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About this Report
Since its rst release of a social responsibility report in 2008, Zhejiang NHU Co., Ltd. ("NHU") has issued such reports for 15consecutive years. The Environmental, Social and Governance (ESG) Report 2024 of Zhejiang NHU Co., Ltd. (the "Report" or"this Report" for short) is the Company's rst-ever ESG Report released to the public.
All data used in this Report are derived from the Company's internal o?cial documents, internal statistics, and publicly availablematerials. Key financial performance data are primarily sourced from the Annual Report 2024 of Zhejiang NHU Co., Ltd.Unless otherwise stated, all monetary amounts in this Report are in CNY. The Board of Directors assumes responsibility for theauthenticity, accuracy, and completeness of the Report's contents.
This Report is available in both Chinese and English versions for readers' reference. In case of any discrepancies, the Chineseversion shall prevail. It can be viewed and downloaded on the Company's website (https://www.cnhu.com).
We welcome feedback from all stakeholders. For inquiries or suggestions regarding NHU's sustainable development initiativesor the content of this Report, please contact us through the following channels:
The Report covers the period from January 1, 2024, to December 31, 2024. However, to maintain information continuity andintegrity, some content may extend beyond this timeframe.
This Report encompasses the environmental, social, and corporate governance e?orts of NHU and its subsidiaries. For ease ofreading, unless otherwise specied, "Zhejiang NHU Co., Ltd." and its subsidiaries are collectively referred to as "Zhejiang NHU","NHU", "the Company", or "We."
Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For TrialImplementation)Sustainability Reporting Standards by the Global Reporting Initiative (GRI Standards)The United Nations' 2030 Agenda for Sustainable Development (UN SDGs)Financial Stability Board's Task Force on Climate Related Financial Disclosures (TCFD) Disclosure Recommendations
Address: No. 418 Xinchang Dadao West Road, Qixing Sub-district, Xinchang County, ZhejiangProvince, ChinaTel.: +86 575 86017157E-mail: 002001@cnhu.com
0102
Message from the Chairman
As time progresses, NHU has achieved notable advancements in 2024. Remaining committed to our corporateprinciples of "Creating Wealth, Elevating Employees, and Benefiting Society", we have strengthened thefoundation for ESG development and integrated sustainability into our corporate strategy while pursuing high-quality business growth.
In 2025, we will continue to implement ESG principles, execute sustainable development strategies, concentrate onour dual-core strategy of "Chemistry+" and "Bio+," propel industry progress through innovation, enrich lives throughchemistry, and generate greater societal value.
We continuously pursue superior products to better serve society.
We are committed to sharing development achievements with all stakeholders and fostering a moreharmonious society.
We are dedicated to leading green and low-carbon development in our industry.
Through intelligent and digital transformation, wehave accelerated our smart factory development,evaluated 22 digital and intelligent projects, andoptimized resource allocation. We remain committedto innovation-driven development, completing 76technical transformation projects and the R&D of14 new products, with a focus on green technologyresearch and low-carbon solutions to enhanceproduction efficiency. We rigorously controlproduct quality, implement information security andquality training for all employees, and reinforceour "customer-centric" philosophy. Guided bytechnological innovation, empowered by intelligentsystems, we remain dedicated to safety and quality,advancing new quality productive forces.
Upholding integrity and compliance operations, we continuously enhance our risk management framework, and strengthenbusiness ethics governance. NHU has maintained a 16-year consecutive "A" rating in the Shenzhen Stock Exchange'sinformation disclosure evaluation and was honored among the 2024 Top 30 Best Internal Control Awards for Zhejiang ListedCompanies. We prioritize employee development by cultivating an inclusive, diverse, and innovative organizational ecosystem.Annual training expenditures exceeded CNY 7 million, with an average of 42 training hours per employee. Our comprehensiveoccupational health and safety (OHS) management system achieved 100% work-related injury insurance coverage andmaintained zero occupational disease incidence. We extend sustainability practices across the supply chain by optimizingsupplier ESG management, achieving 100% execution of Supplier Integrity Agreements. We actively support communitydevelopment initiatives, contribute to building harmonious communities, and increase investments in public welfare andcharitable initiatives. While driving our own growth, we remain committed to social responsibility and the creation of enduringvalue.
In response to the "Dual Carbon" strategy (carbon peaking and carbon neutrality), we achieved a 7.67% reduction in energyconsumption intensity, completed carbon footprint verification for 36 products, and compiled greenhouse gas emissioninventories for all subsidiaries. We continuously improve our environmental management systems, fulfilling annual targetsincluding a 5% reduction in COD
emissions and a 2% decrease in wastewater discharge per output value of CNY 10,000,while ensuring compliance with pollutant discharge standards. Embracing green operational principles, we explore circulareconomy models, maintaining a 96.30% water recycling utilization rate. Confronting challenges posed by climate change,resource constraints, and environmental shifts, we actively drive green and low-carbon transformation to advance sustainabledevelopment.
COD: Chemical oxygen demand.
“
”
Zhejiang NHU Co., Ltd.Chairman Hu Baifan
0304
Global Footprint
With a global footprint encompassing sales, R&D, and production operations, the Company has established integrated functionalsystems covering HR management, nancial operations, logistics, IT infrastructure, and administrative support. Our businessnetwork currently spans key Asia-Pacic markets, including Singapore, Japan, and Vietnam, and extends to Europe and SouthAmerica.
NHU Global LayoutHeadquaterProduction BaseR&D InstituteTrade Company
Company ProleAbout NHU
Zhejiang NHU Co., Ltd. ("NHU" or "the Company"), a subsidiary of NHU Holding Group, was founded in 1999 and listed on theShenzhen Stock Exchange in 2004 (Stock Code: 002001).Maintaining a commitment to innovation-driven development and market-oriented growth, the Company specializes in the R&D,production, sales, and servicing of functional chemicals. Through providing integrated solutions spanning nutrition & health,personal & home care, transportation, environmental protection, and energy sectors, we serve customers across 100+ countriesand regions. Our premium-quality, healthy, eco-friendly, and low-carbon products continuously improve human wellbeing whilegenerating sustainable value for stakeholders, progressing toward our vision as a global leader in functional chemicals solutions.
Founded in1999
Listed in
2004
Provided over
comprehensive
solutions
Among China'sTop 100 FineChemicalCompanies
Among China'sTop 100 Listed
Companies
0506
Development History
Company Honors
Corporate Culture
Teacher Culture
The Wiser Is the Teacher; the More Capable the Teacher; Act in Modesty; Training for ExcellenceThe founders of NHU were mainly teachers and students. Ever since its inception, NHU has rooted values of respectingteachers and stressing training. In its course of development, Corporate leaders and sta? have embodied educator virtues -self-cultivation through mentorship principles and honoring expertise through the title "Teacher". This Teacher Culture, now anorganizational hallmark, continues to propel the Company's sustainable development.
NHU was established by Xinchang County Synthetic Chemical Factory as the initiating entity.
NHU became the rst company to be listed on the SME board (now the main board) of theShenzhen Stock Exchange with the stock code of 002001.The construction of Shangyu Base commenced.
The development of Coenzyme Q10 was successfully completed, marking the Company's entry intothe fermentation sector.
Zhejiang NHU Special Materials Co., Ltd. was established, signaling NHU's expansion into the newmaterials sector.The construction of Shandong Base commenced.
The construction of Shandong NHU Amino Acids Co., Ltd. commenced, marking NHU's foray intothe amino acid sector.The construction of Heilongjiang Base commenced, laying the foundation for NHU's advancementsin bio-fermentation.The NHU Life and Health Industrial Park was completed, heralding a new journey in humannutrition.Zhenxin Bio was founded in collaboration with Sinopec Zhenhai Rening & Chemical Company,and the construction of the 180,000-ton liquid methionine project started.
Cultural Characteristics
In 1999
In 2004In 2003
In 2006
In 2013In 2008
In 2014In 2018In 2021In 2023
Creating Wealth, ElevatingEmployees, and BenetingSociety
New, Harmony, and UnionPursue Pragmatism, Innovation,Quality, and E?ciency
Creating Wealth, Maintaining
Balance, and Sustainable
ProgressHonesty, Focused-mindset,Diligence, and Thrifty
Modeling, Accountability,
Vigilance, and Self-sacriceConduct Oneself With Honestyand Do Everything in aThorough Manner
Aim High But Firmly-grounded
CorporatePrinciples
Core ValuesCorporateMorale
Management
PhilosophyEmployee Codeof Conduct
Administrative Sta?Code of ConductCorporate MottoCorporate Image
HonorAwarded byWinner / Project
The 15th China Listed CompaniesInvestor Relations Tianma Awardfor Shareholder Return
Securities TimesZhejiang NHU Co., Ltd.2024 China's Top 100 Fine ChemicalCompanies
China Chemical Industry Information
Association; China National Fine Chemical
Raw Materials & Intermediates Industry
Cooperation Group
Zhejiang NHU Co., Ltd.2024 Top 20 InnovativeDevelopment Enterprises in China'sFine Chemical Industry
China Chemical Industry InformationAssociation; China National Fine ChemicalRaw Materials & Intermediates IndustryCooperation Group
Zhejiang NHU Co., Ltd.2024 Top 20 Green and Low-CarbonDevelopment Enterprises in China'sFine Chemical Industry
China Chemical Industry InformationAssociation; China National Fine ChemicalRaw Materials & Intermediates IndustryCooperation Group
Zhejiang NHU Co., Ltd.Innovative Small and MediumEnterprises in Zhejiang Province
Zhejiang Provincial Department ofEconomy and Information Technology
Zhejiang NHU Special Materials
Co., Ltd.
0708
ESG Strategy and GovernanceNHU is committed to establishing itself as a global sustainability benchmark in functional chemicals. We have deeply integratedsustainable development into our business operations and formulated an ESG strategy that aligns with the United NationsSustainable Development Goals (SDGs). This strategy aims to foster a more sustainable industrial ecosystem, enhance qualityof life through innovative ne chemical solutions, and demonstrate Chinese enterprises' contributions to global sustainability.
Guided by our corporate mission, "Exploring Chemistry, Improving Life", and our core value of "New, Harmony, and Union", theESG strategy has been developed in accordance with the UN 2030 Agenda for Sustainable Development and fully integratedinto our corporate strategic framework.
Pioneering Innovation, SharedProsperity, Sustainable Future
To establish NHU as a global sustainabilitybenchmark in functional chemicals
Sustainable Development Strategy Map ofZhejiang NHU Co., Ltd.
Integrity
Compliance
Employee
Well-being
Shared
Success
and
Prosperity
ESG Overall Vision
Main Pillars
Key Action Commitments
D
ig
ita
l
and
Intelligent
EmpowermentInnov
ation-driven
DevelopmentR
isk
Management
Low-carbon
Transformation
Harmony
with
N
a
tureCircular
E
con
om
y
SuperiorProductsHarmonious
Society
SustainableEnvironment
P
io
n
e
er
in
g
In
no
vation,
Share
d
Pro
speritySustainable
Future
ESG Strategy
Our ESG implementation framework comprises three strategic pillars - "Superior Products", "Harmonious Society" and"Sustainable Environment" - supported by nine concrete initiatives, to achieve the ESG strategic vision and goals of NHU.Through continuous innovation that transcends conventional chemical boundaries, we deliver competitive product and solutionswhile generating sustainable value for stakeholders. Our efforts address critical challenges in food security, environmentalprotection, and life quality enhancement, driving balanced and sustainable development for humanity, society, and the planet.
ESG Key Areas
ESG Key Areas
Goals
Goals
●
Conduct due diligence investigations on negative impacts or risks relatedto sustainable development every 2 years
●
Complete risk and opportunity assessments related to short, medium,and long-term sustainable development every 2 years
●
By 2028, all strategic suppliers will be included in the Company's ESGmanagement and assessment
●By 2030, the sales proportion of green and low-carbon products will exceed15%
●By 2030, the coverage rate of quality certication system will reach 100%
●By 2030, the proportion of female senior management will reach 20%
●Each employee has an annual learning time of more than 50 hours
●
Annual number of work-related deaths among employees: 0
●Build an ESG Information System
●Maintain zero incidents of data security and customer privacy breaches
●Conduct a business ethics audit of the production legal entity every threeyears
●Annual business ethics and anti-corruption training coverage reaches100%
Superior Products
Harmonious Society
Digital and Intelligent Empowerment: Drivesmart factory development by upgradingentire operations through digitalization,automation, informatization, networking,and intelligentization
Integrity Compliance: Maintainregulatory-compliant operations, anduphold the highest business ethicsstandards, with zero-tolerance policiesagainst corruption and malpractice
Innovation-driven Development: Drive
industrial transformation through productR&D and technological innovation,delivering high-quality products thatcontribute to a better life
Employee Well-being: Cultivateinclusive and “Harmonious” corporateculture, safeguarding employee healthwhile enabling professional growth
Risk Management: Strengthen riskcontrol frameworks to proactively identify,assess, and address sustainability-related risks and opportunities, ensuringsustainable and resilient operations
Shared Success and Prosperity:
Address societal needs and empowerpartners to drive sustainabledevelopment across industries andcommunities
ESG StrategicVision
ESG StrategicGoals
0910
ESG Governance
To ensure the scientic rigor and rationality of the Company's ESG development processes from an organizational perspective,the Company has established a comprehensive ESG governance structure with clearly dened hierarchies and responsibilities.This framework species duties across all organizational levels, departments, and positions to facilitate robust ESG managementsystems and mechanisms.
The Board of Directors serves as the supreme decision-making body for the Company's ESG management, assumingultimate responsibility for the truthfulness, accuracy, and completeness of ESG-related work and report contents. It overseesthe overall ESG strategy and make decisions on material matters. Reporting to the Board of Directors, the Board StrategyCommittee performs research and guidance functions for ESG management, conducting deliberation, evaluation, andoversight of signicant ESG matters. Its responsibilities encompass: (1) developing strategies and policies; (2) overseeingESG plan implementation and performance evaluation; (3) identifying risks and opportunities; (4) reviewing the annual ESGReport and related disclosures, with reporting obligations to the Board of Directors.The ESG Management Committee operates under the Board Strategy Committee, tasked with: (1) Establishing the Company'sESG strategic framework, vision, phased development plans, annual targets, and core policies; (2) Evaluating sustainability-related risks/opportunities with regular reporting to the Board Strategy Committee; (3) Examining sustainability policies andcritical internal management data; (4) Ensuring ESG compliance across business models and organizational structures; (5)Coordinating ESG task allocation and internal resource mobilization; (6) Examining the annual ESG Report for deliberation,approval, and disclosure by the Board Strategy Committee.
The ESG Management Committee has established an ESG Office, which is responsible for leading and coordinating theESG Management Committee's functions, overseeing the implementation of tasks and decisions by ESG working groups,and reporting to the ESG Management Committee. The ESG O?ce performs the following key responsibilities: (1) Regularlytracking external regulations and policy developments, staying informed of changes in legal requirements, regulatoryframeworks, and international standards, and conducting periodic reviews of the Company's sustainability policies andinitiatives; (2) Coordinating the development of corporate ESG goals and dual materiality evaluations, and analyzingsustainability-related risks and opportunities; (3) Overseeing stakeholder engagement activities, and preparing sustainabilityreports; (4) Convening at least one annual ESG Management Committee meeting.The ESG Management Committee establishes two ESG working groups: the Environmental and Sustainability Working Groupand the Social Responsibility and Comprehensive Governance Working Group. Aligned with the Company's ESG strategicroadmap, these working groups operate through clearly dened lead departments and collaborating departments that jointlydrive the implementation of specic ESG strategic initiatives.
ESG Key AreasGoals
●Compared to the 2023 baseline, the Company's water recycling utilizationrate is expected to exceed 95% by 2030
●
The purchased renewable raw materials reach 200 tons/year
●
Environmental management system certification maintains a coveragerate of 100%
●Maintain 0 annual major environmental incidents
●Compared to the 2023 baseline, reduce COD emission intensity 30% by2030
●Compared to the 2023 baseline, reduce industrial waste emissionintensity 10% by 2030
●Compared to the 2023 baseline, reduce hazardous waste generationintensity 10% by 2030
●Achieve operational carbon neutrality by 2060 (Scope 1+Scope 2)
●Compared to the 2023 baseline, reduce greenhouse gas (GHG)emissions per unit of revenue 25% by 2030
Sustainable EnvironmentLow-carbon Transformation:
Reduce energy consumption andcarbon emissions to achieve agreener energy mix and climate-friendly operations
Harmony with Nature: Enhanceenvironmental management systemsto minimize pollution, advancebiodiversity conservation, and fosterhuman-nature coexistence
Circular Economy: Implement waterconservation and recycling programswhile promoting closed-loop resourceutilization and renewable materialadoption to build resource-e?cientcircular economies
Decision-making Level
Management
Level
Executive
Level
Senior Management
Headquater Departments
Business Divisions andSubsidiaries/Branches
Board of DirectorsStrategy CommitteeESG Management Committee
Environmental andSustainability Working GroupESG O?ce
Social Responsibility and Comprehensive
Governance Working Group
O?ce DirectorDeputy O?ce Director
11121112
Stakeholder EngagementNHU attaches high importance to stakeholders' opinions and suggestions. By establishing diversied communication channelsand maintaining regular dialogues, we proactively address inquiries regarding our operational performance and sustainabledevelopment. In alignment with our industry characteristics and business nature, we have identied key stakeholder groupsincluding employees, customers, shareholders & investors, government & regulatory bodies, suppliers & business partners, andlocal communities.
NHU strictly adheres to relevant laws, regulations, and disclosure requirements bypublishing reports on a regular basis and ensuring timely compliance in materialinformation disclosure. We maintain active two-way communication with investorsthrough both digital and physical channels. In 2024, we implemented the InvestorRelations Management Policy to further institutionalize investor relations practices.Our comprehensive investor engagement program includes online performancebriefings, annual investor conferences, on-site communication, participation instrategy sessions, as well as digital platforms and hotline services. This resulted ina 50% year-on-year growth in participant engagement.
This resulted in a50%
year-on-yeargrowth in participantengagement
StakeholdersAreas of FocusCommunication and Response Channels
Customers
●
Customer relationship management
●Product quality and safety
●Innovation and R&D
●Information security and privacyprotection
●O?cial account information disclosure
●
One on one communication channel
●Factory tour
●Customer complaint hotline
Shareholders and Investors
●Compliance operation
●Corporate governance
●Risk management
●Business ethics and anti corruption
●Return on investment
●Information transparency
●Responding to climate change
●Corporate annual reports andannouncements
●Field trip
●O?cial account platform
●Reception Day event
●Roadshows and special meetings
●Investor relations website
Government and Regulatory
Bodies
●Compliance operation
●Corporate governance
●
Tax payment according to law
●Business ethics and anti corruption
●
Implementing national strategies
●
Rural revitalization
●Emission management
●Responding to government inquiries
●Participating in government training
●Regulatory assessment
●Special meeting
Employees
●Employee's rights and interests
●Training and development
●Occupational health and safety (OHS)
●Innovation and R&D
●Intellectual property protection
●President and General Manager's mailbox
●Rational suggestions
●Five mandatory visits and ve mandatoryconversations
●Sta? and workers' representative congress
●Symposium & communication
●Internal reporting and complaint hotline
StakeholdersAreas of FocusCommunication and Response Channels
Suppliers and Partners
●Business ethics and anti corruption
●Responsible supply chain
●Information security and privacyprotection
●Compliance operation
●Supplier conference
●Supplier training
●Whistleblowing hotline and email
Community and the Public
●Environmental management
●Biodiversity
●Rural revitalization
●Implementing national strategies
●Public welfare and charityundertakings
●Provision of jobs
●O?cial account and website
●Assisting in infrastructure construction
●Public welfare and charity activities
●Environmental Open Day
1314
Identication and Analysis of Material Topics
In 2024, NHU conducted a dual materiality evaluation for sustainable development through a four-phase process: (1) contextanalysis & topic identification; (2) dual materiality evaluation; (3) materiality prioritization; and (4) review, analysis andconrmation. This methodology enabled us to systematically assess both the impact materiality and nancial materiality of ESGtopics to our organization.
Based on NHU'sindustry characteristics,business priorities, andcorporate developmentstrategy, whileconsidering externalregulatory requirements,rating agency focuses,and incorporatingfeedback from externalstakeholders, theCompany has identiedits material topic list.
Stakeholderquestionnaires wereadministered withdistinct versions forimpact materiality andnancial materialityassessments, enablingthe evaluation of eachESG topic's materialitythrough these duallenses.
Through analysis ofquestionnaire ndingsand expert inputs, theCompany assessedthe degree to whicheach topic impactsenvironmental,social, and economicdimensions as well asbusiness operations,thereby establishing themateriality prioritization ofidentied topics.
NHU's ESGManagement Committeesubsequently reviewedand approved thematerial topics alongwith the nalizedmateriality matrix forcorporate application.
Through synthesizing internal and external stakeholder concerns with our industry context and business attributes, wedetermined 22 high-priority ESG topics. An extensive survey covering corporate leadership directors, supervisors, and seniormanagement, employees, shareholders & investors, customers, government & regulatory bodies, suppliers & partners, andcommunity members yielded approximately 250 valid questionnaires. These responses provided multidimensional evaluationsof ESG topics' materiality across environmental management, social responsibility, and economic value creation dimensions.
Context Analysis and
Topic Identication
Dual Materiality
Evaluation
MaterialityPrioritization
Review, Analysis and
Conrmation
2024 Matrix of Dual Materiality Topics
EnvironmentalSocialGovernanceEmployee's Rights and Interests
Sta? Training and Development
Financial Importance
Importance of Inuence
Emission Management
Implementing National Strategies
Innovation and R&DCustomer Relationship Management
Public Welfare and Charity Undertakings
Resource and Energy ManagementEnvironmental Management
Biodiversity
Responding to Climate Change
Circular Economy
Chemical Safety
Responsible Supply ChainCompliance OperationRisk ManagementBusiness Ethics and Anti-corruption
Stakeholder Engagement
Information Security and Privacy Protection
Occupational Health and Safety (OHS)
Corporate Governance
Product Quality and Safety
1516
Superior Products
Our Actions
Our Performance
Contribution to SDGsApplied for
informationtechnology-related honors
Achieved ISO 56005
Level 4CertificationTotal valid patents
NHU leverages digital and intelligent empowerment as a fulcrum to build an intelligent system coveringthe entire value chain of R&D, production, and services. By adopting a dual-track development modelthat integrates technological breakthroughs with management upgrades, we drive the coordinatedoptimization of product performance and the reduction of production energy consumption. Throughdigitalization, intelligence, and continuous innovation, we enhance the price-performance ratio of ourproducts while creating greater value for customers and contributing to a better quality of life. Movingforward, we will deepen the integration of intelligent technologies under the strategic framework of"technological breakthroughs + management upgrades," continuously rene the economic value of ourproducts, provide replicable paradigms for high-quality industrial development, and position superior,high-quality products as a key driver of sustainable societal progress.
1718
Digital and Intelligent Empowerment
Digital and Intelligent Management System
Digital and Intelligent Actions
NHU Intelligent Quality Control Management Platform
Amid the rapid growth of global digital economy, digital transformation has become imperative for enterprises to achieve high-quality development. NHU recognizes the critical role of digital transformation, aligning with national policies to position it as thecore engine for our high-quality growth. We are committed to enhancing operational e?ciency, optimizing products and services,and innovating business models through digital and intelligent solutions, thereby building core competitiveness and advancingsustainable development.
NHU places great emphasis on the development of digital and intelligent management systems. It has established a scientic,standardized, and efficient digital and intelligent project management system, providing a solid guarantee for the high-quality development of the enterprise. The Company continues to rene its digital and intelligent project methodology basedon the enterprise architecture. It has issued the Digital and Intelligent Project Management Regulations and the IntelligentManufacturing System Manual. Additionally, it has revised the Application Architecture Management Rules and completedthe issuance and dissemination of the four architecture systems involved in the enterprise architecture method. Meanwhile,the Company has completed the sorting and establishment of the business architecture for data management, softwaredevelopment, and information security, and has formulated and implemented a promotion plan. This provides a systemicguarantee for the standardized management and e?cient implementation of digital and intelligent projects.
By constructing smart factories, advancing intelligent operations, and cultivating digital & intelligent talents, we continuouslydeepen the application of cutting-edge technologies and equipment to boost production e?ciency.
NHU has actively advanced the deployment of smart factories under its digital transformation strategic framework, achievingfull integration of core business chains, including production, supply, sales, and nance. This initiative has realized digitalizedand rened production management, as well as visualized and intelligent production decision-making. Through these e?orts,the Company has developed a replicable chemical smart factory model, providing industry-specic digital transformation bestpractices. To date, smart factory systems have been operationalized in Shandong NHU Industrial Park, Heilongjiang NHU,Shangyu NHU, and Tianjin, demonstrating signicant improvements in production e?ciency and management e?ectiveness.Concurrently, the HSE
management system has been implemented, enabling intelligent real-time monitoring of major hazardsources, Gas Detection System (GDS) data, and re alarm systems, thereby enhancing safety and environmental managementcapabilities.After years of practice and accumulation, several factories and workshops of the Company have received honors related tointelligent manufacturing, and its industrial Internet platform has been selected for the provincial Internet platform creation list.
The Company has established an ITPMO (IT Project Management Office)mechanism to conduct full-process monitoring and management of coredigital and intelligent projects during the stages of preparation, initiation,implementation, and summary acceptance. In 2024, the Company organizedthe evaluation of 22 digital and intelligent projects and summarized anddeveloped replicable and promotable models and templates. These includeguidelines for smart factory development, large-scale amino acid chemicalindustry projects, and operation and maintenance mechanisms for smartfactories. These e?orts provide strong support for the standardized constructionand experience promotion of digital and intelligent projects.
HSE: Health, Safety and Environment.
Applied for a total of
information-relatedhonors
Xinchang NHU Vitamins Co., Ltd.Zhejiang Vityesun Animal Nutrition and Health Co., Ltd.
Zhejiang NHU Co., Ltd.
Zhejiang NHU Co., Ltd.
Zhejiang NHU Co., Ltd.
Shandong NHU Amino Acids Co., Ltd.
Xinchang NHU Vitamins Co., Ltd.
Zhejiang NHU Co., Ltd.
Zhejiang NHU Co., Ltd.
Shandong NHU Amino Acids Co., Ltd.
Vitamin Preparation WorkshopVitamin Premix Production Workshop
Workshop
Industrial Internet Platform
NHU Smart Factory Integrated Platform
NHU Full Process Amino Acids Smart Factory
Xinchang NHU Vitamins Digital Workshop
Workshop
NHU Fine Chemical Industrial Internet Platform
Full-Process Digital Factory Industrial Internet Platform
2019 Shaoxing Intelligent ManufacturingDemonstration Workshop
2020 Shaoxing Intelligent ManufacturingDemonstration Workshop
Zhejiang Province Nutrients Digital Workshop
Zhejiang Provincial Industrial Internet Platform
Creation List
Municipal Industrial Internet Platform
Provincial Smart Factory
2021 Shaoxing Digital Workshop
Second Batch of Digital Factories (UnmannedWorkshops) in Xinchang County
Provincial Industrial Internet Platform
Provincial Key Industrial Internet Platform
Smart Factory
The Company places great emphasis on the application for information technology projects, regarding it as an important wayto showcase digital and intelligent achievements and enhance brand inuence. In 2024, the Company applied for a total of17 information-related honors, including 1 national-level honor (currently under application) and 14 provincial-level (includingassociation) honors (12 of which have been approved and 2 are under review).1920
Shandong NHU Pharmaceutical Co., Ltd.Shandong NHU Vitamins Co., Ltd.
Heilongjiang NHU Biotechnology Co., Ltd.
Heilongjiang NHU Biotechnology Co., Ltd.
Heilongjiang NHU Biotechnology Co., Ltd.Holistic Digital Management of Work Safety
Holistic Digital Management of Warehouse and
Logistics Operations
Heilongjiang NHU Smart Factory
NHU Vitamin B12 Digital Production Workshop
NHU Glucose Digital Production Workshop
Provincial Intelligent Manufacturing Scenarios
Provincial Intelligent Manufacturing Scenarios
Provincial Smart Factory
Provincial Digital Demonstration Workshop
Provincial Digital Demonstration Workshop
Case
Case
NHU aims to become a benchmark enterprise in comprehensive digital transformation. Through the implementation ofintelligent manufacturing systems, the Company enhances automation, informatization, digitalization, and intelligentcapabilities across all business divisions / subsidiaries. Centered on production process optimization, business processreengineering, and management model innovation, the Company progressively achieves "visualization, transparency,predictability, and self-adaptation" in production processes. This system meets manufacturing managementrequirements, including decision-making, planning, execution, analysis, and evaluation, thereby signicantly improvingmanagement e?ciency.
NHU has optimized material storage, utilization, balancing, and statistical operations through its intelligent warehousingmanagement system, which covers the entire process of procurement, sales, transfer, and inventory counting. Thesystem has established warehouse dashboard reports, including inventory reports, storage location utilization rates,and material turnover rates, enabling real-time monitoring of warehouse status and enhancing management e?ciency.The system is deeply integrated with business modules such as procurement, sales, logistics, and production,achieving coordination between order warehousing, sales delivery, and production dispatch. It facilitates inter-companymaterial sharing, thereby reducing inventory costs. Through data analysis and process optimization, the Company hassignicantly enhanced operational e?ciency, decreased o?ine communication by over 30%, and realized digital andintelligent transformation in warehouse management.The Company has established an intelligent system that covers production planning, scheduling,operations, energy, material, and quality management. Through multidimensional data analysis,the system extracts production statistics from multi-source data and generates real-time reports toelevate production management standards. To date, 100 management dashboards and statisticalreports have been developed, with the automated reporting system systematically deliveringoperational, supply-chain, and production information.By implementing the "Integrated Management" concept, the Company achieves vertical controland horizontal information integration to eliminate operational discontinuities and ensure dataconsistency. Adhering to the "Three Integration Systems" principle, the Company has realizedunied management of quality control, decision-execution alignment, and production logistics. Thisculminates in an intelligent manufacturing control platform that enhances operational efficiencywhile reducing production costs.The Company has established end-to-end management from sales order to accounts receivablesettlement. This framework drives coordinated production-sales planning and synchronizedmanufacturing-logistics execution, creating integrated industrial synergies.
Intelligent Operation
Cultivation of Digital & Intelligent Talents
The Company has made sustained progress in the development of its intelligent operation system, achieving significantmilestones in data governance, nancial management, R&D innovation, manufacturing enhancement, and global expansion.These advancements have laid a robust foundation for boosting operational e?ciency, optimizing managerial decision-making,and strengthening core corporate competitiveness.By centralizing procurement and production data, the Company has eliminated data silos across business units, establishingintegrated data connectivity. This infrastructure provides strong support for business analytics, enhancing operational e?ciencyand facilitating management decision-making. We have implemented paperless electronic record-keeping in R&D laboratories,thereby elevating the scientic rigor and standardization in technological R&D and enabling high-e?ciency precision research.The expanded manufacturing platform now features optimized modules for production, energy, and quality management. Keyfunctionalities include full-screen dashboard visualization, accessible via unied portal authentication.While executing business-enabling system deployments, the Company has accelerated the development of digital infrastructurein its overseas subsidiaries. This initiative has created a replicable global digital deployment framework for international tradingentities, extended domestic management systems with localized adaptations, and reinforced the Headquarters' operationaloversight—collectively underpinning the corporation's globalization strategy.
NHU always attaches great importance to the cultivation of digital & intelligenttalents, continuously strengthening training e?orts and gradually establishinga sound talent training system. We have defined competency standardsand capability frameworks for core positions across all functional modules.Specically, we have created over 60 training courses spanning 8 specialitiesand conducted more than 50 training sessions, systematically enhancingemployees' digital intelligence competencies. Furthermore, four benchmarkinginitiatives between the production bases and the Headquarters wereimplemented to facilitate cross-organizational knowledge transfer. Targeteddevelopment programs for three core positions have been designed andoperationalized, ensuring talent pipeline sustainability for key positions.The Company actively advances smart factory system development, leveraging these systems as strategic platforms for digital &intelligent talent cultivation. In 2024, through digital and intelligent projects across branches, subsidiaries and production bases,we have developed business consultants, development engineers, and graduate trainees, forging the core workforce driving ourdigital transformation.
Created over
training coursesspanning 8 specialitiesConducted more than
training sessions
Intelligent Warehouse System DevelopmentSmart Factory Development
BusinessPathOptimization
ApplicationScenarios
ProjectOutcomes
2122
Data Security and Customer Privacy Protection
R&D and Innovation
Innovation-driven Development
The Company has always regarded data security and customer privacy protection as the lifeline of its development, attachinghigh importance to relevant system development and management practices. We are committed to providing users withsecure and reliable products and services while respecting and protecting their privacy information. We have established acomprehensive information security management system, conducting annual internal reviews of the system and performingcomplete inspections on 13 major control areas in accordance with ISO 27001. Through cross-inspections between theHeadquarters and all production bases, we thoroughly investigate potential security risks, generate audit results, and formulatedetailed rectication plans to ensure full implementation of security measures.In 2024, the Company engaged external professional institutions to conduct attack-and-defense drills that simulate real attackscenarios, testing the e?ectiveness of the security protection system. Timely rectications were made based on issues identiedduring the drills. During major events and holidays, the Company implemented on-duty safeguarding measures, performingpenetration tests on application systems to promptly identify and repair security vulnerabilities, ensuring secure and stablesystem operations. The Company regularly conducts data security and privacy protection training to enhance all employees'security awareness and skills. This year, a total of 76 information security training sessions were conducted, covering 100% ofthe Company's employees.
NHU adheres to the development principles of "integration, serialization, and synergy," with "Chemistry+" and "Bio+" as coretechnology platforms. Guided by market demand, we implement forward-looking R&D strategies and conduct multi-levelinnovation encompassing fundamental science, "science + technology", and "technology + application". We have established acomprehensive R&D and innovation management framework, formulating regulations such as the R&D Program ManagementRegulations and the R&D Program Incentive Management Regulations. The Company has built an organizational structurecentered on the Research Institute, supported by R&D centers of business divisions, while strengthening management ofexternal research units, including the Japan R&D Institute and Singapore R&D Institute.We continuously increase innovation investment and upgrade R&D infrastructure. By aligning academic research with industrialneeds, we actively develop specialized common technology platforms in analysis, separation, and catalysis. These effortsaccelerate our transformation toward "innovation leadership" and "basic research technologies", laying the foundation fore?cient industrial development. Over the past three years, the Company's R&D expenditure has consistently exceeded 5% oftotal sales revenue.During the reporting period, NHU has obtained certifications for 9 National High-Tech Enterprises, 1 National "Little Giant"enterprise, 2 National Manufacturing Single Champion products, and 3 Provincial Gazelle Enterprises. The Company has beenrecognized as: China's Top 100 Fine Chemical Companies, China's Top 100 Listed Companies, Top 10 Companies in the FlavorSector in China's Light Industry, Top 500 Petroleum and Chemical Enterprises in China, National Key Leading Enterprise inAgricultural Industrialization, and Hidden Champion of Zhejiang Province. Notably, NHU won Recognition Award in the 7th ChinaGrand Awards for Industry.
NHU has always prioritized innovation as a strategic focus, driving the Company's high-quality development throughtechnological, product and management innovation. We concentrate on green technology R&D, e?cient resource utilization, andlow-carbon solutions, emphasizing industry-academia-research collaboration and intellectual property management to enhanceoperational e?ciency through innovation and ensure product quality and safety through compliance.
A total of
information security training sessionswere conducted
NHU has obtainedcertications for
National High-TechEnterprises
National ManufacturingSingle Champion productsChina'sTop 100
FineChemical Companies
China'sTop 100
Listed Companies
Top 10
Companies in the FlavorSector in China's LightIndustryNational Key
LeadingEnterprise
in AgriculturalIndustrialization
HiddenChampion
of Zhejiang Province
Won
RecognitionAward
in the 7thChina Grand Awards forIndustry
Top 500
Petroleum and ChemicalEnterprises in China
National "Little Giant"enterprise
Provincial GazelleEnterprises
Covering100%
of the Company's employees
Product R&D Management
Technology Platform Construction
In 2024, we optimized the three-tier decision-making process for new products, establishing a decision-making model based onunied principles and quantitative data to achieve hierarchical and categorized product management. This year, we successfullyadvanced over 10 new products into the R&D phase.
Guided by the strategy of "accelerating technology application, deepening technological expertise, and broadening technologicalscope", we established a professional technology matrix through internal collaboration and external partnerships, achievingsignicant progress in building both generic and specialized technology platforms. We actively explored digital transformationby engaging advanced R&D digital solution providers to develop and deploy a tailored management system integrating modulesfor project management, experimental task tracking, analytical management, and resource allocation. This system providesrobust support for knowledge accumulation, reuse, and data-driven decision-making in R&D, creating a systematic innovationecosystem while enhancing the e?ciency and precision of R&D management.2324
Talent Development
Product R&D Achievements
NHU positions talent development as the cornerstone of its innovation ecosystem, driving sustainable growth through e?ectivecultivation mechanisms. The Company maintains a high-caliber R&D team, where 31.81% hold master's degrees and 2.79%hold doctoral degrees. We implement an innovation incentive system featuring milestone-based bonus packages for productdevelopment projects and technology initiatives. This results-oriented mechanism proportionally rewards achievements at criticaldevelopment stages, e?ectively motivating researchers' creativity while enabling rapid market responsiveness and technologicalbreakthroughs.The Company actively expands collaborations with renowned domestic and international universities and research institutions,building a diversified industry-academia-research innovation network. We conducted multiple technical exchanges withinstitutions, including Xiamen University, Lanzhou University, Lanzhou Institute of Chemical Physics (CAS), and the Universityof Oxford, resulting in 32 substantive collaborations. Long-term partnerships have been established with Zhejiang University,the Chinese Academy of Sciences (CAS), Beijing University of Chemical Technology, Jiangnan University, and the TechnicalUniversity of Denmark. By funding cutting-edge basic research at universities, NHU integrates its strengths in talent, technology,capital, and platforms to accelerate the industrialization of scientic achievements.Shandong NHU Vitamins Co., Ltd. has established the Shandong Postdoctoral Innovation Practice Base, certified by theShandong Provincial Department of Human Resources and Social Security. This marks a key achievement in deepeningindustry-academia-research integration. This platform serves as a bridge connecting enterprises with universities and researchinstitutes for high-level talent cultivation and technological innovation, signicantly enhancing the Company's R&D capabilitieswhile contributing to industry advancement and sustainable development.
This year, we completed 76 technical transformation projects. Through green processinnovations, product quality enhancements, and circular economy implementations,we revitalized existing product upgrades, ensured consistent production quality, andelevated customer satisfaction.
In 2024, we achieved breakthrough progress in multiple new product R&D initiatives across business segments,building a robust pipeline of products and technologies for future growth:
R&D team, where
31.81%
hold master's degrees
R&D Team Total number2,867
Persons
R&D team, where
2.79%
hold doctoral degrees
R&D Team Proportion
25.22%
Completed
technicaltransformation projectsCase
NHU has achieved significant breakthroughs in the R&D of plant-based raw materials, successfully creatinglignosulfonate-based (plant-based) feed-grade carotenoid products. To address the growing market demand for plant-based feed solutions, the Company established a cross-functional team comprising R&D specialists, engineers, marketanalysts, and quality control personnel. The team set clear objectives to replace traditional porcine gelatin systemswith lignosulfonate-based formulations while accommodating religious dietary requirements (e.g., Halal, Kosher)and animal-origin-related specications. Through rigorous analysis of global feed regulations, the team ensured fullcompliance and conducted comprehensive studies on the chemical composition, physicochemical properties, andfunctional characteristics of lignosulfonate to identify optimal raw materials for feed-grade applications.The R&D team rened the formulations through experimental optimization, ensuring stability, digestibility, and growth-enhancement performance in feed applications. The products passed stability tests during both pilot-scale and massproduction, with feeding trials in poultry and aquaculture demonstrating e?cacy in growth promotion and carotenoiddeposition. Customer validation confirmed superior product quality, establishing a strategic foundation for NHU'sexpansion in the plant-based feed market.
Our product R&D has garnered widespread industry recognition, with honors including the National Technology Invention Award,China Patent Gold Award, petrochemical and light industry awards, and the Zhejiang Provincial Technology Invention Award:
The Nutraceuticals segment
The Flavors & Fragrances segment
The Specialty Materials segement
The Active Pharmaceutical Ingredients (API) segment
Several "Bio+" innovations achieved industrialization, with select fermentation products reaching industry-leading yield levels.
Enhanced industrial chain competitiveness through new products and processes, expanding into emerging sectors includingUV protection and moisturization.
Made strides in di?erentiated product R&D, with new resin grades entering high-end modication applications.
Multiple products obtained CEP certications and domestic market authorization approvals.
Key TechnologyDevelopment andIndustrialization ofFragrance-Type Series
Flavor Products wasawarded the First Prize in the2024 Technology InventionAwards by China NationalLight Industry Council
A Recombinant Microorganism,Its Preparation Method andApplication in Coenzyme Q10Production and Preparation Methodof Polyphenylene Sulde Resinand Resulting Product receivedOutstanding Awards at the25th China Patent Awards
Green Synthesis TechnologyDevelopment andIndustrialization of High-QualityD,L-Methionine was selected
for the First Prize inShandong Provincial Science& Technology AwardsOutstanding
Awards
First Prize
Plant-based Raw Material Product R&D
First Prize
2526
NHU's 2024 Key Intellectual Property Initiatives
Intellectual Property ProtectionNHU places a high priority on protecting its trade secrets while fullyrespecting the legal rights of third parties. To this end, we haveestablished a comprehensive intellectual property (IP) managementsystem to e?ectively safeguard our innovation achievements. TheCompany has developed a suite of IP governance documents,including the Intellectual Property Management Framework,Patent Management Regulations, Intellectual Property EmergencyResponse Plan, and Product Patent Portfolio & ConfidentialityReview Procedures. These are complemented by the TrademarkManagement Regulations to protect trademark rights and maintainbrand integrity. As a national leader in IP protection, NHU hasachieved ISO 56005 certification for Innovation ManagementSystems, the international standard for innovation and IPmanagement, thereby systematically enhancing our IP governancecapabilities.NHU ensures that all products and services strictly comply with IPregulations and do not infringe on any third-party rights. We alsolegally require our business partners to adhere to equivalent IPcompliance standards for their products or services.
Through comprehensive analysis of industrial ecosystems, market trends, and competitive landscapes,we have led patents in high-e?ciency strains and formulation technologies. We have also optimizedprotection for nylon industry chain projects and established multidimensional patent barriers.
Implementing the ISO 56005 standard with Level 4 certification, we have enhanced lifecycle IPmanagement, spanning pre-development, active R&D, and post-commercialization phases. We haveconducted targeted IP clearance searches to mitigate infringement risks.
Collaborating with the legal division, we have updated technology partnership agreements to includeexplicit IP ownership clauses. We have executed Freedom To Operate (FTO) analyses for strategicprojects, established continuous competitive intelligence monitoring, and strengthened internal riskalert systems.
Partnering with external entities on trade secret protection programs, we have upgraded classifiedinformation systems and revised the Technical Data Condentiality Management Regulations to fortifysafeguards.
As of December 31, 2024, NHU maintains 777 valid patents worldwide, providing robust protection for innovation achievementsacross all core products.This year, Zhejiang NHU Special Materials Co., Ltd. received both the China Patent Excellence Award and was designated asan Innovative Small and Medium Enterprises in Zhejiang Province. Shandong NHU Pharmaceutical Co., Ltd. became a nalistfor the 25th China Patent Excellence Award. To date, the Company has been honored with 2 China Patent Gold Awards, 1 ChinaPatent Silver Award, 3 China Patent Excellence Awards, and 2 Second Prizes in the National Technology Invention Awards.
NHU has achieved ISO 56005 Level 4 Certication
Case
PatentPortfolioStrategy
Proactive IPReview
RiskPreventionand Control
CondentialityEnhancement
Maintains
valid patentsworldwide
China Patent Excellence
Awards
China Patent GoldAwards
Second Prizes in the NationalTechnology Invention Awards
China Patent SilverAward
NHU has implemented a structured IP awareness enhancementprogram, conducting 9 internal training sessions in 2024 withover 10,000 participant engagements. The curriculum coveredessential IP competencies, including patent innovation evaluation,IP risk assessment and mitigation strategies, patent and databaseutilization, and condentiality training.
Conducting
internal training sessions on IPOver10,000
participant engagements
Vitamin E, a critical fat-soluble nutrient, exhibits multiple physiological functions, including antioxidantprotection, anti-inflammatory activity, and lipid metabolism regulation. It finds extensive applications acrossthe food processing, cosmetics, dietary supplements, pharmaceuticals, and animal nutrition industries. NHUpossesses proprietary vitamin E synthesis technology, which has been continuously optimized throughtechnological advancements to enhance product quality, reduce production costs, and sustain our competitiveedge in the global vitamin E market.Regarding feed-grade product nutrition innovation, we have conducted groundbreaking research. Our R&Dteam systematically investigated the crystallographic forms, particle size distribution, and cis-trans isomer ratiosof carotenoids to develop astaxanthin, canthaxanthin, and apo-ester products with superior bioavailability. TheCompany's nutrition research focuses on critical issues such as protein resource scarcity, developing single-cell protein (SCP) as an alternative high-quality protein source with established partial substitution protocols.Concurrently, studies explore replacing inorganic mineral elements with organic forms to enhance trace elementutilization e?ciency and reduce environmental emissions.
Nutritional Health Product R&D
2728
Additionally, for key positions such as IP roles and innovation management roles, we conducted approximately 8 externaltraining sessions to enhance their professional quality and business capabilities. The external training topics included enterpriseIP management, patent practice courses, new IP standards, use of innovation methods, application of large models in thebiopharmaceutical industry, and data IP.
Training for NHU ManagementParticipating in the Innovation Method Promotion and Application
Training organized by Shaoxing Municipal Authorities
Specialized Field Training
To address the unique requirements of the biological field, we engaged experienced former patent examinersspecializing in biological patents to conduct targeted training sessions, ensuring practical integration with actualworkows.
R&D Personnel Training
To enhance R&D personnel's patent application capabilities, we conducted specialized training on: patentinventiveness assessment and mining; technical disclosure drafting; and patent/literature database utilization.These sessions aimed to improve both the quality and e?ciency of patent applications.
Training of the Management
For the management, we engaged senior experts from certication agencies to deliver specialized training on tradesecret protection, strengthening the leadership's condentiality awareness.
Company-wide TrainingDuring Intellectual Property Month, we conducted comprehensive IP education covering fundamental IP knowledgeand confidentiality awareness training. All employees were required to participate, achieving a near 100%completion rate.
Product Quality and Safety
Quality Management SystemNHU always regards product quality and safety as the core elements of enterprise development and iscommitted to providing customers with safe and reliable products.
The Company has established a comprehensive and advanced quality management system. The Chief Engineer's O?ce at theproduction base oversees product quality and safety, while the Quality Assurance Department formulates quality criteria andconducts random inspections on nished products. Several departments collaborate on process safety management, forminga multi-department coordinated mechanism for quality and safety control. NHU has obtained certifications and maintainscompliance with internationally recognized standards, including ISO 9001, ISO 14001, ISO 45001, FAMI-QS, ISO 22000,BRCGS, FSMA, HALAL, NSF, and GMP. The Company has established quality management protocols such as the Quality Lawsand Regulations Identification, Evaluation, and Compliance Monitoring Regulations, Production Process Quality MonitoringRegulations, and Hazardous Materials Sales Management Regulations, covering the entire product lifecycle from R&D,production, and sales to after-sales services. Strict quality control standards have been implemented for each product to ensureconsistent quality and reliability. During the reporting period, no major quality-related incidents involving products or servicesoccurred.
NHU conducts in-depth analysis of customer requirements and performs comprehensive risk assessments. Bothcustomer requirements and quality standards are integrated into product design to proactively mitigate potential qualityand safety hazards from the design phase.
Product Design and Development
NHU continuously renes production processes through customer requirements alignment and industry benchmarking.It implements globally recognized quality assurance methodologies and process control techniques to optimizeproduction e?ciency while maintaining stringent quality standards.
By applying quality management tools and risk identication methodologies, we have established a product risk controlsystem. This includes: Regular specialized risk assessments; Identication of critical control points with correspondingmitigation measures; Periodic review and validation processes; Preventive testing for emerging quality and safetyissues. The systematic approach ensures consistent product quality and safety compliance.
Product Production
Quality Risk Control
Our tiered training framework ensures role-specic development:
2930
CaseZhejiang NHU Special Materials Co., Ltd. continuously explores and innovates in quality management. Adhering toa customer-centric quality philosophy, the company has established a comprehensive quality management systemcentered on its Management Manual. By implementing Total Quality Management (TQM), quality managementpractices are integrated throughout the entire product lifecycle.
NHU has set non-negotiable quality thresholds and compliance baselines to reinforce operational rigor within its QualityManagement System (QMS). By establishing SOPs and risk prevention mechanism, the enterprise ensures processstability across operations. Through systematic and refined quality management, the company has enhanced itsproduct quality and customer satisfaction, thereby facilitating sustainable development.
Quality TrainingDOE Training
Product RecallNHU has developed a food additive Recall Control Procedures in compliancewith HACCP principles, ISO 22000, BRCGS
standards, and China's FoodRecall Management Regulations. These procedures establish dened responseworkflows for safety incidents, enhancing operational resilience duringemergencies while mitigating stakeholder losses. All branches, subsidiaries andbusiness divisions implement the recall mechanisms through periodic simulationexercises, ensuring crisis management readiness. In 2024, NHU maintained zeroproduct recalls attributable to quality deciencies.
BRCGS Standard: BRCGS certication (British Retail Consortium Global Standards) is a global food safety standard originally developed andpublished by the British Retail Consortium in 1998, aimed at ensuring the safety and quality of the production and supply chain of food andother consumer goods. BRCGS certication is an internationally recognized food safety and quality mark, applicable to elds such as food,beverages, and personal care products.
NHU maintained
product recallsattributable to qualitydeciencies
To strengthen company-wide quality awareness, NHUactively conducts comprehensive quality training programscovering quality-related regulations, quality managementsystem knowledge, and quality risk control requirements. In2024, through the "Quality Month" initiative, the Companydelivered specialized training sessions on HACCP
analysis, FMEA
methodology implementation, and qualitymanagement tool applications. These efforts effectivelyenhanced personnel capabilities in critical control pointmanagement and hazard identication. Concurrently, NHUimplemented site management SOP
-focused training andstandardized technical prociency competitions to upgradejob-specific competencies. This approach embeds thecustomer-centric quality philosophy while continuouslyadvancing quality management excellence.
HACCP (Hazard Analysis and Critical Control Point): This is a management system used to ensure food safety. The core principle is to preventfood safety issues by identifying and controlling potential hazards in the food production process.
FMEA (Failure Mode and E?ect Analysis): This tool can identify potential failure modes and causes in product and process design, so thatpersonnel can take necessary measures to reduce potential risks.
SOP: Standard Operating Procedure.
DOE: Design of Experiments. This training can help participants learn how to design and implement experiments, analyze and infer therelationships between various experimental factors.
Strengthening Quality Management by Zhejiang NHU Special Materials Co., Ltd.
●Conduct regular ISO 9001 compliance training to strengthen team competencies.
●
Establish a Quality Control (QC) plan to monitor the production process in real-time.
●Optimize quality information management systems to boost cross-functional collaboration.
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Our Actions
Our Performance
Harmonious Society
On the path to sustainable development, NHU fosters internal cohesion by upholding integrity andself-discipline through standardized operations. This has earned the Company widespread respectand steadfast support from employees. Externally, NHU expands its social responsibility footprintby empowering industrial development through the delivery of high-quality services and products,thereby contributing to a more harmonious social ecosystem. While driving our own growth, weremain committed to social responsibility through active participation in public welfare and charityprograms, collectively shaping a sustainable future.
Annual customersatisfaction index
92.64
pointsSigning rate of the "Integrity Agreement"among the management and employees
100%
Total employee training
478,910
hours
Contribution to SDGs
3334
Compliance Governance
Compliance Management
Business Ethics
Internal Audit
Information Disclosure
NHU strictly adheres to corporate governance laws and regulations, as well as the provisions of the Articles of Association.The Company has established a comprehensive governance framework, including Rules of Procedure for the GeneralMeeting of Shareholders, Rules of Procedure for the Board of Directors, Rules of Procedure for the Supervisory Board, andWorking Guidelines for the General Manager. These documents clearly delineate the responsibilities of the General Meetingof Shareholders, Board of Directors, Supervisory Board, Chairman, and President, ensuring a standardized and efficientgovernance structure.The Board of Directors upholds the principles of independence and diversity of expertise, with members possessingprofessional knowledge in chemical engineering, accounting, and legal affairs to ensure informed and effective decision-making. In 2024, NHU's Board of Directors comprised 11 directors, including 4 independent directors and 7 non-independentdirectors. Throughout the year, the Company held 8 Board meetings, 4 Supervisory Board meetings, and 3 General Meeting ofShareholders, rening management procedures for critical matters through these governance mechanisms.
In 2024, under the oversight of the Board of Directors, the Supervisory Board, and the General Meeting of Shareholders, theCompany implemented the requirements of the newly amended Company Law of the People's Republic of China and revisedinternal governance documents, including the Internal Control System. For high-risk areas identied in operational activities- such as holding subsidiary governance, related-party transactions, fundraising management, external investments, andinformation disclosure - the Company has established dedicated management mechanisms. These include multi-tier approvalprocesses and cross-functional review mechanisms to mitigate risks and ensure robust internal control e?ectiveness.
NHU strictly complies with applicable laws, regulations and business ethics standards in conducting operations. We developand maintain business relationships exclusively with partners committed to principles of integrity, probity and fair practice, theCompany has established comprehensive governance documents including the Business Ethics Governance Procedures, theManagement Discipline Regulations, and Notice on Implementing Integrity Management Requirements, which explicitly addressanti-bribery, anti-corruption and fair competition provisions while institutionalizing ethical compliance initiatives. The Board ofDirectors bears ultimate responsibility for leading, overseeing and decision-making in business ethics governance.During the reporting period, we conducted systematic integrity risk assessments for high-risk positions with decision-makingauthority over human resources, nancial allocations and material procurement. The identied control enhancements have beenincorporated into our 2025 Internal Control Optimization Roadmap to establish a closed-loop management system.The Company maintains an absolute zero-tolerance stance against corrupt practices. To strengthen anti-fraud safeguards, wehave enhanced whistleblowing mechanisms and mandated heightened scrutiny of potential misconduct during internal audits.All personnel including directors, supervisors, senior management and employees completed mandatory anti-corruption training,with 900+ newly onboarded and transferred sta? signing Integrity Commitment Letters in 2024.NHU extends its integrity principles to supplier relationships through mandatory integrity clauses in procurement contracts. Thenewly revised Supplier Integrity Agreement Template (2024 Edition) establishes standardizes compliance requirements for allcontractual engagements. No corruption-related litigation cases occurred during the reporting period.The Company maintains an independent internal audit function sta?ed by full-time auditors. This function encompasses nancialaudits, business ethics compliance audits, post-employment accountability audits, and economic responsibility audits. The AuditCommittee oversees all audit procedures, while the Chief Audit Executive reports directly to the Board of Directors, therebysafeguarding the impartiality, objectivity, and autonomy of audit operations.The Company has established a strict information disclosure regulatory framework,including the Information Disclosure Management Regulations, Insider RegistryManagement System, and Annual Report Material Misstatement AccountabilityProcedures. These documents establish comprehensive standards governing thefundamental principles, content requirements, division of responsibilities amongdepartments, documentation review and release processes, as well as accountabilitymechanisms. The Company has maintained a "A" rating in the Shenzhen StockExchange's information disclosure evaluations for 16 consecutive years.
In 2024, NHU's Board ofDirectors comprised
DirectorsThe Company held
Board meetings
Independent directors
Non-independentdirectors
General Meetingof Shareholders
Supervisory Board meetings
The Company hasmaintained a"
A
" rating in theShenzhen StockExchange's informationdisclosure evaluations for16 consecutive years
NHU was honoredamong the "2024Top 30
Best Internal ControlAwards for ZhejiangListed Companies"
Risk Governance
The Company continuously enhances its risk management framework to ensureoperational stability. During the reporting period, we further optimized risk identicationand mitigation framework by refining the risk register, with new additions includinginformation security, HSE risks, personnel risk inventory, and legal risks inventory forbidding and tendering processes. To address overseas secondment risks, we updatedthe Overseas Short-term Assignment Safety Guidelines based on operational needsand host country risk profiles. The implementation of electronic signature systemswas accelerated through revised Digital Seal Management Protocols, strengtheningcontrols over authorization risks.The Company implements targeted risk management training programs, including compliance training for directors, supervisorsand senior management under the revised Company Law of the People's Republic of China. Recognized for outstandingrisk governance capabilities, NHU was honored among the "2024 Top 30 Best Internal Control Awards for Zhejiang ListedCompanies".
3536
IndicatorData in 2024Unit
The Management's Signing Rate of the Integrity Agreements100%
Employee's Signing Rate of the Integrity Agreements100%
Coverage Rate of Anti-corruption Training100%Number ofAnti-corruption
TrainingParticipants
Directors11PersonSupervisors5PersonSenior Management4PersonEmployees11,365Person
Fair Competition
Whistleblowing Handling Procedure
The Company upholds fair competition principles in strict compliance with applicable lawsand regulations including the Anti-Monopoly Law of the People's Republic of China andthe Anti-Unfair Competition Law of the People's Republic of China. We have establishedCompetition Compliance Management Regulations to proactively reject unethical orunlawful business practices, ensuring all operations maintain fairness and integrity whileeffectively mitigating antitrust risks. A systematic approach has been implemented toregularly consolidate competition-related regulatory updates and precedent cases into ourCompetition Compliance Handbook: Case Studies & Regulatory Guidelines. Furthermore,the Company integrates competition compliance risk inspections into project auditactivities, producing standardized audit reports that: evaluate competition compliance riskcontrols; and standardize ongoing compliance monitoring procedures.
NHU has established the Management Discipline Regulations and the Employee Reward and Punishment ManagementMeasures to standardize the conduct of management and employees. A formal whistleblowing process has been implemented,with dedicated integrity supervision hotlines, reporting email, and President/General Manager's mailboxes to provide multiplereporting channels. The aim is to correct misconduct promptly, with the purpose of rehabilitating and educating the management.At the same time, we actively safeguard whistleblowers' legitimate rights and interests, strictly protecting their personalinformation and the content of their reports, while providing timely feedback on investigation outcomes—fostering a clean andupright work environment.
The whistleblowing handling process is as follows
Case
The Company has proactively advanced anti-monopoly compliance initiatives within its API Division. A dedicated riskassessment was conducted in response to the Anti-Monopoly Guidelines for the Pharmaceutical Sector (Draft forComment), culminating in the issuance of the API Division Self-Inspection Risk Assessment Report Based on theDraft Pharmaceutical Guidelines. Furthermore, two specialized training sessions entitled Interpretation of FundamentalAnti-Monopoly Legal Framework and Guidance on Anti-Monopoly Compliance in the Pharmaceutical Sector wereconducted. These measures have enabled the API Division to enhance the comprehensiveness of its compliance riskassessment framework, thereby e?ectively mitigating potential regulatory violations.
Coverage Rate of Anti-corruption Training
100%
Whistleblowing Investigation
Whistleblowing Acceptance
Handling Decision
Anti-monopoly Self-assessment by the Active Pharmaceutical Ingredient (API) Division
●After receiving a whistleblowing matter, the integrity department of each unit shall report the information to theDiscipline Inspection and Supervision Department within 5 working days for unied registration and circulation.
●Establish an investigation team comprising two or more members based on case requirements, designatea team leader, analyze the circumstances, and formulate an investigation plan; collect evidence, conductinterviews with relevant personnel, and prepare an investigation report. The investigation process strictlyfollows the Company's rules as well as national laws and regulations to ensure fairness and accuracy.
●Decision Execution: The case shall be handled according to the Management Discipline Regulations, includingsupervisory recommendation, interview, yellow card warning, demotion/removal (dismissal), or termination ofthe employment contract.
●Pending Verification: The clues show a certain degree of verifiability, but verification must be temporarilydeferred due to objective constraints until conditions become favorable for proper verication.
●Wrap up: The clues are veried to be unsubstantiated, or verication is possible.
●Transfer to Judicial Authorities: If serious illegal facts are found upon verification subject to criminalprosecution, the case will be transferred to judicial authorities.
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Employee Well-being
Guided by a human-centric development philosophy, the Company has established an employee governance frameworkcentered on talent potential optimization and holistic well-being enhancement. Through integrated empowerment mechanisms,we facilitate employee professional advancement while safeguarding physical and psychological health. Our diversity & inclusionstrategy fosters a collaborative innovation ecosystem where organizational agility synergizes with humanistic values, drivingsymbiotic value co-creation between the enterprise and its employees.Compliance Employment and Human Rights Protection
Compensation and Benets
NHU strictly complies with the Labor Law of the People's Republic of China and the Labor Contract Law of the People's Republicof China to regulate employee recruitment and employment management. We have established internal regulations includingthe Anti-Discrimination, Anti-Harassment and Anti-Abuse Management Regulations and the Prohibition of Forced LaborManagement Regulations, rmly opposing human rights violations such as child labor, forced labor, and discriminatory practices.In the reporting year, NHU maintained a clean record with 0 incidents of child labor, workplace harassment, discrimination, orlabor disputes.NHU is dedicated to fostering a diverse and inclusive workplace through institutionalized mechanisms and systematicimplementation of our Anti-Discrimination, Anti-Harassment and Anti-Abuse Policy. The principle of equity is embeddedthroughout the employee lifecycle from talent acquisition to development, retention, and succession planning - ensuringequal opportunities and value co-creation across all departments in job placement, performance appraisal, promotionrecommendations, and incentive allocation. We rigorously uphold gender equality in recruitment practices, fully complying withnational regulations to prohibit any form of discrimination based on gender or marital status, while providing female employeeswith equitable career advancement opportunities.
NHU adheres to the principles of fairness and value co-creation, establishing a remuneration system based on job valueevaluation to ensure gender pay equity and provide market-competitive compensation and benets. In compliance with nationalstatutory requirements, the Company contributes to social insurance and housing provident fund for all employees. Additionally,through performance evaluation and incentive mechanisms, we align employees' contributions with their career development.Guided by the "contributor-centric" philosophy, NHU implements initiatives such as management innovation awards and projectachievement awards, enabling core employees to share corporate growth dividends while fostering organizational vitality andinnovation.Adhering to the principle of "Harmony," NHU regards employees as the foundation of corporate development. We attentivelyaddress the needs of every employee, o?ering comprehensive support in work, life, mindset, and health. Care initiatives suchas regular health checkups, recuperation leave, and hospitalization mutual aid have been implemented. Facilities includinggyms, libraries, basketball courts, and decompression rooms are provided to promote physical and mental well-being, furtherenhancing the employee benets system. We strive to create an inclusive and harmonious workplace for female employees byo?ering not only standard health checkups but also exclusive benets such as antenatal leave, maternity leave, and lactationleave, fully demonstrating respect and support for women in the workplace.To accelerate employee development, NHU has established a mentorship platform between junior and senior sta? under theguidance of the “Teacher Culture” philosophy, facilitating experience sharing and personalized career roadmaps to help youngprofessionals achieve rapid career progression. Additionally, the Company focuses on building team cohesion by creating avariety of employee clubs based on individual interests and hobbies. It also carefully plans sports and cultural activities, as wellas distributes benets during important moments such as employee birthdays, festivals, and corporate anniversaries. Theseinitiatives cultivate a sense of belonging and organizational identity, ultimately driving synergistic growth between individuals andthe enterprise.Number of Employees by AgeNumber of Employees by Gender
Under 30 years old 30-50 years old Male Female Over 50 years old
4,74242%9,12580%
5%6,09253%
2,24420%
IndicatorData in 2024Unit
Total Number of Employees11,369PersonTotal Number of Disabled Employees Employed34 PersonTotal Number of Employed Veterans210 PersonNumber of New Employees778PersonEmployee Turnover Rate5.07%
3940
Employee CommunicationEmployee Care
NHU respects and values the opinions and suggestions of every employee, establishing diversified and multi-tieredcommunication channels and platforms. Through thorough implementation of the "Five Mandatory Visits and Five MandatoryConversations" mechanism, we e?ectively monitor employees' psychological status and professional/personal needs, ensuringtimely identication and resolution of issues. The Company maintains a dedicated General Manager's Mailbox that encouragesboth named and anonymous feedback, complaints, and suggestions, with strict condentiality protections for whistleblowers tofoster a secure and transparent communication environment. In 2024, NHU conducted a ve-month sta? canteen satisfactionsurvey, implementing dynamic management improvements based on monthly feedback that resulted in progressively enhancedsatisfaction levels.We conduct regular employee symposiums and Sta? and Workers' Representative Congresses to create open and inclusivedialogue platforms. These platforms enable employees to share professional experiences, developmental challenges, andimprovement proposals, serving dual purposes of informing management decision-making and strengthening cultural alignmentand organizational commitment. In compliance with legal requirements, NHU has established a Labor Dispute MediationCommittee comprising employee representatives, administrative personnel, and trade union delegates. Operating underprinciples of fairness and impartiality, the committee ensures prompt resolution of workplace disputes at early stages, therebysafeguarding employee rights while supporting sustainable corporate development.
NHU regards talent as the primary resource, and consistently implements the “Teacher Culture” to advance a culture of care.The Company consistently prioritizes employees' physical/mental well-being and professional development. Through regularlyorganized cultural and recreational activities including storytelling sessions, team-building events, and recreational sportscompetitions, we help employees alleviate work-related stress while enhancing workplace satisfaction and organizationalcommitment, thereby fostering a supportive and collaborative work environment. To accommodate diverse employee interests,NHU has established o?cially registered clubs for yoga, football, basketball, traditional lacquer fan crafting, baking, and otherhobbies, enabling sta? to cultivate personal interests beyond work responsibilities and maintain healthy work-life integration. TheCompany has also developed comprehensive welfare facilities across its production bases, including standardized basketballcourts, fully-equipped fitness centers, and the NHU Town community complex, providing employees with comfortable andaccessible spaces for both professional and leisure activities.NHU has established a structured employee care mechanism, providing professional services such as mental and physicalhealth consultation, legal aid, children's school enrollment support, and green channels for medical treatment, e?ectively helpingemployees solve problems in both work and life.
Five Mandatory
Visits
Five MandatoryConversations
Case
Case
On November 8, 2024, NHU successfully conductedits Annual Staff Sports Festival, engaging nearly200 participants from cross-functional departments.The event featured four team-based recreationalcompetitions where employees demonstratedexceptional collaborative spirit and organizationalcohesion. This initiative not only created valuableopportunities for physical engagement and interpersonalconnection but also embodied the corporate morale of"Dynamic Vitality and Progressive Excellence," therebyreinforcing organizational alignment and culturalcohesion.
Throughout 2024, the Labor Union of NHU Shandong Production Base coordinated with subsidiaries to executetargeted employee assistance programs. These initiatives provided support to nine employees experiencing temporaryhardships through personalized visits and financial aid totaling CNY 117,000. Aligned with our corporate socialresponsibility commitments, the company maintains structured protocols for needs assessment and timely intervention,demonstrating organizational empathy through concrete actions and sustained engagement.
Recreational Sports
Sta? Training and DevelopmentNHU places great emphasis on employee training and development, having established a comprehensive career-cycle trainingsystem that provides diverse and multi-tiered learning platforms with tailored growth pathways. Through innovative initiativesincluding campus recruitment programs, talent subsidy policy implementation, and a doctoral talent database development, westrategically attract and nurture high-caliber professionals. This enables them to maximize career potential and achieve personalvalue, fostering a mutually benecial synergy between individual growth and organizational advancement.
NHU Fun & Spirit: Team Games Showcasing Talent
Hearts Aligned: NHU's Warm Connection Between Employees and Organization
●
1. Mandatory visits are required for employee life events including marriage, bereavement and
childbirth (covering childbirth for female employees, marriage ceremonies, and bereavementof employees or their immediate family members (spouse, children, parents, or spouse'sparents));
●
2. Mandatory visits are required for employees hospitalized due to illness or accidental
injuries;
●
3. Mandatory visits are required when employees experience exceptional hardships (dened
as major natural disasters or family emergencies);
●
4. Mandatory visits are required for severe domestic disputes (including domestic violence,
divorce proceedings, or failure to fulll child-rearing/elder-care obligations);
●
5. Mandatory visits are required for seconded employees supporting project construction (as
dened in the Seconded Personnel Management Regulations).
●
1. Mandatory conversations are required during employee onboarding, position transfers,
or employment separation;
●
2. Mandatory conversations are required for workplace conflicts, emotional distress, or
mental health concerns;
●
3. Mandatory conversations are required for employees receiving S, C, or D ratings in the
annual performance evaluation;
●
4. Mandatory conversations are required for employees subject to disciplinary actions due
to violations of laws, regulations, or company policies;
●
5. Regular conversations are mandated with core personnel (including frontline supervisors
and above, mission-critical positions, graduate employees, PhD researchers, andmanagement trainees).
4142
Employee PromotionSta? Training
NHU has developed a scientic and well-structured employee career development system, focusing not only on enhancing thecapabilities of current employees but also on cultivating backup talents. The Company o?ers a dual-track career progressionsystem (management and professional sequence), providing diversied development options. Promotional assessments for bothtracks strictly adhere to performance-driven and competency-based principles, ensuring equitable and transparent selectionprocesses. Additionally, NHU facilitates internal mobility opportunities with corresponding training support, enabling employeesto chart optimal career paths aligned with personal aptitudes and organizational needs.
Additionally, in the cultivation of management trainees and Future Stars, the Company launched the 2024 NHU Future Stars/New Horizon Development Program in July 2024. Implementation e?ectiveness is monitored through monthly feedback sessionsto ensure continuous optimization and precise execution.
NHU has established a comprehensive career-long training system covering multiple dimensions including new employee onboardingtraining, position-specific skill enhancement, technical expertise development, and management capacity building. The Companydevelops annual training programs that systematically guide the implementation of structured learning initiatives. Employing a blendedlearning approach that combines online and offline formats with internal faculty and external specialists, the organization ensuresindustry-relevant and future-oriented training content. Through meticulously designed curricula encompassing corporate culture,professional ethics, technical expertise, and managerial competencies, the programs holistically enhance employees' comprehensivequality and operational capabilities.Anchored in three agship programs - Yuan Hang, Qi Cheng and Yang Fan - the Company implements a tiered talent developmentframework combining theoretical instruction, practical project work, and mentorship systems. For technical expertise, certificationprograms such as Equipment Technology Expert Certication and Workshop Management Leadership Program have been establishedto cultivate technical specialists and modernize workshop management, driving the organization's strategic transformation towardyouthful dynamism and professional excellence.Capitalizing on digital learning advancements, NHU provides global-standard courses and industry-leading knowledge through itsXiaoXin Digital Academy platform, empowering employees to expand professional horizons and strengthen competitive edge. TheCompany actively encourages employee participation in external training and degree advancement programs, while regularly hostingpremium academic conferences to provide enriched learning resources and growth opportunities, fostering synergy between personaldevelopment and organizational objectives.
Grassroots management → Middle management → Senior management, successively undergoYang Fan, Qi Cheng and Yuan Hang programs to cultivate backup talents
Procient-level → Advanced-level → Expert→ Senior Expert → Chief Expert, with talent developmentimplemented through the establishment of learning path maps.
Management
sequence
Professional
sequence
NHU's annual traininginvestment totaled CNY
7.06
millionWith cumulative traininghours reaching
478,910
acrossthe workforce
An average of
42.12
traininghours per employee
Achieved
100%
trainingparticipation rate throughoutthe organization
Procient-level
Advanced-level
Expert
Senior Expert
Chief Expert
Cultural integration,skills developmentand goal execution
Professionaltraining, integratingtraining withpractice, and tactical
implementation
Overcomingchallenges, circularempowerment, andtactical frameworkbuilding
Innovation synergy,transformationincubation,and strategicadvancement
Leadingdevelopment
NHU Dual-track Career Progression System
In 2024, NHU's annual training investment totaled CNY 7.06 million, with cumulativetraining hours reaching 478,910 across the workforce. This equates to an average of 42.12training hours per employee and achieved 100% training participation rate throughout theorganization.
CaseNext-Gen Talent Cultivation: Institutionalizing Mentorship Traditions
NHU conducted structured onboarding programs including the "Mentorship Journey"bootcamp for new graduate hires. Through blended learning approaches encompassingonline learning, face-to-face classroom, physical training, personal development activitiesand collaborative workshops, new employees gained comprehensive understanding ofcorporate culture, rules and regulations, industry knowledge, and career developmentpathways. These initiatives effectively fostered professional ethics, enhanced essentialworkplace skills, and strengthened alignment with NHU's distinctive "Teacher Culture",facilitating successful transition from academic environments to corporate professionalism.
New Employee Onboarding
Training
"Mentorship Journey" Bootcamp for NHU New Graduate HiresPersonal Growth Activities for NHU New Graduate Hires
Individual development plan
Grassroots managementYang Fan program
Middle managementQi Cheng programSenior managementYuan Hang programCurrent executiveNewly appointed and backup
managementManagement sequence
Professional sequence
4344
Occupational Health and Safety (OHS)
HSE Management System Hierarchy Chart
NHU strictly complies with OHS laws and regulations, including the Work Safety Law of the People's Republic of China, theOccupational Disease Prevention and Control Law of the People's Republic of China, the Fire Protection Law of the People'sRepublic of China, and the Regulations on the Safety Management of Hazardous Chemicals. We actively benchmark againstindustry best practices such as the Guidelines for Chemical Process Safety Management (AQ/T 3034) and the Guidelines forInherent Safety Assessment of Chemical Processes (T/CCSAS 044) to establish a comprehensive OHS management system.The Company has developed and implemented comprehensive internal regulations including the HSE Risk ManagementRegulations, Work Safety Information Management Regulations, Process Hazard Analysis Management Regulations, Accidentand Incident Management Regulations, Factory Change Management Regulations, Contractor HSE Management Regulations,HSE Training Management Rules, Occupational Disease Prevention and Control Measures, Management Regulations forIdentication and Monitoring of Occupational Disease Hazards, and Occupational Health Surveillance and Records ManagementMeasures. These collectively form an HSE management system that comprehensively covers all aspects of OHS management.We provide work-related injury insurance for all employees and have invested CNY 1,226,300 in purchasing work safety liabilityinsurance for high-risk positions, achieving nearly 100% coverage.
The Company has established a dual mechanism for management performance evaluation and incentive compensationspecically for OHS responsibilities, ensuring e?ective implementation, e?cient operation, and continuous optimization of theHSE management system. HSE performance metrics include both outcome-based and process-based indicators: Outcome-based indicators: thousand-person injury rate, total direct economic losses from accidents, number of re/explosion incidentswith losses exceeding CNY 10,000, and new occupational disease cases. Process-based indicators: safety leadershipengagement, quantitative audit scores for work permits, alarm rate, and on-time completion rate of HSE training programs.Through scientically designed management metrics, the management can accurately identify systemic weaknesses, clarifyimprovement priorities, and drive comprehensive enhancement of OHS performance.The company adopts a risk management-centered approach, with Responsible Care as the guiding principle and safetyleadership/safety culture as the foundation, to comprehensively implement the HSE management system. Starting with inherentsafety strategies such as minimization, substitution, moderation, and simplication, we continuously improve HSE performanceto safeguard the health and well-being of employees, customers, and stakeholders, ultimately reducing or eliminating adverseenvironmental and OHS impacts during production while enhancing stakeholder satisfaction.
Executive Standards/Guidelines
Management SystemManagement ScopeCultural Concept
Driving
Force
(49+5 management regulations, 14 management rules)(16 core elements, and 63 sub-elements)(HSE Policy, and Golden Rule)
Leadership, manpower, funding, and time
HSE Policy: Safety rst, green development, full participation of all sta?, andcontinuous improvementThe Golden Rule: Compliance, intervention, and respectCore Elements: Laws, regulations and standards, institutions and responsibilities,risk management, changes, management systems...Sub-elements: Compliance management, work safety investment, factory changes,operating procedures, alarm management...
Management Regulations: HSE Risk Management Regulations,Management Regulations for Withdrawal and Use of Safety-related Funds...Management rules: Management Rules for HSE Projects, ManagementRules for Normative Documents on HSE...
Best Management Practices (Guidelines): Guidelines forPromoting the Elements of Accident and Incident Management...Tools and methods: ACT, JHA, isolation plan, quantitative review,horizontal evaluation...
NHU regards work safety as a precondition of corporate operations. The Company not only maintains rigorous internal safetymanagement but also extends compliance requirements to suppliers and contractors. We have formulated the Contractor HSEManagement Regulations and HSE Management Regulations for Related Parties, clearly requiring contractors to adhere to worksafety standards and implement operational safety protocols throughout project execution.
The Company conducts regular emergency drill exercises,exceeding regulatory requirements by mandating: monthlyemergency skill training or drills for each shift; quarterly on-site emergency handling procedures exercises for eachworkshop section; In 2024, we enhanced 97 specializedemergency response plans and 302 on-site emergencyhandling procedures, achieving 100% drill completion rate.
Work Safety
Pre-contractual
During operations
During contract signing
Conduct compliance verification of contractor qualifications andpersonnel certications, maintain valid documentation with explicitaccountability for record integrity.
Multi-tier supervision is performed by guardians, contract holders,and HSE personnel, covering: contractor pre-entry safety trainingcompliance, risk and technical safety communication e?ectiveness,tool/equipment safety, regulation/procedure adherence, safetymeasure completeness, and contractor behavioral compliance.Identified issues require immediate rectification with feedbackloops to contractors and contract holders.
HSE agreements are executed with contractors, with mandatorypre-entry safety training for all personnel and documentedsafety inspections of construction tools/equipment. Before anyoperational activity, safety condition conrmation, risk notication,and technical safety briengs must be conducted.
Enhanced
specializedemergency responseplans
on-site emergencyhandling procedures
NHU deeply recognizes the unique characteristics of the chemical manufacturing industry and its potential environmentaland social impacts. The Company has actively participated in formulating the national standard Safety Management Code forFine Chemical Enterprises, sharing its practical experience in the ne chemical eld to advance industry safety standards. Toenhance chemical safety management, NHU has established the Chemical Substance Management Regulations, implementingfull-process and lifecycle management of chemicals in production and usage. The Company systematically identies potentialrisks of different chemicals and implements targeted control measures to minimize the incidence and consequences ofaccidents.
Chemical Safety
4546
NHU places high priority on employee competency development and skillsenhancement. Guided by the talent development process of "cultivation,certication, deployment, and management", the Company has established aninternal HSE trainer development program to advance the professionalizationand capacity building of HSE personnel. In 2024, NHU implemented systematicOHS training through blended learning approaches, effectively elevatingemployees' HSE prociency and practical competencies.
In 2024, NHU delivered 209 OHS training sessionsachieving 100% employee coverage rate, substantiallystrengthening company-wide safety awareness andoperational preparedness.
CNAS accreditation refers to the certication system administered by the China National Accreditation Service for Conformity Assessment, demonstratingthat certied bodies, laboratories, or inspection agencies meet international standards in technical competence and impartiality.
OHS Training
Online Knowledge Sharing
O?ine Training
Delivered
OHS training sessions
Achieving100%
employee coverage rate
The Company developed 89 training modules including: Three Simultaneousness Management Process for ConstructionProject Safety, Three Simultaneousness Management Process for Construction Project Environmental Protection, ThreeSimultaneousness Management Process for Construction Project Occupational Health, HSE Training ManagementSystem and Work Safety Cost Management. These courses with instructional videos were uploaded to the officialXiaoXin Platform, providing exible learning resources to help employees master core OHS management competencies.
NHU organized diversied practical activities including: reghting skillscompetitions, hazard identication contests, safety knowledge quizzes,emergency response drills, and on-site emergency handling proceduresexercises. These initiatives signicantly improved employees' accidentprevention capabilities and emergency response readiness.
Case
On 10 April 2024, Shangyu NHU conductedoccupational health training for 122 employees.The session covered: relevant occupational healthregulations, occupational hazard identification,occupational hygiene management systems,and proper use and maintenance of personalprotective equipment. Post-training assessmentsdemonstrated 100% pass rate among frontlineworkshop staff, successfully achieving trainingobjectives. This initiative enhanced employees'awareness of occupational health importance andimproved risk identication/response capabilities.
Occupational Health Training by Shangyu NHU
Fireghting Skills Competitions
2024 NHU HSE Internal Trainer Training
Opening Ceremony
IndicatorData in 2024Unit
Proportion of Employees Covered by OHS Training100%Investment Amount of Work-related Injury Insurance825.11CNY 10,000Personnel Coverage Rate of Work-related Injury Insurance100%
Investment Amount of Work Safety Insurance122.63CNY 10,000
NHU consistently upholds the principle of "shared success and prosperity," creating long-term value for customers, partners,communities, and society. The Company has established a comprehensive customer service management framework thatdrives collaborative implementation of sustainable development goals across the supply chain, actively supports communitydevelopment initiatives, and contributes to building harmonious communities.
Shared Success and Prosperity
NHU maintains a steadfast commitment to customer-centric service principles, dedicated to delivering e?cient, professional, andsustainable service solutions. Through systematized customer service management, structured complaint handling mechanisms,customer satisfaction survey, and digital transformation of sales operations, the Company has achieved holistic improvements inservice quality, resulting in enhanced customer satisfaction and loyalty.
Customer Services
NHU actively promote standardized chemical management in its headquarters and subsidiaries regular chemical inventoriesare conducted to maintain comprehensive internal management records for hazardous substances. NHU requires personnelhandling hazardous chemical production, usage, and emergency response to complete mandatory job-specific safetytraining, ensuring requisite safety knowledge and operational competencies. The Company has established a Safety andEnvironmental Research Institute and formulated the Reaction Safety Risk Assessment Management Regulations, responsiblefor testing chemical reaction heat, thermal stability, and ammability/explosivity data, as well as conducting reaction safety riskassessments. In 2024, the institute achieved: 3 process hazard level downgrades and 8 optimizations of combustion/explosion-related processes. Currently, the institute has obtained CNAS
accreditation, further enhancing the Company's expertise andcredibility in chemical safety management.NHU annually commissions accredited occupational health service providers to conduct comprehensive workplace hazardmonitoring, supplemented by internal inspections. By establishing a monitoring results database and utilizing data analytics withearly-warning systems, the Company optimizes worksite conditions and conducts preemptive maintenance on deterioratingoccupational hazard control facilities. In 2024, NHU and all subsidiaries obtained ISO 45001 OHS Management Systemcertications.
Occupational Health Training for Enhanced Accident Risk Response Capability
4748
To standardize customer management processes, NHU has established the Customer Management Regulation, which:
clearly defines departmental responsibilities, workflows, and management criteria for customer management; ensures thecompleteness and accuracy of customer archive information; systematically enhances overall service quality. The company hasconcurrently optimized sales workows through its Sales Management Regulation. In brand management, NHU enforces theProduct Brand Management Regulations to standardize corporate brand identity, thereby improving brand distinctiveness andmarket competitiveness. Regular brand competency training programs are conducted to deepen employee understanding ofbrand values and ensure e?ective brand strategy execution.To guarantee after-sales service quality, NHU has instituted the Delivery & Returns Management Regulations, establishingstandardized domestic and international logistics processes that ensure timely, accurate, and efficient delivery operations.The Company proactively addresses ESG-related customer requirements by integrating sustainability into service delivery.Zhejiang NHU Special Materials Co., Ltd. has provided some customers with PPS Product Carbon Footprint Declarations andobtained ISCC PLUS certication in January 2025. Shandong NHU Industrial Park conducted full life cycle assessment (LCA
)for VE powder and VB6 products, generating relevant carbon audit certicates and reports to deliver transparent, veriableenvironmental footprint data to customers.
For customer complaint management, NHU has instituted the Customer Information Feedback Management Regulations alongwith related governance documents that dene standardized complaint handling processes:
In 2024, the Company received a total of 15 complaints regarding products and services,with a complaint handling rate of 100%.
Customer Service ManagementCustomer Complaint Management
Case
Case
NHU delivers customized product solutions to customers. To address specific requirements for feed-grade vitaminpreparations, the Company has established a cross-functional team comprising professionals from sales, R&D,and marketing. This team conducted extensive consultations with customers to comprehensively understand theirexpectations regarding product performance, quality criteria, and regulatory compliance.To ensure compliance with customer market requirements, the team performed comprehensive analysis of localfeed additive markets, including market size evaluation, competitive landscape assessment, and trend analysis.Concurrently, regulatory a?airs and technical specialists conducted in-depth reviews of local feed additive regulationsencompassing product quality criteria, vitamin type/level restrictions, and labeling/documentation specifications toguarantee full regulatory compliance. The procurement team secured reliable suppliers of vitamin raw materials toensure consistent material quality. Based on customer requirements and regulatory mandates, the R&D departmentdeveloped optimized formulations for feed-grade vitamin preparations. Rigorous testing of pilot-scale and production-scale samples demonstrated excellent vitamin stability under demanding feed processing conditions, including high-temperature, high-humidity, and extrusion environments. The product has received strong customer endorsement forsuccessfully meeting specialized market requirements.
In vitamin C production, NHU has implemented an integrated customization system spanning "demand analysis- process engineering - production delivery". To address differentiated requirements from food and nutraceuticalcustomers regarding particle size, whiteness, and stability parameters, the Company leverages customizationdemands as drivers for technological advancement. Through physicochemical characterization of reference samplescoupled with application scenario simulations, NHU has established correlation models between vitamin C qualityparameters and end-use performance, enabling the development of tailored production systems.
ComplaintAcceptance
Complaint
Handling
ComplaintTracking
The sales department communicates with customers to understand their needs and provides initial handlingresults or plans within 2 working days.
The sales department fills out the Customer Information Feedback Form and initiates the complaintfeedback and return/exchange process within the system; The quality assurance department investigatesthe reasons and prepares a report; The sales department provides feedback to the customers. Forcomplaints from "major customers", the sales manager of the business division must be notied in order toimprove response speed and e?ectiveness.
The sales department tracks the entire process from initial complaint acceptance, handling, feedback, andcomplainant's satisfaction to ensure customer satisfaction.
With a complainthandling rate of100%
To further enhance product and service quality, the Company has established the Customer Satisfaction Survey ManagementRegulations, administered by the Marketing Management Department and implemented by the Quality Assurance Departmentsacross business divisions, branches and subsidiaries. In 2024, the Company conducted comprehensive customer satisfactionsurveys encompassing product performance, brand perception, and service delivery, achieving an annual Customer SatisfactionIndex (CSI) of 92.64. For identied areas of dissatisfaction, the Company has developed improvement recommendations andaction plans to drive continuous optimization of the quality management system.
To establish precise customer proles and deliver enhanced service experiences, the Company is accelerating its intelligentsales transformation. In 2024, the Company fully implemented intelligent sales systems and established non-intelligent factoryproduction-sales modules to achieve operational synergy. Concurrently, we have consolidated global customer resourcesthrough standardized information management and service process optimization, delivering more efficient and accessibleservice solutions for overseas customers.Through systematic customer service management, streamlined complaint handling mechanisms, comprehensive satisfactionsurvey, and intelligent sales transformation, we have established transparent and sustainable service frameworks thatstrengthen long-term customer relationships.
Customer Satisfaction Survey
Intelligent Sales
LCA: Life Cycle Assessment, a systematic tool evaluating the environmental impact of products/services across their entire lifecycle—from raw materialextraction to nal disposal.
Development of Customized Feed-Grade Vitamin Preparations
Customized Production of Vitamin C
4950
Through technology sharing and collaborative R&D models, NHU actively empowers capacity building across the industrialchain to accelerate sustainable development and innovation-led upgrading. Our approach encompasses: (1) UpstreamEmpowerment: Deploying technical teams and sharing quality management expertise to enhance suppliers' manufacturingprocesses and product quality. (2) Downstream Collaboration: Co-developing market-driven solutions by integrating our materialscience capabilities with customers' application scenarios through joint R&D initiatives.By cultivating an open and collaborative industrial chain ecosystem, NHU achieves high-quality development while generatingmultiplier value for upstream and downstream partners, collectively advancing industrial competitiveness.
NHU recognizes that standardization constitutes the fundamental pillar for the healthy and orderly development of industries.Through technological innovation and industrial implementation, we proactively share our expertise and achievements toadvance industry standardization. To date, NHU has chaired or participated in formulating 34 national standards, 10 industrystandards, and 35 association standards, spanning multiple sectors including chemical industry, pharmaceuticals, and foodmanufacturing, providing crucial support for technological advancement and product quality enhancement across theseindustries.Committed to an open cooperation philosophy of shared success and prosperity, NHU synergizes with cross-industry partners toco-advance technological progress and sustainable development.
Through technological innovation and resource sharing initiatives, NHU empowers partners throughout the industrial valuechain, facilitating comprehensive industry advancement. The Company actively engages in industry standard development,disseminates best practices, and promotes green transformation across sectors. Through global cooperation and industry-academia-research synergies, we deliver high-quality products and solutions to international customers, contributing tothe establishment of robust and sustainable industrial ecosystems. During the reporting period, NHU organized 23 expertsymposiums featuring distinguished specialists, participated in 44 industry conferences and exhibitions, completed 36technology and equipment integration projects, and conducted in-depth evaluations of 144 product technologies, 56 enterprises,and 8 industrial sectors. To accelerate the internationalization of R&D and production capabilities, we continuously monitorglobal technological trends and expand international collaboration channels, thereby solidifying the foundation for our globalstrategic deployment.Assistance to Upstream and Downstream Enterprises
Industry Standard Setting
Industry Empowerment and Ecological Co-construction
NHU chaired or participated in formulating
national standards
Organized
expert symposiumsfeaturing distinguished specialists
Completed
technology andequipment integration projects
Industry standards
Participated in
industryconferences and exhibitions
Association standards
NHU has consistently prioritized promoting sustainable advancement in global industries through global expansion strategies,industry-academia-research collaboration, and technological innovation. This approach empowers the entire industry chain andinjects renewed vitality into industrial development. Guided by the core philosophy of "market-driven demand and integratedcollaboration," NHU has established a technological innovation system characterized by enterprise leadership, marketorientation, and industry-academia-research partnerships, collaborating with global partners to accelerate industrial upgradingand low-carbon development. Regarding global operations, the Company strengthens its multinational footprint through strategicoverseas investments and overseas R&D center establishments, fostering synergistic partnerships to bolster sustainableindustry development.
Empowering Industrial Development
Case
NHU actively participates in global industry exchanges and is committed to advancing technological progress andsustainable development within the pharmaceutical sector. In 2024, the Company made its debut at CPHI Korea,the international pharmaceutical ingredient exhibition hosted at Seoul's COEX Convention & Exhibition Center.NHU showcased its core pharmaceutical-grade products including Vitamin C, Vitamin E, Vitamin B6, MoxifloxacinHydrochloride, and Ibuprofen, along with nutritional health solutions such as food-grade Vitamin C and CoenzymeQ10. The Company's high-quality products and innovative solutions garnered substantial attention and receivedunanimous acclaim from both domestic and international attendees.This participation not only elevated NHU's brand recognition in the global pharmaceutical ingredients market but alsoestablished e?ective communication channels with international customers and partners. Through in-depth discussionswith industry experts and global buyers, NHU gained valuable insights into emerging market demands and industrytrends, which will inform future product R&D and market expansion strategies. The Company also demonstratedits innovative capabilities in sustainable pharmaceutical ingredients and nutritional health solutions, reinforcing itscommitment to industry-wide sustainable development.
Case
To address persistent quality challenges in a specic fragrance ingredient, NHU deployed a dedicated technical teamto conduct on-site capacity building at the supplier's facility. Through systematic process optimization including reactionparameter renement and purication technology enhancement, the six-month collaborative intervention successfullyelevated the compliance rate of critical quality parameters, establishing a robust foundation for high-performancefragrance product development.
Improving Product Quality for a Specic Fragrance Ingredient Supplier
Fostering Global Partnerships: NHU's Strategic Participation in CPHI Korea
5152
Case
Case
In 2024, NHU successfully hosted the "2024 Petrochemical Industry Innovation Summit: Exemplary EnterprisesExchange" in Xinchang, Zhejiang, organized under the auspices of China Petroleum and Chemical Industry Federation(CPCIF). The summit convened industry leaders to explore collaborative innovation pathways and share best practicesin sustainable development.Mr. Hu Baishan, Vice Chairman and President of NHU, presented an overview of the Company's businessdevelopment and innovation achievements in his speech. He sincerely expressed the hope to establish closer ties withenterprise representatives and expert professors, to jointly explore cooperation opportunities, share resources, sharerisks, and pursue mutual development.
NHU played a signicant role as a principal sponsor of the 10th IUPAC International Conference on Green Chemistry,held under the theme "Advancing Carbon Neutrality through Sustainable Chemistry" at the Beijing InternationalConvention Center. Co-organized by the Chinese Chemical Society, the Institute of Chemistry at the ChineseAcademy of Sciences, and the Interdivisional Committee on Green Chemistry for Sustainable Development under theInternational Union of Pure and Applied Chemistry (IUPAC), the event attracted global scientic leaders.At the conference, NHU's exhibition booth served as a hubfor knowledge exchange, drawing specialists, researchers,academics, and industry professionals. NHU demonstratedits capabilities, shared the latest scientific achievements, andgained fresh inspiration and new knowledge from global experts.Moving forward, NHU will continue upholding the philosophyof open cooperation, actively collaborating with global industrypartners and experts to jointly explore cutting-edge scientifictechnologies, promote the development of green chemistry, andcontribute NHU's solutions to sustainable development goals.Honorary Dean of NHU Research InstitutePresents NHU's Green Chemistry Innovations
Speech by Mr. Hu Baishan, Vice Chairman and
President of NHU
As an innovation-driven enterprise, NHU remains steadfast inits dual-core strategy of "Chemistry+" and "Bio+". Guided by theprinciples of integrated development and product diversication,the Company focuses on three strategic pillars: life sciences,new energy, and green and low-carbon technologies.NHU continues to strengthen industry-academia-researchcollaboration while maintaining global perspectives in technicalplanning and innovation ecosystem development.
NHU is committed to establishing a responsible and sustainable supply chain system. Through stringent supplier qualication,auditing, and risk management mechanisms, we ensure compliance with quality, environmental, and social responsibilityrequirements while enhancing supply chain sustainability.
Responsible Supply Chain
NHU has established a rigorous supplier qualication and screening system in strict compliance with internal policies such asthe Supplier Management Regulations under the Purchasing Department. This system mandates comprehensive assessmentsof suppliers' operational status, certifications, and management systems covering quality, environmental protection, andoccupational safety. Adhering to the principles of fairness and equity, NHU evaluates all suppliers against uniform criteriaregardless of their size, thereby ensuring transparency and impartiality in supplier selection. Based on material risk classication(Category A/B/C), NHU implements a multi-stage evaluation process including pilot testing, mass production trials, and on-siteaudits. This ensures both material quality and suppliers' production & quality control capabilities align with the company's internalcontrol standards. Suppliers admitted into the qualied vendor system are required to execute binding agreements includingthe Environmental and Occupational Health & Safety Commitment, Code of Ethical Business Conduct, and Integrity and FairCompetition Agreement, thereby reinforcing their social responsibility obligations. NHU requires suppliers to strictly adhere toenvironmental regulations, safeguard employees' OHS, and uphold ethical business practices. This collaborative approachfosters a fair, transparent, and sustainable supply chain ecosystem. During the reporting period, there were no incidents ofdelayed payments to small and medium-sized enterprises.
Supplier Management Mechanism
IndicatorData in 2024Unit
Total Number of Suppliers4,192Nos.Suppliers' Signing Rate of Integrity Agreements100%
Annually in December, NHU conducts comprehensive performance evaluations for all suppliers. Evaluations for raw materialsand auxiliaries suppliers are jointly performed by production workshops, quality assurance departments across productionbases, warehouse operations teams, and the purchasing department. Equipment suppliers are assessed by the equipmentmanagement division in collaboration with the purchasing department. The rating system categorizes suppliers into four tiers:
Excellent, Good, General, and Unsatisfactory. Subsequent risk assessments and procurement decisions are formulated basedon these evaluation outcomes.All production bases and business divisions implement batch-by-batch incoming inspection for raw materials and auxiliaries,with strict quality compliance verication prior to warehouse acceptance and production usage. Each base's Quality AssuranceDepartment establishes annual supplier audit plans aligned with operational requirements. Primary raw material suppliersundergo on-site audits every three years, while secondary suppliers complete desk audits through standardized questionnairesevery six years.
Supplier Performance Evaluation
Daily Audit of Suppliers
NHU prioritizes supply chain quality management. Focusing on critical areas such as product quality, technical standards, andenvironmental requirements, the Company provides customized professional training and technical guidance to suppliers asneeded, supporting them in enhancing production capabilities and management competencies. The Company is committedto establishing collaborative partnerships with suppliers. Through knowledge sharing and capacity building, it drives theenhancement of overall supply chain competitiveness.Our production bases and business divisions conduct periodic on-site training workshops to ensure supplier alignment withevolving quality criteria, operational protocols, and industry standards. Training modules encompass technical specications,quality testing parameters, environmental regulations, and work safety standards, enabling comprehensive optimization ofsuppliers' quality management, work safety, and sustainability performance.
Supplier Training
NHU Hosts 2024 Petrochemical Industry Innovation Summit: Exemplary Enterprises Exchange
NHU Showcases Sustainable Solutions at International Green Chemistry Conference
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NHU conducts thorough risk assessments for new suppliers, evaluating critical factors including production capacity, productionprocesses, equipment and facilities, quality control, geographic location, transportation methods, and delivery timelines. TheCompany requires suppliers to submit environmental impact assessments (EIA) and safety assessment reports to evaluate theirenvironmental and safety risks. Approved suppliers must complete the standardized Supplier Risk Assessment Form, followedby systematic evaluation through on-site audits and documentation reviews addressing quality, commercial, nancial, EHS, anddelivery risks.According to the risk level, the Company implements di?erentiated control: High-risk suppliers are subject to semi-annual on-site audits or documentary reviews, medium-risk suppliers to annual evaluations, and low-risk suppliers undergo reviews whencircumstances require. Should irremediable risks be identied during evaluation, the Company will promptly terminate businessengagements to safeguard supply chain integrity and operational continuity.
NHU steadfastly upholds its core mission of "Creating Wealth, Elevating Employees, and Beneting Society". While pursuinghigh-quality development, the Company actively participates in public welfare initiatives. Through concrete actions includingeducational donations, healthcare burden reduction programs, and rural revitalization e?orts, NHU earnestly fullls its corporatesocial responsibilities. We not only focus on operational performance but also commit to generating long-term societal value.In 2024, our public welfare and charity contributions totaled approximately CNY 2.56 million. Additionally, the foundation hasallocated approximately CNY 300,000 to rural revitalization initiatives, injecting new vitality into social development.
Supply Chain Risk Management
Public Welfare and Charity Undertakings
Public welfare and charity contributionstotaled approximately CNY
2.56
million
The foundation has allocated approximatelyCNY300,000
to ruralrevitalization initiatives.
The Company's products are exported to over 100 countries and regions worldwide, spanning Southeast Asia, South Asia, theMiddle East, Africa, Central Asia, Russia, and other markets along the Belt and Road Initiative. Within this extensive operationalfootprint, we prioritize both product/service quality enhancement and active community engagement. Through educationalsupport, livelihood improvement programs, and community development initiatives, NHU implements global public welfare andcharity activities that contribute to building a harmonious and sustainable society.
Case
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Addressing age-related immune system vulnerabilities, NHU donated vitamins and nutritional supplements valuedat over CNY 500,000 to Kaihua County's health and nutrition improvement program. This initiative not only improvesquality of life for elderly residents a?ected by health-related poverty but also elevates community health awareness.
In 2024, NHU supported the "Nodule-Free" Lung Cancer Prevention campaign, providing free health screenings throughprofessional medical teams to enhance public health awareness. Our e?orts assisted 49 individuals facing healthcareaccessibility challenges to obtain medical relief.
Case
Case
Case
This year, NHU provided nancial assistance to six academically outstanding students from economically disadvantagedfamilies admitted to Tsinghua University and Peking University, facilitating their enrollment and supporting theachievement of their academic aspirations.
In alignment with China's common prosperity initiative, NHU has proactively implemented the "Third Distribution"mechanism through strategic philanthropic investments. Key programs include the Sertar County Basic Support Fund(targeting underdeveloped regions), the Qixing Subdistrict Common Prosperity Partnership, and the Community CharityEndowment Fund. These initiatives are designed to stimulate regional economic growth and enhance social welfaresystems. These programs not only provide local residents with employment opportunities and sources of income, butalso promote exchanges and cooperation among di?erent regions, contributing to the building of a harmonious society.
NHU's employees actively participate in volunteer services. They have established three volunteer service teamsand ve volunteer associations, which continuously visit local community streets, nursing homes, schools, and otherinstitutions to carry out volunteer services such as street cleaning, home appliance repair, free haircuts, and thepopularization of scientic knowledge.
NHU is committed to building a sustainable supply chain ecosystem, targeting 100% ESG integration with strategicsuppliers by 2025. Our enhanced supplier screening process now incorporates ESG due diligence, systematicallyevaluating suppliers' sustainability performance across environmental, social, and governance practices. This holisticapproach drives collective progress toward sustainable supply chain development.
Caring for Elderly Health: Donating Vitamins and Nutritional Supplements
Assisting Healthcare Burden Reduction and Health Check-Ups
Assisting Students to Achieve Their Dreams and Supporting Impoverished Students
Promoting Common Prosperity and Supporting Local Development
Volunteer Service, Spreading Positive Social Energy
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Compared to theprevious year, theenergy consumptionintensity decreased by
7.67%
Compared to the previousyear, the amount of wastewaterdischarge per output value ofCNY 10,000 decreased by
8.20%
All wastewater and waste gaseswere discharged in compliance withstandards, and hazardous waste aredisposed of legally
Compared to theprevious year, the CODper output value of CNY10,000 decreased by
6.50%
The water recyclingutilization rate was
96.30%
Our Actions
Our Performance
Sustainable Environment
Facing the challenges of climate change, resource depletion, and environmental degradation,NHU actively aligns with China's national strategy of "carbon neutrality" and "carbon peaking."We engage extensively in global climate change action initiatives, comprehensively advance thee?cient utilization of energy and resources, and strive to establish an eco-friendly enterprise.
Contribution to SDGs
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Low-carbon Transformation
Responding to Climate Change
Governance
Climate Strategy
Identication and Management of Climate Risks and Opportunities
Guided by our low-carbon development principles of "Green Transition, Energy E?ciency Enhancement, Smart Management,and Continuous Improvement", NHU drives the transition of the energy structure and reduction of GHG emissions. We rigorouslyimplement low-carbon and clean production practices while reducing the carbon emissions.
NHU consistently considers climate change response as a corporate imperative. We prioritize climate-related topics at thestrategic level, and systematically enhance our climate risk management mechanisms. In this reporting year, we conductedclimate risk and opportunity assessments in alignment with the TCFD framework. These ndings inform our climate changestrategy development and goal-setting process, enabling more e?ective climate change risk mitigation.
We have established a climate-related governance mechanism that clearly denes the principal and supporting departmentsfor climate change topics. The Company proactively identies climate risks and opportunities, develops mitigation strategies,and implements product carbon footprint management. We are committed to enhancing carbon emission performance acrossthe entire value chain and reducing climate change impact. Furthermore, we have institutionalized GHG reduction through theformulation of regulatory documents, including the Carbon Management Manual, Energy Conservation and Carbon ReductionManagement Regulations, Carbon Emission Monitoring Regulations, and Carbon Information Disclosure Guidelines.The Company has implemented a ve-tier climate change governance structure comprising the Board of Directors, StrategyCommittee, ESG Management Committee, ESG O?ce, and ESG working groups. When formulating major strategic plans andreviewing risks and opportunities, the Board of Directors and the Strategy Committee comprehensively consider climate-relatedrisks to ensure full integration of climate strategy and risk management into business development. The ESG ManagementCommittee, operating under the Strategy Committee, assumes direct responsibility for climate-related a?airs. Its responsibilitiesinclude evaluating climate change risks/opportunities, overseeing strategy implementation, and providing regular reporting to theBoard of Directors.The ESG Office executes resolutions from the Board of Directors, Strategy Committee, and ESG Management Committee.It conducts periodic climate risk/opportunity assessments, monitors implementation progress of climate initiatives, ensuresachievement of climate-related goals, and reports regularly to the ESG Management Committee. The ESG working groups driveimplementation of specic climate change related tasks, systematically collect operational data, and submit progress reports tothe ESG O?ce. To strengthen carbon management, we have established a dedicated Carbon Management Task Force underthe ESG working groups. This specialized unit develops carbon management systems, conducts carbon footprint verication,and ensures data accuracy and integrity throughout emission reporting processes.
NHU closely tracks global climate policy dynamics and action initiatives. By aligning corporate operations with mainstreamclimate scenario analysis frameworks, the Company systematically identies, assesses, and responds to climate change risksand opportunities. Deeply embedding climate governance into strategic planning, NHU continuously strengthens its climateresilience while advancing the climate change response capabilities of its supply chain partners. In alignment with strategicdevelopment goals, operational characteristics, and value chain impacts, we have established a comprehensive mechanism foridentifying climate risks and opportunities. This includes in-depth analysis of material climate change risks along with potentialopportunities, coupled with nancial impact assessments to inform scientic decision-making for sustainable development.
Through a comprehensive assessment of climate risks, we have not only identied climate-related risks and opportunities butalso systematically identied, prioritized, and managed both physical and transition risks that may a?ect corporate assets. Thisprocess has enabled the formulation of targeted response measures.We have established clear timeframes for climate-related risks and opportunities: dening 1–2 years as short-term, 3–5 years asmedium-term, and over 5 years as long-term. The key climate-related risks and opportunities identied are as follows:
Risk CategoryPotential ImpactResponse MeasuresTimeframe
AcuteRisks
Typhoon &Rainstorm
Coastal production bases mayface operational stoppages due toextreme weather (e.g., typhoons,rainstorms), a?ecting thetimely delivery of time-sensitiveproducts.
Implement typhoon-resistant upgrades at coastalproduction bases to enhanceclimate resilience.
Short-term
Floods &Waterlogging
Low-lying factory areas arevulnerable to oods andwaterlogging. Water ingressinto workshops and prolongedcommissioning periods may resultin economic losses.
Establish a climate early-warning system andmonitor real-time drainageinfrastructure.
Short-term
ChronicRisks
Sustained HighTemperatures
Prolonged high temperatures mayraise workshop cooling costs,increase refrigeration energyconsumption, and impact thestability of biological products.
Develop heat-resistanttechnologies and optimizerefrigeration systems.
Long-term
Arid Climate &Water Scarcity
High water intensity in chemicalproduction could escalate costsduring prolonged droughts.
Construct emergency waterstorage facilities, reduce per-unit water usage throughR&D, and improve waterrecycling rates.
Mid-term
Sea-Level Rise
Rising sea levels may increaseinsurance costs for coastalinfrastructure and threaten worksafety and stability.
Strategically plan new factorysites and adopt a "1+N"distributed warehousingmodel.
Long-term
Physical Risks and Counter-measures
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Risk CategoryPotential ImpactResponse MeasuresTimeframe
Policy andLegal Risks
Environmental
RegulationUpgrades
Stricter emission requirements fromevolving international and domesticenvironmental regulations maynecessitate continuous investment inenvironmental facility upgrades.
Continuously optimizeenvironmental protectioninfrastructure to ensure timelyregulatory compliance.
Mid-term
InternationalGreen TradeBarriers
Policies such as the EU CarbonBorder Adjustment Mechanism(CBAM) may indirectly impact exportproduct competitiveness.
Enhance carbon emission datamanagement, optimize energymanagement systems, conductcarbon tari? stress tests, anddevelop advanced market pricingstrategies.
Mid-term
Carbon Pricing
and Taxation
Rising carbon costs across theindustrial chain may increaseoperational costs for chemicalenterprises.
Employ innovative nancialinstruments and actively participatein carbon markets.
Mid-termTechnicalRisks
Low-carbonTechnologyTransitionPressure
Green technology R&D has becomea critical competitive factor, whiletraditional processes may faceobsolescence risks.
Increase R&D investment, anddrive innovation in energy-e?cient processes and carbonmanagement technologies.
Long-termMarketRisks
MarketDemandTransformation
Downstream customers andconsumers increasingly demandproducts with stronger greencredentials.
Conduct climate resilienceassessments and carbon emissionmanagement for key raw materialsuppliers.
Short-termReputationRisks
GrowingEnvironmentalAwareness
Inadequate carbon reduction e?ortsmay damage corporate reputation.
Strengthen environmentalinfrastructure to ensure regulatorycompliance and preventenvironmental incidents.
Long-term
OpportunityTransformation StrategyTimeframe
Product
Green Technology Product Development: Leverage technological expertise toaccelerate development of bio-based materials, biodegradable materials, and relatedproducts.Clean Energy Utilization: Promote large-scale adoption of clean energy sourcesincluding biomass energy, optimize energy mix, and reduce product carbon footprint.
Mid-term
Market
International Market Expansion: Mitigate embodied carbon emissions in exportedproducts and reduce potential carbon tari? impacts through supply chain decarbonization.
Mid-termCarbon Trading
Carbon Asset Development & Trading: Identify viable emission reduction opportunitiesfor carbon asset development, generating additional revenue through carbon assetcreation and carbon market participation.
Long-term
Transition Risks and Countermeasures
Climate Change Opportunities
Risk ManagementNHU has integrated climate change risks into its strategic risk management framework, with regular reporting to the Boardof Directors. The Company actively tracks developments in China's Dual Carbon Policy and global sustainable supply chainstandards to promptly identify regulatory changes, climate-related risks, and opportunities relevant to corporate growth.
Aligned with the TCFD framework, NHU has embedded climate governance within its Enterprise Risk Management (ERM)system. By establishing a Climate Risk & Opportunity Management Regulations, the Company follows a four-phase closed-loopmanagement system: Risk Identication - Quantitative Assessment - Strategic Response - Performance Monitoring.
Climate Risk Identication Process
Indicators and GoalsThis year, we have advanced the verication of GHG emissions and enhanced carbon emission data management systems,laying a solid foundation for future carbon reduction e?orts.
Identify physical risks (including high temperatures, extreme cold, long-term precipitation, extremesnowfall, floods, wildfires, etc.) and transformation risks (including policies and laws, technology,markets, reputation, etc.) that may affect the production, operation, and commercial goals of NHU,understand the potential causes and consequences of risks, and form a list of climate risks andopportunities of NHU.Measure the physical risks of climate change to NHU with "xed assets" and "income" as key indicators,and rank them according to the risk levels of "extremely low, low, moderate, high, and extremely high";Make qualitative analysis of transformation risks and evaluate the potential impact of future policy,technological, and market changes on NHU.Monitor the development trends of climate-related regulations, policies, markets, etc., regularly evaluatethe impact of physical and transformation risks, and implement climate risk response measures toreduce or avoid climate change risks.
The management regularly oversees the e?ectiveness of climate risk response measures and the progressof related goals, and optimizes strategies to ensure the timely achievement of climate goals.
Corporate Level
Completed Scope 1 and Scope 2 GHG emissionsinventories for all subsidiaries in 2024; Achieved aRating B in the CDP Climate Change Questionnairesubmission.
Product Level
Conducted carbon footprint verication for 36 products(ISO 14067:2018 certified); Performed LCA dataaccounting for 32 product specifications across 14major categories.
Climate RiskIdentication
Climate RiskAssessment
Climate RiskManagement
Climate RiskOverseeing
6162
NHU continuously optimizes its energy management system to enhance energy e?ciency and increase clean energy adoption.We have established a four-tier energy management structure. This structure ensures the e?ective implementation of energyconservation initiatives. The President holds ultimate accountability for energy management, while the Vice President (incharge of operations) oversees and coordinates energy management e?orts, and supervise the implementation of the energymanagement system. The Production & Operations Department leads the implementation of strategic energy plans and policydecisions.We have established an energy management system documentation, including the Energy Management Manual, EnergyManagement Regulations, and Energy Conservation Protocols. These establish clear accountability matrices, dene energyrelated goals and performance metrics, and institute audit mechanisms to ensure standardized and e?cient energy utilization,thereby enhancing sustainable production capacity. Regular energy conservation training programs engage employees,transforming compliance into proactive participation across all operational processes. This year, NHU accelerated thestandardization of energy management across its facilities, with Shandong NHU Vitamins Co., Ltd. being recognized as a 2023Energy Conservation Exemplary Enterprise by the Weifang Municipal Government.We implement annual energy consumption targets with regularly progress reviews to ensure tangible outcomes.
NHU has incorporated climate-related risks into its strategic risk management framework, accounting for operationalcharacteristics, asset distribution, and potential climate impacts. The Company continuously monitors key climate indicators—particularly GHG emissions and intensity—and systematically quanties carbon data to proactively identify and mitigate emissionchallenges.
Based on operational realities and aligned with climate strategies, NHU has established the following quantitative climate goalsto advance low-carbon development. The Company will implement regular carbon inventory audits, systematically track goalprogress, and execute tailored mitigation measures.
GHG emissions are calculated in strict compliance with ISO 14064-1:2018 Greenhouse Gases - Part 1: Specication with Guidance at the Organization Level for Quantication andReporting of Greenhouse Gas Emissions and Removals.
Compared to the 2023 baseline, decrease the carbon emission intensity per unit of products25% by 2030.
IndicatorData in 2024Unit
Scope 1 GHG emissions765,023.45Ton of carbon dioxide equivalentScope 2 GHG emissions2,018,419.37Ton of carbon dioxide equivalentTotal GHG emissions
2,783,422.82Ton of carbon dioxide equivalentGHG emission intensity2.02Ton of carbon dioxide equivalent/ton of production
2024 Energy Consumption TargetTarget Achievement Status2025 Energy Consumption Target
Compared with the previous year, theenergy consumption per output valueof CNY 10,000 will decrease by no lessthan 5%.
Achieved
Compared with the previous year, theenergy consumption per output valueof CNY 10,000 will decrease by no lessthan 5%.
Energy Utilization
Energy E?ciency ImprovementNHU is committed to achieving efficient utilization of energy and resources. As a strategic priority, the Company hasimplemented energy digital transformation and is advancing the Smart Energy Control Platform to enable intelligent and renedenergy management. This platform facilitates real-time monitoring and analysis of energy consumption data, optimizes energyallocation strategies, and signicantly enhances energy e?ciency. Additionally, the Company has established a comprehensiveenergy consumption indicator management system for production processes. Through digital technologies, it precisely controlskey energy consumption nodes to ensure continuous optimization of all energy performance metrics.
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Expanded Utilization of Renewable EnergyNHU is advancing clean energy integration, achieving 45.58 million kWh of clean electricity utilization in 2024 (including greenpower certificate purchases), substantially decreasing traditional energy dependence. Our photovoltaic power generationprojects across production bases have installed 11.73 MW of solar capacity, delivering 26,000 tons of annual carbon reductions.
In clean transportation, NHU actively adopts green logistics methods such as belt conveying systems and electric trucktransportation, which have substantially increased the proportion of clean energy in inbound and outbound logistics. Theseinitiatives enhance energy e?ciency and reduce carbon emissions throughout the transportation process.Within the biofermentation sector, NHU utilizes renewable corn as a raw material to produce target molecules through advancedmicrobial fermentation technology. By leveraging cell metabolism-based production, the Company drives the strategic transitionfrom fossil fuels to renewable energy sources.
Achieving
45.58
million kWh of cleanelectricity utilization in 2024 (includinggreen power certicate purchases)
Our photovoltaic powergeneration projects acrossproduction bases have installed
11.73
MW
Delivering26,000
tons of annualcarbon reductions
Additionally, NHU innovatively recycles biogas from wastewater treatment stations toreplace traditional fossil fuels. Through the integrated utilization of biogas in productionprocesses and eco-friendly combustion systems, the Company has reduced theconsumption of coal powder and natural gas. In 2024, NHU utilized 11.40 millionstandard cubic meters (SCM) of biogas, achieving an annual carbon reduction of 18,000tons.The Company plans to expand investments in clean energy infrastructure and optimizethe energy structure across its operations.In 2024, NHU achieved a 7.67% reduction in energy consumption intensity compared tothe previous year, reecting signicant energy-saving progress.
The standard used for calculating energy consumption is the General Rules for Calculation of Comprehensive Energy Consumption(GB/T2589-2020).
NHU utilized
11.40
millionstandard cubic meters(SCM) of biogasAchieving an annualcarbon reduction of18,000
tons
IndicatorData in 2024Unit
Total Energy Consumption
809,200Ton of standard coalDirect Energy Consumption560,600Ton of standard coalIndirect Energy Consumption248,600Ton of standard coal
2024 Environmental Management Targets
Target Achievement
Status
2025 Environmental Management
TargetsCompared with the previous year, the COD per outputvalue of CNY 10,000 will decrease by ≥ 5%.
Achieved
The COD per output value of CNY 10,000 willdecrease by 5%, compared with 2024.Compared with the previous year, the wastewateramount per output value of CNY 10,000 will decrease
by ≥ 2%.
Achieved
The wastewater amount per output value ofCNY 10,000 will decrease by 2%, comparedwith 2024.All wastewater and waste gases were discharged incompliance with standards, and hazardous waste are
disposed of legally.
Achieved
All wastewater and waste gases weredischarged in compliance with standards,and hazardous waste are disposed of legally.
Harmony with Nature
Environmental Management
NHU strictly complies with environmental protection laws and regulations in all jurisdictions where we operate, including theEnvironmental Protection Law of the People's Republic of China, the Law of the People's Republic of China on the Preventionand Control of Atmospheric Pollution, and the Law of the People's Republic of China on the Prevention and Control ofEnvironmental Pollution by Solid Waste. We implement rigorous environmental management throughout production andoperations, promote green o?ce initiatives, and continuously strengthen environmental awareness among all employees.
NHU recognizes the Board of Directors' pivotal role in environmental management, and has clearly defined environmentalresponsibilities across all management levels and departments. By integrating the ISO 14001 Environmental ManagementSystem and operational realities, the Company has established a HSE management framework. This framework has beeninstitutionalized through the NHU HSE Management Manual, which contains 20 environmental management documentscovering policy formulation, target setting, regulatory compliance, operational procedures, and emergency response protocols.Specic emergency plans including the Emergency Response Plan for Environmental Incidents and the Special EmergencyPlan for Hazardous Waste Incidents have been developed to enhance incident response capabilities and maintain an accident-free record. The Company conducts annual internal environmental audits to verify e?ective implementation of its environmentalmanagement systems.The Company has prepared Environmental Risk Assessment Report and Environmental Emergency Resource InvestigationReport to promptly identify and rectify potential environmental non-compliances, continuously enhancing pollution monitoringand emergency response capabilities. This ensures rapid, accurate reactions during environmental emergencies to minimizeecological impact. During the reporting period, all NHU production bases maintained ISO 14001 certication, with zero majorenvironmental incidents or penalties.NHU establishes annual environmental management targets with progress tracking mechanisms, incorporating environmentalperformance into all employees’ compensation metrics to ensure e?ective implementation. In 2024, the Company successfullyachieved all its environmental targets, realizing a 6% year-on-year reduction in COD and an 8% decrease in wastewaterdischarge per output value of CNY 10,000 compared to the previous year.
NHU has established a comprehensive HSE training system by formulating and implementing the HSE Training ManagementRules to ensure that the environmental awareness and skills of all staff members meet the job requirements. In 2024, theCompany achieved 100% coverage through systematic environmental training programs for all sta?. For new employees, theCompany implements an "Environmental Access" mechanism, requiring completion of mandatory environmental training hoursand passing competency assessments before obtaining formal job qualication. Prior to equipment maintenance, the Companyconducts specialized environmental training for contracted maintenance personnel, mandating strict adherence to corporateenvironmental management requirements during maintenance activities. The Company routinely supervises and inspects theimplementation of environmental protection measures at maintenance sites.
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Clean Production
NHU has continuously enhanced its clean production management system. In 2024, the Company revised and issued theSolid Waste Management Regulations to comprehensively advance the "reduction, valorization, and harmless disposal" ofsolid waste. Through collaborative R&D and the introduction of internationally advanced three-waste disposal technologies andequipment, NHU has progressively increased waste valorization e?ciency, establishing a solid foundation for developing eco-friendly factories. Adhering to the full-process clean production principle of "source reduction, process control, and end-of-pipetreatment," the Company strengthens fundamental process research and optimizes production workows to minimize wastegeneration and discharge. Leveraging vertical integration advantages across its value chain, NHU actively develops greenprocess technologies that enable circular utilization of intermediates, catalysts, and by-products. This has resulted in signicantreductions in wastewater, waste gas emissions, solid waste discharge, and production-related pollutant emissions.
NHU has achieved notable progress in waste valorization. By implementing comprehensive measures through new technologiesand scientic management systems, the Company has systematically advanced waste reduction, valorization, and harmlessdisposal. For general solid waste, NHU has established recycling mechanisms and external collaboration systems to achievezero-landll disposal. Notably, several production bases of NHU have attained 100% comprehensive utilization of general solidwaste. In alignment with Zhejiang Province's "Near-Zero Landll" Three-Year Campaign for Hazardous Waste Management,Zhejiang NHU Pharmaceutical Co., Ltd. has pioneered a y ash valorization initiative. This innovation has reduced hazardouswaste landll volume by 31.80% year-on-year in 2024, substantially mitigating environmental impacts.The Company has set the goal of "reducing hazardous waste generation intensity 10% by 2030 against the 2023 baseline," andare committed to continuously minimizing hazardous waste emissions to mitigate environmental pollution.NHU proactively adopts new materials, process, technologies and equipment to improve operational e?ciency of equipment.The Company prioritizes energy-e?cient equipment selection, process optimization, and environmental technologies to reduceboth energy consumption and environmental pollution. Through comprehensive energy integration strategies encompassingheat coupling and steam-water balance optimization, NHU actively employs advanced control technologies, utilizing intelligentcontrol systems and sensor technologies to monitor the operating conditions and energy consumption of equipment in real time.By conducting intelligent adjustments and optimized control, we enhance the automation rate of equipment, thereby reducingenergy consumption and improving operational e?ciency.
Waste Gas Management
Waste Management
NHU attaches great importance to waste gas treatment, especially in the management of unorganized waste gas in the factoryareas. It has implemented e?cient and sustainable solutions to advance the construction of "odor-free factories".Case
Heilongjiang NHU Biotechnology Co., Ltd. ("Heilongjiang NHU") has implemented a systematic managementframework encompassing source reduction, process control, and end-of-pipe treatment. The implementation ofunorganized waste gas collection and treatment from anaerobic tanks, coupled with the incineration of collected gases,has fundamentally resolved odor issues in the surrounding areas and ensured compliant exhaust emissions.
Conduct research on clean productionprojects such as fly ash optimizationand salt-containing wastewaterdezincication to reduce the pressureon end treatment.
Pollution Prevention at Source Process Control End-of-pipe Treatment
Establish a quantiable multi-dimensionalenvironmental evaluation plan in terms ofwastewater, waste gas, solid waste, andenvironmental hazard identication.
Explore paths for hazardous wastedisposal and achieve zero storage insolid waste warehouses.Renovate the pre-treatment systemof the sewage station to enhance thesewage treatment capacity.
Heilongjiang NHU Waste Gas Management
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Circular Economy
Green O?ce
Management of Water Resources
NHU adheres to a green operation philosophy and fully implements the circular economy model. We enhance the utilizationof renewable resources and advance the deep integration of chemical products with biotechnology, contributing to industryprogress and ecological sustainability.
NHU actively implements green o?ce practices by optimizing the management of air conditioning, lighting, water systems, andother facilities while cultivating employee awareness of resource conservation. Additionally, the Company has adopted paperlesso?ce initiatives through digital and intelligent platforms to reduce paper consumption, enhance operational e?ciency, minimizeresource waste, and establish a high-e?ciency, low-carbon green o?ce ecosystem. NHU encourages employees to adopt greencommuting practices by installing EV charging stations across its industrial parks. The Company has developed photovoltaic (PV)projects on vacant land, parking sheds, and o?ce building rooftops, utilizing green power for lighting. In 2024, the ShandongNHU Pharmaceutical Base PV-integrated parking facility was commissioned, generating approximately 1.60 million kWh ofelectricity annually and achieving an annual carbon emission reduction of approximately 890 tons.In logistics, NHU is pioneering a green transformation by deploying new energy vehicles (NEVs), optimizing logistics routeplanning, and utilizing less-than-container-load (LCL) consolidation to reduce shipment frequency and enhance logisticse?ciency.
NHU maintains a rigorous water resource management framework, with the President bearing ultimate accountability. TheESG Management Committee oversees water management strategies and performance metrics, while each production baseestablishes annual water conservation targets aligned with operational requirements and conducts regular progress reviews. TheCompany has implemented a tiered water recycling system, achieving e?cient water resource utilization through technologicalinnovation, process optimization, and rened management. In 2024, NHU successfully submitted its response to the CDP WaterSecurity Questionnaire and received a rating B-.
Reduce the consumption of chilled water and circulating water as well as the amount of wastewater generated throughprocess improvement and cascade utilization of water quality.
Case
Shangyu NHU exemplifies environmental responsibility through its innovative water recycling practices. Byimplementing a full-process management strategy that encompasses "source reduction, process control, and end-of-pipe treatment," the Company systematically enhances water efficiency. Guided by its "service + supervision"environmental management philosophy, Shangyu NHU has conducted clean production initiatives, including CODreduction in wastewater and the separation of metal ions in workshop wastewater. These measures e?ectively alleviateend-of-pipe treatment pressures. Additionally, Shangyu NHU has upgraded the pretreatment system at its existingwastewater plant, signicantly improving wastewater quality stability and treatment capacity.Concurrently, Shangyu NHU has pioneered new chemical technologies and processes, streamlining the co-productionprocess for vitamin series products. This innovation, which was awarded the Second Prize of the National TechnologyInvention Award, achieves an annual wastewater reduction of over 50,000 tons.
In 2022, Heilongjiang NHU was awardedthe honorary title of "National Green Factory"
In 2021, Shangyu NHU was awardedthe title of Zhejiang Province's rst batch of
"Waste Free Factories"
NHU has demonstrated exceptional performance in ecological conservation and biodiversity protection, maintaining zeroincidents of soil contamination, ecosystem disruption, or animal testing throughout the reporting period. For new constructionprojects, the Company proactively sources cost-e?ective earthwork and slag resources, achieving 100% on-site backlling forsome factory areas. This circular approach optimizes resource e?ciency while minimizing natural resource consumption.
Ecological and Biodiversity Conservation
IndicatorData in 2024Unit
Total Amount of Harmless Waste229,292.18TonQuantity of Harmless Waste Recycling218,137.77TonTotal Amount of Hazardous Waste109,122.16TonLandll Rate of Hazardous Waste4.06%
Advance technologies including water reclamation, rainwater reuse, and electrodialysis reversal (EDR) water treatmentto enhance wastewater recycling/reuse rates, achieving remarkable water conservation results.
Introduce sophisticated treatment equipment from abroad to reduce the generation of industrial wastewater; Optimizewater-saving management and circulating water systems and strengthen water quality monitoring for optimaldischarge.
Water Conservation from Source
Water Reuse
Optimal DischargeIn 2024, Zhejiang NHU was selected asone of the rst batch of key cultivation units for"zero waste enterprise groups" in Zhejiang Province
Comprehensive Management of Water Resources in Shangyu NHU
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Case
Case
Case
Improved Packaging Materials for Mycelium Residue Bags in Heilongjiang NHU
Conservation and Recycling of Packaging Materials in Shandong NHU Industrial Park
Shandong NHU enhances water e?ciency and reduces wastewater discharge through technological innovation andresource optimization. In 2024, the company conducted general solid waste identication and recycled the aqueoussolutions generated in the production process, reducing COD discharge by 17 tons and salt emissions by 25.50 tons.Full project implementation is projected to decrease annual wastewater discharge by 8,000 tons.The company implements closed-loop water management through boiler blowdown water recycling. After temperaturereduction treatment, the boiler blowdown water is diverted to the common rainwater recycling system. Followingpurication by water treatment equipment, the reclaimed water is repurposed for industrial applications. Furthermore,existing filtration infrastructure has been optimized to utilize treated rainwater as supplementary industrial water,thereby enhancing comprehensive water utilization e?ciency.
Heilongjiang NHU has innovated packaging processes by developing mycelium residue bags using polypropylenegranule blow-molding technology. The incorporation of recycled feedstock into raw materials enhances the eco-performance of these bags, advancing waste valorization and providing practical solutions for circular economyimplementation.
At Shandong NHU Industrial Park, we continuously optimize packaging specications and structural designs accordingto product characteristics and customer requirements, maximizing material efficiency and recyclability. Internalsubsidiaries have achieved 100% circular utilization of packaging materials for intra-park product transfers. Meanwhile,without compromising quality, we have reduced the thickness of certain product packaging bags. These changes yielda 20% reduction in plastic usage and a 33% decrease in paper consumption, signicantly lowering overall packagingmaterial requirements. Decommissioned packaging materials are cleaned and repurposed for filling waste-derivedmaterials, achieving resource reuse.
IndicatorData in 2024Unit
Water Recycling Utilization Rate96.30%
Circular Economy DevelopmentWe actively implement circular economy principles through systematic innovations in packaging material management,establishing a comprehensive green packaging lifecycle management system. The Company has set an annual procurementtarget of 200 tons of renewable raw materials to drive sustainable industry development.
We have created a closed-loop packaging system withstandardized management forreusable materials like pallets,employing digital tracking tomonitor usage patterns andoptimize distribution processes.
Through technologicalinnovation, we have achievedpackaging reduction by adoptingliquid-phase material processingtechnology that replacestraditional solid packaging withpipeline transportation systems.Bulk container trucks are nowpreferentially used for materialtransfer. Aligned with customerrequirements and internallogistics needs, we prioritizerenewable packaging materials,including corrugated boxes,steel drums, and aluminumbottles, signicantly reducingenvironmental impact.
Source ControlProcess OptimizationInnovative Packaging Form
The Company has developeda scientic procurementmanagement system andestablished green procurementpartnerships with suppliers. Byimplementing demand-drivenand specialized procurementmechanisms, we strictly controlthe specications, quantities, andquality of packaging materials atthe source, e?ectively preventingunnecessary purchasesand inventory accumulation.Furthermore, we collaboratewith raw material suppliers andpackaging manufacturers torecycle used packaging drumsand plastic pallets, prioritizingcircular solutions for packagingwaste management.
Comprehensive Utilization of Water Resources and Wastewater in Shandong NHU
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Appendixes
Appendix I: Key Performance Table
Aspect TopicIndicatorUnitData in 2024
GovernancePerformance
EconomicPerformance
Operating revenue
CNY(hundred million)
216.09
Total assets
CNY(hundred million)
429.89
CorporateGovernance
Number of directorsPerson11
EnvironmentalPerformance
Emissions
Nitrogen oxide (NOX) emissionsTon261.52Ozone depleting substances (ODS) emissionsTon4.94Sulfur oxides (SO
X) emissionsTon60.66Volatile organic compounds (VOCs) emissionsTon85.73Particulate matter emissionsTon19.05
Waste
Total amount of general solid wasteTon229,292.18Intensity of general solid waste
Ton/ton ofproduction
0.17
Total amount of hazardous wasteTon109,122.16Intensity of hazardous waste
Ton/ton ofproduction
0.08
Greenhouse
Gas (GHG)
Total GHG emissions (Scope 1 and Scope 2)
Ton of carbondioxide equivalent
2,783,442.82- Scope 1 GHG emissions
Ton of carbondioxide equivalent
765,023.45- Scope 2 GHG emissions
Ton of carbondioxide equivalent
2,018,419.37GHG emission intensity (Scope 1 and Scope 2)
Ton of carbondioxide equivalent/
ton of production
2.02
- Scope 1 GHG emission intensity
Ton of carbondioxide equivalent/
ton of production
0.55
- Scope 2 GHG emission intensity
Ton of carbondioxide equivalent/ton of production
1.46
AspectTopicIndicatorUnitData in 2024
EnvironmentalPerformance
Utilization ofResources
Total energy consumptionTon of standard coal 809,200- Direct energy consumptionTon of standard coal 560,600- Indirect energy consumptionTon of standard coal 248,600Coal consumptionTon781,000Natural gas consumption
10,000 standard cubic
meters
4,708Gasoline consumptionLiter0Diesel consumptionLiter110,947Energy consumption intensity
Ton of standard coal/ton of production
0.59
Proportion of decrease in energy consumptionintensity compared to the previous scal year
%7.67Electricity consumptionTen thousand kWh150,600Electricity intensityKWh/ton of production1,091Purchased electricityTen thousand kWh136,420Photovoltaic power generationTen thousand kWh1,034Proportion of clean energy consumption%2.06Consumption of renewable resourcesTon of standard coal 16,671- Total amount of solar energy used by theCompany
Ton of standard coal 1,271- Total amount of green energy purchased by theCompany
Ton of standard coal4,331- Total amount of biomass energy used by thecompany
Ton of standard coal 11,069Proportion of renewable resources
%2.06- Proportion of solar energy used by theCompany
%0.16- Proportion of green energy purchased by theCompany
%0.54- Proportion of biomass energy used by theCompany
%1.37Managementof WaterResources
Total water intakeTon15,732,000Fresh water intakeTon15,732,000
Proportion of renewable resources=Consumption of renewable resources/Total energy consumption*100%7374
AspectTopicIndicatorUnitData in 2024
EnvironmentalPerformance
Management
of WaterResources
Total water consumptionTon15,732,000Fresh water consumptionTon15,732,000Water consumption intensityTon/ton of production11.40Water reuseTon409,200,000Water recycling utilization rate%96.30Discharge amount of industrial wastewaterTon7,783,289.53Discharge intensity of industrial wastewaterTon/ton of production5.64COD emissionsTon1,636.40Ammonia nitrogen emissionsTon34.15Total phosphorus emissionsTon21.16Total nitrogen emissionsTon93.97
Packaging
Materials
Packaging material consumptionTon27,432- Wood/paper ber consumptionTon16,301- Metal consumptionTon7,014- Plastic consumptionTon4,117Intensity of packaging materials usedTon/ton of production0.02Amount of recycled packaging materialsTon4.50
SocialPerformance
EmployeeEmployment
Total number of employeesPerson11,369
Number ofemployees by level
Senior managementPerson4Middle managementPerson372General managementPerson750Ordinary employeesPerson10,243Number ofemployees bygender
MalePerson9,125FemalePerson2,244
AspectTopicIndicatorUnitData in 2024
SocialPerformance
EmployeeEmployment
Proportion of women in senior management%25Number ofemployees by age
Under 30 years oldPerson4,74230-50 years oldPerson6,092Over 50 years oldPerson535Total number of disabled employees employedPerson34Total number of employed veteransPerson210Number of new employeesPerson778
Employee
Turnover
Employee turnover rate%5.07Employee turnoverrate by gender
Male%4.71Female%6.52Employee turnoverrate by age
Under 30 years old%8.9930-50 years old%2.04Over 50 years old%1.09
Employee's
Rights and
Interests
Percentage of labor contract coverage%100Percentage of employees with social insurance%100
Occupational
Health
and Safety
(OHS)
Physical examination rate of employees%100OHS examination rate of employees%100Number of work-related deathsPerson0Proportion of factories certied by ISO 45001OHS Management System
%100Investment amount of work-related injuryinsurance
CNY 10,000825.11Personnel coverage rate of work-related injuryinsurance
%100Investment amount of work safety insuranceCNY 10,000122.63Number of OHS training sessions conductedTimes209Proportion of employees covered by OHStraining
%100
7576
AspectTopicIndicatorUnitData in 2024
SocialPerformance
Sta?Training andDevelopment
Training participation rate%100Number of training sessions conductedTimes4,166Proportion of trainedemployees by gender
Male%80.26Female%19.74Total training hours bygender
MaleHour370,878FemaleHour108,032Total training hours for employeesHour478,910Average training hours per employeeHour42.12Average training hoursper employee bygender
MaleHour40.64FemaleHour48.14Annual training expenditure amountCNY 10,000706ProductQuality andService
Percentage of products recalls attributable toquality deciencies in the total number of soldor delivered products
%0Complaint handling rate regarding products andservices
%100Data Securityand PrivacyProtection
Number of information security training sessionsconducted
Times76Proportion of employees covered by informationsecurity training
%100
Product R&D
R&D investment (funds related to technologicalinnovation)
CNY(hundred million)
10.36
R&D Team
Total numberPerson2,867Proportion%25.22Number of valid patentsNos.777Number of invention patents applied to the mainbusiness
Nos.405Number of invention patent applicationsNos.114Number of authorized invention patentsNos.76Number of trademark rightsNos.463Number of copyrightsNos.274
AspectTopicIndicatorUnitData in 2024
SocialPerformance
Product R&D
Number of products with carbon footprintcerticates
Nos.14
Supply ChainManagement
Total number of suppliersNos.4,192Number of suppliers byregion
Mainland ChinaNos.4,153Hong Kong, Macauand Taiwan
Nos.2OverseasNos.37Suppliers' signing rate of Integrity Agreements%100Amount of delayed payments to small andmedium-sized enterprises
CNY 10,0000
Anti-corruption
Anti-corruption trainingattendances
DirectorsPerson Times83SupervisorsPerson Times310Senior managementPerson Times762EmployeesPerson Times10,485Number of anti-corruption trainingparticipants
DirectorsPerson11SupervisorsPerson5Senior managementPerson4EmployeesPerson11,365
Proportion of anti-corruption training
Directors%0.10Supervisors%0.04Senior management%0.04Employees%99.82The management's signing rate of the IntegrityAgreements
%100Employees' signing rate of the IntegrityAgreements
%100Number of corruption lawsuits led or concludedNos.0Public Welfare
and CharityUndertakings
Total investment in rural revitalizationCNY 10,00030Investment in public welfare and charityundertakings
CNY 10,000256Number of people participating in volunteeractivities
Person646
7778
Appendix II: Self-Regulatory Guidelines No. 17 for Companies Listedon Shenzhen Stock Exchange—Sustainability Report (For TrialImplementation)
DimensionNo.TopicClauseChapter of the Report
Environmental
1Climate responseArticles 21 to 28
Responding to Climate
Change2Pollutant dischargeArticle 30Clean Production3Waste disposalArticle 31Clean Production
Ecological and biodiversityprotection
Article 32Clean Production
Environmental compliancemanagement
Article 33Environmental Management6Energy utilizationArticle 35Energy Utilization7Water resources utilizationArticle 36
Management of Water
Resources8Circular economyArticle 37
Green O?ceCircular EconomyDevelopment
Community
9Rural revitalizationArticle 39
Public Welfare and Charity
Undertakings10Social contributionsArticle 40
Public Welfare and Charity
Undertakings
11InnovationArticle 42
Digital and IntelligentManagement SystemDigital and Intelligent Actions
R&D and InnovationIntellectual Property Protection
Ethics of science andtechnology
Article 43N/A
DimensionNo.TopicClauseChapter of the Report
Community
13Supply chain securityArticle 45Responsible Supply Chain14Equal treatment of SMEsArticle 46Responsible Supply Chain
Product and service safetyand quality
Article 47
Product Quality and Safety
Customer ServicesEmpowering Industrial
Development
Data Security andCustomer Privacy
Article 48
Data Security and Customer
Privacy Protection17EmployeesArticle 50Employee Well-being
Sustainability-relatedgovernance
18Due diligence Article 52Compliance Management19Stakeholder engagementArticle 53Stakeholder Engagement
Anti-commercial briberyand anti-corruption
Article 55Business Ethics21Fair competitionArticle 56Business Ethics
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