QI Automotive Co., Ltd.2024 Sustainability Report
Stock Name：QI Automotive Stock Code：837242
QI Automotive Co., Ltd.
C
ONTENTS
PrefaceIntroduction02Chairman’s Statement03Company Profile04Sustainability Management07
Shared Responsibility for a SustainableBusiness Management SystemQuality FirstFortifying Product Safety27Collaborative Win-Win: EnsuringSupply Chain Security and Fairness30Driving Industrial Innovation andUpgrading Through Technology34Empowering with DigitalIntelligence to Safeguard Data Security36
Co-Building and SharingPromoting Social ProgressPeople-Oriented Approach: Fosteringa Diverse Development Ecosystem39Altruism in Action: DeepeningSocial Responsibility42
Appendix
Appendix I: Key Performance Indicator Table55Appendix II: Index of Indicators58
EnvironmentalResponsibility
SocialResponsibility
GovernanceResponsibilityStandardized GovernanceDriving High-Quality and Efficient DevelopmentSteady Governance: Solidifying aLong-term Institutional System13Compliance Operation: EnhancingRisk Management Capability15Shared Value: Building aMulti-Stakeholder Engagement Platform18Ethical Leadership:
Driving Industry Progress20
Green Empowerment, Committing toEnvironmental StewardshipCircular Economy Leadership: Buildinga Resource Regeneration Paradigm46Value Resources, Safeguard theFoundation of Green Development48Compliance Foundation, StrengtheningEnvironmental Management Systems49Emission and Waste Reduction,Enhancing Environmental Performance51Climate Action, Addressing GlobalEnvironmental Challenges52
2024 Sustainability Report 1
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.IntroductionIntroduction
ThisreportiscompiledwithQIAutomotiveCo.,Ltd.(hereinafterreferredtoas"QIAutomotive,""we,""theCompany,"or"ourCompany")astheprimaryentity,coveringalloursubsidiaries.Unlessotherwisespecified,thescopeofthisreportalignswiththeCompany’sannualreport.ItoutlinesQIAutomotive’sstrategies,management,andpracticesinenvironmental,social,andgovernance(ESG)domains.
ThereportcoverstheperiodfromJanuary1,2024,toDecember31,2024(hereinafterreferredtoasthe"ReportingPeriod,""theYear,"or"2024").Toenhancecomparabilityandforesight,somecontentincludesretrospectivedatafromprioryearsorforward-lookingstatements.
ReferenceStandards:Thisreportfollowsthe
BeijingStockExchangeListedCompanies
SustainableDevelopmentReportingGuidelineNo.
11(Trial)andtheBeijingStockExchangeListed
CompaniesSustainableDevelopmentReport
PreparationGuidelines.Meanwhile,italso
referencesauthoritativeframeworkssuchasthe
GlobalReportingInitiative(GRI)Sustainability
ReportingStandardsandtheUnitedNations
SustainableDevelopmentGoals(SDGs).
Thedatainthisreportaremainlyderivedfromofficialinternalcompanydocuments,statisticalreports,andpubliclydisclosedmaterialssuchasquarterlyandannualreports.Unlessotherwisespecified,allmonetaryvaluesdisclosedinthisreportaredenominatedinCNY.
ThisreportwasapprovedbytheBoardofDirectorsonApril28,2025.ItisavailableonlineinbothChineseandEnglish.Incaseofdiscrepancies,theChineseversionshallprevail.ThereportcanbeaccessedordownloadedviatheBeijingStockExchangewebsite(https://www.bse.cn)andQIAutomotive’sofficialwebsite(https://www.qi-auto.com/).
Certaincontentinthisreportcontainsforward-lookingstatements,includingplansandobjectivesforfuturedevelopment.Thesestatementsarebasedonmanagement’scurrentexpectationsandmaydiffermateriallyfromactualresultsduetouncertainties.TheCompanyassumesnoobligationtoupdatesuchforward-lookingstatements.
ReportScopeReferenceStandardsReportApprovalandAccessDisclaimer
TimeScopeDataSources
2024 Sustainability Report 2
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.
Chairman’s Statement
StandardizedGovernance:TheFoundationofSustainabilityStronggovernanceispivotaltosustainablegrowth.Onlythrougheffectivemechanismsandrulescanlong-termstrategiesmaterialize.In2024,werevisedourArticlesofAssociationthreetimes,introducedonenewgovernancepolicy,andamendedtwootherstorefineourgovernanceframework.Throughouttheyear,weconvened12boardofdirectorsmeetings,11boardofsupervisorsmeetings,5generalmeetings,andissued125announcements.Weproactivelyfulfilledourinformationdisclosureobligationsandsafeguardedthelegitimaterightsandinterestsofallinvestors.People-Centricity:TheCoreofSustainabilityWeadheretoapeople-orientedcorporatecultureandprioritizeouremployeesasthedrivingforceofsustainability.Guidedbyourmissionto"pursuethematerialandspiritualwell-beingofallemployees,creatingcost-effectiveproductstohelpourcustomersgrowandsavemoneyforallcarownersglobally.",weadvocate"nounnecessaryovertime"(exceptforcriticalroles)andensurerestrights.TheCompanyhasestablishedaregionallycompetitivecompensationsystemforallemployees,particularlyR&Dtalent,anddemonstratesourcommitmenttolong-termdevelopmentthroughequityincentivesandothermeasures.
TechnologicalInnovation:TheEngineofSustainabilityWefirmlybelievethat"technologicalinnovation"isthedrivingforcebehindsustainablecorporatedevelopment.In2024,wecontinuouslypromotedproductiterationandupgrades,launchingover2,000newproductsintothemarket.FosteringanopenR&Denvironment,wevalueknowledgeandtalent.Bytheendof2024,wehad70R&Dpersonnel,accountingfor21.28%ofthetotalworkforce.Duringtheyear,ourR&Dexpenditureincreasedby19.52%,resultingin9newpatents(including2inventionpatentsand7utilitymodelpatents,coveringthoseobtainedbysubsidiaries)and49softwarecopyrights,layingastrongerfoundationforsustainablegrowth.FinancialHealth:TheSafeguardofSustainability
Webelievefinancialtransparencyandcompliancearefundamentalprinciplesforsustainablecorporatedevelopment.Asoundfinancialconditionprovidesstablecapitalsupport,ensuringsufficientresiliencetonavigatemarketfluctuations.In2024,weachieveda34.71%increaseinoperatingrevenueanda52.91%growthinnetprofitattributabletoshareholders.Bytheendof2024,wemaintainedacashreserveofCNY269millionandadebt-to-assetratioof29.23%,reflectingarobustfinancialposition.Adheringtoour"ReservoirManagementPrinciple"philosophy,weensurethatstrongfinancialhealthservesasasolidfoundationforsustainablegrowth.GreenPractices:TheGuidanceofSustainability
Wechampionlow-carboninitiatives,offeringfreevegetarianmeals,biodegradablepackaging,recycledofficefurniture,andenergy-savingpractices.Byadvancingautomotivepartsremanufacturing,wecontributetothecirculareconomyandglobalcarbonneutrality.In2024,wepassedourfirstSAQAudit,issuedsustainabilityguidelinestosuppliers,andcollaboratedwithpartnersongreeninitiatives.TheglobalcarbonneutralitygoalsandESGinvestmenttrendsareacceleratingindustrytransformation.Werecognizethatonlybyintegratingsustainabilityintoourstrategiccoreandtranslatingitintodailyoperationscanweachieveenduringsuccess.Allemployeeswillcontinuetoupholdgreendevelopmentprinciples,workinghand-in-handwithpartnerstoexplorepathwaysforinnovativedevelopmentandcirculareconomy.OnbehalfoftheBoardofDirectorsandthemanagementteam,Iwouldliketoexpressourdeepestgratitudeandhighestrespecttoallemployeesfortheirdedicationandhardwork,aswellastoourinvestors,partners,governmentagencies,andfriendsfromallsectorsofsocietyfortheirlong-standingsupportandcommitmenttotheCompany'sgrowth.In2025,underthe"newsituation,newnormal,"weembarkanew.Steeringwithresponsibilityandinnovation,QIAutomotivewillsailboldlytowardsustainabledevelopment,contributingtoautomobileindustry.
2024markedthe20thanniversaryofQIAutomotive.Overtwodecadesofperseverance,wehaveadheredtolong-termismandbeensteadfastinourbeliefthat"smalldailystridesaccumulateintomonumentalachievements."In2024,theCompanyachievedanetprofitexceedingCNY100millionforthefirsttime,madebreakthroughsinOEMbusiness,commencedconstructionofacastingpartsfactoryinThailand,andreleasedourinauguralbilingualESGreport.Thisyearalsosawtheintegrationof"sustainabilityasdailypractice"intoourcorporatedevelopmentphilosophy.Nowadays,amidacceleratingglobalizationandclimatechallenges,sustainabilityhasbecomeaninescapableresponsibilityandastrategicopportunity.Weembracethe"newsituation,newnormal"andfirmlypursuesustainabledevelopment.
Zhong YongduoChairman of the BoardQI Automotive Co., Ltd.
2024 Sustainability Report 3
Chairman’s Statement
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.
Company Profile
QIAutomotiveCo.,Ltd.(StockCode:837242),asoneofthefirstbatchoflistedcompaniesontheBeijingStockExchange,hasbeenconsistentlydedicatedtothedesign,development,andsalesofautomotiveaftermarkethard-to-findpartsworldwidesinceourestablishment.Additionally,weprovidecustomerswithcomprehensivesupplychainmanagementservices.Withdeepexpertiseintheautomotiveaftermarket,ourportfoliospansautomotivehard-to-findparts,ATV/UTV,motorcycles,yachts,andindustrialmachinery.Weexcelinresourcerecyclingandremanufacturing.Ourofferingscoverautomotivetransmissionsystem,electricandelectronicsystem,steeringsystem,brakesystemandenginesystemwithover30,000SKUsandannualexpansions.Weoperate6subsidiaries(with5subsidiariesasofyear-end2024)andemployover300staffmembers.TheCompanyintegratescapabilitiesindesignanddevelopment,manufacturing,qualitycontrol,andperformanceverification,demonstratingexceptionalcomprehensivecompetencies.EquippedwithadvanceddigitalmanagementsystemsincludingSAPandWMS,alongwitha30,000-square-metermodernwarehousingcenter,weensurehighlyefficientmanagementandspeedydeliverycapabilities.Wepursuethematerialandspiritualwell-beingofallemployees,creatingcost-effectiveproductstohelpourcustomersgrowandsavemoneyforallcarownersglobally.WearecommittedtobecomingtheChineseautomotiveaftermarketleaderwithglobalcompetitiveness.
Corporate Overview
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Company Profile
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.Milestones
2004Founded and providedproducts and servicesfor multiple renownedinternationalautomotive aftermarketbrands.
2016Listed on the National EquitiesExchange and Quotations(NEEQ), becoming the firstautomotive aftermarket andparts supply chainmanagement company on theplatform.
2017
Established strategicpartnerships with multipledomestic partners, withBAIC Group becoming thesecond largest shareholder.
2018Rapidly expanded into thedomestic aftermarket.
2020Became Shandong’s firstcompany listed on the NEEQSelect Layer (the first in China’sautomotive aftermarket industry).
2021Recognized as "JiaozhouDemonstration Enterprise forCapital Market".
2024Achieved “Three StandardsIntegration” by adding ISO14001 (Environmental) and ISO45001 (Occupational Healthand Safety) to existing ISO9001 (Quality) certifications.
2021
Among the first batch ofcompanies listed on theBeijing Stock Exchange.
2023
Obtained ISO 27001Information SecurityManagement Systemcertification.
2012Obtained the InternationalOrganization forStandardization (ISO) 9001Quality Management Systemcertification.
2024
Established asubsidiary inThailand.
2024
A subsidiary obtainedIATF 16949 AutomotiveQuality ManagementSystem certification.
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Company Profile
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.
Honors and Awards
2020Award forMost Potential Enterprise
of Whole Vehicle Parts
2021JiaozhouDemonstration
Enterprise forCapital MarketAdvanced Enterprisesin Investor Protection
2022
Advanced Enterprises inInvestor Education andProtection 100 Days Pulpit
2023
Advanced Enterprises in
Investor Protection
2024Top 10 Most Valuable BeijingStock Exchange ListedCompanies (18th Edition)
2024Advanced Enterprises inInvestor Protection
2024 Sustainability Report 6
Company Profile
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.Sustainability ManagementESGGovernance FrameworkSustainabilityGovernanceStructure////TofurtherenhancetheCompany'senvironmental,social,andgovernance(ESG)managementstandards,improvetheESGmanagementsystem,andstrengthenESGmanagementcapabilities,onFebruary27,2024,theCompany'sBoardofDirectorsapprovedtheestablishmentofanESGManagementCommittee.Wehaveimplementedathree-levelsustainabledevelopmentgovernanceframeworkconsistingofthe"BoardofDirectors-ESGManagementCommittee-ESGImplementationTeam,"creatingaclosed-loopmanagementsystemfromdecision-makingandmanagementtoexecutionandperformanceevaluation,ensuringtheeffectiveimplementationofESGmanagementinitiatives.
Governance
Level
OrganizationMembershipCompositionFunctionalResponsibilities
Decision-Making
Board ofDirectors
BoardMembers
(1)AssumeultimateresponsibilityforcorporateESGperformance,overseeingthe
developmentofESGstrategiesanddirectionalplanning;
(2)Identify,evaluate,andmanagesignificantESGrisksassociatedwithbusinessoperations;
(3)ReceiveandassessregularESGperformancereportsfromtheESGManagement
Committeeandseniorleadership;
(4)ReviewandapprovetheCompany’sSustainabilityReportandallmaterialESG
managementpolicies.
Management
ESGManagementCommittee
Chairman:
Zhong Yongduo(Chairman of the Board)Members:
Wang Fengmin(Director and GeneralManager)Dai Xiaoling(Director and DeputyGeneral Manager)Chen Rugang(Board Secretary)Zhang Huaxia(Manager of the IntegratedManagement Department)
(1)GuideandestablishtheCompany'sESGvision,objectives,strategies,andframeworkto
ensurealignmentwithcorporateneeds,applicablelaws,regulations,andinternationalstandards;
(2)MonitorthedevelopmentandimplementationoftheCompany'sESGvision,strategies,
andframework,includingsettingESGperformancetargetsandreviewingprogress,whileprovidingrecommendationsforimprovement;
(3)IdentifyandprioritizetheCompany'smaterialESGrisksandissues,andmake
recommendationstotheBoardofDirectors;
(4)ReviewkeyESGtrends,associatedrisksandopportunities,andassesstheadequacyand
effectivenessoftheCompany'sESGframeworkaccordingly;
(5)Overseestakeholderengagementchannelsandmethods,ensuringpoliciesareinplace
toeffectivelyfosterrelationshipsandsafeguardtheCompany'sreputation;
(6)ReviewtheCompany'sESG-relatedpoliciestoensuretheirrelevanceandcompliance
withinternationalESGstandards;
(7)ReviewtheCompany'sESGreportsandotherESG-relateddisclosures,providing
recommendationstotheBoardtomaintaintheirintegrity;
(8)PerformotherESG-relateddutiesasassignedbytheBoardofDirectors.
Execution
ESGImplementationTeam
DepartmentHeads
UnderthecoordinationoftheESGManagementCommittee,implementandexecuteESGinitiativesrelevanttothedepartmentbyintegratingESG-relatedindicatorsintodailyoperationalmanagement.RegularlymonitortheprogressandrisksofdepartmentalESGmattersandprovideperiodicreportstotheESGManagementCommittee.
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Sustainability Management
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.
SustainabilityReportingMechanism////
Wehaveestablishedacomprehensiveinternalreportingmechanismforsustainabilityinformation,ensuringefficientcommunicationandsharingacrossalllevels.MembersoftheESGWorkingGroupregularlycollectandconsolidateprogressupdatesanddevelopmentsonsustainability-relatedmattersfromvariousdepartments.Thisinformationundergoesthoroughcompilationandin-depthanalysisbeforebeingreportedtotheBoardofDirectorsbytheESGManagementCommittee.Throughthisprocess,personnelatalllevelsofthecorporategovernancestructuregaintimelyandcomprehensiveaccesstothelatestESG-relatedinformation,enablingmorescientificandprecisedecision-making.ThismechanismnotonlyenhancesinternaltransparencyandcollaborationefficiencybutalsoprovidesrobustdatasupportforthecontinuousoptimizationoftheCompany'ssustainabilitystrategies.Itensuresthatwhilepursuingeconomicbenefits,wecaneffectivelyfulfilloursocialresponsibilitiesanddrivesustainabledevelopment.SustainabilitySupervisionMechanism////Wehaveestablishedacomprehensivesustainabilitysupervisionmechanismdesignedtoensuretheeffectiveimplementationandcontinuousimprovementofallsustainabilityinitiatives.Thismechanismisexecutedbymembersatvariouslevelsofthesustainabilitygovernanceframework,whoconductregularandad-hocin-depthreviewsandevaluationsoftheCompany'ssustainabilityperformance.Throughthisprocess,membersatalllevelscanpromptlyidentifyopportunitiesandchallengesintheCompany'ssustainabilityjourneyandconsistentlyreportrelevantinformationtothedecision-makingorganization.Thisenablesthedecision-makingbodytoquicklyandcomprehensivelygrasptheCompany'ssustainabledevelopmentstatus,therebyfacilitatingtimely,scientificandrationaldecision-makingtoeffectivelyaddressvariousopportunitiesandchallenges.ThisefficientsupervisionmechanismnotonlyhelpstheCompanycontinuouslyrefineoursustainabilitypathway,ensuringthesuccessfulachievementofsustainabilitygoals,butalsoenhancestheCompany'scompetitivenessandadaptabilityinthefieldofsustainabilitythroughtimelystrategyadjustmentsandimprovements.Asaresult,itlaysasolidfoundationfortheCompany'slong-term,stablegrowth.
Materiality Assessment
DoubleMaterialityAnalysis////
Weconductedour2024doublematerialityassessmentinaccordancewiththeBeijingStockExchangeListedCompaniesSustainableDevelopmentReportingGuidelineNo.11(Trial)andtheBeijingStockExchangeListedCompaniesSustainableDevelopmentReportPreparationGuidelines,whilealsoreferencingauthoritativeframeworkssuchastheGlobalReportingInitiative(GRI)SustainabilityReportingStandards(GRIStandards)andtheUnitedNationsSustainableDevelopmentGoals(SDGs).Duringthereportingperiod,weconductedin-depthengagementswithstakeholderstounderstandtheirexpectations,whichwerethenincorporatedintoourmaterialityassessmentquestionnaire.Bydistributingthesurvey,wequantifiedstakeholderprioritiesandcompletedthedoublematerialityanalysis.
1)UnderstandingCorporateContext
andBusinessRelationships
Benchmarkedagainstdomesticandinternationalsustainabilitystandards,weanalyzedtheCompany'soperations,products/services,valuechain,andindustrylandscapetoestablishoursustainabilitycontext.
2)DevelopingtheMaterialIssues
ListInalignmentwiththeBeijingStockExchangeListedCompaniesSustainableDevelopmentReportingGuidelineNo.11(Trial),weidentifiedpreliminarysustainabilityissuesthroughstakeholderengagement,assessingtheirassociatedimpacts,risks,andopportunitiestoformaninitialmaterialissueslist.
3)MaterialityAssessmentand
Prioritization
AgainstthebackdropoftheCompany'ssustainabledevelopmentcontext,weconductedfurtherevaluationandprioritizationofthefinancialmaterialityandimpactmaterialityoftheissues,andconstructedadoublematerialitymatrix.
4)ReviewandReporting
Uponcompletingthematerialityassessmentprocess,followingreviewandconfirmationbytheCompany'sBoardofDirectorsandseniormanagement,wehaveprovidedfocuseddisclosureinthisreportonissuesdeemedhighlymaterialduringthereportingperiod.
Materiality Assessment Process
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Sustainability Management
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.DueDiligenceandStakeholderEngagement////Weattachgreatimportancetocommunicationwithstakeholders.Throughdiversifiedengagementchannels,weproactivelydiscloseinformationregardingouroperations,environmentalprotection,technologicalinnovation,anddevelopmentstrategiestosafeguardstakeholders'rightstoknowandparticipate.Wesystematicallyintegratestakeholderexpectationsintodailyoperationsandcollaboratewithstakeholderstojointlyadvancesustainabledevelopment.
StakeholdersKey Focus IssuesEngagement ChannelsGovernment andRegulatoryAgencies
?Compliance Management?Anti-commercial Bribery and
Anti-corruption?Anti-unfair Competition?Climate Change Response
?Government-enterprise
Symposiums?Information Reporting
Customers
?Product Quality and Services?Data Security and PrivacyProtection
?Online Promotions/ Livestreaming
Platforms?Offline Promotions/ Exhibitions?Company Website?WeChat Official Account Customer
Satisfaction Surveys?Market Research Activities
Employees
?Employee Rights Protection?Occupational Health and Safety?Corporate Culture Development?Green Office Practices
?All-hands Meetings?Employee Training?Internal and External Websites?Internal Surveys?Corporate Culture Promotion?One-on-one Coaching?Employee Activities
Investors
?Corporate Governance?Risk Management?Stakeholder Communication?Information Disclosure
?Shareholders’ Meetings?Roadshows?Investor Mailbox?Periodic Information Disclosure?Email or Phone Inquiries?Company Website?News Media Interactions
StakeholdersKey Focus IssuesEngagement ChannelsBusiness Partners
?Sustainable Supply Chain?Technological Innovation?Anti-unfair Competition
?On-site Research?Supplier Meetings and Audits?Supplier Agreements and Contracts?Supplier Training and ExchangeProgramsCommunities andthe Environment
?Environmental ComplianceManagement?Philanthropy?Rural Revitalization?Community Relations?Waste Management?Pollutant Management
?Low-carbon Awareness Campaigns?Community Co-building Initiatives?Social Welfare Programs?Volunteer Activities?Waste Management ReportsMedia
?Information Disclosure?Stakeholder Communication?Data Security and PrivacyProtection
?Press Conferences?Media Briefings?Company Website?Social Media EngagementPhilanthropicOrganizations andNGOs
?Climate Change Response?Rural Revitalization?Philanthropy
?Participation in Charitable Causes?Project Empowerment Initiatives
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Sustainability Management
PrefaceEnvironmental ResponsibilitySocial ResponsibilityGovernance ResponsibilityAppendixQI Automotive Co., Ltd.Materiality AnalysisConclusions
Corporate GovernanceCompliance Management
Risk ManagementAnti-unfair Competition
Anti-commercial Bribery and Anti-corruption
Stakeholder CommunicationDue DiligenceInformation Disclosure
Employee Rights ProtectionCorporate Culture DevelopmentOccupational Health and Safety
Product Quality and Services
Community Relations
Rural Revitalization
Philanthropy
Sustainable Supply ChainTechnological InnovationData Security and Privacy Protection
Climate Change Response
Waste ManagementWater Resource ManagementPollutant Management
Environmental Compliance Management
Green Office PracticesCircular Economy
4.40
4.60
4.80
5.00
0.501.001.502.002.503.003.504.004.505.00
Financial Materiality
Impact Materiality
2024 Sustainability Report 10
Sustainability Management
GovernanceResponsibilityPART01
Wehavealwaysregardedstandardizedgovernanceasthecoredriverofhigh-qualitydevelopment.Byestablishingagovernancestructurewithclearauthorityandeffectivechecksandbalances,wehaverefinedthedecision-makingmechanismsoftheBoardofDirectorsandthesupervisionfunctionsoftheBoardofSupervisors,ensuringthescientificrigorandtransparencyofstrategicplanningandexecution.Tostrengthencomplianceoperationsandinternalcontrolmanagement,weembedlegaladherenceintobusinessprocessesthrougharisk-orientedapproach,therebyfortifyingourdefensesagainstoperationalandregulatoryrisks.Ininvestorrelationsmanagement,weadheretoprinciplesofopenness,fairness,andtimeliness.Throughregularcommunication,transparentinformationdisclosure,andlong-termvalue-sharingmechanisms,theCompanysafeguardsshareholderrightsandenhancesmarkettrust.Furthermore,weupholdbusinessethicsbyintegratinganti-corruption,anti-bribery,andanti-unfaircompetitionintoemployeeconductguidelines.Theseprinciplesareenforcedthroughinstitutionalconstraints,managementtraining,andthird-partysupervision,fosteringacultureofintegrityandself-discipline.Thesegovernancepracticessynergizetosolidifytheinstitutionalfoundationforsustainabledevelopment.Incomplexenvironments,theyenableustoforgearesilient,efficient,andsociallyresponsiblepathtowardexcellence.
Standardized GovernanceDriving High-Quality andEfficient Development
Steady Governance: Solidifying a Long-termInstitutional System //////
ComplianceOperation: Enhancing RiskManagement Capability //////
Shared Value: Building a Multi-StakeholderEngagement Platform //////
Ethical Leadership: Driving IndustryProgress //////
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
Standardized GovernanceDriving High-Quality and Efficient DevelopmentSteady GovernanceSolidifying a Long-term Institutional SystemDuringthereportingperiod,westrictlyadheredtotheCompanyLawofthePeople'sRepublicofChina(hereinafterreferredtoasthe"CompanyLaw"),theSecuritiesLawofthePeople'sRepublicofChina(hereinafterreferredtoasthe"SecuritiesLaw"),theMeasuresoftheBeijingStockExchangefortheContinuousRegulationofListedCompanies(forTrialImplementation),theStockListingRulesoftheBeijingStockExchange,andotherlaws,regulationsandnormativedocuments.Inlightofourowncircumstances,wecontinuouslyoptimizedourgovernancesystem,improvedtheorganizationalstructureandoperationalmechanismscoveringtheshareholders'meeting,theBoardofDirectorsanditsspecializedcommittees,theBoardofSupervisors,andthemanagement,strengthenedthestandardizationofcorporategovernance,andestablishedaclearsystemofrightsandresponsibilities.
Governance
GovernanceSystem////Wehaveestablishedandrefinedacomprehensivesuiteofinternalgovernancesystemsincompliancewithcorporategovernancelaws,regulations,andnormativedocuments.Theseinclude:ArticlesofAssociation,GeneralMeetingProcedures,BoardofDirectorsGovernanceRules,BoardofSupervisorsOperatingRegulations,ExternalGuaranteeManagementPolicy,Related-PartyTransactionsControlSystem,SpecialMeetingProceduresforIndependentDirectors,andIndependentDirectors'WorkingGuidelines.Thisinstitutionalframeworkensuresstandardizedoperations,enhancesgovernancestandards,andprovidessystematicsafeguardsagainstoperationalrisks.Strategy
Wehaveembeddedthesustainabledevelopmentandmulti-stakeholdervaluebalancingasourcorephilosophy,drivinglong-termstableoperationsthroughastandardizedgovernanceframework.Intermsofgovernancestructure,westrictlycomplywithlegalrequirementstoclarifytherolesandresponsibilitiesoftheGeneralMeeting,BoardofDirectors,BoardofSupervisors,andmanagement,formingamutuallyrestrictivemechanismfordecision-making,execution,andsupervision.Attheinstitutionallevel,theCompanycontinuouslyrefinesgovernanceguidelinesandriskmanagementsystems,integratingsocialresponsibility,environmentalmanagement,andcompliancerequirementsintostrategicplanninganddailyoperations.Thesepracticesenhancethenormativegovernanceofcorporateentitiestobalancetheinterestsofshareholders,management,employees,customers,suppliersandotherstakeholders.
GeneralMeetingBoard ofDirectorsGeneralManager
ESG Management CommitteeDeputy General Manager
Board ofDirectors'Office
Board ofSupervisors
International
BusinessDepartment
DomesticBusinessDepartmentProcurementDepartment
ProductDepartment
TechnologyDepartment
QualityDepartment
LogisticsDepartment
FinanceDepartment
LegalDepartment
IntegratedManagementDepartment
AuditDepartment
Independent Directors’Special MeetingAudit Committee
OperationDepartment
GovernanceStructure////
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PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
ManagementoftheGeneralMeeting,BoardofDirectorsandBoardofSupervisors////
Duringthereportingperiod,werigorouslyadheredtolegalregulationsandinternalgovernancesystems,ensuringstandardizeddeliberationprocedures.Alldirectorsandsupervisorsfulfilledtheirdutieswiththeutmostresponsibleattitudetowardtheshareholders,theCompanyandsocietyatlarge.Throughrigorousreviewofallproposedresolutions,theyensuredthescientificsoundnessandrationalityofcorporatedecision-making.
GeneralMeeting
5Number of Meetings24Number of
Board of DirectorsMeeting
12Number of Meetings 53Number of100% Director Attendance Rate
Board ofSupervisors Meeting
11Number of Meetings 35Number of100% Supervisor Attendance RateIndependentDirectors’ SpecialMeeting
7Number of Meetings 17Number of100% Director Attendance Rate
Audit CommitteeMeeting
4Number of Meetings 11Number of100% Committee Attendance Rate
BoardDiversityandExpertise////WearecommittedtoenhancingthediversityandprofessionalismofourBoardofDirectors.Whenelectingboardmembers,comprehensiveconsiderationisgiventocandidates'educationalbackgrounds,professionalfields,careerexperiences,andotherrelevantfactors.Throughmulti-dimensionalqualificationreviews,theCompanyensuresthatboardmemberspossessdiversepracticalexperiencesandmultidisciplinarycompetencies,therebyprovidingascientificfoundationforbusinessdecision-making.Theindependentdirectorscomefromvariedprofessionalbackgroundsincludingaccountingandindustry-specificexpertise.Leveragingtheirsolidprofessionalknowledgeandpracticalexperience,theyeffectivelyperformtheirguidanceandsupervisionduties.Alldirectors,supervisors,andseniormanagementpersonnelmaintainadiligentandresponsibleattitude,activelyparticipatinginongoinglearningandtrainingprogramstoenhancetheircomplianceawarenessandperformancecapabilities,thuseffectivelysafeguardingtheCompany'sgovernanceefficiency.
Board ofDirectors
Independent DirectorsNon-Independent DirectorsAuditCommittee
PreventionofInterestConflicts////Tostrictlyregulaterelated-partytransactionsandreducenon-essentialones,whilepreventingcontrollingshareholders,actualcontrollers,directors,supervisors,andseniormanagementfromharmingtheCompany'sinterestsandthoseofminorityshareholdersthroughsuchtransactions,wehaveestablishedtheRelated-PartyTransactionsControlSystemandotherrelevantpolicies.Thesemeasuresclearlydefinethescopeofrelated-partytransactionsandimplementatieredreviewprocess,mandatorydisclosurerequirements,andrecusalmechanismsforinterestedparties.Thisinstitutionalframeworkensuresthestandardizationofrelated-partytransactionprocedures,transparencyininformationdisclosure,andfairnessindecision-makingoutcomes.Duringthereportingperiod,allrelated-partytransactionsconductedbyuswerenormalcommercialtransactions.Thepricingofthesetransactionsfollowedmarket-orientedprinciples,beingdeterminedthroughmutualnegotiationbasedonproducttechnicalspecificationsandmarketprices.Theproductdelivery,paymentarrangements,andsettlementmethodsinvolvedinthesetransactionscompliedwiththeCompany'sstandardcommercialterms.Alltransactionpricingandprocedureswereconductedinaccordancewiththeprinciplesofequality,voluntariness,andfairness.Therewerenoinstancesofutilizingrelated-partyrelationshipstoharmtheinterestsofus,noranysituationsthatcompromisedourlegitimateinterestsorresultedinimproperbenefittransferstorelatedparties.Thesetransactionsdidnotaffectourindependence.
Proposals Reviewed
Proposals Reviewed
Proposals Reviewed
Proposals Reviewed
Proposals Reviewed
Independent DirectorsNon-Independent Directors
2024 Sustainability Report 14
Standardized GovernanceDriving High-Quality and Efficient Development
Impact, Risk andOpportunity Management
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendixMetrics and TargetsCompliance Operation
Enhancing Risk Management Capability
Wehavealwaysregardedcomplianceoperationsandinternalcontrolasavitalsupportforsustainablecorporatedevelopment.Westrictlyadheretolaws,regulations,andindustrystandards,continuouslyimprovingourcompliancemanagementsystemandinternalcontrolsystems.Bydynamicallyoptimizingbusinessprocesses,clarifyingresponsibilityandauthoritymechanisms,andstrengtheningriskearly-warning,weensurethestandardizationandstabilityofourbusinessoperations.Weplacegreatemphasisoncultivatingacompliance-orientedmindsetamongallstaff,integratingcompliancerequirementsintoeveryaspectofdailymanagement,andestablishingamulti-levelsupervisionmechanismtoeffectivelyensuretheimplementationandconsistencyofoursystems.Wefirmlybelievethatrobustcompliancemanagementandinternalcontrolarenotonlycrucialbarriersagainstoperationalrisksbutalsothefundamentalguaranteesforenhancingcorporategovernancecapabilities,safeguardingtherightsandinterestsofstakeholders,andachievinghigh-qualitydevelopment.
Governance
GeneralMeetingBoard ofDirectors
Board ofSupervisorsIndependent Directors’Special Meetings
Audit CommitteeSeniorManagement
GeneralManager
Deputy General
Manager
Chief Financial
Officer
BoardSecretary
Department HeadsSubsidiary Leaders
Metrics////
Targets////
NumberofBoardofDirectorsMeetingsin2024
NumberofBoardofSupervisorsMeetingsin2024
NumberofIndependentDirectors’SpecialMeetingsin2024
NumberofAuditCommitteeMeetingsin2024
NumberofGeneralMeetingsin2024
AsofDecember31,2024theBoardofDirectorscomprised
7membersIncludingindependentdirectors
Representing
42.86%oftheBoard
ComplianceGovernance
WestrictlycomplywiththeCompanyLaw,SecuritiesLawandotherlawsandregulationsaswellastheArticlesofAssociationtoensurethequalifications,performanceproceduresandproportionofindependentdirectorsmeetregulatoryrequirements,guaranteeingthelegalityandstandardizationofthegovernancestructure.
ExpertiseandDiversity
Emphasizingthecomplementarityofprofessionalbackgroundssuchastechnologyandfinance,wecontinuouslyoptimizethecompositionoftheBoardofDirectors,andenhancetheforesightandfeasibilityofstrategicdecision-makingthroughdiversifiedperspectives.
SupervisionandChecks
WestrengthenthefunctionsoftheBoardofDirectorsanditsspecialcommittees,implementroutinesupervisionovertheperformanceofseniormanagement,avoiddecision-makingrisksdrivenbyshort-terminterests,andensurethatoperationaldecisionsarealignedwithlong-termstrategicobjectives.
ResponsibleGovernance
Weintegratetheconceptofsustainabledevelopmentintothegovernancemechanism,comprehensivelyconsidertheimpactsofenvironmental,socialandlong-termcorporatevalueinstrategyformulation,riskmanagementandperformanceevaluation,andpromotedeepcoordinationbetweenthegovernanceframeworkandsustainabledevelopmentgoals.
GovernanceStructure////
2024 Sustainability Report 15
Standardized GovernanceDriving High-Quality and Efficient Development
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
GovernanceSystem////Toenhanceourinternalcontrolsystemandcompliancemanagement,we'veestablishedandimplementedrelevantsystemdocuments,includingtheInternalAuditSystem,SealManagementSystem,ProcurementControlProcedures,LogisticsControlProceduresandWarehouseControlProcedures.Thesecoverkeyaspectsofourbusinessmanagement.StrategyWehaveestablishedagovernancesystemcenteredoncomplianceoperationsandinternalcontrolmanagement.Weimplementedamulti-tieredgovernancestructure,includingtheGeneralMeeting,BoardofDirectors,BoardofSupervisors,andtheAuditCommitteeundertheBoard,whichclearlydefinestheauthorityandresponsibilityboundariesofeachbodyindecision-making,execution,andsupervision,formingascientificallybalancedoperationalmechanism.Infuture,wewillcontinuetomakesystematicadjustmentstoourorganizationalstructure,responsibilities,authorities,processes,andstandardsbasedonouruniquecharacteristicsandfuturedevelopmentneeds.Thisensuresthatthegovernancesystemremainsdeeplyalignedwithcomplianceandinternalcontrolobjectives,effectivelypreventingandmitigatingvariousrisksinouroperations.
StrictlyObeytoCoreInternalControlPrinciples////
?PrincipleofComprehensivenessInternalcontrolsshouldencompasstheentiredecision-making,execution,andsupervisionprocess,coveringallbusinessoperationsandmattersoftheCompanyandoursubsidiaries.
?PrincipleofMaterialityWhilemaintainingcomprehensivecontrol,internalcontrolsshouldprioritizesignificantbusinessmattersandhigh-riskareas.?PrincipleofChecksandBalancesInternalcontrolsshouldensuremutualrestraintandsupervisioningovernancestructure,organizationalsetup,authorityallocation,andbusinessprocesses,whilemaintainingoperationalefficiency.
?PrincipleofAdaptabilityInternalcontrolsshouldalignwiththeCompany’soperationalscale,businessscope,competitiveenvironment,andrisklevel,andbeadjustedpromptlyinresponsetochangingconditions.?PrincipleofCost-EffectivenessInternalcontrolsshouldbalanceimplementationcostswithexpectedbenefits,achievingeffectivecontrolatanappropriatecost.
ComprehensiveImplementationofInternalControlActivities////
InaccordancewiththeguidingprovisionsoftheBasicStandardsforInternalControlofEnterprises,wehaveestablishedandimplementedeffectiveinternalcontrolscoveringthefollowingfivekeycomponents:(1)internalenvironment;(2)riskassessment;(3)controlactivities;(4)informationandcommunication;(5)internalsupervision.
InternalEnvironmentWehaveestablishedastandardizedgovernanceframeworkincompliancewithlawsandregulationssuchastheCompanyLawandtheSecuritiesLaw.ThedivisionofresponsibilitiesisclearlydefinedintheArticlesofAssociationandthethree-tiergovernancesystem(GeneralMeeting,BoardofDirectors,andBoardofSupervisors),formingascientificallybalancedmechanism.Functionaldepartmentssuchasfinance,legal,andtechnologyhavebeensetuptooverseesubsidiaries'operations,finances,andpersonnelmanagement.Wehaveformulatedspecializedandsustainabledevelopmentplans,strictlyadheretotheLabourLawofthePeople'sRepublicofChina,andcontinuouslyimproveourhumanresourcemanagementsystemwithafocusonsafeguardingemployeerights—particularlythespecialprotectionsforfemaleemployees.Socialresponsibilityisintegratedintostrategicpractices,ensuringstatutorysocialinsurancecontributions,promotingfairemployment,andfosteringan"altruistic"corporateculturetodefinetheCompany’svisionandmission.TheAuditDepartmentoperatesunderthedirectsupervisionoftheAuditCommittee,strengtheningrisksupervisionandcomplianceassurance.RiskAssessment
InordertopromotetheCompany'ssustained,healthyandstabledevelopmentandachieveourbusinessobjectives,wecomprehensively,systematicallyandcontinuouslycollectrelevantinformationaccordingtotheestablisheddevelopmentstrategiesandincombinationwithdifferentdevelopmentstagesandbusinessexpansionsituations.Itconductsriskassessmentsinatimelymanner,dynamicallyidentifiesandanalyzesrisks,andadjuststheriskresponsestrategiesaccordinglytoensurethatrisksarecontrolledwithinanacceptablerange,improvestheriskmanagementability,andprovidesasafeguardfortheCompany'ssustainabledevelopment.
ControlActivities
Wehaveestablishedamulti-dimensionalinternalcontrolsystembyscientificallydelineatingauthorityandresponsibilities,strictlysegregatingincompatiblefunctionstocreatemutualsupervisionmechanisms,andimplementingclearapprovalprocessessupportedbydigitalplatformstoenhanceefficiency.Infinancialmanagement,werigorouslyadheretonationalaccountingstandardsandstandardizefinancialreportinganddisclosureprocedurestoensureinformationauthenticityanddecision-makingeffectiveness.Thesecontrolmeasurescollectivelyformacomprehensiveframeworkcoveringsegregationofduties,tieredauthorization,policycompliance,assetprotectionandindependentauditing,systematicallysafeguardingoperationalcomplianceandassetsecurity.
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Standardized GovernanceDriving High-Quality and Efficient Development
Impact, Risk andOpportunity Management
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
InformationandCommunication
Wehaveestablishedessentialnetworkandcommunicationinfrastructure,utilizingOA,SAP,andWMSsystemssupportedbyprofessionalITpersonnel.Thisenhancesthetimelytransmissionofbasicbusinessandfinancialdatawhileensuringeffectivedisseminationofpolicyupdates,criticalbusinessinformation,andcorporatecultureinitiativestofacilitatesmoothinformationflowandstrengtheninternalcontroleffectiveness.Adedicatedwhistlebloweremailandhotlinehavebeenimplemented,withthewhistleblowingpolicyandwhistleblowerprotectionmeasuresclearlycommunicatedtoallemployeesandsupplierstomaintainunimpededreportingchannels.WehaveestablishedtheBoardofDirectors'Office,whichoperatesunderthedirectleadershipoftheBoardSecretarytofacilitatecommunicationandinformationexchangewithexternalentitiesincludingsecuritiesregulatoryauthorities,theBeijingStockExchange,industryassociations,intermediaryagencies,andnewsmedia.ThisstructureensurestheCompany'stimelyandcomprehensiveaccesstoexternalinformationwhileeffectivelydisseminatingcorporateupdates,therebysupportingbusinessdevelopment.
InternalSupervision
Wehaveestablishedsupervisorybodiesatalllevelsincompliancewithlaws,regulations,andrelevantnormativedocumentstooverseeinternaloperations.TheBoardofSupervisorsisaccountabletotheGeneralMeetingandmonitorstheperformanceofalldirectors,managers,andotherseniorexecutives,aswellastheCompany'slawfuloperations.TheAuditDepartmentoperatesindependentlytoensureeffectivesupervisionbytheBoardofDirectorsoverthemanagementteam,withresponsibilitiescoveringinternalcontrols,financialinformationverification,andmajortransactions.Wedeeplyintegratecomplianceprinciplesintoeverybusinessoperation,upholdinglawfulnessandregulatoryadherenceasfundamentaloperationalboundaries.Throughsystematicpolicydevelopment,processcontrols,andculturaldissemination,itensuresstrictalignmentofallorganizationalbehaviorswithlegalrequirementsandcorporatestandards.Astrongemphasisisplacedoncascadingcomplianceawarenesstoeveryemployee.Regulartrainingprogramsandwell-definedaccountabilitymechanismshelpstafffullyappreciatecompliance'scriticalroleinensuringbusinessstabilityandpersonalcareergrowth.Wecontinuouslystrengtheninternalmonitoringandfeedbackchannels,activelyencouragingemployeestoidentifyandreportpotentialrisks.Thiscollectiveeffortbuildsacomprehensive,employee-engagedcompliancemanagementsystemspanningalloperationalprocesses,therebysolidifyingthefoundationforsustainablecorporatedevelopment.
Metrics and Targets
Weconsistentlyprioritizecompliancemanagementandtheenhancementofinternalcontrolsystems.Wearecommittedtoestablishingcomprehensiveinstitutionalframeworksandefficientexecutionmechanismstoensurefullcompliancewithapplicablelaws,regulations,andsupervisoryrequirements,therebyeffectivelypreventinglegal,financial,andoperationalrisks.Throughcontinuousimprovementofinternalcontrols,wehavesignificantlyimprovedoperationalefficiencyandthereliabilityoffinancialinformation.Thisenablesustoprovideconsistentandtransparentvaluetoallstakeholderswhilereinforcingourcommitmenttosustainabledevelopmentpractices.
In2024,theCompanycarriedoutaseriesofcompliancetrainingsessions.ThetrainingcontentwascloselycenteredaroundtheCompany'scorebusiness,andfocusedonin-depthanalysisofkeyareassuchasthefull-processmanagementofESG,anti-fraudguidance,protectionofintellectualpropertyrightsandtradesecrets.Thisensuredthattheconceptofcompliancepermeatedtheentirebusinesschain.Weattachimportancetodeepeningtheunderstandingthroughinteractiveformssuchascasestudiesandscenariosimulations,andpromotethepracticaltransformationofcompliancerequirementsintoemployees'codesofconduct.Meanwhile,throughthedynamictrackingandfeedbackevaluationmechanism,theCompanycontinuouslyimprovesthetrainingsystem,providingasolidguaranteeforthestabledevelopmentofthebusiness.
Targets////
Metrics////
HazardousWasteComplianceDisposalRate100%
NumberofFireIncidents
CertificationRateforSpecialOperationsPersonnel100%NumberofCasualtiesAccidents
In2024,weconducted
6compliancetrainingsessions
withatotalparticipationof
277employees
ComplianceManagementTargetsAchievedin2024
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Standardized GovernanceDriving High-Quality and Efficient Development
ComplianceOperations////
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
Shared Value
Building a Multi-Stakeholder Engagement Platform
Weconsistentlyregardinvestorrelationsmanagementasacrucialcomponentofcorporategovernance.Wefullyrecognizeinvestorsasvitalpartnersinourdevelopmentandmaintainanopenandtransparentapproachtoestablishtwo-waycommunicationchannels.Throughregularexchanges,informationdisclosure,anddailycommunications,wepromptlyconveyourstrategicdirection,operationalupdates,andfuturedevelopmentplans.Whileensuringcorporatesustainabledevelopment,weformulatereasonabledividendpoliciesbasedonactualconditionstoactivelyaddressinvestors'expectationsforstablereturns.Simultaneously,wehaveestablishedscientificallydesignedequityincentivemechanismstoaligntheinterestsofourcoreteamwiththeCompany'slong-termgrowth.Wealwaysvaluethelegitimateconcernsofeveryinvestorandcontinuouslyimproveourinvestorrelationsmanagementsystemtoensuretheauthenticityandcompletenessofinformationdisclosure.Throughcomprehensivecommunication,weaimtoenhancemutualunderstandingandtrust,ultimatelycreatingsustainablelong-termvalueforourinvestors.Governance
Board ofDirectors
BoardSecretary
Board ofDirectors’ Office
Leadership
Role
Accountability
Role
Execution
Role
Weproactivelyconductinvestorrelationsactivitiesthroughdiversechannelsincludingperformancebriefings,roadshows,investorresearchsurveys,brokeragestrategyconferences,investorconferencecalls,andquestion-and-answerinteractions,therebyenhancingcommunicationandmutualtrustwiththecapitalmarkets.
GovernanceStructure////
Investor Relations Management Structure
GovernanceSystem////
WehaveestablishedaseriesofinternalmanagementsystemsincludingtheInvestorRelationsManagementSystem,ProfitDistributionManagementSystem,PublicOpinionManagementSystem,InformationDisclosureManagementSystem,InsiderInformationRegistryManagementSystem,andCommitmentManagementSystem,whichcomprehensivelyregulateinformationdisclosureandinvestorcommunicationactivitiestoenhancecorporategovernancecapabilitiesandmarkettransparency.Strategy
Wehavealwaysregardedsafeguardinginvestors'lawfulrightsandinterestsasthefundamentalprincipleofinvestorrelationsmanagement.WestrictlycomplywiththeCompanyLaw,SecuritiesLawandrelevantregulatoryrequirements,andhaveestablishedaninstitutionalframeworkcenteredonprotectingminorityshareholders'rightsandinterests.Wehaveimprovedtheonlinevotingsystemforgeneralmeetingstoprovideinvestorswithconvenientremoteparticipationandreducevotingcosts.Weimplementedcumulativevotingfordirectorandsupervisorelectionstoenhanceminorityinvestors'participationincorporategovernance.Aseparatevotingmechanismensuresminorityinvestors'independentvoiceinmajordecisions.Westandardizedproxyvotingprocedureswithclearauthorizationrulestopreventabuse.Thesemeasuresprotectinvestors'rightstoinformation,profits,anddecision-makingparticipation,strengtheningthelegalandstandardizedfoundationofinvestorrelationsmanagement.
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Standardized GovernanceDriving High-Quality and Efficient Development
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
Impact, Risk andOpportunity ManagementInformationDisclosure////
TheCompanystrictlycomplieswithrelevantlawsandregulationsincludingtheAdministrativeMeasuresonInformationDisclosurebyListedCompaniesandtheStockListingRulesoftheBeijingStockExchange.Inaccordancewithouroperationalrealities,wehaveestablishedcomprehensiveinformationdisclosuresystemssuchastheInformationDisclosureManagementSystem,andInsiderInformationRegistryManagementSystem.Thesesystemsensuretheauthenticity,accuracyandcompletenessofinformationdisclosure,fullyprotectinvestors'righttoknow,andenablefairaccesstocorporateinformationforinformedinvestmentdecisions.TheBoardofDirectorsisresponsibleforimplementingtheinformationdisclosuremanagementsystem.TheChairmanservesastheprimaryresponsiblepersonforthissystem'sexecution,whiletheBoardSecretaryspecificallycoordinatesdisclosurematters-includingimprovingdisclosuremechanisms,managingmediarelations,respondingtopublicinquiries,andensuringallcorporatedisclosuresaretruthful,timely,accurate,lawful,andcomplete.Weplacehighimportanceonthequalityofinformationdisclosure.Inadditiontofulfillingstatutorydisclosureobligations,wevoluntarilydiscloseinformationrelevanttoinvestors'valueassessmentandinvestmentdecisions,adheringtotheprinciplethatsuchvoluntarydisclosuresmustneitherconflictwithlegallyrequireddisclosuresnormisleadinvestors.ThispracticeenhancescorporatetransparencyandactivelycommunicatestheCompany'svalueproposition.Westrictlycomplywithinformationdisclosureregulationsandmaintainhigh-qualitydisclosurepracticestoensuretheauthenticity,accuracy,completenessandtimelinessofalldisclosedinformation.Weactivelybuildadisclosuresystemthatisdemand-drivenbyinvestors,consistentlyenhancingboththeefficacyandtransparencyofourinformationdisclosurepractices.
InvestorEngagement////Weplacegreatemphasisoninvestorcommunicationandengagement.Throughmultiplechannels,wemaintainsmoothdisseminationofcorporateinformationandvaluepropositiontoenhancemutualunderstandingandtrust.SinceimplementingtheInvestorRelationsManagementSystem,wehaveintensifiedinvestoroutreachthrough:issuingannouncements(bothperiodicandinterimreports),holdingGeneralMeetings,answeringinvestorhotlinecalls,maintaininganinvestorrelationscolumnontheCompanywebsite,participatinginbrokeragestrategyconferences,andacceptinginvestorresearchsurveys.TheseenhancedcommunicationeffortsenableustopromptlyaddressinvestorinquiriesandhumblyaccepttheirsuggestionsandsupervisionregardingtheCompany'soperationsandmanagement.In2024,weactivelyengagedwithvarioustypesofinvestorsthroughmultiplechannelsincludingperformancebriefings,brokeragestrategyconferences,investorresearchsurveys,andconferencecalls.Theseconsistentandpracticalcommunicationinitiativeshavesignificantlyenhancedinvestors'understandingoftheCompany'sindustryposition,strategicplanning,andbusinessdevelopments,strengthenedtheirrecognitionoftheCompany'svalue,andestablishedlong-term,mutually-trustinginvestorrelationships.Duetoourproactiveinvestorrelationsmanagementandcommunicationefforts,wewerehonoredas"QingdaoAdvancedEnterprisesinInvestorProtectionfor2024."
ShareholderReturns////
In2024,theCompanycarriedoutaprofitdistribution,demonstratingourhighregardforshareholderinterestsandcommitmenttorewardinginvestors.SinceourlistingontheNEEQin2016,theCompanyhasupheldtheprincipleofsharingdevelopmentgainswithshareholders,distributingprofits11timeswithacumulativepayoutofCNY141million.Throughasteadyandreliabledividendpolicy,theCompanyhasactivelyreturnedvaluetoshareholders,allowingthemtotrulybenefitfromtheCompany'sgrowth,therebyenhancingtheirconfidenceandtrustintheCompany.
EquityIncentives////
Talentisthecorestrategicresourcedrivingthesustainabledevelopmentofanenterprise.Todeepenthealignmentbetweentalentandcorporategrowth,wehaveestablishedalong-termincentivemechanism,implementingmultipleequityincentiveplanstofostersharedbenefitsandresponsibilitiesbetweenourcoreteamandshareholders.Wehaverolledoutthreeconsecutiveequityincentiveplans,whichnotonlydemonstratemanagement’sstrongconfidenceinstrategicgoalstothecapitalmarketsbutalsomotivateinnovationwithinthecoreteamthroughequityincentives.ThisapproachinjectsendogenousmomentumintotheCompany’ssustainablebusinessgrowth.InNovember2024,theCompanysuccessfullycompletedthegrantingofreservedrestrictedsharesunderour2023EquityIncentivePlan.UponapprovalbytheBoardofDirectorsandtheBoardofSupervisors,atotalof240,000reservedrestrictedsharesweregrantedtoseniorexecutivesandkeyemployees.Concurrently,theCompanyprocessedtheoptionexercisesunderthe2022EquityIncentivePlan,wherethesecondexerciseperiodfortheinitiallygrantedoptionswasfulfilledwith759,000optionsbeingexercised,andthefirstexerciseperiodforthereservedgrantedoptionswascompletedwith353,750optionsexercised.Intotal,seniorexecutivesandkeyemployeesexercisedanaggregateof1,112,750stockoptionsthroughthesetwoexerciseevents.
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Standardized GovernanceDriving High-Quality and Efficient Development
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendixMetrics and Targets
Wehavealwaysprioritizedtheprotectionofinvestors'lawfulrightsandinterestsasourfundamentalobjective,strictlyadheringtotheprinciplesoffairness,justiceandtransparencytoensureallinvestorsequallyenjoytherightstoinformation,decision-makingparticipation,andprofitdistribution.Ininformationdisclosure,weinsistonpresentingtheCompany'soperatingconditionsobjectively,truthfully,accuratelyandcompletely,prohibitinganyexaggeratedormisleadingstatementsthatmayimproperlyinfluenceinvestors'decisions.Wehaveestablishedinstitutionalizedchannelstopromptlyrespondtoinvestorinquiriesandsuggestions,buildingtransparentandefficientcommunicationmechanisms.WestrictlycomplywiththeSecuritiesLawandrelevantregulatoryrulesinallinvestorrelationsactivities,expresslyprohibitingthedisclosureofanymaterialnon-publicinformationunderanycircumstances.Incaseofabnormalinformationdisclosureduetospecialcircumstances,wewillimmediatelyactivatestatutorydisclosureprocedures,makeannouncementsthroughcompliantplatforms,andsimultaneouslytakeremedialmeasurestothegreatestextenttosafeguardmarketfairness.
Ethical Leadership
Driving Industry ProgressBusinessethicsserveasthefoundationforthesurvivalanddevelopmentoftheCompany.Wefirmlybelievethatonlybyadheringtointegrity,fairness,andresponsibilitycanweearnthetrustofourpartnersandtherespectofsociety.Inallbusinessactivities,wealwaystakelawsandregulationsasthebottomlineandethicalstandardsastheyardstick.Werequireallemployeestoperformtheirjobdutieswiththehighestprofessionalethicsandresolutelypreventanybehaviorthatunderminesbusinessethics.Whetheritisthedailycooperationwithcustomersandsuppliersortheparticipationincommunityaffairs,wealwaysadheretotheprinciplesof"respectasthefoundation,fairnessasthebasis,andjusticeastheessence",ensuringthatthelegitimaterightsandinterestsofallpartiesarefullyprotectedthroughtransparentandequalcommunication.Wearemadeawarethatethicsarenotjustslogansbutactions.Tothisend,weintegrateethicalstandardsintobusinessprocessesanddecision-makingmechanismsthroughinstitutionalconstraints,casepromotion,andregulartraining,makingtheawarenessofcomplianceaninstinctivechoiceforeveryemployee.Upholdingbusinessethicsisnotonlyacommitmenttostakeholdersbutalsothepracticeofthemissionofsustainabledevelopment.Wewillcontinuetoadoptanattitudeofself-disciplineandself-reflectiontobuildanopenandhonestbusinessecosystem,contributingtotheprogressoftheindustryandthewell-beingofsociety.
OrganizationalStructure
PreventionMeasuresSupervisionandReporting
TheBoardofDirectorshasestablishedanAuditCommittee.TheCompanyhassetupanAuditDepartment,whichreportstotheAuditCommitteeandisspecificallyresponsibleformonitoringbusinessethicsmatters.
BoththeChairmanandtheAuditDepartmentcandirectlyreceivesupervisionreportsandwhistleblowing.
Preventionduring dailyoperations
prevention through
internal control
processes
comprehensiveprevention throughinternal audits
Targets////
Metrics////
InformationDisclosure:In2024,weissued125announcements,involvingperiodicreports,interim
reports,andothercontent.InvestorInteractionandCommunication:In2024,weheldthe2023AnnualPerformanceBriefing,activelyaddressingthekeyquestionsofinvestors.Weparticipatedinover10strategysessions,roadshows,andanalystresearchactivities.WealsotookpartintheBeijingStockExchange"10,000MilesJourney"eventonceandreleasedtheInvestorRelationsActivityRecordForm8times.
EquityDistribution:In2024,weimplementedanequitydistribution,distributingcashdividendsofCNY5forevery10sharestoallshareholders.ThetotalamountofcashdividendsdistributedwasCNY32,259,625.00.GovernanceStructure////
Standardized GovernanceDriving High-Quality and Efficient Development
Anti-corruption and Anti-unfair Competition Management Structure
Governance
2024 Sustainability Report 20
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
GovernanceSystem////WehaveformulatedandimplementedrelevantsystemsincludingtheAnti-FraudManagementPolicy,BusinessEthicsManagementPolicy,EmployeeHandbook,andSupplierSocialResponsibilityCodeofConducttocomprehensivelyregulatetheconductstandardsofemployeesandbusinesspartners,promotingtheestablishmentofanhonest,law-abiding,fairandtransparentbusinessethicssystem.
StrategyAScientificallySoundOrganizationalStructureSystem////
TheBoardofDirectors,AuditCommittee,andAuditDepartmenthaveclearlydefinedresponsibilitiesandperformtheirrespectiveduties,establishinganeffectivechecks-and-balancesmechanismthroughinstitutionalarrangementsatthetop-leveldesign.AMulti-dimensionalSupervisionSystem////LeveragingtheefficientcollaborationbetweentheAuditCommitteeandtheAuditDepartment,combinedwiththeprofessionalexpertiseofexternalindependentdirectorsanddedicatedauditors,adualinternalandexternalsupervisionmechanismisformedtoensurecompliantandefficientcorporateoperationsacrossmultipledimensions.ACorporateCultureDeeplyRootedinEthicalValues////
Throughtheinstitutionalizedconstructionofananti-corruptionandintegritysystem,wehavedevelopedadistinctivebusinessethicscultureembeddedinemployees'consciousness,guidingthemtoconsciouslyupholdprofessionalethicsattheideologicallevel.
Anti-BriberyandAnti-CorruptionMeasures////Wehavealwaysregardedanti-corruptionandanti-commercialbriberyascoreprinciplesforsafeguardingcorporateintegrityandmaintainingahealthybusinessecosystem.Wefullyrecognizethatsuchmisconductnotonlyunderminescorporatereputationanddisruptsmarketorder,butalsoerodesthefundamentaltrustofstakeholders.Inthisregard,wehaveestablishedacomprehensivepreventionandcontrolsystemcoveringpre-eventprevention,in-processmonitoringandpost-eventaccountability.Throughmeasuresincludingimprovinginstitutionalnorms,implementingtransparentprocurementproceduresandestablishinganonymousreportingmechanisms,wesystematicallymitigatepotentialrisks.Meanwhile,theCompanycontinuouslystrengthensourintegrityculturethroughstandardizedtrainingprogramsandpositiveincentivemechanisms,guidingallemployeestoadheretoprofessionalethics,transformingcomplianceawarenessintovoluntaryactions,andjointlybuildingafair,transparentandethicalbusinessenvironmentwithintegrity.Tosystematicallyenhancetheanti-corruptionawarenessandpracticalcapabilitiesofallemployees,weengagedprofessionallegalcounseltoassistinreviewinganti-corruptionmeasures.Werevisedtheemployeehandbook,systematicallyorganizedcontentrelatedtoviolationsofbusinessethicsandbreachesofmoralconduct,anddistributedthehandbooktoallemployeesforcomprehensivepublicityandstudy,basedonthelawyers'recommendations.Toguardagainstcorruptionrisksintheprocurementprocess,wehaveestablishedasystematicpreventionandcontrolmechanism:
Anti-corruption Training
Weperiodicallyconductintegrityeducationtocontinuouslyreinforceemployees'awarenessofintegrityandself-discipline.
Communication Management
SuppliercommunicationfullyutilizestheEnterpriseWeChatplatform,withallbusinessinteractionsretainingtraceablerecords.Thegeneralmanagerandprocurementmanagerdynamicallymonitorgroupinformation.
Product Quotation
Inprinciple,procurementquotationsmustinvolveacomprehensivecomparisonandselectionamongmultiplesuppliers.Sole-sourceprocurementmustbesubmittedforspecialapprovalbythemanagerofProcurementDepartment.
Price ReviewCompanyengineersshallconductreasonablepriceevaluationsbasedonmarketconditions,productquality,andotherrelevantfactors.
Supplier PaymentThepaymentprocessiscontrolledbythesystem,withpaymentsmadeaccordingtothesupplier'spaymentterms,preventinganyunduedelaysinsupplierpaymentsduetoprocurementpersonnel.
Employee RotationWehavealwaysadheredtothesystemofjobrotationinprocurementpositions.SinceNovember2024,wehavelaunchedanewroundofjobrotationforprocurementpositions.Procurementpersonnelwhohaveservedfortwoyearswillbeincludedintherotationplan,withthemaximumtenureinthesamepositionnotexceedingthreeyears.
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Standardized GovernanceDriving High-Quality and Efficient Development
Impact, Risk andOpportunity Management
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendix
WhistleblowingandWhistleblowerProtectionPolicy////
Wehaveestablishedmulti-dimensionalsupervisionreportingchannels,setupamulti-levelacceptancemechanismincludingtheChairmanandtheAuditDepartment,andformulatedstandardizedcomplainthandlingprocedures.Wewillverifyeachfeedbackandreport,assigndedicatedpersonneltoinvestigateuponreceivingareport,promptlyfollowupandinvestigatesuspectedincidents,andprepareinvestigationreportstobesubmittedtotheChairman.Theestablishmentofthewhistleblowingandcomplaintsystemhelpsencourageemployeesandpartnerstoactivelyexposeandreportillegal,non-compliant,orotherimproperconductwithintheCompany,enablingtheCompanytopromptlyidentifyandaddresspotentialrisksandsafeguardourcorporateimage.Meanwhile,toprotectwhistleblowersfromretaliation,wehaveestablishedawhistleblowerprotectionmechanismthatprohibitsanyformofretaliatoryaction,ensuringtherightsandinterestsofwhistleblowersareprotected.
CommercialBriberyandCorruptionRiskAssessment////Wehaveestablishedacomprehensivecommercialbriberyriskpreventionandcontrolsystem,deeplyintegratingriskidentificationandassessmentmechanismsintodailyoperationalprocessestoidentifyandpreventpotentialcommercialbriberyrisks.Accordingtothenatureofthebehaviorandthedegreeofharm,wehaveestablishedafive-levelhierarchicalcontrolmechanism:
Category 1 Risk
Forcommercialbriberyinvolvingthecrimeofofferingoracceptingbribesbynon-statefunctionaries,theCompanyshall,afterinvestigationandverification,transferthecasetojudicialauthoritiesinaccordancewiththelaw.Category 2 Risk
ForcommercialbriberythatcausessignificantfinanciallossestotheCompanyorproducesseverenegativeimpacts,theCompanyshalltransferthecasetojudicialauthoritiesafterevidencepreservation.Category 3 Risk
Forcommercialbriberythattriggersabnormalstockpricefluctuationsanddamagesinvestorrights,theCompanyshallinitiatelegalproceedingsinaccordancewiththelaw.
Category 4 Risk
Forcommercialbriberyinvolvingamountsbelowthestatutorythresholdforduty-relatedcrimes,wherethepartiesconcernedactivelyrectifytheirwrongdoingandrecoverlosses,theCompanyshallhandlethematteraccordingtointernalregulations.
Category 5 Risk
Forunintentionalviolationswithminorconsequences,theCompanyshallimplementbehavioralcorrectionthroughwarningeducationandcompliancetraining.
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Standardized GovernanceDriving High-Quality and Efficient Development
PrefaceGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendixAnti-unfairCompetition////Wehavealwaysconsideredmaintainingfaircompetitionorderasthefundamentalguaranteeforhealthycorporatedevelopment.Wedeeplyrecognizethatopposingunfaircompetitionisnotonlyacompulsorylegalrequirement,butalsothecorefoundationforestablishingasoundmarketecosystemandprotectingtherightsofcustomersandpartners.Byimplementingmeasuresincludingperfectingthecompliancesystemandenhancingbusinessethicstrainingforallstaff,wesystematicallypreventriskssuchasmarketconfusion,falsepublicity,andcommercialdisparagement.WepersistentlyimplementtheconceptofintegrityoperationthroughouttheentirevaluechaincoveringR&D,manufacturing,andmarketing.Throughtransparentcooperationmechanismsandstandardizedcompetitivepractices,wecontinuouslyconsolidatethefoundationfortheCompany'ssustainabledevelopmentwhilecontributingtothecreationofamorevibrantandresilientmarketenvironment.Duringthereportingperiod,westrictlycompliedwithrelevantlawsandregulationsincludingtheAnti-MonopolyLawofthePeople'sRepublicofChinaandtheAnti-UnfairCompetitionLawofthePeople'sRepublicofChina,maintainingpropercompetitionorderintheindustry.SupplierEthicsPolicies////
Toensurethecomprehensiveimplementationofbusinessethicsstandards,wehavealsostandardizedsupplierbusinessethics.Wehaveformulatedthe20ProhibitionsforNewSupplierIntroductiontostrictlyregulatetheonboardingofnewsuppliers.NewsuppliersmustundergoreviewbytheQualityDepartment,TechnologyDepartment,andProcurementDepartment,andcanonlybeincorporatedintothecooperationsystemafterpassingcross-departmentaljointevaluation.Furthermore,weissuetheProposalonSupplierSocialResponsibilitytoourcooperativesuppliers,advocatingjointlybuildingabusinessecosystemofintegrityoperation,complyingwithnationallawsandregulationsthatprohibitcommercialbriberyandencourageintegritybuilding;requiringsupplierstoabidebylawsandregulationsregardinganti-monopolyandanti-unfaircompetition,andtoavoidreachinganyunderstandingoragreementwithcompetitorsorbusinesspartnersthatmayhinderfaircompetition.WealsorequiresupplierstosignanIntegrityCommitmentLetter.IfasupplierviolatestheCompany'sintegrityregulations,wewillimmediatelyterminatecooperationandpursuelegalliability.
Metrics and Targets
In2024,weconductedoneanti-commercialbriberyandanti-corruptiontrainingsession.Allprocurementpersonnelreceivedtrainingwiththethemeof"EliminatingFraud,OperatingCompliantly."Atotalof2directors,10managers,and71employees
participatedinthetraining,accountingfor21.58%oftheCompany'stotalworkforce.In2024,wereceived0internalorexternalwhistleblowingreports.
In2024,weexperienced0commercialbriberyorcorruptionincidents.
In2024,weexperienced0lawsuitsormajoradministrativepenaltiesduetounfair
competitionbehavior.In2024,thesigningrateoftheIntegrityCommitmentLetterbytheCompany'ssuppliersreached100%.
Metrics////
2024 Sustainability Report 23
Standardized GovernanceDriving High-Quality and Efficient Development
QI Automotive Co., Ltd.Environmental ResponsibilitySocial ResponsibilityAppendixPrefaceGovernance Responsibility
Internal Control
Throughsegregationofincompatibledutiesandprocessnodemanagement,weestablishacross-checkingsystemforbusinessapprovalsandfinancialaudits,reducingbusinessethicsrisksviastandardizedprocesses.
Internal Audit
Weimplementauditsupervisioncoveringtheentireoperationalcycle.Theeffectiveoperationofbusinessethicsstandardsinoperationalprocessesisensuredthroughpre-eventriskprevention,in-processexecutiontracking,andpost-eventreview.
Collaborative EcosystemWeextendintegrityrequirementstobusinesspartners,buildingatransparentsupplychainalignedwithethicalstandards.Ensurefairprofitmarginsforsuppliersandlawfulrightsforcustomerswhilefosteringamulti-stakeholdercomplianceframework.
Employee RightsWedevelopanemployeedevelopmentmechanismintegratingmaterialbenefitsandethicaleducation,cultivatingcomplianceawarenessandorganizationalloyaltytoreducecorruptionrisks.
Targets////
2024 Sustainability Report 24
StandardizedGovernanceDriving High-Quality and Efficient Development
SocialResponsibilityPART02
Amidtheongoingglobalmomentumtowardsustainabledevelopment,corporatesocialresponsibilityhasincreasinglybecomeakeymetricforassessinglong-termvaluecreation.Wehavealwaysregardedsustainabilityasoneofourcorestrategies.Wenotonlyprioritizethestabilityandsecurityofouroperationsbutalsoaimtoalignemployeedevelopmentwithsocialwell-being.Wearecommittedtoadvancingcorporategrowthintandemwithsocialresponsibility,aimingtoachieveawin-winoutcomeforcorporatevalue,employeefulfillment,andsocietalcontribution.Meanwhile,wecontinuetoexpandthescopeofourresponsibility,workinghandinhandwithstakeholderstoco-createlong-termvalueandpaintawarm,resilientblueprintforsustainabledevelopment.
Shared Responsibility fora Sustainable BusinessManagement System
Quality First: Fortifying Product Safety //////
Collaborative Win-Win: Ensuring Supply ChainSecurity and Fairness//////
Driving Industrial Innovation and UpgradingThrough Technology //////
Empowering with Digital Intelligence toSafeguard Data Security //////Werecognizethatintegratingsustainabilityintoeveryoperationalfacetisessentialforresilienceinacomplexmarketenvironment.Throughproductsafety,supplychainsecurity,innovation,datasecurity,andcustomerprivacyprotection,weenhancesustainablecapabilities,createstakeholdervalue,andcontributetoindustry-wideprogress.
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
Quality First
Fortifying Product Safety
Governance
General Manager
Product DepartmentQuality Department
Technical DepartmentResponsibleforplanning,implementing,supervising,reviewing,andmaintainingtheCompany’sinternalmanagementsystems;formulatinginspectionstandardsandspecifications;organizinginspectionsofrawmaterials,semi-finishedproducts,finishedproducts,outsourcedparts,andpurchasedparts;developingcorrective,preventive,andimprovementmeasuresfornon-conformingitemsandconductingfollow-upinspections;overseeingthemanagementofqualityrecordsandconductingregularqualityanalysisandevaluations.
Responsibleforintroducingcompetitivenewproducts;establishingaproductmanagersystembasedoncompanyneeds;supportingthepromotionofallproductlinesandconductingproductknowledgetraining;assistingtheLegalDepartmentinscreeningproductpatents;buildingandimprovingtheteamstructure;supportingtheCompanyinachievingstrategicgoals;andoverseeingdepartmentalperformanceevaluations.
Responsiblefortechnical-relatedtasksduringproductdevelopmentandintroductionprocesses,establishingandimprovingproductstandards,technicalspecificationsandqualitycontrolcriteria.
Product Safety and Quality Management Structure
GovernanceSystem////Intermsofproductsafetyandqualitymanagement,theCompanyplacesgreatemphasisonqualitycontrolandriskpreventionthroughouttheentireprocess.Ithasdevelopedandstrictlyimplementedseveralmanagementsystems,suchastheProductMonitoringandMeasurementControlProcedure,Non-conformingProductControlProcedure,andMonitoringandMeasurementEquipmentControlProcedure,focusingonkeyareastoensurethatallproductsconsistentlymeetindustrystandardsorcustomerrequirementsintermsofsafetyandreliability.Strategy
TheCompanytargetstheindependentaftermarketandhasdevelopedastrategicapproachfocusingonautomotivehard-to-findparts,withanoverarchingstrategyof"BasedinChina,servingtheworld;globalsourcing,globalsales."Inproductdevelopment,theCompanycontinuestoresearchanddevelopproductsthatcombine"hardwareandsoftware,"particularlyintheautomotiveelectronicsfield.TheCompanyvaluestechnologyandtalent,holdsindependentintellectualpropertyrightsforitsproducts,andcontinuallydrivesproductiterationandupgrades.
Withthecontinuousupgradingofindustrystandardsandtheincreasingrequirementsoftheterminalmarketforproductqualityandsafetyperformance,ensuringthestabilityandreliabilityofproductshasalwaysbeenanimportantmissionoftheCompany.Tothisend,theCompanysystematicallypromotesthecoordinatedimprovementofqualityandservicelevelsfromfouraspects:focusingonkeyproductlines,improvingthequalityinspectionprocess,deepeningqualitytraining,andoptimizingcustomerservice.Iteffectivelyensuresproductsafety,productquality,andcustomersatisfactionandpromotesthesustainableandhigh-qualitydevelopmentoftheenterprise.PrioritizingKeyProductLinesforContinuousQualityImprovement////
TheCompanycurrentlymanagesatotalof84productlines,including33keyproductlinesand51potentialproductlines.Basedonactualbusinessdevelopmentneeds,theCompanydynamicallyadjustsitskeyproductlinelayoutannuallyandprovidessystematicqualityimprovementsupporttorelevantfactories.Thisincludesassistinginstreamliningqualitycontrolprocessesandadvancingqualityenhancementinitiatives.Meanwhile,theCompanyregularlymonitorsfactoryperformanceandcontinuouslystrengthensprocessmanagementtosupportsteadyimprovementsinoverallproductquality.
GovernanceStructure////
2024 Sustainability Report 27
Shared Responsibility for a SustainableBusiness Management System
Impact, Risk andOpportunity Management
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
StrengtheningQualityInspectiontoEnsureProductPerformance////
Process
ResponsibleDepartment
Main ResponsibilitiesIncoming InspectionRequestIncoming Inspection
Incoming ProcessingOutgoing InspectionRequestOutgoing InspectionProduct DeliveryRecord Management
LogisticsDepartment
LogisticsDepartment
LogisticsDepartment
QualityDepartment
QualityDepartment
SubmitinspectionrequestsviaSAP/WMSuponarrival,specifyinginspectionlocationandtime;confirmPOnumbers,quantities,andmodels.Conductinspectionsofincomingmaterialsaccordingtostandards;documentinspectionrecordsandconclusions;organizereviewsandinputdataintothesystem;identifynon-conformingproducts;SQE(SupplierQualityEngineer)compilesqualityreports.Processstorage,quarantine,orreturnbasedoninspectionconclusions.Submitsecondaryinspectionrequestsviaemailforproductsexceedingthestorageperiodwithoutshipment.Inspectproductpackagingandappearance;documentinspectionconclusions.
In2024,theCompanyconducted85specializedtestsfocusedonproductperformanceandsafety.Eachteststrictlyadheredtoestablishedstandards,withmeticulousmanagementthroughouttheentireprocess—fromtestdesignandequipmentcalibrationtodatacollectionandanalysis.Leveragingrigoroustestingprotocols,aprofessionaltechnicalteam,andarobustqualitycontrolsystem,theaforementionedtestprojectsachieveda100%passrate,fullyvalidatingtheexceptionalqualityandsafetyoftheCompany’sproducts,therebyprovidingcustomerswithsolidandreliablequalityassurance.
DeepeningProductQualityTrainingtoStrengthenQualityManagementFoundations////In2024,theCompanyimplementeddiversetrainingprogramscoveringQualityManagementSystemsandqualitymanagementtools,utilizingmethodssuchasinternalworkshops,externalexpertlectures,andon-sitesuppliervisits.Theseinitiativesnotonlyenhancedemployees'professionalskillsandqualityknowledgebutalsoreflectedtheCompany’ssustainedinvestmentinqualityimprovementandtalentdevelopment.ThishaslaidasolidfoundationforoptimizingproductqualityandadvancingtheCompany’scommitmenttosafetyandsustainabledevelopment.
OptimizingCustomerServiceProcessestoEnhanceServiceQuality////
OptimizingCustomerServiceProcessestoEnhanceServiceQualityTheCompanyhasovertwentyyearsofindustryexperienceintheautomotiveaftermarketpartssectorandhasbuiltaninternationalmarketingteamwithstrongmarketingcapabilities.Itscustomerbasespansbothdomesticandinternationalmarkets,withoverseascustomersprimarilylocatedintheUnitedStates,Europe,andothermajorcountrieswithmatureautomotiveaftermarket.TheCompanyhasextensiveindustryresourcesoverseaswhilealsoactivelyexpandinganddevelopingthedomesticmarket,wheresalesrevenuehassteadilyincreasedinrecentyears.Leveragingtheadvantagesoftheglobalautomotivepartsplatformdevelopment,theCompanysynchronouslysellsinbothdomesticandoverseasmarkets,formingeconomiesofscale,acceleratinginvestmentrecovery,andshorteningtheinvestmentreturnperiod.TheCompanyhascollaboratedwithwell-knownoverseasclientssuchasCardoneIndustries,Inc.,DormanProducts,Inc.,andSchaefflerGroupUSAInc.foroveradecade.Ithasalsopartneredwithmanylarge,well-knowndomesticautomotivepartschainenterprises,includingMancando,Carzone,Tuhuandcross-bordere-commercecompanieslikeFuzhouYangtengNetworkCo.,Ltd.andWenzhouShengmuTradingCo.,Ltd.Thishasresultedinamarketstructurethatbalancesbothdomesticandinternationalmarkets,withcoordinateddevelopmentofbothonlineandofflinechannels.ThestrongcustomerbaseprovidessolidsupportforthestabledevelopmentoftheCompany’sbusiness.TheCompanyhasalwaysregardedservingcustomersasacruciallinkinfulfillingsocialresponsibilitiesandpromotingsustainabledevelopment.Itiscommittedtobuildingacomprehensiveandmulti-levelcustomerservicesystem,continuouslyimprovingcustomersatisfactionandloyalty,andfacilitatingthecommongrowthoftheenterpriseanditscustomers.Upholdingtheprincipleofbeingcustomerdemand-oriented,theCompanycontinuouslyimprovesitscustomerservicesystem.Ithasformulatedanumberofmanagementsystems,suchastheReviewProcedureforRequirementsRelatedtoProducts,theCustomerSatisfactionControlProcedure,andtheCustomerComplaintandSituationRegulationsoftheInternationalBusinessDepartment.Inthestageofidentifyingcustomerneeds,througharigorousreviewprocess,theCompanyensuresahighdegreeofmatchingbetweenproductsandservicesfromthesource.Intermsofsatisfactionmanagement,itestablishesasystematicinvestigation,analysisandimprovementmechanismtoensurethatcustomerfeedbackisrespondedtoinatimelyandaccuratemanner.Theafter-salesservicelinksetsupastandardizedcomplaint-handlingprocesstoeffectivelyensurethatcustomerdemandsareresolvedefficientlyandproperly.Allthesesystemsworkincoordinationandlinkage,formingaserviceclosedloopthatcoversdemandidentification,deliveryexecution,andfeedbackhandling,whichfullyreflectstheCompany'shighemphasisoncustomerrightsandinterests.
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Shared Responsibility for a SustainableBusiness Management System
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
Metrics and TargetsMetrics////
Targets////
Lookingaheadto2025,theCompanywillcontinuetosteadilyimproveproductquality,maintainahighproductqualificationrate,andavoidmajorproductqualityandsafetyincidentsaswellasproductrecalls.Meanwhile,theCompanywillbecommittedtoreducingthenumberofcustomercomplaints,steadilyincreasingcustomersatisfaction,andcontinuouslymaintainingahighlevelofcustomercomplaintresolutionrate.Throughsystematicandforward-lookingmanagementmeasures,theCompanywillfurtherconsolidatethefoundationofproductqualityandsafetymanagementandpromotethelong-term,stableandhealthydevelopmentofcustomerrelationships.QualityManagementSystemCertificationObtainedin2024:
InMarch2024,theCompany’ssubsidiary,QIAutomotive(QINGDAO)Co.,Ltd.,Ltd.,obtainedtheIATF16949AutomotiveQualityManagementSystemCertification.
NumberofMajorProductQualityandSafetyIncidentsin2024
ProductQualificationRatein2024
96.5%
ProductScrapRatein2024
NumberofProductRecallIncidentsin2024
CustomerSatisfactionin2024
8.57points(ona10-pointscale)
NumberofCustomerComplaintsin2024
CustomerComplaintResolutionRatein2024
100%
AboutCapabilityBuilding
TheCompanyactivelyguidesitsbusinessteamstokeepupwithmarketdynamicsandstrengthensthelearningofproductknowledgeandbuildingofcapacity.Regulartraininghelpsbusinesspersonneltomasterproductkeypointsproficiently,ensuringthattheycanprovideprofessionalandaccurateanswerstocustomersduringtheserviceprocess,andcomprehensivelyimprovethelevelofcustomerservice.TheCompanyarrangesforbusinesspersonneltodeeplyparticipateinthecustomerserviceprocess,conductsproductknowledgetrainingandprovidesprofessionalanswerstocustomers,helpscustomersbetterunderstandtheproductperformanceandapplicationvalue,furtherenhancescustomers'awarenessandtrustintheCompany'sproducts,andconsolidatesthefoundationofcooperationbetweenthetwoparties.
AboutProductServiceSupport
TheCompanyattachesgreatimportancetothelong-termmaintenanceofcustomerrelationshipsandcontinuouslyexpandscommunicationchannels.Itstrengthensinteractionthroughvariousformssuchastelephonecallsandvideoconferences,promptlyunderstandschangesincustomerneedsandfeedbacksuggestions,improvesthefrequencyandqualityofcommunication,andcontinuouslyenhancescustomerstickinessandsatisfaction.Meanwhile,theCompanyhasestablishedaregularcustomersatisfactionsurveymechanism.Everyyear,itwidelycollectscustomers'opinionsandsuggestionsthroughquestionnaires,andaftersystematicanalysis,itpromptlyprovidesfeedbacktorelevantdepartmentstoenhancetargetedserviceoptimization.Bycontinuouslyoptimizingtheservicemechanismandbuildingservicecapabilities,theCompanycontinuouslyconsolidatesthefoundationofcustomerrelationshipmanagement,providingstrongsupportforachievingalong-term,stable,mutuallybeneficialandwin-wincooperationpattern.Inthefuture,theCompanywillcontinuetooptimizethecustomerservicesystemtomeetcustomerneedswithhigher-qualityservices.
AboutMaintainingCustomerRelationships
Awardsrelatedtoproductsafetyandqualitymanagementandcustomerserviceobtainedin2024InJune2024,theCompanywasinvitedtoattendthe2024GlobalSupplierConferenceconvenedbySchaefflerGroup.inHerzogenaurach,Germany,andwontheonlySupplierValueAwardintheChineseregion.ThisawardfullyaffirmsthecomprehensivevaluecontinuouslycreatedbytheCompanyforitsbusinessintheChineseregionintermsofsupplyguarantee,costcontrol,qualitymanagement,etc.,anddemonstratestheCompany'sprofessionalstrengthandcooperativecontributionswithintheglobalsupplychainsystem.
2024 Sustainability Report 29
Shared Responsibility for a SustainableBusiness Management System
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendixCollaborative Win-WinEnsuring Supply Chain Security and FairnessGovernance
General Manager
QualityDepartment
TechnicalDepartmentProcurementDepartment
LogisticsDepartment
Supplier Management Structure
ProcurementDepartment:Responsibleforsuppliersourcingandonboarding,newproductmolddevelopment,
bulkproductprocurement,dailysuppliermanagement,andquarterlysupplierevaluations.QualityDepartment:Responsibleforconductingon-sitequalityauditsandevaluationsofsuppliers,trackingandhandlingsupplierdeliveryqualityandcustomercomplaints,performingquarterlysupplierqualityassessments,andinspectingincomingmaterialsanddeterminingnon-conformities.
TechnicalDepartment:Responsibleforreviewingandevaluatingthetechnicalcapabilitiesofsuppliers,providingtechnicalsupportduringnewproductplanning,development,production,andafter-salesprocesses,assistingsuppliersinresolvingtechnicalissues,andconductingquarterlyevaluationsonsuppliers'technicalaspects.LogisticsDepartment:Responsiblefortheselectionandevaluationofservicesuppliers(suchaslogisticscompanies,freightforwarders,courierservices,etc.),handlingtheCompany'slogistics,goods,andwarehousemanagement,ensuringthesafetyoftheCompany'sgoods,containers,andtransportationtools,andparticipatinginthesafetymanagementofbusinesspartners.
GovernanceSystem////
Withthegoalofbuildingasustainablesupplychain,theCompanystrengthenssuppliermanagementthroughasoundinstitutionalsystemandpromotessharedresponsibilityandcollaborativedevelopmentacrosstheentiresupplychain.TheCompanyhasformulatedtheProcurementControlProcedure,whichtakesthestandardizedmanagementoftheentireprocessasitscore,coveringaspectssuchassupplieradmission,supplierassessment,implementationandmonitoringofprocurement.Clarifyingtheresponsibleentitiesandoperationspecificationsateachstageensuresthatprocurementactivitiesarelegal,compliant,efficientandtransparent.
StrategyInsupplychainmanagement,theCompanyadherestothemanagementmodelof"Separatewhennecessary,integratewhenoptimal,"withafocusonreliablequalityandstablesupply,managingglobalsupplierswithbothstrictnessandflexibility.
Impact, Risk andOpportunity ManagementAgainstthebackdropofthecontinuousevolutionoftheglobalsupplychainlandscape,theintensifyingfluctuationsinmarketdemand,andthecontinuousimprovementofregionalpoliciesandcompliancerequirements,theCompanyfacesmultiplerisksandchallengesinsupplychainmanagement.Toactivelyaddresstheaboveuncertainties,theCompanycontinuouslystrengthenstheconstructionofitssupplychainmanagementsystemandfocusesonsystematicallydeployingkeymeasuresfrommultipleaspects,includingbuildingamulti-dimensionalsupplieradmissionmechanism,improvingandperfectingthesuppliermanagementmechanism,optimizingthesupplierstructureandmanagingrisks,promotinglocalizedprocurementandreducingcostswhileincreasingefficiency,jointlyenhancingthesupplychainquality,andtreatingsmallandmedium-sizedenterprisesequally,soastocomprehensivelycreateastable,efficient,transparentandsustainablesupplychainecosystem.
GovernanceStructure////
2024 Sustainability Report 30
Shared Responsibility for a SustainableBusiness Management System
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 31
BuildingaMulti-dimensionalSupplierAdmissionMechanism////TheCompanyhasestablishedastrictsupplierqualificationevaluationmechanism,comprehensivelyconsideringvariousdimensionssuchasbusinessrisks,qualitylevels,andtechnicalcapabilities,layingasolidfoundationforbuildingahigh-qualitysupplychainsystem.In2024,theCompanycarriedoutthescreening,review,andadmissionworkfordifferenttypesofhigh-qualitysuppliersinmultiplefields,suchasautomobilesandconstructionmachinery.Finally,58supplierswereselectedfrom210candidateunitsandcompletedcontractsigning.WesenttheProposalonSupplierSocialResponsibilitytoallnewlysignedsuppliers,advocatingforthemtofulfilltheirsocialresponsibilities.Meanwhile,werequiredthat100%ofnewlysignedsuppliersformallyexecutetheIntegrityCommitmentLetter,,jointlypromotingtheprinciplesofcompliance,integrity,andsustainabledevelopment.
BusinessRiskDimension30points
Technical
StrengthDimension
30pointsQualityLevelDimension
40points
BusinessRiskDimension
includesevaluationelementssuchasbusinessoperationrisks,legalrisks,risksfromcompetitorsandthewillingnesstocooperate,etc.
TechnicalStrengthDimension
includeselementssuchastheexperienceindevelopingsimilarproducts,thecapabilitiesoftheR&Dteam,theR&Dprocess,theuseofR&Dtools,thetechnicalreviewperformance,theevaluationofproductregulationsandstandards,andwhetherthetestingitemsandequipmentmeetnationalstandardsorenterprisestandards,etc.QualityLevelDimension
includesevaluationelementssuchastheconditionofproductionequipment,theconditionoftestingequipment,theoperationofthequalitysystem,on-siteauditresults,thecapacityofrawmaterialsandwarehousingmanagement,andthesuppliermanagementability,etc.
Supplier Qualification Criteria
ImprovingandPerfectingtheSupplierManagementMechanism////
TheCompanyimplementshierarchicalmanagementforqualifiedsuppliers,conductsquarterlyevaluationsandannualaudits,anddynamicallyadjuststhesupplierlevelsandcooperationstrategiesaccordingtotheevaluationresults.In2024,theCompanyevaluated83%ofitssuppliers,ofwhich85%wereratedasqualified.Throughthecontinuouslyoptimizedevaluationmechanism,itcontinuouslypromotestheimprovementofsuppliers'qualityandperformancecapabilities.
Additionally,theCompanycommunicatesitscoresustainabilityrequirementsandbehavioralstandardstoallsuppliersbydistributingtheProposalonSupplierSocialResponsibilityandIntegrityCommitmentLetter,committingtopromotingsocialresponsibilityandcompliantoperationsacrosstheentiresupplychain.
Supplier Rating System
QualityTechnologyProcurementCooperationInformation Security
AssessmentAEO Management
CustomerComplaintQualificationRate15IncomingInspectionPassRate15First-TimeSampleApprovalRate20On-timeDeliveryRate20PriceSupport10Cooperation10InformationSecurityImplementation5CompliancewithAEOManagementRequirements5
Shared Responsibility for a SustainableBusiness Management System
QI Automotive Co., Ltd.Social ResponsibilityPrefaceGovernance ResponsibilityEnvironmental ResponsibilityAppendix
2024 Sustainability Report 32
SupplierStructureOptimizationandRiskManagement////SupplierConsolidationTostreamlinesuppliermanagementandimproveoperationalefficiency,theCompanysystematicallyreducedcomplexitybyphasingoutunderperformingsuppliersandintegratingsimilarsupplyresources.In2024,atotalof75supplierswereconsolidatedcomparedtothepreviousyear.
In2024,theCompanyenhancedthetieredsupplierevaluationsystem,increasingtheproportionofhigh-qualitysuppliers(thosewithanannualevaluationscoreof85orabove)to9.5%ofallsuppliers.Byestablishinglong-termstrategicpartnershipswiththesesuppliers,theCompanynotonlyeffectivelyreducedprocurementcostsbutalsosignificantlyimprovedproductqualitystabilityanddeliverytimelinessbyleveragingtheirreliablequalitymanagementandefficientcollaborativedeliverycapabilities,therebyprovidingstrongsupportforproductionoperations.
High-QualitySupplierRatioImprovement
Tomitigatesupplychainrisks,theCompanyestablishedathree-dimensionalriskidentificationmodelbasedonproductlines,moldcosts,andrisklevelstocomprehensivelyassesssecondarysuppliers.Bycreatingahigh-risksupplierlistandimplementingadynamicriskwarningmechanism,theCompanyhassignificantlystrengthenedfull-processriskmonitoring.Inthefuture,theCompanywillcontinuetorefineriskidentificationandmonitoringprocedurestopromotemorerefinedmanagementofsecondarysuppliersandenhancetheoverallresilienceandriskresistanceofthesupplychainsystem.
SecondarySupplierManagement
LocalizedProcurementandCostEfficiency////LocalSourcingStrategyIn2024,theCompanyactivelyimplementedalocalsourcingstrategybyreplacing5supplierslocatedinsouthernChinawithShandong-basedsuppliers,achievinglocalizedprocurementworthapproximatelyCNY2million.Thisinitiativenotonlysavedapproximately3%inprocurementcostsbutalsoeffectivelyshortenedlogisticstransportationdistances,reducingtheproductioncycleofrelatedproductsby20%andsignificantlyimprovingthesupplychain'sresponsivenessandoveralloperationalefficiency.Direct-to-CustomerModel:Tooptimizedeliverypathways,theCompanyactivelypromotedadirect-to-customersupplymodel.In2024,12loyalsuppliersprovideddirectdeliveryservicesfor1,426productsacross742batchescoveringfivecoreproductlines.Byreducingintermediatesteps,theCompanysignificantlyimproveddeliveryefficiency,achievinga95%on-timedeliveryrateunderthismodelandmarkedlyenhancingcustomersatisfaction.
Direct-to-CustomerModel
TheCompanyadoptedadirectprocurementmodelfornon-confidentialparts,allowingsupplierstoindependentlypurchasenon-confidentialmaterials.Thisinitiativehaseffectivelysimplifiedinternalprocesses,reducedinternalhandlingtimeby50%,andsignificantlyloweredwarehousingmanagementcosts.Non-confidentialPartsDirectProcurement
Shared Responsibility for a SustainableBusiness Management System
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 33
CollaborativeSupplyChainQualityImprovement////TheCompanyplaceshighimportanceoncollaborativequalitydevelopmentacrossthesupplychain.Itregularlyorganizestargetedtrainingprogramsforsuppliers,aimingtostrengthentheirqualityawarenessandtechnicalcapabilities,therebycontinuouslyenhancingtheoverallcompetenceandperformanceofthesupplychain.
Case: On-site Guidance forthe Cast Flywheel SupplierToaddresstheissueofalowproductqualificationrateatacastflywheelsupplier,theCompany'squalityandtechnicalteamsprovidedon-site,one-on-onesupport.Byanalyzingproductionprocesses,optimizingprocessparameters,andimprovingqualityinspectionmethods,theteamhelpedthesuppliersignificantlyraisethequalificationrateto98%,therebyeffectivelyensuringproductdeliveryquality.
TreatingSmallandMedium-sizedEnterprisesEqually////
TheCompanyalwaysadherestotheprinciplesoffairnessandjusticeincooperation,strictlyabidesbycommercialcredit,andthereisnosituationofoverduepaymenttosmallandmedium-sizedenterprises.Duringtheprocessofcooperationwithsuppliers,theCompanyiscommittedtoprovidingequalcooperationopportunitiesforsmallandmedium-sizedenterprisesandjointlycreatingahealthyandsustainablebusinessecologicalenvironment.
Metrics and Targets
Metrics////NumberofSuppliersEvaluatedin2024
EvaluationCoverageofKeySuppliersin2024
100%
NumberofSuppliersIdentifiedwithSignificantActualorPotentialNegativeESGImpactsin2024
MajorDisputeswithSuppliersin2024
ProcurementDifficultiesin2024
OperationalDisruptionsorSignificantPriceFluctuationsDuetoSupplyShortagesorDelaysin2024
Targets////
Lookingaheadto2025,theCompanywillcontinuetostrengthendynamicsuppliermanagement.Basedontheworkin2024,itplanstostreamlineacumulativetotalof100suppliers,furtherpromotingtheoptimizationofthesupplychainstructureandtheimprovementofquality.Meanwhile,theCompanywillcontinuetomaintainfullcoverageoftheevaluationofimportantsuppliersandcontinuouslyenhancethepreventionofsignificantactualorpotentialnegativeESGrisksatthesupplierlevel.TheCompanywillalsoactivelypreventandcontrolsupplychainoperationriskssuchasprocurementinterruptionsorabnormalpricefluctuations,effectivelyensuringthestabilityandsustainabilityofthesupplychainsystem.
Shared Responsibility for a SustainableBusiness Management System
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 34
Driving Industrial Innovation
Upgrading Through Technology
Governance
General Manager
Technology
Department
R&D Management Structure
EngineeringTechnologyTeam
QualityTesting TeamHardwareTeam
Software
Team
GovernanceSystem////
TheCompanyattachesgreatimportancetotheconstructionoftheR&Dmanagementsystem.Focusingontheentireprocessofproductdevelopment,ithassuccessivelyformulatedaseriesofinstitutionaldocuments,includingtheAdvancedProductPlanningControlProcedure,theSoftwareDesignandDevelopmentProcessSpecification,theHardwareDesignandDevelopmentProcessSpecification,andtheIntellectualPropertyManagementMeasures.Thesesystemscovertheentireprocessfromplanning,developmentandimplementationtoachievementmanagement.Throughtheimplementationofthesystemsmentionedabove,theCompanyhaseffectivelyimprovedthestandardizationandefficiencyofitsR&Dactivities,ensuredcomplianceandcontrollabilityoftechnologicalachievements,andlaidasolidfoundationforcontinuouslypromotingproductinnovationandenhancingcorecompetitiveness.StrategyTheCompanyregards“Deliveringhigh-quality,cost-effectiveelectronicsfortheautomotiveaftermarket”asthestrategicobjectiveofitsR&Dandinnovationefforts.Inpursuitofthisgoal,ithascontinuedtoincreaseR&Dinvestment,improvetheinnovationsystem,advanceproductplanningandtechnologicalbreakthroughsinlinewithmarketneeds,andstrengthenbothindependentR&Dcapabilitiesandcoretechnologicalcompetitiveness.
Facingmultiplechallenges,suchastheacceleratedtechnologicalchangeintheindustry,theincreasinglydiversecustomerdemands,andtheintensifyingpressureofgreenandlow-carbontransformation,thesupportingroleofscientificandtechnologicalinnovationinpromotingtheCompany'sfuturedevelopmenthasbecomeincreasinglyprominent.Toactivelyrespondtotheaboverisks,relyingonacomprehensiveandadvancedR&Dsystem,theCompanycontinuouslypromotesproductinnovation,keepsupwiththetechnologicaldevelopmenttrendsandmarketdynamics,andaccuratelyrespondstothediversifiedneedsofcustomers.TheabovemeasuresnotonlyhelptheCompanyenhanceitsmarketadaptabilityandcustomersatisfactionbutalsocontributetothegreenandlow-carbondevelopmentoftheautomotiveindustryandtheglobalsustainabletransformation.
GovernanceStructure////
EngineeringTechnologyTeam:Responsibleforthestructuraldesignanddevelopmentofproducts,ensuring
thattheymeetfunctionalrequirementswhiledeliveringstrongperformance,reliability,andmanufacturability.HardwareTeam:Responsibleforthedesign,development,testing,andmaintenanceoftheproducthardwaresystem,ensuringitsperformance,reliability,andstability.
SoftwareTeam:Responsibleforthedesign,development,testing,maintenance,andoptimizationofthe
softwarerelatedtotheproducts,ensuringthatthesoftwareproductsmeettheuserrequirementsandbusinessneeds.
QualityTestingTeam:Responsibleforconductingcomprehensivetestsontheproductstoensurethatthequalityandperformanceoftheproductsmeetthespecifiedstandardsanduserrequirements.
Shared Responsibility for a SustainableBusiness Management System
Impact, Risk andOpportunity Management
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 35
Case: Electric Power Steering
Rack and Pinion SystemInthefieldofautomotivepartsR&D,theCompanyfocusesonthecorecomponentsofintelligentdrivingandhassuccessfullylaunchedtheproductoftheelectricpowersteeringrackandpinionsystem.Thisproductconformstothedevelopmenttrendsofautomotiveintelligenceandelectrification.Throughtheindependentlydevelopedadvancedalgorithmsandsystemintegrationtechnologies,itsignificantlyimprovessteeringcontrolaccuracyanddrivingcomfort.TheCompanyhasassembledaprofessionalR&Dteam.Aftermorethantwoyearsoftechnicalresearchandrepeatedverification,ithasbrokenthroughanumberoftechnicalproblemsintheindustry.Theproducthaspassedmorethan30professionaltestscoveringenvironmentaladaptability,reliability,durability,etc.,andhasundergonelong-termreal-vehicleroadteststoensurethestableandreliableperformanceofallaspects.Thecoreperformanceindicatorsofthisproducthavereachedanadvancedlevelintheindustry,andsomeperformancesarebetterthansimilarproductsinthemarket.Relyingontheachievementsoftechnologicalinnovation,theCompanyhasestablishedacompleteproductmatrixwithawiderangeofvehiclemodeladaptationcapabilities,andcanmeetdiversecustomerneeds.Astheproductgraduallyachieveslarge-scaleproduction,itisexpectedtoeffectivelyreducecostsandfurtherenhancemarketcompetitiveness.Aftertheproductislaunched,itisexpectedtobewidelyrecognizedbycustomers.WhilebringinggoodeconomicbenefitstotheCompany,itwillalsohelpthetechnologicalupgradingoftheautomotiveaftermarketandpromotethesustainabledevelopmentoftheindustry.Inthefuture,theCompanywillcontinuetoincreaseitsR&Dinvestment,continuouslyoptimizeproductperformance,andprovidecustomerswithmorehigh-qualityandsafeintelligentdrivingsolutions.
Metrics and Targets
Metrics////R&Dinvestmentin2024
CNY23,671,743.04
R&DInvestmentasaPercentageofMainBusinessRevenuein2024
3.15%
NumberofR&DpersonnelasofDecember31,2024
ProportionofR&DPersonnelinTotalEmployeesasofDecember31,2024
21.28%
Targets////
Lookingaheadto2025,theCompanywillcontinuetostrengthenthedevelopmentofitsR&Dsystem.WhilemaintainingareasonableproportionofR&Dinvestment,itaimstosteadilyimproveR&Defficiencyandthetransformationofresearchoutcomes.TheCompanywillaimtomaintainastableR&Dteamsizeandcontinuouslyoptimizethetalentstructuretosupporttechnologicalinnovationandproductiteration.Intermsofintellectualpropertyrights,theCompanywillactivelypromotethecontinuousapplicationforandgrantingofinventionpatents,ensuringthatR&DachievementsbetterservethecorebusinessandprovidestrongsupportfortheCompany’shigh-qualitydevelopment.
NumberofInventionPatentApplicationsbytheCompanyandItsSubsidiariesin2024
NumberofInventionPatentsGrantedtotheCompanyandItsSubsidiariesin2024
NumberofValidInventionPatentsHeldbytheCompanyandItsSubsidiariesasofDecember31,2024
NumberofInventionPatentsAppliedtoCoreBusinessbytheCompanyandItsSubsidiariesasofDecember31,2024
NumberofPatentApplicationsbytheCompanyandItsSubsidiariesin2024
NumberofPatentsGrantedtotheCompanyandItsSubsidiariesin2024
NumberofValidPatentsHeldbytheCompanyandItsSubsidiariesasofDecember31,2024
NumberofPatentsAppliedtoCoreBusinessbytheCompanyandItsSubsidiariesasofDecember31,2024
NumberofSoftwareCopyrightsHeldbytheCompanyandItsSubsidiariesasofDecember31,2024
Shared Responsibility for a SustainableBusiness Management System
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 36
Empowering with Digital Intelligence
Safeguard Data SecurityGovernance
GeneralManager
Integrated Management Department
Data Security and Customer Privacy Protection Management Structure
ResponsiblefortheprocurementandmaintenanceoftheCompany'sIThardwareequipment;maintenance,management,andinformationsecurityoftheCompany'sinformationsystemssuchasSAP,OA,WMS,andPDM;monitoringofnetworksecurity;andtheestablishment,implementation,andmaintenanceoftheCompany'sinformationsecuritymanagementsystem.
GovernanceSystem////Intermsofdatasecurityandcustomerprivacyprotection,theCompanyhassuccessivelyformulatedanumberofspecialmanagementsystems,suchastheInformationSecurityManual,theRegulationofInformationAssetSecurityManagement,andtheRegulationofInformationSecurityIncidentManagement.Thesesystemssystematicallystandardizetheworkofinformationsecurityandcustomerprivacyprotection,effectivelyimprovethedataprotectioncapabilitiesandmanagementlevel,andtheCompanyhasobtainedtheISO27001CertificationforInformationSecurityManagementSystem.
Strategy
TheCompanyadherestotheoverallpolicyof"Prioritizesafetythroughprevention:integratedmanagementandtechnicalsafeguards",andcomprehensivelyimprovestheinformationsecurityprotectioncapabilitiesandthelevelofriskpreventionandcontrol.
Againstthebackdropofaccelerateddigitaltransformation,frequentcyberattacks,andincreasinglystringentdatacompliancesupervision,enterprisesarefacedwithmultiplerisksinaspectssuchasdatasecurityandcustomerprivacyprotection.Inordertoeffectivelyaddresstheabovechallenges,theCompanyhascomprehensivelyestablishedadatasecurityprotectionsystem.Focusingonkeyaspectssuchashardwareprotection,systemprotection,customerprivacyprotection,andemployeetraining,ithassystematicallydeployedmulti-dimensionalsecuritymeasurestoeffectivelyenhancethelevelofdatasecuritymanagementandtheabilitytoprotectcustomerprivacy.
Intermsofhardwareprotection:Comprehensivelyimprovethesecuritymanagementandcontrolcapabilitiesofhardwaredevices////
Unified terminal management
and controlAllemployees'officecomputershavebeenincorporatedintodomainmanagement,andaterminalmanagementsystemhasbeenenabledtostrictlylimitthepermissionsofusersatalllevels.
Login authentication mechanismAmandatorypasswordpolicyisenforcedforallcomputerlogins,andtwo-factorauthenticationisenabledforemailloginstoensuretheauthenticityandvalidityofoperators.
DynamicmonitoringandearlywarningTheCompanyhasdeployedareal-timemonitoringsystemtomonitortheoperationofserversandnetworkdevicesaroundtheclock.Ifanyabnormalitiesoccur,anemailalertistriggeredimmediately,andtheissueispromptlyinvestigatedandresolved.
Physicalsecurityprotection
SwipecardsarerequiredtoentertheCompany'sofficearea.Takingphotosorvideosareprohibitedinthewarehouse.Fingerprintaccesscontrolisenabledinconfidentiallocationstopreventunauthorizedpersonnelfromenteringimportantareas.
GovernanceStructure////
Shared Responsibility for a SustainableBusiness Management System
Impact, Risk andOpportunity Management
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 37
Intermsofsystemprotection:Strengthenthecomplianceofsystemplatformsanddatausage////
Bindingandmanagementandcontrolofkeysystems
TheCompany'sSAPsystemimplementsthebindingofMACaddressesanddevicecharacteristiccodes,allowingloginonlyfromauthorizedterminals.
Cloudsecurityprotection
AllcoresystemsoperateintheAlibabaCloudenvironment,andAlibabaCloudsecurityservicesarefullyenabledtoachieveclouddataprotection.
Fullcoverageofgenuinesoftware
TheCompany'soperatingsystems,officesoftware,andengineeringdesignsoftwarearealllicensed,mitigatingsoftware-relatedrisks.
Intermsofcustomerprivacyprotection:Improvetheprotectionmechanismforcustomerandbusinessinformation////Multi-dimensionalencryptionandaccesscontrolTheCompanyisequippedwithmultipleprotectionmeasures,includingfirewalls,encryptionmechanisms,andaccesscontrol,spanningfromterminalstonetworkdevicestoservers,ensuringthesecurityofdatatransmissionandstorage.
Finehierarchicalpermissions
TheCompanyadoptsalayer-by-layerpermissiondivisionmechanismatthenetworkleveltoensureauniqueaccesspathandcontrollableoperationbehavior.Withinthesystem,role-basedpermissionsaresetforcustomerandsupplierinformation,ensuringemployeescanonlyaccessdatawithintheirauthorizedbusinessscope.
Intermsofemployeetraining:Improveemployees'datasecurityawareness////
Closed-loopdepartureauditTheCompany'sIntegratedManagementDepartmentconductsacomprehensiveauditoftheinformationsecuritycomplianceofalldepartingemployeestoeliminatepotentialrisksofinformationleakage.
Comprehensivetrainingcoverage
TheCompanyemphasizestheimportanceofnetworkandinformationsecurityduringonboardingtrainingfornewemployees.AllemployeesareprovidedwithnetworkandinformationsecuritytrainingeveryyeartocultivatetheirawarenessofnetworkandinformationsecuritysothatallemployeesarefamiliarwiththeCompany'snetworkandinformationsecuritymanagementsystem.
AI-assistedpromotionviatheintelligentQ&Asystem
TheCompanyhasdeployedanAI-basedintelligentQ&Asystem,enablingemployeestoconvenientlyconsultinternalsystemsandsecurityrequirements,thusimprovingtheefficiencyofunderstandingandtheaccuracyofexecution.
Metrics and Targets
Metrics////
NumberofEmployeesinFunctionalDepartmentsParticipatinginInformationSecurityTrainingandExamsin2024
ParticipationCoverageRateofEmployeesinFunctionalDepartmentsin2024100%
PassRateofEmployeesinFunctionalDepartmentsParticipatingintheExamin2024
98.85%
Targets////Lookingaheadto2025,theCompanywillcontinuetostrengthenitsdatasecurityandcustomerprivacyprotection,ensuringthatinformationsecuritytrainingandexamscoverallemployeesinfunctionaldepartmentsandaimingtomaintainahighpassrate,continuouslyimprovingemployees'securityawarenessandoperationspecifications.Additionally,theCompanywilltryitsbesttoensurethetimelyandeffectiveidentificationanddisposalofunacceptablerisks,aimingtoavoidmajordatasecurityincidents,customerprivacyleakage,customercomplaintsregardingdatasecurityandcustomerprivacy,andriskssuchaslong-terminterruptionoftheinformationsystem.ThiswillensurethecontinuousandstableoperationofthebusinessandprovideasolidsecurityfoundationfortheCompany’ssustainabledevelopment.
UnacceptableRiskHandlingRatein2024
100%
NumberofCustomerComplaintsRelatedtoDataSecurityandCustomerPrivacyProtectionin2024
NumberofTimesBusinessInterruptionsDuetoInformationSystemUnavailabilityLasting≥4HoursOccurredin2024
NumberofMajorDataSecurityIncidentsOccurringin2024
NumberofCustomerPrivacyBreachIncidentsOccurringin2024
*Calculation formula: Unacceptable risk handling rate = Number of unacceptable risks addressed / Totalnumber of unacceptable risks
Shared Responsibility for a SustainableBusiness Management System
Wehavealwaysattachedgreatimportancetothegrowthandwell-beingofouremployeesandarecommittedtocreatingadiverse,inclusive,harmoniousandsymbioticworkingenvironment.Weensureemployees'rightsandinterestsinallaspects,rangingfromtalentcultivation,salaryandbenefitstooccupationalhealth.Meanwhile,weactivelyfulfilloursocialresponsibilities,givebacktosocietyinvariousforms,andconveythewarmthoftheenterprise.Wefirmlybelievethatonlybypromotingthegrowthofemployeesandsocialdevelopmentsimultaneouslycanweachievethecommonprosperityoftheenterpriseandsocietyandwriteasatisfactoryanswersheetfortheeraofsustainabledevelopment.
Co-Building and SharingPromoting Social Progress
People-Oriented Approach: Fostering a DiverseDevelopment Ecosystem //////
Altruism in Action: Deepening SocialResponsibility //////
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2024 Sustainability Report 39
Co-Building and Sharing: PromotingSocial ProgressPeople-Oriented ApproachFostering a Diverse Development Ecosystem
Governance
General Manager.
Integrated Management Department
Human Resource Management Structure
Responsibleforformulatingandimplementingtheannualtrainingplan,establishingjobresponsibilitiesandqualificationstandardsforeachposition,andconductingemployeerecruitment,selection,andcompetencyevaluation.GovernanceSystem////Inhumanresourcemanagement,theCompanyhasestablishedmultiplespecializedmanagementsystems,includingtheEmployeeHandbook,Environmental,OccupationalHealthandSafetyOperationalProcedures,HumanRightsandWorkingConditionsPolicy,andEmployeeGrievanceManagementSystem.Thesesystemscomprehensivelystandardizeemployeeconduct,safeguardoccupationalhealthandsafety,protectemployeerights,andestablishclearcommunicationandgrievancemechanisms.TheCompanycontinuouslyimprovestheimplementationandsupervisionmechanismsofthesesystemstoensureeffectiveexecution,providingstrongsupportfortalentdevelopmentandtheCompany’ssustainablegrowth.
Strategy
Atthestrategiclevelofemployeemanagement,theCompanyadoptsasystematicandforward-lookingapproachtobuildingacomprehensivetalentdevelopmentsystem.First,theCompanydeeplyintegratesemployeemanagementintoitsoverallcorporatestrategy.Throughprecisehumanresourceplanning,itforecaststalentdemands,strategicallyreservestechnicaltalentduringdigitaltransformationandoverseasexpansion,andcultivatestransnationalelitestoaligntalentsupplywithbusinessgrowth.Second,theCompanyimplementsdifferentiatedtalentmanagementstrategies.Focusingoncorerolesthatgenerate80%ofcorporatevalue,itcustomizesexclusivedevelopmentpathsforthetop20%ofhigh-impactemployees,coveringexecutivesuccessionplansandcompensationoptimization.Concurrently,theCompanyemploysflexibleemploymentmodels(full-time,outsourcing,expatriatesupport)tooptimizelaborcostsscientifically.Additionally,guidedbycorporateculture,theCompanyintegratesthevaluesof“Operatelawfully,actrightly,benefitothers”intoemployeeconductstandardstoreducemanagementcosts.Adheringtothephilosophyof“pursuingbothmaterialandspiritualwell-beingforallemployees”,itenhancesemployeehappiness,fostersculturalcohesion,anddrivesmutualgrowthbetweentheCompanyanditsworkforce.Impact, Risk andOpportunity ManagementInthefast-evolvingmarketenvironment,companiesfacechallengessuchasincreasingtalentmobility,urgentneedsforemployeeupskilling,andrisingoccupationalhealthandsafetyrisks.Toaddresstheserisks,theCompanyhasimplementedproactivemeasuresacrossemployeerecruitment,traininganddevelopment,compensation,femaleemployeesupport,andoccupationalhealthandsafety,aimingtocreateasuperiorworkenvironment,safeguardphysicalandmentalhealthandcareersecurity,andenhanceorganizationalcohesionandcompetitiveness.
GovernanceStructure////
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2024 Sustainability Report 40
EmployeeRecruitment////
TheCompanyadherestoan“Ethics-first”employmentphilosophy,emphasizingthealignmentofintegrityandcapability.
Intherecruitmentprocess,forpositionsotherthanfront-linepositions,theinitialinterviewsarejointlyconductedbytheemployingdepartmentandtheheadsofrelevantbusinessdepartments.AtleasttheChairmanoftheBoardortheGeneralManagerwillparticipateinthefinalinterview.Fortherecruitmentofkeypositions,thehumanresourcesdepartmentandtheemployingdepartmentwilljointlycarryoutbackgroundcheckstoensurethatthecandidateshaveexcellentcomprehensivequalities.
Theentirerecruitmentprocessiscompliant,transparent,andfair,upholdingtheprincipleof“Equitablehiring,rigorousentry,andflexibleexit”.Non-competencyfactors(e.g.,gender,age,maritalstatus,parenthood)arestrictlyexcludedtoguaranteeequalemploymentrights.
EmployeeTrainingandDevelopment////
?TheCompanycontinuouslyconductstalentreviewsandcapabilityenhancementprogramstocultivateatalentpipelinedrivenbybothcharacterandcapability.?TheCompanyconductscompany-widetalentreviewstwiceayear,evaluatingallemployeesacrossfourdimensions—character,capability,performance,andexceptionalcontributions—andensuresthateachkeypositionhasonetotwodesignatedbackupcandidates.?SinceNovember2024,theCompanyhasimplemented1-to2-yeargrowthplansforhigh-potential
employees,utilizingmentorship,jobrotations,specializedtraining,andmanagementmeetingobservationstosupporttheirrapidgrowth.
ComprehensiveTrainingSystemforTalentGrowth
?Newemployeetraining:Withinoneweekofonboarding,theCompanyassignsamentortoeachnewemployeeandformulatesatailoredtrainingplanfortheprobationperiod.Amongthenewhiresin2024,7wereawardedthe“BestNewcomer”title.?CharacterDevelopmentInitiatives:
?TheCompany'smanagementteamhostsbookclubsthatalignwithcorporatevalues,reinforcingthemindsetof“Refinethemindandtemperthesoul”.?TheCompanyorganized13book-sharingsessionsfornewlyappointedmanagerstocontinuously
studyKazuoInamori’smanagementphilosophy,furtherstrengtheningconsensusonvaluesandmanagementconcepts.?TheCompanyorganizedSeiwajyukuSixPillarsofImprovementOffsiteIntensiveWorkshops.In2024,
atotalof37employeesparticipatedinthetraining,withatotalinvestmentofCNY150,000.Since2022,199employeeshaveparticipatedinthisworkshop,achievingacoveragerateof60.48%.Afterthetraining,90%ofemployeesreportedself-reflectionandgrowth,effectivelypromotingthedevelopmentoftheircharacterandastrongalignmentwiththeCompany’scorevalues.?Corporate-widereadinglogs:Annualreadingplansforallemployees,fosteringfamilyreadingcultures.?Sharedlibrarysystem:TheCompany’sreadingcornerhasaccumulatedover1,500books,coveringcategoriessuchasmanagement,humanities,andtools.Asetofprinciplesforbookusagehasbeenestablished,focusingon"Sharing,agreements,andself-discipline."
Multi-DimensionalTrainingforaLearningOrganization
?Overseasexhibitionsandclientvisits:LedbytheChairman
andGeneralManager,theCompanyactivelyorganizeshigh-potentialtalenttoparticipateinbothdomesticandinternationalexhibitionsandclientvisits,gainingin-depthinsightsintoindustrytrendsandcustomerneeds.In2024,theCompanysentatotalof78employeevisits,furtherexpandingtheirglobalperspectives.?Leadershipdevelopment:InSeptember2024,theCompany
organizeda“sailingteam-building”eventforthemanagementteam,usinghands-onexperiencetostrengthenteamworkandstrategicalignment,furtherenhancingorganizationalcohesionandleadership.
ExpandingGlobalPerspectivesandLeadership
Co-Building and Sharing: PromotingSocial Progress
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2024 Sustainability Report 41
?EmployeeStockOwnershipPlan:AsofDecember31,2024,123employees,accountingfor37.39%ofthe
totalworkforce,heldsharesintheCompany.ExcludingtheChairman,employees(includingindirectholdings)collectivelyheld8.06millionsharesandoptions,withamarketvalueofapproximatelyCNY200millionbasedontheclosingpriceofCNY23.93onthefinaltradingdayof2024.?Employeewelfaresystem:TheCompanycontinuouslyimprovesitswelfareofferings,includinghousingsubsidies,heatingallowances,commutershuttles,annualtravel,andteam-buildingactivities.In2024,enhancedbenefitswereintroduced,suchassupplementalcommercialinsurance(coveringuptoCNY1millioninmedicalexpenses),regularhealthcheckups,andspecializedexamsforemployeesovertheageof40—furtherstrengtheningemployees’senseofbelonging,fulfillment,andsecurity.
EmployeeCompensationandBenefits
?Since2021,theCompanyhasseenasteadyincreaseintheproportionoffemaleemployees.Asof
December31,2024,therewere97femaleemployees,accountingfor29.48%ofthetotalworkforce—anincreaseof5.09percentagepointsfromthepreviousyear.Meanwhile,womenmadeup50%oftheseniormanagementteam,maintaininggenderbalanceatthedecision-makinglevelanddemonstratingtheCompany’slong-termcommitmenttodiversityandinclusion.?TheCompanyattachesgreatimportancetothephysicalandmentalhealthandfamily-workbalanceof
femaleemployeesintheworkplace.Ithasspeciallysetupacaringspacecalled"MommyCafe",whichisequippedwithfacilitiessuchasreclinersandrefrigeratorstoprovideacomfortable,safeandprivateenvironmentforemployeesduringthelactationperiod.Meanwhile,foremployeesfacingspecialsituationssuchasdiscomfortduringpregnancy,thechallengesofraisingtwins,orhavingnoonetotakecareoftheirsecondchild,theCompanyflexiblyofferstheoptionofworkingfromhometoensurethattheirdualneedsofworkcontinuityandfamilycarearemet.
CareforFemaleEmployees
In2024,theCompanyorganized8dedicatedtrainingsessionsandhands-ondrillsfocusingonoccupationalhealthandsafety.Topicsincludedfireevacuationdrills,AEDfirst-aidoperation,electricshockemergencyresponse,testvehiclesafetyprotocols,andspecializedtrainingforsafetymanagers.Thesesessionscoveredatotalof235employeeattendances.Throughsystematictraining,theCompanysignificantlyimprovedemployees’safetyawarenessandemergencyresponsecapabilities,ensuringahigherlevelofworkplacesafetyandfurtherstrengtheningthefoundationofitssafetymanagementsystem.TheCompanyhasinstalledtwoAEDdevicesatitssitesandestablishedaregularinspectionandmaintenancemechanismtoensurequickaccessincaseofemergencies.
Employees'OccupationalHealthandSafety
FireEvacuationDrills
AEDFirst-aidOperation
ElectricShockEmergencyResponse
Co-Building and Sharing: PromotingSocial Progress
PrefaceSocial ResponsibilityGovernance ResponsibilityQI Automotive Co., Ltd.Environmental ResponsibilityAppendix
2024 Sustainability Report 42
Metrics and Targets
Metrics////
Targets////
Lookingaheadto2025,theCompanyhassetthegoalthattheproportionoffemaleemployeesinthefuturewillnotbelessthan35%.Itwillcontinuetoensurethatthesigningrateofemployees'laborcontractsandemploymentcontractsremainsat100%andensurethatallemployees'socialinsuranceandhousingprovidentfundsarefullycontributed.TheCompanywillfurtherstrengthenemployees'healthprotectionandaimtoachieveafreemedicalexaminationcoverageratecloseto100%forallnewhiresandemployeeswhohaveservedformorethanoneyear.Intermsofsafetymanagement,theCompanywilldoitsbesttoavoidmajorsafetyaccidentsandwork-relatedinjuryaccidents,continuouslyimproveemployees'safetyawareness,andfurtheroptimizetheworkingenvironmenttoensurethatallemployeesgrowanddevelopinasafeandhealthyenvironment.
CertificationsObtainedin2024InApril2024,theCompanyobtainedtheISO45001OccupationalHealthandSafetyManagementSystemcertification.InApril2024,theCompanyobtainedtheISO14001EnvironmentalManagementSystemcertification.EmployeeLaborandEmploymentContractSigningRateasofDecember31,2024100%
EmployeeSocialInsuranceandHousingProvidentFundContributionRateasofDecember31,2024
100%
NumberofMajorSafetyAccidentsin2024
EmployeeWork-RelatedInjuryRatein2024
0%
TotalNumberofFreeMedicalExaminationsforEmployeesin2024
TotalNumberofFreeMedicalExaminationsforNewEmployees
Coveragerate
100%
TotalNumberofFreeMedicalExaminationsforEmployeesEmployedforOverOneYear
Coveragerate
98.5%
Altruism in Action
Deepening Social ResponsibilityCorporate Culture and Philosophy
TheCompanyconsistentlyupholdsthecoreculturalphilosophyof“Actrightly,benefitothers,”promotingpositiveandaltruisticvalues.Thephilosophyguidesorganizationalbehaviorthroughculturalinfluence,continuouslyfosteringintrinsicmotivationamongemployees.ItisnotonlyreflectedindailyoperationsandmanagementbutalsodeeplyembeddedintheCompany’sactionsacrosspublicwelfare,employeecare,andsocialresponsibility.
Co-Building and Sharing: PromotingSocial Progress
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Co-Building and Sharing: PromotingSocial ProgressPublic Welfare andPhilanthropic PracticesUnityinResponsibility,SolidarityinAction:CultivatingMomentumforCollectiveGoodness////In2024,theCompany’sdirectorsandseniorexecutivesdonatedCNY444,000totheJiaozhouRedCrossSocietytosupport12charitableinitiatives,includingmedicalandeducationalassistance,careforhematopoieticstemcelldonors,theconstructionofruralelderlycanteens,andvisitstobereavedfamilies.TheseeffortsdemonstratedtheCompany’scommitmenttosupportingvulnerablegroupsandimprovinggrassrootslivelihoods.Meanwhile,employeesactivelyparticipated,joiningRedCrossstafftovisittheaidsites.Theynotonlydeliveredgoodsandofferedcondolencesbutalsoconveyedwarmthandcarethroughsincerecommunication.Bypracticingcorporatesocialresponsibilitywiththeiractions,theyhelpedcreateacorporateculturefocusedoncaringforothersandspreadinggoodwill.SmallActsofKindness,WavesofWarmth:
JointlyCultivatingaHarmoniousPhilanthropicAtmosphere////Since2020,theCompanyhasorganizedtheOne-DayCharityDonationCampaignforfiveconsecutiveyears.In2024,manyemployeesvoluntarilymadeanonymousdonations,andthecorrespondingfundswerecollectivelydonatedtotheJiaozhouCharityAssociation.Thisinitiativegatheredindividualkindnesstocreatecollectivewarmth,fosteringapositivecharitableatmospherewithintheCompany.
TheCompanyhasalwaysregarded"Actingrightly"and"Benefitingothers"asthecoredrivingforcesbehindthecollaborativedevelopmentoftheenterpriseandsociety.Itcontinuouslyexpandsthebreadthanddepthofitspublicwelfareparticipation,activelyguidingemployeestoengageinsocialvaluepracticesindiversewaysandjointlybuildinganenterpriseculturethatisbothcompassionateandresponsible.
EnvironmentalResponsibilityPART03
Guidedbyoursustainabledevelopmentstrategy,weconsistentlyprioritizeenvironmentalprotectionasacoreoperationalfocus,activelyimplementinggreendevelopmentprinciples.Byestablishingacirculareconomymodel,strengtheningcompliancemanagement,optimizingresourceutilization,reducingemissionsandwaste,andaddressingclimatechangechallenges,wearecommittedtobalancingbusinessgrowthwithenvironmentalresponsibility.Movingforward,wewillcontinuetoexplorelow-carbonandsustainablesolutions,collaboratingwithstakeholderstodrivethegreentransitionandachieveharmonywithnature.
Green Empowerment, Committingto Environmental Stewardship
Circular Economy Leadership, Building a ResourceRegeneration Paradigm //////
Value Resources, Safeguard the Foundation of GreenDevelopment //////
Compliance Foundation, StrengtheningEnvironmental Management Systems //////
Emission and Waste Reduction, EnhancingEnvironmental Performance //////
Climate Action, Addressing Global EnvironmentalChallenges //////
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 46
Circular Economy Leadership
Building a Resource Regeneration Paradigm
Accordingtopublicdata,China'stotalvehiclesinoperation(VIO)reached353millionunitsbytheendof2024,representingayear-on-yearincreaseof5.33%.WiththecontinuousgrowthofVIO,thedomesticautomotiveaftermarkethasenteredastockmarketphase,withannualafter-salesservicescalereachingtrillionsofCNY.Coupledwiththeimpactofincreasingvehicleage,theautomotiveaftermarketispoisedforrapidexpansion,presentingsignificantdevelopmentopportunitiesfortheremanufactureindustry.Asawholly-ownedsubsidiaryofQIAutomotive,CoreMaxRecycling(QINGDAO)Co.,Ltd.("CoreMax")hasbeendeeplyengagedintheremanufacturefieldforseveralyears,activelyimplementinga"green"productionphilosophy.Governance
Client Demand
Collection ofCores
ProductionOperations
Remanufactured
ProductsExplore CoresSource withClients
Sell
GovernanceSystem////
CoreMaxhasobtainedtheremanufacturingmanagementsystemcertificationandcollaboratedwithSuzhouAutomotiveResearchInstituteofTsinghuaUniversity,ChinaNationalResourcesRecyclingAssociation,andQingdaoAutomotiveResearchInstituteofJilinUniversitytojointlydraftgroupstandardsforremanufacturedbrakecaliper,providingstandardizedguidelinesforrelatedremanufacturedproducts.
StrategyWeadheretosustainabledevelopmentprinciplesandprioritizeenvironmental,socialandgovernance(ESG)initiativesasakeystrategicfocusthroughourinvestmentsinautomotivepartsremanufacturing.Wewillcontinuededicatingresourcestothisfieldbydevelopingproductseriesincludingbrakecaliperandwipermotor,whileactivelyexploringnewremanufacturingopportunities.CommittedtoestablishingCoreMaxasaleadingdomesticremanufacturingenterprise,weaimtodevelopandpromoteindustrystandardsforremanufacturingteamstodrivesector-wideprogress.
Impact, Risk andOpportunity ManagementConceptCultivation:DeepeningCustomerUnderstandingofCircularEconomy////
Themarketacceptanceofremanufacturedproductsrequiresagradualprocessinbothusedpartssupplyandsales.CoreMaxhasproactivelyengagedwiththemarketthroughmultiplechannels,conductingextensivecommunicationswithusedpartssuppliersandpotentialcustomerstoenhancetheirunderstandingofremanufacturedproducts.Throughyearsofdedicatedefforts,wehavesuccessfullybuiltconfidenceintheremanufacturedbrakecaliperindustryamongover70usedpartssuppliers,establishingcollaborativepartnershipstodevelopasustainablecirculareconomymodelforusedpartssupplyandremanufacturing.Intermsofmarketpenetration,morethan80customershaveadoptedCoreMax'sremanufacturedproductsandareactivelypromotingtheminthemarketplace.
GovernanceStructure////
Green Empowerment, Committing toEnvironmental Stewardship
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 47
Multi-prongedApproachtoBuildaStableSupplySystemforUsedParts////CoreMax'susedpartschannelsareentirelyself-established,primarilyfocusingonmodel-specificdismantlechannelsupplementedbytraditionalautodismantlers,whileactivelyexploringpotentialcollaborationswithOEMs.Ononehand,CoreMaxeliminatesintermediariesbypartneringdirectlywithupstreamdismantlingchannels,reducingsupplychainrisksforusedparts.Ontheotherhand,themulti-channelsupplysystemenhancesresilienceagainstcompetitiverisksandensuresgreaterstabilityinusedpartssupply.UsedPartsRecycling,DrivingEnergyConservationandEmissionReductioninManufacturing////
Comparedtonewbrakecaliperproduction,eachremanufacturedbrakecalipersaves10kWhofelectricity.CoreMax'sproductionof40,000remanufacturedbrakecalipersin2024achievedtotalelectricitysavingsof400,000kWh.Basedonthecurrentconversionrateof3,333kWhpertonofstandardcoalequivalent,thisremanufacturingactivityresultedinapproximately120tonsofcoalsavings,whilereducingemissionsby312tonsofCO?,66tonsofparticulates,1.2tonsofsulfurcompounds,and1.2tonsofnitrogenoxides.
ReplacementInnovation,CreatingClosed-LoopValueintheSharingEconomy////CoreMaxhasproactivelydevelopedaproductreplacementchannel,encouragingcustomerstoreturnusedpartsthroughsaleschannelsforeachremanufacturedbrakecalipersold.Since2024,thisinitiativehasfacilitatedtherecoveryof1,661usedparts,accountingfor6.8%ofCoreMax'stotalusedpartsprocurementduringtheyear.
CollaborativeChannelDevelopment:EnergizingtheResourceCirculationEcosystem////
Priorto2024,oursourcesofusedpartsforremanufacturedproductsremainedrelativelysingular,primarilyoriginatingfromautodismantlers.Thecorrespondingproductmodelstendedtobeolder,withlimitedmarketdemand.Since2024,CoreMax'smarketresearchhasidentifiedthatusedcalipersfrommodel-specificdismantlechannelcaneffectivelymeetstrongmarketdemand.Inthefirsthalfof2024,CoreMaxstrategicallyadjustedandexpandeditsapproachbyleveragingitsestablishedcustomerresourcesinChinatodeeplydevelopprofessionaldismantlechannels.FromJune2024onward,wesuccessivelyestablishedpartnershipswithover70usedpartssuppliersacrossBeijing,Guangzhou,Jinan,Zhengzhou,Wuhan,Chengdu,Chongqing,andShanghai,receiving39,000high-demandusedparts.Additionally,CoreMaxhasactivelyexpandedOEMchannelstofurtherdiversifyitsusedpartsresources.
Metrics and Targets
Metrics////
Targets////
Movingforward,wewillcontinuetoenhancetheutilizationrateofusedpartsandimproveremanufacturingproductionefficiencytoreduceresourceconsumption.Throughtheseefforts,weaimtoachievesteadygrowthinremanufacturedproductsaleswhileestablishingacirculareconomyparadigmforusedpartsrecycling.
2024RemanufacturedProductSalesYear-on-yearGrowthRate
58.97%
2024RemanufacturedProductSalesVolume
23,843Units
2024EstimatedElectricitySavingsfromRemanufacturingBrakeCaliper
Approximately400,000kWh2024RemanufacturedBrakeCaliperProduction
40,000Units
Green Empowerment, Committing toEnvironmental Stewardship
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 48
Value ResourcesSafeguard the Foundation of Green Development
Wehaveestablishedacomprehensiveenergyandresourcemanagementsystem,implementingstandardizedpoliciesincludingtheEnergyEfficiencyPolicy,RenewableEnergyPolicy,andWaterQuality,Consumption&ManagementPolicytoensuresystematicgovernanceofenergyandresourceutilization.InalignmentwithourEnergyEfficiencyPolicyandRenewableEnergyPolicy,weestablishannualenergyconservationtargetsbasedonoperationalrealities.TheGeneralManageroverseesallenergy-savinginitiatives,supportedbyadedicatedEnergyConservationTaskForceresponsibleforimplementationandcoordination.Eachdepartmentandproductionworkshopmaintainsitsowntaskforcetoexecutelocalizedenergyefficiencymeasures.InaccordancewiththeWaterQuality,Consumption&ManagementPolicy,wehaveestablishedadedicatedWaterConservationDepartmenttooverseewaterusage.Thisdepartmentformulateslong-termconservationplansandannualworkprogramsalignedwithcorporatestrategy,whileensuringcompliancewithnationalwater-relatedregulations.Annually,itsetswater-savingtargetsforalldepartments,conductsregularstatisticalanalysisofconsumptionpatterns,andpublishesperformancereports.Eachdepartmentfurtherallocatesthesetargetstooperationalunits,implementsmeasurablewaterquotas,andconductsperiodicevaluationstoensureaccountability.
Governance
Wearecommittedtobalancingbusinessgrowthwithsustainableoperationsbyoptimizingresourceutilizationandenergymixtoachieveanefficient,low-carbonoperationalmodel.Wefocusonenhancingresourceandenergyefficiency,exploringcircularsolutionswherefeasible,prioritizingeco-friendlymaterials,increasingrenewableenergyadoption,andimplementingcontinuousenergy-savingmeasurestoreduceoperationalintensity.Furthermore,weencouragesupplychainpartnerstojointlyadvanceresourceandenergyefficiencythroughcollaborativesustainablepractices.
Strategy
GreenOperation,BuildingaLow-Carbon,High-EfficiencyWorkplace////
Weactivelypromotecircularuseofofficeresourcesbyadvocatingforsecond-handfurnitureprocurement,reducingbottledwateranddisposablecupusagewhileencouragingstafftousereusablecups,utilizingbiodegradabletrashbagsdaily,andimplementingaquota-controlledonlinesystemforofficesupplyrequeststominimizeresourceconsumption.Weactivelypromotegreenofficeinitiativesbyintegratingenvironmentalawarenessintodailyoperationsandfosteringaparticipatorysustainabilitycultureamongemployees.Clearvisualreminderssuchas"AdjustACtemperatures,""Turnofflights,""Powerdownequipment,"and"Conservewater"reinforceenergy-savinghabits.Additionally,weimplementmonthly"PhilosophyofSweeping"activitiesandconductrandomfacilityinspectionstoenhancestaffengagementinenvironmentalstewardship,collectivelybuildinganeco-friendlyworkplace.AdvocatingVegetarianDiets,DrivingtheTransitiontoHealthy,Low-CarbonEatingHabits////
Weencouragevegetarianfoodchoicesbyprovidingstaffwiththreeplant-basedboxmealsperweekthroughcertifiedcaterers,mandatingbiodegradablemealcontainers.FromJanuary2022todate,we'vedistributed
59,105vegetarianmeals,reducingcarbonemissionsby46,101,900grams-including23,622vegetarianmealsservedin2024,achieving18,425,160gramsofcarbonreduction.CommunityPartnership:AdvancingCleanEnergyEcosystems////WeactivelypromotecleanenergyadoptionatourQingdaoTransferLogisticParklocation,delivering5.295millionkWhofrenewableelectricitytothenationalgridin2024.Notably,thephotovoltaicsysteminstalledonourleasedwarehouseroofsgenerated1,085,425kWhannually,equivalenttoreducingCO?emissionsbyapproximately582.4391tons.Thisinitiativedemonstratesourconcretecommitmenttoenhancingrenewableenergyutilizationandreducingemissions.Movingforward,wewillcontinueexpandingapplicationsofphotovoltaicpowergenerationandothergreenenergysolutionstosupportChina'scarbonneutralitygoals.
Green Empowerment, Committing toEnvironmental Stewardship
Impact, Risk andOpportunity Management
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 49
Metrics and TargetsMetrics////
Targets////Weareincreasingtheproportionofrenewableenergyusagetoprogressivelyreducerelianceonfossilfuels,whileimplementingenhancedwaterconservationmeasuresandpromotingwastewaterreuse.
TotalEnergyConsumption38,936.32Tonsofstandardcoal
Gasoline
51,367.04Liters
Energy Intensity
0.5176 Tons of standard
coal/10,000 CNY revenueDiesel4,300.22LitersPurchasedElectricity
444,600kWh
Water
1,360Tons
WaterIntensity
0.0181Tons/10,000CNYrevenue
Compliance FoundationStrengthening Environmental Management SystemsGovernance
StrategyWeconsistentlyintegratesustainabledevelopmentprinciplesasacorecomponentofourcorporatestrategy,usingthisstrategicframeworktocomprehensivelydrivebusinesstransformationandupgrading.Bycontinuouslyembeddingenvironmentalprotectionrequirementsthroughoutourproductionandoperationalprocesses,wesystematicallyenhancetheeffectivenessofourenvironmentalmanagementpractices.
Weupholdscientificdevelopmentprinciplesandsustainablepractices,makingenvironmentalprotectionafundamentalpillarofourhigh-qualitycorporatedevelopment.Throughourscientificallydesignedandefficientlyoperatedenvironmentalmanagementsystem,wesystematicallyenhanceperformanceviainstitutionalintegrationandfull-processcoordination,seekingtoleadindustry-widegreentransformation.Wehaveestablishedamulti-layeredenvironmentalmanagementsystemthatembedsregulatorycomplianceintostrategicdecision-makinganddailyoperations,withallpoliciesrequiringcross-departmentaljointapproval,legalcompliancereview,andfinalauthorizationbytheGeneralManagerbeforeimplementation.OursystemdesignstrictlycomplieswithEnvironmentalProtectionLawofthePeople'sRepublicofChina,EnvironmentalImpactAssessmentLawofthePeople'sRepublicofChina,andRenewableEnergyLawofthePeople'sRepublicofChina,alongsideISO14001requirements,spanningresourcecirculation,pollutionprevention,andcarbonemissionmanagementthroughspecializedpoliciesincluding:RenewableEnergyPolicy,AirQualityStandards,EnergyEfficiencyPolicy,DecarbonizationPolicy,WaterQuality,Consumption&ManagementPolicy,GreenhouseGasEmissionsPolicy,WasteReductionManagementSystem,andReuse&RecyclingGuidelines-collectivelyformingtheinstitutionalfoundationforourgreen,low-carbontransformation.Weconductregularenvironmentaltrainingtosystematicallyenhancestaffeco-literacy,embeddingsustainabilityasacoreculturalvalue.Theseprogramscoverenvironmentalmanagementsystemstandardswhilestrengtheningbothecologicalawarenessandemergencyresponsecapabilities.
EnergyandResourceUtilizationMetrics
Note: Data covers QI Automotive, QI Automotive (QING DAO) Co., Ltd. and CoreMax.
Green Empowerment, Committing toEnvironmental Stewardship
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 50
Wehaveembeddedenvironmentalriskidentificationandassessmentmechanismsintodailyoperations,enhancingriskmanagementeffectivenessthroughtieredcontrols,dynamicmonitoring,andcontinuousimprovement.Ourcomprehensiveriskcontrolsystemappliespreventivemanagementthroughoutproductionprocesses,withstandardizedpoliciesandoperationalproceduressystematicallymitigatingpotentialenvironmentalriskstoensureregulatorycomplianceandstrengthensustainabledevelopmentfoundations.Wearestrengtheningstaffenvironmentalriskawarenessthroughtargetedtrainingprograms,whilesimultaneouslyimprovingouremergencycontingencyplansandresponsemechanismstoelevatepracticalriskmanagementcapabilities.Theseconcertedeffortsestablishadurableandrobustenvironmentalriskgovernanceframeworkforlong-termresilience.
Metrics and Targets
Metrics////
Targets////
Movingforward,wewillmaintaincomprehensivecomplianceinalloperationstoensurefulladherencetonationalandlocalenvironmentalregulations,withzerotoleranceformajorenvironmentalviolations.
During the reporting periodenvironmental protection training
4 Sessions
During the reporting periodmajor environmental pollution incidents
0 Case
Duringthereportingperiodenvironmentalcomplianceviolations
0Case
EnvironmentalComplianceIndicatorsQIAutomotiveobtainedISO14001:2015EnvironmentalManagementSystemcertificationinApril2024,ensuringcontinuedcompliancewithinternationalstandards.InJune2024,CoreMaxreceiveda"Green"ratingintheenvironmentalcreditevaluationconductedbytheDepartmentofEcologyandEnvironmentofShandongProvince.
Green Empowerment, Committing toEnvironmental StewardshipImpact, Risk andOpportunity Management
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 51
Emission and Waste ReductionEnhancing Environmental Performance
Thepropermanagementofwasteandwastewaterdischargesconstitutesacriticalmanifestationofcorporateenvironmentalresponsibility,withscientificallysoundpracticesbeingessentialforsustainabledevelopment.Improperhandlingexposesenterprisestothreefoldrisks:(1)regulatoryviolationsmayincuradministrativepenaltiesandpotentialproductionshutdowns;(2)inefficientresourceutilizationsignificantlyincreasesoperationalcosts;andmostcritically,(3)environmentalincidentscaninflictprofound,lastingdamagetobrandequityandmarketcredibility.Thesepotentialconsequencesunderscoretheparamountimportanceofestablishingcomprehensiveenvironmentalmanagementsystems.Toaddressthesechallenges,wehaveestablishedarobustwasteandwastewatermanagementsystem,continuouslyexploringresourcerecoverysolutionsforwastematerialswhileconductingunscheduledinternalcomplianceauditstoensurefulladherencetoregulatoryrequirements.In2024,weachieved100%compliantwastedischargestandardswithzeroenvironmentalcomplianceviolations.
Metrics and Targets
Metrics////
Total Waste
78.07 Tons
Non-hazardous Waste
75.83 Tons
Hazardous Waste
2.24 Tons
Compliance Disposal Rate ofWaste100%
WastewaterDischarge Volume
1,200 Tons
Note:DatacoversQIAutomotive,QIAutomotive(QINGDAO)Co.,Ltd.andCoreMaxWepromotewastereductionandrecyclinginitiatives,ensuring100%ofwastedischargesconsistentlymeetnationalstandards.
2024 Waste and Wastewater Discharge Metrics
Governance
Strategy
WestrictlyadheretotheEnvironmentalProtectionLawofthePeople'sRepublicofChina,LawofthePeople'sRepublicofChinaonthePreventionandControlofEnvironmentalPollutionCausedbySolidWastes,LawofthePeople'sRepublicofChinaonPreventionandControlofAtmosphericPollutionandLawofthePeople'sRepublicofChinaonPreventionandControlofWaterPollution.Throughsourcereduction,processcontrol,andresourcerecovery,weminimizeoperationalenvironmentalimpacts,enhanceresourceefficiency,anddrivegreenlow-carbontransformation.
Alignedwithgreendevelopmentprinciples,wecontinuouslyoptimizeemissionsandwastemanagement.In2024,pursuanttotheLawofthePeople'sRepublicofChinaonthePreventionandControlofEnvironmentalPollutionCausedbySolidWasteandconsideringindustry-specificrequirementsandoperationalrealities,weformallyestablishedourWasteReductionManagementSystem.UndertheWasteReductionManagementSystem,theIntegratedManagementDepartmentandLogisticsDepartmentoverseecentralizedwasterepositorymanagement,whilewaste-generatingdepartmentsareresponsibleforcategorization,collection,temporarystorage,anddisposaltransfer.WeimplementscientificclassificationdividingwasteintoGeneralManagementandSpecialManagementcategories,withsecondarysortingbyrecyclability,supportedbyvisuallabelingforaccuracy.Processcontrolsmandatedifferentiatedstoragebywastetype,standardizedtransferprocedures(includingdocumentation),anddefineddisposalpathways:maximizingrecyclingofrecyclables,outsourcinggeneralwastetocertifiedcontractorswhenreusablethroughtheGeneralAffairsDepartment,arranginglandfilldisposalfornon-recyclablegeneralwastethroughsanitationdepartments,andrequiringcontractorshandlingspecialwastetoprovideenvironmentaldepartmentcertificationswithcomplianceassurance.Alldepartmentsmustconductmonthlywasteoperationaudits.Wemaintainstrictcontroloverwastewaterdischargethroughoutouroperations.Currently,ourwastewateroriginatessolelyfromofficeanddomesticwaterusage,whichiscollectedthroughthepark'sdedicatedpipelinesystemandtransportedtolicensedprofessionalwastewatertreatmentplantsforcentralizedprocessing.
Targets////
Green Empowerment, Committing toEnvironmental Stewardship
Impact, Risk andOpportunity Management
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 52
Climate ActionAddressing Global Environmental ChallengesThe28thConferenceofthePartiestoTheUnitedNationsFrameworkConventiononClimateChange(COP28),heldinDubaionNovember30,2023,reaffirmedtheinternationalconsensustolimitglobaltemperatureriseto1.5°Cabovepre-industriallevels.Asanactiveparticipantinglobalclimategovernance,Chinahasintegratedits"CarbonPeakingandCarbonNeutrality"goalsintonationaldevelopmentstrategy,committingtocarbonpeakemissionsby2030andachievecarbonneutralityemissionsby2060,demonstratingsteadfastcommitmenttogreentransformation.Asanenvironmentallyaccountableorganization,werecognizeourcriticalroleinsupportingtheseclimateobjectives.Wehaveestablishedathree-tieredmanagementsystemencompassinggovernance&strategy,impact,risk&opportunitymanagement,andmetrics&targetstoimplementconcreteactionsalignedwithChina's"CarbonPeakingandCarbonNeutrality"strategy.
Inresponsetoglobalclimateactiongoals,wehavesystematicallyassessedclimate-relatedriskspertheTaskForceonClimate-relatedFinancialDisclosures(TCFD)framework.Thisevaluationcoverstworiskcategories:(1)physicalrisksfromextremeweatherandlong-termclimatepatterns,and(2)transitionrisksarisingfromlow-carbonpolicyshifts,carbonpricingvolatility,andmarketchanges.Basedonfindings,weestablishedtargetedriskmanagementmechanismstoproactivelymitigateoperationalimpactswhilecapturinggreentransitionopportunities,advancingoursustainabilitystrategyimplementation.
GovernanceClimatechangeresponseconstitutesacorepriorityinoursustainabilitystrategyimplementation.Wehaveestablishedaboard-levelclimategovernancestructure,withtheBoard-appointedESGManagementCommitteeoverseeingclimate-relatedstrategiesandmajordecisions,mandatingsystematicintegrationofclimateconsiderationsintoinvestmentevaluationsandbusinessplanning.TheGreenhouseGasEmissionsPolicyandrelatedregulationsprovideoperationalguidelines,whiledepartmentheadsastheESGManagementCommittee'sexecutivearmcoordinateemissionreductiontargetimplementationpertheseestablishedstandards.
Strategy
Atthestrategiclevel,weconductspecializedclimatechangeanalysistailoredtotheautomotiveaftermarketpartsindustry,systematicallyevaluatingmultidimensionalimpactsonsupplychains,marketdemand,andregulatoryframeworkstoidentifyassociatedrisksandopportunities.Throughcomprehensiveassessmentandprioritystratification,weinformresourceallocationandstrategicdecision-making.Buildingontheseinsights,wewillcontinuouslyoptimizeoperationalmodelsandinvestmentstrategiestoenhanceclimateresilience,mitigatingriskswhilecapitalizingontransitionopportunitiestoensuresustainable,robustdevelopment.
Green Empowerment, Committing toEnvironmental Stewardship
Impact, Risk andOpportunity Management
QI Automotive Co., Ltd.AppendixEnvironmental ResponsibilitySocial ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 53
PhysicalRisk
Acute PhysicalRisk
ChronicPhysical Risk
Extremeweathereventstriggeredbyclimatechange,includingfloods,droughts,andblizzards,maycausephysicaldamagetoourproductionequipmentandfacilityinfrastructure.Sucheventscouldresultinoperationaldisruptionsorcompleteshutdowns,withpotentialemployeesafetyhazardsinseverescenarios.Theseimpactsultimatelyleadtodirecteconomiclossesthroughassetdestructionandrevenuereductionfrombusinessinterruption,aswellasindirectcostssuchaspotentialcompensationexpenditures.Climatechangemayleadtoincreasedoccurrencesofdrought,extremeheat,andhighhumidityevents,alongwithenvironmentalchangessuchasrisingsealevels.Thesefactorscouldadverselyaffectstorageconditionsforautomotivecomponentsandincreaseproductionenergyconsumptionwhilereducingefficiencyatsupplierfacilities.Suchoperationalchallengesmayultimatelyelevateproductcostsandpotentiallycompromiseourmarketcompetitiveness.
?EmergencyResponseCapacityBuildingWeareestablishingasystematicemergencyresponsesystembyconductingspecializedmeteorologicaldisasterpreparednesstrainingtoenhancestaffriskidentificationandself-rescuecapabilities,whileequippingnecessaryprofessionalemergencyrescueequipment.?SupplyChainResilienceEnhancementWearestrengtheningsupplychainresiliencethroughgeographicdiversificationofsuppliersandestablishingalternativesupplynetworkstomitigatesingle-pointclimaterisks.?EmergencyPreparednessSystemWemaintaindynamicsafetystocklevelsandhavedevelopedcontingencyplansforsupplydisruptionscausedbyextremeweatherevents.
TransitionRisk
Policy andRegulation
Market
Increasinglystringentglobalcarbonregulationshaveestablishedlow-carbontransitionasanewinternationalcompetitivenessthreshold.Wefacehighercompliancecostsduetocarbonbordermechanismsandproductcarbonfootprintlabelingpolicies,whichmayultimatelyincreaseourproductioncosts.Thetighteningofglobalenvironmentalregulationscoupledwithrapidexpansionofthenewenergyvehiclemarketmayleadtodecliningdemandfortraditionalinternalcombustionenginecomponents.Failuretoadaptproductportfoliosaccordinglycouldresultinmarketshareerosionandrevenuereduction.
?SupplyChainDecarbonizationAccelerationWewillprogressivelyimplementasuppliercarbonemissionsassessmentmechanism,prioritizingpartnershipswithlow-carbonsuppliersunderequalconditionswhilesupportingkeysuppliers'energyefficiencyupgrades.?CarbonPolicyMonitoringTeamEstablishmentWeareformingadedicatedteamtotrackreal-timeregulatorychangesincoremarketswhilesystematicallydevelopingandenhancingourcarbondatamanagementsystem.?CustomerandProductPortfolioTransformationWearediversifyingourclientbasebytargetingnewenergyvehiclemanufacturerandaftermarketcustomers,whileacceleratingdevelopmentofcompatibleproductsforthenewenergyvehiclesector.
Opportunities
Products &Services
Weareactivelydevelopinginnovativelow-carbonproductstosecurefirst-moveradvantagesandbuildstrongerindustrycompetitivebarriersamidincreasinglystringentenvironmentalregulations.
Weareincorporatinglow-carbonprinciplesintoourcorestrategy,drivinggreenproductdevelopmenttoachievedualeconomicandenvironmentalbenefits.
Risk TypeRisk/OpportunityManifestations and Potential ImpactsMitigation MeasuresGreen Empowerment, Committing toEnvironmental Stewardship
Environmental ResponsibilityAppendixQI Automotive Co., Ltd.SocialResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 54
Metrics and Targets
Metrics////
Direct Greenhouse Gas
Emissions (Scope 1)
148.13 tCO?e
Total Greenhouse Gas Emissions
386.70 tCO?e
Indirect Greenhouse Gas Emissions
(Scope 2)
238.57 tCO?e
Greenhouse Gas Emission Intensity
0.0051 tCO?e/10,000 CNY Revenue
Note:DatacoversQIAutomotive,QIAutomotive(QINGDAO)Co.,Ltd.andCoreMax.
Targets////Wewillestablishanend-to-endgreenhousegasmanagementmechanismacrossallbusinessoperations,continuouslyoptimizingemissionmonitoringandaccountingsystems.Bydeeplyintegratingclimategovernanceintostrategicdecision-makingandsystematicallyidentifyinggreentransitionopportunities,weaimtoproactivelyaddressstakeholderexpectationsforsustainabilitywhileachievingsynergisticimprovementinbothenvironmentalandoperationalperformance.
2024GreenhouseGasEmissionsReport
Green Empowerment, Committing toEnvironmental Stewardship
Environmental ResponsibilityAppendixQI Automotive Co., Ltd.Social ResponsibilityPrefaceGovernance Responsibility
Appendix I:
Key Performance Indicator Table
2024 Sustainability Report 55
Appendix I: Key Performance Indicator Table
IndicatorUnit20232024
Economic PerformanceTotal AssetsCNY 10,00070,175.7985,463.51Operating RevenueCNY 10,00055,842.8575,223.52Net Profit (Attributable toParent Company)
CNY 10,0006,965.0510,650.25Basic Earnings per ShareCNY1.101.65
Total Tax PaidCNY 10,0003,139.723,496.36
Corporate Governance PerformanceProportion of Independent
Directors
%42.8642.86Proportion of Female
Directors
%28.5728.57Board Member Attendance
Rate
%100100Anti-corruption TrainingSessions
Session11Number and Rate ofDirectors Trained in Anti-corruption
Person (%)2 (28.57)2 (28.57)Number and Rate ofManagement Trained inAnti-corruption
Person(%)5 (29.41)10 (50)Number and Rate ofEmployees Trained in Anti-
corruption
Person (%)43 (14.98)71 (21.58)
IndicatorUnit20232024
Environmental Management PerformanceTotal EnvironmentalProtection Investment
CNY 10,0001.56Major Environmental
Pollution Incidents
Case00Environmental Compliance
Violations
Case00Environmental Training
Sessions
Session24Environmental Training
Participants
Person-time1015Environmental Training
Hours
Hour46
Energy Usage PerformanceGasolineLiter46,720.0551,367.04DieselLiter3,128.214,300.22Purchased ElectricitykWh334,300444,600Total ComprehensiveEnergy Consumption
Ton of Standard
Coal
33,282.8338,936.32Comprehensive Energy
Intensity
Ton of StandardCoal/10,000 CNY
Revenue
0.59600.5176
Environmental ResponsibilityAppendixQI Automotive Co., Ltd.Social ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 56
IndicatorUnit20232024
Resource Usage PerformanceTotal Water ConsumptionTon9701,360
Water Intensity
Ton/10,000 CNY
Revenue
0.01740.0181
Packaging MaterialsTon99.14221.97Packaging MaterialIntensity
Ton/10,000 CNY
Revenue
0.00180.0030
Greenhouse Gas Emissions PerformanceDirect Greenhouse GasEmissions (Scope 1)
tCO?e
124.29148.13
Indirect Greenhouse GasEmissions (Scope 2)
tCO?e
179.39238.57
Total Greenhouse Gas
Emissions
tCO?e
303.68386.70
Greenhouse Gas Emission
Intensity
tCO?e/10,000 CNY
Revenue
0.00540.0051
Waste and Wastewater Management PerformanceNon-Hazardous WasteGenerated
Ton71.2775.83Hazardous Waste
Generated
Ton1.152.24Total Waste GeneratedTon72.4278.07Recycled/Reused WasteTon00Rate of Recycled/Reused
Waste
%00Waste Compliance Disposal
Rate
%100%100%Wastewater DischargeTon8501,200
Appendix I:
Key Performance Indicator Table
IndicatorUnit20232024
R&D Innovation PerformanceR&D InvestmentCNY 10,0001,980.632,367.17R&D Investment as apercentage of Operating
Revenue
%3.553.15Total Valid PatentsItem103112Total R&D PersonnelPerson7070Proportion of R&DPersonnel
%24.3921.28Supply Chain Management PerformanceTotal SuppliersSupplier535525LocalizedProcurementRatio
%14.716.7Product Quality PerformanceMajor Safety/QualityLiability Incidents Relatedto Products/Services
Case00Product RecallsCase00Employees Trained inQuality
Person-time40157Customer ComplaintsCase206223Customer Complaint
Resolution Rate
%94.599.1
Environmental ResponsibilityAppendixQI Automotive Co., Ltd.Social ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 57
IndicatorUnit20232024
Employee Employment PerformanceTotal EmployeesPerson287329Employeesby Gender
MalePerson217232FemalePerson7097Proportion of Female
Employees
%24.3929.48Labor Contract Signing Rate%100100Social Insurance Coverage
Rate
%100100Employee Training PerformanceTotal Employee TrainingInvestment
CNY 10,00046.2572.11Employee TrainingCoverage Rate
%100100Total Employee TrainingSessions
Session105211Total Employee Training
Hours
Hour5,9105,278Average Training Hours per
Employee
Hour20.8116.55
IndicatorUnit20232024
Occupational Health & Safety PerformanceInvestment in Work InjuryInsurance & Safety Liability
Insurance
CNY 10,0009.027035.9539Coverage Rate of WorkInjury Insurance & Safety
Liability Insurance
%100100Major Safety IncidentsCase00Work-Related FatalitiesPerson00
Work Injury Rate%00Total Safety TrainingParticipants
Person-time53235Total Safety Training HoursHour124249
Social Contribution PerformanceTotal Social ContributionInvestment
CNY 10,00041.986746.4507Employee Volunteer
Participation
Person-time3025Total Employee Volunteer
Hours
Hour240200
Appendix I:
Key Performance Indicator Table
Environmental ResponsibilityAppendixQI Automotive Co., Ltd.Social ResponsibilityPrefaceGovernance Responsibility
2024 Sustainability Report 58
Appendix II: Index of Indicators
Appendix II: Index of IndicatorsIndex to the Beijing Stock Exchange Listed Companies Sustainable Development ReportingGuideline No. 11 (Trial)
Chapter
DisclosureItem
ArticleCorresponding Report SectionChapter I General Provisions/Articles 1-10Preface: (I) IntroductionChapter II SustainabilityDisclosure Framework
/Articles 11-19Preface: (IV) Sustainability Management
Chapter IIIEnvironmentalInformationDisclosure
Section 1:
ClimateChangeResponse
ClimateChangeResponse
Articles 20-28
Environment Responsibility: (V) Climate Action,Addressing Global Environmental Challenges
Section 2:
PollutionControl andEcosystemProtection
PollutantEmissions
Article 30
Environment Responsibility: (IV) Emission andWaste Reduction, Enhancing EnvironmentalPerformanceWasteManagement
Article 31
Environment Responsibility: (IV) Emission andWaste Reduction, Enhancing EnvironmentalPerformanceEcosystemandBiodiversityConservation
Article 32
Not Applicable (During the reporting period, none ofour production and operation sites were located inkey protected areas, and our operational activitiesdid not generate significant negative impacts onecosystems or biodiversity.)EnvironmentalComplianceManagement
Article 33
Environment Responsibility: (III) ComplianceFoundation, Strengthening EnvironmentalManagement SystemsSection 3:
ResourceUtilizationand CircularEconomy
EnergyUtilization
Article 35
Environment Responsibility: (II) Value Resources,Safeguard the Foundation of Green DevelopmentWaterResourceUtilization
Article 36
Environment Responsibility: (II) Value Resources,Safeguard the Foundation of Green DevelopmentCircularEconomy
Article 37
Environment Responsibility: (I) Circular EconomyLeadership: Building a Resource RegenerationParadigm
Index to the Beijing Stock Exchange Listed Companies Sustainable Development ReportingGuideline No. 11 (Trial)
Chapter
DisclosureItem
ArticleCorresponding Report Section
Chapter IVSocialInformationDisclosure
Section 1: RuralRevitalizationand SocialContribution
RuralRevitalization
Article 39Not ApplicableSocialContribution
Article 40
Social Responsibility: Chapter II (II) Altruism inAction: Deepening Social ResponsibilitySection 2:
Innovation-DrivenDevelopment andTechnologyEthics
Innovation-DrivenDevelopment
Article 42
Social Responsibility: Chapter I (III) DrivingIndustrial Innovation and Upgrading ThroughTechnologyTechnologyEthics
Article 43
Not Applicable (The Company is not engaged inresearch involving life sciences, AI or otherethically sensitive fields.)
Section 3:
Suppliers andCustomers
Supply ChainRiskManagement
Article 45
Social Responsibility: Chapter I (II) CollaborativeWin-Win: Ensuring Supply Chain Security andFairnessEqualTreatment ofSmall andMediumEnterprises(SMEs)
Article 46
Social Responsibility: Chapter I (II) CollaborativeWin-Win: Ensuring Supply Chain Security andFairnessProduct/Service Safety andQuality
Article 47
Social Responsibility: Chapter I (I) Quality First:
Fortifying Product SafetyData Securityand CustomerPrivacy
Article 48
Social Responsibility: Chapter I (IV) Empowering
with Digital Intelligence to Safeguard Data
SecuritySection 4:
Employees
Employees
Articles 49-
Social Responsibility: Chapter II (I) People-
Oriented Approach: Fostering a Diverse
Development EcosystemChapter VSustainabilityGovernanceInformationDisclosure
Section 1:
SustainabilityGovernanceMechanisms
CorporateGovernance
Article 51
Governance Responsibility: (I) Steady
Governance: Solidifying a Long-term Institutional
SystemDue DiligenceArticle 52
Governance Responsibility: (IV) Ethical
Leadership: Driving Industry ProgressStakeholderEngagement
Article 53
Governance Responsibility: (III) Shared Value:
Building a Multi-Stakeholder Engagement
PlatformSection 2:
BusinessConduct
Anti-briberyand Anti-corruption
Article 55
Governance Responsibility: (IV) Ethical
Leadership: Driving Industry ProgressAnti-unfairCompetition
Article 56
Governance Responsibility: (IV) Ethical
Leadership: Driving Industry ProgressChapter VI SupplementaryProvisions and Interpretations
/Article 57Index of Indicators
Contact Tel: 0532-86626982Contact E-mail: chenrugang@qi-auto.comQI Automotive Headquarters address:
No. 1 LuanheRoad, Economic and Technological Development Zone, JiaozhouCity, Shandong Province
Stock Name：QI Automotive Stock Code：837242