On April 23, 2024, Shanggong Shenbei (Group) Co., Ltd. (hereinafter referred to as "Shanggong Shenbei") released its Corporate Social Responsibility (ESG) report for the second consecutive year. Under the business philosophy of "global market layout, innovative green development" and the guidance of the group's development strategy, Shanggong Shenbei adheres to steady operation, achieving a revenue of 3.79 billion yuan in 2023, a year-on-year increase of nearly 14%, a total profit and tax of 193 million yuan, and a social contribution value of 1.72 yuan per share. As a globally advanced manufacturing enterprise, Shanggong Shenbei actively responds to the national "dual carbon" goals, continuously innovates and breaks through in the fields of green development and intelligent manufacturing, and strives to create sustainable competitive advantages, creating more value for shareholders, employees, and society.

• Practice green and low-carbon development. Shanggong Shenbei implements low-carbon, environmental protection, and energy-saving measures throughout the product design and intelligent manufacturing process. The e-con sustainable sewing solution launched by D ü rkopp Adler GmbH, a subsidiary of the group in Germany, links every design of electrical equipment with green energy conservation, making the production workflow better, faster, more efficient, and greener. It has won the Texprocess Americas Sustainability and Recycling Innovation Award. Shanggong Shenbei continuously improves product performance by improving and optimizing mechanical structure design and precision CNC technology, and has launched a more digital QONDAC green intelligent workshop overall solution to minimize waste in sewing production and achieve green development.

• Advocate the concept of green operation. Guided by the national energy strategy and supporting the global low-carbon transformation, Shanggong Shenbei vigorously promotes the large-scale renovation of low-carbon buildings with photovoltaic design as the main idea. Shanggong Sewing Machinery (Zhejiang) Co., Ltd., a subsidiary of the group, has installed photovoltaics on the roof of the factory building, with a planned area of 14000 square meters and an average annual power generation of 2.17 million kilowatt hours, saving 362900 yuan in electricity bills annually. At the same time, Shanggong Shenbei is committed to introducing advanced digital management tools, promoting paperless office models, and creating a green working environment. In 2023, a total of 47414 electronic approvals were completed within the group, reducing carbon emissions by 94.9 kilograms.

• Market first, innovate to connect customers. Shanggong Shenbei adheres to the concept of customer first, persistently polishing product quality and improving service innovation, fully leveraging the synergistic advantages of German technology and Chinese manufacturing, developing and producing a series of products with characteristics of automation, digitization, and low carbonization. It has achieved rapid expansion in the fields of special clothing, automatic production lines for airbags, automotive interior parts, and processing and application of carbon fiber composite structural components. In 2023, by investing in the acquisition of SONOTRONIC GmbH in Germany, we aim to expand our product portfolio in industrial sewing and welding technology, and further enhance our global competitiveness in the field of material connection technology.

•Putting people first and sharing the fruits of development. Respect the value of employees, improve the employee training system and career development mechanism, create a diverse and inclusive corporate atmosphere and a positive working environment. In 2023, the group and its domestic and foreign subsidiaries organized 258 training projects, with a total of 2061 participants. Serve the development of the community, be enthusiastic about public welfare and charity, contribute to helping the needy and promoting social employment, encourage employees to participate in community construction, and convey love through practical actions. In 2023, a total of 21 butterfly fabric experience public welfare activities were held, covering about 700 people including street residents, employees of enterprises and institutions.

• Strengthen ESG management and empower brand value. As the first company in the industry to release ESG reports, Shanggong Shenbei is committed to continuously improving the company's ESG governance system and establishing a long-term mechanism that integrates ESG with daily production and operation. At the same time, by establishing a sound risk management system, timely and effective identification and prevention of internal and external risks in the operation process of enterprises can be carried out, continuously improving the level of international operation, and enhancing the company's business performance, brand strength, and international influence.

Connecting technology, creating a smart future. Adhering to the path of "globalization" and actively welcoming the "Year of Total Quality Management", Shanggong Shenbei will continue to make efforts in "technological innovation, comprehensive automation, and people-oriented", continuously create economic benefits and strengthen its own resilience, accelerate the application and promotion of material connection technology, promote the development of new quality productivity, and strive for the coordinated progress of economic and social development and environmental and ecological protection, working together with stakeholders to create a better future!