2024
Environmental, Social andGovernance (ESG) Report
About the ReportThis is an Environmental, Social and Corporate Governance (ESG) report for the year 2024 issued by LuenMei Quantum Co., Ltd. (hereinafter referred to as "Luen Mei Quantum" "the Company" or "We"). The reportcomprehensively presented our efforts and progress in environmental protection, social responsibility and corporategovernance. For better communication and engagement with stakeholders, we tried our best to make the reportconcise, clear and easy to read. The reader feedback form at the end of the report is designed for recording yourcomments and suggestions which are crucial for us.Organizational ScopeUnless otherwise specified, the scope of this report is consistent with that of the consolidated statement of theCompany's 2024 annual report, that is, covering the Company and its subsidiaries.Reporting Period
This report covers the period from January 1, 2024 to December 31, 2024 (hereinafter referred to as the "reportingperiod"). Considering the continuity and comparability of the disclosed information, some contents may relate toprevious years or subsequent years.Release PeriodThis report is an annual report and the sixth environmental, social and corporate governance (ESG) report issued bythe Company.Information Description/Data Source
The information and data cited in this report come from the official documents, statistical reports and financial reportsof the Company, all of which have been audited by relevant departments of the Company. The financial data in thereport are in RMB as the bookkeeping currency, unless otherwise noted.Reference Standards/Basis of Compilation
?United Nations Sustainable Development Goals (SDGs);?GRI standards;?Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial);?SSE Guideline for Self-regulation of Listed Companies No.4-Compilation of Sustainable Development Report;?Guidelines for Sustainable Development Report of China Enterprises (CASS-ESG 6.0)-General Framework.Access to the ReportThis report is released in Chinese and English, and the electronic version can be viewed and downloaded on thewebsite of Shanghai Stock Exchange (https://www.sse.com.cn/) and the Company's official website (http://www.luenmeilz.com/). In case of any discrepancy between the two versions, the Chinese version shall prevail.
CONTENTS
Chairman's MessageEntering Luen MeiCompany ProfileOrganizational StructureDevelopment HistoryManagement StrategyCorporate CultureHonors in 2024
ESG Management
ESG Management StructureCommunication with StakeholdersAnalysis of Material Topics
Connecting Togetherfor Co-governanceand Co-growthStandardizing Corporate GovernanceBusiness Compliance ManagementUpholding Business EthicsProtecting Investors' Interests and Rights
Protecting andBeautifying theEnvironment JointlyClimate Change TacklingStrengthening Environmental ManagementOptimizing Resource Utilization
Benefiting Thousandsof Household,Creating BetterFuture Together
Innovation-driven TransformationStick to Strict Quality ControlOptimizing Service ExperienceCreate a Sustainable Supply ChainProtect Employees' Rights and InterestsBuilding a Harmonious Society Together
Key Performance TableIndex tableReader Feedback Form
In an era that continually surges forward, our commitment to responsibility becomes ever more profound.As we stand at the historical milestone of 2024, upholding the spiritual principle "Connecting to the Future,Making Life Beautiful", with the original aspiration of serving the nation through industry, the boldnessof driving development by innovation, and the commitment to green development, Luen Mei Quantumleaves its footprint after footprint on the journey towards sustainble development. This year, we haveembraced our role not only as active participants in the "carbon peaking and carbon neutrality" strategybut also as pioneers of new quality productive forces. We are both the creator of a better life and staunchguardian of social value. On behalf of Luen Mei Quantum, I extend our sincerest gratitude to all partnerswho have supported and encouraged us and share with you our reflections and practices on sustainabledevelopment.With Green as the Foundation, Pioneering a New Realm of Sustainable DevelopmentIn the face of dual challenges posed by global climate change and energy transition, Luen Mei Quantum has alwaysupheld green development as the lifeline of the enterprise. We deeply understand that "green" is the distinctiveundertone of high-quality socio-economic development. As a pioneer in China's clean energy supply sector, we activelyrespond to the national "carbon peaking and carbon neutrality" initiative, adhering to the principles of "clean, efficient,smart, and low-carbon." Guided by forward-looking strategic planning, we have comprehensively reviewed andupgraded our integrated energy strategy and found four pathways—developing low-carbon technologies for energyconservation and emissions reduction, expanding integrated energy services, exploring energy storage markets, andlaying out hydrogen energy industries.
Taking Responsibility as the Anchor, Writing the Chapters of Shared ProsperityWe firmly believe that the value of an enterprise lies not only in profit creation but also in sharing development outcomeswith society. Luen Mei Quantum is committed to its mission of "Connecting to the Future, Making Life Beautiful",navigating with mutual benefit and leveraging technological innovation to drive capital investment for good, technologydevelopment well, and industrial convergence. We advocate for coordinated governance across the industrial chainand shared value among stakeholders, aiming to transform the business ecosystem from zero-sum games to positive-sum co-creation. We uphold our multi-dimensional commitments to shareholders, employees, the environment, andsociety.Using governance as the helm, steer towards a new era of inclusive and shared progressToday the consensus on sustainable development is rapidly solidifying, corporate governance has transcended its roleas a mere "compliance baseline" to become the core engine driving the "value creation". Luen Mei Quantum, usinggovernance as the helm, steers towards the intersection of long-termism and inclusive growth. In resonance with theadvancement of business civilization and human well-being, it calibrates its direction and scale for moving forward onthe path of sustainable development. We are keenly aware that exemplary governance is the cornerstone of lastingprosperity. In 2024, our company has continued the development and improvement of ESG management framework,fully identifying and analyzing the impacts, risks, and opportunities presented by sustainable development factorsto the Company, aiming at activating the Company's value potential through system innovation and ensuring everystrategic decision on sustainability can stand the test of time.In such an era focusing on sustainable development, Luen Mei Quantum is committed to following this path withunwavering dedication. We firmly believe that by rooting ourselves in green development, embracing our socialresponsibilities, and using governance as our guiding light, we will be able to write our unique story on the canvas ofthis era. Let us look forward together to a future where the skies are bluer, cities are more beautiful, and communitiesare warmer!
April 2025
Chairman'sMessaage0102
Company ProfileOrganizational StructureLuen Mei Quantum Co., Ltd. (hereinafter referred to as "Luen Mei Quantum", "Company" or "We") (stock code: SH.600167) is a coremember enterprise of Luen Mei Group, the largest clean heating company listed on A-share market at present. As an integratedenergy smart operator, the Company integrates clean coal-fired combined heat and power (CHP), natural gas distributed cooling/heat/electricity integrated supplies, recycled water-source thermal pump heating, biomass-fueled combined heat and power (CHP)generation and hydrogen industry chain development.Over the years, the Company has consistently adhered to its business philosophy of technological innovation as a driving force andlean management as its cornerstone. Based on different energy needs and regional characteristics of energy use, focusing on thegoals of "low carbon, cleanness, efficiency, and economy", the Company provides appropriate integrated energy solutions and smartoperations management service in line with its goals of low carbon, cleanness, efficiency, and economy. It achieves smart energyoperations and provides energy management service using the Luen Mei Smart Operations Platform to address the needs of urbanresidents for heating and cooling and to meet the multi-energy requirements of industrial parks, huge urban public buildings, andothers.Luen Mei Quantum is based in Shenyang, Liaoning and seeks to expand nationwide in “self-building + acquisition + operationsmanagement” mode. It is currently implementing and operating multiple projects in Shenyang, Liaoning; Taizhou, Jiangsu;Heze, Shandong; Shanghai; and so forth. Among these, its demonstration projects—including flue gas waste heat recovery, thedemonstration application of Intelligent Heating 2.0, and recycled water-source thermal pump heat source stations—are in theleading position in the industry. Through these projects, the Company has continuously contributed to green, low-carbon, andenergy-saving emission reductions across society, providing high-quality integrated energy services for social development andpeople's lives and realizing an organic integration of social, economic, and ecological benefits.
ENTERINGLUEN MEI
Technological innovation as a driving force〡lean management as its cornerstone
PresidentEnvironmental Protection andConstruction Committee
Peormance Management
CommitteeOverhaul and TechnologicalTransformation Committee
VicePresident
Heat Source and Heat Network
Construction Committee
ChiefEngineer
VicePresident
VicePresident
VicePresident
VicePresident
VicePresidentChief FinancialOcer
Inspection Depament
Financial Depament
Legal Aairs Depament
Operations Depament
IT Management DepamentMarket Development Center366 Mobile Internet Technology Co., Ltd.Integrated Energy Business Division 1Integrated Energy Business Division 2Integrated Energy Business Division 3Hydrogen Energy Business DivisionSecurities and Brand Depament
Xinyuan Project Construction HeadquaersHuman Resources and Administration DepamentHorgos Luen Mei Engineering Technology Co.,
Ltd.
Luenmei Sma Energy Technology (Shenyang)
Co., Ltd.Beijing Luenmei Environmental Science andTechnology Research Institute Co., Ltd.
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ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
Development History
April 2005After completing the equitytransfer with ShenyangNanhu TechnologyDevelopment Group Co.,Ltd., Luen Mei Groupbecame No. 1 majorityshareholder of ShenyangNew District Development(600167.SH), and the natureof the listed companychanged from state-ownedholding to private holding
June 2006Shenyang New DistrictDevelopment (stockcode: 600167) foundedShenyang HunnanHeat-supplying Co.,Ltd., comprehensivelycarrying out the cleanheating and heat supplybusiness in HunnanNew District, ShenyangCity
February 2008Shenyang New DistrictDevelopment (600167.SH) was, throughindustrial and commercialregistration, renamedas "Luen Mei QuantumCo., Ltd."; then its stockname for short waschanged to "Luen MeiQuantum", while its stockcode, 600167, remainedunchanged
September 2012Investment andconstruction workbegan on the No. 3Heat Source Plant ofHunnan Heat-supplying,a subsidiary of LuenMei Quantum (stockcode: 600167)
January 2016
Luen Mei Quantumrenamed to Luen MeiQuantum Co., Ltd. inindustrial and commercialregistration, with stockabbreviation "Luen MeiQuantum" and the stockcode "600167"
May 2016Luen Mei Quantum(stock code:
600167) completed its assetacquisition and restructuring andwas joined by Shenyang XinbeiThermoelectric and its subsidiaries,Guohui Environmental Protection andits subsidiaries (7 companies in total),and so forth as member companies,thus expanding its business scale andacquiring new businesses such asclean coal combustion, biomass-basedcombined heat and power (CHP), andintelligent monitoring of extremelyhigh environmental benefits
April 2017Luen Mei Quantum (stockcode: 600167) completedthe reorganizationand optimization ofthe organizationalstructure and improvedthe Company's leanmanagement level
March 2019It acquired ShandongHeze Fulin ThermalTechnology Co., Ltd.,thus enhancing itsbusiness deploymentin heating sector
April 2020It signed the heat/electricity integratedgeneration projectagreement with thePeople's Governmentof Sujiatun District,Shenyang City, underwhich the Companywould invest a total ofRMB 2.1 Billion in thedistrict
March 2022
CEMT was listedin the TOP100 ofGlobal HydrogenEnergy Enterprises in2022GHEE, and LuenMei Quantum activelyexplored the businessin hydrogen energyindustryNovember 2018
Luen Mei Quantum (stockcode: 600167) acquired100% equity of Mega-infoMedia, the largest digitaloperator of high-speed railmedia in China,putting it in a double-main-business mode featuring"clean energy + high-speedrailway digital media"
December 2021It officially investedin CEMT by way ofequity transfer andbecame its importantshareholders
March 2020
It acquired part ofthe shares in NECC(Shanghai) energystation and deployed itsnatural gas distributedcooling/heating/electricity integratedsupply business inSouth China
December 2022
Mega-info Media, asubsidiary of Luen MeiQuantum, was officiallylisted on ShenzhenStock Exchange (stockcode: 301102)
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Protecting and Beautifying
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Benefiting Thousands of Household,Creating Better Future Together
Appendix
Management StrategyCorporate CultureDriven by technological innovation, the Companyactively adapts to changes in both internal and externalenvironments, aligning itself with the evolving trendsof the times. With the triple mode of " self-building +acquisition + operations management", the Companystrategically expanded its business across the nation.By continuously reinforcing its operational foundationand firmly adhering to its strategic roadmap, theCompany leverages its managerial strengths toovercome challenges and maintained a robust andsteadily improving operational performance, thuslaying a solid foundation for the Company's sustained,healthy, and high-quality growth.The Company mainly engages in the followingbusiness: heat supply, power supply, steam supplyand engineering construction. The combined heat andpower (CHP) with a focus on clean heating, recycledwater-source thermal pump heating, biomass-fueledcombined heat and power (CHP) generation, cleanenergy based cooling/heat/electricity integratedsupplies, are all businesses prioritized for developmentby the state. The Company will continue to focus oncore products in cooling, heating, electricity, and steamsupplies, integrating the latest energy technologies andequipment to provide customers with clean, efficient,safe, and stable integrated energy solutions. Whilefurther enhancing the efficiency of urban centralizedheating systems, the Company will vigorously developdistributed clean energy technologies and equipmentto achieve cleaner upgrades at the source; At the end,the Company will further improve its service quality byleveraging IoT technology to enhance response speedand precision, realizing accurate feedback.
self-buildingacquisition
operationsmanagement
Enterprise Healthy Development Staff Healthy Development
Fulfilling Workplaces
Achieving Others While Perfecting Ourselves, Creating a Better Future Together
Social Healthy DevelopmentThriving Well-being
Focus on the main businessand strengthen the industryImprove the mechanism andoperate in complianceCollaborative operation andcontinuous innovationImprove management mechanism
and develop steadily
Promote the physical andmental health of employeesEncourage employees to
grow and progress
Share the achievements of
enterprise development
Comprehensively enhancepersonal value
Promote mutual benefit and win-win
between enterprises and society
Create a high-quality lifeAchieve harmony between
humans and nature
Be responsible corporatecitizenship
Work hardand pursue dreams
Realize self-value
Make yourself happyMake the team happy
Mutual trustWilling to supportand share
Make your family happy
Harvest abundantlyEnjoy a happy time
Make your customers happy
Whole-hearted serviceCreate a betterfuture together
HeilongjiangJilinLiaoningShenyangBeijingHebeiShanxiInner Mongolia
Henan
AnhuiShanghaiZhejiangFujianJiangxiGuangdongGuangxiHainanYunnan
GuizhouHunanHubeiChongqingSichuan
ShaanxiGansuNingxiaQinghaiTibet
Xinjiang
TaiwanHongkongMacao
TianjinShandong
Jiangsu
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report2024
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Connecting Together forCo-governance and Co-growth
Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
0708
Honors in 2024 ESG Management
Luen Mei Quantum consistently practices the concept of sustainable development and fulfills its social responsibilities. By integratingsustainability into its corporate strategy and operations, the Company continuously optimizes its ESG management system. In2024, the Company further strengthened its ESG management by systematically reviewing material topics, management strategies,practical actions, and key performance related to environmental protection, social responsibility, and corporate governance. TheCompany actively responded to the expectations and demands of its stakeholders and was committed to providing clean, reliable,and affordable heating services to the public in a manner that is honest, responsible, and sustainable.▼ESG Management StructureLuen Mei Quantum has established a top-down three-level ESG management structure, clearly defining the responsibilities at alllevels, effectively promoting all departments to actively participate in ESG work, helping the Company comprehensively, systematicallyand efficiently transforming its sustainable development concept and commitment to stakeholders into concrete actions.
Responsible for the deliberation and decision-making of major ESG issues, includingthe formulation of relevant strategies and guidelines, and special review of the annualESG reportCo-ordinated by the Company's Office of the Board of DirectorsResponsible for coordinating ESG related affairs, including collecting ESG relatedperformance information, compiling ESG reports, and conducting communication andexchanges with ESG investorsESG Working Group consists of functional departments and business departments ofthe headquarters and affiliated companiesResponsible for the centralized management of ESG topics, continuously deepeningESG key practices, and regularly submitting relevant management measures,performance indicators and excellent cases
ESG Working
Group
ESG Co-ordinationGroup
Board ofDirectors
Luen Mei Quantum has continuously improved its scientific ESG management by organizing sustainability and ESG related trainingsessions and activities for relevant personnel, improving the sustainability awareness and professional expertise of decision-makinglayer, management layer, and executive layer, thus ensuring the relevant personnel are equipped with the necessary skills andcapabilities. During the reporting period, Luen Mei Quantum actively engaged senior executives in ESG training and exchange eventshosted by prestigious organizations such as the Shanghai Stock Exchange and the China Association for Public Companies, as wellas other societal forums like the 2024 ESG Management System Conference for Listed Companies, making them stayed informedabout the latest policy developments and trends in ESG and learn from industry-leading practices, thus significantly improving itsprofessional understanding and practical capabilities in environmental, social, and governance areas. Simultaneously, the Company'sSecurities and Brand Department continuously studied relevant regulations and guidelines, deepening their knowledge of ESGrelated subjects to further enhance the Company's ESG management capabilities.By establishing a regularized ESG learning mechanism, Luen Mei Quantum has further enhanced the integration of sustainabledevelopment principles and its daily operations and management, laid a robust foundation for the effective implementation of theCompany's ESG strategy.
China Institute of Energy EconomicsResearch China Energy NewsMade the "2024 China Energy (Group)Top 500" for the fifth timeNational Business DailyThe 13th Summit of ListedCompanies in China Won the Awardfor the Most Socially ResponsibleListed CompaniesShenyang High-techEnterprises AssociationGuohui Environmental Protectionpassed the national high-techenterprise recognition review forfour consecutive times
JRJ.com
Won the JRJ's 13th "GoldenWis" AwardWon the "Green and Low CarbonOutstanding Contribution Award"China ESG Observers ConsortiumSelected in 2024 Report on ESGPractices of Chinese EnterprisesExcellent case of social managementpracticeChina Industry News AgencyChina Energy IndustryDevelopment Network
Won the "Green Energy StarExcellence Award"
China securities indexESGESG Rating Ranked third in theindustry
Office of National High-TechEnterprise Identification andManagement Leading TeamLuen Mei Smart Energy, a subsidiarycompany, was Recognized as aNational High-Tech Enterprise
Ministry of Culture and Tourismof the People's Republic of China
Mega-info Media, a subsidiary ofLuen Mei Quantum, passed thereview of "National Cultural IndustryDemonstration Base"
Management
layer
Decision-making layer
Execution layer
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Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
On September 26, 2024, Luen Mei Quantum participated in the 2024 ESG Management System Conference for ListedCompanies themed "focusing on practice of sustainable development and creating a new engine for value growth". Theconference collected excellent ESG cases from all listed companies and their subsidiaries, and presented 48 excellent practicecases. Among them, Luen Mei Quantum won the award of "Excellent Social Management Practice Case" by its efforts in "Strivingto Create Social Value, Intelligent Heating Making Life Beautiful".
To better understand and actively address the expectations and concerns of various stakeholders, the Company identified its keystakeholders based on the industry trends, the Company's characteristics and development status. By maintaining communicationwith these stakeholders through diverse channels, including stakeholder interviews, surveys, and other forms of engagementconducted on a regular or ad-hoc basis, the Company listened to their suggestions and provided timely and appropriate responses,promoted the stakeholders' further understanding on the Company's ESG governance practice, thereby improving the Company'sESG governance capabilities and promoting its fulfillment of its social responsibilities.
▼Communication with Stakeholders
StakeholdersFocus Areas
Communication ModeLuen Mei Quantum's Responses
Governments andregulatory authorities
˙Providing reliable heatingservices˙Integrity and Compliance inoperations˙Paying taxes according to law
˙Government communicationmeeting
˙Exchange with regulatoryagencies˙Information disclosure andsubmission
˙Regular visits
˙Guarantee heating service
˙Abide by laws and regulations
˙Pay taxes voluntarily according tolaw
Shareholders
˙Steady growth in performance˙Standardized companygovernance˙Transparent informationdisclosure
˙Periodic reports and informationannouncements˙Investor investigation˙Shareholders' Meeting˙Interactive platformcommunication and answeringquestions
˙Improve business performance
˙Strengthen internal controllevel
˙Regular information disclosure
Employee
˙Protection of employees' rightsand interests˙Occupational health and safety˙Training and careerdevelopment˙Compensation and benefitsgrowth
˙Hold the workers' congress˙Employee satisfaction survey˙Organize all kinds of employeetraining˙Set up complaint and feedbackmailboxes.
˙Organize staff recreation andsports health activities
˙Expand communication andfeedback channels˙Strengthen the occupationalhealth construction˙Optimize the training andpromotion mechanism˙Improve the compensation andbenefits system
Customers
˙Improve service quality˙Protect customers' rights andinterests
˙Disclose service qualitycommitment˙Customer room temperaturemeasurement˙Telephone hotline services˙Customer satisfaction survey
˙Strengthen personnel training˙Perfect after-sales service
Business partners
˙Supplier/contractormanagement˙Fair and transparentprocurement˙Win-win cooperation
˙Hold bidding meeting˙Contract negotiation and dailymeeting˙On-site inspection˙Supplier evaluation work
˙Create responsible supply chain˙Fair and open bidding˙Industrial chain cooperationand exchange
Communities
˙Promoting employment growth˙Protecting the communityenvironment˙Driving the development of localcommunities˙Participating in charity activities
˙Hold public open day˙Community visits and exchanges.˙Employee volunteer serviceactivities˙Carry out knowledge publicityand education
˙Create employment opportunities˙Strengthen environmentalprotection management˙Support community building˙Carry out public welfare projects
CaseLuen Mei Quantum Participated in the 2024 ESG Management System Conference for Listed Companies.
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report
2024EnteringLuen Mei
ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Luen Mei Quantum, based on its business scope, industry characteristics, expectations of internal and external stakeholders, andglobal sustainable development trends, has updated and upgraded its corporate evaluation system in accordance with relevantdomestic and international disclosure standards such as the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation ofListed Companies—Sustainability Report (Trial) and the GRI 3: Material Topics, incorporated financial materiality analysis based on theprevious impact materiality assessment, thereby comprehensively identifying topics that affect the Company's financial, economic,environmental, and social aspects and pertain to stakeholder concerns and forming a matrix of material topics.
▼Analysis of Material Topics
Topic Assessment ProcessAnalysis Methods
Understand the backgroundof company activities andbusiness relationships
Topic selection
Topic confirmation
Materiality assessment
Understand the Company activities and business relationshipsUnderstand the external objective environmentUnderstand the main affected stakeholdersReferring to the topics set forth in the Guidelines No. 14 of ShanghaiStock Exchange for Self-Regulation of Listed Companies—SustainabilityReport (Trial), and combining with the industry characteristics, industrydevelopment stage, own business model, relevant regulatory policiesand peer practice, analyze and initially identify the material topics of theCompany
According to the materiality assessment results of topics, form the matrix ofmaterial topics
Impact materiality assessment: Assess whether each topic will have a
potential or actual significant positive or negative impact on the economy,society and environment.Financial materiality assessment: Assess whether each topic is expectedto have a significant impact on the Company's business model, businessoperation, development strategy, financial status, operating results, cashflow, financing methods and costs in the short, medium and long term
Matrix of material topics
Financial Materiality to the Company
? Rural Revitalization? Contribution to the Society? Ethics of Science and Technology? Equal Treatment to Small and Medium-sized Enterprises? Ecosystem and Biodiversity Protection? Data Security and Customer Privacy Protection? Due Diligence
? Environmental Compliance Management
Impact material topics Dual-materiality topics Related topics Financial material topics
? Innovation-driven? Circular Economy? Usage of Water Resource? Supply Chain Security? Communication with Stakeholders? Employees? Anti-unfair Competition? Anti-commercial Bribery and Anti-corruption? Energy Usgae? Exploring Clean Energy
? Product Quality? Service Experience? Pollutant Discharge? Waste Disposal? Climate Change Tackling
Materiality to economic, social and environmental impacts
High materiality
High materiality Low materiality
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Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Connecting Togetherfor Co-governance andCo-growth
Standardized corporategovernance
Business compliancemanagement
Upholding businessethics
Protecting investors'interests and rights
Response to United Nations Sustainable
Development Goals (SDGs)
In Luen Mei Quantum' ESG practice journey, a sound and efficient governance system serves as the cornerstone, solidifying thefoundation for the Company to fully fulfill its social responsibilities and achieve sustainable development. Excellent governance isnot only crucial for the orderly operation of the Company internally but also profoundly influences its effectiveness in addressingenvironmental challenges and promoting social well-being. By establishing a comprehensive governance system, adhering tocompliance in operations, and upholding business ethics, the Company has steadily advanced along the path of ESG, creating long-term value for all stakeholders.1516
Standardizing Corporate Governance
Luen Mei Quantum strictly abides by the Company Law of the People's Republic of China, Securities Law of the People's Republic of China, RulesGoverning the Listing of Stocks on Shanghai Stock Exchange and other relevant laws and regulations, and is committed to establishing a rigorous,scientific and standardized governance structure, ensuring that the "three boards" (namely the shareholders' meeting, the Board of Directorsand the board of supervisors" operate in a compliant and orderly manner, unswervingly leading the party's work style and clean governmentconstruction into practice, providing organizational guarantee, institutional guarantee and ideological guarantee for business related decision-making, and leading the Company's long-term and steady development with excellent corporate governance.▼Improving Organizational Structure
▼Efficient Operation of "Three Boards"
The Company has established a governance mechanism with clear rights and responsibilities and standardized operation according to therequirements of relevant laws and regulations. In such mechanism, the Board of Directors is the highest governing body of the Company,responsible for and reporting to the shareholders' meeting. There are four special committees under the Board of Directors, each of whichperforms its own duties to ensure the standardization, science and effectiveness of the board's decisions. Simultaneously, the company iscommitted to integrating the philosophy of sustainable development into its corporate governance framework, promoting comprehensiveintegration between the ESG governance system and the existing governance structure. The Board of Directors are responsible for thedeliberation and decision-making of major ESG issues. Under the coordination of the Company's Office of the Board of Directors, an ESG Co-ordination Group has been established to formulate sustainability-related strategies, management methodologies, and operational plans,while overseeing the operations of the ESG Working Group. For more details on governance architecture, please refer to the chapter "ESGManagement Structure" in this report.
Board of Shareholders
Board of Directors
Board of Supervisors
ShareholderBoard of Directors
Management
Strategic Devlopment
Committee
Audit Committee
The board of shareholders is the highest authority of the Company. In strict accordance with the requirements of laws and regulations, theCompany comprehensively regulates the convening of shareholders' meetings, the qualifications of participants and the voting procedures ofshareholders' meetings. In the whole process, the Company treats every shareholder equally, fully guarantees the shareholders to exercisetheir rights and interests according to law, paying particular attention to protecting the legitimate rights and interests of minority shareholders.No incidents have occurred that would harm the rights and interests of minority shareholders.
As the decision-making body of the Company, the Board of Directors is an important part of the governance structure and is responsible tothe shareholders' meeting. The Board of Directors of the Company strictly abides by the relevant legal requirements to perform its duties,attends board meetings and shareholders' meetings seriously, strictly implements the authorization of the shareholders' meeting to the Boardof Directors, and implements the resolutions of the shareholders' meeting.The Board of Directors of the Company consists of four special committees, namely, the Strategic Development Committee, the Remunerationand Assessment Committee, the Nomination Committee and the Audit Committee. Each professional committee provides relevantprofessional support and suggestions for the Company's development according to their respective responsibilities, effectively improving thescientific and normative nature of corporate governance.When selecting board members, the Company systematically considers the age structure, educational background, professional qualifications,industry experience and other diversified elements of board members, so as to build a decision-making team with complementaryprofessions and rich experience that can not only effectively matches the development needs of various business sectors of the Company,but also significantly improve the strategic decision-making efficiency and management level of the Board of Directors, thus providing astrong governance guarantee for the Company's sustainable development. At present, the Company's Board of Directors consists of sevendirectors, including three independent directors. The members of the Board of Directors have diverse professional backgrounds, rich industryexperience and professional knowledge reserves, who can provide professional insights and make independent judgments for the Company'smajor decisions from multiple dimensions.
As the highest supervisory body of the Company, the Board of Supervisors is directly responsible to the shareholders' meeting. The Company'sBoard of Supervisors earnestly performs its duties in strict accordance with relevant regulations, and supervises and inspects the Company'sdecision-making procedures, legal operation, performance of the Board of Directors and senior management, construction of internalcontrol system, regular reports, profit distribution, related party transactions and use of funds, so as to effectively safeguard the interests ofshareholders.
During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥
One annual general meeting, to review the 2023 annual report and other related proposalsFive extraordinary shareholders' meetings, to review the general election of the board of directorsand the board of supervisors, amendments of some articles of the articles of association, specialdividends and other proposals.
Audit Committee
Board meeting
The company organized and held the meeting through a combination of "on-site+communication voting"
Nomination Committee
Remuneration and Appraisal Committee
The Company heldshareholders' meetingstime
Including
the Company organized
meetings of the Board of Supervisors by means of "on-site+communication voting" to reviewthe annual report, quarterly report, general election, special dividends, deposit and actual use of raised funds and otherproposals.
Board of Supeisors
HQ DepamentSubsidiaries
Nomination CommitteeRenumeration andAssessment Committee
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Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
2024.11.12
China Association of Listed Companies' "Special Training on Typical Cases of Listed Companies' Violation of Laws andRegulations in 2024"
Training for Directors, Supervisors and Senior ManagementThe Company actively participated in online and field trainings for directors, supervisors and senior management organized byShanghai Stock Exchange, China Securities Regulatory Commission Liaoning Office and China Association of Public Companies,and participated in 9 trainings throughout the year, which further improved the capabilities of directors, supervisors and seniormanagement to perform their duties.2024.3.14
Training on the new Company Law organized by Liaoning Association of Listed Companies Training on the new CompanyLaw organized by Liaoning Association of Listed Companies2024.4.3Shanghai Stock Exchange's "Follow-up Training for Independent Directors"2024.4.26
"Training Meeting on Interpreting the New Capital Market Policies of Listed Enterprises and Listed Reserve Enterprises in theProvince" jointly organized by China Securities Regulatory Commission Liaoning Office and Office of Finance Committee ofLiaoning Provincial Committee of CPC2024.9.19
Shanghai Stock Exchange's "the 5th Follow-up Training for the Secretary of the Board of Directors of Listed Companies in2024"2024.10.23
Liaoning Association of Listed Companies "Studying the Spirit of the Third Plenary Session of the 20th CPC CentralCommittee: Training on Financial Support for High-Quality Economic Development"
2024.11.16China Securities Regulatory Commission Liaoning Office's "Special Training on Reform of Independent Director System"
2024.11.28Shanghai Stock Exchange's "Special Compliance Training for Independent Directors of Listed Companies"2024.12.9
China Securities Regulatory Commission Liaoning Office's "Special Training on Comprehensive Punishment and Preventionof Financial Fraud in Capital Market"▼Strengthening the Leadership of Party Building
▼Strengthening Internal Control Inspection
▼Conducting Compliance Training
The Company adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a NewEra, thoroughly implements the Party's guidelines and policies, and fully leverages the leadership role of Party organizations. Itcomprehensively advances all aspects of Party building, providing a strong guarantee for the company’s high-quality development.The Company consistently integrates Party leadership with corporate governance, continuously strengthening the coreguiding role of Party organizations in decision-making, execution, and supervision, and encouraging Party members to play anexemplary role in their daily work. At the same time, the Company has established a normalized education and training mechanismfor Party members, continuously conducting training to improve their qualities in firmly resisting interest-driven temptations,adhering to original aspirations, so as to foster a clean and upright environment to ensure the company's healthy and sustainabledevelopment while enhancing its management and operational standards.The Company is steadfast in advancing anti-corruption efforts and regularly inspects the Party conduct and integritybuilding of all Party branches to ensure the strict implementation of comprehensive and strict Party governance. The Companyadheres to an attitude of "no forbidden zones, full coverage, and zero tolerance", enforcing the Party conduct and integrity buildingand combat corruption by means of audits, special inspections and regular routine checks. The Company has implemented astrict supervision and reporting system in the procurement and bidding process, set up a clean reporting method in the biddingdocuments, and arranged the internal control department participate in the main links of the bidding work. Any unit or individualcan complain and report to the internal control department of the Company if there are illegal acts in the bidding work.process.The Company commits to conduct a rigorous investigation on the bidding projects, and suspend the bidding or cancel the bid-winning results of any project after verifying that the reported problem of the project is true.
Business Compliance Management
Luen Mei Quantum has continuously strengthened the construction of internal control system and improved its ability to resistrisks. The Company consistently integrates lawful corporate governance with production and operations and focuses on cultivatinga corporate legal culture. It has established and improved mechanisms for preventing legal risks and has initially developed a multi-dimensional compliance management system to ensure that all production and operational activities are legally compliant.
The Company has formulated inspection management measures including the Internal Control Management Measures, HeatingInspection Management Regulations, Regulations on Equipment and Materials Quality Inspection Management and Measures forManagement of Environmental Protection Materials Sampling. During the reporting period, according to the internal control system,the Company has carried out routine internal control inspections in key areas of the Company, and completed four routineinspections and two special inspections. Through the inspection, supervision and evaluation of key internal control links such assystem construction, process control and business execution, the Company has timely identified and prevented various mistakes andmalpractices, thereby mitigating various operational risks and ensuring all levels and links within the Company operate scientificallyand efficiently.
The Company actively carries out law-abiding and compliance training to enhance employees' awareness of law-abiding andcompliance and create a corporate culture atmosphere of law-abiding and compliance, thus ensuring the orderly promotion ofvarious management systems of the Company and the stable development of various businesses. During the reporting period, theCompany has organized and studied the latest revised securities law, company law, accounting standards and other related industrypolicies.
SSE Guideline for Self-regulationof Listed Companies No. 7--ShareRepurchaseSSE Guideline for Self-regulationof Listed Companies No.1-Announcement Form No.13Announcement on Raising Fundsfor Listing
Listing Rules of Shanghai StockExchangeSSE Guideline for the Application ofListing Audit Rules No. 6
Company Law of the People'sRepublic of ChinaGuidelines on the Bylaws ofListed Companies
Measures for the Administrationof Independent Directors of ListedCompanies
Securities laws and
regulations
Regulations and rules on
information disclosure
Other laws and
regulations
Upholding Business Ethics
Luen Mei Quantum has always adhered to the highest standards of morality, honesty, integrity and compliance, insisted on strictdemands on itself with high standards of business ethics, severely cracked down on unfair competition, and steadily improved thelevel of anti-commercial bribery, anti-corruption and anti-unfair competition by continuously promoting the construction of businessethics system, optimizing diversified supervision systems and improving the complaint reporting mechanism.1920
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report2024EnteringLuen Mei
ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
During the reporting period﹥﹥﹥During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥▼Anti-commercial Bribery and Anti-corruption
▼Anti-illegitimate Competition
Protecting Investors' Interests and RightsLuen Mei Quantum adheres to the investor-oriented principle and continues to create exceptional value for shareholders. With itsoutstanding hydrogen energy and comprehensive energy business, the Company has maintained steady growth for many years.Not only does it lead in profitability compared to its peers, but its prepayment model for residential heating services also ensuresexcellent cash flow, with substantial available funds far exceeding industry standards. Additionally, the company consistentlyrewards its investors through methods such as cash dividends and stock buybacks. With high dividend payout ratio and active sharerepurchase programs, it has been listed multiple times on the list of high-dividend potential stocks, demonstrating its commitment toinvestors through concrete actions.
In terms of information disclosure management, Luen Mei Quantum has adhered to the business philosophy of openness,transparency, legality and compliance, abided by the Securities Law of the People's Republic of China, the Company Law of the People'sRepublic of China and the Listing Rules of Shanghai Stock Exchange, and established the Information Disclosure Affairs ManagementSystem to ensure the proper performance of its information disclosure obligations, protect the legitimate rights and interests of theCompany, its investors, creditors and other stakeholders, and enhance the information transparency.
The Company fully respects and safeguards the legitimate rights and interests of investors, placing great importance oncommunication and engagement with them. It has established the Investor Relations Management System and makes full use ofmultiple communication channels such as shareholders' meeting, performance briefing, on-site visits, telephone consultations andSSE's e-platform to maintain close interaction with investors, and strives to build a harmonious and trusting relationship between theCompany and investors.
The Company strictly abides by the requirements of the Criminal Law of the People's Republic of China and other laws and regulationsand has established internal control systems. By conducting both special inspections and regular checks, and by setting up publicreporting hotlines and email addresses, the Company performs routine reviews of commercial bribery and embezzlement risks bythe principle of zero-tolerance to commercial bribery and embezzlement. The Company strictly protects whistleblowers to ensurethat their rights and interests are protected.The Company urges all employees to strictly abide by relevant laws and regulations, industry norms and guidelines, company rulesand regulations and professional ethics, so as to establish a good atmosphere of honesty, self-discipline and diligence. At the sametime, the Company clearly conveys its anti-commercial bribery and anti-fraud policies to suppliers, agents and ecological partners,and opposes all forms of unfair competition.
The Company strictly abides by the relevant provisions of the Anti-Unfair Competition Law of the People's Republic of China and the Anti-Monopoly Law of the People's Republic of China. By establishing and improving the internal management system, strengthening themoral training of employees, and setting up a special supervision mechanism, etc., it ensures that all business activities are legaland compliant, maintains a healthy and orderly market environment and resolutely puts an end to any form of unfair competition,contributing to building a positive and competitive market ecology.During the reporting period, there were no lawsuits or major administrative penalties caused by unfair competition.
Proportion of directors receivingtraining on anti-commercial briberyand anti-corruption
%
%
The company has completed the distribution of equity
Regular reports
Temporary announcements
Cumulative cash dividends distributed per share (including tax)
RMB
0.32
%
The company successfully completed the information disclosure workon time and regularly communicated the its development status to thepublic with a total of
118 announcement documents
SSE's e-platform: Respond to investors' questions for
times by using SSE e interactive platform.Telephone counseling: The Company has received more than
calls from investors every day.
Performance presentation: On May 30, 2024, the Company held a performance presentation for its annual report and the
Q1 report; On October 21, the Company held a semi-annual performance presentation. On December 10, the Company helda performance presentation for its Q3 report, on which it actively answered the questions raised by investors.Receiving institutional investors foron-site researches:
The Company hasreceived
on-site surveys made byinstitutional investors.
Proportion of managers receivingtraining on anti-commercial briberyand anti-corruption
Proportion of employees receivingtraining on anti-commercial briberyand anti-corruption
Including
2122
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report
2024
EnteringLuen Mei
ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
Protecting and Beautifyingthe Environment Jointly
Climate change tacklingStrengthening Environmental
Management
Optimizing ResourceUtilization
Response to UN Sustainable Development Goals (SDGs)
As a pioneer in the field of clean heating in China and a comprehensive energy service provider driven by scientific and technologicalinnovation, Luen Mei Quantum actively responds to the national initiative "carbon peaking and carbon neutrality", adheres to the conceptsof "cleanliness, high efficiency, wisdom and low carbon", consistently guiding its development with forward-thinking strategic planning.It is committed to prioritizing ecological conservation and pursuing a path of green development, focusing on building intelligent andenvironmentally friendly production models. Luen Mei Quantum is actively advancing initiatives such as ultra-low emission projects for heatsources, heating with medium water source heat pumps, industrial waste heat utilization, and smart energy operation and managementsystems. Concurrently, the Company is swiftly developing a new type of clean and intelligent energy service system characterized by balancedenergy mix and dynamic supply-demand interaction, contributing to the goal of "carbon peaking and carbon neutrality".2324
Climate change tacklingClimate change has become a critical topic impacting global economic and social development, posing a major challenge faced byhumanity. Actively addressing climate change not only helps the company fulfill its environmental responsibilities and demonstratesocial accountability, but also lays a solid foundation for building long-term competitive advantages and achieving high-qualitydevelopment. Luen Mei Quantum adheres to the requirements of the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulationof Listed Companies—Sustainability Report (Trial) and focuses on four areas: governance, strategy, risk management, indicators andobjectives to comprehensively improved its ability to cope with climate change.▼Climate-related Governance
▼Climate-related Impacts, Risks and Opportunities Management
▼Climate-related Strategies
Luen Mei Quantum incorporated climate change issues into the Company's development strategy, and established a sustainabledevelopment governance structure consisting of the Board of Directors, ESG co-ordination group and ESG working group, so asto comprehensively improve the Company's level and professional capabilities to cope with climate change. For more details ongovernance architecture, please refer to the chapter "ESG Management Structure" in this report.
The Company has strengthened the management of climate risks and opportunities by formulating standardized processes forclimate risk identification, assessment and response, and made timely adjustments to such processes according to its own businesscharacteristics and internal and external environmental changes, so as to continuously improve its risk management capability inresponse to climate change.To address climate change, Luen Mei Quantum identifies potential risks and opportunities that the Company currently faces or mayencounter in the future, taking into account industry characteristics and business scope. It assesses the impact cycles and levels ofthese risks and opportunities and develops targeted risk mitigation measures, so as to enhance the Company's risk managementcapabilities and reduce the impact on its business operations.
Opportunitytype
Description Impact periodFinancial impactCountermeasuresMarketopportunities
The rising tide of climate change response is driving theemergence of clean energy and other related fields, bringingeven greater market demand for the Company
Medium-term
Operatingrevenueincreasing
Actively promote the improvement of cleantechnology and process, and enhance themarket competitiveness of the Company'sproductsResourceEfficiency
By promoting the transformation of low-carbon and efficientproduction methods, energy consumption can be reducedand efficiency can be improved
Short andmedium-term
Operational costdecreasing
Optimize energy utilization efficiency,conduct energy efficiency assessmentregularly, and enhance employees'awareness of resource utilization◎NotesImpact period Short-term is within 1 year (including 1 year) after the end of the Company's sustainable information reporting period,medium-term is 1-5 years (including 5 years), and long-term is more than 5 years
Risk identification
Comprehensively analyze the current environmental conditions, domestic and international policies andregulations, industry characteristics, and stakeholder demands, and identify potential climate-related risksbased on the Company's actual situationFor the identified climate risks, comprehensively evaluate their potential impacts on the Company'sincome, cost and assets from the dimensions of impact period and impact degree, and adjust the priorityof climate change risk management according to the evaluation resultsFor various risks identified and evaluated, the relevant departments shall be responsible for theimplementation of targeted control measuresRisk assessmentRisk control
Risk type Description Impact periodFinancial impact Countermeasures
Physical risks
AcuterisksTemperature is a critical factor affecting the profitabilityof heating companies. Sudden extreme weather eventsduring the heating period can directly impact theCompany's financial performance
Short andmedium-term
Operating costsrisingOperating incomedeclining
Increase investment ininfrastructure upgrading toimprove its defense ability againstsudden extreme weatherChronicrisksDrought or wet weather causes equipment damage ordifficulty in operation and maintenance
Medium-termand long-term
Operating costsincreasing
Strengthen the daily maintenanceof equipment and facilities
TransformationRisks
Policy andlegal risks
Environmental investments and operations are a criticalcomponent of the production process for heatingcompanies. Currently, the Company's environmentalequipment and operations fully comply with nationalstandards and emission requirements. However, as thestate progressively raises its environmental standards,the Company needs to increase environmentalinvestments and operational costs
Medium-term
Production costincreasingOperating costsincreasing
Closely monitor relevantregulations at the international,national, and local levels to ensurethat its operations comply withthe latest environmental policyrequirements, prevent potentialpenalties and litigation
TechnicalrisksIn order to cope with climate change, the Companyneeds to adopt more advanced and environmentallyfriendly production technologies and equipment, andinput more in technological innovation
Long-term
R&D costsincreasing
Increase investment in greentechnology research anddevelopment, actively seekpartners, establish innovationmechanisms, and accelerate theapplication and promotion of newtechnologiesMarketRisksThe centralized heating industry in China is movingtowards cleaner operations, with customers increasinglyfavoring more low-carbon and energy-efficient products.If the company fails to meet customer expectations interms of energy savings and sustainability performance,it may face the risk of losing customers
Medium-term
Operatingrevenuedecreasing
Reduce the impact on theenvironment by adopting cleanenergy and popularizing low-carbon technologies
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report2024EnteringLuen Mei
ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
◎Notes
Calculation basis: Luen Mei Quantum has accounted its carbon emissions in accordance with the Guidelines on Enterprises GreenhouseGas Emissions Accounting and Reporting--Power Generation Facilities issued by the Ministry of Ecology and Environment, along with otherrelevant standards or technical specifications. The Company's emission facilities include boilers, gas turbines, and power generationequipment purchased. The carbon emission accounting was carried out by the operational control approach and using factors setforth in standards such as the Announcement on the Release of 2022 Power Sector CO
Emission Factors jointly published by the Ministryof Ecology and Environment and the National Bureau of Statistics
By establishing and improving the carbon emission management system, improving the carbon emission management
system, promoting low-carbon technology innovation and low-carbon projects, the Company effectively controls the total amountand intensity of carbon emissions. The company integrates digital technologies and applies the latest energy technologies andequipment to enhance the efficiency of urban centralized heating systems. At the same time, it vigorously develops distributedclean energy technologies and equipment. By continuously and deeply optimizing heat sources from multiple dimensions, theCompany implements energy-saving and emission-reduction renovations, thereby achieving ongoing clean upgrades at the source.During the reporting period, the Company’s greenhouse gas emission reduction reached 56,921 tons of carbon dioxide equivalent.In terms of the heat source end, the Company is committed to promoting the environmental protection transformation of theheat source plant, achieving ultra-low emission standards and minimizing the impact of heat sources on the environment.In terms of operation end, the Company has installed and optimized online detection system, and uses a smart operations
platform to conduct real-time data monitoring, precise adjustments, and optimized configuration of heat sources and the heatingnetwork, so as to minimize emissions from operations to the greatest extent possible. Additionally, building on the significantsuccess of the pilot circulating fluidized bed (CFB) boiler project, the Company has been continuously advancing the transformationof other projects to further enhance boiler efficiency, reduce coal consumption, and thereby promote energy conservation andemission reduction.
◎Greenhouse gas emission reduction
Strengthening Environmental Management
The company consistently upholds a firm commitment to environmental responsibility, placing the impact of its production activitieson the environment at the core of its considerations. By taking concrete actions, the Company fully implements green and low-carbon production principles. From the very beginning to the end of the production process, the Company meticulously monitorsand controls every step to ensure that each step strictly adheres to environmental compliance requirements. Through these practicalmeasures, the company actively contributes to environmental protection and sustainable development.▼Environmental GovernanceThe Company attaches great importance to the protection of ecological environment, takes the improvement of environmental managementmechanism as the top priority of the Company's environmental protection work, and strives to minimize the impact of production andbusiness activities on the environment. The Company strictly abides by national and local environmental protection laws, regulationsand standards such as Environmental Protection Law of the People's Republic of China, Law of the People’s Republic of China on EnvironmentalImpact Assessment, Law of the People’s Republic of China on the Prevention and control of Atomospheric Pollution, the State Council's Opinions onStrengthening Key Work of Environmental Protection, Regulations on the Administration of Construction Project Environmental Protection, EmissionStandard of Air Pollutants for Thermal Power Plants and Emission Standard of Air Pollutants for Boilers, etc., and has formulated the EnvironmentalProtection Management Measures of Luen Mei Quantum and the Environmental Protection Responsibility System, clarifying the general requirementsof the Company on environmental protection. The Board of Directors is responsible for supervising the implementation of the environmentalprotection work of the functional departments at each level in the headquarter; Subsidiary companies fulfill their primary responsibility forenvironmental protection, ensuring that grassroots units implement environmental protection measures effectively. By establishing a three-tier environmental management system consisting of decision-making, supervision, and implementation, thereby enforcing a vertically gradedmanagement structure.
▼Climate-related Indicators and GoalsGuided by "green development, scientific and technological innovation, clean energy supply", the Company has continuouslyupgraded its heat source and heating network projects through independent research and development, cooperative introductionand other means, strengthened green and low-carbon technologies, committed to improving resource utilization efficiency andreducing emissions caused by its production. By deeply integrating its sustainable development with the national "carbon peakingand carbon neutrality" goal, the Company contributed its share to advancing the realization of the "carbon peaking and carbonneutrality" goal.During the reporting period, the Company successfully completed its carbon emission compliance obligations and did not encounterany instances requiring rectification or investigation by relevant authorities.
◎ Climate Goals of Luen Mei Quantum
Headquarterslevel
Horgos Luen Mei EngineeringTechnology Co., Ltd.
Responsible for the Company's overall material procurement and management, cost management,engineering management and other functions Screening suppliers of environmental protectionfacilities and related materials, equipment and services, and managing environmental protectioncompaniesOperations ManagementDepartment
Responsible for tracking, collection and analysis of data in each operation link including the rawmaterials, boilers, pipe networks and end users, and monitoring daily environmental dataLuen Mei Smart EnergyTechnology (Shenyang) Co., Ltd.
Explore and study the application of new environmental protection technologies in the Company'sbusiness field, and responsible for directing the implementation of heating projects and technicalsupport for comprehensive energy businessAudit Department
Monitor environmental protection work and the operation of environmental protection facilities, andcoordinate environmental protection-related affairs of various functional departmentsSubsidiaryCompanyieslevel
Production TechnologyDepartments, OperationDepartments and otherdepartments in membercompanies
Based on the environmental protection management system at the company headquarters level,develop the environmental protection management system for their company; collaborate withthe local environmental protection administrative authorities; responsible for the operation,management and maintenance of the environmental protection facilities of their company,the initiation and construction supervision of the overhaul, technical transformation and newconstruction of the environmental protection facilities of their company, conduct testing ofenvironmental materials; record and analyze data on emissions and the operational status ofenvironmental protection facilities; and ensure the safe, stable, efficient, and economical operationof these facilities▼Environmental StrategiesRecognizing the critical importance of environmental management, our company is well aware that mishandling pollutants and wastegenerated during production and operations can lead to regulatory penalties and negatively impact neighboring communities andthe environment. To avoid these risks, the Company has identified potential risks within its environmental management processesand formulated targeted response strategies, so as to strengthen its emergency environmental protection measures and effectivelyprevent significant environmental risks. During the reporting period, the Company did not experience any administrative penalties orcriminal liabilities related to environmental incidents.Achieve carbon dioxide equivalent reduction in greenhouse gas emissions
tons
Indicator Unit2024
Direct greenhouse gas emissions (Scope 1)Million tons of carbon dioxide equivalent3.01Indirect greenhouse gas emissions (Scope 2)Million tons of carbon dioxide equivalent0.04Total greenhouse gas emissions (scope 1+ scope 2) Million tons of carbon dioxide equivalent3.05
During the reporting period﹥﹥﹥114,835.082728
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report2024EnteringLuen Mei
ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
▼ "Three Wastes" Management Measures
▼Indicators and Objectives
The Company has invested heavily in the installation of environmental protection equipment. Over the years, it has continuouslyinvested in technology updating and equipment transformation, and is committed to providing quality services to users in aninnovative, energy-saving, environmentally-friendly and low-emission operation mode, and constantly strictly managing wastewater,waste gas and solid waste.During the reporting period, the Company and its subsidiaries have strictly complied with the pollutant emission concentrationlimits established by environmental protection authorities. There have been no significant adverse effects on employees, localcommunity residents, or the environment due to the Company's pollutant emissions. Additionally, the Company has not faced anymajor administrative penalties or criminal liabilities. For more details about pollution discharge information, please refer to our "2024Annual Report".
The Company has formulated the Environmental Self-monitoring Plan according to the national standards, continuously strengthenedthe management of environmental assessment and completion acceptance of the project, entrusted a qualified third party to carryout testing and input it into the self-monitoring system for publicity, and regularly identified, evaluated and monitored the potentialrisks in production and operation.At the same time, the Company closely integrates environmental protection with production. By implementing an environmentalprotection job responsibility system, safety operation procedures for environmental protection, operation record ledgers, dailyoperation reports, and inspection standards for desulfurization and denitrification agents upon delivery to the plant, the Companyminimizes the negative environmental impact during the production process.
The Company intends to progressively increase its financial commitment to environmental protection focusing on several key areas,including pollution control, the acquisition of advanced environmental monitoring equipment, and the research and development ofnew environmental technologies, so as to maximize the elimination of "three wastes" (wastewater, waste gas, and solid waste) duringthe production process, strictly control pollution, ensure that any remaining wastewater and exhaust gases meet emission standards,and manage waste disposal appropriately, thereby preventing any sudden major environmental incidents.
Risk typeRisk descriptionImpact periodFinancial impactCountermeasures
Policyrisks
As the government strengthens the standardsof waste water, waste gas discharge and wastetreatment, the Company needs to invest moremoney to upgrade technology and controlpollution discharge
Short andmedium-term
Operating costs
increasing
The Company pays close attention to andstrictly abides by the relevant laws andregulations on pollutants and wastes in timeto ensure that its production and emissionsmeet the latest environmental policies andregulations
Market
Risks
As the public pays more attention to watersafety and air quality, enterprises with highpollution and high emissions will lose their marketcompetitiveness
Long-term
Operating revenuedecreasing
Monitor and manage all kinds of pollutionemissions, and regularly entrust qualified third-party testing units for testing, so as to find anddeal with potential pollution risks in a timelymanner; At the same time, actively introducegreen and low-carbon technologies to reducethe emissions generated by productionChemicalrisk
The chemical substances used in equipmentoperations, such as ammonia water, can causeirritation and corrosion to the human body. Ifsafety management is inadequate during storageand usage, leaks are likely to occur, potentiallyleading to environmental incidents
Short-term
Operating costsincreasing
The Company has formulated the EmergencyPlan for Sudden Environmental Incidents,specifying the emergency commandorganization and its responsibilities, preventionand early warning, information reporting,emergency response, post-treatment and otherwork requirements for sudden environmentalpollution incidents,as well as regular trainingand drills for emergency plans
The company implements a separated system for rainwater and sewage by establishing pipe networks for each.Domestic wastewater is directed via municipal sewage pipelines to a centralized wastewater treatment facility.Industrial wastewater is handled in strict compliance with legal, administrative regulations, and standards set bythe national environmental protection authority, with specific discharge points established accordingly. Toxic andhazardous water pollutants in industrial wastewater are collected and treated separately, ensuring they meet theprocessing requirements of centralized treatment facilities before being discharged. In this way, it guaranteesthat no industrial wastewater enters rivers or underground water sources through drainage systems.The Company abides by the requirements of total emission control of key air pollutants, sets up air pollutantdischarge outlets in accordance with laws and regulations and the regulations of the competent department ofenvironmental protection in the State Council, installs and uses pollution prevention facilities in accordance withregulations for production and service activities that produce waste gas containing volatile organic compounds,and adopts measures such as sealing, enclosure, covering, cleaning and sprinkling water to reduce dust andgaseous pollutants generated in internal material storage, transmission, loading and unloading. For malodorousgas produced in production and business activities, the Company takes measures such as setting a reasonableprotective distance and installing purification devices, conducting daily spot checks on waste gas treatmentfacilities, and entrusting a qualified third-party institution to regularly monitor the environment of waste gasoutlets.
◎Wastewater Management
◎ Waste Gas Management
During the reporting period, Shenyang Guorun Low CarbonThermal Power Co., Ltd. (hereinafter referred to as "GuorunLow Carbon"), a subsidiary of Luen Mei Quantum, replacedone layer of denitration catalyst for six boilers, and at thesame time, partially dismantled the heat exchanger partitionsof some boilers, and adjusted the temperature of denitrationreactor within the range in which the catalyst can maintainreasonable high efficiency. Following the technologicalupgrades, the company Shenyang Guorun has achievedstable ultra-low emissions of nitrogen oxides.
The company is steadfast in its efforts to prevent and control environmental pollution caused by solid waste,adopting centralized collection and management practices for all waste materials. The primary types of solidwaste generated during the production and operations of the Company include fly ash, filter residue, anddesulfurization gypsum from boilers, which are all transported to a third party with qualification and disposalcapacity for off-site treatment. In addition, the industrial solid waste report, Solid Waste Consumption Contract anda Solid Waste Evaluation Record are provided. During the reporting period, Shenyang Hunnan Thermal Co., Ltd.(hereinafter referred to as "Hunnan Thermal") comprehensively utilized a total of 200,000 tons of industrial solidwaste (slag and fly ash), and entrusted a qualified third party to prepare a comprehensive utilization report fordisclosure, ensuring closed-loop management.
◎Waste Management
Case Denitrification Catalyst Replacement and Boiler Heat Exchanger Partition Reconstruction Project of Guorun Low Carbon
The Company continuously upgrades its technologies by adopting low-nitrogen combustion technology, as well as Selective Non-Catalytic Reduction (SNCR) and Selective Catalytic Reduction (SCR) systems to control nitrogen oxide emissions. Meanwhile, it useselectrostatic bag dust remover and fabric filter dust remover to control particulate matter and adopts in-furnace calcium injection,limestone-gypsum wet scrubbing, magnesium oxide wet scrubbing, sodium carbonate-lime dual alkali method, and circulatingfluidized bed methods to control sulfur dioxide emissions.▼Impact, Risk and Opportunity Management
2930
Luen Mei Quantum Co., Ltd.Environmental, Social and Governance(ESG) Report2024
EnteringLuen Mei
ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
▼ Saving Energy, Reducing Consumption and Increasing Efficiency
▼Promoting Water Conservation
▼Cyclic Utilization of Resources
The heating industry is a critical component of essential public services and also a major energy consumer. In the Action Plan forCarbon Dioxide Peaking Before 2030 issued by the State Council, it clearly emphasizes the importance of reducing carbon emissionssafely, ensuring energy security, and actively implementing renewable energy alternatives to accelerate the construction of a clean,low-carbon, safe, and efficient energy system.
The Company strictly complies with the relevant provisions of Water Law of thePeople's Republic of China for water withdrawal and wastewater treatment, strivingto reduce wastewater discharge and improve water resource utilization efficiency.Simultaneously, the Company actively promotes water conservation by posting water-saving signs in office premises and project sites, encouraging employees to conservewater during their daily work, and enhancing their awareness of water-saving practices.Shenyang Guohui Heat Supply Co., Ltd., a member company of Luen Mei Quantum,has long been dedicated to comprehensive water resource utilization. By the end ofthe reporting period, it had obtained 55 related patents. The company's independentlydeveloped "Heat Pump Self-Cleaning Technology" irecovers waste heat from treatedwastewater and residual heat through a thermodynamic water-source heat pumpsystem for centralized heating. This technology is the first of its kind domesticallyand is internationally recognized as leading-edge, offering substantial environmentalbenefits. It has been recognized as a demonstration project by the Ministry of Housingand Urban-Rural Development.
Through the dual drivers of digital transformation and circular resource utilization, the company systematically advances resourcerecycling. It remains committed to using renewable and recyclable materials to promote efficient resource utilization andenvironmental protection, thereby achieving dual improvements in operational efficiency and environmental benefits.In production, the Company's heat source plant recycles chemical wastewater and boiler sewage for flushing ash or desulfurizationand drainage treatment: The sewage after washing ash is ash removal water, which is discharged into the sedimentation tank forsedimentation, and the supernatant is reused for ash washing; After being used for flushing ash slag, the wastewater (the ash water)is directed into a sedimentation pond. Following settling, the supernatant is reused for further ash slag flushing. For desulfurization,the double alkali method is employed. Inside the desulfurization tower, a mist of water (mixed with alkali solution) is sprayed to treatthe exhaust gases, generating approximately 1300 tons per day of desulfurization wastewater. This wastewater is then directed intoa sedimentation pond. After settling, the supernatant is reused for desulfurization spraying. Both methods effectively enable therecycling of production wastewater.
Optimizing Resource Utilization
Luen Mei Quantum places great importance on the rational utilization of resources and has established management systems forkey resources such as fuel and water. During production and operations, the Company employs innovative technologies to improveresource use efficiency, thus achieving effective and efficient operations. While vigorously promoting energy conservation andefficiency improvement, the Company strengthens the management of water resources and improves the recycling rate of resources,truly achieving the goal of "using the least resources to provide the best heat supply service".
The company has taken energy-saving renovations as its starting point to progressivelyimprove energy efficiency. On one hand, it closely follows the latest developments inindustry equipment updates and energy-saving technology research. On the otherhand, it conducts thorough reviews of existing production processes to identify areasfor increased efficiency. By phasing out high-energy-consuming equipment, introducingenergy-saving technologies and energy management systems, and optimizingproduction processes as well as other measures, the Company achieves more efficientenergy use. As of the end of the reporting period, the Company has achieved a 100%clean heating rate.
%
In 2024, Shenyang Guohui HeatSupply Co., Ltd., a member companyof Luen Mei Quantum, drew onits experience from energy-savingtechnology upgrades in 2023 torenovate an old boiler that had beenin operation for 15 heating seasonsand successfully transform the oldboiler into an internally circulatingfluidized bed boiler, addressedissues such as ash accumulation,corrosion, and increased wear onthe heating surfaces. By the end ofthe reporting period, the renovatedboiler had been successfully ignitedand put into operation, achievinga boiler efficiency of 88%, 8.37%higher than that before renovation,greatly improving the energyutilization efficiency.
Coal consumption
tons
tons
tons
tons2,181,316.07
Number of computersrecycled
Total water consumption
4,104,182.00
Gasoline consumption56,756.52
Diesel consumption
Electricity consumption
liters
litersMWhGJ
745,963.92
181,314.49
Number of tonercartridges recycled
Consumption of liquefied petroleum gas
Total amount of purchased heat
26.66
495,636.49
Proportion of recycled water to totalwater consumption
%
10.96
Total amount of water recycled449,761.00
Technological Upgrades Promote Energy Conservation and Consumption ReductionCase
During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥
The Company has achievedclean heating rate
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Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
▼Exploring Clean Energy
Driven by the "carbon peaking and carbon neutrality" policy that is guiding the industry's reform and development, the Company haspositioned itself as a comprehensive clean energy service provider, steadily expanded and strengthened its clean heating businesswhile continuously increasing the proportion of clean energy in its overall energy mix. The Company has been actively exploringthe industrial application of hydrogen energy and intensifying its investment and strategic layout in hydrogen-related businesses topromote the implementation of hydrogen energy solutions in the energy sector.
In addition, the Company has been actively exploring renewable energy technologiessuch as photovoltaics (PV) to further expand the share of clean energy. By utilizingapproximately 910m
of rooftop space on its main office building, the Companyconstructed a distributed rooftop photovoltaic power station with an installed capacityof 30.8 kWp. During the reporting period, the station generated a total of 27,411.10kWh of electricity, opening up new space for green development.
Distributed photovoltaic powerstation generated a total of27,411.10kWhDuring the reporting period﹥﹥﹥
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ESGManagement
Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
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Benefiting Thousands ofHousehold, Creating BetterFuture Together
Innovation-driven
Transformation
Stick to StrictQuality Control
Optimizing Service
Experience
Create a SustainableSupply Chain
Protect Employees'Rights and Interests
Building a Harmonious
Society Together
Response to UN Sustainable Development Goals (SDGs)
Luen Mei Quantum has been dedicated to comprehensive energy services for more than 20 years, consistently adhering to the philosophyof "Connecting to the Future, Making Life Beautiful". The Company integrates the concept of "responsible heat supply" into its corporateoperations, providing heat supply services with smart and clean heat supply technology for thousands of households. While striving to achievecommercial success, Luen Mei is committed to creating greater social value and fulfilling its responsibilities as a modern enterprise.3536
Innovation-driven TransformationStick to Strict Quality ControlIn the context of the new era, Luen Mei Quantum, with technological innovation as its core driving force, is committed to deepeningthe integration of smart heating systems and multi-energy complementary technologies, advancing digitized management acrossoperational processes, and establishing a low-carbon, high-efficiency energy ecosystem. Through these initiatives, the Companyactively contributes to the green and low-carbon transformation of the economy and society. In 2024, Luen Mei Quantum hascontinued to exert its efforts in the intelligent operation of energy supply, promoted the green and low-carbon energy supply throughmulti-dimensional intelligent and digital means, built an intelligent operation platform that is now running stably. The Company is alsoactively promoting energy technology innovation, accelerating the cultivation and development of new drivers for quality productivity,and continuously expanding its investments in emerging energy sectors such as hydrogen energy and energy storage, advancing thegreen and low-carbon transformation of the heating industry to a higher level.The Company possesses core competitiveness in research and development and technology and has formed a robust mechanism fortechnological innovation by laying out high-tech enterprises which are rare in the heating industry, and a municipal-level enterprisetechnology center. During the reporting period, the Company did not experience any incidents involving violations of scientific ethics.
Luen Mei Quantum views product quality as the cornerstone of its survival and development, adhering to the principle of "Long-term Planning, Quality First." The Company is committed to building a differentiated competitive advantage by pursuing excellence inquality. The Company has established a sound organizational structure and mechanism for quality governance, fully identifying theimpacts, risks, and opportunities related to quality. By benchmarking against advanced international quality management systems,the Company actively leads or participates in the formulation of industry standards, promoting quality upgrades and the sustainabledevelopment of the industry.
CaseExplore Full-dimensional Intelligent Heating
In recent years, Luen Mei Quantum has continuously explored the full-dimensional intelligent heating operation framework,aimed at realizing smart, precise, and highly efficient heating regulation by leveraging intelligent and digital tools to replacetraditional "manual experience". In 2024, the digital operation platform developed and implemented by Luen Mei Smart Energy,a subsidiary of Luen Mei Quantum, achieved significant success. The platform successfully integrated 874 heat exchange stationdevices, effectively addressing the challenges of balancing secondary network heating systems. This provided operators witha powerful tool for network adjustment, enabling heating department staff to schedule operations and issue commands viaPC terminals. As of February, 2025, the smart heating pilot project of the secondary network of Luen Mei Quantum has beenrunning for four consecutive heating seasons. The seven pilot projects networked covered an area of about 1.44 million squaremeters, and the highest heat saving rate achieved by these projects full-dimensional intelligent heating operation frameworkreached about 20%, demonstrating significant energy-saving results. The successful operation of the project is an importantstep for the Company to establish and improve the full-dimensional intelligent heating operation framework. In the next step,Luen Mei Quantum will gradually expand the smart heating system and establish a full-dimensional intelligent heating operationframework special for Luen Mei Quantum from four dimensions: source-network-station-household.
R&D expenses
2,292.55
Number of accumulatedauthorized patents
Number ofinvention patents
Number of utilitymodel patents
Number ofsoftware copyrights
Number of projectsunder research
▼Quality Management
▼Quality Strategy
▼ Impact, Risk and Opportunity Management
The Company strictly abides by the Metrology Law of the People's Republic of China, Standardization Law of the People's Republic of China andother laws and regulations, constantly promotes the improvement of quality management mechanism and establishes and improves theproduction and operation management system. The Company has formulated and improved systems including Management Regulations onQuality Inspection of Equipment and Materials and Management Measures for Sampling and Testing of Environmental Protection Materials. TheTechnical Renovation Committee of "Three Repairs" (minor repair, intermediate repair, overhaul), which is directly managed by the President,is responsible for the planning and target setting of production and operation, and formulates the Annual Production and Operation Planat the beginning of each year. The Quality Audit Department is responsible for the daily quality management, and regularly identifies andupdates related impacts, risks and opportunities. The Company requires all member companies with certification qualifications to pass thequality management system certification in time. By the end of the reporting period, all member companies of the company that are stablein operation and possess certification qualifications have passed the quality management system certification and maintained the effectiveoperation of their quality systems.The company has always placed great emphasis on quality and safety management, strictly monitoring the potential adverse impacts and risksto current and expected financial conditions caused by aging pipeline equipment and engineering quality in the short, medium, and long term.
The Company has established a comprehensive product quality management system and updates the system regularly every year based on therequirements of the product quality management system, internal business and management structure, so as to ensure that it meets the actualmanagement requirements and effectively promote the continuous improvement of product safety management quality. The Company has formulatedand continuously improved the Measures for Engineering Quality Management (for Trial Implementation), Management Measures for Acceptance of HeatSource and Heating Network Construction Projects (for Trial Implementation), Management Measures for Construction of Primary Network Projects (for TrialImplementation), Management Measures for Construction of Secondary Network Projects and Heat Exchange Station Projects (for Trial Implementation) andother systems to identify and evaluate short-, medium- and long-term impacts and risks.
the company strives to use high-quality new materialsfor new construction and pipeline upgrades; strengthensthe maintenance of existing pipelines and equipment toextend their service life and control the costs of pipelineand equipment maintenance and upgrades.
the Company continues to optimize the current material andengineering management systems, focusing on the supervisionof newly built heat sources, primary networks, heat exchangestations, secondary networks with large volume, boilers under"three repairs (minor repair, intermediate repair, overhaul), specialenvironmental protection projects, boiler overhaul, furnaceinsulation, and renovation of vertical poles with large volume.
In terms of pipeline equipmentIn terms of engineering quality
Quality management of equipment andmaterials arrived:Check bulk materialsand key parts of heat source constructionprojects and primary network projects toensure the material quality and preventpotential short, medium and long-term risks.
Engineering quality management:
Conduct on-site audit of the projectapproved by each member company toprevent potential quality risks on the projectsite.
Heating management: Strictly preventunauthorized valve opening, strengthenstatistical analysis of data, strictly check thereporting procedures, and ensure inspectioncoverage and valve confirmation rate.ten thousandyuanDuring the reportingperiod﹥﹥﹥
As of the end of the reporting period﹥﹥﹥
Including
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Protecting and Beautifying
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Benefiting Thousands of Household,Creating Better Future Together
Appendix
▼Indicators and Goals
▼ Quality Control Measures
The Company sets quality-related indicators and goals according to the Production and Operation Plan for 2023-2024.
◎ Guided by StandardsAccording to the Company's long-term development strategic plan, in order to implement the management mode that emphasizesinstitutionalization, standardization, and synergies in business operations, effectively prevent quality-related risks, clarify relevanttechnical requirements, and ensure that quality and cost are effectively controlled, the Company has fully analyzed nationalstandards and regulations. Through multiple rounds of discussion, comparison, and optimization of the standards previouslyadopted by subsidiaries, the Company reached a consensus and established a continuously updated corporate quality andtechnical standards system that covers the equipment, materials, engineering, testing and other dimensions and contains 12enterprise standards of Luen Mei Quantum. In 2024, the Company continued to organize the training of subsidiaries at all levels,publicized the technical standards of enterprises, strictly implemented the quality standards, unified the technical requirementsof the Company, and laid a solid foundation for the improvement of product quality.◎ Quality-related PunishmentIn order to strengthen the Company's quality control and address any quality loopholes, the Company has formulated andimproved the punishment procedures, strengthened the quality inspection and acceptance of the arrived equipment, so as toensure that the materials used meet the qualified standards. For unqualified products, the Company implemented the policy ofreturn and exchange and gave corresponding punishments; the Company also has strengthened the management of coal testing,ensured the timely and accurate testing data, so as to provide reliable basis for controlling the quality of coal and the scientificand efficient operation of the Company; the Company has strengthened the inspection of unauthorized valve opening, severelycracked down on unauthorized valve opening and unauthorized network connection, so as to safeguard the legitimate rights andinterests of heat users, and improve the quality of urban heat supply service.
Number of major quality accidents
Number of quality audits
Completion rate of rectification of quality hidden dangers/problems
%
Indicator UnitGoalsCompletion in 2024
Coverage rate of audits on bulk materials and key parts %100Completed
Accidents resulting from poor engineering qualityCases0Completed
Quality Punishment ProceduresThe Quality Audit Departmentissues inspection reports andpunishment opinions
The relevant departmentsand leaders sign theapproval form
The quality audit departmentissues the punishment noticeto the punished unit
The punished unit makesrectification and pays the fine01020304
Optimizing Service Experience
The Company strictly abides by the Law of the People's Republic of China on the Protection of Consumers' Rights and Interests, adheresto the principle of "customer-centered and market-oriented", establishes the concept of all-staff service, establishes an industrialchain of sincere cooperation and mutual benefit with customers, and pursues a long-term, stable and win-win cooperativerelationship with customers.▼ Service System Construction
▼Optimized Service Measures
The Company has established a customer service team and a unified call center, which is responsible for user consultation, repairreport and complaints related to heat supply work. Users can communicate with the Company through telephone hotline, onlinebusiness hall, WeChat official account and 24-hour offline business hall.
After years of development, the Company has earned the recognition and trust of various users through its high-quality heatingservices and exceptional customer support. In 2024, the company continued to enhance service efficiency and quality byimplementing optimized service measures, including the following:
The Company regularlytrains customer servicepersonnel, standardizesand unifies service terms,and enhances businesscapabilities.
The Company has implemented "the one whoanswers first responsible" system, which clearlystipulates that the individual who receives the userinformation first is the person in charge of theuser's questions, who needs to track and handlethe user's claim and pay a timely return visit to thecustomer. The indicators such as user reception,user claim handling and complaints are includedin the performance appraisal standards. Excellentemployees, stations and offices will be rewarded.
The Company has formulatedand continuously improvedthe Management Measuresfor Compensation for Low-temperature Users and theManagement Measures for Claimsfor Running Water, defined thestandards of service qualityand related remedies, andeffectively safeguarded therights and interests of users.
In terms of systemIn terms of peormance appraisal
In terms of skills training
Increase the distribution of convenience service contact cards,through which users can directly solve problems through theCompany platform;
Shorten the work chain, users' demands can be routed tomaintenance personnel, with customer service staff monitoringthe process in real time to ensure prompt service delivery;
Provide door-to-door services for special groups with mobilitychallenges due to health conditions, and assign dedicated onlinecustomer service representatives to assist these users online.
During the reporting period﹥﹥﹥
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Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Case
Case
Intimate Service "E" Life
The WeChat official account "366e Life"platform independently built by the Companyis a comprehensive online platform integratingheating fee payment, repair reporting, servicecomplaints and operational guidance. In 2024,the Company made full use of the WeChatofficial account's publicity function to remindusers of important nodes such as heating feepayment and water supply time, and occasionallypublished common knowledge about heatingonline through cartoons and videos. By the endof the reporting period, the articles published onthe "366e" platform had been read more than300,000 times, which was well received by allwalks of life.
In 2024, the company make over 148 modificationsto business data by relying on its supply chain cloudmanagement system, adjusted permissions more than10 times, and addressed over 40 business vulnerabilities.Additionally, the Company completed the developmentof a consolidated payment module for procurementas well as secondary development work with suppliers'collaboration. At the same time, the Company analyzedand optimized business processes, and organizedmaterials, inventory receipts and issues documents, andcontracts. As a result, the number of available materialsfor the year was streamlined from 63,756 to 26,329.
Number of customerservice staffpeople
The Company did not experience any data security incidents orbreaches of customer privacy.
Telephone customerservice satisfaction
%
Online customerservice satisfaction
%
Customer complaintresolution rate%
Number of customer commendationsand acknowledgments received
▼ Data Security and Customer Privacy Protection
▼Management System
▼Management Measures
The Company continuously strengthens the information security management and customer privacy protection system, strictlyadhering to relevant laws and regulations such as the Cybersecurity Law of the People's Republic of China, the Data Security Law of thePeople"s Republic of China and the Personal Information Protection Law of the People's Republic of China full translation. The Company hasestablished an approval process for accessing data and materials, with designated personnel responsible for managing special systemdata. All data access permissions are strictly controlled to ensure the utmost protection of data and customer privacy from unauthorizeddisclosure. On the user side, customers must provide valid identification or other identity verification information to access services suchas querying overdue payments, suspension of heating supply, or user contact details. Customer information is never disclosed to anythird party without explicit consent.
Create a Sustainable Supply ChainLuen Mei Quantum strictly abides by the Law of the People's Republic of China on Tenders and Bids and other laws and regulations,and continuously improves the supplier management system. Besides the quality of products and services, the Company alsopays attention to the management of suppliers in employment compliance, occupational health and safety, business ethics andenvironmental awareness, and continuously conveys the sense of responsibility for sustainable development to suppliers to build asustainable supply chain.
The Company is committed to establishing and improving a unified, standardized and transparent supplier management system, andformulating and improving such systems as Supplier Management Access System, Bidding Management Measures, Procurement ManagementMeasures, Bidding Management Measures, and Bidding Negotiation Procurement Operation Management Measures. The Quality AuditDepartment will supervise the compliance and deviation of bidding to ensure the transparency and fairness of recruitment.
In order to optimize the Company's supplier management, the Company continuously uses the online supplier management platformto improve the efficiency of data processing and online audit in supplier management. On the basis of ensuring suppliers' complianceand performance, the Company guides suppliers to abide by business ethics, fulfill their social responsibilities and improve theirenvironmental and social performance through supplier evaluation. In the process of purchasing, the Company fully ensures that thesupplied products meet the requirements of environmental safety and quality, and encourages suppliers to improve and upgrade theirproducts to better serve the heating customers. To deepen cooperation and communication with suppliers, the company proactivelyconducts pre-bid evaluations of suppliers and performs on-site visits and inspections after the bid award. For engineering equipmentsuppliers, the Company's inspection of suppliers includes: comprehensive evaluation of supplier factory scale, comprehensive evaluationof product quality, comprehensive evaluation of technical ability and comprehensive evaluation of performance, etc.
Overall structure of cloud based supply chain
Optimizing Supply Chain Cloud Management
需求计划
13家公司
采购合同
新北浑南国新国惠国润国盈江苏联美山东福林合力……物料采购库存领用物料结算
合同管理
组织间结算供应商协同
中台服务
存货核算付款管理采购管理库存管理采购合同确认单结算判定交易对账对账查询虚单方案
取价规则交易路径存货暂估费用分摊出库核算成本调整跌价计提分项核算
付款申请合并付款
合同变更需求计划
物料清单集中采购
采购订/退货
自行采购入库处理
库存调整库存盘点二级库
出库处理调拨处理批量付款
框架协议
注册登录准入协同询价比价招标管理报价助手黑白名单用户中心物料中心采购中心库存中心物流中心结算中心
During the reporting period﹥﹥﹥
During the reporting period﹥﹥﹥
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Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
Compilation of Safety Management Systems by Jiangsu Luen MeiBioenergy Co., Ltd.Safety Risk Announcement Management SystemEmergency Plan for Safety Accidents of General Cargo WharfSafety Production Management SystemSafety Production Accident Management SystemSafety Production Responsibility SystemSafety Production Management SystemRegulations on Management of Hidden Risk Investigation and GovernanceAnti-Violation Management RegulationsResponsibility System for Work Safety at All Levels
▼ Equal Treatment of Small and Medium-sized Enterprises
▼ Occupational Safety and Health
To ensure fair competition among small and medium-sized suppliers,the Company implements a vendor pre-qualification system for allbidding processes, and selects suppliers from an approved supplierpool in each bid. Suppliers outside the pool can also qualify if theypass the qualification review. In 2024, the Company provided trainingto suppliers, including small and medium-sized enterprises, andestablished standardized guidelines and requirements for pre-qualification, bid opening, bid evaluation, and inquiry and pricecomparison.
◎ Occupational Safety and Health Management System
The Company attaches great importance to production safety and employees' occupational health, strictly abides by and implements the WorkSafety Law of the People's Republic of China, the Interim Measures for the Investigation and Management of Hidden Dangers in Production SafetyAccidents, the Implementation Guidelines for the Investigation and Management of Hidden Dangers in Hazardous Chemicals Enterprises and otherlaws and regulations, and forms a top-down occupational safety and health management system. At the Company level, it is responsible forthe revision of relevant systems of member companies and the supervision of safety production, promoting the construction of managementsystems of member companies and implementing the long-term mechanism of safety production. The safety supervision department of eachmember company is responsible for refining and improving their own occupational safety and health system according to the requirementsof Luen Mei Quantum. In order to properly implement the safety management, the Company has established a part-time safety officermanagement system in front-line production units. Some employees of member companies, while performing their primary job duties, afterrecommended by their department and passing the training and assessment, can take on the additional role of safety administrator withintheir department or team, assist and cooperate with the main person in charge of safety production in their departments to carry out dailysafety production management under the guidance of the safety supervision department.
◎ Strengthen safety trainingSafety training is crucial for the thorough implementation of the safetymanagement system. The Company clearly stipulated in the ManagementSystem of Employee Education and Training that regular external trainingsessions are to be organized for safety management personnel. All employeesmust undergo routine safety education annually. Furthermore, the SafetySupervision Departments of each member company shall organize monthlyspecialized training sessions and practical drills for part-time safety officers,so as to enhance the safety knowledge and problem-solving capabilities ofrelevant personnel.
Total number of suppliers
2,906
Incidents of overdue paymentto SMEscases
Protect Employees' Rights and Interests
Luen Mei Quantum always regards talents as valuable resources and wealth for enterprise development. Guided by the philosophyof "Healthy Development, Happy Working", we have established a comprehensive occupational health management system and builta robust compensation and benefits framework to motivate employees' growth and progress, enhance their personal value, andenable them to share in the company's development achievements.
Shenyang Xinbei Thermal Power Co., Ltd
13 safety-related regulations25 special emergency plans for natural disasters, accidents, public health incidents and social security incidents
Safety Production Management SystemWork Objectives and Control Measures for Work Safety in 2024-2025Responsibility System for Safety Production and Fire Prevention inVarious Posts
Shenyang Guohui Heat Supply Co., Ltd.
Jiangsu Luen Mei Bioenergy Co., Ltd.
Shenyang Guoxin Environmental Protection New Energy Co., Ltd.
Safety Production Management SystemResponsibility System for Safety Production and Fire Prevention in Various
Posts at All Levels of the CompanyThree-year Action Implementation Plan for Special Rectification of Work Safety
Shenyang Guorun Low Carbon Thermal Power Co., Ltd.
Shenyang Hunnan Thermal Co., Ltd.
Safety Production Management System of Hunnan ThermalResponsibility System for Safety Production and Fire Prevention in Various
Posts of Hunnan ThermalImplementation Manual for the Construction of Risk Classification Control and
Hidden Danger Investigation and Management System
Shandong Heze Fulin Thermal Technology Co., Ltd.
Safety Production Management SystemSafety Production Reward and Punishment Management System
Emergency Rescue Plan for Work Safety AccidentsRules for All-staff Responsibility of Safe ProductionRegulations on Management of Special Operations
Anti-Violation Management SystemManagement System for Labor Protection Equipment
Some safety and health-related systems of member companiesDuring the reporting period﹥﹥﹥
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Connecting Together forCo-governance and Co-growth
Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
Case
Case
Shenyang Xinbei Thermal Power Co., Ltd., a subsidiary of Luen Mei Quantum, firmly implements the principle of "safety first,prevention foremost, and comprehensive management." The company successfully completed its annual safety trainingtasks and organized its key personnel, safety officers and special operation personnel for handling and renewal of relevantcertification, achieving a 100% certification holding rate. During the "three repairs (minor repair, intermediate repair, overhaul)period" in the summer of 2024, Xinbei Company organized six centralized safety trainings, with a total of 882 persons trained.
Shandong Heze Fulin Thermal Technology Co., Ltd. (hereinafter referred to as "Shandong Fulin"), a subsidiary of Luen MeiQuantum, attaches importance to the management of employees' occupational health and safety. It formulates the ManagementSystem for Labor Protection Equipment (Trial) and other related management systems, and is committed to strengthening themanagement of employees' working environment. In 2024, the company hired a third-party organization to detect and evaluatethe occupational hazard factors within the company, fully identified the occupational hazard contact factors of employees onthe job, organized 42 employees on the job to take comprehensive occupational health examination, rectified the employees'working environment according to the evaluation results in the Occupational Hazard Factors Detection Report and General Reporton Occupational Health Examination issued by professional organizations, and made an occupational disease publicity manual toincrease the popularity of occupational disease prevention knowledge. In 2024, the expenditure related to occupational healthmanagement of Shandong Fulin reached RMB 20,040.
◎ Focusing on occupational healthThe Company integrates health into the daily management of the Company in accordance with the requirements of the Law ofthe People's Republic of China on Prevention and Control of Occupational Diseases the Management Measures for Occupational HealthExamination and other laws and regulations, signing the Notice of Occupational Hazards with employees at the positions withoccupational disease risks when signing labor contracts, explaining the potential hazard factors, occupational contraindications andoccupational disease protection measures stipulated by the Company to such employees, paying attention to the labor protectionof employees in daily work and fully protecting their health rights and interests. Meanwhile, the Company actively promotes itsmember companies to identify and evaluate occupational safety risks, strengthen the management of occupational hazards, improvethe management of working environment, reduce occupational hazards, regularly arrange occupational health examinations for allon-the-job personnel, strengthen occupational health education for employees, improve their awareness of labor protection, andprevent the occurrence of occupational diseases.
Investment amount of work-related injury insurance
ten thousand yuan
Work-relatedinjuriescases
Work-relatedfatalities
case
Lost working hours due towork-related injuries
hours1,096
Coverage of work-relatedinjury insurance%
▼ Employment and Rights and Interests of Employees
Luen Mei Quantum strictly abides by the Labor Law of the People's Republic of China, Labor Contract Law of the People's Republic of Chinaand the Trade Union Law of the People's Republic of China as well as other laws and regulations, adheres to the principle of fairness,justice and openness, and respects and protects the legitimate rights and interests of employees. The Company adheres to the policyof equality and non-discrimination, regulates employment according to law, and establishes harmonious and stable labor relationswith employees. In 2024, the Company actively carried out campus recruitment. Through a variety of methods including informationsessions, job fairs, and targeted visits to faculty members, the company reached out to 19 relevant professional institutions andextended a total of 134 interview invitations, did a good job in ongoing talent acquisition and reserve.
During the employee recruitment process, the Company strictly adheres to non-discriminatory hiring principles,and ensures that employees of all genders, ethnicities, and religious beliefs are provided with a unified, fair,and non-discriminatory environment in terms of compensation, promotion, and other talent developmentmechanisms.
Employmentaccording tolaw
The Company continuously strengthens and refines its human resources management system, signingemployment contracts with all employees according to law to define their rights and responsibilities.The Company strictly abides by the National Regulations on Prohibiting the Use of Child Labor and the legalrequirements of the country (region) where it operates. It firmly prohibits the employment and use of child laborand opposes any form of forced or compulsory labor. The Company implements the supervision and inspectionsystem of labor and employment, conducts spot checks on labor management practices from time to time, andconducts training on human rights protection for all employees. In 2024, the Company did not encounter anyincidents involving the employment of child labor or forced labor.
DemocraticManagement
The Company implements the democratic management system of enterprises with the workers' congress as thebasic form, and encourages employees to actively contribute their ideas and suggestions for the development ofthe Company. All subsidiaries regularly hold the congress of workers and staff, and take the initiative to listen toemployees' demands and solve their actual needs via the platform of the congress of workers and staff.Compensationand benefits
The Company actively reforms the compensation and benefits system, including providing employees withsalary not lower than the regional average salary level, and paying social insurances and one housing fund infull (including paying the housing fund for employees at the highest proportion). In 2024, the Company's socialinsurance coverage rate was 100%, and the labor contract signing rate reached 100%.
EmployeeCare
The Company adheres to the concept of "healthy development and happy work", strives to balance the work andlife of employees by holding trade union activities such as Spring Festival celebrating activity, employee birthdayparty and International Working Women's Day activity every year. In 2024, the Company organized multi-leveland multi-faceted employee care activities, which not only enriched employees' leisure time but also furtherboosted morale and enhanced team cohesion.
Safety Training in Xinbei Company
Occupational Health Management Upgrade
EqualTreatment
During the reporting period﹥﹥﹥
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Connecting Together forCo-governance and Co-growth
Protecting and Beautifyingthe Environment Jointly
Benefiting Thousands of Household,
Creating Better Future Together
Appendix
◎Employee Structure
●Number of male employees●Proportion of female employees
88.67%
11.33%
●Proportion of employees under the age of 30●Proportion of employees aged 30-50
●Number of employees with high school education or below●Number of employees with undergraduate and junior college education●Number of employees with master's degree or above●Proportion of employeesabove the age of 50
50.44%
14.50%
35.06%
60.93%
38.00%
1.07%
Gender structure
of employees
Employee education
structureAge structureof employees
Total number ofemployees
peoplepeople2,524
Labor contractsigning rate
%
Social insurancecoverage rate%100796
Number of newemployees
%
Employeesatisfaction
Case
Case
Case
In 2024, to enhance employee management efficiency and improve the precision of management, the Company launchedthe Beisen EHR system, comprehensively reviewed and integrated existing personnel information structures and authorityallocations via the system, and redesigned its approval processes, phased out outdated attendance equipment and relatedsystems, and upgraded the processing of attendance data to be more refined. Based on attendance data, the Companyoptimized payroll rules, achieving seamless integration from employee records to attendance data to salary calculations.
In order to realize the sustainable development of the Company's core talent team, the Company has established an effective coretalent training mechanism. Based on the training principle of "primarily internal cultivation, supplemented by external cultivation, witha combination of unified and distributed approaches", Luen Mei Quantum adopts a "dynamic talent pool management" approach forcontinuous and cyclical training. The talent development program covers three training plans, namely, "Luen Mei's Leaders", " Luen Mei'sEagle" and " Luen Mei's Craftsman", with a total of 78 trainees from various business sectors. As of June, 2024, the "Successor" talent poolproject has been in operation for three years, and 7 people have been selected as "Luen Mei's Leaders", 2 people have been promotedas training targets, and 25 people have been selected as "Luen Mei's Eagle", and 7 people have been promoted as the training targets.On July 22, 2024, the Company held a three-year graduation ceremony of the "Successor" talent development project.
In 2024, Luen Mei Quantum participatedin the fourth speech contest organizedby Luen Mei Group. This year's speechcontest was centered around the theme"Growing Together with Luen Mei".Participants used language as a mediumto vividly explain their understanding ofthe Company's corporate culture, sharetouching stories of practicing corporateculture, show the elegant demeanor andspiritual outlook of Luen Mei, and winapplause and honor.
▼Career Development and Training
Luen Mei Quantum continuously improves and deepens its talent cultivation mechanisms, placing significant emphasis on employee careerplanning, strengthening the development of talent teams, and ensuring an adequate number of talents with a reasonable hierarchy andoptimized structure. The Company has formulated and improved the training systems such as Internal Lecturer Management System and TalentDevelopment Management System, and constantly improved the induction training system, compiled the induction training materials and planassessment system, and standardized the training process. Based on the Company's actual situation of management and its developmentneeds, the Company provides equal development opportunities for different types of employees
Implements the "successor" development plan from 2021 to 2024, providing core talents with sufficientcareer development space For core talents
The company regularly carries out a series of professional skills training through the combination of internaltraining and external training, and encourages employees to specialize in their strengths and engage inprofessional work for a long time in the business fieldFor employees withprofessional skills
The company places great emphasis on cultivating and reserving future talent. It continuously follows up onthe development of previous campus hires and interns, while formulating and improving systems such as themanagement measures for the mentorship system of fresh graduates, the training program and managementmeasures for honor students, etc., To help employees quickly adapt to the work environment, familiarizethemselves with work processes, and enhance the capability and competency levels of new employees.For campus hiresand interns
Case
In 2024, the Company organized the enterprise integration trainingof "Honor Students Phase V", and arranged the trainees of "HonorStudents Phase V" for mentorship ceremonies, job rotations, monthlyonline learning assignments, and the submission of offline assessmentmaterials. By the end of the reporting period, the retention rate ofhonor students reached 100%.
"Successor" Talent Development Plan
Continuously Promote the Cultivation of "Honor Students" Talents
EHR System Enhances HR Management Upgrade
Using Voice to Convey Dreams
During the reporting period﹥﹥﹥
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Protecting and Beautifying
the Environment Jointly
Benefiting Thousands of Household,Creating Better Future Together
Appendix
Case
Case
CaseBuilding "Luen Mei Cloud Classroom"
Training and Empowering Professional Skills
"Energy Engine" of Rural Revitalization
In addition to offline training activities, the Company makes full use of the "Luen Mei Cloud Classroom"learning platform, giving feedback to students on their learning progress at the beginning of themonth, at the middle of the month and at the end of the month, ranking the class hours of studentsevery six months and rewarding the top 10 students, thus actively promoting employees' onlinelearning. From October, 2024, the Company established the "New Employee Induction Training"study group on the "Luen Mei Cloud Classroom" platform for new employees, set up a new employeetraining account for each member company, and updated the learning content (including the latestpromotional video, company introduction and rules and regulations). By the end of the reportingperiod, a total of 145 new employees from the Company headquarters and member companies hadparticipated in the induction training for new employees on " Luen Mei Cloud Classroom" platform.
In order to improve the skills and quality levelof managers and key employees, and improvethe quality level and organizational efficiencyof employees, the Company has continuouslyorganized a series of employee empowermenttrainings since 2022. In 2024, it organizedtechnical and experience seminars andproduction safety responsibility awarenesstraining for environmental protection, autorepair and other sectors, with the participation of production and operation technicians such as safety supervision, environmentalprotection and steam turbines, as well as middle and primary management cadres, with up to 500 trainees.
As the living standards and production levels in our country continue to rise, the handling of agricultural and forestry residues inrural areas has become a focal point for rural revitalization. In order to promote the transformation of agricultural and forestrywastes from "ecological burden" to "green wealth", Jiangsu Luen Mei Bioenergy Co., Ltd., a wholly-owned subsidiary of Luen MeiQuantum, continues to innovate biomass energy utilization technology and promote the comprehensive utilization of agriculturaland forestry biomass towards larger scales, industrialization, intensification, and smarter operations. Under the dual backgroundof "carbon peaking and carbon neutrality" goals and rural revitalization, the comprehensive utilization of biomass energy holdsthe promise of fostering a high-quality development with equal emphasis on rural development and cleaner energy practices.
Total number of employeesparticipating in training
Total number of participants inknowledge and skills training
person-time
peoplepeoplepeople
1,347
Average training durationper employee
hours/personhours/personhours/person
5.62
Average training duration permiddle manager
4.47
Average training duration pergrassroots employee
5.78
Number of middlemanagers trained
Number of grassrootsemployees trained
Training expenditures
yuan47,500
▼ Collaborative Rural Development
▼ Paying taxes according to law
Establishing deep roots in local communities and implementing localized operations are crucial strategies for promoting theintegration of the company with local areas. Under the background of advancing rural revitalization, the Company leverages thecharacteristics of its industry to continuously expand its biomass clean energy sector. By fully utilizing agricultural and forestryresidues from rural areas, the Company ensures it performs its primary duties of providing heating and cooling services effectively. Bythe end of the reporting period, Luen Mei Quantum has achieved an annual biomass processing capacity of 300,000 tons.
Paying taxes according to law is an important social responsibility of enterprises. While creating economic benefits, Luen MeiQuantum insists on paying taxes in good faith according to law to promote regional development. In 2024,the Company has paidthe taxes with a total amount of RMB 299 million, made a contribution to the national and local economic development and socialprogress.
Building a Harmonious Society TogetherWhile creating economic benefits, Luen Mei Quantum actively fulfills its social responsibilities, devotes itself to giving back tocommunities and residents, and supports local economic development. Based on its own advantages in human resources, capitaland technology, the Company pays attention to a number of public welfare topics, encourages employees to actively participate inurban construction and volunteer service, and promotes the harmonious development of society.
▼ Public Welfare ActivitiesAdhering to the tenet of "dedication, love, unity and mutual assistance", the Company actively participates in public welfare activitiesin various ways and contributes to the creation of a harmonious society and a beautiful community.CaseCharitable Walk for Love in HunanOn September 4, 2024, 15 employees of Shenyang Guorun Low Carbon Thermal Power Co., Ltd, amember company of Luen Mei Quantum, participated in the charity-themed city walking activity of"Charitable Walk for Love in Hunan", and the charity walking was set around five themes: "Sports forGood", "Digital for Good", "Culture for Good", "Sunshine for Good" and "Service for Good".
During the reporting period﹥﹥﹥
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Protecting and Beautifying
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Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Key Performance Table▼Environmental Performance
▼Social Performance
Indicator Unit 2024
Greenhouse gas emission
Scope 1: Greenhouse gas emissions from direct emission sources Million tons of carbon dioxide equivalent 3.01Scope 2: Greenhouse gas emissions from indirect emission sources Million tons of carbon dioxide equivalent 0.04Total greenhouse gas emissions (scope 1+ scope 2) Million tons of carbon dioxide equivalent 3.05Greenhouse gas reductionTons of carbon dioxide equivalent114,835.08
Emission ManagementTotal non-hazardous waste Ton 647,453.8Non-hazardous waste density Ton/million yuan revenue 184.49Total hazardous waste Ton 420.74Hazardous waste density Ton/million yuan revenue 0.12Nitrogen oxide emissions Ton 618.81Sulfur dioxide (SO2) emissions Ton 169.63Particulate Matter (PM) emissionsTon 30.67Emissions of other harmful gases(such as volatile organic compounds VOCs, etc.)
Ton 11.74Energy managementCoal consumption Ton 2,181,316.07Diesel consumption Liter 745,963.92Consumption of liquefied petroleum gas Ton 26.66Gasoline consumption Liter 56,756.52Total biomass combustion Ton 303,638.03Total amount of purchased heat GJ 495,636.49Electricity consumption MWh 181,314.49Direct energy consumptionTons of standard coal equivalent 1,125,248Indirect energy consumptionTons of standard coal equivalent 12,015Total energy consumption Tons of standard coal equivalent 1,137,263Total energy consumption intensity
Tons of standard coal equivalent/million
yuan revenue
324.06
Water resource managementTotal water consumption Ton 4,104,182Total water consumption intensity Ton/million yuan revenue 1,169.48Total amount of circulating water Ton 449,761Percentage of circulating water to total water consumed % 10.96
Indicator Unit 2024
Employment and rights and interests of employees
Labor contract signing rate % 100Social insurance coverage rate: % 100Total number of employees Person 2,524Number of Employees by Gender
Female Person 286Male Person 2,238Number of Employees by Age
Below the age of 30 Person 36631-50 years old Person 1,27351 years old and above Person 885Number of Employees byEducation Background
High school and below Person 1,538Undergraduate and Junior College Person 959Master's Degree or Above Person 27Proportion of female middle managers % 22.92Proportion of female senior managers % 5.88Number of new employees Person 796Employee satisfaction % 100
Career Development and TrainingTotal number of employees participating in training Person 944Number of middle managers trained Person 70Number of grassroots employees trained Person 874Training expenditures Ten thousand yuan4.75Total number of participants in knowledge and skills training Person-times 1,347Average training duration per employee Hours/person 5.62Average training duration per middle manager Hours/person 4.47Average training duration per grassroots employee Hours/person 5.78Training coverage of employees % 47.87
Occupational health and safetyInvestment amount of work-related injury insurance Ten thousand yuan115Coverage of work-related injury insurance % 100Work-related injuries Cases 5Work-related fatalities Cases 0Lost working hours due to work-related injuries Hour 1,096Coverage of physical examination and health records % 100
Technological innovation
R&D expenses Ten thousand yuan2,292.55Number of newly authorized patents /3Number of software copyrights /3Number of accumulated authorized patents/74
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Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Indicator Unit 2024
Product qualityNumber of major quality accidents / 0Number of quality audits Time 432Completion rate of rectification of quality hidden dangers/problems % 100
Service experienceNumber of customer service staff Person 60Telephone customer service satisfaction % 100Online customer service satisfaction % 100Customer complaint resolution rate % 100Number of customer commendations and acknowledgments received Time 320
Supply chain securityTotal number of suppliers /2,906
Rural revitalization and social welfareAmount invested in social welfare Ten thousand yuan2.08
▼Governance performanceIndicator Unit 2024
Number of directors receiving trainingon anti-commercial bribery and anti-corruption
Person 7Number of managers receiving trainingon anti-commercial bribery and anti-corruption
Person 147Number of employees receiving trainingon anti-commercial bribery and anti-corruption
Person 757Proportion of directors receiving trainingon anti-commercial bribery and anti-corruption
% 100Proportion of managers receiving trainingon anti-commercial bribery and anti-corruption
% 100Proportion of employees receiving trainingon anti-commercial bribery and anti-corruption
% 30Number of board meetings held throughout the year Time 10Number of investor communication activities /5Number of roadshows Time 3Number of investor visits received Time 5Number of investor communication meetings held Time 3
Index table▼ Index for GRI Standards
Using thestandards
Luen Mei Quantum Co., Ltd. has repoed the information cited in this GRI content index with reference to GRIstandards from Janua 1, 2024 to December 31, 2024.
GRI 1 applied Foundation 2021
Disclosure items Corresponding chapters
GRI 2: General disclosures 2021Organization and its repoing practices2-1 Organization details About the Repo2-2 Entities included in the organization's sustainability repoing About the Repo2-3 Repoing period, frequency and contact point About the Repo2-4 Restatements of information Not involved2-5 External assurance /
Activities and workers2-6 Activities, value chains and other business relationships About Luen Mei2-7 Employees Protect Employees' Rights and Interests2-8 Workers other than employees Protect Employees' Rights and Interests
Governance2-9 Governance architecture and composition Standardizing Corporate Governance2-10 Nomination and selection of the highest governing body Standardizing Corporate Governance2-11 Chairman of the highest governing body Standardizing Corporate Governance2-12 Supeiso role of the highest governing body in managing inuence Standardizing Corporate Governance2-13 Delegation of responsibility for managing inuence Standardizing Corporate Governance2-14 Role of the highest governing body in sustainability repoing ESG Management Structure2-15 Conict of interest /2-16 Communication of critical concerns Analysis of material topics2-17 Common knowledge of the highest governing body Standardizing Corporate Governance2-18 Peormance assessment of the highest governing body /2-19 Remuneration policy Protect Employees' Rights and Interests2-20 Procedures to determine remuneration Protect Employees' Rights and Interests2-21 Annual compensation ratio /
Strategy, policy and practice
2-22 Statement on sustainable development strategies Chairman's Speech2-23 Policy commitments Chairman's Speech2-24 Integration policy commitments Chairman's Speech2-25 Procedures for remedying adverse eects /2-26 Mechanisms for seeking advice and raising concerns Communication with Stakeholders2-27 Compliance with laws and regulations Standardizing Corporate Governance2-28 Membership in the Association /
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Benefiting Thousands of Household,Creating Better Future Together
Appendix
Disclosure items Corresponding chapters
Stakeholder Participation
2-29 Paicipato approach of stakeholders Analysis of material topics2-30 Collective bargaining agreement /
GRI 3: Material Topics 20213-1 Process to determine material topics Analysis of material topics3-2 List of material topics Analysis of material topics3-3 Management of material topics Analysis of material topics
GRI 201: Economic Performance 2016201-1 Economic value directly generated and distributed About Luen Mei201-2 Financial impact of climate change and other risks and oppounities Climate change tackling201-3 Dened benet plan obligations and other retirement plans Protect Employees' Rights and Interests201-4 Financial subsidies from the government /
GRI 202: Market Presence 2016202-1 Ratio of standard staing sala by gender to local minimum wage /202-2 Propoion of senior executives hired from local communities /
GRI 203: Indirect Economic Impacts 2016203-1 Infrastructure investment and suppoing seices Climate change tackling203-2 Signicant indirect economic impact /
GRI 204: Procurement Practice 2016204-1 Propoion of expenditures for purchase from local suppliers /
GRI 205: Anti-corruption 2016
205-1 Operational points for conducting corruption risk assessments Upholding business ethics205-2 Communication and training for anti-corruption policies and procedures Upholding business ethics205-3 Conrmed corruption and actions taken Upholding business ethics
GRI 206: Anti-competitive Behavior 2016206-1 Legal proceedings against anti-competitive behavior, antitrust, and anti-monopoly practices Upholding business ethics
GRI 207: Tax 2019
207-1 Tax policies
Building a Harmonious SocietyTogether207-2 Tax governance, control and risk management /207-3 Stakeholder paicipation and management related to tax concerns /207-4 Count repos Not involved
GRI 301: Materials 2016301-1 Weight and volume of material used /301-2 Recycled incoming materials used /301-3 Recycled products and their packaging materials /
GRI 302: Energy 2016302-1 Energy consumption within the organization
Saving energy, reducing consumptionand increasing eciency302-2 Energy consumption outside the organization /302-3 Energy intensity
Saving energy, reducing consumptionand increasing eciency302-4 Reduction of energy consumption
Saving energy, reducing consumptionand increasing eciency
Disclosure items Corresponding chapters
302-5 Reduction of energy demand for products and seices
Saving energy, reducing consumptionand increasing eciencyGRI 303: Water and Effluents 2018303-1 Mutual impact between the organization and water, as common resources Promoting water conseation303-2 Management of drainage-related impacts Promoting water conseation303-3 Water taking Promoting water conseation303-4 Water draining Promoting water conseation303-5 Water consumption Promoting water conseation
GRI 304: Biodiversity 2016304-1 Operation points owned, leased, managed by organization in or near protected areas andbiodiversity-rich areas outside protected areas
Not involved304-2 Signicant impacts of activities, products and seices on biodiversity Not involved304-3 Protected or restored Hhabitat Not involved304-4 Species in habitats affected by operation that have been listed in the IUCN Red List andNational Protection List
Not involved
GRI 305: Emissions 2016
305-1 Direct (Scope 1) greenhouse gas emission Climate change tackling305-2 Direct (Scope 2) greenhouse gas emission of energy Climate change tackling305-3 Other direct (Scope 3) greenhouse gas emission /305-4 Greenhouse gas emission intensity /305-5 Emission reduction of greenhouse gas /305-6 Emissions of ozone depleting substances (ODS) Not involved305-7 Nitrogen oxides (NOX), Sulfur oxides (SOX), and other signicant air emissions Key peormance table
GRI 306: Waste 2020306-1 Waste generation and signicant waste related impacts
Strengthening EnvironmentalManagement306-2 Management of signicant waste related impacts
Strengthening EnvironmentalManagement306-3 Wastes generated
Strengthening EnvironmentalManagement306-4 Wastes transferred from disposal
Strengthening EnvironmentalManagement306-5 Waste entering disposal
Strengthening EnvironmentalManagementGRI 308: Supplier Environmental Assessment 2016
308-1 New suppliers screened by environmental assessment dimensions Create a sustainable supply chain308-2 Negative environmental impacts of supply chains and actions taken Create a sustainable supply chain
GRI 401: Employment 2016401-1 New employee hiring rate and employee turnover rate Protect Employees' Rights and Interests401-2 Benets provided to full-time employees (excluding tempora or pa-time employees) Protect Employees' Rights and Interests401-3 Parental leave /
GRI 402: Labor/Management Relations 2016402-1 Minimum notice period for operation change /
GRI 403: Occupational Health and Safety 2018
403-1 Occupational health and safety management system Protect Employees' Rights and Interests403-2 Hazard identication, risk assessment, and accident investigation Protect Employees' Rights and Interests5556
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Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Disclosure items Corresponding chapters403-3 Occupational health seices Protect Employees' Rights and Interests403-4 Occupational health and safety affairs: Participation, consultation and communication ofworkers
Protect Employees' Rights and Interests403-5 Occupational health and safety training for workers Protect Employees' Rights and Interests403-6 Promoting the health of workers Protect Employees' Rights and Interests403-7 Prevention and mitigation of OHS impacts directly related to business relationships Protect Employees' Rights and Interests403-8 Workers covered by the OHS management system Protect Employees' Rights and Interests403-9 Work-related injuries Protect Employees' Rights and Interests403-10 Health problems associated with work-related injuries Protect Employees' Rights and Interests
GRI 404: Training and Education 2016404-1 Average number of hours of training per employee per year Protect Employees' Rights and Interests404-2 employee skill upgrading program and transition assistance program Protect Employees' Rights and Interests404-3 Percentage of employees accepting the performance and occupational developmentassessment regularly
/
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversication of governance organization and employees Protect Employees' Rights and Interests405-2 Ratio of basic wages and remuneration of male and female /
GRI 406: Non-discrimination 2016
406-1 Incidents of discrimination and corrective actions taken Protect Employees' Rights and Interests
GRI 407: Freedom of Association and Collective Bargaining 2016407-1 Operators and suppliers whose freedom of association and collective bargaining rights maybe at risk
/GRI 408: Child Labor 2016
408-1 Operational points and suppliers with signicant risk of child laborer incidents /
GRI 409: Forced or Compulsory Labor 2016409-1 Operational points and suppliers with signicant risk of forced or compulso labor events /
GRI 410: Security Practice 2016410-1 Security personnel who have been trained in human rights policies or procedures Not involved
GRI 411: Rights of Indigenous Peoples 2016411-1 Incidents involving violations of indigenous rights Not involved
GRI 413: Local Communities 2016413-1 Operating points with local community paicipation, impact assessment and developmentplan
/413-2 Operating points with actual or potential signicant negative impact on local communities Not involved
GRI 414: Supplier Social Assessment 2016
414-1 New suppliers selected using social evaluation criteria Create a sustainable supply chain414-2 Negative social impacts of supply chains and actions taken Create a sustainable supply chain
GRI 415: Public Policy 2016
415-1 Political donation Not involved
GRI 416: Customer Health and Safety 2016
416-1 Evaluation of the health and safety impacts of product and seice categories
Stick to strict quality control, optimize
seice experience416-2 Violations involving health and safety impacts of products and seices Not involved
Disclosure items Corresponding chapters
GRI 417: Marketing and Logo 2016417-1 Requirements for information and logo of product and seice
Stick to strict quality control, optimizeseice experience417-2 Violations involving information and logo of product and seice Not involved417-3 Violations involving marketing communications Not involved
GRI 418: Customer Privacy 2016
418-1 Substantiated complaints involving invasion of customer privacy and loss of customer data Not involved
▼ Index ofGuidelines No. 14 of Shanghai Stock Exchange forSelf-Regulation of Listed Companies—Sustainability Report (Trial);Topic Article Corresponding sections
Environment
Climate change tackling Article 21 to 28 Climate change tacklingPollutant dischargeArticle 30 Strengthening Environmental ManagementWaste disposal Article 31 Strengthening Environmental ManagementEcosystem and biodiversity protection Article 32 Not involvedEnvironmental compliance management Article 33 Strengthening Environmental ManagementEnergy usageArticle 35 Optimizing Service ExperienceUsage of water resourcesArticle 36 Optimizing Service ExperienceCircular economy Article 37 Optimizing Service Experience
SocietyRural revitalization Article 39 Building a Harmonious Society TogetherContribution to the societyArticle 40 Building a Harmonious Society TogetherInnovation-driven Article 42 Innovation-driven TransformationEthics of science and technology Article 43 Not involvedSupply chain security Article 45 Create a sustainable supply chainEqual treatment to small and medium-sizedenterprises
Article 46 Create a sustainable supply chainSafety and quality of products and services Article 47 Stick to strict quality control, optimize service
experienceData security and customer privacy protection Article 48 Optimizing Service ExperienceEmployees Article 50 Protect Employees' Rights and Interests
Sustainability-related governance
Due diligence Article 52 Communication with StakeholdersCommunication with stakeholders Article 53 Communication with StakeholdersAnti-commercial bribery and anti-corruption Article 55 Upholding business ethicsAnti-unfair competition Article 56 Upholding business ethics
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Benefiting Thousands of Household,
Creating Better Future Together
Appendix
Reader Feedback FormDear readers：
Thank you for reading the Luen Mei Quantum Co., Ltd. 2024 Environmental, Social and Governance (ESG) Report We expect to receive yourvaluable feedback on our environmental, social and corporate governance report. Your comments and suggestions are crucial for usto continue to promote the management and practice of sustainable development of enterprise. We earnestly look forward to yourcomments and suggestions on the report and our work. You can send the questionnaire back to us by mail, email or fax, or call us directlyto put forward your valuable opinions. Multiple-choice questions (please tick √ in the corresponding position)What kind of stakeholders of Luen Mei Quantum does your work unit belong to?
Shareholder□ Employee□ Business partner□Customer□ Government□
Community□ Bank□ Other
□（
please specify）
Do you think this report can reflect the significant impact of Luen Mei Quantum on economy, society and environment?Yes□ Fair□ No□Do you think the analysis of the stakeholders identified in this report and their relationship with Luen Mei Quantum is accurateand comprehensive?Yes□ Fair□ No□Do you think the information disclosed in this report is comprehensive?Yes□ Fair□ No□Do you think the information disclosed in this report is readable?Yes□ Fair□ No□ Open questionsWhat other information do you think you are concerned about but not ?nd in this report?What do you think can be improved in this report?
If you have any questions or comments about the report, please contact us through the following ways:
Email: zhangyao@luenmeichina.comAddress: No. 1 Yuanhang Middle Road, Hunnan New District, ShenyangPostal Code: 110168Contact Tel.: 024-23784835
www.luenmeilz.com024-23784835Luen Mei Quantum Co., Ltd.
Address: No. 1 Yuanhang Middle Road, Hunnan New District, ShenyangPostal Code: 110168