, for library preparation and nucleic acid extractionOne-stop modular sequencing workstation, providing a fullprocess automation platform from sample preparation tosequencing report issuanceFully automatic plasma membrane separation productionline, offering a full process automation platform from wholeblood to plasma membrane layerFully automatic library preparation production line, offeringa full process automation platform for ultra-high-through-put library preparation with intelligent customization
Reagents for sample processing and consumablescompatible with automation equipment
Reagents for DNA and RNAextraction, consumables forautomation, and reagentsfor sample collection andstorage, etc.
Business Module
LaboratoryAutomation
Automated sampleprocessing systems
MGISTP-7000 seriesMGISP-960 series andMGISP-100 series
MGIFLP seriesMGIGLab-S seriesMGIGLab-L seriesLaboratory automation line
Sample processingreagents and consumables
Product TypeProduct DescriptionMain Product Models
To Develop and Promote Advanced Life Science Tools for Innovative Validation in Disease ControlIn November 2023, MGI Tech and the Shenzhen Center for Disease Control and Prevention (Shenzhen CDC) entered into apartnership agreement to establish the Shenzhen CDC-MGI Joint Laboratory. The joint initiative aims to develop the ShenzhenCDC-MGI Joint Laboratory, which will utilize MGI’s gene sequencing, laboratory automation, and information managementplatforms. By harnessing the technological prowess, expertise, and resource capabilities of Shenzhen CDC in disease preventionand control, the laboratory will capitalize on the complementary strengths of both entities. This collaboration is expected toexpedite industry innovation, facilitate rapid result identification, and enhance foundational research within the realm of diseasecontrol. It will also drive the transformation of applications, industry advancement, and the establishment of standards. Theinitiative aims to advance the innovative validation and showcase leading applications of life science core tools, such as sequenc-ers, within the domain of disease control.
Collaborating with Shanghai Children’s Medical Center to Enhance the Development of Medical IntelligenceIn November 2023, MGI Yunying and Shanghai Children’s Medical Center entered into a strategic cooperation agreement. Bothparties will capitalize on their respective strengths to jointly advance the research and application of fully automated systems for thediagnosis and monitoring of congenital heart diseases and hip joint development in children. Leveraging the Shanghai Children’sMedical Center’s preeminent clinical expertise, MGI Tech is committed to developing innovative applications and ultrasound robotdevices tailored to clinical needs. The collaboration will deepen the cooperation in areas such as robotic ultrasound system andautomated ultrasound and explore the integration of 5G, artificial intelligence, and big data within the healthcare industry. Together,we aim to drive the development and application of fully automated ultrasound robots.
Case Study
Product features
Ultra-high throughputall-in-one platform forlarge population genomics
Ultra-high throughput,ultra-fast,and ultra-low cost
High efficiency and good qualityCompact and flexible
Simple, flexible,extremely fast
Lightweight and
diversified
Number of flowcells/runFlow cell sizeLane/flow cellEffective numberof reads/flow cellMax. Read LengthSupportedMin. Read LengthSupportedMax. ThroughputQ30 (Max./Min. read length)Runtime
slide
40B
PE150*
/72T
≥85%
80h
FC
5800MPE150SE50
7T
PE150>85%
SE50>85%
FCS
550MPE300SE100330G
DNBSEQ-T2Ox2DNBSEQ-T7MGISEQ-2000MGISEQ-200DNBSEQ-G99DNBSEQ-E25
ApplicableApplications
5-24h13-37h14-107h10-28h9-40h5-30h
PE300>80%PE150>85%SE100>85%
FCL
1500-1800MSE400 PE200
5E501440GPE150>85%PE100>85%SE50>90%
SE100,PE50>90%
PE150>85%PE300>85%
FCS
100MPE150SE100
30G
PE150>80%5E100>80%
FCL
500MPE150
E50150G
FC
80MPE300SE100
96G
5-20hPE150>80%5E100>90%
FC
125M
PE150
SE100
7.5G
PE150>80%5E50>85%
Model parameters for each type of throughput
WGS, cWGS, stLFR EGS,WGBS single-cell sequencing,spatiotemporal omicssequencing, etc.
WGS, WES, metagenomicssequencing, Tumor PanelSequencing, etc.
Transcriptome sequencing, WGS, WES,molecular breeding, rapid pathogenidentification, liquid biopsy, targeted druguse, genetic disease detection, early tumorscreening, and individual identification
Genetic disease detection,targeted drug use, early tumorscreening, and individualidentification
Targeted capture/multiplexed testing,small genome sequencing, low depthwhole-genome sequencing (WGS),transcriptome sequencing, andindividual identification
Rapid pathogenidentification, andpopular scienceeducation
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools for
Future HealthcareMessage From Chairman
5354
MGI Tech seamlessly integratesproducts, technologies, and expertisefrom various fields, continuouslyexpanding its technical depth andbusiness scope. This strategy is aimedat enhancing the innovation, reliability,versatility, compatibility, and adaptabilityof its products, so as to deliver to itsusers a precise and operationally robustone-stop product portfolio. Moreover,MGI Tech offers platform supporttailored to various industries and scenar-ios.
Capable of Integratingextraction, library preparation,sequencing, and optional dataanalysis into one device,pioneering a novel “one-touch”sequencing paradigm forstreamlined operations;Reduces overall experimentaltimeline to under 24 hours; andSignificantly decreases manualoperation time, enhancesefficiency in library preparationand sequencing processes, andaddresses challenges inlocalizing gene sequencingplatforms.
Single-cell library buildingTelemedicine
ZTRON,ZLIMS, etc.
Single-cell platformUltrasound platformBIT products
New Businesses
Comprehensive management platform for genesequencing and lifecycle management of gene data,including both hardware and software
MGICLab-LT series,MGICLab-LN series,ZSM pro biological samplemanagement systemBiobank platforms
With intelligent and automated design concepts, wecustomized stable, safe, intelligent and efficientautomated biobanks for users.
DNBelab C seriesMGIUS-R3
MGIFLP-L50
Modular sequencing workstation
Capable of operating multiplemodules concurrently, enhanc-ing the extraction process withintelligent automation, flexibleliquid handling, efficientextraction, and informationtracing;Designed to minimize manualintervention to the greatestextent possible; andOffers broad support for diverseapplication scenarios, includingbut not limited to tumorresearch, infectious diseaseresearch, and reproductivehealth research.
MGISP-NEXNucleic acid extraction and
The MGIUS-R3 is the world’sfirst remote ultrasound robot,enabling professional doctors todirectly and remotely controlultrasound probes. This deviceintegrates advanced robotics,real-time remote controlcapabilities, and ultrasoundimaging, effectively transcend-ing the limitations of traditionalultrasound diagnostics byovercoming geographicalbarriers.
MGIUS-R3Robotic Ultrasound System
Featuring an aviation-grade highvacuum double-layer insulatedcanister, which effectivelymaintains sample temperatureequilibrium, ensuring the stabilityand safety of the samples;Equipped with automatic liquidnitrogen refill, monitoring alarms,emergency safety protection, andother advanced security measuresfor the deep low-temperature coldchain, ensuring sample safety forover 288 hours even during liquidnitrogen supply interruptions orother exceptional circumstances(excluding force majeure); andOffers full-process automation forthe storage and retrieval ofsamples, making the samplestorage process effortless.
MGICLab-LN55K Pro
The ZTRON integrates biotechnolo-gy (BT) and information technology(IT) to create a mobile gene datacenter, offering innovative features.Specifically tailored forhigh-throughput sequencers, thismachine combines bioinformaticscomputational acceleration,extensive gene data storage, andlaboratory management into asingle system. It is designed forimmediate use in the laboratory orfor integration into traditional datacenters.It supports independent offlinedeployment and horizontal scaling.Compliant with GDPR regulations,the ZTRON is certified byEuroPriSe for privacy and security,ensuring safety and reliability whilereducing IT operational costs.
ZTRON
All-in-One Machine
Business ModuleProduct TypeProduct DescriptionMain Product Models
Automated Liquid Nitrogen Storage
System
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Promoting Cutting-Edge Re-search in Modern Life Sciences
MGI Tech is dedicated to its mission as the “To Develop and PromoteAdvanced Life Science Tools for Future Healthcare” and embraces thevision of “Leading Life Science Innovation”. By launching initiatives likethe Global Research Empowerment Program and continuouslyenhancing our product technological capabilities, we strive to propelcutting-edge research in the field of modern life sciences.
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On September 11, 2023, MGI Tech officially announced the initiationof the DCS Lab 2023 Scientific Research Empowerment Program,targeting top global scientific research endeavors. The initial alloca-tion of resources is intended to support the establishment of 10cutting-edge DCS Labs worldwide. This program marks MGI Tech’sinaugural effort in empowering laboratories within cutting-edgeresearch domains, focusing on population genomics, Cellomics , andspatiotemporal omics (aligning with the “DNA Sequencers”, “CellOmics”, and “Spatial Omics” sections of the DCS Lab). It aims toaccelerate research progress by enabling scientific endeavors inthese emerging technologies. The ultimate goal is to assist leadingglobal researchers in establishing internationally recognized,large-scale, and standardized multi-omics cutting-edge laboratories,thereby fostering the advancement of frontier research and industrygrowth in life sciences.
Global Research Empowerment Program
Cutting-edge DCS Labs (schematic diagram)
In November 2023, MGI Tech declared the official completion ofthe first DCS Lab dedicated to hematology at the Haihe Labora-tory of Cell Ecosystem. MGI Tech will leverage its platform’sstrengths to support the Haihe Laboratory of Cell Ecosystem inadvancing hematological research and establishing an innova-tive global omics laboratory demonstration site.The newly established DCS Lab at the Haihe Laboratory of CellEcosystems is capable of supporting a minimum of 10,000high-depth Whole Genome Sequencing (WGS) samples, 3,000single-cell sequencing samples, and 480 spatiotemporal omicschips annually. In the forefront of omics research, scientists willno be constrained by the scale and cost of their studies. Further-more, the DCS Lab is equipped with state-of-the-art, compre-hensive all-in-one omics research tools and platforms, comple-mented by a comprehensive range of support, includingcomplete workflows and technical assistance.
Inauguration of the First DCS Lab in Hematology
In September 2023, the National Cancer Centre Singapore(NCCS) and MGI Tech formalized a strategic researchcollaboration. Leveraging MGI Tech’s proprietary DNBSEQcore technology, the NCCS conducts comprehensive andmulti-dimensional genomic analyses on prevalent cancerswithin the Asian population. This initiative is furtherenhanced by spaciotemporal genomics technology, aimingto propel the development of personalized medicine andprecision cancer treatments.By January 2024, building upon the foundational platformof the DCS Lab and incorporating spaciotemporal genom-ics technology along with single-cell sequencing capabili-ties, the NCCS and its project partners have releasedsignificant research findings. These include studies on the“Spatial Co-localization Relationships of ‘Cancer-Embry-onic’ Cell Clusters in Hepatocellular Carcinoma” and the“Cellular and Molecular Mechanisms of IdiopathicMulticentric Castleman Disease”. These achievementsdemonstrate the DCS Lab’s capacity to provide robustsupport for omics research at various scales, empoweringglobal researchers to generate outstanding researchoutcomes and fostering the advancement of life sciencesworldwide.
The first DCS Lab dedicated to neuroscience at the Shanghai ResearchCenter for Brain Science and Brain-Inspired Intelligence (hereinafterreferred to as “Shanghai Brain Center”) has been officially completed byMGI Tech. By integrating advanced life science technologies, the labbolsters its leadership in fundamental neuroscience research and contrib-utes to the establishment of a brain science research development networkcentered in Shanghai, extending collaboration to the Yangtze River Deltaregion and beyond to the southern areas.Currently, the DCS Lab at the Shanghai Brain Center is equipped with anarray of sophisticated equipment, including the MGI ultra-high-throughputgene sequencer DNBSEQ-T7, the integrated gene data machine ZTRONLite, and the automated sample preparation system MGISP-100. Additional-ly, the lab has accumulated extensive hands-on experience in the domain ofsingle-cell sequencing and spatiotemporal transcriptomics. This expertise isfurther enhanced by the utilization of the DNBelab C4 single-cell libraryconstruction platform along with its corresponding single-cell RNA librarypreparation kit and the single-cell ATAC library preparation kit. The lab hasestablished efficient and stable systems for the preparation of centralnervous system single-cell nuclei and single-cell suspensions, completewith standardized operating procedures (SOPs). Furthermore, the facility iswell-equipped with both the software and hardware necessary for localizedexperimentation and on-site data analysis.
Inauguration of the First DCS Lab in Neuroscience
Interim Achievement of DCS Lab
Case Study
Case Study
About MGI Tech
Sustainable DevelopmentTransform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
The Lean Committee established the Lean MBS system to incorporate lean principles and promoteprocess standardization;The Lean Committee conducted diverse and engaging forms of lean cultural promotion activities;The Lean Committee advocated for streamlined management processes, process standardization, anddata visualization.Developing a leanculture
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MGI Tech officially unveiled its next-generation sequencing reagent, StandardMPS 2.0, at the 2024 Advances in Genome Biology and Technology(AGBT) conference, marking the dawn of the Q40 era in genetic sequencing quality. The product is engineered to elevate the quality of sequencingdata on the DNBSEQ platform to Q40 (99.99% accuracy) for over 85% of reads, which represents a tenfold improvement in accuracy compared toQ30 standards. This enhancement significantly enhances the accuracy and sensitivity of whole-genome sequencing (WGS) and mutation detectionin cancer research while reducing the required volume of sequencing data. With this breakthrough, MGI Tech brings forth a new standard of productexperience to users across the globe.
Fully Embarking on the Q40 Era
Establishment of Lean Manufacturing
Through continuously screening andtesting, we have adopted a DNApolymerase with higher polymerizationefficiency and an MDA (MultipleDisplacement Amplification) enzymewith superior strand displacementfunctionality, significantly enhancingthe original signal’s strength and stabili-ty.
DNA polymerase and MDAenzyme optimization
By optimizing the fluorescent dyeson dNTPs to reduce crosstalkbetween bases, we have improvedthe accuracy of base recognition.
dNTP optimization
Utilizing data that provides a morerealistic estimation, we have trainedthe Q-value table and employedhigh-fidelity enzymes and PCR-Freelibrary construction methods tominimize biases stemming fromerrors in upstream experiments.With more precise model training,we have improved the accuracy ofdata interpretation, ensuring thatsequencing results better reflectactual biological sequences.
Q-value table optimization
Lean ManufacturingMGI Tech champions the principles of continuous improvement and lean production, establishing the MBS MGI Lean System. Through dedicatedefforts to enhance and innovate in lean research and development, logistics, production, quality control, assembly, and supply chain management,the Company has successfully reengineered its value streams. This has led to a significant reduction in waste, increased efficiency, tighter costcontrol, and improved product quality. MGI Tech has formed a specialized Lean Committee, tasked with spearheading lean manufacturing transfor-mation projects and developing corresponding management strategies. The lean transformation has notably reduced work hours in the manufactur-ing process, effectively cutting overall costs and ensuring production stability through standardized processes. Currently, MGI Tech’s pursuit ofcontinuous improvement has entered a phase focused on value-driven outcomes and empowerment, steadily progressing towards businessintegration and the adoption of intelligent manufacturing practices.
Qingdao MGI Lean Production TrainingWuhan MGI Lean Production Training
Building organiza-tional capacity
The Lean Committee initiated the “Outstanding Team Leader” program to strengthen management founda-tions, implement a flat management structure, establish team management processes, and conduct quantifi-able assessments, all aimed at fostering a positive and continuous cycle of team development.The Lean Committee supported the “Craftsmen Plan” within the Human Resources Development program,which aims to chart a clear and visible path of growth for students, team members, and team leaders, therebycontributing to a deeper understanding and refinement of business processes.Lean practitioner capability development
By the end of 2023, the Lean Committee had proposed a total of 1,919 improvement suggestions, of which1,133 were approved and 513 were successfully implemented, representing a 45% increase compared to theprevious year.The Lean Committee has categorized the improvement proposals into six major categories and establishedstandards for profit accounting related to these improvements.The Lean Committee promoted a sharing mechanism for improvement proposals, which includes analyzingthe reasons for unsuccessful proposals, collecting feedback from frontline staff, promoting best practices,and ensuring that these improvements are accessible to every team member.
Lean proposalimprovement
Shenzhen launched 3 special projects, focusing on breakthroughs in reagent and chip production, as well asquality enhancement.Wuhan initiated 29 special projects, aiming to enhance the efficiency of key equipment in T7/G99/2000sequencing’s Incoming Quality Control (IQC), improve overall efficiency in warehouse material preparation,instrument and reagent production, FQC inspection, and packaging and shipping, as well as optimizingfacility layouts and establishing new standards.Qingdao introduced three special projects, initially focusing on improving the efficiency and quality of E-25sequencers, reagents, and chips, with plans to extend these improvements to automated 960 product line inlater stages.
Carrying out leanspecial improvementprojects
By the end of 2023, a total of 15 lean improvement weeks had been held, with 8 focusing on self-improve-ment, accounting for 58.3% of the events and attracting 2,344 participants.By the end of 2023, a total of 15 lean training sessions had been conducted, including 9 internal sessions,accounting for 60% of the total and covering a total of 876 participants.
Carrying out leanimprovement weeks
and lean training
About MGI Tech
Sustainable Development
Transform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Follow-up and improvementNonconforming Product Control Procedure
MGI Quality Philosophy
Quality ServiceMGI Tech upholds the principle that quality management is its core competitiveness and considers customer service as a vital complement. TheCompany champions the “Five Synchronization” quality management model, which encompasses a comprehensive and integrated system coveringall business processes and value chains. This system is designed to meet both domestic and international compliance standards while leveragingdigital technology for empowered integrated management. MGI Tech has established a robust quality and safety assurance mechanism thatextends throughout the entire product lifecycle. The Company is dedicated to promoting excellence in smart manufacturing and places a highpriority on quality. Concurrently, MGI Tech has developed a comprehensive customer service management system. By adopting a customer-centricapproach, the Company delivers professional, efficient, and attentive services. Committed to building a strong customer service brand, it aims formutually beneficial and collaborative development with its customers.
To prevent the unintended use or distribution of substandard products, MGI Tech has established and strictly adheres to a series of internalprotocols, including the Nonconforming Product Control Procedure, and the Recall Management Procedure. Additionally, we have implemented acomprehensive system for the identification, documentation, containment, reporting, investigation, disposal, and monitoring of non-conformingproducts, ensuring the safety and efficacy of medical devices and safeguarding human health. As of the end of December 2023, there had been noincidents of quality and safety issues, adverse reactions, recalls, or instances of non-compliance identified during random inspections.
The Company prioritizes quality and compliance, having designed and executed a series of specialized quality management training programs.These programs cover various aspects including medical device regulations, information security laws, international and domestic standards, aswell as knowledge and tools related to quality management, totaling 60 courses. By the end of 2023, the Company had invested over 2,000 hoursin training, involving 4,200 participants.
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Delivering High-Quality, Satisfactory Products
MGI Tech adopts the “Five Synchronization” quality management model, integrating science, technology, quality, standards, and intellectual proper-ty rights. Upholding the philosophy of “excellence in intelligent manufacturing, quality first”, we implement a quality policy that emphasizes “adher-ence to standards, pursuit of excellence, commitment to innovation, and continuous improvement”. Our quality management structure is robust, withthe CEO as the chief responsible officer for quality and safety, the EMT as the operational decision-making body, and the Global Quality SystemVP overseeing overall management, ensuring clear roles and an efficient operation. We have established detailed procedures, including theMedical Device Product Design and Development Management Procedure, Production Management Procedure, Customer Service ManagementProcedure, Quality Control Procedure, and others to fully execute quality responsibilities, establish a quality integrity mechanism, and build agovernance system safeguarding product quality.
Pursuit of excellence
We diligently complywith global and localregulations, as well asindustry standards.Our commitment is todelivering high-quali-ty, safe, eco-friendly,and effectiveproducts, and productportfolio, ensuring weget it right from thestart.
Prioritizing customersatisfaction, we excelin quality byunderstanding andfulfilling customerneeds, and consis-tently exceeding theirexpectationsthroughout theproduct lifecycle,from design todelivery.
Innovation lies at theheart of intelligentmanufacturing. Itdrives our continuousimprovement of thecore competitivenessof our products,adding value for ourcustomers.
We embrace acraftsman’s ethos,constantly pushing ourlimits and raising thebar for intelligentmanufacturingexcellence.
ContinuousimprovementCommitment to
innovation
Discoverer
Production manage-
ment procedureProduction-relatedwarehouse management
Online defect record formONR
Nonconforming product reportNCMR
Identification manage-ment standards
Freeze manage-ment regulations
Investigate non-con-
forming products
Nonconforming product reportNCMR
Completion
Excellence in intelligent manufacturing, quality firstAdherence tostandards
Leadership roleFull participation
R1
R1
Quality controlprocedure
Non-con-
forminghandling
teamQA
Identification, recording, and isolation
of non-conforming products
Prevent the spread ofnonconforming items
Develop disposalplans for non-con-forming products
Review andapproval
QCC TrainingAnti-Static Knowledge Training
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools for
Future HealthcareMessage From Chairman
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Improving the Global NetworkMGI Tech is continuously refining its global network and localizing its global marketing efforts. The Company has established local sales teams forthe China, Asia-Pacific, Europe-Africa, and Americas regions. To support local business growth, subsidiaries have been opened in key cities includ-ing San Jose (USA), S?o Paulo (Brazil), London (UK), Paris (France), and Shenzhen (China). Furthermore, customer experience centers in Beijing(China), London (UK), product portfolio, Berlin (Germany), and Tokyo (Japan) enable local researchers and partners to engage with MGI Tech'sadvanced technologies and innovative platforms. These centers provide comprehensive technical support and application guidance for diverserequirements, such as training, technical testing, and project validation.In 2023, MGI established over 10 customer experience centers.MGI Tech actively cultivates comprehensive customer relationships by employing a refined customer satisfaction measurement system andimprovement mechanism. Regular customer surveys are conducted, and improvement measures are formulated based on the feedback received.The Company places great importance on customer feedback and complaints and has established an efficient system for managing and monitoringthem through its CRM system. A comprehensive customer service management system covering pre-sales, in-sales, and after-sales phasesensures swift and effective responses to and effective resolution of customer concerns. Additionally, the Company has established a series ofservice standards, including Pre-sale Technical Support Standards, Client Training Service Management Standards, After-sales Remote ServiceManagement Standards, Warranty Service Execution Standards, and Complaint Management Procedures, aiming to enhance service quality andoperational efficiency.
MGI’s customer service quality enhancement system
Customer Service Management
We have established a standardized“Customer Satisfaction SurveyProcedure” to regularly assesssatisfaction levels. Utilizing the CRMsystem, we conduct surveys viaemail, phone, and other methods toassess customer satisfaction acrossservice and product offerings. Thisenables us to promptly capturecustomer sentiments regarding ourproducts, delivery, and servicequality. By identifying areas forimprovement and enacting relevantmeasures, we are committed tocontinuously enhancing ourproducts, thereby increasingcustomer satisfaction.
Customer satisfaction survey
The Company regularly organizesjoint visits and technical exchang-es between the technical andmarketing teams to engage withcustomers. This includes the“Spring Breeze” initiative, whichentails 39,000 high-quality visitsto both current and prospectiveclients, in addition to routinecustomer visit. These efforts areaimed at deepening our under-standing of customers’ genuinerequirements, collecting feedbackon product utilization, andfacilitating swift resolution andproduct optimization.
Customer visit
The official website featuresonline seminar videos and trainingplatforms, offering webinars andinstructional content covering theperformance and technicaloperation of our products. Theseresources serve as valuableplatforms for both potential andexisting customers to seekproduct guidance, participate intechnical discussions, adhere tostandardized operations, andengage in remote trainingsessions.
Online seminar videos andtraining platforms
Feedback investigation results
Validation of reported
problemsAddressing theidentified problemsFeedbackSatisfaction survey
Escalating to qualityinvestigationFeedback investigation results
Adverse events
Investigation
Quality improvement initiatives to enhancecustomer service
Customized product portfolio & projects
Project designProject acquisition and management
Customization
CRM system
Forwardingthe issue
Recall
NG
OK
Product disposal
Corrective actions
Causes
Effectiveness
verification
Reporting togovernment
Close
Customerservice center
FAS/FSE
QualityCustomer
Feedback
PersonnelProduct
A structured support systemEnhanced feedback, complaint, andissue resolution mechanismsProblems
Service qualityenhancement
ProductoptimizationServiceenhancement
StructuredsupportRefinedsystem
Skill assessmentCapability assurance
Engineer qualificationassessmentTraining system for productimplementationComprehensive product
portfolioThird-party integrationNew product support
Closed-loop management process for customer feedback
During the reporting period, MGI
Cumulative installed base of laboratory automationproducts reached more than4,000 units
Added449 installed units for sale in 2023
automated biobanking business revenue grewover300% year-on-year,15 biobanks were completed
Key Performance
About MGI Tech
Sustainable DevelopmentTransform
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Advancing Life Science Tools forFuture HealthcareMessage From Chairman
Annual new sales of geneticsequencers exceeded854 units,a year-on-year increase of
41.39%
In December 2023, MGI Tech announced the furtherenhancement of its Brisbane-based Customer ExperienceCenter (CEC) in Australia. The center now features the DCSLab experience, catering to researchers in Australia andNew Zealand. This initiative allows researchers to accessgenomics, cellomics, and spatialomics technologies in oneplace, corresponding to the “DNA Omics”, “Cell Omics”, and“Spatial Omics” sections of the DCS Lab. They will also havehands-on opportunities to operate various technologyplatforms.This upgrade aims to provide local users with more efficientand direct services, offering them high-quality experienceswith advanced tools and platform essential for scientificresearch in fields such as medical science, environmentalexploration, cancer research, and agricultural genomics.
The Company regularly conducts satisfaction surveys and loyaltyassessments tailored to the specific needs of different customersegments. Utilizing a five-point scale, these surveys are conductedquarterly or semi-annually. The results are analyzed, shared withpertinent departments, and used collaboratively to devise improve-ment strategies. The customer service center continuously monitorsthe progress of these improvements and their implementation.
In 2023, the Company conducted a customer satisfactionsurvey. Aimed at gaining an objective understanding ofcustomer contentment with various service aspects andbenchmarking them against competitors, the surveyindicated that the Company’s overall customer satisfactionscore stands at 95.1 points, reflecting a generally satisfac-tory situation.
DCS Lab Special Experience at the MGI CEC Australia
Survey Results
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MGI Tech is committed to ethical procurement practices,embracing the principles of legality, compliance, and integrity.The Company has established independent supplier manage-ment structures at both its headquarters and regional/factorylevels to streamline supply chain operations.To regulate supplier management and ensure supply chainsustainability, MGI Tech has instituted protocols such as theSupplier Management Procedure, Supplier Material ChangeManagement Specification, and Supplier Quality ManagementSpecification, which assess suppliers based on criteria includ-ing product quality, safety practices, and procurement manage-ment. In addition, suppliers are required to completedocuments such as the Supplier Survey Form, sign the SupplierSupply Chain Security Letter, and the MGI Anti-CommercialBribery Commitment. Ethical conduct reminders are issuedduring significant holidays, emphasizing adherence to businessethics. Furthermore, MGI Tech expects all its procurement staffto strictly adhere to the Procurement Code of Conduct.Moreover, suppliers are also mandated to provide environmen-tally compliant materials that meet RoHS/REACH require-ments, along with relevant testing reports and declarations.On-site audits are conducted to assess the effectiveness ofsuppliers’ hazardous substance management, fostering aharmonious, efficient, and eco-friendly supply chain ecosys-tem.
Supply Chain Management
100 % review completion rate
Key PerformanceAs of 2023
MGI Tech is dedicated to constructing a secure and stable supply chain to support sustainable development. The Company is developing substan-tial in-house production capabilities for critical core materials such as enzymes and dNTPs, while also ensuring regional supply chain support forvital components like optical elements. In alignment with the strategic positioning of various regional production hubs, MGI Tech is extending itslocalized supply chain systems. Concurrently, grounded in lean production principles, the Company is establishing an intelligent production systemand bolstering the global logistics and warehousing infrastructure, thereby enhancing the efficiency of product delivery to end-users.To fulfill the delivery needs of customers worldwide, make full use the local supply chain, and mitigate the risks posed by supply disruptions, theCompany has strategically established seven production bases and nine international spare parts warehouses globally, and initiated the develop-ment of a comprehensive network of global logistics center. We adhere to the driving forces of quality, delivery and cost, thereby successfully estab-lishing a global sequencing technology ecosystem accessible within a three-hour radius. As a result, this builds a long-term, sustainable and stablesupply capacity for the Company to develop domestic and overseas markets.
MGI Tech, a trailblazer in China’s upstream gene sequencing industry, champions open collaboration and strives to empower downstreamecosystems. The Company fosters partnerships with innovative enterprises globally, spurring technological innovation, applicationtransformation, regulatory compliance, and public science education within the sector. With a robust lineup of three core product lines, MGITech has cultivated a vibrant and diverse industry ecosystem in collaboration with upstream and downstream partners. This synergy hasfacilitated the broad application and integration of genomics across various domains. The Company continually supports its partners inscientific research, clinical practice, and emerging sectors, propelling advancements in foundational research, the development of newclinical diagnostic technologies and products, and the exploration of novel application areas. In the recent reporting period, MGI Techintroduced the LIFE2GETHER online information sharing platform, a pioneering ecological information-sharing platform within China’sgenetic sequencing industry. This one-stop platform serves to showcase application scenarios based on the MGI Tech Tool Platform. Theplatform gathers the full range of our products along with compatible third-party products. By providing a wider array of choices for endusers, LIFE2GETHER aims to promote the expansion of application scenarios and fields.
Launch of the LIFE2GETHER Online Information Sharing Platform
Sustainable Supply Chain
MGI Tech conducts a comprehensivepreliminary evaluation of potential suppliers,assessing their company qualifications,quality control systems, delivery speed,responsiveness, technical capabilities, andprice competitiveness. Suppliers meetingMGI’s standards undergo on-site evalua-tions by dedicated teams to ensure theirability to fulfill our requirements.
Supplier admission
In cases where a supplier consistentlyfails to meet MGI’s criteria orexperiences a prolonged decline inperformance, we will initiate ourwithdrawal process. This includesproviding advance notification to thesupplier, offering opportunities forcorrective action, and strategicallyplanning for replacements.
Supplier withdrawalWe perform quarterly assessmentsof our suppliers, focusing onquality, delivery timeliness,service, and cost-effectiveness. Bysetting clear evaluation metricsand challenging targets, wemotivate suppliers to continuouslyimprove their performance anddelivery quality.
Regular supplier performanceevaluation
Case Study
42 Manufacturers, 116 distributors or agents reviewed
845 suppliers in total
285 suppliers with quality management systemcertification39 suppliers with ISO14001 Environmental Manage-ment System Certification
324 Local suppliers (based in Guangdong province)
Case Study
About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life ScienceInnovation
Advancing Life Science Tools for
Future HealthcareMessage From Chairman
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About MGI Tech
Sustainable DevelopmentTransform
Leader in ComplianceGovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life Science
Innovation
Advancing Life Science Tools forFuture HealthcareMessage From Chairman
6768
Sound corporate governance is crucial for MGI Tech’s robust operational performance and serves as the fundamental prerequisite forcomprehensive prevention of compliance risks. We strictly adhere to the laws, regulations, and regulatory requirements stipulated by theChina Securities Regulatory Commission and the Shanghai Stock Exchange. Upholding business ethics, we operate with higher standardsto practice normative management, safeguarding the Company’s excellent reputation and image while sharing the fruits of our businessdevelopment with our valued shareholders.
Leader in Compliance Governance
Corporate Governance
Compliance Operations
Risk Management
Responsible businessoperations
Strengthening Information Securityfor Fostering Healthy Development
2023-2035 Plan
Status of GoalAchievementProactively pursued ISO 27001 Information Security Manage-ment System and ISO 27701 Privacy Information ManagementSystem certificationOrganized annual internal control inspections and risk-specificoptimization activitiesEstablished a continuous, stable, and systematic investorreturn mechanismEnsured compliance with tax laws with no instances of taxviolation foundHad access to over 110 markets worldwideProvided anti-corruption and integrity training to all employees
Long-term CommitmentAligned with UN SDGs
Main Objectives and Outcomes
“Regulatory compliance is the cornerstone for our corporate development. Following the principles of integrity, fairness and transparency, we complywith the laws, regulations and market rules, and safeguard the rights and interests of our shareholders, employees, customers and partners. We haveestablished a sound internal control system and strengthened our risk management to ensure our stable and sustainable development.”
To operate responsibly and improve the business environment
Progress of Actions
6970
Successful CompletionSteady Progress
Progress Update:
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Caption: MGI security & privacy system certifications
Strengthening Information Security forFostering Healthy Development
Operational Security
MGI Tech’s information security policy is designed to balance the confidentiality, integrity, and availability of information assets, ensuringfull compliance with relevant regulations. The Company flexibly adjusts protection priorities based on evolving business needs to ensuresecurity without compromising operational efficiency. Our information security principles encompass comprehensive leadership account-ability, active participation from all personnel, vigilant supervision and control mechanisms, and a commitment to continuous improve-ment. These principles collectively establish a robust and effective information security management system.
ISO 27001 Information Security ManagementSystem Certification for various sites, includingIMABOT SHENZHEN, Wuhan MGI, Qingdao(MGI, EGI, Hua'ao, DGI), IMABOT KUNSHAN,and Latvia MGIISO 27701 Privacy Information ManagementSystem Certification for Latvia MGI
Information Security Management
In order “To Develop and Promote Advanced Life Science Tools for Future Healthcare”, MGI Tech places a high priority on informationsecurity. The Company strictly adheres to the Cybersecurity Law of the People’s Republic of China, Personal Information ProtectionLaw, Data Security Law, EU GDPR requirements, and other pertinent laws and regulations across various jurisdictions. To safeguarddiverse information assets, MGI Tech has instituted internal management systems, including the Information Asset Identification andRisk Assessment Guide and Information Security Operations and Maintenance Management Procedures. In the realm of informationsecurity management certification, the Company aligns with international standards such as ISO/IEC 27701:2019 for Privacy InformationManagement Systems, ISO/IEC 27001:2013 for Information Security Management Systems, and GB/T 22239-2019 for Informationsecurity technology—Baseline for classified protection of cybersecurity. MGI Tech is committed to enhancing its information securityorganizational structure and management system framework continually. The Company conducts regular security audits to ensure thatall implemented measures meet industry benchmarks and provide a solid foundation for the secure and stable operation of its business.By the end of 2023, MGI Tech’s information security management system had successfully passed the SGS security and privacy certifica-tion surveillance audit.
Information Assurance and Risk ManagementMGI Tech integrates the principles of confidentiality, availability, and integrity into its information security framework. The Companyconducts comprehensive identification of information assets and risk assessment across all business processes and personnel. Employ-ing a closed-loop management approach, MGI Tech actively engages in environmental construction, risk identification, analysis, assess-ment and treatment to effectively manage information security risks. Moreover, the Company keeps abreast of the latest security manage-ment practices, routinely updating its risk assessments to address emerging threats and vulnerabilities, continuously refining its riskassessment protocols and management practices. This commitment ensures that information security risks are consistently minimized tomeet the requirements of various privacy protection laws.
External Certifications Obtained
Information Security Risks
Unauthorizedaccess
Response MeasuresResults
Access control involves user identificationand authentication, requiring uniquecredentials and regularly updated complexauthentication information. Accountlockouts are triggered after multiple failedlogin attempts.
Established a comprehensive account andaccess management system;Standardized procedures for account creationand closure; conducted regular reviews of userpermissions;Implemented identity authentication andinformation management strategies; andMinimized the risk of unauthorized access.Externalcyberattacks
security measures such as firewalls,intrusion detection systems (IDS), intrusionprevention systems (IPS), and antivirussoftware were deployed.
Decreased the success rate of cyber attacks;Raised awareness of vulnerabilities andpotential threats; andDetected and responded swiftly to securityincidents.
Internal threatsand socialengineeringattacks
Training programs were implemented toenhance employee security awareness andminimize internal misuse of informationassets.Lower the success rate of social engineer-ing attacks,improve staff capability torecognize potential risks.
Minimized internal misuse of informationassets;Lowered the success rate of social engineeringattacks; andImproved staff capability to recognize potentialrisks.
Third-party risks
Third-party vendor security practices wereevaluated and monitored to ensure clearsecurity agreements and defined responsi-bilities.
Developed a supplier management system forregular third-party management; minimizedthird-party risks; andIntensified monitoring and management ofthird-party relationships.
7172
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Information Security Culture DevelopmentMGI Tech has established clear information security policies and procedures to ensure that all employees are well-informed and adhereto these guidelines. Furthermore, the Company is committed to fostering a robust information security culture by elevating employeeawareness. This is achieved through annual online training modules and assessments that encompass fundamental security knowledge,internal policies, and routine security practices. Additionally, MGI Tech bolsters the security team’s response capabilities through regularphishing drills and simulated attack exercises, thereby enhancing the overall readiness and effectiveness of the security measures inplace.
Product Security Capability RequirementsMGI Tech stands as an upstream entity in the gene sequencing industry. In its capacity as an equipment provider, the Company’s opera-tions do not extend to gene sequencing services or the collection, storage, or processing of data generated by sequencers. The Compa-ny’s sequencers feature offline operation capability, ensuring that data, whether stored locally or on high-performance computers, can beprocessed without the need for a shared network connection. This feature not only guarantees data accuracy but also minimizes the riskof unauthorized external access via the Internet. Furthermore, during the R&D process of its products, MGI Tech has developed networkresearch materials in alignment with the Guiding Principles for the Registration Review of Medical Device Cybersecurity. These materialsundergo a comprehensive evaluation of the products’ security levels, data flow management, and network security capabilities, coveringthe following aspects:
Product SecurityIn the product design process, MGI Tech strictly adheres to the Guiding Principles for the Registration Review of Medical Device Cyberse-curity in China, EU GDPR requirements, and pertinent regional laws and regulations. The Company has established managementprocedures for product data and privacy protection, processes for responding to data subject rights, confidentiality systems, and privacypolicies. These measures are designed to safeguard the rights of data subjects and to ensure the legality, fairness, and transparency ofprivacy data management during the data processing phase. In terms of product development, MGI Tech prioritizes the integration ofinformation security to guarantee the security and reliability of its products. Furthermore, the Company has engaged third-party entitiesto perform security capability assessments, vulnerability scans, and certifications for product safety, resulting in several products meetingregistration review and GDPR security standards.
Comprehensive online information security training andassessments are conducted for all employees, coveringessential concepts, internal policies, daily office safetypractices, software licensing compliance, and secureuse of technology. These initiatives are designed tobolster employees’ information security consciousness,reduce the risk of social engineering threats, andenhance overall information security literacy within theorganization.
Information Security Training and Assessment
Regular phishing exercises are conducted, andthird-party security service providers are invited annual-ly to simulate network attacks. These activities areaimed at strengthening the security team’s prepared-ness to response to real threats, while also evaluatingthe effectiveness of the Company’s existing securitydefense mechanisms.
Phishing Drills and Simulated Attacks
Conducting 3 training sessions themed on information anddata security protection
3,602 employees participating in information and datasecurity protection training
98% employees participating in information security
and data protection examsReceived0 Case of confirmed complaints related to
customer privacy violations
Key Performance2023 Information Security
Optimized product design requirements by fully integrating GDPR and regional cybersecurity requirements throughout design input,product testing, and verification phases.Data Ownership: MGI Tech is not associated as the controller, processor, or owner of genetic data;Local Operation: Genetic sequencer operate without an internet connection, preventing external laboratory personnel from
accessing data via the internet and effectively avoiding data leaks;
Security Protection: Gene sequencers lack wireless data transmission modules or cards; wired LAN ports are restricted to
internal network construction; USB ports on the device are designated solely for emergency data backup to prevent data lossdue to network failures or other exceptional circumstances.
Product designProduct Data Privacy Compliance
Comprehensively optimized the data processingworkflow to ensure that all stages, including data collec-tion, transmission, storage, and destruction, meetcompliance requirements.Data processing
Interviewed main business and support departments involvedin data processing, analyzed the status of information protec-tion, identified opportunities for improvement, and implement-ed various compliance measures.
Business scope
Explicit definition of the software’sname, model specifications, releaseversion, and software security level;Identification of product usagescenarios, along with organizeddata flow diagrams and networkinterface diagrams; andAnalysis of the product’s applicabili-ty to each of the 22 networksecurity capabilities, detailingimplementation methods forapplicable capabilities and reasonsfor inapplicability.
Identification and management ofthe required environment and the listof hardware and software necessaryfor running the software, along withan assessment of the security statusof the current version;Employment of automated tools orengagement of third-party organiza-tions to scan for vulnerabilities in theproduct, identification of availablepatches and existing vulnerabilities;andDefinition of procedures fordeploying patches and addressingvulnerabilities, determination of theseverity of vulnerabilities using theCommon Vulnerability ScoringSystem (CVSS) and the businessmodel, documentation of the statusof repaired and unrepaired vulnera-bilities, and explanations for anyunresolved vulnerabilities.
Shipment of the product withantivirus software activated bydefault in its initial configuration.Comparison of the operationalstatus of the deployed software withand without the antivirus featureenabled to ensure seamlessoperation, and monitoring for anysystem freezes or blue screenerrors to verify compatibility.Routine maintenance and trouble-shooting involve updating theanti-malware client version, engineversion, antivirus library, andanti-spyware library to maintainoptimal security performance.
Network security capability
Network security patchesand vulnerability management
Safety management software
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Third-Party Testing Products
Corporate Governance
MGI Tech strictly adheres to the legal and regulatory framework, including the Company Law of the People’s Republic of China and the Securities Law,as well as compliance guidelines such as the Code of Corporate Governance for Listed Companies in China and the Rules Governing the Listing ofStocks on Shanghai Stock Exchange. The Company has established a robust information disclosure management system and investor relationspractices. Additionally, it has enhanced internal controls and oversight of risk management to standardize corporate conduct and ensure the Compa-ny’s healthy and stable development.
MGI Tech has lawfully established a corporate governance framework comprising the shareholders’ meeting, the board of directors, the supervisoryboard, and senior management. The Company has clearly delineated the responsibilities of each functional department, resulting in a corporategovernance mechanism that is founded on a clear delineation of statutory powers and duties, transparency in operations, harmonious functioning, andeffective checks and balances.
The shareholders’ meeting is convened and conducted strictly in compliance with the Rules on Shareholders’ GeneralMeetings of Listed Companies and the Company’s Articles of Association, ensuring the meeting’s legitimacy. Allshareholders, including small and medium-sized shareholders, are afforded equal treatment, with each provided withample opportunity to articulate their views during the Company’s shareholders’ meetings.
Governance Structure
Shareholders’
Meeting
The Board of Directors operates in strict compliance with the relevant laws of the People’s Republic of China, specificallythe Company Law, and adheres to the Company’s Rules of Procedures of the Board of Directors. The Board comprisesseveral committees, including the Strategy and Investment Committee, Audit Committee, Remuneration and AppraisalCommittee, and Nomination Committee, which assist in the Board’s daily operations and provide robust support for theCompany’s sustainable growth.By the end of the reporting period, the Company’s board of directors comprised 12 directors, including 3 directorsappointed by institutional investors who do not hold other positions in the Company, 4 independent directors and 2female directors. The directors bring a wealth of diverse industry expertise and a broad range of corporate managementexperience to the table. This varied background of the Board members establishes a strong foundation for the Compa-ny’s enduring development.
Board ofDirectors
The composition and size of the supervisory board adhere to all applicable laws and regulations. In addition to timelyconvening and conducting their own meetings, all members of the supervisory board have consistently attended theCompany’s shareholder and board meetings as required.Supervisory
Board
Shareholders’ Meeting
Supervisory BoardBoard of Directors
Strategy andInvestment Committee
Remuneration andAppraisal CommitteeAuditCommittee
NominationCommittee
Guiding Principles for Network Security Registration Review of Medical Devices: G99/T20/E25
GDPR-EuroPrise Certification: MGI ZTRON Appliance/Robotic Ultrasound System
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MGI Tech rigorously adheres to the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange and the Administrative Measures onInformation Disclosure by Listed Companies. It has established a robust internal information disclosure system and process to ensure that disclosedinformation is truthful, accurate, complete, timely, fair, concise, clear, and understandable. Additionally, MGI Tech proactively manages investorrelations, enhancing communication with current and prospective investors through various channels, including the “SSE E-interactive” platform,in-person research events, virtual roadshows, broker strategy sessions, telephone, company website, and email. By the end of 2023, the Companyhad maintained a record of accurate disclosures with no instances requiring correction.
Investor Relations Management
Compliance Operations
MGI Tech continuously strengthens its internal control standards to enhance business management, and bolster risk prevention and control capabili-ties, thereby promoting standardized operations and sustainable development within the Company. It has implemented the Internal Control Manage-ment Procedures, and Daily Internal Control Inspection and Reporting Standards to ensure the effective execution of corporate business goals andrelated policies. The Company follows a multi-stage internal control management process that encompasses prevention, auditing, correction, andreporting measures, thereby consistently reinforcing compliance with internal control standards.Internal Control Management Process
Timely reporting of work to superiors ensures the acquisition ofpertinent guidance through effective communication. Theresponsible department should then consistently monitor theprogress of the implementation to ensure its successful execu-tion.
Evaluate the effectiveness of internal controls and submit theassessment, as provided by the certified public accountant, tothe securities exchange. Disclose this evaluation alongside theCompany’s annual report to the public.
MGI Tech places significant importance on sharing its development outcomes with shareholders. To achieve this, we have established the MGITech Shareholder Return Plan within Three Years after Listing. This plan fosters long-term and stable relationships with shareholders while prioritiz-ing investor returns. In formulating this plan, the Company considered factors such as shareholder preference, development stage, profitability, andcash flow. We strive to implement a consistent and reliable profit distribution policy that strikes a balance between short-term benefits and long-termgrowth.
Investor Relations Management
Internal Control and AuditingKey Performance
Held 7board meetings
Held 5 meetings forthe Audit Committee
Held 1meeting held for theRemuneration Committee
Held 2 meetings for theNomination Committee
Issued145 public
disclosures
Reception of
institutes visits
As of 2023Key Performance
Establish “red line” rules in accordance with the Company’sArticles of Association;Undertake a comprehensive systemic transformation project tostreamline the Company’s systems, identify control processrisks, and establish internal control measures, thereby continu-ously strengthening the internal control system and processes;Regularly conduct internal control self-assessments and inspec-tions;Provide organizational management-related knowledge trainingto compliance and internal control personnel to enhance theirprofessional capabilities.
The Audit and Risk Control Department executes auditing tasksfor risk modules across various business sectors of the Compa-ny as outlined in the annual audit plan, offering well-reasonedrecommendations to streamline and oversee the Company’smanagement practices;Perform routine audits on all legal entities, subsidiaries, andsignificant branches of the Company, aligning with both internaldemands and external regulatory stipulations;Conduct special audits as needed, focusing on areas such assales, procurement, or other specific matters.
Overseas Compliance
MGI Tech is dedicated to strict compliance with local laws, regulations,and ethical standards in all overseas operations. The Company hasdeveloped internal policy documents addressing export controls, person-al privacy, and anti-commercial bribery to safeguard the sustainablegrowth of its international markets and to mitigate the risks and potentiallosses from unlawful activities. Additionally, MGI Tech has instituted athorough compliance process and a robust communication and reportingmechanism with local stakeholders. This not only clarifies the Company’scompliance expectations and obligations, ensuring that both employeesand management are well-informed and follow these guidelines, but italso helps to build a positive corporate identity. By doing so, the Compa-ny gains the trust and support of local markets, which in turn aids in theexpansion of its overseas business ventures.
PreventionAuditing
Query resolution rate on “SSE E-interactive” platform100%
As of 2023Key Performance
Correction
4 times of internal control and audits
Reporting
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Held 141 investorscommunication events
Reception of1,783institutional investor visitsDealt with22 inquiries addressedon SSE E-interactive platform
7980
RiskControl andManagementProcedure
Fully leverage the preventive role of thefirst line of defense, continuouslystrengthen routine risk training, andpromote proactive risk prevention andcomprehensive management with aholistic awareness of potential threats.
Risk prevention
Develop applicable risk rating assess-ment criteria in line with businessdevelopment objectives. Choose suitablerisk assessment methodologies based onthe type of the risk and the practicalities ofrisk management.
Risk assessment
Ensure the comprehensiveness andapplicability of the risk database.Contin-uously gather and dynamically updateinformation on risk management, as wellas pertinent internal and external data.
Risk identification
Analyze risks at various levels, identifycorresponding control objectives andactivities, and compile a comprehensiverisk control matrix.
Risk analysis and response
Risk Management
Decision-makingLevel
Bearing the ultimate responsibility forrisk management and internal controlOverseeing the establishment andimplementation of risk control systems
Board of DirectorsAudit Committee
Owners and those accountablefor risk and internal control
Business Departments
ManagementLevel
ManagementLevel
ExecutionLevel
Supporting, coordinating, and assisting in theimplementation of internal control and risk responsemeasures
Legal DepartmentRisk Control Department
Responsibility:
Primary responsible party forinternal controlProcess: Ensuring compliance inboth procedural and substantiveaspectsRole: Creating value and effectivelymanaging internal controls
Coordination: Managing high-risk matters acrossdifferent processes and domainsJob: Establishing and promoting risk controlmethodology, focusing on in-process supervisionRole: Serving as a helping hand to the businessdepartment without meddling in their affairs
First line of defense
(Execution)
Second line of defense
(Supervision)
Third line of defense
(Auditing)
Audit and Risk ControlDepartment
Conducting independent assessmentof the effectiveness of the first andsecond lines of defense
Internal Audit/Integrity Team
Job: Conducting post-eventinvestigations and establishing adeterrent effectRole: Providing independentassessment and supervision
Risk Management
MGI Tech places a strong emphasis on risk management and has established a robust risk management mechanism. By integrating its unique charac-teristics with the external environment, the Company has established a three-tiered defense system, enabling the timely identification and analysis ofrisks, leading to the standardized management of company-wide risks. In light of potential risk events, MGI Tech implements a comprehensive riskmanagement program that encompasses risk prevention, identification, assessment, and response. The Company continuously integrates informationfrom various departments and subsidiaries, classifying and dynamically managing risks in a proactive manner. For significant risks identified, MGI Techdevelops targeted control strategies. The Company systematically manages risks within its business processes through the use of risk lists and controlmatrices, ensuring the Company’s ability to effectively respond to a variety of risks, thereby supporting its sustainable development.
Supervising the daily risk management andinternal control work
Key Performance
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1 risk managementtraining session
Special optimization on
5 risks items
MGI Integrity Portal
8182
Email Report: 19537955110@m-gi-tech.comPhone Report (same number forWeChat): +86 19537955110Reporting via Letter or In-Person:
Address: Room 805, 8th Floor, Building11, Beishan Industrial Zone, YantianDistrict, Shenzhen, China.Reporters may choose to report in-per-son or through other appropriatemethods as deemed suitable.
Reporting methods
The Company is committed to protect-ing the identity of whistleblowers,ensuring that their information remainsconfidential.Whistleblowers will be rewarded basedon the quality of clues and the validity ofevidence provided, following a tieredsystem.
Whistblower managementReporters must provide accurate andvalid information and evidence, includ-ing specific details about the individualinvolved.Confirmation of receipt will be givenwithin 3 days, and the whistleblower willbe confidentially notified of the receiptof their report.Internal investigations will be conductedin accordance with the Whistleblowingand Case Investigation Standards andother relevant institutional procedures.Feedback on the investigation resultswill be provided within 3 months.
Reporting procedure
Responsible Business OperationsMGI Tech is committed to responsible business operations, actively preventing and firmly opposing unfair competition while striving to advance thehealthy operation of the industry. In line with these principles, MGI Tech has established a robust system for clean governance and anti-corruptionmanagement, along with a responsible responsible marketing, so as to cultivate a healthy business environment both internally and externally.
MGI Tech considers business ethics and integrity as fundamental components of its corporate culture. To this end, the Company has put in placeInternal Supervision Management Procedures, Red Line Management Regulations, and Integrity Incentive and Rewarding Measures to govern theexecution of internal inspections and reporting and case investigation processes. The overarching goal is to minimize operational risks and foster anenvironment of integrity and professionalism in the workplace.The Company has established a dedicated Integrity Portal as a distinctive platform to reinforce a culture of integrity and cleanliness within the organi-zation. Through internal communication and training initiatives, we ensure that our employees possess a thorough understanding and heightenedawareness of business ethics and compliance standards. Additionally, a robust internal complaint and reporting mechanism has been put in place toencourage employees to safely and anonymously report any observed misconduct.In addition, MGI Tech actively participates in organizations such as the Anti-Fraud Alliance and the Trust and Integrity Enterprise Alliance. The Compa-ny has adopted a blacklist system and collaborates with industry peers and members of external associations to share information on violators, aimingto elevate ethical standards across the entire industry. MGI Tech also engages in regular dialogue with stakeholders such as agents, customers,remove "investors", and suppliers. By signing integrity commitments with these stakeholders, the Company strengthens its commitment to upholdinghigh standards of business ethics and integrity. These actions demonstrate MGI Tech’s unwavering commitment to fostering business ethics andintegrity.
Business Ethics
Logic Diagram: Reporting Management Process
1,440 employees participatedin integrity training
2 hours of integrity trainingper person on average
As of 2023Key Performance
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Key PerformanceAs of 2023
8384
Compliance management personnel evaluate investment transactions to determine if they meet the criteriafor concentration of undertakings as defined by the Anti-Monopoly Law. This assessment considers variousfactors, including the transaction structure, post-transaction shareholding, voting rights, and board appoint-ments. They also ascertain whether the transaction qualifies for an exemption. Should a declaration benecessary, the Company will submit it to the anti-monopoly enforcement agency before proceeding with theinvestment activities upon receiving approval.
MGI Tech strictly adheres to the Anti-Monopoly Law of the People’s Republic of China and other relevant legal regulations to ensure compliantbusiness operations. The Company has established a robust competition compliance management system, overseen by dedicated compliancepersonnel. These professionals are tasked with issuing preemptive warnings against potential market monopolization behaviors and conducting bothmid-term and post-event audits, so as to guarantee that all corporate operations, strategic decisions, external collaborations, and developmentalinitiatives comply with the legislation aimed at curbing unfair competitive practices. What’s more, MGI Tech offers ongoing compliance advice andguidance to employees, emphasizing the importance of anti-unfair competition measures to prevent and oppose any form of unfair competition. As ofthe end of 2023, the Company had maintained a clean record, with no legal disputes arising from confirmed anti-monopoly practices or incidents ofunfair competition.
Anti-monopoly
Anti-monopoly Measures Taken by the Company
Compliance officers scrutinize contracts to ensure they do not lead to the exclusion or restriction of competi-tion, thereby preventing the formation of horizontal or vertical monopolistic agreements. Contractual productprices must align with the Company’s established pricing system. In instances of low pricing, an explanationciting special circumstances is required, along with obtaining approval from the relevant company authority.This process is designed to prevent market dumping and protect the legitimate rights and interests of bothoperators and consumers.
Compliance officers pay close attention to reviewing agreements with suppliers and customers to ensurethey do not contain provisions that fix resale prices to third parties or set minimum resale prices. Thisvigilance helps safeguard consumer rights and uphold fair competition in the marketplace. Additionally, theCompany performs regular internal audits to identify and address any issues related to the internal opera-tions of the business, further reinforcing the commitment to fair competition and legal compliance.
MGI Tech adheres strictly to pertinent laws and regulations governing marketing activities. To ensure compliance, we have established internal policiessuch as the Marketing and Promotion Behavior Guidelines. All promotional content in external communication materials is subject to review by theLegal Department to ensure adherence to advertising legislation and mitigate the risk of intellectual property infringement. Furthermore, we conductongoing responsible marketing training for our marketing personnel to enhance their awareness and understanding of ethical marketing practices. Asof the end of 2023, the Company had maintained a record free of any violations concerning the branding of products.
Total amount of taxespaid by the Company
28,688thousand yuan
Responsible Marketing
MGI Tech is committed to tax compliance practices, and strictly complies with the Tax Collec-tion and Administration Law, Value-Added Tax Interim Regulations, Enterprise Income TaxLaw, and Individual Income Tax Law of the People’s Republic of China, along with otherrelevant national and local laws, regulations and policies. We have implemented a range ofmeasures to ensure the standardization and compliance of our tax management practices.Besides, we oversee tax affairs through comprehensive monitoring and management, conduct-ing regular risk assessments and audits. Moreover, we prioritize internal tax education andpublicity to raise staff awareness and compliance. We actively engage with national and region-al tax authorities for oversight, proactively report tax information, and ensure timely andaccurate tax reporting. We strictly adhere to all tax regulations to prevent any tax violations.
Tax ComplianceExternal investment
General business contracts
Signing agreements with upstream suppliers and downstream customers
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Nurturing the “Three Good”Culture for an Enriched Life
Employee Rightsand Interests
Employee Care
Occupational Healthand Safety
Social ResponsibilityPrograms
MGI Tech upholds the Three Good Culture of “Stay Healthy, Study Well and Work Hard”, which underscores our commitment to respectingemployees’ rights and interests. We have established a comprehensive compensation and benefits system to ensure employee safety andhealth, as well as to support their professional growth and development. We prioritize fostering an environment where employees can realizetheir full potential, showcase their abilities, and express their talents. Committed to building a diverse and inclusive workforce, MGI Techstands firmly against any form of discrimination and bias. We are dedicated to cultivating an equitable and inclusive work environment, aimingto achieve shared success and mutual development among our employees and the Company. Meanwhile, we are conscientious in discharg-ing our social responsibilities and in promoting the values of progress and advancement.
Value Growth Partner
2023-2035 Plan
Status of GoalAchievement
Employees received a total training duration of over 100,000hours annuallyEliminated all forms of discrimination and prejudice to ensurefair and unbiased recruitmentConducted annual care activities for overseas employeesand female employeesEnsured timely and full payment of social insurance for allemployeesMaintained zero recorded cases of occupational diseasesand Level III or above liability accidentsGenetic technology benefiting more than 10,000 peopleCarried out rural revitalization or public welfare donationactivities every year.
Long-term CommitmentAligned with UN SDGs
Main Objectives and Outcomes
“We firmly believe that sharing the consensus of growth value is critical for sustainable development. We are committed to the common develop-ment of our employees, customers and the society, and the creation of a more open, inclusive, and diverse environment to create a brighterfuture.”
To embrace diversity and inclusiveness, and practice social responsibility
Progress of Actions
8788
Progress Update:
Successful CompletionSteady Progress
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MGI Tech embraces the Three Good Culture of “Stay Healthy, Study Well and Work Hard”, dedicated to fostering a work environment that encouragesa sense of responsibility, innovation, and proactive initiative among employees. Our goal is to nurture a vibrant and innovative talent pool, one that notonly respects individual lives but also actively engages in and pursues the study and application of life sciences.
StayHealthy
MGI Tech is attentive to its employees’ health, focusing on various aspects including the office environment, physicalactivities, and a scientific diet. The Company implements measures like a health assessment system, comprehensivephysical fitness evaluations, and complimentary health check-ups for all staff members, thereby promoting targetedprevention and health management. In addition, MGI Tech offers personalized exercise and nutritional guidance tailoredto employees’ needs. They also organize a range of special activities aimed at reducing body fat, enhancing complexion,and lowering uric acid levels. These initiatives are designed to assist employees in achieving a state of improved physicalfitness, well-being, and intelligence .
Maintain self-awareness, proactivity,and resilience; control your diet andstay active; maintain passion anddrive, and uphold a positive attitudeeven in adversity.
MGI’s “Three Good” Philosophy
Stay Healthy
Engage in proactive learning andscientific cognition; gain insight intothe essence of things and cultivateinterdisciplinary thinking; apply yourknowledge to achieve tangiblebusiness outcomes.
Study Well
Self-driven: Focus on ambitious goalsand set challenging objectives; takeresponsibility, collaborate efficiently,and execute precisely to ensuresuccessful results.
Work Hard
MGI Tech is committed to embodying the philosophyof “My health is my responsibility, and health manage-ment begins with me”. The Company facilitatesannual physical fitness assessments for its employ-ees, ensuring that each individual maintains a consis-tent awareness and understanding of their physiologi-cal and biochemical indicators, as well as their overallphysical fitness. Concurrently, MGI Tech proactivelydelivers subsequent health guidance and interven-tions to support employees’ wellness journeys. By theend of 2023, the participation rate among the Compa-ny’s domestic employees had reached an impressive94%. The initiative also recognized a group ofstandout individuals as the “Physical Fitness Expertsof the Year”, leveraging their stories to inspire andmotivate colleagues to prioritize their health.In addition, MGI Tech offers healthy meal options andhosts weight loss competitions. A total of 135 employ-ees have voluntarily formed 27 teams to take part inthe “Get Fit Together Group”, an initiative focused onself-intervention for those with concerning healthfindings from their physical examinations.
Annual Physical Fitness Assessment
Double Ninth Health Festival
MGI Tech champions a distinctive health culture among itsemployees, promoting the dissemination of wellness concepts totheir families and social circles. In September 2023, the Companysuccessfully hosted its annual “Double Ninth Health Festival”,inviting employees from diverse regions to join with their families,friends, and partners in an impromptu hiking adventure. Thisfestival transcends the mere celebration of individual birthdays; itis an occasion that fosters familial bonds, community spirit,friendly rivalry, and an optimistic approach to life.Self-disciplineProactivity Self-driven
Nurturing the “Three Good” Culture for an Enriched Life
Case Study
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9192
MGI Tech champions a healthy lifestyle, seamlessly integrating it with the Company’s “Three Good” principles. The innovative useof staircase spaces enhances this commitment. Artistic murals of pets like flamingos and mammoths adorn the stairwells, while thecreations of the second generation of MGI children are uniquely displayed along the stairways. Each step resonates with motivation-al slogans that narrate the climbing team’s journey and calorie markers that track the energy burned. Additionally, fire escape routestickers on each floor transform stair-climbing into a metaphorical ascent of Mount Everest. These engaging staircase designs serveas a tangible manifestation of MGI Tech’s “Three Good” culture, inspiring employees to adopt a healthy regimen of mindful eating,regular exercise, mountain climbing, and walking.
Stair Climbing Culture at MGI Tech
Employee Sports Day
The annual Sports Day at MGI Tech is a key event that not onlyreflects the Company’s culture but also highlights the employ-ees’ commitment to health and fitness. In 2023, the eventsuccessfully engaged employees in a variety of competitions,including basketball, soccer, table tennis, badminton, planking,North Mountain speed racing, tug-of-war, dry land curling, andrelay marathon. These activities not only tested their physicalprowess but also embodied the “Three Good” Culture, i.e.,“Stay Healthy, Study Well and Work Hard”. The sports dayeffectively showcased the Company’s vibrant, energetic, andhealthy workforce.
A program for identifying and nurturing managerial talent from promising employees through a project-based,long-term training approach that integrates industry, academia, and research.
This initiative aims to deepen employees’ understanding of the Company’s culture, operations, andorganizational structure, reinforcing core values and fostering consensus through regular online andoffline MGI history and cultural training sessions. The initiative attracts global staff, with over 8 sessionsannually and over 400 participants. A total of 1,300 employees, representing 46% of the workforce, havesuccessfully completed the assessment.
Aimed at facilitating new hires’ cultural integration and role transition, the Company has increased investment inonboarding. The “Underwater Navigating” program for new employees recruited from society covers over 90%of the staff who joined that year, while the “Setting Sail” program for recent graduates achieves 100% coverage.
These programs aim to enhance cadre talent development, cultivate high-potential individuals atvarious levels, and improve the overall management skills required for a global business strategy.The design of these plans is based on the talent capabilities required for a global business layout.
A short-term initiative to support newly-promoted staff at all levels with rapid role adaptation and understandingof their new responsibilities.
StudyWell
MGI Tech adheres to the “One Core, Two Drives, Four Forces” philosophy, offering a broad curriculum that includes gener-al skills, professional knowledge, and leadership management via online and offline lectures. Our “Eagle” and “Wing”programs are designed to develop scientists, senior engineers, and management specialists. For new hires, the FullParticipation Culture enhances cultural integration and fosters the growth of internal trainers and mentors. Additionally,we’ve established a self-learning platform to encourage continuous skill enhancement and talent development.Eagle Program
Wing Program
Full Participation Culture
Escort, Pilot, Guide, and Long Voyage Programs
Sailing and Submarine projects
126,680 hours of
employees training in total
Key Performance
As of 2023
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44.2Hours of employees training on average
72,596.9 training hours for male employees
54,083.1 training hours for female employees
2,867 employees participated in training1,643 male employees participated in training1,224 female employees participated in training
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WorkHard
MGI Tech recognizes exceptional teamwork and individual contributions among its employees through an honor awardsystem. This system includes both team and individual awards, such as the MGI Most Valuable Award and the MGI Super-star Pioneer Award. By doing so, the Company underscores the significance of mission-driven awareness and the valueof honor as a motivational tool. This approach not only boosts employees’ intrinsic motivation and sense of pride but alsopromotes the overall innovation and growth of the organization.
We commend teams that are guided by ambitiousobjectives, achieving organizational synergy and effectivecommunication. Through forward-looking innovation, theseteams have delivered outstanding performance, bringingsignificant value to the Company’s major events andspecial projects. Their efforts have made a substantialcontribution to the Company’s development.
MGI Most Valuable Award (team award)
Talent Team BuildingIn an industry characterized by technological intensity, having a stable and highly skilled workforce is crucial for the Company's development. MGITech formulates human resource development plans aligned with its strategic objectives. It optimizes its organizational structure based on businessdevelopment requirements, emphasizes innovation-driven initiatives, and prioritizes talent planning in core areas. On one hand, the Company focuseson attracting technical experts and global talent to enhance its global presence, fosters industry-academia partnerships, and nurtures future talent. Onthe other hand, it bolsters internal talent assessment, establishes clear career progression paths, identifies and promotes outstanding individuals,updates its talent database, adjusts talent pool promptly, and cultivates a versatile and capable workforce. This approach ensures a robust talentpipeline to support global business expansion.
MGI Tech strictly adheres to the relevant legal and regulatory frameworks of the People’s Republic of China, including the Labor Law, the LaborContract Law, and the Employment Promotion Law, as well as the labor and employment legislation applicable within the jurisdictions where itoperates. The Company has established multiple management systems, including the Recruitment Management Process, to standardize employeerecruitment and onboarding processes, eradicate all forms of discrimination and prejudice, and ensure fair, impartial, and orderly recruitment practices.As of the end of 2023, the Company had signed labor contracts with all its employees, founded on the principles of equality and voluntariness remove.
Fair Recruitment
Employees Composition As of 2023
Sorting byage (pie chart)Total numberof employees
Number of male employeesNumber of female employees
30 years old and below31 to 40 years old41 to 50 years old51 years old and above
Higher VocationalEducation (HVE) DiplomaVocational secondaryeducation and belowVocational secondaryeducation and below
Chinese Mainland, Hong Kong, Macao and TaiwanAmericas regionEurope and Africa regionAsia-Pacific regionAustralia-New Zealand region
UnitPeople
UnitPeople
UnitPeople
UnitPeople
2,867
2,331
1,532
2,613
1,643
1,224
Sorting byarea (pie chart)
Sorting byeducationbackground(pie chart)
We also recognize individuals who embody the spirit of“MGI Three Good” Practices. These award recipients haveprovided fresh perspectives and directions for the Compa-ny’s objectives in areas such as research and development,production, marketing, and support. They have maderemarkable contributions and served as pioneers and rolemodels within the organization. Their efforts and talentshave not only delivered outstanding value but have also seta benchmark for excellence that we aspire to.
MGI Superstar Pioneer Award (individual award)
Key Performance
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MGI Tech has always prioritized talent pipeline development, providing employees with dual career advancement channels (management and profes-sional tracks). Leveraging guidelines like the Talent Development Management Process and the Position Competency Certification ManagementStandards, the Company conducts regular talent assessments and devises targeted development plans. These plans include offering a wide range oftraining programs, promotion opportunities, and cross-departmental job rotation experiences. Tailored training plans are also established for keypersonnel, high-potential employees, and international talents to continuously unlock their potential, thereby laying a solid talent foundation for theCompany’s sustained growth.
Career Advancement
Employee Care EnhancementMGI Tech emphasizes employee well-being and values diversity and inclusiveness, striving to create an equitable and diverse workplace with a focuson the development of international and female staff. Additionally, the Company offers comprehensive benefits and support, assisting employees inneed and promoting a culture of solidarity and mutual support.
MGI Tech has established a variety of internal communi-cation channels, including annual and departmentalmeetings, communication platforms, emails, a WeChataccount, and an internal publication, to efficiently dissemi-nate information and share company news.
The Company strengthens employee bondsthrough events like “tea chats” and groupmeals, fostering an environment of trust andteamwork. Additionally, performance reviewand complaint systems are in place to ensurethat employee voices are heard, therebyenhancing overall organizational unity.MGI Tech offers annual health check-ups andholiday gifts to employees, and providesamenities like cafeterias, dormitories, andgyms to ensure relaxation and rest beyondworking hours.
The “MGI Mutual Aid” program offers supportto employees facing hardships, promotesinvolvement in fundraising efforts, andprovides essential aid to colleagues, reflect-ing a spirit of compassion and unity.
MGI Tech has established internal documents such as the Compensation and Performance Management Process and Compensation ManagementProcedures to develop a robust compensation and benefits system. Aligned with business needs and industry norms, the Company offers competitiveremuneration packages comprising base pay, allowances, year-end bonuses, sales incentives, and special awards. It also implements differentiatedincentive mechanisms based on employee performance and development potential.The Company adheres to national laws and regulations, providing employees with a variety of leave policies , ensuring their rest and vacation rights.It also ensures timely and full social insurance contributions for all employees and purchases commercial insurance for those in specialized positions.Furthermore, MGI Tech extends comprehensive welfare and support to foster personal growth and provide both material and emotional well-being forits employees.
Compensation and Benefits
Fostering open internal communication
Balancing work and lifeSpecial hardship support
Employee Health Team Building Activities
Employee Health Team Building Activities
Employee Career Advancement Path
TechnologyMarketingProductionSupport
Employee
Profession TrackManagement Track
Group ManagementCorporate ManagementDepartmental Management
Employee Assistance Program
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Visit, communication and training activities
for overseas employees
MGI Tech is dedicated to fostering a diverse, equitable, and inclusive workplace, with a focus on the diversity and inclusiveness of international andfemale staff. Recognizing the value of diverse overseas teams, the Company enhances adaptability to various markets and cultures through cross-cul-tural interactions and equal career opportunities. For women, MGI Tech offers a gender-neutral work setting and flexible schedules to advance theircareer empowerment and development. This contributes to a vibrant work environment that nurtures all employees’ growth and supports the Compa-ny’s global development and innovation.Through its “Female Employee Care and Support Program”, MGI Tech provides comprehensive career development opportunities, holiday benefits,and subsidies for female employees, also prioritizing their health and well-being. Regular health checks, health education initiatives, and improve-ments to the work environment further strengthen our support for female staff. In addition, we are firmly against workplace sexual harassment,ensuring a safe and respectful workplace for all women employees.
Diversity and Inclusiveness
9798
At MGI Tech, female employees not only hold significant positions in R&D, product management, and sales, but also play indispensable roles in crucialmanagement positions. They combine their innate sensitivity, resilience, and empathy with the Company’s professional training, showcasing a distinc-tive mix of intellectual and rationality, thereby creating a more efficient and harmonious work environment.
MGI Tech prioritizes fostering culturalexchanges among its overseas employ-ees to enhance cross-cultural under-standing and team collaboration. In 2023,over 100 employees from the Asia-Pacificregion visited the headquarters for animmersive experience in both strategicand cultural aspects. Furthermore,specialized cross-cultural trainingsessions were introduced for employeesfrom Europe and Africa, aimed atdeepening their understanding ofChinese culture. Simultaneously, theseinitiatives aimed to help Chinese staffgain better insights into internationalcultures, thereby boosting global teamcommunication and cooperation skills.
MGI “Her” Power
Women account for 50% of the workforce, yet only 28% of women are employed in the fields of science, technology, engineering,mathematics, and medicine (STEMM). We strongly believe that a diverse, equitable, and inclusive environment is more conducive tofostering problem-solving and innovation. At MGI Tech, these women are spread across various countries and regions, holding diversepositions. Their interpretations of “cool” differ, and they aim to inspire every woman in the STEMM field, serving as role models andsources of empowerment in their communities.
Women in Science | Defining “Cool” in the World of STEMM
The coolest thing is exploring the limits of technology, breaking through barriers, and making everymoment that benefits our users truly “cool”.
?Chief Operating Officer of MGI Tech
Follow your passion, then you are fearless despite of the difficulties ahead.
The coolest thing isclimbing a 5,000-meterpeak and delving into a10,000-meter chasm,writing my scientificexplorations in the realmof “extreme” spacetime.?Vice General
Manager of Qingdao MGI
The coolest thing istraversing New Zealandsolo and crossing theAtlantic alone with twopieces of luggage.
?Market Director forEurope and Africa
As a native Latin American,the first time I saw theNorthern Lights and experi-enced the extreme coldwas incredibly “ cool”.
?Technical Support
Engineer from Brazil
The coolest thing is success-fully applying for 15 highlyinnovative internationalpatents, with 2 of thembreaking through technologi-cal barriers.
?Head of Sequencing
Chemistry Research and
Development
Keep moving forward and chase your dreams, and the light ahead will shine on you.
Paid maternity leave and breast-feeding leaveNursing room support
Cervical cancer and breastcancer screeningsHealth education activitiesFair promotion opportu-nitiesGender-nuetral policy
Anti sexualharassment
Strict prohibition of sexual harassmentEnsuring respect for female employeesWell-equipped nursing roomFree menstrual productsprovided in the restroom
Workenvironment
Careerdevelopment
Holidays andsubsidies
Well-being
MGI FemaleEmployee Care andSupport Program
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MGI Tech’s workforce are spread across various overseas countries, including France, Germany, Latvia, the UK, Singapore, Japan, India,Indonesia, South Korea, and the United States. As our company expands internationally, we embrace and incorporate diverse local culturalpractices and organize care activities for our international employees. In December 2023, several overseas branches of of MGI Techorganized Christmas-themed team-building events, demonstrating our commitment to inclusiveness and our respect and care for employeesfrom diverse cultural backgrounds.
Team-Building Activities for Overseas StaffCase Study
99100
536 overseasemployees in total
53 nationalities involved amongoverseas employees (including China)
Occupational Health and SafetyMGI Tech rigorously adheres to the Production Safety Law of the People’s Republic of China, Law of the People’s Republic of China on Preventionand Control of Occupational Diseases, as well as regional statutory requirements. Based on these legal frameworks and pertinent system standards,the Company assimilates cutting-edge international concepts in occupational health and safety management, thereby erecting a distinctive, high-cali-ber occupational health and safety management system tailored to MGI Tech’s unique attributes. This system empowers global MGIers with a secureworking environment, concierge-style safety technical support, user-friendly communication channels, and management tools. In concert with allMGIers and external stakeholders, MGI Tech strives to jointly cultivate an exemplar of safety, health, harmony, and sustainability in occupational healthand safety.
Key Performance
As of 2023
Scene photos from overseas staff team-building activities
MGI Tech has established a dual-tier EHS Committee governance structure comprising the corporate headquarters and subsidiary entities, accompa-nied by dedicated Safety & Environmental Protection Departments and EHS specialist roles serving respectively as the routine administrative bodiesfor occupational health and safety at both the headquarters and subsidiary levels. This framework clearly defines the responsibilities of eachstakeholder, interlinking them through the decomposition of overarching objectives, empowering each entity with substantial autonomy in managingtheir respective domains and fostering a continuous improvement mindset. This configuration is conducive to the prompt, precise, and agile identifica-tion, response, and adaptation of local occupational health and safety management requirements across the Company's global regions.
Simultaneously, we have instituted a top-down business support mechanism and a bottom-up information feedback system, mandating monthlyassessments and summaries of occupational health and safety (OHS) management practices. These are followed by global OHS business communi-cation conferences organized by the Corporate Headquarters' Safety & Environmental Protection Department, promoting comprehensive improve-ment of occupational health and safety management.Moreover, for our globally dispersed R&D and production facilities, application support centers, and customer experience centers, we have put in placeOHS inspection management protocols and oversight mechanisms. These entail the conduct of unscheduled unannounced inspections and internalaudits on an annual basis, strengthening the OHS interface between the corporate headquarters and subsidiary entities, thereby fostering improvedOHS management across the organization.
Organizational Structure
EMT
SubsidiaryEHS Team
R&D UnitSupport UnitMarketing
Unit
Production
Unit
Safety Director
EHS Department
Executive AgencyEHS Department
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After meticulous scrutiny of the ISO 45001 occupational health and safety managementsystem, production safety standardization, globally pioneering OH&S management philoso-phies, the dual-preventive approach encompassing risk tiered management and hazardrectification, alongside over 200 principal relevant laws and standards, in conjunction with theerstwhile OH&S documentation of its subsidiaries, MGI Tech has formulated a series ofinternal documents, including the EHS Committee Management Procedure, EHS ObjectiveManagement Procedure, Hazardous Chemicals Safety Management Procedure, and Chemi-cal Laboratory Production Safety Regulations. These have ultimately coalesced into acomprehensive, universally applicable Occupational Health and Safety Management SystemManual bespoke to MGI Tech’s operations.Concurrently, we facilitate the accommodation of localized, distinctive needs at the subsidiary level through dedicated input channels. Subsidiaries areempowered to identify and compile such requirements, which are subsequently subjected to review and revision by the corporate headquarters. Thisprocess yields a current, advanced, and inherently adaptable “1+N” Occupational Health and Safety Management System, uniquely tailored to MGITech's operations and continuously poised for optimization. In 2023, this comprehensive management system has been effectively implemented.
System Building
MGI Tech believes that accident risk prevention is of paramount priority within Occupational Health and Safety Management. Based on the specificcharacteristics of materials and processes inherent to our research and production activities, we have meticulously formulated distinctive criteria forhazard identification and evaluation, as well as accident classification and assessment, exclusive to MGI Tech. Following 8 months of concertedefforts, we have culminated in the creation of a MGI Tech-specific Accident Risk Assessment Inventory and an associated Accident Risk Database.Through these tools, we systematically conduct Occupational Health and Safety training, monitoring, supervision, risk control measures, andemergency preparedness initiatives.In addition to our steadfast commitment to robust accident risk management, we actively pursue enhancements to occupational health conditions forall relevant stakeholders. Taking cues from European Union concerns regarding Occupational Health and Safety, we diligently attend to the occupa-tional health and safety needs of laborers across a range of domains, including labor employment practices, engagement with external parties,comprehensive safety briefings and personal protective equipment provisions, safe operational procedures, tool refinements, and the allocation ofemergency supplies.We also actively enhance our employees' safety literacy and consciousness by conducting regular events such as safe production month, fire safetymonth, and online safety training sessions. Utilizing WeChat official accounts and video platforms, we disseminate safety knowledge and cultivate apervasive culture of safety. In accordance with the requirements outlined in the Emergency Preparedness and Response Control Procedure, theCompany annually organizes fire drills, chemical emergency simulations, and biological spill exercises, thereby reinforcing employees’ emergencyawareness and defensive skills. These measures ensure the protection of both company assets and personnel lives, as well as the legal and regulato-ry compliance of our production operations.
Risk Management and Occupational Health Improvement
The principal R&D and production facilitieshave attained certifications for both the ISO45001 and the ISO 14001.
Domestic principal R&D and production facilitieshave successfully completed the establishmentof Production Safety Standardization.
There was zero recorded cases of occupational
diseases or accidents of Level III and above
involving accountability.1 Network: Headquarters + R&D and ProductionFacilities + Customer Experience Centers +External Warehouses + All Personnel
1+N: A Universal Occupational Health and SafetyManagement System Tailored to MGI Tech +
Localized Patch Portals
1 List: MGI Tech’s Accident Risk Identification
and Assessment List
亮点绩效Performance Highlights
To realize the digitalization and visualization of Occupational Healthand Safety Management, we have established the MGI Tech Occupa-tional Health and Safety Management System Platform. This platformintegrates modules encompassing the safety information database,incident hazard detection and rectification, accident risk database,permit management, and regulatory repository, thereby enhancing theefficiency of Occupational Health and Safety Management, accentuat-ing key focus areas, and amplifying the efficacy of investments inOccupational Health and Safety Management.
Furthermore, in response to the distinct characteristics of various occupational health risks, we have implemented targeted improvementmeasures:
In addressing the challenges presented by conventional storage containers, namely their incompatibility for stacking,oversized configurations prone to damage, we have undertaken a redesign to enable stable stacking and adapt contain-er dimensions according to item size, catering to diverse logistical requirements. Additionally, we have incorporatedmore durable materials in their construction. These enhancements have not only led to significant improvements inspace utilization and operational efficiency, but have also generated economic benefits through time savings andreduced material costs.
In addressing the stringent safety requirements associated with frequent chemical transfers, we have custom-designedhazardous chemical transport equipment in various specifications, incorporating features such as leak-proofing,lightweight construction, enhanced stability, and ease of handling during transit.In light of the heightened risks posed by certain overnight chemical syntheses, we have specifically formulated theOvernight Experiment Safety Management Regulations. These guidelines encompass a comprehensive evaluation ofparameters such as chemical reaction characteristics, feedstock quantities, reaction types, and governing mechanisms,thereby establishing rigorous management requirements to ensure overnight reactions proceed safely, stably, and in anorderly fashion, with emergency response procedures remaining clear, accessible, and rational.With regard to the diverse scenarios encountered in material handling and transfer across different occupational roles,we have devised detailed guidelines for the management of material handling and transfer. These guidelines encom-pass rigorous assessment from perspectives such as single-person risk, multi-person coordination, and human-ma-chine interaction, thereby ensuring that accident risks associated with material handling and transfer activities remainpreventable and controllable.In response to the multitude of risks confronted by operators during nitrogen cylinder replacements, such as equipmentvibration, excessive temperatures, and chemical leaks, Wuhan MGI Tech has undertaken Human Factors Engineeringimprovements, introducing transfer vehicles for the purpose of transportation. These measures not only render thenitrogen cylinders significantly safer during transit but also effectively mitigate the potential risk of muscle strainsincurred by employees during manual lifting and carrying operations.
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2,000 employees participated inoccupational health and safety-related training
63.7 thousand Chinese yuan
invested in employee occupationalhealth and safety
289.6 thousand Chinese yuan
invested in safety production
235 employees in high-risk positionsfor occupational diseases235 employees acceptedoccupational disease screening
0 employee suffering fromoccupational diseases
124 hours of occupational healthand safety-related training in total
124 sessions of occupational healthand safety-related training
As of 2023Key Performance
Fulfilling Social Responsibility
MGI fully leverages its industrial advantages to fulfill social responsibilities with the power of science and technology, improving the accessibility ofhigh-quality medical resources in poor areas. In addition, MGI Tech actively engages in social welfare initiatives and rural revitalization efforts, sharingin collective growth and fulfilling its social obligations.
In 2023, MGI Tech fully leveraged its industrial advantages to fulfill social responsibilities with the power of science and technology, improving theaccessibility of high-quality medical resources in poor areas. Additionally, MGI Tech conducted genetic sequencing educational programs by organiz-ing campus visits and inviting students into laboratories for hands-on learning experiences.
Social Welfare
Event site photo of HKSTP αLab’s Laboratory Experience Day
From June 4-5, 2023, MGI Tech collaborated with NanjingUniversity’s Medical School to conduct an educational outreachprogram featuring the portable gene sequencer,DNBSEQ-E25. This initiative seamlessly integrated thepractical applications of gene sequencing instruments andtechnology across research, industry, and academic realms.Through hands-on experience, students not only enhancedtheir theoretical knowledge and technical proficiency but alsodeveloped their competencies in life sciences, genomics, andinterdisciplinary skills. This initiative is a step towards forginginnovative collaborative models in life science education.
Nanjing University’s Gene Sequencing Outreach: MGI Tech’s DNBSEQ-E25 Application
Following the official opening of HKSTP αLab at the Hong KongScience Park in 2023, MGI Tech extended an invitation to 9 studentsand 5 teachers from the Chinese Foundation Secondary School inHong Kong to partake in the “αLab Experience Day” event. Thisevent took the form of a seminar aimed at providing students withbasic knowledge of genetic sequencing. Additionally, laboratory toursand practical computer operation sessions were organized to helpthe students gain insights into genetics and cutting-edge industrytechnologies.
Laboratory Experience Day
Case Study
Bioinformatics Analysis TrainingSessionGroup Photo of Faculty and Students fromNanjing University Medical School
Case
High-Throughput Sequencing Education and Training Products
DNBSEQ-E25RS(Education-specific)
SamplingDNA ExtractionLibrary PreparationHigh-Throughput SequencingData Processing
MGIEasy Saliva Sample
Collection Kit
Also available for Saliva SamplesAlso available for SE50 read lengths
High-Throughput Sequencing Reagent Kit
(FCL SE100)
MGIEasy Magnetic Beads Blood
Genomic DNA Extraction Kit
MGIEasy Individual Identification
Library Prep Kit
Education and Training Analysis
SystemDNA Characterization Analysis
Software
0.5h1h5.5h4h5min
SamplesStudent SalivaDNBSEQ-E25(Education-specific)
Hair color, pupil color, wet and dry earwax, lactose tolerance, alcoholingestion blush response, power bursts and endurancePhenotypic Prediction ResultPlatform
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In accordance with China’s 14th Five-Year Plan for National Economic and Social Development, the Long-Range Objectives for 2035, and the 14thFive-Year Plan for Bioeconomy Development, as well as the current status of the biological industry, bio-economy enterprises are encouraged toenhance their innovation within the biological sector. This involves advancing the integration of cutting-edge technologies like genetic testing andbio-genetics with disease prevention efforts, initiating early screenings for significant illnesses, and extending the accessibility of high-quality health-care resources to reach a broader patient population.
Genomic Technology Benefits All
MGI’s tele-ultrasound robot, integrated with 5G technology, has conducted over 30,000 diagnoses across various regions, thereby enhancingmedical service efficiency. It has also contributed to medical education; for instance, the First Affiliated Hospital of Sun Yat-sen Universityprovides specialized training through remote systems. Furthermore, Shenzhen Yunying, in collaboration with the Shenzhen Charity FederationYantian, donated a set of remote ultrasound diagnostic systems valued at 2.99 million yuan to the Health Bureau of Leye County in Baise,Guangxi Autonomous Region. This initiative aims to extend high-quality medical resources to underprivileged areas, ensuring that localresidents have access to superior medical care and effectively implementing targeted assistance policies.
Promoting Medical Resource Accessibility through Targeted AidMGI’s Multimodal 3D Breast Ultrasound Screening: Pioneering Early Breast Cancer Detection
In 2023, MGI Tech launched the MGI Agricultural Genomics Funding Initiative, aiming to foster collaboration among researchers andbreeders in Asia-Pacific and Middle Eastern regions. This initiative seeks to support their efforts in advancing genomic sequencingand genotyping research to expedite the breeding and improvement of crops and livestock.The project features a three-tiered award system, with the top prize offering complimentary access to designated DNBSEQsequencers, along with installation, reagents, and sequencer training. This initiative has significantly facilitated the establishmentand enhancement of local agricultural genomics databases.
MGI Agricultural Genomics Funding Initiative
In September 2023, MGI Tech introduced a groundbreaking initialscreening platform for breast cancer, employing multimodal 3Dbreast ultrasound technology within a comprehensive mobilescreening unit. This innovative automated volumetric breastultrasound imaging overcomes the limitations of conventionalultrasound, such as reliance on operator experience and restrict-ed imaging range. It enables high-resolution 3D visualization ofthe entire breast structure and allows for simultaneous compari-son of both breasts on screen. Deployed in various cities includ-ing Shenzhen and Wuhan, by end of 2023, this initiative hadcompleted over 7,000 screenings with a 29% positive rate. It hasmarkedly heightened awareness of breast health among womenat the grassroots level and offered effective technical and servicesupport for early breast cancer detection.
On-site free clinic event featuring the automated breastultrasound mobile unit
Remote ultrasound robotic system
Case Study
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Creating Low-Carbon,Environmentally-FriendlyProducts in Response toClimate Change
107108
MGI Tech incorporates green development into its corporate strategy and everyday operations. By assessing climate risks and opportunities,developing low-carbon and eco-friendly products, prioritizing biodiversity conservation, optimizing resource usage, minimizing waste, andimplementing green operations, MGI actively shoulders its environmental responsibilities. These efforts propel sustainable development andfoster a harmonious relationship between humanity and nature.
Guardian of Our Environment
EnvironmentalManagement
ResourceUtilization
Waste Management
Green Practices
2023-2035 Plan
Status of GoalAchievement
Attain carbon neutrality by 2060Cumulatively supported over 5,500 items of the complete DNAsequences of the human genome, as well as those of otheranimal, plant and microbial species.Reduced overall production energy consumption by 10%year-on-yearProactively sought ISO 14001 Environmental ManagementSystem certificationEnsured pollution levels of wastewater, exhaust gases, noises,and other pollution sources are below local emission standards
Long-term CommitmentAligned with UN SDGs
Main Objectives and Outcomes
“We are deeply aware of the importance of safeguarding our living environment, and integrate the concepts of low carbon, environmental protection,and biodiversity conservation into every aspect of our development. We are dedicated to practicing green development with practical actions, andjointly protecting the Earth.”
Promoting biodiversity conservation and green and low-carbon development
Progress of Actions
109110
Progress Update:
Successful CompletionSteady Progress
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Creating Low-Carbon, Environmentally-FriendlyProducts in Response to Climate Change
Responding to Climate Change
The World Health Organization’s Special Report on Climate Change and Health emphasizes that climate change poses the greatestthreat to human health. MGI Tech, guided by its vision of “Leading Life Science Innovation”, recognizes climate change as a pivotal issuein sustainable development. Following the framework recommended by the Task Force on Climate-related Financial Disclosures, theCompany identifies climate-related risks and opportunities in its operations and undertakes climate risk management initiatives. Theseefforts aim to effectively manage the Company’s greenhouse gas emissions, bolster resilience against extreme weather events,implement low-carbon operations, and contribute to society's green and sustainable development.
Categories
Physical Risk
Acute
Potential Impact of RisksExtreme weather events like floods and typhoons pose threats to the stability ofthe supply chain, making it challenging to ensure the stable supply of products .Chronic
Climate change harms employee health, leading to suboptimal healthconditions that subsequently reduce overall labor force levels and adverselyaffect technology development and production efficiency.Policy andregulation
Implementation of carbon emission control policies is underway, alongsideincreased requirements for climate response and disclosure.Market
Market preferences are gradually shifting towards low-carbon products,potentially resulting in decreased sales of medical equipment.Technology
Outdated energy technologies may lead to increased production costs.Reputation
Decreased stakeholder attention towards non-environmentally friendly products
is observed.
Transition Risk
Enhance water resourceutilization efficiency byemploying recycled watersystemsUtilize renewablematerialsImplement efficienttransportation strategiesStreamline productionand distribution process-es
Establish plans forenergy conservationand emission reductionEngage in carbontrading marketsUtilize clean energies
Exploit marketopportunities forlow-carbon products
Take advantage ofgovernment incentivesForge partnershipswith educationalinstitutionsStrengthen supplychain capabilities
Diversify energy andresource usage
Resourceefficiency
Energysources
Products
Market
Adaptability
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113114
Low-Carbon, Environmentally-Friendly ProductsMGI Tech responds to the green manufacturing strategy by designing and producing low-carbon, eco-friendly products. We integrate theprinciple of green innovation into our product development process, committed to making positive contributions to environmental protectionat every stage of product value realization.
Compared to air transport, sea freight boasts a lower carbonfootprint and higher energy efficiency. Recognizing this advan-tage, MGI Tech conducted a comprehensive assessment oftransportation methods regarding their impact on operationalcosts, global resource utilization, and the environment. As aresult, the Company prioritized sea freight over air transportwithin its supply chain. To mitigate the transit time discrepan-cies between these modes, MGI Tech implemented effectivetime and inventory management practices. Furthermore, theCompany optimized container load capacity by integrating railand sea transport. By the end of 2023, the Company hadcumulatively dispatched 21 sea freight and rail freight contain-ers to destinations including the United States, Germany,Latvia, Japan, and Australia. The proportion of goods shippedvia sea freight increased from zero to 7%, leading to signifi-cant cost savings and a notable reduction in carbonemissions.
Leveraging Sea Freight to Minimize Shipping Carbon Emissions
MGI Conducts Carbon Footprint Verification for the DNBSEQ-G400 Series Gene SequencerIn line with the dual carbon strategy goals of “carbon peaking and carbon neutrality”, MGI Tech has proactively positioned itselfto support its products’ global expansion. It took the lead in the industry by initiating the “ISO 14067 carbon footprint verification”for its key products. This initiative resulted in the industry’s first certificate for product carbon footprint verification, setting a quanti-fiable benchmark for the Company’s carbon reduction objectives and strategies. According to calculations, the GHG emissionsfor the full lifecycle phase of MGI Tech’s MGISEQ-2000 (DNBSEQ G400) gene sequencer was 31,062.7 kg CO2eq; and the GHGemissions of MGI Tech’s DNBSEQ-G99 gene sequencer was 18312.71kg CO2 eq.
Product Carbon FootprintVerification Statement
Comprehensive inspection of containers at the Company’sQianhai warehouse before loading for sea freight
R&D design
We prohibit the use of harmful substances and materials, reduce resource waste,and ensure that our products comply with customer environmental requirementsand relevant legal regulations.
Raw materialprocurement
While ensuring product quality and meeting customer needs, we increase the use ofeco-friendly materials to make our packaging materials greener, more minimalist,and renewable.
Production
We promote the effective reduction of greenhouse gas emissions in both productionand transportation by utilizing new processes, materials, and technologies.
Greenpackaging
We procure more packaging materials that incorporate recycled materials, such aswhite cardboard (for outer boxes), fluted paper (for outer boxes and cases), EPE(polyethylene foam for inner padding), and wooden crates (for outer cases).
Transportation
We comprehensively assess the significant impact of transportation methods onoperational costs, global resource utilization, and the environment, with a prefer-ence for sea freight over air freight in supply chain transportation.
Total greenhouse gas emissions(Scope 1 + Scope 2)13,016.16tCO2eGreenhouse gas emission intensity
0.11tCO2e/10 thousand yuan
Key Monitoring Indicators: Greenhouse Gas Emissions
Scope 1:
Greenhouse gas emissions18.34tCO2eScope 2:
Greenhouse gas emissions12,997.82tCO2e
Case Study
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Prof. Craig Kinnear, Director of the SAMRC GenomicsPlatform (center) along with his team of scientists
MGI Tech has collaborated with Indonesia’s National Researchand Innovation Agency (BRIN) to leverage MGI’s cutting-edge lifescience technologies in supporting marine biodiversity researchand conservation efforts in Indonesia. The collaboration focuseson establishing research platforms and providing technicalsupport, including high-throughput gene sequencing, to bolsterthe protection of Indonesia’s diverse marine ecosystems.
MGI Collaborates with Indonesia’s National Research and Innovation Agency for MarineBiodiversity ConservationCase Study
Group Photo of Representatives from Both Parties
Biodiversity Conservation
MGI Tech is actively involved in biodiversity conservation, leveraging the power of technology to safeguard ecosystems. The Company’sDNBSEQ-G400 (marketed domestically as MGISEQ-2000) high-throughput gene sequencing platform, along with its stLFR (single tubelong fragment reads) technology, will support the African BioGenome Project in conducting the first sequencing of a plant species. Thisinitiative promotes biodiversity conservation across the African continent, as well as economic, social, and scientific progress.Furthermore, the Company is actively revolutionizing methods for discovering and monitoring biodiversity by establishing “eDNA metabar-coding” technology, which links high-throughput sequencing with eDNA sequences. MGI Tech has also introduced an environmental DNAmetabarcoding product based on the ATOPlex platform and DNBSEQ sequencing platform. This product empowers researchers to detectand quantify biodiversity and its changes at high throughput, offering a comprehensive one-stop environmental DNA monitoring platformfrom sample collection to analysis. The product is capable of identifying microorganisms, plants, algae, and animals in environmentalsamples such as water, soil, and sediment. It features several advantages, including no harm to living organisms, no developmental stagerestrictions, high sensitivity, broad species coverage, and robust analytical functions. It serves as a powerful tool for biodiversity monitor-ing in ecosystems post-nuclear wastewater discharge and provides a more effective approach for assessing the risks of environmentalpollution on ecosystems.
MGI Tech’s modern gene sequencing technology enables scientists to obtain the comprehensive DNA sequences of the human genome, as well asthose of other animal, plant, and microbial species, thus providing a powerful tool for exploring the origins of diverse life phenomena.
3496+
Cover multi-species applicationsUnit: Number of species
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Environmental ManagementMGI Tech adheres to the Environmental Protection Law of the People’s Republic of China and relevant environmental regulations in its operatingregions, implementing high-standard environmental management systems such as the Environmental Sustainability Management Process and theHazardous Noise Prevention Procedure. We are committed to reducing energy consumption and environmental pollution through scientific manage-ment practices while strictly adhering to the “three simultaneous” principle of environmental protection to ensure the pollution control capabilities ofprojects, the level of environmental risk management, and the coordinated development of project construction and operations.We place a high priority on creating and sustaining EHS governance frameworks and environmentalmanagement systems, undergoing evaluation system certifications to ensure the effectiveness of ourenvironmental stewardship and construct robust environmental protection measures. ProfessionalEHS management teams have been established at headquarters and all facilities, tasked withimplementing EHS guidance policies, achieving goals, adhering to management regulations, andensuring consistency in environmental management actions. These teams also rigorously monitorenvironmental risk points in production and operations, identify and assess potential environmentalimpacts, and enhance employee awareness and capabilities in environmental risk prevention throughenvironmental protection training.The Company actively participates in third-party certification activities for its environmental systems.The production bases in Shenzhen, Wuhan, and Qingdao have been certified under ISO 14001:2015Environmental Management System. Additionally, we have entrusted qualified third-party entities tomonitor pollution sources such as wastewater, exhaust gases, and noise, in compliance with localenvironmental assessment requirements, ensuring that pollutant levels remain well below the setstandards. In 2023, the Company conducted environmental pollution tests, and the reports indicatedthat all environmental indicators not only met but also exceeded the required standards.
Resource UtilizationMGI Tech is dedicated to sustainable development, prioritizing the reduction of environmental impacts in its production and operations to achievegreen practices. We believe in a symbiotic relationship between business expansion and environmental preservation, not in one at the expense of theother. To this end, we have been actively engaged in energy conservation, water resource management, and waste reduction, aiming to foster aneco-friendly image. By adopting innovative processes, materials, and technologies, we have significantly reduced greenhouse gas emissions in theproduction and transportation processes, supporting the nation’s “dual carbon” strategic objectives.
The Company highly values energy management, andstrictly complies with relevant laws and regulations.Efforts have also been made to establish a sound energymanagement system, and we have successfully obtainedthe ISO 50001 energy management system certification.Meanwhile, the Company implements effective measuresfor energy conservation and efficiency, while raisingenvironmental awareness among all staff.By the end of 2023, electricity, particularly for airconditioning and other public infrastructure, had been thepredominant energy source consumed. To address this,we systematically pursued lean manufacturing toenhance production efficiency and focused on the follow-ing areas.
MGI’ s Environmental Management
System Certificate
Key Performance
As of 2023114 thousand yuan invested in energy
conservation and emissions reduction
32 sessions of environmental
protection training
356 participants engaged in
environmental protection training
The Company has also established an energy-saving plan, introduced high-effi-ciency energy metrics, implemented an energy management platform, and adoptedmeasures such as renewable energy sources and photovoltaic green electricity tosupport the carbon verification process and align with the “dual carbon” goals. Ourmonitoring indicators include total electricity consumption, energy intensity,reduction in production energy consumption, and the proportion of cleanenergy/green electricity usage, with a focus on creating an indicator systemcentered on energy consumption and greenhouse gas emissions. To continuallystrengthen carbon emission management, the Company actively seeks reductionopportunities, improves production processes, and engages in product carbonfootprint certification efforts.
We have actively conducted systematic monitoring,control, and optimization of energy consumption toreduce energy costs. For example, Qingdao MGIinitiated energy-saving efforts in 2022 by upgradingproduction line equipment and adopting energy-sav-ing modes through lean manufacturing practices,which reduced unnecessary energy losses andimproved energy utilization efficiency. By the end of2023, Qingdao MGI had achieved a 10% reductionin overall production energy consumption andobtained clean production certification from theShandong Provincial Environmental ProtectionDepartment.
Energy Management
In response to green environmental principles and to fulfill thecriteria for green buildings, the Company installed 9,723 squaremeters of photovoltaic panels on the rooftops of Buildings B and Cat the MGI Space-Time Center headquarters in Shenzhen,connecting them with the power grid. In 2023, this initiative yieldedan annual peak electricity generation of 1.5296 megawatts,reducing CO2 emissions by 1,591.64 tons (CO2eq), and saved
2.075 million yuan in electricity expenses, underscoring the
Company’s notable contributions to promoting clean energy useand mitigating environmental pollution.
Green Energy Innovation—MGI Space-Time Center Photovoltaic ProjectCase Study
Photovoltaic panels on the rooftop of Buildings B
Qingdao MGI plant equipment
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MGI Tech adheres to the principle of “use as needed”, rigorouslycontrolling water usage in the production process to eliminate waste.We integrate the concept of water conservation into the dailyroutines of our employees, emphasizing its environmental and socialsignificance. While ensuring product quality and meeting employees’everyday needs, we continually strive to enhance water resourceutilization efficiency.Through the implementation of stringent water management practic-es, we retrofit production equipment and processes for water conser-vation and regularly maintain the water supply system, significantlyreducing water consumption. By promoting water-saving conceptsthrough training and publicity campaigns, we have successfullyraised employees’ water-saving consciousness. We have alsoimplemented various water-saving initiatives, such as wastewaterrecycling and improving equipment recycling rates, to enhance waterresource efficiency. We systematically monitor and analyze totalwater consumption and intensity, and adjust our water strategies in atimely manner to maintain optimal water management.
Water Resource Management
Waste Management
Mismanagement of the “three wastes”—wastewater, waste gases, and solid waste—can severely affect the environment and human health. There-fore, our company places a high priority on their management and has implemented a series of specific measures. We have established a rigorouswaste management system that monitors the generation, treatment, and discharge of these wastes throughout the entire process. By investingsubstantial funds and adopting cutting-edge waste treatment equipment and technologies, we ensure that our waste management practices meetnational and local standards.
MGI Tech assumes environmental responsibility for the wastewater andwaste liquids generated during the manufacturing process, which includeslaboratory cleaning wastewater, tail water from pure water preparation,backwash water, and domestic sewage. We strictly adhere to wastewaterdischarge regulations and standard, and issue monitoring reports thatcover typical indicators (such as wastewater flow rate, COD, TN, ammonianitrogen, etc.), regularly monitoring and upgrading our facilities to preventany negative impacts on the environment or neighboring communities. Inaddition, we regularly evaluate the test cycles of our equipment and theperformance of our treatment processes, so as to ensure ensure theeffective treatment of all wastewater segments.
Wastewater Treatment
Wastewater Management and Treatment Flowchart
In-Plant/On-Site TreatmentLaboratory cleaning wastewater and purewater backwash water are classified asindustrial wastewater generated during theequipment maintenance processDomestic sewage and concentrated waterproduced from pure water preparation canbe treated as typical domestic wastewater
Wastewater Category
Park wastewater treatment system
Septic tank pretreatment
Off-Site/Municipal Treatment
Municipal water qualitypurification plantIn line with our commitment to green environmental protection and sustainable development, we have established a reclaimed wastewatertreatment and rainwater harvesting system. This system effectively gathers and treats rainwater and domestic wastewater for various non-po-table purposes, including toilet flushing, road cleaning, greenery irrigation, and landscape water supply. In 2023, this approach notablyenhanced the efficiency of water resource utilization, processing 1,125 tons of reclaimed water daily, with peak daily water usage reaching800 tons. Additionally, 270 tons of reclaimed water and 50 tons of rainwater per hour were reused. Moreover, daily greenery watering, flushing,and landscape pool replenishment amounted to 463 cubic meters, utilizing 445 cubic meters of reservoir water directly for toilet flushing.These initiatives resulted in water cost savings of approximately 1.4 million yuan, exemplifying a successful practice that balances betweenenvironmental stewardship with economic gains.
Green Pioneer—Recycling and Reuse of Rainwater and WastewaterCase Study
Key Monitoring Indicators: Water Resource Management
Total water consumption120,369.59Cubic metersWater consumption intensity
0.99Cubic meters/10 thousand yuan
To further enhance the energy utilization efficiency of ourlaboratory, we have launched the Tianjin automated coldstorage project. Unlike the traditional method of utilizingmanual refrigerators, this project can increase the ratedpower by 12.4KW, reduce the floor space plus the area ofoperation and equipment room by nearly 100m?,decrease the required air-conditioning unit by 3KW, andreduce the total average operation power by about 7KW.Based on monitoring statistics, the project has achieved a20% improvement in energy-saving efficiency.
Laboratory Energy-Efficiency Renovation
Comprehensive energy consumption per everyRMB10,000 reached 0.000081 tons of standard coal
Comprehensive energy consumption
9.80 tons of standard coal
Key Monitoring Indicators: Energy Consumption Management
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Implementing paperless officepractices, transitioning dailyapplications and approvals toonline systems, thereby saving asignificant amount of paperresources.
Green office
Prioritizing office spaces located in buildings that havewon green energy-saving awards.
Green building
Installing photovoltaic powergeneration equipment on therooftop of the new headquartersbuilding, with plans to utilizephotovoltaic power for self-con-sumption in the future.
Green energy
We consistently strive to minimize waste gas emissions during produc-tion, ensuring compliance with environmental standards and fulfillingour environmental responsibilities. We have implemented rigorouswaste gas treatment procedures, utilizing advanced technologies andequipment to effectively remove harmful substances and ensureemissions meet safety standards.The Company categorizes waste gases into organic and acidic typesand treats them accordingly. Organic waste gases are treated withventilation cabinet filters and activated carbon adsorption in waste gastowers, while acidic waste gases are subjected to alkaline scrubbingand activated carbon adsorption in waste gas towers. For example, inthe chip production facility, organic gas emissions from processes suchas coating and cleaning are extracted through ventilation cabinets andthen treated by rooftop devices, resulting in ultra-low emissions ofpollutants through activated carbon adsorption.To ensure treatment effectiveness, we enlist third-party agencies forregular environmental monitoring, obtaining data on waste gasemissions and spent activated carbon, and continuously optimizing ourwaste gas treatment procedures based on monitoring results. As aresult, by the end of 2023, we had successfully prevented any emissionviolations, significantly minimizing our negative impact on the environ-mental.
Waste Gases Treatment
MGI Tech takes the management, storage, and subsequent treatmentof hazardous waste very seriously. In order to prevent leakageincidents, we have established corresponding rules and regulations fordifferent categories of waste to ensure standardized, regulated, andsystematic waste management. The Company classifies industrialsolid waste into hazardous waste and general industrial solid waste,and strictly monitors data indicators such as total hazardous wastegeneration, total general waste generation, hazardous waste genera-tion density, and laboratory waste generation.For general industrial solid waste, MGI Tech implements effectivemanagement by entrusting it to local waste management companiesfor recycling and disposal, with valuable parts being disposed of for afee. Recognizing the specificity of hazardous waste, the Company hasestablished hazardous waste temporary storage rooms in variousproduction units, with dedicated personnel responsible for collectinghazardous waste generated during the production process. Thesewaste materials are regularly collected and disposed of by third-partyenvironmental companies with the appropriate qualifications accordingto strict standards, ensuring the formation of a complete and effectivedisposal loop. This has established a virtuous cycle of hazardouswaste generation, collection, and disposal, providing crucial support toprevent hazardous waste leakage. As of the end of 2023, no hazardouswaste leakage incidents had occurred.
Industrial Solid Waste Treatment
Key Monitoring Indicators: “Three Wastes” Management
Total amount of general solid waste
159.45Tons
Total amount of recyclable waste
5.24Tons
Total amount of waste gas emissions112,985,000Cubic meters
Total amount of wastewater discharge
64,125.46Cubic meters
Total amount of hazardous waste
300.14Tons
Green Operations
MGI Tech adheres to the concept of sustainable development, dedicated toreducing environmental impact throughout its production and operationalprocesses, and takes concrete actions to safeguard ecological balance.Sustainable Practices for Green Operations
Key Performance Indicator: Use of Packaging Materials
Packaging Material Used:
Lumber15.70Tons
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A clean laboratory environment is crucial for improving work efficiency, minimizing cross-contamination risks, and ensuring the accuracy of experimen-tal results. MGI Tech effectively maintains laboratory cleanliness and safety through the establishment of well-defined protocols, regular training, anddiligent supervision.
Creating a Clean Laboratory Environment
Develop detailed laboratory cleaning protocols, including daily, weekly, and monthlycleaning task lists; andProtocols should detail cleaning guidance and frequencies for various lab areas (e.g.,workbenches, equipment surfaces, floors).
Regularly conduct cleaning and safety training for lab personnel to emphasize the importanceof cleanliness in ensuring experimental accuracy and safety; andEncourage lab members to monitor each other to ensure effective implementation of cleaningprotocols.
Establish cleaningprotocols
Implement wastemanagement plan
Provide trainingand educationalprograms
Define responsibilityallocation
Clearly define the roles and responsibilities for lab cleaning tasks;Encourage lab members to provide feedback on cleaning processes for continu-ous improvement; andRegularly inspect lab cleanliness to ensure adherence to protocols.
Select suitable cleaning agents based on the lab’s specific needs, such as residue-freedisinfectants for work surfaces; andPrepare adequate cleaning tools (e.g. paper towels, spray bottles, brushes, protective gloves)and ensure they are suitable for the lab environment.Use appropriatecleaning agentsand tools
Enact an effective waste management plan to promptly clean up waste generated inthe lab, including chemical, biohazardous, and general waste; andEnsure waste is correctly categorized, stored, and disposed of.
Caption: Corporate laboratory site photos
With extreme weather events occurring globally and the persistent trend of global warming, it has never been more crucial for us tocontribute to the protection of our planet. In 2023, we launched an internal cultural awareness campaign themed “Reducing CarbonFootprint”, aiming to educate our employees on the concept of a carbon footprint, and the benefits of reducing it, and to provide themwith practical strategies for decreasing their carbon footprint without significantly disrupting their lifestyle. The goal of this campaignwas to effectively enhance environmental consciousness among our staff and to inspire them to adopt sustainable practices in theireveryday lives.
EHS Cultural Knowledge Propaganda: 10 Simple Ways to Reduce Carbon Footprint
To fulfill the requirements of green building standards, the Company has installed six magnetic levitation chillers in the basementlevel two of Building B at the MGI Space-Time Center office. Besides, the Company has implemented a water-sourced coolingsystem that integrates the chilled water tank with the fire water tank. This system has a total chilled water storage capacity of9,668.59 cubic meters, maintaining a chilled water temperature of 7.0°C. The system operates on intelligent strategies, storingcooling energy during off-peak electricity hours and releasing it during peak demand periods, which effectively reduces operationalcosts. Project outcomes indicate that the system achieves an annual average Energy Efficiency Ratio (EER) of at least 5.3, conserv-ing 10% more electricity than conventional electric refrigeration systems do; the annual electricity savings reached 1.82 million kW·hand 2,309 tons of CO2 emissions were reduced, leading to significant improvements in both energy efficiency and economicbenefits.
Case Study
MGI Space-Time Center’s Magnetic Levitation Chiller and Chilled Water Storage System
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Cost of per humangenome sequencing
Per human genomesequencing
First Chinese genesequencingElectrophoresisMaxm-Gilbert chemicaldegradation methodSanger dideoxychain-terminationsequencing
Second-generationsequencing technology
Capillary sequencingmethodFirst capillary sequencer
Synthesis method
Localization
Year
First sequencerin China
Genomics Study ofChinese Populationin more than140,000 Genomes
ChinaMAP Chinesepopulation referencegenome set andresearchThe Million Microbiomeof Humans Project(MMHP)
Population-basedcohort intestinalmetagenomicsstudyMoore’s LawThe first sequencermass-produced inChina
One of the world’s highest dailythroughput single-unit sequencer
Pan-cancercirculating tumorDNA (ctDNA)detection in Chinesepatients
Genomics ThailandIntegrated Action PlanIndonesia's First HumanGenome Project.Ultra-high-throughput sequencers,ushering in an era of lowered cost of perwhole-genome sequencing to $100
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Appendices
Overview
Corporate Entities Covered in This Report
This is the first Environmental, Social, and Governance (ESG) report issued by MGI Tech Co., Ltd., also known as “MGI Tech”, “MGI”, “the Company”,or “we”. The Report is designed to communicate our strategies, management practices, and achievements in environmental protection, social respon-sibility, and corporate governance to our stakeholders.Reporting PeriodThis annual report covers the period from January 1 to December 31, 2023. Some content may extend beyond this timeframe, and explanations willbe provided where necessary.
Appendix I: About the Report
HK Co.MGI TechMGI International SalesMGI InnovationEGI HKEGI USCG USCG LLCMGI HKMGI LatviaMGI JapanMGI AmericasMGI DubaiMGI SingaporeMGI TECH KOREA CO., LTD.MGI AUSTRALIA PTY LTDMGI Tech GmbHMGI TECH UK LTDMGI Tech FR, SARLMGI BRASIL LTDAMGI TECH NEW ZEALAND LIMITED
refers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers to
CGI HONG KONG CO., LIMITEDMGI Tech R&D HONG KONG CO., LIMITEDMGI INTERNATIONAL SALES CO., LIMITEDMGI Innovation Co., LimitedEGI HONG KONG CO., LIMITEDEGI USA Inc.Complete Genomics, Inc.Complete Genomics LLCMGI Tech HONG KONG CO.,LIMITEDLatvia MGI Tech SIAMGI Tech Japan株式会社MGI Americas IncMGI Tech Middle East DMCCMGI TECH SINGAPORE PTE. LTD.MGI TECH KOREA CO., LTD.MGI AUSTRALIA PTY LTDMGI Tech GmbHMGI TECH UK LTDMGI Tech FR, SARLMGI BRASIL LTDAMGI TECH NEW ZEALAND LIMITED
MGI Tech, MGI, the Company, WeWuhan MGISoftware CompanyIMABOT SHENZHENIMABOT KUNSHANQingdao MGlQingdao DGIEGI TECH (SHEN ZHEN)EGI TECH (QING DAO)IMABOT HAINANYiyang MGIMGl SalesShanghai MGIShenzhen MGI Biotech
refers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers torefers to
MGI Tech Co., Ltd.Wuhan MGI Tech Co.,Ltd.MGI Shenzhen Software Tech Co., Ltd.IMABOT SHENZHEN MEDICAL CO., LTDIMABOT KUNSHAN MEDICAL CO., LTDQingdao MGl Tech Co.,Ltd.DGI TECH (QING DAO) CO., LIMITEDEGI TECH (SHEN ZHEN) CO., LIMITEDEGI TECH (QING DAO) CO., LIMITEDIMABOT HAINAN SOFTWARE TECH CO., LTDHunan Yiyang MGl Tech Co.,LtdShenzhen MGl Sales Co.,LtdShanghai MGl Tech Co.,LtdShenzhen MGI Bioelectronics Tech Co., Ltd.
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Appendix II: Sustainability Performance
129130
Basis of Preparation
The Report is prepared in accordance with the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainabili-ty Report (Trial), issued by the Shanghai Stock Exchange, the Global Reporting Initiative (GRI) Standards from the Global Sustainability StandardsBoard (GSSB), industry guidelines from the Sustainability Accounting Standards Board (SASB), and the IFRS Sustainability Disclosure Standardsfrom the International Sustainability Standards Board (ISSB). Additionally, it aligns with the European Commission's European Sustainability ReportingStandards (ESRS) and adheres to the United Nations’ SDG Compass for business action on the Sustainable Development Goals (SDGs).
Data Source and Reliability StatementThe Report utilizes data from various sources, including public data from government departments, internal statistical reports, third-party surveyquestionnaires, administrative documents and reports, and third-party evaluation interviews. All content and data disclosed in this report have beenreviewed and approved by the Board of Directors of MGI Tech Co., Ltd.MGI Tech commits that there are no false records, misleading statements, or significant omissions in the content of this report. The Board of Directorsof the Company assumes individual and joint responsibility for the truthfulness, accuracy, and completeness of its content.
Report AccessThis report is published in both printed and electronic forms, with printed copies available in the Company’s securities department.The electronic version can be accessed and downloaded on the Company’s official website at https://www.mgi-tech.com/.
Forward-Looking StatementsThe forward-looking statements in this report are founded on the Company and its subsidiaries’ forecasts, assumptions, and expectations concerningcurrent production and operational conditions. Actual outcomes may vary from those projected in this report, as they may be influenced by risk factorsand force majeure events that could impact the implementation process.
ContactMGI Tech encourages all stakeholders to provide suggestions or feedback on the Company’s sustainable development and social responsibilitymanagement. For any related matters, please contact MGI_IR@mgi-tech.com.
Indicators
Unit2023 Data
IndicatorsUnit2023 Data
FinancialPerformance
SessionSessionSessionsSessionsSessionsPeoplePeoplePeoplePeoplePeopleSessionsPeopleInstitutesInquiries
1,783
CorporateovernancePerformance
RevenueNet profit attributable to shareholdersBasic earnings per shareTotal assetsNet assets attributable to shareholdersDebt-to-asset ratioTotal amount of taxes and fees paid in the year
yuanyuanyuanyuan10 thousand yuan
%10 thousand yuan
2,911,222,301.98
-607,499,880.61
-1.4610,557,087,161.63
8,634,440,859.33
17.83
28,688
Number of general meeting of stockholders heldNumber of board meetings heldNumber of meetings held for the Audit CommitteeNumber of meetings held for the Remuneration CommitteeNumber of meetings held for the Nomination CommitteeNumber of board membersMale directorsFemale directorsIndependent directorsNon-independent directorsNumber of investor communication events hostedNumber of institutional investor visitsTotal number of institutes visitsNumber of inquiries addressed on “E-SSE” platform
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%PiecesTimesSessions
Items10 thousand yuan
People
%%
Pieces
Pieces
Pieces
Pieces
Pieces
Pieces
Pieces
PiecesSessionsPersons%Complaints
100%
90,998.30
33.4%
58.6%
3,602
98%
131132
ManufacturersAgents or distributors
%SuppliersSuppliersSuppliersSuppliersSuppliersSuppliersSuppliers
PeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeople
2,8671,6431,2242,864
2,331
1,532
2,613
SocialPerformance
CorporateovernancePerformance
IndicatorsUnit2023 DataIndicatorsUnit2023 Data
Query resolution rate on “E- SSE” platformNumber of public disclosures issuedNumber of internal control inspectionsRisk management trainingOptimization of specific riskR&D investmentR&D staffing numberR&D personnel ratioPercentage of R&D personnel holding Master’s Degrees or higherNumber of patent applicationsNumber of patents grantedNumber of utility model patent applicationsNumber of utility model patents grantedNumber of design patent applicationsNumber of design patents grantedNumber of software copyright applicationsNumber of software copyrights registeredNumber of Information and data security training conductedParticipants in information and data security trainingExam-participation rate for information security and data protectionComplaints on customer privacy violation received
Number of manufacturers reviewedNumber of agents or distributors reviewedAudit completion rateTotal number of suppliersTotal number of new suppliersMainland Chinese suppliersSuppliers from Hong Kong, Macao, Taiwan, and overseasNumber of local suppliers (within Guangdong Province)Number of suppliers with quality management system certificationTotal number of employeesNumber of male employeesNumber of female employeesNumber of enrolled staffOther employees (eg. rehired employees or retirees)Employees from Chinese Mainland, Hong Kong, Macao and TaiwanTotal number of overseas staffEmployees from Americas regionEmployees from Europe and Africa regionEmployees from Asia-Pacific regionEmployees of 30 years old and belowEmployees of 31 to 40 years oldEmployees of 41 to 50 years oldEmployees of 51 years old and aboveEmployees with Bachelor’s Degree or higherEmployees with Higher Vocational Education (HVE) DiplomaEmployees with Vocational secondary education and below
Number of suppliers with ISO14001 Environmental ManagementSystem Certification
Total number of nationalities involved among overseas staff (including China)
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Total number of grassroots employeesTotal number of key employeesTotal number of core employeesTotal number of core employeesNumber of female employees in core managementTotal number of strategic employeesTotal number of strategic management employeesNumber of female employees in strategic managementPercentage of production personnelPercentage of sales personnelPercentage of technical personnelPercentage of financial personnelPercentage of administrative personnelTotal duration of training received by employeesAverage duration of training received by employeesTotal number of training hours received by male employeesTotal number of training hours received by female employeesNumber of Training ParticipantsNumber of male employees receiving trainingNumber of female employees receiving trainingEmployee occupational health and safety investmentsSafety production investment
Number of employees suffering from occupational diseasesTotal duration of occupational health and safety-related trainingSessions of occupational health and safety-related training
PeoplePeoplePeoplePeoplePeoplePeoplePeoplePeople
%%%%%HoursHoursHoursHoursPerson-timesPerson-timesPerson-times10 thousand Chinese yuan10 thousand Chinese yuan
PeoplePeoplePeopleHoursTimesPeople
1,5761,096
20.89
31.98
33.45
2.41
11.27
126,680
44.2
72,596.954,083.1
2,8671,6431,224
63.7
289.6
2,000
10 thousand yuan10 thousand yuan
TimesPerson-timeskW·hLitersLitersTons of standard coal
tCO2e
tCO2e
tCO2etCO2e/10 thousand yuanCubic metersCubic meters/10 thousand yuan
TonsTonsTonsTonsCubic metersCubic meters
mg/m?
mg/m?
mg/m?
mg/m?Cubic meters
mg/L
mg/L
mg/L
mg/L
mg/L
-
mg/L
mg/L
24,659.119.35
3,5004,320
9.80
0.000081
18.34
12,997.8213,016.16
0.11
120,369.59
0.99
15.7
159.45
5.24
300.14
64,125.46112,985,000
3.17
3.48
4.57
1.33
64,125.46
17.4
2.09
2.39
1,240.63
131.43
EnvironmentalPerformance
IndicatorsUnit2023 Data
SocialPerformance
IndicatorsUnit2023 Data
Tons of standard coal/10 thousand yuan
Number of participants in occupational health andsafety-related training
Number of employees in high-risk positions foroccupational diseasesNumber of employees undergoing occupational diseasescreening
Investment in environmental protectionTotal investment in energy conservation and emissions reductionEnvironmental protection training sessions conductedNumber of participants in environmental protection trainingTotal consumption of electricityTotal consumption of dieselTotal consumption of GasolineComprehensive energy consumptionScope 1: Greenhouse gas emissionsScope 2: Greenhouse gas emissionsTotal greenhouse gas emissions (Scope 1 + Scope 2)Greenhouse gas emissions intensityTotal water consumptionWater consumption intensityPackaging Material Used: LumberTotal amount of general solid wasteTotal amount of recyclable wasteTotal amount of hazardous wasteTotal amount of wastewater dischargeTotal amount of waste gas emissionsParticulate matterNon-methane total hydrocarbonsVOC emissionsAmmoniaTotal amount of wastewater dischargeChemical oxygen demand (COD)5-day biochemical oxygen demand (BOD5)Suspended solidsAmmonia nitrogenTotal phosphoruspHTotal dissolved solidsFecal coliforms
Comprehensive energy consumption per 10 thousandyuan output value
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Appendix III: Index of ESG Reporting IndicatorsReport Framework
ISDSGuidelines
ESRSGuidelines
GRI Standards 2021SASB
S1,S2S1
ESRS 1ESRS 2
ESRS 1S1S1,S22-6,2-25
2-43-3203-1,203-2,2-6203-1,203-2,2-6203-1,203-2,2-6203-1,203-2,2-6
418-1201-1,203-1,203-2201-1,403-8
HC-MS-240a.1
S1,S2S1S1S1S1S1
2-132-1,2-62-12-12-9,2-22,2-29 ,3-1,3-2,3-3
201-1,403-8418-1,416-1,416-2
Strengthening InformationSecurity for Fostering HealthyDevelopment of Life Sciencesand Health
Nurturing the “Three Good”Culture for an Enriched Life
201-1,403-8418-1,416-1 ,416-2
Message From ChairmanAbout MGI Tech
Company ProfileCompany DevelopmentMilestonesCompany AwardsSustainable DevelopmentManagementKey ESG Risks andOpportunities2023 SustainableDevelopment ProgressTools for MeasuringSustainable DevelopmentEnhancing the Accessibilityof GenomicsExpanding DiverseApplication ScenariosSupporting the Advancementof Precision MedicineEmpowering IndustryEcosystem DevelopmentEstablishing the Systematicand Standardized Systemtowards IntelligentManufacturingR&D InnovationLean ManufacturingQuality ServiceSustainable Supply Chain
S1ESRS S4
S1S1S1
S1201-1
S1S1
ESRS G1ESRS G1S1
S1
ESRS G1
ESRS S3S1ESRS S1S1ESRS S1
2-272-92-102-112-162-27
2-15 2-27,205-1205-3 206-1
401-1401-2401-3406-1407-1408-1409-1404-1404-2404-3
402-1402-2405-1
HC-MS-240a.2.HC-MS-270a.2.HC-MS-510a.1.
Corporate GovernanceCompliance Operations
S1ESRS 2Risk Management
Talent Team BuildingRisk Management
S1ESRS S3413-1HC-MS-410a.2.
S2
ESRS E1
ESRS E3
ESRS E4
ESRS E5
ESRS 1
201-2304-1304-2304-3305-1305-2305-3305-4
HC-MS-410a.1.
Fulfilling SocialResponsibility
S1ESRS S1
403-1403-2403-3403-4403-5403-6403-7403-8
S1203-1Environmental ManagementS2301-1303-,303-5Resource UtilizationS1
2-272-28303-2306-1306-2
Waste Management
S1203-12-2 2-32-4
Green Operations
S1S2Outlook for 2024
Occupational Healthand Safety
Responsible BusinessOperations
Developing Low-Carbon,Eco-Friendly Products inResponse to Climate Change
ESRS 1 S1S2Appendix
Guardian of Our EnvironmentAdvancing Life Science Tools for Future Healthcare
Leading Life Science Innovation
Sustainable Development Transform
Leader in Compliance Governance
Report Framework
ISDSGuidelines
ESRSGuidelines
GRI Standards 2021
SASB
Value Growth Partner
Guidelines No. 14 of Shanghai StockExchange for Self-Regulation of ListedCompanies—Sustainability Report (Trial),issued by the Shanghai Stock Exchange
HC-MS-250a.2.HC-MS-410a.1.HC-MS-250a.1.HC-MS-250a.3.HC-MS-430a.1.HC-MS-430a.2.HC-MS-430a.3.
Guidelines No. 14 of Shanghai StockExchange for Self-Regulation of ListedCompanies—Sustainability Report (Trial),issued by the Shanghai Stock Exchange
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Article 53Article 52
Article 46
Article 42Article 47Article 45
Article 48
Articles 55 and 56
Article 50
Articles 39 and 40
Articles 21-28, and Articles 32Articles 33Articles 30 and 31Articles 36-37
137138
Appendix IV: List of Laws and Regulations
Laws and Regulations of China
Leader in Compliance Governance
Value Growth Partner
Guardian of Our Environment
European and North American Laws and RegulationsCorresponding Chapters
Leader in ComplianceGovernanceCompany Law of the People's Republic of ChinaSecurities Law of the People's Republic of ChinaCriminal Law of the People's Republic of ChinaRules Governing the Listing of Stocks on the Shanghai Stock ExchangeRules Governing the Listing of Stocks on the Shanghai Stock ExchangeAdministrative Measures on Information Disclosure by Listed CompaniesAnti-Monopoly Law of the People's Republic of ChinaAnti-Unfair Competition Law of the People's Republic of ChinaBasic Standards for Enterprise Internal ControlData Security Law of the People's Republic of ChinaMeasures for the Ethical Review of Biomedical Research Involving HumansLabor Contract Law of the People's Republic of ChinaEmployment Promotion Law of the People's Republic of ChinaSpecial Provisions on Labor Protection of Female EmployeesLaw of the People's Republic of China on the Protection of MinorsPublic Welfare Donations Law of the People's Republic of ChinaEnergy Conservation Law of the People's Republic of ChinaEnvironmental Protection Law of the People's Republic of ChinaLaw of the People's Republic of China on the Prevention and Control of Water PollutionLaw of the People's Republic of China on the Prevention and Control of Air PollutionLaw of the People's Republic of China on the Prevention and Control of Soil Pollution
Leading Life Science InnovationGuidelines for the Establishment of Ethical Review Committees for ClinicalResearch Involving Humans
Law of the People's Republic of China on the Prevention and Control of EnvironmentalPollution by Solid WasteLaw of the People's Republic of China on the Prevention and Control of EnvironmentalNoise Pollution
U.S. Foreign Corrupt Practices Act (FCPA)U.S. Federal Trade Commission ActU.K. The Bribery Act 2010EU the General Data Protection Regulation (GDPR)U.S. the Data Protection Act
Corresponding Chapters
Guardian of Our Environment
Value Growth Partner
U.S. the Animal Welfare ActU.S. the Energy Policy Act of 2005U.S. the Clean Water ActU.S. the Clean Air ActU.S. the Solid Waste Disposal ActUniformed Services Employment and Reemployment Rights Act, USERRAU.S. Uniformed Services Employment and Reemployment Rights Act (USERRA)U.S. Employee Rights for Workers with Disabilities Paid at Special Minimum Wages (EPPA)U.S. Pay Transparency Nondiscrimination Provision
Advancing Life Science Tools for
Future Healthcare
About MGI Tech
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Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life Science
Innovation
Advancing Life Science Tools for
Future HealthcareMessage From Chairman
139140
Feedback
Thank you very much for taking the time to review the MGI Tech 2023 ESG Report. In our ongoing efforts to enhance our ESG management practicesand reporting quality, and to elevate our ESG capabilities and standards, we sincerely invite you to provide valuable feedback and suggestions onthis report. We will carefully consider your feedback and suggestions and pledge to safeguard your information from unauthorized third-party access.
1Which category of stakeholder do you belong to?
2To what extent do you believe this report accurately and comprehensively reflects the Company’s significant economic, social, and environmentalimpacts?
3How do you rate the responsiveness and disclosure quality of this report with regard to the issues that are of concern to stakeholders?
4How do you rate the clarity, accuracy, and completeness of the information, indicators, and data disclosed in this report?
5How do you evaluate the readability of this report, including the logical structure, content design, language, and format design?
6What suggestions do you have for our future ESG reports?
□ Customers □ Governments and regulatory agencies □ Others (please specify)
□ Employees □ Suppliers □ Cooperating institutions □ Investors □ Media □ Distributors □ Industry associations
□ Good □Very good □ Average □ Poor
□ Good □Very good □ Average □ Poor
□ Good □Very good □ Average □ Poor
□ Good □Very good □ Average □ Poor
Appendix V: Key Annotations
1. In the special topic “Building the ‘Four + Six’ System”, the term “automation” refers to one of the two pillars of lean production, and it is also known
as “intelligent automation” or “automation with human judgment”.
2. The environmental performance scope encompasses five R&D and production bases, among which the monitoring data of waste gas and wastewa-
ter are based on the maximum values from each production base.
3. The annual average electricity emission factor for regional power grids is 0.5271 tCO2/MWH, while the emission factors for gasoline and diesel are
0.067914 tCO2/GJ and 0.072585333 tCO2/GJ, respectively.
4. Carbon emission calculation formula: Carbon emissions = Activity data (AD) * emission factor (EF).
5. Only a partial list of key overseas laws and regulations is provided here. The Company rigorously complies with the laws and regulations in all
jurisdictions where it operates.
6.Regarding the target values, they are set in accordance with the principles outlined in the "Forward-Looking Statements" section of this report.
Additionally, in consideration of privacy protection, the "Action Progress" section only provides a general overview of the company's development inrelation to the overall target trajectory.
7. During the reporting period, MGI Tech had only one discharging subsidiary, i.e., DGI TECH (QING DAO) CO., LIMITED, which is under the supervi-
sion of Qingdao’s discharging list of 2023. DGI TECH (QING DAO) CO., LIMITED has obtained a sewage discharge license issued by the localEnvironmental Protection Authority. The main pollutants include waste gas and wastewater.In addition, based on the local government’s environmental impact assessment (EIA) , MGI Tech entrusted qualified third-party entities to monitorpollution on wastewater, waste gas and noise levels, ensuring that pollutants were discharged strictly with the standards.In 2023, MGI Tech organized an environmental pollution assessment. The assessment report indicated that all emission indicators were withinemission standards.
About MGI Tech
Sustainable Development
Transform
Leader in Compliance
GovernanceValue Growth PartnerGuardian of Our EnvironmentOutlook for 2024AppendicesLeading Life Science
Innovation
Advancing Life Science Tools for
Future HealthcareMessage From Chairman