Suofeiya Home Collection Co., Ltd
Environmental, Social, andGovernance Report (2023)
Social ResponsibilityGovernance Structure and Systems
Internal Control
Protection of Rights and Interests ofShareholders and CreditorsInformation DisclosureInvestor Relations ManagementStockholder ReturnsEnhanced Product QualityEnhanced Product InnovationMore Attentive Service
Compliance in EmploymentHarmonious and Equal Employment Relationships
and Occupational Health ProtectionCompetitive Incentive SystemSustainable Talent Supply Chain
Employee Care
.Lead the Industry Development WithEnvironmentally Friendly Products
Build Green Plant SystemImprove Green ManagementEnhanced Energy Management
Green ManufacturingGreen Logistics
Supplier Selection and ManagementEfficient Operations and Cost OptimizationAdvantages of Nationwide Supply Chain LayoutSustainable Development of the Supply Chain
Support Medical Institutions and PublicHealth UndertakingsSupport Public Benefit Activities andDevelop Social WelfareProvide Assistance in Basic Education DevelopmentAssit Qinghai Disaster Area in Times of DifficultyBuild Harmonious and Loving Communities Together
目录
Table of Contents
Prudent Corporate
Governance
Protection of Rights andInterests of Shareholdersand Creditors
Commitment to HighQuality and Better Service
Win-Win Cooperation andCommon DevelopmentGrowing Together
with Suofeiya
Commitment to Public Welfarefor a Harmonious Society
Environmental Protection andLow-Carbon Management
Instructions on Report PreparationESG Governance FrameworkESG Key PerformanceESG Key Issues AnalysisStakeholder CommunicationCase 1: China Charity Federation X Suofeiya Children’s Book HouseCase 2: Providing More Reliable Products for ConsumersAbout Suofeiya2023 MilestonesAdherence to Party BuildingHonors of 2023
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INSTRUCTIONS ON
REPORT PREPARATION
This Report is the Environmental, Social, and Governance Report 2023 of Suofeiya Home Collection Co., Ltd.(hereinafter referred to as "the Company" or "Suofeiya"). It is the 7th report issued by the Company, aimed atstrengthening communication and connection with various stakeholders.This Report objectively and truthfully reflects the Company's practices in corporate governance, employeerights, operational development, stakeholder communication, environmental protection, public welfare, andcharity in 2023. It discloses the Company's philosophy, actions, and achievements in fulfilling economic,environmental, safety, and social responsibilities.
Report Overview
Chinese national standard the Guidance on Social Responsibility (GB/T36000-2015)Chinese Academy of Social Sciences (CASS) - the Guidelines on Corporate Social Responsibility Reportingfor Chinese Enterprises Basic Framework (CASS-ESG 5.0)Global Sustainability Standards Board the GRI Sustainability Reporting Standards (GRI Standards)The No. 1 Guidelines on Self-Regulation of Listed Companies of Shenzhen Stock Exchange - StandardizedOperation of Listed Companies on the Main BoardThe No. 1 Guidelines on Self-Regulation of Listed Companies of Shenzhen Stock Exchange - BusinessHandling
Compilation Basis
This is an annual report covering the period from January 1, 2023, to December 31, 2023. Some content mayappropriately reference previous years.Time frame
The financial data in the Report is sourced from Suofeiya’s audited annual report for the year 2023. Otherdata is compiled from its internal statistics. Unless otherwise specified, the currency type and amountsmentioned in the Report are in RMB. The Company assures that the content of this Report does not containany false records, misleading statements, or significant omissions.
Data Sources
This Report is available in both Chinese and English versions, and may be downloaded at the official websiteof Suofeiya Home Collection Co., Ltd. (www.sfygroup.com) or the China Securities Regulatory Commission'swebsite (www.cninfo.com.cn).Report Access
Contact Address: No. 2 Xianning Road, Guo Village, Yongning Subdistrict, ZengchengDistrict, Guangzhou City, Guangdong Province, ChinaContact Number: (+86) 20-87533019Email: ningji@suofeiya.com.cnOfficial Website: www.sfygroup.com
Report Feedback and Contact Information
Environmental, Social and Governance Report l ESG
Against the backdrop of rapid changes in both the social and business environments, Suofeiya has always believed that establishing andenhancing Environmental, Social, and Governance (ESG) systems is beneficial for driving sustainable development. We have estab-lished a sustainable development organizational structure covering the entire Company, and formed the ESG Committee responsible forESG projects and related performance assessments as well as regular reports to the Board of Directors. Within the Company, variousfunctional departments have set up ESG Execution Teams to ensure coordination and integration of efforts from top to bottom.
The ESG Committee, composed of senior leaders including the general manager and vice general manager, isresponsible for managing the Company's sustainable development affairs related to the environment, society, andgovernance. It also focuses on preventing associated risks. Report regularly to the Board of Directors on theprogress of ESG work.The ESG Execution Teams, comprised of various functional departments within the Company, report to the ESGCommittee on the Company's affairs related to the environment, society, and governance. They provide the neces-sary information for decision-making, offer guidance to the functional departments, and support the execution ofsustainable development strategies and decisions.
CategoryIndicatorUnit202120222023
EconomicPerformance
EnvironmentalPerformance
Operating RevenueNet ProfitTotal Tax PaidTotal Cash Dividends (Tax Included)Cash Dividends per 10 SharesCompliance Rate of Exhaust Emissions
Ten ThousandRMBTen ThousandRMBHundred MillionRMBTen ThousandRMB
Compliance Rate of Solid Waste TreatmentEfficiency of Dust Removal + RTO ExhaustTreatment SystemCompliance Rate of Noise EmissionsReduction in Carbon Dioxide EmissionsTotal Number of EmployeesPercentage of Female EmployeesEmployee Training Coverage RatePublic Welfare Expenditures
RMB
RMB
%%PeopleTons%%%%
1,040,709.49
12,257.55
8.97
54,448.60
6.00
Above 90
9,94214,486
27.38
611,400.75
1,122,254.14106,430.37
8.56
63,523.37
7.00
Above 90
10,23114,906
27.67
1,088,940.65
1,166,564.64126,127.78
9.29
95,170.27
10.00
Above 90
12,16914,400
27.59
1,487,475.85社会绩效
The Board of Directors regularly listens to the ESG Committee's annual work reports to ensure the achievement ofSuofeiya's sustainable development goals.
ESG Governance FrameworkESG Key Performance
The Board of
Directors
The ESGCommittee
The ESGExecutionTeams
0304
Environmental, Social and Governance Report l ESG
To further enhance the effectiveness and scientific nature of ESG management and to moreaccurately respond to stakeholder demands, the Company has conducted ESG key issuesanalysis based on the substantive issue analysis method provided by the Global ReportingInitiative (GRI). We carried out this analysis through steps such as sustainable developmentbackground analysis, stakeholder identification, issue identification, and research. Throughthese steps, we identified a total of 23 key ESG issues, including 7 environmental aspects, 11social aspects, and 5 governance aspects.Based on the dimensions of "importance of economic, environmental, and social impacts" and"impact on stakeholder assessment and decision-making", we rated the importance of these23 issues. This process resulted in an ESG Key Issues Matrix, which serves as the main basisfor reviewing the Company's ESG performance over the year.
The healthy development and achievements of the Company are inseparable from the support of stakeholders such asthe government and regulatory agencies, shareholders and investors, employees, customers, suppliers, and communi-ties. The Company adheres to principles of transparency and equality, placing great importance on communication andcooperation with stakeholders. Throughout the reporting period, we continuously improved our stakeholder communica-tion mechanisms and engaged in diverse communication activities to understand and respond to the expectations anddemands of stakeholders in a timely manner.
Environmental
Carbon emissionsClimate changeRecyclingWaste managementWater resource utilizationGreen operationsGreen products
Society
Supply chain social responsibilitymanagementEmployee’s health and safetyEmployee training and developmentCompensation and benefitsDiversity and equal opportunitiesInformation security and privacyprotectionTechnological innovationCustomer experienceProduct quality and safetyIntellectual property managementIndustry development promotion
GovernanceCorporate governanceBusiness ethics and moralsLegal complianceShareholders' rightsAnti-corruption
经济、环境和社会影响的重要性
1110
StakeholdersFocus AreasCommunication ChannelsGovernment andRegulatory Agencies
Compliance OperationsDaily reporting, information submission
Tax ComplianceAccepting supervision and assessmentEmployment PromotionRegular reporting, recruitmentSustainable OperationsGeneral Meeting of ShareholderssCompliance GovernanceInformation disclosure
Risk Prevention
Investor hotline, interactive platforms,online and offline communicationCompliance EmploymentStaff representative meetingsCompensation and BenefitsEmployee conferencesSafety in ProductionEmployee trainingCareer DevelopmentTraining, enterprise culture activitiesProtection of Customer Rights
High-Quality ProductsProfessional ServicesTransparent Procurement
Win-Win Cooperation
Industry EcologyParticipation in Community Development
Active Engagement in Public WelfareParticipating in public welfare activities
Fulfilling social responsibilitiesSupplier conferencesCost reduction and efficiency improvement,
joint research and developmentSupply chain management system
Satisfaction surveys（CSI/DSI）Design, quality, and technology iteration
Information confidentiality, after-sales
service mechanism
Shareholders and
Investors
Employees
Customers
SuppliersCommunity and Non-GovernmentalOrganizations
ESG Key Issues Analysis Stakeholder Communication
0506
Environmental, Social and Governance Report l 专题1
柳州市三江县独峒镇唐朝小学
海口市龙华区新坡中心小学
河北赞皇·张楞乡中心小学
凭祥市友谊镇中心小学
商洛市山阳县西照川镇石佛寺九年制学校
凉山州喜德县李子乡新田小学
武汉市新洲区辛冲街中心小学
六安市金寨县希望小学
泗水县泗张镇南陈小学
广西壮族自治区
湖北省陕西省
河南省
山西省
河北省北京
山东省甘肃省
四川省
贵州省江西省
安徽省
广东省
海南省
审图号：GS（2019）1823号
China Charity Federation X Suofeiya
Case 1
Children’sBook HouseStrong youth will lead to a strong China. Following thePlan for Implementing the National Youth StudentReading Campaign issued by eight national depart-ments, including the Ministry of Education and thePublicity Department of the Communist Party of Chinain 2023, Suofeiya Children’s Book House officiallycommenced to contribute to the campaign of “pro-moting national reading and building a nation of avidreaders”. The initiative saw Suofeiya stepping intovarious regions across China, including Wuhan inHubei, Haikou in Hainan, Liuzhou in Guangxi, Liang-shan Prefecture in Sichuan, Shangluo in Shaanxi,Jining in Shandong, and Taiyuan in Shanxi. Suofeiyaventured into remote and mountainous areas, towns,and rural areas, bringing a ray of hope to thousands ofchildren - a gift of newly established reading rooms anda plethora of books.
What has the Children’s Book Housebrought to the rural children?
Massive Collection of High-Quality Books
With a maximum collection of over ten thousand volumesEnvironmentally Friendly and Safe EnvironmentKang-Chun grade (ENF) boards for health, Child-friendlydesign to prevent bumps and injuries Innocent and Childlike Atmosphere
Nature-inspired color schemes, Bright and harmonious color palettesComfortable SpaceAmple reading seats, Immersive reading spaces
0708
The Company has been well aware of a lack of reading resources among rural children in current China.According to the 2022 Survey Report on Reading Conditions of Rural Primary Schools in China, the averageextracurricular reading volume per capita for rural primary school students is 3.27 books, less than one-third ofthe national average for primary school students. Moreover, it is recognized that reading spaces need to meetrequirements for comfortable environments, environmentally friendly materials, natural and harmoniousdesigns, and durable quality.Suofeiya takes proactive action by mobilizing its nationwide dealer resources and leveraging the “HappyHomes” Village and Community Mutual Aid Project initiated by the China Charity Federation to establish theChildren’s Book House public welfare initiative. This initiative, jointly launched by Suofeiya Home Collection,the China Charity Federation, and Suofeiya dealers across the country, aims to build public reading rooms inrural schools. It provides high-quality reading resources to help rural children cultivate reading habits, enhancetheir cultural literacy, and stimulate intrinsic learning motivation.
Currently, over a dozen Children’s Book Houses have been established and put into useacross various regions nationwide. It is expected to establish over thirty Children’s BookHouses in Beijing, Hangzhou, Shanghai, Wuhan, Shenzhen, Changsha, Harbin, Guiyang,Zunyi, Baoding, Huizhou, Chengde, Zhaoqing, Lu'an, Puyang, Yichang, Huangshi,Xinxiang, and more. The program of Suofeiya Children’s Book House not only provideschildren with an environmentally friendly, safe, and comfortable reading environment butalso aims to sow the seeds of reading and love in their hearts. In the future, more cities willhave Children’s Book Houses. By focusing on the future of education in rural areas,contributing to rural revitalization, and continuing to deliver sustainable corporate values tosociety, Suofeiya remains steadfast in its commitment.
Environmental, Social and Governance Report l 专题1
0910
As household products serve as items closest to the lives of ordinary people and enter countlesshouseholds, their environmental friendliness and adaptability must closely follow the changing demandsof consumers in different eras. Building trustworthy and user-friendly products for ordinary people teststhe utmost in research and development, innovation, and product capabilities. During the reportingperiod, Suofeiya's product development team deeply simulated consumer life scenarios and innovatedand upgraded products through technological empowerment. They released a market-leading innova-tion targeting five major household life pain points: marks caused by oil-based pens, unintentionalscratches on door panels in daily use, fingerprints left by sweat stains, discoloration and aging due toprolonged use, and oil stains commonly encountered on sideboards. Collaborating with EB coating andEB curing equipment suppliers, the Company repeatedly adjusted the EB coating formula ratio, electronbeam energy, electron beam intensity, and curing agent dosage to obtain the optimal solution. Com-pared to traditional baking paint/UV technology, the curing degree reaches 100%, achieving the bestlevels of coating density, UV blocking, and film hardness. The combination of EB curing technology withexisting melamine board products not only retains the rich decorative effects but also upgrades thetactile sensation. Being resistant to graffiti, scratch, fingerprint, yellowing, and oil, this product providesconsumers with a higher-quality home experience.
By extending supplier social responsibility management and empowering assistance, theCompany has developed new technologies and products to provide the maximumprotection for customers and consumer rights. To address the common issue of swellingin panel furniture, the Company made a pioneering attempt in the industry to collaboratewith suppliers in developing PUR anti-mold glue, which has been successfully promotedand applied. This anti-mold glue not only possesses all the performance characteristicsof ordinary PUR glue but also meets the "Grade 0" standard for mold resistance.The Company has always adhered to the strategy of "leading through technologicalinnovation", consistently taking the lead in product development, intelligent manufactur-ing, and digital transformation within the industry. With continued investment in R&D,Suofeiya takes quality optimization and cutting-edge technology research as its corecompetitive strengths, and always keeps customer needs in mind to deliver innovativesolutions that exceed expectations.
Environmental, Social and Governance Report l 专题2
Case 2
Providing MoreReliable Productsfor Consumers
—— Joint Innovation with Suppliers for You and Your Home
1112
Environmental, Social and Governance Report l 关于索菲亚
1314
Suofeiya Home Collection Co., Ltd. was founded in 2003 and has been deeply involved in theChinese home furnishing market for over two decades. As one of the pioneers in introducingthe concept of "customized closets" in China, Suofeiya successfully brought customizedclosets to the market and gained recognition from Chinese consumers with its innovativeproduct concept combining tailored customized closets and sliding doors for closets.Suofeiya is committed to providing consumers with comprehensive customized homefurnishing solutions, engaging in the design, development, production, and sales ofwhole-house furniture, including closets, cabinets, doors and windows, wall panels, flooring,household goods, appliances, and sanitary ware. In 2011, Suofeiya was successfully listedon the Shenzhen Stock Exchange, becoming the first A-share listed company in the indus-try (Stock Code: 002572).
ABOUT
SUOFEIYA
Company Overview
Business Philosophy
Since the establishment, the Company has been actively creating and introducing excellentproducts and brands, to bring better home decoration experience to consumers andcustomize a better life together. Currently, responding to the demand for whole-housecustomization, the Company has established a brand matrix covering the entire market,including “Suofeiya” targeting the mid- and high-end market, “Milanla” targeting themass market, and “Schmidt” and “Huahe” targeting the niche market. The four majorbrands complement each other, forming a complemental product R&D and supply system,covering the complete range of closets, cabinet and doors, matching various styles such aswall boards, sanitary ware, floor, household supplies and appliances. They can servecustomers in all fields including online and offline retail, whole-house installation, engineer-ing projects, and overseas markets, thus achieving all-round development of the channels.
Brand Matrix
Decorating Homes Easily with Technology and Creativity, Integrating Beautyof the World into New Life
Corporate Culture
Customer Experience
Iron Triangle ofCustomizatioPersonalizedCustomization
Professional &EfficientMission
Providing Customers with a Good Experience through Personalized Designand Efficient Operation, and Becoming a Trustworthy World-leading HomeFurnishing CompanyVision
Customer Foremost, Innovation and Sharing, Professional and Efficient,Honest and ProgressiveCore Value
黑龙江齐齐哈尔
河北廊坊
河南兰考
浙江嘉善浙江金华湖北黄冈
广东增城
四川成都
审图号：GS（2019）1823号
Production Base LayoutThe Company owns eight production bases in China and has pioneered the investment and construction of advanced Industry 4.0 work-shops in Asia in the industry. This has significantly shortened the product delivery cycle, with the average delivery cycle from factories todistributors remaining at 7 to 12 days for many years, breaking through the capacity bottlenecks commonly faced in the customizationindustry. The accuracy and repair rate has achieved industry-leading levels, providing supply chain guarantees for front-end sales whilereducing operating costs for both factories and distributors. With globally leading intelligent manufacturing, the average efficiencyexceeds that of German intelligent production lines by 125%. The entire process is automated, with no manual handling of the compo-nents, and each piece of board has a unique identity card for traceability. The accuracy of robot component sorting is close to 100%.
Huanggang, Hubei-Central China Production CenterCustomized wardrobes and supporting customized furnitureproducts, and customized cabinets.
Jiashan, Zhejiang-East China Production Center
Customized closets and supporting customized furniture productsChengdu, Sichuan- Western China Production Center Customized closets and supporting customized furniture products.Langfang, Hebei -North China Production CenterCustomized closets and supporting customized furniture products.Lankao, Henan-Henan Suofeiya Home Collection Co., Ltd.Customized closets and supporting customized furniture products, and bulk business.
Qiqihar, Heilongjiang-Suofeiya Huahe Door Co., Ltd.Customized wooden doors.
Jinhua, Zhejiang-Zhejiang Jinhua Production Base.
Zengcheng, Guangdong-South China Production Center
Customized wardrobes and supporting customized furnitureproducts, customized cabinets, wooden flooring, supportinghardware, and bulk business.
Environmental, Social and Governance Report l 关于索菲亚
1516
Milanla successfully held the "Upgrade New Gener-ation · 5A Hardcore Home Furnishing Conference",driving the whole home customization industrytowards a new future. Suofeiya Whole Home Bath-room Strategy was heavily promoted, officiallylaunching the "Suofeiya Bathroom" brand.
The final of the 9th Suofeiya Installation and Delivery Skills Competitionwas grandly held at the Suofeiya headquarters building, an unparalleledachievement of Suofeiya in terms of whole home delivery service.
"Peak Discussion on Fusion and Coexistence" - Suofeiya& TOP Custom Home Furnishing Strategic PrivateAdvisory Board was grandly held, marking the industryintegration trend, and Suofeiya led the creation of a newindustry ecosystem. Huahe Custom Home Furnishing"High-end Full Case for Aesthetic Upgrade" brand strate-gy conference was successfully held in Guangzhou.
The "Boost Consumer Confidence with High-quality Products,Jointly Promote Green Development of Home Collection"symposium, hosted by the China Consumers Association, washeld at Suofeiya Home Collection's Guangzhou headquarters.The symposium was attended by relevant persons in chargeof provincial and municipal consumer associations across thecountry. Suofeiya "Kang-Chun Whole Home" environmentalupgrade conference was held, marking the industry's entryinto the era of whole home environmental protection.
Suofeiya deeply participated in thedrafting of the Custom Furniture -Specification for Installation Accep-tance (GB/T43003-2023), which hasbeen officially released and will beimplemented starting from April 1,2024.
2023 MILESTONES
Environmental, Social and Governance Report l 2023年度大事记
Suofeiya officially announced Ni Ni as itsglobal brand ambassador.
"All-round Home Furnishing for a New Life" -Suofeiya's Whole Home Customization 3.0 Strat-egy was heavily promoted.
The launch ceremony of the "Happy Homes ·Suofeiya Children's Book House" project by theChina Charity Federation took place at theXinzhou Primary School in Xinchong Street,Wuhan, Hubei Province.
April
July
October
NovemberJune
September
February
March
1718
The Company's Party organization comprehensively implementsthe responsibility system for Party building, and adheres the leader-ship of the Party in various aspects of corporate governance. Bypromoting the deep integration of Party building with production andoperation, the Party organization and management have achievedthe goal of learning together and unifying the ideological essencewith the development principles of the Company.In the year 2023, the Company convened a total of 54 meetings ofthe Party committee (branch committees) and 16 Party membercongresses. Additionally, 36 Party classes and member educationtraining sessions were held, along with 40 themed Party day events,continuously enhancing the ideological qualities of existing Partycadres. Furthermore, the Suofeiya Party organization focuses onthe training of Party members and Party workers, implementingcustomized training tailored to different levels and roles, includingParty members, Party workers, and Party organization leadersholding management positions within the group and variouscenters. These efforts ensure that under the leadership of the Party,all Party members and cadres can grasp the Company's develop-ment direction, and provide strong political guarantees and organi-zational support for the stable development of Party building workand production operation.
The Company's Party committee actively establishes the “RedLeadership, Joint Construction” mechanism with Party organiza-tions from government agencies, state-owned enterprises,schools, non-public enterprises, etc. In the year 2023, a total of 27co-building activities and Party-building visits and exchanges wereconducted. Actively organizing activities for the benefit of the peopleeffectively solved 65 specific issues. Through this mechanism, theorganizational advantages are transformed into developmentadvantages, not only promoting the complementary sharing ofresources between Party branches in different industries but alsocontributing to the mutual assistance and mutual prosperity goals.The Company firmly inherits the red gene, deeply implements themechanism, integrates with social responsibility, jointly promotesthe development and progress of enterprises and society, andtirelessly strives to create a better life for humanity.
Suofeiya has established mechanisms such as the Party MemberVanguard Posts, Party Member Innovation and Research Groups,and Production Safety Party Member Vanguard Teams, fullyharnessing the exemplary role of Party members in their respectivepositions. The Company's Party organization controls the "talententry gate", focusing on encouraging young, ambitious, and morallyupright business talents to join the Party. In 2023, Suofeiya had atotal of 10 new Party members, and 17 active applicants for Partymembership, who have played important exemplary roles in keyproject R&D and integrity promotion, taking on more significantresponsibilities in the Company's development. Through such a dualtalent selection approach, we effectively integrate Party building withtalent development, achieving mutual promotion between Companydevelopment and Party organization construction.
The Company firmly inherits the red genes of the Party whileintegrating and practicing the corporate "family culture". Bystrengthening the role and responsibilities of Party members in theenterprise and society, the individual integrates better into thecollective, expanding the happiness of the "enterprise family" to thehappiness of the society at large, thereby deepening employees'identification with the corporate culture and the Party's sense ofgreat love.In 2023, the Company's Party organization conducted a series ofthematic learning and propaganda activities on "In-depth Study of XiJinping Thought on Socialism with Chinese Characteristics for aNew Era", including organizing thematic organizational life meetings,patriotic base learning, red tourism, and fireside talks, totaling 38activities. These activities embodied the warmth and sunshine of thecorporate "family culture". Meanwhile, the Party's appeal wasdemonstrated by fulfilling the Party's responsibilities throughactivities such as fulfilling micro-wishes, providing assistance tothose in need, and organizing blood donation events. Approximately80 Party members and residents were supported, and a total ofnearly 35,000 milliliters of blood were donated. This effort allows thehappiness of the enterprise to be extended to more people insociety, as Suofeiya's Party members strive tirelessly to create abetter life for humanity.
Nanhu Theme Red Education"'Small Family and Big Family' PartyMembers Blood Donation "
ADHERENCE TOPARTY BUILDING
Environmental, Social and Governance Report l 坚持党建强基
Since its establishment in 2014, the Company's organization of Communist Party of China (hereinafter referred to as the “Party”) has continu-ously grown its membership. To better leverage the role of the Party organization, the Company has established 7 Party organizations in variousfactories. Among them, the headquarters in Zengcheng and the Huanggang branch factory have Party committees, while the other 5 factorieshave Party branches. There is a total of 260 registered Party members.Since its establishment, the Company's Party organization has consistently focused on the goal of "Powerful Party Building, Prosperous Enter-prise Development". It has expanded from achieving the "Bidirectional Integration" of Party building and enterprise development to fulfilling thegreat mission of integrating social responsibility and development. In the current year, the Company has been honored with awards such as the"Guangzhou City 'Strong Party Organization with Excellent Performance'" and the "Five-Star Party Organization" in the Huanggang High-techZone, as well as recognition as an "Outstanding Party Member" in the Development Zone (Huimin Street). Guided by the exemplary leadership ofthe Party organization, the Company not only achieves healthy and stable development but also makes greater contributions to the society.
Enhance the Construction of PartyOrganization, Deepen the Integrationof Party Building and Production
Adhere to the Vanguard Role ofParty Members, Deepen the Inte-gration of Party Building and TalentDevelopment
Uphold the Integration of PartyBuilding and Corporate Culture witha Sense of Great LoveUphold the “Red Leadership, JointConstruction” Mechanism, Deepenthe Integration of Party Building andSocial Responsibility
The Party committee and the Bureauof Human Resources and SocialSecurity jointly organized themedParty day activities.
The Party branch of Schmidt joinshand with the district marketsupervision bureau in the “RedLeadership, Joint Construction”Mechanism.
Party Vanguards MemorialCommemoration Event
Party Vanguards Visit the Masses withGifts and Donations.
1920
PRUDENT CORPORATE
GOVERNANCEA
An effective corporate governance system is crucial to ensuring the healthy, stable, and sustainable development of an enterprise. Sinceits listing in 2011, the Company has continuously improved its governance system, standardized its operations, and established acomprehensive, multi-level management system in accordance with the Company's actual situation and regulatory requirements. Thishas promoted the continuous optimization of the Company's governance structure, effectively safeguarding the rights and interests ofthe Company and all shareholders.
The General Meeting of Shareholders, composed of all shareholders, is the highest authority of theCompany, responsible for making decisions on major issues. The Company convenes and holds theGeneral Meeting of Shareholders in strict compliance with the requirements of relevant laws,regulations, articles of association, and rules of procedure, such as the Securities Law of China, theCompany Law of China, the Articles of Association, and the Rules of Procedure for the GeneralMeeting of Shareholders. The Company adopts a combination of on-site voting and online voting tofacilitate the participation of shareholders, especially small and medium-sized shareholders, in theGeneral Meeting of Shareholders, treats all investors equally, and effectively safeguards the rightsand interests of small and medium-sized shareholders.
Social Responsibility
The Company adheres to the construction of a clear division of responsibilities, mutual checks and balances, and efficient operation ofthe corporate governance system. In accordance with the relevant laws and regulations such as the Company Law, the Securities Law,and the requirements of the China Securities Regulatory Commission, the Company has established a corporate governance structureconsisting of the General Meeting of Shareholders, the Board of Directors, the Board of Supervisors, and the management. At the institu-tional level, the group has formulated a series of normative documents such as the Rules of Procedure for the Board of Directors, theRules of Procedure for the Board of Supervisors, the Work Regulations of the Audit Committee, the Work Regulations of the BoardSecretary, the Information Disclosure Management System, the Insider Registration System, and the Internal Audit System, continuouslyimproving the Company's governance system.
Governance Structure and Systems
Shareholders and General Meeting of Shareholders
Directors and Board of Directors
Supervisors and Board of Supervisors
The Board of Directors serves as the decision-making institution responsible to the General Meet-ing of Shareholders. Currently, the Board of Directors consists of five directors, including threeindependent directors, each serving a term of three years. The composition of the Board of Directorsis reasonable, and the qualifications, selection procedures, and composition of directors all complywith relevant laws and regulations. The Company attaches importance to the diverse backgroundsand experiences of board members while ensuring that they possess the professional skills, experi-ence, and diverse perspectives necessary for the business. Candidate selection is based on arange of diversity factors, including (but not limited to) age, cultural and educational background,professional experience, skills, and years of service.All directors are able to conduct their work in accordance with the Rules of Procedure for the Boardof Directors and the Independent Director System, attending board meetings on time with a 100%attendance rate. They actively participate in the decision-making on major matters of the Companyand the review of important information disclosure. In 2023, the Company revised the IndependentDirector System and conducted dissemination and training sessions. Directors actively participatedin relevant training activities organized by regulatory authorities, further enhancing their ability tofulfill their duties as directors. No directors of the Company have been subjected to inspections,penalties, public criticism, or condemnation by regulatory authorities.
The Company's Board of Supervisors consists of three members, including one representativeemployee supervisor and two representative stakeholder supervisors, with a female representationratio of 1/3. The representative employee supervisor is elected through democratic elections amongthe Company's employees. The composition of the Board of Supervisors members is reasonable,and their qualifications, selection procedures, and composition comply with relevant laws andregulations.The Board of Supervisors has been working diligently and conscientiously, with procedures such asconvening and voting in compliance with the Rules of Procedure of the Board of Supervisors andother related regulations, and has inspected and supervised Suofeiya's decision-making processas well as the establishment and implementation of internal control systems to promote thestandardized operation of the Company in accordance with the law. The actual attendance rate ofthe Board of Supervisors is 100%.
Shareholders’ MeetingBoard of DirectorsBoard of Directors OfficeSupervision Department
Board of Supervisors
Audit CommitteeAudit DepartmentGeneral Manager’s OfficeGeneral Manager
Environmental, Social and Governance Report l 稳健的公司治理
general meetingsof shareholdersThe company held
boardmeetings
The company held a total of
supervisorymeetings
The Company held a total of
Suofeiya Retail Business DivisionSchmidt Retail Business DivisionMilanla Retail Business DivisionHuahe Retail Business DivisionIntegrated to House Decoration Company Business DivisionB2B Whole Seal Business DivisionFurniture and Home Collection Business DivisionQuality CenterManufacturing CenterDesign CenterInformation and Digital CenterSmart Home Technical R&D CenterCustomer Service CenterSupply Chain CenterFinancial Management CenterNew Retail CenterMedia DepartmentBrand Management DepartmentCivil Construction OfficeResearch InstituteOrganization DepartmentHuman Resources CenterAdministration CenterGuangzhou Ningji Intelligent System Co., Ltd.Guangzhou Suofeiya Investment Co., Ltd.Direct Retail Business Division.
2324
Improve efficient internal control system
Management
The daily operation activities of Suofeiya are performed by the senior management. As of the end of2023, Suofeiya has employed five senior management personnel. Management teams of Suofeiyacover fields of marketing, finance, intelligent manufacturing, etc. and have extensive industry back-ground and professional management experience. These teams participated in establishing theCompany's Operations Management Committee to help Suofeiya seize market opportunities inpractical operations, and protecting the company's long-term sound development.
The Company has established a three-in-one risk control line consisting of the Audit Department,the Supervision Department, and the Legal Affairs Department. In accordance with laws, regula-tions, and guidelines such as the Company Law, the Securities Law, and the Corporate Gover-nance Code for Listed Companies, the Company has formulated multiple internal managementsystems including the Articles of Association, the Rules of Procedure for the General Meeting ofShareholders, the Rules of Procedure for the Board of Directors, the Rules of Procedure for theBoard of Supervisors, the Information Disclosure Management System, and the Internal AuditSystem.
Build a corporate culture of integrity
In 2023, the Supervision Department regularly organized activities to promote a corporate cultureof honesty and integrity, and carried out both online and offline events and training on positiveculture for the executives, core members of various business units, employees holding keypositions, and new recruits. Throughout the reporting period, six large-scale integrity educationtraining sessions and film viewing events were held under the theme of "Conscious Integrity, Aspir-ing High", reaching thousands of participants. This initiative continuously strengthens the deter-rence against corruption, strengthens the institutional framework against corruption, and enhanc-es the conscious resistance against corruption, organically integrating and interconnecting variousmeasures to address both symptoms and root causes.Moreover, efforts were made to deepen the propaganda and education on integrity, innovatingmethods such as conducting integrity lectures, producing integrity-themed microfilms, anddisseminating typical case studies to spread the concept of integrity and guide employees infortifying their ideological defenses.
Enhance protection of intellectual property rights
The Company places great emphasis on the protection of intellectual property rights, which hasbeen a longstanding responsibility for us. Protecting our proprietary intellectual property frominfringement is crucial. To enhance brand construction and maintenance, the Company rigorouslymanages intellectual property, such as patents and trademarks, through standardized manage-ment practices. We have established comprehensive management systems, including theIntellectual Property Management System and the Intellectual Property Management Measures.Additionally, we continuously carry out actions to safeguard intellectual property rights, ensuringthe lawful use of patents and trademarks, effectively mitigating risks, and maintaining our brandimage. This fosters a culture of integrity in our operations and creates a favorable environment forprotecting intellectual property rights.
During the reporting period, the "three lines of defense" continuously empowered various businessunits to strengthen the identification, assessment, management, and continuous supervision andimprovement of compliance risks, ensuring the effectiveness of internal control and enhancing theCompany's level of operation management and risk prevention capabilities.In 2023, the Company's Audit Department conducted a comprehensive audit covering the Compa-ny's financial expenditures and carried out special audits for 11 major business processes, follow-ing up on 48 audit rectification issues. The audit covered various subsidiaries and key businesscontrol activities, including fund activities, procurement business, asset management, projectengineering, and contract management. The internal audit system was improved, optimizing theannual audit plan, routine audits, special audits, and the audit results rectification process, therebypromoting efficiency. The Audit Department participated in 43 OA adjustment projects during theyear, achieving a speed increase rate of 95% in individual processes. Efforts were also made tostrengthen the rectification of audit issues, achieving a timely rectification rate of 96%. Throughsystem construction, business departments were encouraged to implement audit rectifications byimproving systems.During the reporting period, the Audit Department collaborated with the IT Department to utilize theCompany's big data analysis platform (BI) configured with Tableau Server data analysis applica-tions to build a risk assessment model and create visual analysis dashboards. This enabledself-service analysis of global data in the risk assessment and pre-analysis stages and providedreal-time preview, filtering, and export of target data, thereby improving quality and efficiency withtargeted actions.
During the reporting period, the Audit Department continuously organized self-inspection work forthe eight major production bases nationwide, involving 21 regulatory documents and setting up 425inspection points. A total of 172 suggestions for system improvement were collected, out of which44 were deemed effective. Over the course of three years of self-inspection work, the factorieshave developed a certain level of self-inspection capability and risk sensitivity, achieving mutualinspection of systems and execution status, as well as enhancing self-correction capabilities.At the same time, in each business unit, training was conducted in six aspects including salesbusiness, asset management, project engineering, procurement projects, contract management,and quarterly self-inspection of audit internal controls. Throughout the year, a total of nine specialtraining sessions were held with 347 participants.Internal Control
Environmental, Social and Governance Report l 稳健的公司治理
The Audit DepartmentThe Supervision
Department
The Legal AffairsDepartment
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Attach importance to business ethics
Following the China Enterprise Anti-Fraud Alliance in order to promote the normalization andlong-term governance of corruption prevention, the Company has collaborated with its suppliersto sign the Business Partner Integrity Commitment Agreement. This agreement serves as a set ofguidelines for both parties to adhere to in their business dealings and clearly outlines the mecha-nisms for withdrawal and penalties for violations of the integrity commitment agreement. We havealso enhanced various regulations and systems, such as the Reporting Reward ManagementMeasures of Suofeiya Home Collections Co., Ltd., the Whistleblower Protection Policy, and theestablishment of integrity accounts. Additionally, we have diversified our channels for reportingcomplaints, including email, telephone, WeChat, and on-site reporting, while ensuring full protec-tion for whistleblowers.During the reporting period, the training conducted by the Supervision Department reachedthousands of individuals. Serious violators were subject to the punishment of relevant depart-ments. A "zero-tolerance" approach was adopted towards behaviors that harm consumers,partners, or the Company's interests.
During the reporting period, the Company and its affiliates collectively held 1,684 domesticallyapproved registered trademarks. To date, the "Suofeiya" brand has been protected as awell-known trademark 128 times. In terms of rights protection, in 2023, the Company won thejudgment in the case of trademark infringement and unfair competition disputes. This successfuloutcome effectively safeguarded the legitimate rights of consumers and the reputation of Suofeiyaas a listed Company. The substantial compensation awarded in the case served as a deterrent toinfringers, setting a benchmark for active rights protection in the home furnishing industry andpromoting healthy competition within the sector.
1,684
Domesticallyapprovedregistered trademarks
Protected as a well-known trademark
1300+
Over 1300 group-wide anti-fraudpolicies were disseminated.
59 operational sitesunderwent evaluations foranti-corruption measures.
Privacy and information security
Information security is a comprehensive system engineering effort. The Company's Informationand Digital Center (IDC) has adopted a series of network security products and tailored a set ofsecure and efficient network security solutions. This includes network access mechanisms, antivi-rus software, firewalls, dedicated lines, virtual private networks (VPN), Internet behavior manage-ment devices, file scanning monitoring, bastion hosts, system backups, etc. We have establisheda comprehensive information system management, network security mechanism, and permissioncontrol management system, strengthening data and information security from individual to overalllevels. As the Company continues to grow, and due to the needs of our business, we have estab-lished branch offices/branches in different regions, connecting them to form a vast Internetnetwork system, which enhances efficiency and competitiveness.
Suofeiya places particular emphasis on protecting consumer personal information, strictly adhering to relevant laws and regulations suchas the Personal Information Protection Law of the People's Republic of China, the Data Security Law of the People's Republic of China,and the Cybersecurity Law of the People's Republic of China. We lawfully and compliantly collect and use personal information providedby consumers to the Company. We study and utilize data dynamic desensitization techniques and tools to desensitize customer-relatedinformation, effectively preventing the leakage of customer information and avoiding potential losses. Proactively following guidelinessuch as the Self-Assessment Guidelines for Illegal and Irregular Collection and Use of Personal Information by Apps and the Scope ofNecessary Personal Information for Common Types of Mobile Internet Applications, we continuously update and improve the PrivacyPolicy disclosed to consumers on official websites, official apps, and various social platform mini-programs involved in collecting userprivacy information, in accordance with national laws and regulations. We have provided clear explanations of the types, rules, andusage methods of the collected information.During the reporting period, Suofeiya collaborated with multiple departments to assess and rectify the information system's internalcontrol situation, covering dimensions such as system changes and operation and maintenance control, permission control, physicalsecurity, and network security control. No major internal control deficiencies were found.Over the years, Suofeiya has continuously strengthened and improved information security management work, with various tasks andindicators incorporated into the management system. This ensures the smooth operation of the Company's various business andmanagement operations, effectively guaranteeing the Company's rapid development and safe operation, and fulfilling its due value.
Network access mechanisms, antivi-rus software, firewalls, virtual privatenetworks, bastion hosts, vulnerabilitymanagement.
AF
External Security Defense
Emergency plans, security checksand records, security training,security risk identification, andInternet behavior management.
Network redundancy, networkequipment, and backbone lineupgrades.Availability
Data classification, dynamic datadesensitization, and developmentof market terminal tools to preventdata loss.
Data PrivacyManagement
Data backup and recovery, regularinspections and automated monitor-ing, sensitive information encryptionstorage, secure data circulationcontrol, and file security systems.
Data Security Management
Information system managementand network security mechanisms,permission control, code encryptionprotection, system backups, andsystem stability.
BE
CD
System SecurityConstruction
Informationsecurity0 incidents
Environmental, Social and Governance Report l 稳健的公司治理
2728
Security ManagementStandards and Respon-sibility System
PROTECTION OF RIGHTS ANDINTERESTS OF SHAREHOLDERS
AND CREDITORS
B
Suofeiya places great emphasis on safeguarding the legitimate rights and interests ofshareholders, especially small and medium-sized shareholders. In accordance withthe Company Law, the Code of Governance on Listed Companies, and the Guidelinesfor the Articles of Association of Listed Companies, Suofeiya has formulated compre-hensive rules and systems related to corporate governance. It continuously promotesand strengthens the construction of internal control management systems, standard-izes corporate operation and management, and has established a relatively completesystem of internal control management that effectively balances interests. Mecha-nisms have been established to ensure fairness, transparency, and impartiality forshareholders and creditors, allowing them to fully enjoy the legitimate rights specifiedby laws, regulations, and institutional rules.Suofeiya consistently improves the standardized operation of the General Meeting of Shareholders, the Board of Directors, the Board ofSupervisors, and the management. It places full emphasis on and meticulously prepares for these meetings, ensuring proceduralcompliance. The Company respects and leverages the role of independent directors and special committees of the Board of Directorsto enhance the effectiveness and independence of board operations. By utilizing the corporate governance structure of the GeneralMeeting of Shareholders, the Board of Directors, the Board of Supervisors, and the management with mutual separation and balance,each level performs its duties and responsibilities within its scope of authority, ensuring the Company's standardized operation. Throughvarious learning and training initiatives, the Company continuously enhances the performance and self-discipline awareness of direc-tors, supervisors, and senior executives, thereby improving the scientific decision-making level of the Board of Directors and themanagement.
Protection of Rights and Interests ofShareholders and Creditors
The Company consistently prioritizes investor relations management, striving to present itself as a truthful, transparent, and compliantlisted Company. It actively establishes effective communication mechanisms with investors, adhering to the Investor Relations Manage-ment System, to fully safeguard investors' right to information, understand market trends, and perceive investor needs. The Companyprovides investors with a rich and convenient communication channel through investor hotlines, email, investor relations interactiveplatforms, the official website's "Investor Zone", media interviews, performance presentations, offline surveys, and other channels,actively engaging in communication and interaction with investors, fostering a positive relationship.At the same time, it promptly feeds industry news and capital market concerns back to the management, endeavoring to construct aharmonious and interactive investor relationship.
Investor Relations Management
Since its listing in 2011, Suofeiya has consistently prioritized stockholder returns to safeguard investorinterests. It has established a continuous and stable dividend policy and repurchase policy, includingthe "Long-Term Stockholder Return Plan", ensuring the sustainability and stability of profit distributionpolicies, allowing shareholders to share in the Company's development achievements. When distrib-uting profits by way of cash dividends, the Company ensures no less than 20% of the distributableprofits realized that year. From 2011 to 2022, the Company has cumulatively distributed cashdividends (including share repurchases) totaling 4.082 billion yuan to all shareholders.While maintaining stable dividend payouts, Suofeiya has also implemented a series of share repur-chase programs. Since 2013, the Company has launched three phases of share repurchase plans,continuously used for implementing the Company's equity incentive plans and employee shareholdingplans, aiming to maintain stable market value and protect the interests of all shareholders. Since itslisting, the Company has introduced one restricted stock incentive plan, three employee shareholdingplans, and two dealer shareholding plans. This has established not only a stockholder structure thataligns the interests of the management, core staff, and all shareholders, but also an incentive mecha-nism that strikes a balance between short-term and long-term incentives and constraints.
Stockholder ReturnsIn the year 2023, the Company disclosed a total of 76 announcement documents (each with an announcement number). The Companyattaches great importance to information disclosure work and strictly complies with the requirements of the Shenzhen Stock ExchangeInformation Disclosure Guidelines and other regulations to fulfill its disclosure responsibilities. It ensures that the disclosed information istrue, accurate, and complete, without any false records or misleading statements.The Company designates the following media for information disclosure: Securities Times, China Securities Journal, Securities Daily,Shanghai Securities News, and cninfo website (cninfo.com.cn). The disclosed information includes regular reports and other ad-hocannouncements covering all significant matters of the Company. This enables investors to quickly understand the Company's develop-ment status, safeguarding their right to information. During the reporting period, the Company issued a total of 76 announcements (eachwith an announcement number), including 6 regular reports and 70 ad-hoc announcements.Throughout the reporting period, the Company's information disclosure was rated as Grade A bythe Shenzhen Stock Exchange, marking the tenth consecutive year of receiving this rating.Currently, there are only 43 domestic main board listed companies that have received Grade Aevaluations for ten consecutive years. As a listed company, Suofeiya will continue to improve itsquality of information disclosure and enhance operational standards to achieve high-qualitydevelopment.
Information Disclosure
Image Source: Shenzhen Stock Exchange
Organized and participatedin more than 300 sessionssuch as regular exchange,special reception ofinvestors, online exchangemeetings and offline strategymeetings of institutionalshareholders.
Actively conducted annualperformance presentations,organized two sessions onexchange with investorspromptly following therelease of regular reportperformance, and activelyparticipated in the annualonline collective receptionday for investors within thejurisdiction.
Regular Communication
Timely updated thestockholder register, trackedand analyzed changes instockholder structure,responded promptly to 53inquiries on the interactiveplatform of Shenzhen StockExchange, actively answeredinvestor hotline calls, andkept investors informedabout the Company'soperations through newmedia platforms such asWeChat public accounts andvideo platforms, ensuringsmooth communication.
Interaction and Reply
The Company's executiveoffice regularly compilesindustry news and capitalmarket dynamics feedback,sharing domestic andinternational industryoperating changes andinvestor concerns with themanagement. This feedbackloop ensures both investoradvisory and informationalrights are fully protected,facilitating a better integrationof capital empowerment andsubstantive businessoperations.
Two-Way Communication
40.82
million RMB
Environmental, Social and Governance Report l 股东与债权人权益保护
Cash Dividends 2011-2022
Daily Communication
3132
COMMITMENT TO HIGHQUALITY AND BETTER SERVICEC
In 2023, the Company's Party organization conducted a series ofthematic learning and propaganda activities on "In-depth Study of XiJinping Thought on Socialism with Chinese Characteristics for aNew Era", including organizing thematic organizational life meetings,patriotic base learning, red tourism, and fireside talks, totaling 38activities. These activities embodied the warmth and sunshine of thecorporate "family culture". Meanwhile, the Party's appeal wasdemonstrated by fulfilling the Party's responsibilities throughactivities such as fulfilling micro-wishes, providing assistance tothose in need, and organizing blood donation events. Approximately80 Party members and residents were supported, and a total ofnearly 35,000 milliliters of blood were donated. This effort allows thehappiness of the enterprise to be extended to more people insociety, as Suofeiya's Party members strive tirelessly to create abetter life for humanity.
Product quality and R&D are the lifelines of an enterprise, serving as the fundamental guarantee for customer and consumer rights. Inresponse to the national call for high-quality development, Suofeiya, based on its overall strategy and corporate culture, has clarified itsquality objectives, quality strategy, and quality policy, taking into account the changing demands of the times and the internal and exter-nal environment. Through intelligent manufacturing initiatives, Suofeiya aims to ensure quality and safety across all scenarios, meetingthe needs of users for a better life.
Currently, the Company's quality management is inthe stage of forging excellent quality management,continuing to implement the quality strategy—focusing on the entire value chain process andpromoting digitization—to refine and improve,aiming to deliver more reliable and trustworthyproducts and services to users.
Enhanced Product Quality
Clarification of quality management strategy and development stage
The Company places great emphasis on the environmental protection, quality, and service of its products, adhering to the red line ofproduct quality and strictly implementing the "quality veto" system. To assist in advancing the Company's quality management to anexcellent level, the Company has established the "QDS" Green Integrated Customized Quality Management Mode.
Upgrade quality management mode
Make Suofeiya the
benchmark for
quality in thefurniture industry.Quality Objective
Through quality managementacross the entire value chain,digitization-driven initiatives, andthe promotion of innovative service
models, aim to create green,healthy, and beautiful homes for
customers.
Quality Strategy
AccumulateImproveInnovateQuality Policy
Construction andDevelopment Period
Steady Improvement
Period
Quality ManagementSystem Construction
2003-2008Established ISO9001 Quality Manage-ment System.Became the industry's first to receiveTen Rings Certification.Honored as the most influential buildingmaterials brand in South China.
Became the industry's first listed Company.Established the Suofeiya Home CollectionResearch Institute. Implemented ERP/SRM/PLM systems.Production bases established in Chengdu,Jiashan, Langfang, and Huanggang.Received CNAS accreditation.Awarded the "Zengcheng GovernmentQuality Award".Obtained Measurement ManagementSystem certification.Recognized as a "Guangdong FamousBrand Product".
Established Intelligent Manufacturing 4.0factories.Established Ningji Intelligent SystemsCo., Ltd.Established Intelligent Home TechnologyR&D Center.Developed green environmental materialstandards.Cabinet factory established, and bases inQiqihar and Lankao put into operation.Achieved Occupational HealthManagement System certification.Obtained FSC Forest Certification.Recognized as a "High-tech Enterprise".
Marketing revenue exceeds 10billion yuan.Awarded the Guangzhou Mayor'sQuality Award.Received "National Green Plant"recognition.Established IPD Research andDevelopment System.Production base established inJinhua, Zhejiang.Obtained Energy ManagementSystem certification.Received American Dual NAFFormaldehyde-Free Certification.
2009-2014
2015-2020
2021-PresentQuality Enhancement Strategic Deployment
Continuous Improvement ofQuality Management System
Forging Excellent
Quality Management
Expansion andBreakthrough Period
Excellence ForgingPeriod
Establishing the Company's product development bridge through the adoption ofan Integrated Product Development (IPD) management model, creatingend-to-end product development teams, and establishing processes forplanning, product development, product launch preparation, and product releasephases to improve development accuracy and shorten development cycles.
Research and Development Quality Management
Quality management of procurement, logistics, and supplier modules, establish-ing the Supplier Assessment Management System, implementing centralizedprocurement bidding, multimodal transportation logistics models, logisticsintegration, and joint development of new materials and processes with suppliersto tackle industry challenges.
Supply Chain Quality Management
Combining the implementation of projects such as Industry 4.0, Total QualityManagement (TQM), Total Productive Maintenance (TPM), Voice of Process(VOP), 5S methodology, Manufacturing Execution Systems (MES), LeanProduction, and Advanced Planning and Scheduling (APS) to form a manage-ment model aimed at ensuring quality control and consistency throughout theproduct manufacturing process.
Manufacturing Quality Management
Encompassing front-end marketing and back-end service quality management.Expanding brand influence in front-end marketing while improving service qualityin the back-end, conducting regular measurements of DSI (Dealer SatisfactionIndex) and CSI (Customer Satisfaction Index), and quarterly assessments tocontinuously enhance market quality management.
Market Quality Management
Full Value Chain Quality Management ("End-to-End" Quality Management Mechanism)
Q
Environmental, Social and Governance Report l 坚守品质 强化服务
Creating green, healthy and beautiful
homes for our customers
Organization,Mechanism,Culture,Talent
Full Value ChainQualityManagementchainResearch and DevelopmentQuality Management
Digital R&DDigital ManufacturingDigital Supply ChainsDigital Quality Assurance
Dealer Service SystemConsumer Service System
Service SystemConstruction
···
········
········
·······
Manufacturing Quality
ManagementSupply Chain QualityManagementMarket Quality Management
Digitalization ofSystemsQDS
3536
Client requirementCustomer satisfaction
Suofeiya's years of dedication and leadership have transformed the industry from standardized product styles to diversified styles, andfrom independent product displays to experiential showcases, continually setting the industry standard for innovation and design.
Enhanced Product Innovation
Effectiveness of quality control
Through the construction of digital systems, including Industry 4.0, EMS, TPM, 5S, VOP, etc, production processes areoptimized, production costs are reduced, and production efficiency is enhanced. The Company has linked the entire productionprocess digitally, from WMS, WCS, MES, ERP systems to PLC execution systems, achieving a digital factory where boards areprocessed without touching the ground. Continuous upgrades to equipment in the cutting and edge sealing sections on thefoundation of the 4.0A intelligent factory have increased production efficiency. The Company has also developed the industry'sfirst domestically produced CNC equipment to improve accuracy and pass rates.
Improvement inProduction Efficiency
Enhancement in
R&D Efficiency
Increase in Pass
Rate
The Product Lifecycle Management (PLM) system stores digitized technical,
process, and basic data generated during the research and development
process, achieving centralized and unified product databases. The DIY Home
system utilizes parametric modeling technology, automatic splitting, and other
technologies to integrate with production systems, combining multiple systems
such as management systems, order systems, and ERP systems to simplify the
design process.
Digital R&D
The Advanced Planning and Scheduling (APS) is adopted for effective forecast-ing and scheduling based on order requirements, production capacity, andresources to automatically generate optimal production plans. The WarehouseManagement System (WMS) is developed to enhance warehouse managementand optimize warehouse management processes.
Digital Manufacturing
The ERP system manages supplier information input and management,
procurement information input and management (including materials and prices),
purchase order input and management, material reception, and distribution. The
Supplier Relationship Management (SRM) system manages supplier information,
order issuance and receipt, and business communication. The Transportation
Management System (TMS) realizes the informatization and visualization of
dealer ordering, factory production, and product delivery.
Digital Supply Chains
Applications such as machine vision and sensor technology are used toautomatically collect process quality and laboratory inspection data. Aautomaticdetection and collection functions are developed in the Manufacturing ExecutionSystem (MES) to provide reliable quality data for production processes andafter-sales quality. In the MES quality digitalization module, quality data isstatistically analyzed from different dimensions to identify the root causes andtrends of quality problems. It also tracks and records product quality information,achieving full lifecycle traceability of products.
Digital Quality Assurance
Digitalization of Systems
D
The DSI establishes a positive dealer relationship management for the Company through comparative ranking,
incentive measures, assessments, and features such as point-based management.
Dealer Service System (DSI)
The CSI provides consumers with customized home solutions and enhances their purchasing experience through
initiatives like the "X Plan" and a 400 call system.
Consumer Service System (CSI)
Service System Construction
S
To improve R&D efficiency, the Company intervenes in quality control during the R&D phase to avoid delays and redundantwork, reducing development cycles. The use of PLM systems manages the product development process, documents, anddata, reducing the time and cost of physical prototype production and testing. Early identification and resolution of issuesimprove R&D efficiency and quality, shortening product development cycles and accelerating time to market. Over the pastthree years, the Company's R&D efficiency has increased by nearly 20% due to the construction of digital systems.v
The Company establishes clear quality standards and requirements for supplier management, including supplier admission,product categories, key materials, key processes, sample testing and certification, and incoming material inspection, ensuringclear and smooth communication of quality information among various organizations and achieving quality synergy. In suppliermanagement, timely business communication with suppliers reduces lead times and ensures production readiness. Thedevelopment of process quality inspection and laboratory inspection systems provides quality data assurance for manufactur-ing and after-sales quality. Quality inspection and automated testing equipment reduce the generation of defective productsand waste, lowering the operating costs of manual inspection. Automated inspection equipment continuously and accuratelydetects abnormal boards, helping to improve production efficiency and ensure product pass rate.
20032001
20112012201920222023
Uphold product R&D
Environmental, Social and Governance Report l 坚守品质 强化服务
In 2001, Suofeiya introduced customized closets into China, creating the era of China's customizedclosets.In 2003, it first launched the iconic louvered door. In 2011, Suofeiya taken the lead in launching the Haina Baichuan storage system .In 2012, the "Future Closet" from Suofeiya marked the beginning of intelligent customization in theChinese furniture industry.In 2019, Suofeiya proposed the concept of light luxury with the "Star" proposition, guiding industrydesign trends and development by focusing on various dimensions such as style, material, crafts-manship, and fashion elements in customized furniture.In 2022, Suofeiya launched new products such as the Carlo series, Unbounded series, Les series,and Bella series, with the development of a staggering 2,345 new items.In 2023, Suofeiya introduced EB technology, applied to create the high-value and high-qualityAzure series. The Flow series products incorporated micron-level powder coating technology,achieving visual integration and a finish comparable to baked paint products.
3738
Talent is the primary driving force of development. As of December 2023, the company's R&D staff totaled 1,380, accounting for 9.58%of the company's total headcount. Innovation in research and development is a key driver of sustainable development. Suofeiya hasconsistently adhered to the "Development Led by Technology Innovation" strategy, with R&D expenditure accounting for over 3% ofrevenue in recent years.To meet consumers' diversified demands for customized home products, the Company has established a product development processthat aligns with its corporate culture of "professionalism and efficiency". During the reporting period, the Company introduced the IPDproduct integrated development project, improving the product development process. It conducted multi-functional concurrent develop-ment, early intervention, and cross-departmental team matrix operations to shorten the product development cycle. Additionally, byestablishing quality planning, expert reviews, and project technical review mechanisms, the Company enhanced product quality,reduced customer complaints resulting from R&D, ultimately improving the efficiency, quality, and consumer experience of productdevelopment.
Establish R&D system
The Company places great importance on the development of talent and training. It has established external innovation resourceplatforms with major universities and research institutions. It has jointly established the National Engineering Research Center ofLow-Carbon Processing and Utilization of Forest Biomass with the Chinese Academy of Forestry. Additionally, partnerships withNanjing Forestry University have established the Smart Manufacturing Industry College, while collaborations with Central South Univer-sity of Forestry and Technology have established the Modern Bamboo Industry College. These initiatives aim to build a cooperativemechanism between industry and academia to effectively align disciplinary, innovation, and industrial chains.
In terms of collaborative innovation, the Company has successively partnered with units such as the Wood Industry Research Instituteof the Chinese Academy of Forestry, Nanjing Forestry University, South China Agricultural University, and Central South University ofForestry and Technology. Around areas including process technology, quality improvement, material research, and advanced manufac-turing, they have undertaken 36 industry-university-research cooperative innovation projects and achieved fruitful results. In 2023, asthe lead unit, Suofeiya, in collaboration with 10 other institutions, successfully applied for and was approved to undertake the NationalKey R&D Plan for the 14th Five Year Plan (2023YFD2201500) titled "Key Technologies for Intelligent Manufacturing of Wood ProductsBased on Digital Collaboration". This project focuses on in-depth research on key technologies for intelligent manufacturing related towooden furniture, wooden doors, wooden flooring, engineered wood products, and plywood.
Build innovation platform
In June 2011, the Company established the Research Institute, the first specialized research institution in the wardrobe industry nation-wide. It has set up four branches in production bases across the country, shouldering responsibilities such as product R&D, processdevelopment, quality control, participation in industry standardization, product testing, material performance testing, as well as externaltechnical cooperation, exchange, and talent training. It is an integral part of the Company's development strategy and a vital guaranteefor continuously leading the industry. Currently, the Research Institute has established six major laboratories, forming a testing matrixcharacterized by "strong technical strength, comprehensive testing services, and professional testing personnel". The South ChinaLaboratory of Suofeiya in Guangzhou has obtained national CNAS accreditation, becoming the industry's first nationally accreditedtesting institution. The Company continuously innovates in various aspects, such as new product development and design, raw materialquality, and production process control, ensuring that its products comply with the latest national safety and performance standards.Additionally, the Company actively promotes the construction of various innovation platforms. Since its headquarters in Guangzhoupassed the national high-tech enterprise certification in 2009, currently, five subsidiary companies have obtained high-tech enterprisecertification. In 2023, Suofeiya was recognized as a "National Industrial Design Center" by the Ministry of Industry and Information Tech-nology.
Establish innovation teamUnder the guidance of the "Development Led by Technology Innovation" strategy and inresponse to consumers' pursuit of a better home living experience, the Company contin-ues to conduct innovative research and development, implementing the transformation ofscientific and technological achievements and breaking through industry technical bottle-necks. During the reporting period, the Company carried out researches on over ahundred new products and new technology projects, applied for patent protection for 125technologies, participated in the formulation of 8 standards, published 11 academicpapers, and received 59 product innovation design awards and 2 science and technologyinnovation awards.As of December 2023, the Company has obtained 665 valid patents, including 69 inventionpatents, 265 utility model patents, and 331 design patents. It has been granted 700 autho-rized patents, registered 181 software copyrights, published 106 papers, and participatedin the formulation of 64 national, industry, and group standards. It has accumulated 15international leading or advanced technology identification achievements, along with over300 honors including product innovation design awards and science and technologyinnovation awards, recognized by authorities from various sectors.
Transformation of R&D achievements
69265
Utility model patents
Design patents
Registration ofsoftware copyrights
12511
Innovation Platform
Innovation exchange
universities andscientific research units
national innovation
alliances
trade associations/societies
standardization
committees
academic
journals
specializeddatabases
Industry-Universi-
ty-ResearchCooperation
Industryexchange
Standardformulation
Paperpublication
Information
retrieval
Suofeiya
Environmental, Social and Governance Report l 坚守品质 强化服务
Award Certificates of Suofeiya
National Green PlantNational High-techEnterprise
National Service-orientedManufacturing Demonstra-tion Enterprise
Provincial Engineering Center
Provincial EnterpriseTechnology Center
Provincial IntelligentManufacturing Demonstra-tion Enterprise.
Well-known Trademark
National IndustrialDesign Center
3940
Apply for patent protection
of technologyProduct Innovation &Design AwardsInvention patents
Science and technology
innovation awards.
Publication ofacademic papers
During the reporting period, the Audit Department collaborated with the IT Department to utilize theCompany's big data analysis platform (BI) configured with Tableau Server data analysis applica-tions to build a risk assessment model and create visual analysis dashboards. This enabledself-service analysis of global data in the risk assessment and pre-analysis stages and providedreal-time preview, filtering, and export of target data, thereby improving quality and efficiency withtargeted actions.
Sustainable development strategy with serviceas the core competitivenessAdhering to the core value of "Customer Foremost, Innovation and Sharing, Professional andEfficient, Honest and Progressive", the Company has proposed a development strategy withservice as the core competitive advantage. Placing customers at the center, the Company priori-tizes customer service, upholds customer and consumer rights, continuously improves servicequality, enhances customer satisfaction, and ultimately achieves mutual benefit and win-winoutcomes with customers.
During the reporting period, the Company, in collaboration with the China ConsumerJournal, held a symposium titled "Boost Consumer Confidence with High-quality Prod-ucts, Jointly Promote Green Development of Home Collection" at its headquarters inGuangzhou in 2023. Representatives from consumer associations in Beijing, Shanghai,Tianjin, Guangdong, Guangzhou, Sichuan, Hebei, Hunan and other provinces andcities, as well as experts from the China National Forest Products Industry Associationand the Wood Research Institute of the Chinese Academy of Forestry, along with repre-sentatives from the home furnishing industry, participated in the symposium. Address-ing various concerns of consumers such as product quality, after-sales service, greenand low-carbon initiatives, health and safety, and product traceability, Suofeiya insistson customer-centricity. Through a series of measures, Suofeiya ensures the quality ofproducts and services.
For example, in August, Suofeiya introduced a traceability technology by embeddingNFC chips in each plate. Consumers only need to use their smartphones to scan andview detailed information about factory shipments, thus preventing suppliers fromsubstituting shoddy products for superior ones. In addition to NFC chip traceabilitytechnology, the Company has a comprehensive control system for the entire serviceprocess. It categorizes dealers across the country into numerous groups, and custom-ers evaluate sales, design, delivery, installation, and products. Evaluation data areentered into the headquarters' system, prompting dealers to proactively addresscustomers’ reasonable concerns.
More Attentive Service
The service standards were upgraded to "Suofeiya Super 6+1 Service", enhancing two-way communica-tion and interaction with customers. Centered around the "Six-Virtue Services" guidelines, the Companyensured extreme satisfaction through outstanding service, winning proactive recommendations fromcustomers.As an industry leader, Suofeiya pioneered the "Six-Virtue Services",focusing on six aspects of service to the utmost.
2019
Suofeiya launched a new service IP "French Cabinet Butler", whichintegrates services throughout the pre-sale, during-sale, andafter-sale phases, providing more considerate and personalizedservices to meet consumer needs. Suofeiya Academy was estab-lished with five campuses to conduct systematic training courses,boost service levels and efficiency in various regions.
2020
To empower dealers comprehensively, the Company provided over 200service-related training sessions, covering more than 1,000 regions andattracting over 80,000 participants. The installation skills competition has beenheld continuously for eight years to enhance service levels. Continuousimprovement in online services (Internet service platforms, service platformmini-programs, etc.) and the promotion of tiered and personalized serviceswere initiated, with standardized processes and strict service indicators estab-lished to enhance customer satisfaction and trust.
2022
2018
2009
Responding to customers' demand for "one-stop whole-home service", theCompany upgraded its service to "full-chain delivery". Through IPD integrateddevelopment, digital systems and competitive education, its service efficiencywas comprehensively improved. The ninth National Installation Delivery SkillsCompetition was held with a total of 18 events and 1,374 participants, cultivating a"craftsman culture" among installation professionals. Six "Delivery OperationWorkshops: Creating Service Operation Officers in 3 days and 2 nights" and ninetraining sessions on "Conquering the Market with Sales, Establishing Dominionwith Service" were organized for regional whole-home delivery, covering over500 regions and involving over 3,000 participants. The aim is to make servicebecome Suofeiya's core competitiveness and provide professional, caring, andwarm services to consumers.
2023
CSIOne-timeComplaint RateRepeated ComplaintRateCounter HousekeeperScore Rate
Special DeductionItems
Customer Satisfaction
On-time andCompleteRecception RateServiceSatisfaction
DSI
Sincerity in SalesConcentration in
Measurement Design
Consideration inProductionMeticulousness
in Delivery
Craftsmanship
in Installation
Empathy inAfter-sales
0102
Sincerity in SalesConcentration in
Measurement Design
Considerationin ProductionMeticulousnessin Delivery
Craftsmanshipin Installation
Empathy inAfter-Sales
Customerrecommendation+1
Establishing the Service Center to mark the industry's first complete service system. Using the Customer ServiceIndex (CSI) and Dealer Service Index (DSI) as two major indicators, Suofeiya leveraged its entire chain to provideexcellent service.
Complaint RateProduct ErrorRate
Environmental, Social and Governance Report l 坚守品质 强化服务
4142
Enhance systematic, digital, and attentive services as the core competitiveness
The Company's service system consists of three main dimensions - metric measurement, digital supervision system construction, andbusiness driving. Ensuring the authenticity and effectiveness of data, the efficient operation of the entire service system is promoted bysetting standards, advocacy, supervision, and execution. These three dimensions are like the bicycle's wheels and crossbar, ensuringthe integrity and stability of the system.
key service keywords for the
Company in 2023.
Systematic
Leveraging the databases accumulated from CSI and DSI, the Company has constructed a digital matrix service system called the "XPlan + Service Procedure + Installation Procedure + One Customer One Group". This system encompasses the entire process from"entering customer information, placing orders, delivery, installation, to after-sales service", and collects feedback from end-users(customers, distributors). Through the digitized system, the entire process is monitored, ensuring the authenticity and effectiveness ofthe data while facilitating deposit, self-correction, and iteration.
Digital
From the user's perspective, Suofeiya continuously improves its service processes, striving to provide customers and distributors with abetter service experience. This entails achieving a more transparent service process, greater penetration of services upfront, and asmoother service experience. The Company has transformed intangible services into tangible, actionable service standards. Forinstance, it has established service standards such as the 21 Installation Service Standards, the 36 Closet Installation Acceptance Stan-dards, and the 36 Cabinet Installation Delivery Standards, making services more systematic. Implementing the IPD integrated develop-ment strategy, the Company anticipates service requirements in the product development phase, absorbing customers' pain points suchas transportation, packaging, and installation early in the product development process, thus integrating services throughout the productdevelopment lifecycle. Through specific operational training, it bridges critical nodes across the service chain, significantly enhancingregional operational service capabilities. The "Inspection Tour in Hundred Cities" covers 16 provinces and 82 regions, driving on-sitelearning in surrounding areas, and enhancing the overall service capabilities of terminal stores.
Attentive
1V1 Butler ServiceUbiquitous IntelligentRobots
Enterprise WeChatHuman-MachineCollaborativeOperation
Big Data User DemandForecasting
DigitalAttentiveSystematic
Environmental, Social and Governance Report l 坚守品质 强化服务
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WIN-WIN COOPERATION AND
COMMON DEVELOPMENTD
To ensure the quality of raw materials and the efficiency of services, Suofeiya rigorously establishes supplier admission and evaluationsystems. Comprehensive assessments are conducted from various aspects including products, quality control, services, and manage-ment systems, adhering to the principles of fair competition. We optimize the criteria for selecting alternative suppliers and establish asupplier assessment and management system. Continuously enhancing supplier social responsibility awareness, we aim to elevate themanagement capabilities of the supply chain and the iteration level of the industrial chain.
Supplier Selection and Management
Efficient operations not only reflect Suofeiya's competitiveness but also ensure the provision of high-value products and services tocustomers. The Company's supply chain, while ensuring efficient delivery to customers, places significant emphasis on improvingoperational efficiency. Leveraging IT systems such as ERP, BI, MES, and big data management tools, operational metrics such as rawmaterial readiness and inventory turnover have been notably improved. Efficiency in goal setting and project optimization has significant-ly increased, driving the continuous and efficient iteration of operational metrics.The Company's supply chain and lean manufacturing departments actively explore the enhancement of sheet utilization rates. Combin-ing big data on the dimensions of the Company's cabinet products, collaborative research and development with upstream suppliersfocus on creating the most suitable customized surface panel sizes for the home furnishing industry. This initiative aims to increase theCompany's surface panel utilization, reduce unnecessary raw material wastage through process optimization, and scientifically promotemanufacturing cost optimization. Ultimately, this enables the provision of high-value products to customers more effectively.
Efficient Operations and Cost Optimization
To ensure the efficient delivery of customer orders, Suofeiya has established a comprehensive industrial layout nationwide. Currently,there are eight major manufacturing bases located in Guangzhou, Langfang, Jiashan, Chengdu, Huanggang, Lankao, Qiqihar, andJinhua. Leveraging the advantages of this nationwide industrial layout, the Company coordinates customer orders across the countryand matches them with the production capacity of each manufacturing base.Over the years, the Company's manufacturing bases have collaborated closely with raw material suppliers, progressing hand in handand fostering mutual development. This collaboration has effectively ensured the timely and complete delivery of customer orders andmaintained service quality.
Advantages of Nationwide Supply Chain Layout
Supplier investigation/on-site(admission), evaluation
Supplier performanceassessment (quality control)assessment of suppliers based onfactors such as on-time delivery,
product quality, service, andpricing, fostering deepercooperation with high-qualitysuppliers while addressing
deficiencies through cooperation,improvement, or elimination
Transparent procurementincorporating the Integrity Agreement intocontracts with suppliers, and upholding asound business environment and mutual legalrights and interests with collaboration andsupervision from the Audit Department,Supervision Department, and the supply
chain
Transition to "qualified
suppliers"
qualified product identification leads totransition to "qualified suppliers", wherecontracts are signed confirming productstandards, pricing, cooperation models,payment cycles, etc., ensuring mutual
interests
Order placement
Transition to "alternative
suppliers"Collection of potential
supplier informationhigh-quality supplier resources areincluded into the Company's ERPsystem's "Potential Supplier Database"
Product identification report
Supplier Admission and Evaluation System
on-site audits of supplier products,quality control, production capacity,management systems, etc, leading tothe formation of a Supplier On-siteReview Report)
Environmental, Social and Governance Report l 合作共赢 共同发展
potential suppliers meeting the standardsare transitioned to "alternative suppliers" in
the ERP system
comprehensive testing and evaluation ofsupplier samples based on processes andproduct standards, including physical andchemical properties, functionality, andproduct surface
placing orders according to plans, withsuppliers responsible for stock preparation,delivery, payment, and online securityinventory monitoring
4748
In the procurement and supply chain management processes, the Company adheres to principles of sustainable development andresponsibility. Priority is given to selecting suppliers with a proven track record of environmental protection and social responsibility.Attention is focused on the environmental performance of products and the traceability of raw materials.At the same time, efforts are made to optimize transportation and storage methods during the material procurement process to reducecarbon emissions and resource consumption during transportation. Suofeiya also implements a green procurement policy, encouragingsuppliers to provide environmentally friendly and sustainable products and services.In order to uphold responsible procurement practices and achieve the goal of sustainable development in the supply chain, the Companyhas undertaken various standardized and effective initiatives:
Sustainable Development of the Supply Chain
Beyond considering product quality and price, their social responsibility performance and practices are also crucial factors.Suppliers are required to provide traceability information for raw materials to ensure compliance and environmental friendlinessin sourcing.Sheet material is one of the Company's main raw materials. In September 2020, the Companyobtained Forest Stewardship Council (FSC) certification from SGS (a Swiss multinational Com-pany), ensuring that all purchased wood comes from forests managed with high quality andsustainable development practices. Additionally, efforts are made to encourage suppliers tostrive for low-carbon, environmentally friendly, and sustainable development goals. Major sheetmaterial suppliers are partners certified by the FSC for forest management.
Example
Priority is given to selecting suppliers with a strong environmental and social responsibilitytrack record.
It continuously collaborates with suppliers to develop environmentally friendly products, such as water-based paint coatingswith low volatile organic compound (VOC) emissions and water-based edge-sealing cleaners.
During the reporting period, the Company collaborated with suppliers to upgrade technology and established two furnitureproduct powder coating surface treatment production lines. These lines replaced 50% of the traditional painted door panelswith powder coating surface treatment, resulting in a production process with zero VOC emissions and over a 50% reductionin carbon emissions.
Example
Suofeiya focuses on the environmental performance of products and the traceability ofraw materials.
With over 90% of packaging materials being recyclable, reusable, or biodegradable. By establishing and enforcing environ-mentally friendly packaging standards, suppliers are encouraged to prioritize the use of eco-friendly packaging materials andreduce the use of disposable plastic packaging materials. This initiative aims to reduce consumption of natural resources,environmental pollution, and energy consumption during the recycling and disposal processes.
In early 2023, the Company collaborated with suppliers to pioneer the removal of wooden packaging for cabinet countertops,replacing it with packaging-free or reusable and recyclable turnover steel frames. This initiative saves approximately 500mof wood consumption annually. In the future, the Company will continue to focus on using recyclable packaging materials andmethods for more materials.
Example
Suofeiya actively implements a green procurement policy
Through deep cooperation with core photovoltaic product suppliers, the Company has spearheaded the establishment of"low-carbon industrial parks" domestically. These parks integrate innovative technologies such as "green building", "smartenergy", "industrial ecology", and "carbon asset management", forming a comprehensive management model for low-carbonindustrial parks throughout their lifecycle. The ultimate vision is to achieve "zero impact on climate and zero fossil energyconsumption".In the future, Suofeiya will leverage the experiences gained from these parks toencourage more supplier partners to join in sustainable initiatives together andcontinue to explore and promote low-carbon production methods in manufacturingzones and processes, striving collectively to improve the human living environment.
Collaborating with supply chain partners, Suofeiya explores energy-saving and emission-reducing initiatives in supplier manufacturing zones, aiming for low-carbon development.
Suofeiya has initiated joint R&D with major suppliers to produce high-strength, lightweight particleboard since 2022. Thisparticleboard, with lower density and better resistance to deformation, eliminates the need for the traditional aluminum straight-eners commonly used in high-end doors. Thanks to the widespread adoption of this innovative product, between 2022 and2023, the Company has cumulatively reduced consumption by approximately 15,000m of wood resources, about 1,000 tonsof aluminum alloy materials, and approximately 1,000 tons of iron-zinc alloy materials.
Collaborating with suppliers to innovate products and reduce resource consumption
Environmental, Social and Governance Report l 合作共赢 共同发展
4950
GROWING TOGETHER
WITH SUOFEIYAE
Responsibility
Benefit
Delivery
Suofeiya strictly adheres to relevant laws and regulations in the People's Republic of China, suchas the Labor Law, the Labor Contract Law, the Regulations on the Implementation of the LaborContract Law, and the Social Security Law, to legally safeguard the rights and interests ofemployees. It standardizes the labor contract system, ensuring that labor contracts are signedwith employees in accordance with the law, achieving a 100% signing rate. The procedures forsigning and renewing labor contracts are standardized.The employment of child labor is strictly prohibited, and the Company continuously improves itslabor employment management system. It adheres strictly to the requirements of the laborsecurity authority to regulate the order of labor employment and safeguard the legal rights andinterests of both workers and the Company. Suofeiya rigorously complies with national regula-tions on social insurance, making full monthly contributions to social insurance and housingprovident fund to ensure that employees receive relevant benefits promptly.
Compliance in Employment
Suofeiya has established a standardized yet flexible organizational structure and a diverse talent pool. Its employees include comprehensive management talents who havegrown from the production line, as well as professional talents with advanced management concepts. The Company is committed to building a healthy, harmonious, and equalemployment system to meet the continuous high-speed development needs.Suofeiya firmly opposes discrimination based on gender, region, or religious belief. It strictly prohibits the employment of child labor and forced labor. It implements policies suchas equal pay for equal work between men and women and humane employment practices, continuously enhancing employees' sense of happiness and satisfaction. Additionally,in accordance with laws and regulations such as the Occupational Disease Prevention and Control Law of the People's Republic of China and the Regulations on OccupationalHealth Supervision and Management in the Workplace, Suofeiya entrusts qualified occupational health technical service organizations to identify workplace occupationalhazards. It also updates the standard for providing personal protective equipment to employees in a timely manner, and establishes individual occupational health monitoring filesfor employees.
Harmonious and Equal Employment Relationships and OccupationalHealth Protection
Suofeiya has formulated a Salary Management Method for employees, establishing competitivesalary standards and reasonable incentive mechanisms. While safeguarding employee rights, itfully mobilizes their enthusiasm and unleashes their potential, further achieving talent strategicobjectives and maintaining the intrinsic drive for sustained organizational development. TheCompany clearly defines the direction of value distribution, effectively combining individualdevelopment with enterprise development, and adheres to principles of value, market, perfor-mance, and diversity.
Benefits
Annual LeaveChildcare Leave
Marriage LeavePaternity Leave
Factory Leave
Maternity Leave
Lactation Leave
Types of
Leave
72.41
%
27.59
%
Gender Structure
59.58
17.05
22.56
%
%%%
High Schooland Below
Master's Degree and Above
Bachelor'sDegreeAssociateDegree
Education Structure
0.82
Age Structure
34.94
%
47.65
%
2.72
%
14.68
%
30 and Below
Above 51
31-40
41-50
Competitive Incentive System
Environmental, Social and Governance Report l 与索菲亚共同成长
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MaleFemale
PensionInsuranceMedicalInsurance
AnnualTravel
UnemploymentInsurance
EmployeeDormitories
Work InjuryInsurance
EmployeeCanteen
MaternityInsurance
HousingProvident FundAccident Insurance
Employee PhysicalExamination
During the reporting period, the total number of employees was 14,400.
Suofeiya is committed to building a "sustainable talent supply chain" around its strategic and business development. As the organization-al structure continues to expand and evolve, the demands of employees at different ages and stages of development become morediverse. To better support strategic development, the construction of a learning organization becomes increasingly important.The Company continuously establishes sound training management systems and formulates the Employee Training ManagementMeasures and the Internal Trainer Management Measures. Training is implemented based on the needs of personnel at various levels,forming a matrix of "talent development system + internal trainer system + business empowerment talent chain". During the reportingperiod, the Company's training system has evolved from the past decentralized training V1.0 and V2.0 to V3.0 which focusing onemployees’ continuous development. In the future, Suofeiya will continue to optimize its training system.
Sustainable Talent Supply Chain
Suofeiya adheres to a people-oriented approach and continuously carries out cultural and sports activities to satisfy the spiritual andcultural needs of its employees to improve their quality of life.
Regular employee health check-ups are conducted, withhospitals and medical institutions invited to provide free medicalconsultations on-site. Expert professors are hired to provideemployees with lectures on traditional Chinese medicine healthcare, common first aid knowledge, stress relief techniques, andother health-related topics to enhance their health knowledgeand awareness. Collaboration with local social service stationsprovides employees with psychological counseling services,focusing on promoting employees' mental well-being andensuring their physical and mental health.
Supervisor/Reserve Base
Team ManagementDevelopment Workshop
Center/Division Talent Development Map
...Whampoa/Executives
General Literacy for GrassrootsEmployees-Super Individuals
School enrollment trainingDigital Learning Platform: External Learning Platform Leasing +
Internal ECS Learning Platform ConstructionEducation and Training Mechanism: Staff Training Management Measures +
Internal Trainer Management Measures
Supporting strategic development,consolidating management foundations, building a learning organization
Thinkclearly
Speakclearly
Do itright
Work well
together
IntegrationTurningAccelerateAdvance
Customer service 5positions knowledgebase building
InternalCertification
Team ManagementDevelopment WorkshopProduct Manager JobCompetency Extraction
Emerging ManagersEmpowerment
Talent training system +internal trainer system +business empowermentPremium/EmergingManagerTalent/SeniorManager
Schmidt RetailBusiness Division
Huahe RetailBusiness DivisionB2B Whole SealBusiness Division
Integrated to HouseDecorationCompany Business Division
TraineeInternalTrainer(Junior)
Senior InternalTrainer(Intermediate)
Professionalin-housetrainer(senior)
Every year, Suofeiya holds various events to celebrate festivalssuch as the Spring Festival, Dragon Boat Festival, and Mid-Au-tumn Festival, as well as birthday parties for employees, springand autumn outings. Additionally, sports and cultural festivals,union cultural and sports club activities, Qixi (Chinese Valen-tine's Day) social events, outdoor hiking activities, and bookreading events are also organized. These activities aim to enrichthe cultural lives of employees and meet their growing spiritualand cultural needs.
Suofeiya ensures the rights of its female employees with mater-nity leave, breastfeeding breaks, etc, and sets up lactationrooms in the workplace. Various recreational and sportsactivities are organized specifically for female employees toenrich their leisure time. Branch offices across differentlocations organize activities such as Women's Day celebrationsand health knowledge lectures for female employees.
Suofeiya places great importance on family culture. To assistemployees and their families in coping with sudden majorillnesses, the Company's founder established a charity fundwhich continuously contributed from corporate executives toprovide assistance to employees in need. Through hospitaliza-tion care and condolences, secondary medical insurancesubsidies, significant life events and other means, the Companyoffers care and support to its employees.
Employee Care
Environmental, Social and Governance Report l 与索菲亚共同成长
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Construction of trainingsystem for first-lineteam leaders
Manufacturing CenterCustomer Service
CenterQuality CenterResearch InstituteInformation andDigital CenterNew Retail CenterSuofeiya RetailBusiness Division
Milanla RetailBusiness Division
QualificationPublic lectureExternal learning
Mentor System
COMMITMENT TO PUBLIC WELFARE
FOR A HARMONIOUS SOCIETYF
Support Medical Institutions andPublic Health Undertakings
In 2023, Suofeiya contributed to the advancement of public health by donat-ing to medical institutions. It collaborated with Fudan University's affiliatedPediatric Hospital to enhance the medical environment. Tailored productswere provided for the play areas, outpatient clinics, and maternity rooms inthe Nephrology and Rheumatology departments. These products werecrafted using environmentally friendly ENF-grade materials and designedwith rounded edges for safety, aiming to create an environmentally friendly,healthy, and safe environment for patients.Moreover, the Company partnered with regional distributors to supportmedical facility construction projects in various institutions, including theJiangsu Maternal and Child Health Hospital, the Shenzhen Maternal andChild Health Hospital, the Xiangyang Central Hospital in Hubei Province, thePediatric Hematology Department of Wuhan Union Hospital, the NanjingChildren's Hospital, and elderly care facilities. This commitment underscoresSuofeiya's dedication to advancing public health initiatives.
Support Public Benefit Activitiesand Develop Social WelfareSuofeiya actively promotes public welfare activities such as voluntary blooddonation, serving as a backbone for saving lives and spreading love andpositive energy to society. Through practical actions, the Company organizesvoluntary blood donation events, encouraging employees to contribute active-ly. The cumulative amount of blood donated by employees is close to 35,000milliliters.Furthermore, Suofeiya collaborates with itree a public welfare and environmental protection team - to holdregular "Tree Planting and Loving Trees" events each year. These events involve organizing a series of treeplanting and afforestation activities, tree planting knowledge competitions, and botanical treasure hunts for Suofei-ya employees and their families. Through these initiatives, Suofeiya demonstrates its commitment to supportingpublic interests and enhancing social welfare.
Provide Assistance in Basic EducationDevelopmentAs the proverb say, "It takes ten years to grow trees, but a hundred years to cultivate people." Suofeiya has longbeen committed to supporting education at all stages, from kindergarten to high school. Through charitabledonations or support waivers, the Company has provided assistance to numerous schools, including prestigiousinstitutions like Pazhou Experimental School of Guangzhou Zhixin High School, Licheng No.2 Middle School inJinan, as well as schools in remote areas of Guangxi and Yunnan provinces. This support has contributed to theconstruction of campus facilities, ensuring a conducive learning environment for countless students.In 2022, Suofeiya initiated the Children’s Book House charity project in collaboration with the China CharityFederation and national distributors. This project aimed to create a conducive reading environment for childrenin underdeveloped areas, helping them enhance their learning and critical thinking skills while broadening theirhorizons. Tailored solutions were designed to be visually appealing, child-friendly, and user-friendly, catering tothe age groups and habits of the children.Assit Qinghai Disaster Area in Times of DifficultyAt 23:59 on December 18, 2023, a 6.2 magnitude earthquake struck Jishishan County, Gansu Province, with rippleeffects felt in Qinghai, Xinjiang, and other regions, stirring the hearts of people across the nation. Occurring duringthe harsh winter season and in high-altitude areas, the affected regions faced the dual threat of disaster and severecold.Responding promptly, Suofeiya initiated emergency response measures, and donated cold protection clothing tothe affected areas through the China Charity Federation, contributing to frontline earthquake relief efforts.
Build Harmonious and Loving CommunitiesTogetherSuofeiya places great importance on the development of the national elderly care cause and actively assumescorporate social responsibility. During important festivals such as the Mid-Autumn Festival and Chinese NewYear, Suofeiya pays special attention to the living conditions of retired employees and the elderly in surroundingcommunities who may be facing difficulties or loneliness. Suofeiya carefully prepare gifts and take action to showits respect and care for the elderly.Sparing no effort in community service activities, Suofeiya encourages and actively organizes employees toparticipate in community service. Through various forms of volunteer activities and initiatives such as fuall wishesfor those in need, Suofeiya contributes the development of the commlfilling smunity and the well-being of itsresidents.
Environmental, Social and Governance Report l 坚持公益事业 同筑和谐社会
5960
ENVIRONMENTAL PROTECTIONAND LOW-CARBON MANAGEMENTG
6162
On June 29, 2023, the State Council executive meeting reviewed and approved the Several Measures to Promote Home Consumption,deploying relevant measures to boost household consumption. The home industry is an essential livelihood industry that satisfies thepeople's need for a better life. In recent years, the quality and efficiency of the home industry have steadily improved, showing a trend ofgreen, intelligent, and integrated development.To boost consumer confidence and pursue high-quality green development, the home industry requires not only environmentally friend-ly and intelligent product offerings but also adaptable and diverse services to meet various scenarios. This will further stimulate andunleash consumption potential.
Up to now, Suofeiya has been adhering to rigorous environmental standards, and providingproducts and services to numerous institutions with stringent environmental qualityrequirements, including Shanghai Children's Medical Center, Fudan Affiliated Children'sHospital, Jiangsu Maternal and Child Health Hospital, Xiyun Postpartum Care Center,Babysky Postpartum Care Center, Anru Xingyue Postpartum Care Center, AMFA BabyCenter, Weierkang Care Center, Tianjin Nankai District First Kindergarten, Changde FujiPrimary School Liuye Lake School, Wuyunduo Experimental Kindergarten, Sino-FinnishForest Kindergarten, Guangzhou Yingzhou Primary School, Kunshan High-tech ZoneElderly Care Service Center, among others.
In the daily procurement and production processes, the Company also adheres to stringent standards. Within laboratories accredited bythe National CNAS, the Company conducts inspections on the boards in three major stages: initial inspection, bulk sampling inspection,and routine sampling inspection. Each stage involves 12 testing processes, ensuring environmental quality with a rigorous attitude.Additionally, the Company insists on monthly submissions to third-party authoritative testing institutions and publicly discloses the testresults, providing consumers with peace of mind and setting a positive example in the industry.
Lead the Industry Development With EnvironmentallyFriendly Products
2007
2015
2016
20192023
2020
2021
2022the formaldehyde-free Kang-Chun-Banboard was officially launched.Suofeiya was among the earliestin the industry to receive the TenRings Certification.
Suofeiya's formaldehyde-free Kang-Chun-Banboard added three international environmentalprotection certifications, making Suofeiya becomethe first enterprise in the industry to obtain the topfive international environmental protectioncertifications.
it obtained the Certification of Child Safety Product
and became an enterprise recognized by seven
domestic and foreign authorities in the industry.
Suofeiya successfully developed thestable-quality substrate formalde-hyde-free Kang-Chun-Ban boardand formulated product standards.
Suofeiya's formaldehyde-freeKang-Chun-Ban boardbecame the first in the industryto receive NAF FormaldehydeExemption Certification issuedby EPA of the US Environmen-tal Protection Agency andpassed a number of SGSdeterminations in Switzerland.
two new national standards forartificial boards, in which SuofeiyaHome participated in drafting, wereofficially implemented on October1st. Suofeiya Kang-Chun-Banboard was recommended by theNational Maternal and InfantNetwork.
Suofeiya conducted a new environ-mental upgrade for "Kang-Chun-BanWhole Home" and established the"Kang-Chun-Ban Whole Home"Environmental Alliance with upstreamand downstream suppliers. It set ahigher threshold for whole-homeproduct access based on environmen-tal requirements far above the nationalstandards, constructing a whole-homeenvironmental ecosystem.Suofeiya has been recognized by seven domesticand foreign authorities
· EPA NAF Formaldehyde -free Exemption Certification in the United States· CARB NAF Formaldehyde -free Exemption Certification in the United States·F★★★★ Certification in Japan·SGS Determination in Switzerland·FSC Forest Certification·Recommended Products by the Green Channel for the Maternal and Infant Products inNational Maternal and Infant Network· Certification of Child Safety Product
Environmental, Social and Governance Report l 绿色环保 低碳管理
Suofeiya prioritizes the environmental quality of its products, striving to provide every consumer with a healthy and eco-friendly homeliving environment. Since obtaining the first-ever US EPA NAF formaldehyde-free certification in the industry in 2019, the Company hascontinuously refined its efforts and has successively obtained multiple authoritative recognitions worldwide. In 2022, Suofeiya HomeCollection obtained the "Children's Product Certificate", and to date, it has acquired as many as seven authoritative environmental certifi-cations.
6364
2020
2022
20212023
Suofeiya has been adhering to the production concept of “Manufacturing Green and Eco-friendly Home Products using Green andEco-friendly Production Methods”, and is committed to addressing the green and environmental issues of general concerns in society.As a leading enterprise in the custom home industry, the Company has been recognized eight times by the Ministry of Industry andInformation Technology of China. Additionally, the Company has increased its investment in AI technology research and development,advancing projects such as digital factories, intelligent design, and smart stores. This has enhanced efficiency and quality in productdesign, production management, and customer service, providing customers with modern, green, and intelligent one-stop homesolutions.
In the fiscal year 2023, Suofeiya and its Environmental Safety Department continuously optimized and implemented a series of environ-mental management systems, such as the Group EHS Responsibility System, the Administrative Measures for Environmental Protec-tion, and the Administrative Measures for Environmental Protection Information Reporting. Each plant increased the establishment ofindependent environmental protection positions, ensuring unified responsibilities and independent assessments of environmental safety.All factories firmly adhered to various environmental management systems and rigorously implemented the promotion of environmentalmanagement systems.Regular environmental monitoring of wastewater, exhaust gases, noise, and solid waste wasconducted, along with self-monitoring of soil and groundwater, with monitoring data activelydisclosed to the public. Since its listing, the Company has successively obtained various environ-mental protection-related certificates and titles, such as the "Model Enterprise of Guangzhou Cityof Customization", "China Environmental Labelling Certificate and National Green Plant","Guangzhou Clean Production Enterprise", and "National Green Plant". During the reportingperiod, the Company did not experience any environmental pollution incidents and did not receiveany administrative penalties due to environmental issues. A total of 25.28 million yuan was invest-ed in environmental protection and energy conservation during the reporting period.
Build Green Plant SystemImprove Green Management
EHS VisionEHS ObjectivesContinuous optimization of environmental safetymanagement system
All Suofeiya’s plants have adopted interlocking and interlinking fire Security control systems forSecurity management, which have fully improved the monitoring network system and furthersecured the manufacturing processes. All companies in the Group have strictly complied with aseries of emergency management systems, clarified emergency management principles, emer-gency management institutions, operation mechanisms, emergency security, emergency planmanagement, etc., and organized at least seven comprehensive emergency plan drills andspecial emergency plan drills on an annual basis, so as to enhance the emergency responsecapabilities of employees in handling emergencies. During the reporting period, creative initiativessuch as "Environmental Day" were introduced to enhance employees' awareness of safetymanagement through activities focused on the theme of Environmental Day, including family-ori-ented events.The Company from time to time revises the Emergency Plan for Environmental Emergencies -Air Pollution, the Emergency Plan for Environmental Emergencies - Fire Accident, the Emergen-cy Response Plan for Sudden Environmental Incidents - Dust Explosion Pollution, and the Emer-gency Plan for Hazardous Waste Leakage; and regularly conducts drills, summaries, and reviewsof various emergency response plans.
Security management system and environmentalemergency management
Environmental, Social and Governance Report l 绿色环保 低碳管理
Suofeiya East China Production Base and Suofeiya HomeCollection (Zhejiang) Co., Ltd. were recognized the NationalGreen Plants, making the Company the only one selected inthe customized cabinet industry.
West China Production Base of Suofeiya and Suofeiya Home Collection (Chengdu)Co., Ltd. were recognized the National Green Plants, with the level of greenmanufacturing and the concept of sustainable development being recognized by thenational authority, which has realized a plant featuring intensive land use, harmlessraw materials, clean production, resourceful waste and low-carbon energy.
Suofeiya added another national honor by being given an Enterprise Green Code bythe Ministry of Industry and Information Technology of China. This recognitionsignifies its achievement in intensive land use, harmless raw materials, cleanproduction, resourceful waste and low-carbon energy. Suofeiya's green manufac-turing level and sustainable development concept have also been recognized bynational authorities. Suofeiya Home Collection (Chengdu) Co., Ltd., for the third time,was recognized the National Green Plant by the Ministry of Industry and InformationTechnology of China, making it the absolute benchmark in the custom homeindustry.
The Guangzhou Headquarters South China ProductionBase was selected for the list of 2021 Green Manufacturingissued by the Ministry of Industry and Information Technol-ogy.
Creating an exemplary operational system for Environment, Health, andSafety (EHS), fostering a work environment and corporate culture that aresafe, healthy, green, and sustainable.Zero major safety accidents, zero major fire accidents, and zero instancesof regulatory non-compliance.
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By introducing permanent magnet variable frequency energy-saving vacuum pump systems and intelligently regulating energyconsumption to stabilize negative pressure, Suofeiya has resolved the adverse effects of negative pressure fluctuations and flow attenu-ation of old-fashioned vacuum pumps on production processes. In December 2023, the technology was first used in the 4.0E productionline of the Jiashan production base in Zhejiang. After data testing, compared with the old-fashioned rotary vane pump under the samepower, the flow rate increased by 1.8 times, energy consumption decreased by 17.8%, and the noise level decreased from 90dB to below80dB. The Company plans to complete comprehensive promotion in the first half of 2024, further contributing to green management andenvironmental protection.
In response to the national call for energy conservation and emission reduction, Suofeiya isactively developing itself into an energy-saving and environmentally friendly enterprise. Itstrengthens energy conservation education and training for all employees, actively conductsresearch and utilization of new technologies and processes for electricity conservation, adjustsand optimizes production processes. Special focus is given to improving technology in high-en-ergy-consuming sections. The adoption of CNC digital control systems facilitates quickerprocessing of production data, enabling production forecasts and enhancing wood utilizationefficiency, thus effectively reducing waste of timber resources.With advanced industrial technology and intelligent equipment as its foundation, the Company isdeveloping new production processes while phasing out outdated and high-energy-consumingtechnologies, processes, and equipment. It promotes green procurement and the reduction ofpackaging materials through design, aiming to enhance the efficiency of resource recycling. TheCompany is advancing clean production and energy conservation efforts, continuously promot-ing the comprehensive utilization of clean energy sources such as photovoltaic power andnatural gas. It is also systematically replacing fossil energy sources with alternatives like fuel cellforklifts, contributing to global greenhouse gas reduction efforts.
Since 2017, the Company has vigorously promoted rooftop solar photovoltaic power generationprojects in factory buildings, which have been fully utilized in five major production bases.Suofeiya has constructed grid-connected distributed photovoltaic power generation systemscovering an area of approximately 337,000 square meters, with an installed capacity of about
32.22 megawatts-peak (Mwp). During the reporting period, solar photovoltaic power generation
projects have provided approximately 14.29 million kilowatt-hours of green electricity to theCompany and the national grid, resulting in a reduction of approximately 12,169 tons of carbondioxide emissions, equivalent to saving 4,575 tons of standard coal. From 2017 to 2023, thecumulative green electricity provided to the Company and the national grid has reached approxi-mately 70.8 million kilowatt-hours. Going forward, Suofeiya will continue to promote solar photo-voltaic power generation projects.
Energy efficiency management
Water resource management is also an important aspect of fulfilling corporate social responsibility.The Company adheres to the principles of reduction, recycling, and harmless treatment to imple-ment the recycling and reuse of water resources. Investments have been made in constructingsystems for reusing production wastewater, where wastewater from the terminal sewagetreatment station is treated again. After meeting reuse water standards, it is reused for purposessuch as equipment cleaning in the factory, reducing wastewater discharge. From 2021 to 2023, atotal of 26,700 tons of tap water were saved.Suofeiya has innovatively adopted the UASB (Upflow Anaerobic Sludge Blanket) treatmentprocess. In this process, "biological treatment" utilizes a combination of anaerobic and aerobicprocesses, while "deep treatment" employs a sand filtration process. This approach reduces theChemical Oxygen Demand (COD) of wastewater and improves its renewability. After furtherremoval of various pollutants through aerobic ponds, the usage of tap water is reduced. During thereporting period, 8,283 tons of production wastewater were reused.
Water resources and wastewater management
Suofeiya exercises comprehensive supervision and controls throughout the production process,minimizing solid waste generation or emission from the source, and ensuring final compliantdisposal. It establishes standardized waste management systems to ensure legality and compli-ance in processes such as generation, storage, transfer, and disposal. Standardized control andclassification are implemented for various process steps to facilitate the comprehensive utilizationof waste with reuse value, achieving the recycling and harmless disposal of waste.During the reporting period, for the edge sealing process in the cabinet workshop, the Company required the adhesive supplier tochange the packaging by lining the inner wall of the packaging iron barrel with a layer of tin film, separating the solid resin hot melt adhe-sive from the iron barrel, thereby reducing the generation of hazardous waste. The iron barrels can be recycled by waste recyclers,reducing the generation of hazardous waste in the cabinet workshop by over 90% annually.
Waste management
Suofeiya places great emphasis on the construction and operation of its energy managementsystem, implementing diverse energy-saving measures. It has introduced green environmen-tal protection technologies such as water resource and wastewater treatment, as well as wasterecycling and utilization. There's a comprehensive strengthening of energy management,water resource and wastewater management, and waste management to promote the greenand healthy development of the supply chain.
At the same time, the Company is systematically advancing the "oil-to-electricity" conversion project, and has been gradually replacingfuel-powered forklifts with electric ones since 2017 to reduce the use of fossil fuels and emission of atmospheric pollutants. During thereporting period, the substitution rate of electric forklifts reached 99.61%.Enhanced Energy Management
zero dischargeof wastewaterCompliance Rate ofExhaust Emissions
Compliance Rate of SolidWaste TreatmentCompliance Rate ofNoise Emissions
To further reduce factory exhaust emissions, each production base of the Company responds tonational regulations on controlling air pollution during heavy pollution weather and summerozone levels. They have upgraded exhaust treatment facilities or technologically renovatedexhaust collection systems to improve the level of exhaust gas control. This includes the instal-lation of new exhaust treatment systems using dust removal combined with RTO (RegenerativeThermal Oxidizer) systems, achieving an organic exhaust treatment efficiency of over 90%.Additionally, low-nitrogen emission reduction work for boilers has been carried out, with existingnatural gas boilers being retrofitted. Nitrogen oxide emissions have decreased from 71 mg/min 2022 to 21 mg/m in 2023, representing a reduction of over 70%.
Efficiency of Dust Removal + RTOExhaust Treatment System
%Providing greenelectricity
Reduction of carbondioxide emissions
millionkWh1,429tons12,169
Standard coalsavings
Cumulative provisionof green electricity,2017-2023
tons4,575kWh7,080
以上
26,700
Total tap water savingsin 2023
tons8,283Wastewater reuse
tons
In accordance with the requirements of the Industrial Enterprise Boundary Environmental NoiseEmission Standards, the Company thoroughly identifies the sources of noise and transmissionpaths, studies various noise reduction solutions, and implements sound insulation and shockabsorption measures to block the transmission path of sound to reduce the impact of noise onhuman health and the surrounding environment during the production process.
Noise management
Environmental, Social and Governance Report l 绿色环保 低碳管理
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100%
100%100%
Based on the concept of sustainable development, Suofeiya actively promotes a culture of green office practices, and encourages itsemployees to enhance their sense of responsibility and environmental awareness. LED energy-saving lights are used in office areas topromote energy-efficient lighting, power saving, water conservation, and waste sorting. Paperless office practices are encouraged tocultivate habits of low-carbon behavior among employees. Internal promotion of energy conservation and environmental protection isintensified to create a favorable environment for green office practices and foster habits of green office and living among employees.
Promote green office
Green manufacturing also crucially relies on maintaining high-quality standards. The Company invests significant resources in Voice ofProcess (VOP) management and has developed the Suofeiya VOP methodology, which is based on process quality fundamentals suchas on-site inspections and real-time data. It connects factors like equipment, personnel, and materials, and employs a 4H meetingmechanism for rapid response and resolution. Furthermore, after meetings, extensive data analysis and resolution are conductedon-site. Since its comprehensive implementation in 2023, the VOP methodology has achieved significant effectiveness.
Driven by digitalization, Suofeiya implements green and efficient production practices. With green energy factories as the foundation, theCompany utilizes intelligent technologies such as smart production lines, equipment, and data-driven systems to construct efficient,precise, large-scale, and rapidly responsive C2M intelligent factories. This initiative aims to achieve the Company's operational goals ofresource, management, logistics, and process refinement, as well as scientific management.Since 2017, the Company has been continuously innovating in the field of Industry 4.0 productionlines, integrating goals of green environmental protection and cost reduction. During the report-ing period, Suofeiya developed the first 5th generation "national production" equipment, a 4.0digital production line for panel furniture that is fully automated. This line is capable of simultane-ously producing panels of various sizes and utilizes linked milling equipment to further improvethe utilization rate of materials. The investment and coverage of 4.0 production lines haveexpanded, resulting in better cost reduction and efficiency enhancement compared to traditionalmanual lines. This includes reduced manual handling and a significant increase in efficiencycompared to traditional manual lines due to the decreased need for manual replenishment.
Green Manufacturing
VOP Process ManagementMarket Services Cockpit
Traceability of raw materialsReal-time process quality signage
Environmental, Social and Governance Report l 绿色环保 低碳管理
IntelligentManufacturingSystem
IntelligentWarehousingand
Logistics
IntelligentData-drivenProcessesIntelligent Production
LineProduction LineControl System
APS AdvancedScheduling System
Intelligent 3D
Design System
Central Control Room
Real-time Order Panel
On-site Status Panel
Real-time Monitoring ofProduction Status
Intelligent Production
Line Equipment
Intelligent Board PoolIntelligent Finished
Product Pool
Logistics TransportEquipment
Gantry Planer
IntelligentDataCollection and
Visualization
Intelligent Plant for Customized Home Furnishings
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By leveraging the Company's nationwide transportation resources and collaborating withupstream departments in the supply chain, fixed shipping dates and routes have beenestablished for different distributors within the same region. Distributors can sharelogistics resources and transportation networks to achieve batch transportation of goods,thereby improving transportation efficiency and reducing logistics costs. Additionally,intelligent algorithm programs are utilized to optimize transportation routes, consideringfactors such as distance, cargo demand, and traffic conditions. This ensures that goodsreach their destination in the shortest time possible while minimizing carbon emissionsand resource consumption.
Mainline integration and optimization of logistics networks and route planning
Integrated dry warehouse distribution is a model that tightly integrateslogistics and warehousing. Through this model, goods from distributors in thesame region are transported from the supplier to the Regional DistributionCenter (RDC) for centralized distribution, thus improving logistics efficiency.
In 2023, Suofeiya prioritized the promotion of integrated dry warehouse distribution. Leverag-ing existing warehouse networks and logistics resources, the Company completed the layoutof "six warehouses in five provinces" for integrated dry warehouse distribution. Some ware-house facilities used environmentally friendly building materials and water-saving andenergy-saving appliances, strictly carried out dust and waste management, and installed newenergy charging and swapping facilities in the surrounding areas.The integrated dry warehouse distribution model saved warehouse space and labor costs,achieving rapid collection, distribution, and sorting of goods. With the aid of advanced logisticstechnology and equipment such as information-based warehousing and intelligent informa-tion sorting systems, the efficiency and accuracy of warehouse operations and distributionwere enhanced, contributing to the sustainable development of green logistics.
Logistics mode optimization and integrated drywarehouse distribution
Optimization of Urban Distribution VehiclesSuofeiya is actively promoting the use of new energy vehicles for urban distribution throughthe adoption of the integrated warehouse distribution model and close collaboration withdistributors. Currently, some distributors in provinces like Hunan and Beijing have begunutilizing new energy vehicles for urban delivery.By closely collaborating with logistics companies, the Company aims to increase the propor-tion of new energy vehicles used, thereby reducing emissions of tailpipe pollutants and carbonduring the transportation stage. This collaborative effort contributes to the advancement ofgreen logistics.In the future, Suofeiya will prioritize cooperation with logistics providers that align with greenlogistics goals to reduce the adverse environmental impact of transportation and minimizecarbon emissions. Additionally, ongoing collaboration with other companies in the industry forsharing logistics resources will further promote the development and innovation of greenlogistics.
Urban Distribution Vehicles in Beijing
Urban Distribution Vehicles in
Hunan Dry Warehouse
湖南长沙干仓配仓库
浙江干仓配推广
Six Dry Warehouses Distributedin Five Provinces
浙江温州干仓配仓库
Integrated Road
Strengths of TMS
Environmental, Social and Governance Report l 绿色环保 低碳管理
In the process of promoting the construction of a new development pattern and ensuring the security and stability of the global supplychain, achieving green development and the "dual carbon" goals are significant tasks for the economic and social development of China.Traditional logistics methods in the custom home furnishing industry often involve long-distance transportation, multiple transfers,inefficient loading, and the use of high-energy vehicles, which can have adverse environmental effects if not properly managed. Inresponse to the national call for energy conservation and emission reduction, Suofeiya has focused on green logistics, continuouslyoptimized logistics networks, innovated logistics modes, promoted the use of energy-efficient vehicles, and selected out high-qualitypartners. These efforts aim to reduce carbon emissions, save energy, lower operating costs, enhance customer satisfaction and brandrecognition, and positively impact society and the environment.
Green Logistics
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of 2023
Society
Brand Innovation
DesignPublic WelfareGovernance
Environmental, Social and Governance Report l 荣誉2023
H ONORS
High-tech Enterprise Certificate (Suofeiya Home CollectionChengdu)National Industrial Design Center (issued by the Ministry ofIndustry and Information Technology)One of the main units formulating the General AssessmentPrinciple for Sound Integral Customized Housing Product
Continuous "A" Grade Evaluation for Information Disclosure byShenzhen Stock Exchange for Ten Consecutive YearsInvestor Relations Gold Award - Outstanding IR TeamInvestor Relations Gold Award - Best Interaction with Small andMedium InvestorsBest Practice Case Award for Board Office of Listed Companiesin 2023China Listed Companies Investor Relations Pegasus Award
German iF INDUSTRIE FORUM DESIGN (Mountain Star,
S-Series Moor)
2023 A Design Award (Schmidt S-Series Triumph - Silver
Award, Center Wood Veneer UV - Silver Award)
2023 MUSE DESIGN AWARDS (S-Series Triumph - Platinum
Award, S-Series Moor - Platinum Award, Extension - Platinum
Award)
2023 Influential Brand Award - Suofeiya
2023 Most Popular Product Award
2023 China's Top 100 Customized Home Furnishing Brands
Excellent Innovative Brand Award for Infants and Children
2023 Consumer Favorite Custom Home Furnishing Brand
Certificate of Appreciation from the China Charity Federation forChildren’s Book House2023 Listed Company ESG Innovative Practice Case (Children'sBook House)Chinese Business View Charity Brand 2023