Suofeiya Home Collection Co., LtdENVIRONMENTAL, SOCIAL,AND GOVERNANCEREPORT(2024)

This is the 8th annual ESG report published by Suofeiya Home Collection Co., Ltd. It aims to comprehen-sively and objectively reflect the company's practices and achievements in environmental protection,social responsibility, and corporate governance in 2024, further strengthening communication andconnection with various stakeholders.

Report Overview

This annual report covers the period from January 1, 2024, to December 31, 2024. Some content mayreference previous years where appropriate.Time Frame

For the convenience of expression and reading, the terms "Suofeiya," "the Company," "the enterprise,"and "we" in this report all refer to "Suofeiya Home Collection Co., Ltd."Terminology Explanation

The textual material and case studies in this report primarily come from the company’s statistical data,relevant documents, and internal communications. The financial data in the report is sourced from thecompany’s audited 2024 annual report, while other data is based on internal statistics. Unless otherwisespecified, the currency type and amounts mentioned in the report are in RMB. The company assures thatthe content of this report does not contain any false records, misleading statements, or significant omis-sions and is responsible for the truthfulness, accuracy, and completeness of the content.

Data Sources

This report is available in both Chinese and English versions for readers’ reference. It can be download-ed from Suofeiya Home Collection Co., Ltd.’s official website (http://www.sfygroup.com) or the CNINFOwebsite (http://www.cninfo.com.cn).Report Access

Contact Address: No. 2 Xianning Road, Guo Village, Yongning Subdistrict, Zengcheng District, Guang-zhou City, Guangdong Province, ChinaContact Number: (+86) 020-87533019Email: ningji@suofeiya.com.cnOfficial Website: www.sfygroup.com

Report Feedback and Contact Information

FOREWORD

Compilation BasisGlobal Reporting Initiative (GRI) Sustainability Reporting Standards (GRI Standards)International Organization for Standardization (ISO) 26000: 2010 Guidance on Social ResponsibilityUnited Nations Sustainable Development Goals (SDGs) Business Action GuidelinesChinese Academy of Social Sciences (CASS) - the Guidelines on Corporate Social ResponsibilityReporting for Chinese Enterprises Basic Framework (CASS-ESG 5.0)Research on the Compilation of ESG Special Reports for Centrally Administered State-Owned Enterpris-es’ Listed Subsidiaries by State-owned Assets Supervision and Administration Commission (SASAC) ofthe State CouncilESG Reporting Rating Standards for Chinese Enterprises (2025) (Consultation Draft)Guideline No. 1 on Self-Regulation of Listed Companies of Shenzhen Stock Exchange --- StandardizedOperation of Listed Companies on the Main BoardGuideline No. 3 on Self-Regulation of Listed Companies of Shenzhen Stock Exchange SustainableDevelopment Report PreparationGuideline No. 17 on Self-Regulation of Listed Companies of Shenzhen Stock Exchange SustainableDevelopment Report (Trial)

·Sustainable Development Governance·Compliance Governance·Protection of Shareholder Rights·Compliance in Operations and Business Ethics·Privacy and Information Security

CONTENTS

Sustainable GovernanceSection

·Addressing Climate Change·EHS Policies and Management·Resource Consumption and Management·Green Logistics

Promoting GreenDevelopment

目录

Responsible?Supply?Chain?Management

Qualily innovvation·Standard Iteration Leading Industry Upgrades·Technological Innovation Leading Industry Transformation

Service Upgrades

·Employee Rights and Benefits·Employee Growth· Female Employee Care·Employee Activities

Joint Growth

Stakeholder CommunicationESG Key Issues AnalysisAbout SuofeiyaClosing RemarksESG Key PerformanceCompany Honors

SocialResponsibility

Service Standards Leading ContinuousDevelopment of Industry ServicesSmart Service Upgrades for Full-ChainEfficiencyFull-Process Relay Service CoordinationService Indicators Meteorological StationEstablishment

····

·Transformation of Innovative R&D Achievements, Continuously Stimulating Innovation Vitality

·Actively Fulfilling Social Responsibilityand Facilitating the Development of a Friendly Healthcare Environment.·Illuminating the World with Reading,The"Children's Book House" Public WelfareProject Supporting the Development of " Campuses with Reading Ethos"

The company continuously improves its stakeholder communication management system, utilizing various channels such as regularsurveys, work interviews, and online communication to promptly and transparently convey information. This strengthens interactionswith shareholders, employees, customers, and communities, building an open, inclusive, and cooperative relationship. By innovativelyintroducing digital technologies, conducting online surveys, holding regular meetings, and organizing open day events, the companyachieves two-way information exchange, gains a deeper understanding of the needs of all parties, formulates personalized communica-tion strategies, and enhances stakeholders' understanding of and support for the company. This fosters trust and collaboration, effec-tively promoting the co-creation of social value and laying a solid foundation for the company’s sustainable development.

Following the substantive issue analysis method provided by the Global Reporting Initiative (GRI), the Company identified 25 key ESGissues. These issues were assessed based on their impact on the economy, environment, and society, as well as their importance tostakeholders' decision-making. This led to the creation of the ESG Key Issues Matrix. These issues cover:

StakeholdersFocus AreasCommunication Channels

Government andRegulatory Agencies

Shareholders andInvestors

Employees

Customers

Suppliers/PartnersMedia

General Public

Corporate Governance TaxCompliance Employment

Promotion CarbonEmissions Management

Pollution ControlInformation Security and PrivacyProtection Occupational Health and Safety

Compliance Operations

Tax ComplianceSupervision and AssessmentRegular Reports or Presentations

Special MeetingsQuestionnaire SurveysAnti-Corruption MechanismsSustainable OperationsRisk Management and Compliance

Investor RelationsR&D and InnovationCompliance EmploymentCompensation and Benefits

Work SafetyCareer Development

Shareholder MeetingsInformation DisclosureInvestor Communication Meetings

Official Website

Supply Chain Management SystemCost Reduction and Efficiency ImprovementTransparent ProcurementWin-Win Cooperation

Industry EcosystemSwift Response to Public Opinion EventsParticipation in Community DevelopmentActive Involvement in Public Welfare

Proactively Accept Media InterviewsFulfill Social ResponsibilitiesEngage in Public Welfare ActivitiesCreate Employment Opportunities

Volunteering

Design, Quality, and Technology Iteration

Satisfaction Surveys (CSI/DSI)Information Confidentiality, After-Sales Service Mechanism

Provide Authoritative and TransparentCompany Information

Respond to Social Concerns, Post Company Updates on Official Website,

WeChat Official Account, etc.

Protection of Customer RightsHigh-Quality ProductsProfessional Services

Staff Representative MeetingsEmployee MeetingsEmployee TrainingTraining and Corporate Culture Activities

Stakeholder Communication

ESG Key Issues Analysis

Impact Materiality

FinancialMateriality

Higher

Business EthicsAnti-corruptionGreen Operations

Employee trainingand development

Response to climateChange

Green productsCarbon emissions

Compensation and benefitsProduct quality and safety

Promotion of industry developmentSustainable development managemenEmployee health and safety

Waste managementEnergy management

Corporate governanceCompliance operationsShareholder rightsIntellectual property protectionResource managementWater resource usageCustomer rights

Supply chain managementTechnological innovationBusiness ethics,Information security and privacy protection

Joint R&DSupplier Conferences

High

High0102

Suofeiya Home Collection Co., Ltd. was founded in 2003 and has been deeplyinvolved in the Chinese home furnishing market for over two decades. As one ofthe pioneers in introducing the concept of "customized closets" in China, Suofeiyasuccessfully brought customized closets to the market and gained recognitionfrom Chinese consumers with its innovative product concept, combining custom-ized closets and sliding doors for closets. Suofeiya is committed to providingconsumers with comprehensive customized home furnishing solutions, engagingin the design, development, production, and sales of whole-house furniture,including closets, cabinets, doors and windows, wall panels, flooring, householdgoods, appliances, and sanitary ware. In 2011, Suofeiya was successfully listedon the Shenzhen Stock Exchange, becoming the first A-share listed company inthe industry (Stock Code: 002572).

Decorating Homes Easily with Technology and Creativity,Integrating Beauty of the World into New Life.

Customer Experience

Iron Triangleof CustomizationPersonalizedCustomization

Professional &

Efficient.

ABOUT

SUOFEIYA

Mission

Providing Customers with a Good Experience throughPersonalized Design and Efficient Operation and Becominga Trustworthy World-leading Home Furnishing Company.

Vision

Customer Foremost, Innovation and Sharing, Professionaland Efficient, Honest and Progressive.Core Values

Corporate Culture

Business Philosophy

Company Overview

0304

SUSTAINABLE

GOVERNANCE

0506

Suofeiya is committed to responding to national sustainable development policies, with the vision of “providing customers with awonderful experience through personalized design and efficient operations, becoming a trustworthy and globally leading home furnishingenterprise.” The Company adheres to its core values of “Customer Foremost, Innovation and Sharing, Professional and Efficient,Honest and Progressive,” advancing the deep integration of ESG principles into the Company’s value chain. The Company hasestablished a three-level linkage system of "Strategic Decision-Making - Coordinated Management - Efficient Execution" to ensure theeffective implementation of sustainable development strategies.

The Board of Directors is the highest decision-making body for the ESG management system, responsi-ble for strategic decisions, issue evaluation, and supervising implementation.

The company strictly adheres to relevant laws and regulations. Ithas established a comprehensive corporate governance structure,including the General Meeting of Shareholders, the Board of Direc-tors and its specialized committees, the Board of Supervisors, andthe management team. It has formulated a series of regulatorydocuments, including the Rules of Procedure for the Board ofDirectors, the Rules of Procedure for the Board of Supervisors, andthe Information Disclosure Management Regulations to ensurecompliance with operations and business ethics.

Strategic Decision-Making

The Company's ESG management organization is responsible for formulating strategic plans and goalsand overseeing project implementation.Coordinated Management

Various departments and subsidiaries are responsible for incorporating ESG objectives into daily opera-tions, ensuring effective implementation.Efficient Execution

Suofeiya Retail Business DivisionSchmidt Retail Business DivisionMilanla Retail Business DivisionHuahe Retail Business DivisionIntegrated to HouseDecorationCompany Business DivisionB2B Whole Seal Business DivisionDirect Retail Business DivisionFurniture and Home CollectionBusiness DivisionOverseas Business DivisionQuality CenterManufacturing CenterDesign CenterInformation and Digital CenterSmart Home Technical R&D CenterCustomer Service CenterSupply Chain CenterFinancial Management CenterMedia DepartmentBrand Management DepartmentCivil Construction OfficeResearch InstituteOrganization DepartmentHuman Resources CenterAdministration Center

Guangzhou Ningji Intelligent System Co., Ltd.

Guangzhou Suofeiya Investment Co., Ltd.

New Retail Center

Shareholders’

Meeting

SupervisionDepartment

AuditDepartment

AuditCommittee

Board ofDirectors OfficeSupervisionDepartment

Board ofDirectors

GeneralManager

General Manager’s

Office

Compliance Governance

Sustainable Development Governance

SOCIAL

GOVERNANCE

ENVIRONMENTAL

0708

The General Meeting of Shareholders, composed of all shareholders, is the Company’s highest authority body, responsible for makingdecisions on major matters. The Company convenes and holds the General Meeting of Shareholders in strict accordance with relevantlaws and regulations, such as the Securities Law of the PRC, the Company Law of the PRC, the Articles of Association, and the Rules ofProcedure for the General Meeting of Shareholders. Voting is conducted both onsite and online to provide convenience for shareholders,especially small and medium-sized shareholders, to participate. The Company treats all investors equally and renders earnest protec-tion of small and medium-sized shareholders' rights.

General Meeting of Shareholders

On the premise of giving full play to the role of the General Meeting of Shareholders as the authority body for major business matters,Suofeiya continues to uphold the Board of Directors’ role in "setting strategies, making decisions, and preventing risks." The Companycontinuously optimizes the management system on the Board's independence to ensure the Board's autonomy. During the reportingperiod, the independent directors strictly followed relevant laws and regulations, the Company’s Articles of Association, and the estab-lished rules for independent directors. They provided professional and objective suggestions on the Company’s operations, enhancingthe Board’s decision-making.In the process of establishing a sound Board of Directors, the Company focuses on improving decision-making transparency andclarifying responsibilities. The Company has promoted the diversification of the board structure. Over the years, the Company haspracticed board diversity in terms of "cultural literacy, professional skills, educational background, and professional qualities," ensuringdiverse perspectives and views for senior-level decisions.To further enhance governance structure transparency, the Company has formulated the Rules of Procedure for the Board of Directorsand the Independent Director System. During the reporting period, all directors performed their duties as per regulations, attended boardmeetings on time with a 100% attendance rate, and actively participated in decisions on major matters and reviews of important informa-tion disclosures.The Board of Directors has set up an Audit Committee to strengthen the governance structure, be responsible for supervising andinspecting specific company affairs within the scope of the Board’s authorization, regularly checking and overseeing the overall opera-tions and financial performance of the Company to ensure effective risk management and internal control systems.

Board of Directors

The Board of Supervisors is the Company’s supervisory body, responsible for overseeing the company’s financial status,related-party transactions, major matters, and the legal compliance in the duty fulfillment by the directors and senior management, thussafeguarding shareholders' legitimate rights. In 2024, the Board of Supervisors is composed of 3 members, including 1 employee repre-sentative supervisor and 2 shareholder representative supervisors, with females accounting for one-third of the members. The employ-ee representative supervisor is elected democratically by the company’s employees. The establishment of the Board of Supervisorsaims to strengthen internal supervision, ensure operational transparency, and promote sustainable development. By constructing amulti-level governance structure, the company ensures that all operations are compliant with the governing regulations, effectivelypreventing risks. The members of the Board of Supervisors are diligent and responsible, and the procedures for meetings and votingconform to the Rules of Procedure for the Board of Supervisors and other related regulations. The Board supervises the company’sdecision-making processes, establishes and executes internal control systems, and ensures legal operations, fostering the compa-ny’s standard operations. During the reporting period, the actual attendance rate of the Board of Supervisors was 100%.

Board of Supervisors

The management team is the company’s executive body, appointed by the Board of Directors and accountable to the Board. Themanagement executes the resolutions of the Board of Directors, drives the company’s operational activities, and helps achieve thecompany’s business and strategic goals. In 2024, the company’s management team comprised 5 senior executives, including onefemale senior executive. The management team covers professional areas such as marketing, finance, and intelligent manufacturing,boasting rich industry backgrounds and professional management experience. They are also involved in formulating the company’sannual business plans and investment proposals, helping the company seize market opportunities and implement them, thus ensuringthe company’s long-term and stable development.

Management

General Meetingsof Shareholders

Board of Directorsmeetings

Board of Supervisorsmeetings

Audit Committeemeetings of the Boarddeliberating

proposalsdeliberating

proposalsreviewing

proposalsdeliberating

proposals

0910

The company places great emphasis on protecting the legitimate rights of shareholders, especially small and medium-sized sharehold-ers. In accordance with the Company Law of the PRC, the Code of Governance for Listed Companies, and the Guidelines for the Articlesof Association of Listed Companies, the company adheres to an investor-centric approach. By continuously standardizing corporategovernance, improving the quality of information disclosure, enhancing investor communication, and establishing a strong sense ofshareholder return, the company effectively fulfills its responsibilities and obligations as a listed company. It takes on social responsibili-ties and strives to become a trustworthy, examplary high-quality listed company.

The company attaches great importance to information disclosure, strictly complying with the Shenzhen Stock Exchange’s informationdisclosure guidelines and other regulations to fulfill its disclosure responsibilities. It ensures that the information disclosed is truthful,accurate, and complete, increasing the transparency and openness of the company’s operations, allowing investors to quickly under-stand the company’s development and business status, and safeguarding the right to information for investors. During the reportingperiod, the company issued 65 announcements (each with a corresponding announcement number), including 6 regular reports and 59ad-hoc announcements. The company’s information disclosure was rated Grade A by the Shenzhen Stock Exchange, marking the11th consecutive year of receiving such a result. Currently, only 36 listed companies on the Shenzhen main board have been granted 11Grade A ratings in a row. The company will continue to improve the quality of information disclosure and standardize operations topromote the high-quality development of the listed company.

Information Disclosure

The company has always placed great importance on investor relations management, adhering to the principles of transparency andfairness. It has established a comprehensive investor communication platform, implementing the Investor Relations ManagementSystem to fully safeguard investors' right to information and ensure the accuracy and authenticity of the information. A dedicated teamhas been established to actively engage in investor interaction activities, enhancing shareholder trust and participation.The company provides a variety of convenient communication channels for investors, actively engaging with them through investorhotlines, email, investor relations interactive platforms, the "Investor Section" on the official website, media interviews, performancebriefings, and offline surveys. The company ensures positive interaction with investors. At the same time, industry news and key capitalmarket concerns are promptly conveyed as feedback to the management team, striving to create a harmonious and interactive investorrelationship.

Investor Relations Management

Since its listing in 2011, the company has consistently focused on enhancing shareholder returns and protecting the rights of small andmedium-sized shareholders. The company has formulated a stable and continuous dividend policy, including the Suofeiya HomeCollection Co., Ltd. Long-Term Shareholder Return Plan and the Shareholder Dividend Return Plan for the Next Three Years(2022-2024). These plans ensure the continuity and stability of profit distribution policies, enabling shareholders to share the company'sdevelopment achievements. From 2011 to 2023, considering the company’s operational performance, financial status, and shareholderinterests, the company has distributed a total of 5.034 billion RMB in cash dividends (excluding share buybacks) to all shareholders,effectively sharing the results of its business growth.

Shareholder Returns

Regular Reports

Ad-hoc Announcements

ObtainedAgrade in the evaluationof information disclosure work of ShenzhenStock Exchange for 11 consecutive years

Routine Communication

The company organized and participated in over300 sessions of routine communication withinstitutional shareholders, special investorreceptions, online exchange meetings, and offlinestrategy meetings.

Regular CommunicationThe company actively held an annual performancebriefing, organized 4 special sessions withinvestors regarding regular report performance,and participated in the online collective receptionday for investors as organized by the authorities ofthe region the company resides in.Interactive ResponsesThe company promptly updated the shareholderregister and tracked and analysed changes inshareholder structure. It responded to 57 investorinquiries on the Shenzhen Stock Exchange'sinteractive platform, actively answered investorhotline calls, and provided timely updates on thecompany’s operations through new mediaplatforms such as the WeChat public account andvideo accounts, so that smooth communication withinvestors was maintained.

Two-Way CommunicationThe company’s Board Office regularly writesreports on industry news and capital marketdynamics, shares domestic and internationalbusiness changes, and provides feedback tomanagement on key issues that investors areconcerned about, fully guaranteeing theinvestors’ right of suggestion and right to knowand ensuring solid integration of capital empower-ment and real business.

Protection of Shareholder Rights

1112

0.96

2011201220132014201520162017201820192020202120222023

0.77

1.1

1.54

2.2

3.23

4.16

4.56

5.02

5.47

5.44

6.35

9.52

Dividend amount（nit: Billions of RMB）

The company continuously builds a systematic and standardized compliance management system. It has developed and improved theContract Management Regulations and the Contract Management Measures, implementing fine-grained management throughout theentire contract process. This includes key elements such as risk review, decision-making responsibilities, performance supervision, andfinancial income-expense control. These measures effectively prevent legal and economic risks, ensuring transaction security.Additionally, the company has enhanced its Physical Stamp Management Regulations with a tiered authorization mechanism for sealusage, strictly controlling the proper use of seals and eliminating unauthorized use.Based on these efforts, the company focuses on the decision-making authority differences and risk control needs across variousbusiness scenarios. The company continuously optimizes the OA approval system’s nodes and review standards by adjusting hierar-chical permissions, grading processes, and managing risks through classification. This approach ensures a balance between "strongcontrol over major matters" and "efficiency improvement for routine business", solidifying the governance structure for the company'shigh-quality development.

Suofeiya strictly conducts business activities in accordance with national laws, regulations,and business ethics standards, adhering to laws such as the Criminal Law of the People'sRepublic of China, the Anti-Unfair Competition Law of the People's Republic of China, and theAnti-Money Laundering Law of the People's Republic of China. The company has developedand implemented regulations such as the Employee Duty Conduct Management Measures,Employee Handbook, Employee Integrity Management Guidelines, Eight Major Red Lines,Conflict of Interest Reporting and Filing Notice, and supplier and employee blacklist systems.The company has established a business ethics compliance management framework, with the Supervision Department fully responsiblefor overseeing, managing, and guiding the company's business ethics matters. The Supervision Department collaborates with the AuditDepartment, Legal Affairs Department, and various business units to promote anti-corruption efforts and build a clean governanceecosystem, regularly identifying and supervising internal anti-corruption risks.In 2024, the company continued to strengthen internal supervision work, conducting comprehensive "prevention beforehand, in-processsupervision, and post-investigation" management of business activities through special inspections, process supervision, and routinemonitoring. The company used information technology tools such as financial data sharing and internal work platforms for routine super-vision. During the reporting period, 6 routine inspections were conducted, and risk identification and rectification were conducted in aclosed-loop manner. The company participated in 82 bidding supervision activities, combining online tendering management systemsand offline process supervision, effectively reducing or avoiding the risk of fraud in departments with procurement functions, such asbusiness units and the supply chain.

Followed-up-on Audit Rectification Measures：

New and Revised Documents：

Timely Completion Rate of Rectification：

96%

Compliance Risk Control

Business Ethics

Since its establishment, Suofeiya has always regarded compliance operations as one of its core principles. By establishing soundinternal control systems, the company ensures that business activities are conducted in an orderly manner within the legal framework.The company has set up a three-tier risk control system, comprising the Audit Department, the Supervision Department, and the LegalAffairs Department. In accordance with the applicable laws and regulations, such as the Company Law of China, the Securities Law ofChina, and the Code of Governance for Listed Companies, the company has formulated a series of internal management systems,including the Articles of Association, Rules of Procedure for the General Meeting of Shareholders, Rules of Procedure for the Board ofDirectors, Rules of Procedure for the Board of Supervisors, Information Disclosure Management System, and the Internal Audit System.

The company’s internal control management system is comprehensive, dividing its main business operations into 22 modules forinternal control and risk management. As of the reporting period, a total of 2,939 different management documents have been published,improving operational management levels and promoting the company’s sustainable business development. During the reportingperiod, the company, with intensifying internal control and management, added and revised 784 internal documents, 625 of which wererelated to environmental, social, and governance (ESG) factors, covering areas such as production and manufacturing management,R&D management, occupational health and safety, environmental protection management, quality and systems management, humanresources management, and service management.The company has also established an audit risk data evaluation system and continuously improves its big data analysis tools, assessingand analyzing 18 aspects of the Guidelines for Internal Control Application of Enterprises. During the reporting period, the Audit Depart-ment carried out several routine and special audit projects, focusing on key business modules such as sales management, procurementmanagement, financial management, asset management, and contract management. The company strengthened audit-exposed issuerectification efforts by applying a "dual engine" approach for rectification sample checks and rectification prompting actions, optimizingseveral related systems and processes. The company also organized internal self-inspection and rectification efforts, focusing on theimplementation of internal rules and documents and improving compliance awareness and risk management capabilities among allemployees.

During the reporting period, the "three lines of defense" continuously empowered various business units, strengthening the identification,assessment, and management of compliance risks, and improving the implementation of oversight and supervision processes. Thisensured the effectiveness of internal control and enhanced the company’s ability to manage risks while improving operational andmanagement levels.

Compliance Operations and Business Ethics

1314

In 2024, the Supervision Department received 31 reports of violations and illegal activities through various channels. All 31 cases wereinvestigated and closed, achieving a 100% case closure rate. Based on the investigation results, 10 employees had their labor contractsterminated, and 13 were subject to administrative penalties, with the company reserving the right to pursue legal liability. Additionally, thecompany required employees to sign the Suofeiya Employee Self-Discipline Agreement as an attachment to the labor contract, achiev-ing a 100% employee signing rate.To build a clean and ethical ecosystem, the company formulated the Whistleblower Manage-ment Measures and established channels such as the official website platform, whistlebloweremail, hotline, and in-person reporting to receive information on violations of business ethicsor actions that harm the company's interests from internal and external parties, as well aspartners (suppliers, distributors, etc.). Upon receiving whistleblowing information, the Super-vision Department conducts preliminary screening and investigation, maintaining a zero-tol-erance attitude toward serious violations. The company promises to strictly protect anywhistleblower's identity and safeguard his or her legal rights, preventing retaliation. Thewhistleblowing management process follows the "dedicated personnel for reception, investi-gation, and rewards" mechanism, ensuring confidentiality and procedural integrity.To strengthen the integrity awareness of all employees and enhance the effect of warning education, the company publishes internaldisciplinary notices on serious violations through its electronic work platform and conducts a series of integrity training sessions. In 2024,the company issued 5 internal disciplinary notices and organized 8 offline integrity training sessions under the theme "Integrity and Purity,the Flourishing of Righteousness," with the total attendance of 14,000 to the legal and disciplinary violation warnings. The integrity educa-tion coverage rate reached 100%.

Routine Inspections:

Whistleblower Reports Received: ，with a100% case closure rate

Tendering Supervision Sessions:

Domestically Registered Trademarks1,934次Record of Trademark Protection

Offline Integrity Training Sessions:

，with a total attendance of14,000,achieving100%integrity education coverage

The company has always viewed intellectual property protection as the lifeline of its business development. Through continuousimprovements of the intellectual property management system, active intellectual property rights protection actions, and in-depth effortson brand value preservation, the company fosters an atmosphere of business operation integrity and intellectual property rights protec-tion.

In terms of trademark registration, the company and its affiliates collectively hold 1,934 domestically registered trademarks, establishinga solid trademark protection fortification. Regarding rights protection, the "Suofeiya" brand has been recognized as a well-known trade-mark 136 times, highlighting the company’s outstanding achievements in intellectual property protection.In 2024, the company won a retrial case in the Supreme People's Court regarding trademark infringement and unfair competitiondisputes. This victory not only effectively safeguarded the legitimate rights of consumers and the company’s reputation, but also furtherstrengthened the company’s competitive advantage and industry standing. Additionally, it would also facilitate healthy competitionwithin the industry, providing strong legal support for consumer rights and fair market competition.

Intellectual Property Protection

Privacy and Information SecurityThe company’s Information and Digital Center (IDC) complies with laws and regulationsregarding information security and privacy protection, including the Personal InformationProtection Law, the Consumer Rights Protection Law, the Self-Assessment Guidelines forIllegal and Unregulated Collection and Use of Personal Information by Apps, and the Regu-lations on the Necessary Scope of Personal Information for Common Types of MobileInternet Applications. The company has tailored a secure and efficient network securitysolution, which includes network access mechanisms, antivirus software, firewalls, virtualprivate networks (VPN), internet behavior management devices, file scanning and monitor-ing, bastion hosts, system backups, and other components. These measures establish aninformation system management and network security mechanism, along with permissioncontrol systems, to strengthen data and information security management.The company has developed systems such as the Emergency Response Plan for Environ-mental Emergencies, Environmental Information Reporting Management Measures, FireSafety Equipment Maintenance Management System, and Information Systems Emergen-cy Plan. An Information Security and Confidentiality Management Committee has beenestablished, along with dedicated security management departments and personnel, todefine the overall goals, scope, principles, and security framework for security operations.These departments are responsible for the construction and operation of the informationsecurity system.The company has formulated and improved systems and regulations such as the Business System Launch Security ManagementDetails, Data Center Security Management System, Terminal Computer Protection Regulations, Terminal Equipment and NetworkManagement Regulations, Information Security Management Procedures, and Data Security Management Standards. These regula-tions classify and manage business information, customer data, and other critical information, specifying risk avoidance measures toeffectively maintain the security of customer information and data assets.

Image: On-Site Data Center Deployment

1516

External Security Defense

Network access mechanisms, antivirussoftware, firewalls, virtual private networks(VPN), bastion hosts, vulnerability manage-ment

Security Management Standardsand Responsibility System

Emergency plans, security checks and records, securitytraining, security risk identification, internet behaviormanagement

Data Security Management

Data backup and recovery, regularinspections and automated monitoring,sensitive information encryption storage,secure data flow control, file security systems

AvailabilityNetwork redundancy, network equipment,backbone line upgrades

System Security ConstructionInformation system management and networksecurity mechanisms, permission control, codeencryption protection, system backups, systemstability

Data Privacy Management

Data classification, dynamic data desensitiza-tion, market terminal tool development toprevent data loss

The company has developed a comprehensive information security system based on actual needs. Over time, it has been continuouslybuilt, optimized, and refined to achieve the goal of ensuring the security of the company’s information systems.

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Based on the overall information security management system plan, high standards are set for information security management goalsconsidering factors, scenarios, and technologies that impact information security. The company drives the execution thereof to ensurecomprehensive security and 0 incidents.

The company has continuously invested in information security management over the years, consistently strengthening and improvingits practices, and has made significant progress. All work and indicators are now integrated into the management system, ensuring thesecure and efficient operation of the company's business and management, supporting its rapid development, and safeguarding itsvalue.

Goal Wall

Technology Follow-up

Information

Security

99.99%

99.99%

99.99%

Host availabilityrate

Databaseavailability rate

Networkavailability rate

Key systems are deployed with a HighAvailability (HA) architecture to ensurebusiness continuity for critical opera-tions.

The company adopts the internationallyleading Veritas backup solution toensure reliable system data backups.

The company researches and appliesdata desensitization technologies andtools to anonymize customer-relatedinformation, effectively preventingcustomer data leaks.

A proactive "Privacy Policy" mini-pro-gram is configured to collect theminimum necessary personal informa-tion from users, ensuring that customerdata is collected, used, and protected ina limited and effective manner.

Software monitoring for anomaly alertsis utilized, and service monitoringsoftware (e.g., Zabbix) is deployed toensure the reliable operation ofbusiness systems.

6)Zero-threat security measures with

comprehensive control: Kasperskysoftware is deployed, and endpointdevices are managed by accesscontrol systems to prevent unautho-rized devices from accessing thesystem. Unauthorized software thatmay harm information security is alsoprevented. Additionally, the companydeploys deep security internet behaviormanagement equipment (e.g., Sangfor)to prohibit illegal network access.

ABC

DEF

0Incidents

1718

PROMOTING

GREEN

DEVELOPMENT

With global issues such as global warming, frequent extreme weather events, and rising sea levels becoming increasingly prominent,Suofeiya actively responds to the national carbon peak and carbon neutrality strategic goals. The company views climate change as acore issue for sustainable development. It follows guiding documents such as the Opinions of the Central Committee of the CommunistParty of China (CPC) and the State Council on the Complete and Accurate Implementation of the New Development Concept and theProper Implementation of Carbon Peaking and Carbon Neutral Work and the Action Plan for Carbon Dioxide Peaking Before 2030. Thecompany actively undertakes work related to addressing climate change.In 2024, Suofeiya referred to the framework the Task Force on Climate-related Financial Disclosures (TCFD) suggested to identifyclimate-related risks and opportunities related to its operations and carried out risk management activities. While achieving low-carbonoperations, the company also enhances its resilience in addressing climate change, contributing to society's green and sustainabledevelopment.

Addressing Climate Change

Identification of Climate Change Risks and Opportunities

As global and domestic governments acceler-ate the implementation of climate policies suchas carbon trading and carbon taxes, if thecompany fails to comply with carbon-relatedregulations in a timely manner, it may faceregulatory fines, increased compliance costs,and a decline in market trust.

Failure to invest in low-carbon environmentaltechnology R&D.

The introduction of carbon emission rightscontrol and adjustment mechanisms worldwidemay lead to increased business operations andfinancial costs.

Strengthen carbon emission compliance monitoring;optimize carbon emission intensity in production andsupply chain processes; provide regular training foremployees and suppliers to enhance their response toclimate policies; advance green smart manufacturingprocesses to ensure compliance and reduce risks.

Continue implementing energy-saving and emissionreduction strategies, closely monitor carbon pricingmechanisms in the countries where assets are locatedand globally, and proactively and flexibly meetchallenges.

Introduce and cultivate professional talent, strengthentechnology imports, actively engage in external learn-ing, and enhance R&D capabilities.Failure to timely identify and apply low-carbontechnologies, resulting in the company’sproducts lagging behind competitors inlow-carbon transformation.

Continuously research and apply low-carbon technol-ogies, and actively engage in industry collaborations.

Failure to effectively meet consumer demandfor green, low-carbon products.

Actively develop green, low-carbon products to meetconsumer demand.Rising costs of raw materials and energy.

Promote resource conservation and recycling;strengthen supply chain management.Poor performance in addressing climate changeand sustainability, leading to damaged companyreputation and negative feedback from stake-holders.

Enhance the company’s sustainable developmentcapabilities, proactively respond to climate change;increase transparency in related management andactively address concerns raised by stakeholders.

Risk CategoryRisk Description

Transformation Risks

Response Measures

Policy andLegal Risks

Technology

Market Risks

ReputationRisks

China Environmental Label Product Certifications:

"National Green Plant" Certifications:

"Zero Waste Factory" Certifications:

Energy System Certifications:

ISO 14001 Certifications:

Low-carbon development and circular economy have become a global consensus. Suofeiya has always adhered to the businessphilosophy of green and environmental protection, continuously promoting the construction of an environmentally friendly enterprise.The company integrates sustainable concepts of low-carbon energy saving and green circulation throughout its entire business opera-tion process, pursuing carbon reduction across all stages. Suofeiya actively promotes the green economy, addresses climate change,and fulfills its corporate environmental responsibilities. The company is committed to collaborating with ecological partners, movingtowards a greener, mutually beneficial, and sustainable future.

2122

Higher energy-efficient equipment, buildings, andtechnologies; supportive policy incentives.

Development of green, low-carbon products; climatechange response solutions within the industry.

Substitution of renewable energy sources.

Actively explore the development or application of newtechnologies, equipment, and processes to fullyimprove resource efficiency; proactively respond togovernment supportive policies and green projects.Promote energy efficiency optimization in processes toreduce energy consumption and greenhouse gasemissions.Strengthen low-carbon technology R&D and increaseinvestment in the development of green, low-carbonproducts.Access to emerging markets; increasing demand forgreen markets.

Increase the share of green, low-carbon products;identify and participate in emerging markets.Energy substitution and diversification solutions;participation in renewable energy projects.

Promote the development and utilization of renewableenergy.

OpportunityOpportunity Description

Climate Change Opportunities

Response Measures

ResourceEfficiency

EnergyEfficiencyProductsandServicesMarketAdaptation

Production Base

Direct Greenhouse

Gas Emissions

(Scope 1)

Indirect Greenhouse

Gas Emissions

(Scope 2)

Total Greenhouse

Gas Emissions

(Scope 1 + Scope 2)

Greenhouse Gas Emissions from Suofeiya's 7 Production Bases in 2024 (Unit: tCO2e)

South China Production CenterCentral China Production CenterEast China Production CenterWestern Production CenterNorth China Production CenterLankao Production BaseQiqihar Production BaseJinhua Production Base

667.53

470.31

366.17

255.50

206.22

260.26

44.02

29.03

7073.994984.013880.362707.532185.352758.02

466.44

307.62

7741. 525454.324246.532963.032391.573018.28

510.46

336.65

EHS Policies and Management

Vision

To create an EHS-excellence operating systemand build a safe, healthy, green, and sustainablework environment and corporate culture.

GoalsZero major safety incidents, zero major fireaccidents, zero regulatory non-compliance.

EHS Vision and Goals

Extreme weather may damage factory, officebuilding structures, and equipment, causingasset loss.

Rising temperatures increase the company'scooling demand, raising operational costs.

Equipment damage, employee inability to work,and transportation interruptions due to extremeweather may affect stable production.

Develop emergency response plans for natural disas-ters and continuously improve the emergencyresponse mechanism.Provide training on responding to and protectingagainst extreme weather events, continuously improvethe natural disaster emergency response mechanism.Upgrade energy-efficient cooling systems and useenvironmentally friendly equipment to reduce energyconsumption.Employee health and work efficiency areimpacted by prolonged exposure to heat.

Scientifically arrange production schedules, organizeproduction efficiently, and improve operational efficiency.Long-term droughts may lead to insufficientwater supply, affecting the stability of productionand operations.

Continuously promote water-saving environmentalupgrades, avoid building factories in areas with highwater supply risks, and strengthen water reserves.

Risk CategoryRisk Description

Physical Risks

Response MeasuresAcute Risks(Extreme Weather,such as Storms,Floods, Typhoons)

Chronic Risks(Sustained HighTemperatures,Droughts)

2324

In 2024, the company optimized a series of safety and occupational health management systems, including the Group EHS Responsibili-ty System, Safety Incident Management Measures, and EHS Meeting Management Measures. These optimizations improved thecompany’s environmental and safety management system, aligning the environmental protection, safety, and occupational healthregulatory frameworks with the current EHS management practices.

EHS Organizational Management Responsibilities

The company has established an employee work safety responsibility system centeredaround the "three managements and three musts," which clearly defines the specific worksafety responsibilities that regional managers must fulfill within their areas of responsibility.Following the " Dual Prevention Mechanism: Safety Risk Classification and Control, andHazard Identification and Rectification," risk identification is conducted at the worksite, andsafety warning signs are posted in risk areas to prevent safety incidents. Operations such ashot, high-altitude, and confined space work require approval and control, with full-processsupervision during execution. Additionally, through specialized inspections, seasonalchecks, holiday checks, daily team-level checks, weekly workshop-level checks, andmonthly factory-level checks, we continuously improve work safety management andpromote the stable and healthy development of work safety.

The company has established and improved an emergency management system forsudden safety accidents and environmental incidents to ensure the safety of the compa-ny’s assets and protect employees' lives. It strictly adheres to a series of emergencymanagement regulations, clarifying emergency management principles, emergencymanagement institutions, operational mechanisms, emergency support, and emergencyplan management. Each year, the company organizes at least seven comprehensive emer-gency response drills and specialized emergency drills to enhance employees' ability tohandle emergencies, ensuring that unexpected events remain within a controllable rangeand building a work safety network for all employees.By collecting data on equipment and facilities at the work site and identifying potentialhazards, the results are recorded in the "Work Safety Risk Electronic Map." Safety manage-ment personnel and regional managers can access the system to understand and monitorthe hazard situations in the plant and various areas. The use of the work safety riskelectronic map enables the dynamic operation of the dual prevention mechanism. Each areaconducts daily hazard identification work, with safety responsibilities delegated to depart-ments, forming a safety management mode where the safety management departmentoversees and the responsible departments implement the safety measures. This approachhas transformed safety work from "passive compliance" to "self-reliant management."

Management System Optimization

The company is committed to ensuring the safety of employees' lives and company propertyby implementing safety controls on production facilities and equipment. All of Suofeiya’sfactories employ interlocking and interactive fire safety control systems with full-fledgedmonitoring networks, ensuring a safer production process. We strengthen safety inspec-tions and supervision at all levels, encouraging full participation in identifying and correctingvarious safety violations. Focus is placed on team safety efforts, hazard analysis at workpositions, and minimizing and controlling accidents to ensure safety in production, fireprevention, occupational health, and environmental protection.We have obtained ISO 45001, OHSAS 18001, other occupational health and safety manage-ment system certifications, and work safety standardization certifications. These certifica-tions effectively ensure the normal operation of the company’s safety managementsystem.

Implementing Safety Production

Promote national EHS policies, regulations, laws, and standards and oversee their implementation.Develop the company's annual work safety plans and work plans and organize/guide their implementation.Establish and improve the company's EHS rules, regulations, and the EHS responsibility system, and oversee andinspect their enforcement.Supervise the implementation of safety corrective actions and propose corrective measures for violations.Participate in the "three simultaneous" reviews for new, modified, or expanded construction projects, review safetyand occupational health facilities, environmental protection facilities, and final exam-acceptance procedures.Be responsible for collecting, analyzing, and statistical reporting of safety and environmental incidents from variousdepartments.Organize and carry out EHS-related safety inspections and correct and penalize violations.Promote the use of modern safety management methods and conduct occupational safety and health managementsystem certification and environmental management system certification.

Safety Rankings

Unsafe BehaviorsUnsafe ConditionsMajor Issues Identified

+

General Issues Identified

+

Factory Inspectionsand Visits

OWD Incidents

Safety Accountability

Matrix

EHS Standards/Boards

EHS Training Session

Good Practices

Government Inspections

Key EHS Projects

Management Platforms

Pilot NoiseReduction Projects

1,130,000+800,000+

2526

Water Resource Management

Resource Consumption and ManagementThe company places great importance on establishing and operating its energy management system, striving to build an energy-efficientand environmentally friendly enterprise. The company continuously improves relevant systems, including the Environmental ProtectionManagement System, Energy-saving Management System, and Energy Management System. It adopts a diversified approach toenergy-saving and emission-reduction measures and strengthens energy management, water resources and wastewater manage-ment, and waste management while promoting the green and healthy development of the supply chain.Relying on advanced industrial technology and intelligent equipment, the company develops new production processes, promotes greenprocurement, and advocates less-packaging-material design, thereby improving resource recycling efficiency. The company advancesclean production and energy-saving emission reductions, continuously promotes the comprehensive use of clean energy such asphotovoltaic power generation and natural gas, and aims to completely eliminate the use of fossil fuels, contributing to global greenhousegas emissions reduction.

The company has consistently adhered to the principles of less-consumption orientation, resource orientation, and harmlessness,implementing consumption reduction and recycling measures. Since 2019, the company has promoted the use of neutral catalytic oxida-tion treatment and high-efficiency dewatering equipment for wastewater. Several of our production bases around China have imple-mented wastewater reuse projects in their wastewater treatment stations, further treating wastewater and reusing it in productionprocesses, such as spray towers and water curtain cabinets, in order to reduce tap water consumption.During the reporting period, all of the company's factories used tap water and did not use underground wells or other water sources.Water supply was sufficient, and there were no issues affecting production due to water quantity or quality problems.

The total amount of recycled water/reclaimed water used by the company was5,797m

From 2022 to 2024, the company saved a total of22,945 tons of tap water.

Since 2017, the company has been steadily advancing the "Oil-to-Electric" initiative, gradually phasing out fuel-powered forklifts andreplacing them with electric forklifts, thus reducing the use of fossil fuels and achieving the goal of reducing air pollutants.The company's electric forklift substitution rate reached 99.59% during the reporting period.

2 / "Oil-to-Electric" Project

0.41%

Electric Forklifts

Diesel Forklifts

UnitsUnits

99.59%

The company actively conducts environmental and safety training and education at alllevels, regularly providing training for new employees, including "three-level" training,"four-new" safety training, hazardous waste management, rainwater, and wastewaterpipeline management training, specialized operations personnel training, emergencyresponse team training, environmental protection management, group EHS training camps,occupational health, and first aid training. To encourage the participation of all employees inEHS efforts, the company organizes a series of EHS cultural activities, such as "Work SafetyMonth," "World Environment Day," "Occupational Health Awareness Week," and "100 DaysWithout Safety Accidents." These activities engage employees directly in EHS culturalevents, enhancing their EHS awareness.

Energy Management

During the reporting period, the company continued to strengthen energy-saving and consumption-reduction education and training forall employees, actively conducting research and application of electricity-saving and other new technologies and processes and adjust-ing and optimizing production processes. Special focus was placed on technological improvements in high-energy-consuming produc-tion stages. The company continued to invest in energy-saving technological transformations, actively developing solar photovoltaicpower generation projects, replacing fuel-powered forklifts, and adopting centralized vacuum systems, among other measures.

Since 2017, the company has actively promoted rooftop solar photovoltaic power generationprojects at its factory buildings. It has built grid-connected distributed photovoltaic powergeneration systems at 7 major production bases, covering an area of approximately337,000, saving limited coal and petroleum resources.During the reporting period, the solar photovoltaic power generation project providedapproximately 21.28 million kWh of green electricity to the company and the State Grid,resulting in a reduction of 18,523 tons of CO2 emissions, equivalent to saving 6,810 tons ofstandard coal. The photovoltaic power generation amount in the reporting period increasedby 48.9% compared to 2023. From 2017 to 2024, the total amount of green electricityprovided to the company and the State Grid was approximately 92.08 million kWh.

21.28

million kWh of green electricitySaving 6,810 tons of standard coal

Reduction of18,523 tons of CO2 emissions

1 / Photovoltaic Power Generation

2728

Waste Management

To better reduce factory exhaust emissions, the company's factories responded to national controlmeasures for heavy-pollution weather and summer ozone management by upgrading their exhausttreatment facilities/systems. The company manages organized exhaust emissions, upgradesexhaust treatment processes, and improves exhaust treatment levels.

1 / Exhaust Gas

The company regularly commissions third-party organizations to conduct waste testing and sets annual "Three Wastes" KPI indicators,including production wastewater reuse rate, proportion of production wastewater generated, hazardous waste disposal rate, andcompliance rate of exhaust emissions. Monthly environmental KPI data, such as air pollutant emissions, production wastewater reuse,domestic sewage pollutant emissions, hazardous waste generation, and photovoltaic power generation, are collected and analyzed. Thecompany is committed to reducing waste, ensuring compliance with air pollutants and water pollutants discharge standards, andminimizing environmental impact.

Exhaust Emissions Compliance Rate:

100%

100%

Wastewater Discharge Compliance Rate:

100%Solid Waste Disposal Compliance Rate:

100%Noise Emissions Compliance Rate:

The company selects exhaust gas treatment facilities with strict standards for end-of-pipetreatment, reducing the emissions of volatile organic compounds (VOCs), sulfur dioxide (SO2),nitrogen oxides (NOx), particulate matter, and other pollutants.New exhaust treatment facilities adopt a dust removal + RTO (Regenerative Thermal Oxidizer)process with an organic waste gas treatment efficiency of over 90%.The company has carried out low-nitrogen emission reduction for boilers. Nitrogen oxide emissionsdecreased from 71 mg/m in 2022 to 21 mg/m in 2023, a reduction of over 70%.An exhaust system is installed in the heating area of the edge banding machine to collect and treatwaste gas with an activated carbon adsorption device, reducing unorganized emissions of VOCs.A VOCs online monitoring system is installed to observe and monitor exhaust gas indicators, alongwith an early warning system and visual and audible alarms for exhaust treatment facilities to ensuretimely fault handling.The company implements a low-VOCs content product substitution project, using advanced raw andauxiliary materials through special processes to reduce VOCs emissions at the source. Powder iscollected and processed by a secondary recovery device to reduce particulate emissions. Afterprocess upgrades, VOCs and particulate emissions are expected to decrease by over 85%year-on-year.

Water resource management is also a crucial aspect of Suofeiya's commitment to fulfilling its social responsibility. The companyunswervingly control and adjust processes from the source, implement a series of water-saving measures, and invest in the construc-tion of a production wastewater reuse system to treat and reuse wastewater, thereby reducing discharge. The company has upgradedits wastewater treatment system, simultaneously monitoring wastewater discharge and reducing the generation of solid waste sludge.

2 / Wastewater

The company uses the UASB (Upflow Anaerobic Sludge Blanket) treatment process, where the "biological treatment" process combines"anaerobic + aerobic" methods, and the "deep treatment" uses the "sand filtration" process. Wastewater containing paint is directed intoa collection and adjustment reaction sedimentation tank. After pre-treatment, production wastewater enters the production wastewateradjustment tank, which is regulated and then pumped to a flotation tank for further treatment. In the initial reaction area, acid or alkali isadded to adjust the wastewater's pH to neutral. PAC (Poly Aluminium Chloride) and PAM (Polyacrylamide) are added for flocculation toremove most of the suspended solids. After flotation, the wastewater enters the primary settling tank for further sedimentation to removeadditional suspended solids. After the sedimentation process, the wastewater enters the integrated adjustment tank.

Collection and AdjustmentReaction SedimentationTank (New)

Secondary Settling

Tank (Existing)

Intermediate Tank 1(Renovation of Existing)Neutral CatalyticOxidation Tank (New)

Sand Filter Tank +Carbon Filter Tank (Existing)

Clean Water Tank(Renovation of ExistingSludge Tank)

Intermediate Tank 2(Renovation of Existing)

Sludge Tank

Filter Press

Mud Cake forExternal Disposal

Supernatant toCollection Well

Recycling Industry

ProductionWastewater

Blower

ChemicalAddition

ChemicalAddition

Sludge Discharge

Hydrolysis Acidification

Tank (Renovation ofExisting Inclined TubeSedimentation Tank)

UASB AnaerobicReaction Tank (Renova-tion of Existing HydrolysisAcidification Tank)Multi-Stage ContactOxidation Tank (Renova-tion of Existing Tank)SludgeReturn

Domestic wastewater, pre-treated in a septic tank, is pumped together with the treated production wastewater into integrated wastewa-ter treatment equipment in the comprehensive adjustment tank. The biochemical treatment system first passes through the anaerobicreaction tank to reduce the chemical oxygen demand (COD) of the wastewater while improving its biodegradability. The wastewater thenenters the aerobic tank for further removal of various pollutants. The effluent from the aerobic tank enters the secondary settling tank,where the supernatant is discharged to the sand filtration tank for further treatment before meeting discharge standards. The remainingsludge is sent to the sludge tank. The daily treatment capacity is 6-8m/d.

2930

In the context of the accelerated global carbon neutrality process, Suofeiya has proactively built a green logistics system driven by a"technology + ecology" dual approach. The company uses the customized home furnishing industry as a testing ground to createlow-carbon solutions that cover the entire supply chain.Given the industry characteristics of customized home furnishings, such as non-standard components and the exponential increase inwarehouse SKU complexity, it has become increasingly difficult to maintain the traditional logistics systems. The company upholds thecore concept of energy conservation and emission reduction, utilizing consolidated logistics methods to build a green logistics system.By promoting a "dry-warehouse-distribution" delivery model, the company aims to increase the utilization rate of unit transport resourc-es, thereby reducing energy consumption, cutting pollution, and contributing to the development of a green China.

Green Logistics

The company actively introduces an intelligent transportation management system to plan and optimize transportation routes precisely.The system analyzes real-time data such as order distribution and traffic conditions, reasonably arranges vehicle routes, improvesvehicle load rates, reduces empty mileage, and effectively lowers fuel consumption and exhaust emissions. Currently, the system hasbeen implemented across all factories.Through systematic logistics management, more refined resource allocation optimization has become possible, reducing the occupationrate of social logistics resources and leading the industry in green logistics development. At the same time, the transportation manage-ment system can collect and store a large amount of transportation data, such as transportation costs, transportation time, vehicleutilization, and customer satisfaction. By analyzing and mining these data, the company can better understand the operational status ofits transportation business, identify potential issues and optimization opportunities, and provide strong support for decision-making.

Intelligent Driving, Green Navigation

The manual way before going liveThe way of the system after the go-live

High communication costTransportation is not transparentBusiness is not standardized

Transportation VisualizationEfficiency ImprovementCustomer Satisfaction Improvement

Change

Difficulty in trackingcustomer waybill status

Increase full load rateata information system one flow

Logistics informationvisualizationAppointment online

Line back-propagation schedulingOffline car rentalLow full load rate

Telephone communication

Excel deliveryUnclear responsibilityCumbersome transportation

TMS System Route Planning

TMS System Advantages

Transportation Management System - Logistics Provider Operations

Scheduling of transportationroutes (multiple regions)Separate scheduling fordifferent routes

Route Planning Vehicle Reservation Vehicle Modification Schedule Confirmation

!

Suofeiya conducts full-process supervision and control throughout waste generation, managing theprocess from the source to reduce the production or discharge of solid waste and ensuring finalcompliant disposal. The company has established the Waste Standard Management System toensure that processes such as generation, warehousing, transfer, and disposal are legal andrule-compliant. It also implements source control classification, comprehensively utilizing waste withpotential value, achieving waste recycling and harmless disposal.The company has purchased organic solvent recovery devices to filter and reuse wastewatercontaining cleaning agents generated in the workshop.The company has changed the packaging of hot melt adhesives by coating the inner walls of the pack-aging iron drums with tin foil, reducing hazardous waste generation. The iron drums can be recycled.Hazardous waste generation in the cabinet body workshop has been reduced by more than 90%annually.

3 / Solid Waste

The company follows the relevant requirements of the Emisson Standard for Industrial Enterprises noiseat Boundary, thoroughly identifies noise sources and transmission paths, and studies various noisereduction solutions. The company blocks sound transmission paths through soundproofing and vibra-tion-damping measures to reduce the impact of production noise on human health and the surroundingenvironment. The company smartly adjusts energy consumption by introducing permanent magnetvariable frequency energy-saving vacuum pump systems. It maintains stable negative pressure,addressing the adverse effects of negative pressure fluctuations and flow attenuation caused by oldvacuum pumps on production processes.At the end of 2023, the Zhejiang factory became the first to use this technology on a large scale in thefifth-generation 4.0E production line. Data testing showed that compared to the old rotary vane pump atthe same power, the flow was increased by 1.8 times, energy consumption decreased by 17.8%, andnoise levels dropped from 90dB to below 80dB. The company is now promoting this technology acrossmajor production bases, contributing further to green management and environmental protection.

4 / Noise Control

Business irregularitiesOffline communicationNon-transparentinformation

Business standardizationOperation processspecificationLogistics managementspecification

Restriction of 48 hours signing,responsibility division

3132

In the customized home furnishing industry, the dry-warehouse-distributionshipping model offers multiple significant advantages. It effectively addresseschallenges in the logistics process (such as cost and operational quality) andhelps businesses enhance operational efficiency and market competitiveness.As the core component of the company's logistics, the dry-warehouse-distribu-tion model integrates trunk line transportation, warehousing, and distribution.This not only improves the operational quality of distributors, but also achievesthe company's cost reduction and efficiency enhancement goals.In the trunk line transportation segment, the company achieves economies ofscale by integrating logistics resources and fully utilizing the carrying capacityand volume of transport vehicles. Large trucks are used for long-distancetransportation, significantly reducing per-unit transport costs. In the warehous-ing segment, professional warehousing systems are employed for meticulousgoods management. From accurate records at the time of product entry andreasonable planning of storage locations to rapid sorting and distribution duringthe outbound process, efficient operations are achieved. In the distributionsegment, delivery routes and times are reasonably planned based on factorssuch as customer location and order requirements. Throughout the process,distributors can monitor the location and status of goods in real time, ensuringtimely delivery and improving customer satisfaction. By integrating the threemajor segments, the company connects the entire supply chain from productionto consumer terminals, reducing unnecessary logistics losses and promotinggreen and sustainable business development.

Suofeiya has always actively implemented the concept of green development,closely collaborating with logistics partners and strictly following green environ-mental protection principles, continuously optimizing the logistics model. In thefuture, the company will continue to play a leading role, working with logisticspartners to explore the infinite possibilities of green logistics, continuouslyenhancing the company's overall competitiveness, and contributing to achievinga beautiful vision for sustainable development.

Unlocking New Shipping Models, Building New Competitive Advantages

Shenyang Warehouse

“"11 Provinces, 23 Warehouses" Dry-Warehouse-Distribution Landscape

辽宁

浙江福建湖南贵州

四川

重庆

河南陕西

江苏

RESPONSIBLE

SUPPLYCHAIN

MANAGEMENT

3334

RESPONSIBLE

SUPPLYCHAIN

MANAGEMENT

Suofeiya has always integrated sustainable development and responsiblegovernance throughout the entire supply chain process. The company hasbuilt a transparent, safe, and low-carbon supply chain system through strictsystem design and innovative practices. In 2024, we further strengthenedour supplier management system, supplier ecosystem dynamic optimiza-tion, and sustainable supply chain innovation practices based on our alreadyrobust supply chain governance framework.

Suofeiya has established a comprehensive supplier evaluation system covering the entire process of "supplier entry - cooperation -evaluation - exit" and has outlined the following core policies:

Suofeiya has built a rigorous supplier access review system. In addition to assessing research and development management, produc-tion capacity & supply management and quality management, the company also evaluates suppliers from multiple perspectives, includ-ing environmental compliance, labor rights, and business ethics.Suppliers of key materials are required to meet environmental protection standards 100%. For the most important raw material—boardmaterials—priority is given to partners with certifications such as FSC and national-level green factory qualifications.As of 2024, Suofeiya has over 300 global cooperative suppliers, with strategic-level suppliers accounting for 20%. The company prioritiz-es cooperation with suppliers who have secured ISO 14001 Environmental Management System certification and FSC certification.

Supplier Chain Management System andPolicy Framework

Supplier Access Mechanism and SupplierEcosystem Dynamic Optimization

Green Procurement

To standardize corporate business activities, jointly prevent commercial bribery, and protect the legitimate rights of Suofeiya and itspartners, the company follows the principles of fairness, transparency, and notarization. This policy is implemented through restraint ofrules and contracts, technical controls, and an internal audit and supervision mechanism:

Quality Assurance Policy: The company implements the ISO 9001 quality management system and requires suppliers to providethird-party quality certifications (such as SGS test reports). A "Raw Material - Production - Finished Product" three-level qualityinspection mechanism is also implemented.

Supplier and procurement contractscover 100% of the agreements, withanti-bribery clauses embedded inprocurement contracts. Supplierspledge to prohibit any form of bribery,kickbacks, and illicit benefits transfer.

Anti-Bribery Policy and Compliance Management

Ouality Assurance Policy

Contractual Constraints

In research and development management, examine the supplier's investmentin R&D, team strength, and innovation achievements to assess their techno-logical competitiveness; In production capacity and supply management,evaluate production capacity, supply stability, and logistics and distributionprocesses; In quality management, review the supplier's quality system, controlprocesses, and previous quality data.Diverse Capability

Evaluation

In environmental compliance, check the supplier's adherence to environmentalregulations and energy-saving and emission-reduction measures; In laborrights, ensure that they comply with labor laws and protect employee rights; Inbusiness ethics, assess whether there are any improper business practicesand whether they operate with integrity.Social Responsibility

Evaluation

The company uses a digitalprocurement platform to enable theentire process of bidding, priceapproval, and contract signingonline, reducing human intervention.

A cross-departmental audit team is estab-lished to inspect the compliance of internalprocurement activities and processesregularly. Non-compliant activities must berectified within a specified period. Anindependent whistleblowing channel is setup, and anti-corruption training is conduct-ed regularly.

Supplier Access Mechanism

Driven by the wave of digitalization, Suofeiya actively embraces change and upgrades itssupply chain management using advanced technological means. The SRM system (Suppli-er Relationship Management System) plays a key role in achieving the digital managementof the entire process, including order flow, delivery information, and cash flow, as well asefficient business collaboration, injecting strong momentum into the company's supply chainoperations.

Digital Management

Technical Control

Internal Audit andSupervision Mechanism

Printed: 12/11/2024

Maggie Schwartz, Vice President, Program DevelopementSCS Global Services

does hereby certify that an independent audit has been completed and conformity to the applicablestandard(s) has been confirmed for:

Suofeiya Home Collection Co., Ltd.No. 2, Xianning Road, Guocun, Yongning Street, Zengcheng District, Guangzhou City, 511300, Guangdong, China

This single certificate covers the production of custom furniture, tables, beds,office furniture, institutional casework, wardrobes, cupboards and chests and tradeof tables, chairs, coffee tables, beds and sofa using the transfer system.The facility(s) are hereby Chain of Custody certified to sell products as:

FSC 100%, FSC MixThe assessment has been conducted by SCS Global Services in accordance with the protocols of the Forest StewardshipCouncil? A.C. (FSC?).FSC Standard: FSC-STD-40-004

Certificate Code: SCS-COC-701226

Trademark License Code: FSC-C211008

Valid from: 11/12/2024 Expiry date: 10/12/2029

This certificate itself does not constitute evidence that a particular product supplied by the certificate holder is FSC-certified (or FSC Controlled Wood where applicable). Products offered, shipped or sold by thecertificate holder can only be considered covered by the scope of this certificate when the required FSC claim is clearly stated on sales and delivery documents. The scope of this certificate is considered accurate onthe date of issuance. The current validity and scope, including the full list of products, shall be verified on http://info.fsc.org. The certificate shall remain the property of SCS, and this certificate and all copies orreproductions of this certificate shall be returned to SCS immediately upon request. Where a certificate covers more than one site, the covered products and processes/ activities are performed by the network ofParticipating Sites, and not necessarily by each of them.

Printed: 12/11/2024

Maggie Schwartz, Vice President, Program DevelopementSCS Global Services

2000 Powell Street, Ste. 600, Emeryville, CA 94608 USA

特此证明，已完成独立审核，并确认符合相关标准:

索菲亚家居股份有限公司

地址：广东省广州市增城区永宁街郭村仙宁路2号

该单场所证书范围涵盖了转换体系下的定制家具, 桌子, 床, 办公家具, 公共设施家具,衣柜, 碗柜和床头柜的生产和销售以及餐桌,椅子,茶几,床和沙发的贸易

该获证组织已获得产销监管链认证，可将以上产品销售为：

SCS Global Services 依据 Forest Stewardship Council ? A.C. (FSC ?) 的协议执行审核。依据FSC标准：FSC-STD-40-004 V3-1 ; FSC-STD-50-001 V2-1

证书编码: SCS-COC-701226商标许可码: FSC-C211008起始日: 2024 年 12 月 11 日 到期日: 2029 年 12 月 10 日

该证书不能视为证书持有者供应的特定产品已获得FSC（或适用的FSC受控木材）认证的证据。只有当销售和交付文件中明确规定FSC声明时，证书持有者提供、运输或销售的产品才能视为包含在认证范围内。认证范围在证书颁发时已得到确认。应在 http://info.fsc.org 网站上验证证书当前的有效性、范围及完整的产品清单。SCS保留对证书的所有权，证书及所有复印件或复制品应根据要求立即归还SCS。证书若涵盖多个场所，产品和加工/活动可在参与场所网络进行，而非必须在每个场所进行。此版本为英文原版的翻译，如有疑问，请以英文原版证书为准。

3738

Collection of potentialsupplier information

Supplier Admission and Evaluation SystemThe company conducts annual supplier grading assessments, and suppliers with poor performance are placed on the corrective actionlist. If they fail to meet standards after correction, cooperation would be terminated. Through a process of natural selection, the companydynamically optimizes and improves the overall level of its suppliers.

Dynamic Optimization of Supplier Ecosystem

Suppliers are assessed annually in various areas, including product quality,on-time delivery rate, and environmental performance. The assessmentresults are categorized into four levels: excellent, good, qualified, and unquali-fied. Excellent suppliers are rewarded, encouraging them to proactivelyimprove their overall performance.Regular AssessmentMechanism

Unqualified suppliers are placed on the corrective action list, and the companyassists in developing a corrective plan and monitors progress. If they still fail tomeet standards after rectification, cooperation would be terminated.Rectification andElimination Mechanism

high-quality supplier resources areincluded into the Company's ERP

system's "Potential Supplier

Database"

Product identification

report

comprehensive testing and evaluation ofsupplier samples based on processesand product standards, includingphysical and chemical properties,functionality, and product surface

Transparent procurementincorporating the Integrity Agreement intocontracts with suppliers, and upholding a soundbusiness environment and mutual legal rightsand interests with collaboration andsupervision from the Audit Department,Supervision Department,and the supply chain

Order placementplacing orders according to plans,with suppliers responsible for stockpreparation, delivery, payment, andonline security inventorymonitoring

Supplier performanceassessment (quality control)assessment of suppliers based on factors such

as on-time delivery, product quality, service,

and pricing, fostering deeper cooperationwith high-quality suppliers whileaddressing deficiencies through

cooperation, improvement,

or elimination

Transition to "qualified

suppliers"

qualified product identification leads totransition to "qualified suppliers", wherecontracts are signed confirming productstandards, pricing, cooperationmodels, payment cycles, etc.,ensuring mutualinterests

Supplier investigation/on-site (admission), evaluatioon-site audits of supplier products, qualitycontrol, production capacity,management systems, etc, leadingto the formation of a SupplierOn-site Review Report

Transition to "alternative

suppliers"potential suppliers meeting thestandards are transitioned to"alternative suppliers"in the ERP system

3940

In 2024, the company fully implemented the aluminum frame door packaging material innovationplan. By establishing a heat shrink film packaging process standard system, the companyachieved a 100% transition from paper to plastic for aluminum frame door product packagingmaterials. According to a Life Cycle Assessment (LCA), this innovative measure is expected toreduce corrugated cardboard consumption by 170,000 square meters annually, which keepsapproximately 3,400 mature trees from being felled. The packaging weight is slashed by morethan 90%, facilitating carbon emission reduction during transportation. Additionally, the recyclingand reuse rate of the heat shrink film packaging materials reaches up to 90%.

Sustainable Supply ChainInnovation PracticesGreen Packaging System Upgrade

In 2024, while maintaining product quality and enhancing aesthetic appeal, the company achieved a reduction of 136 tons in edge band-ing material consumption throughout the year through optimization of edge banding technology and innovative lightweight design of edgebanding materials.

Edge Banding Material Lightweight Innovation Design

Suofeiya, in strategic collaboration with core equipment and material suppliers, has innovatively developed and promoted the "PowderElectrostatic Spray Particleboard Door Panel," which replaces 90% of traditional painted door panels. This technology achieves zeroVOC emissions throughout the production process, completely eliminating volatile organic compound (VOC) pollution. Additionally, byoptimizing the process, the carbon footprint of each product is reduced by over 50% compared to traditional methods, making it a bench-mark case for the industry's low-carbon transformation.

Emission Reduction and Low Carbon Technology Innovation

We have established long-term partnerships with suppliers that excel in sustainable development and social responsibility practices.These include hardware suppliers such as Austria BLUM and Austria HETTICH, decorative paper suppliers like Germany Schattdecor,and panel suppliers such as Fenglin Group and Wanhua Hexiang Group.

Suofeiya uses its industry-leading Industry 4.0 full-link digital governance as the cornerstone, driving sustainable industry developmentthrough innovation and collaboration. Through systemic and digital governance, ecological collaboration, and value co-creation strate-gies, Suofeiya leads and promotes the construction of a compliant, transparent, and sustainable supply chain ecosystem and gover-nance system. The company is gradually achieving penetrative management of supplier carbon data, driving ecological chain partnersto co-create a "zero-carbon blueprint" for the home furnishing industry. By reshaping the industry’s circular economy paradigmthrough a business-ecology value symbiosis, Suofeiya is moving toward a net-zero value chain goal, offering solutions for the globalsustainable home transformation.

Supply Chain Social Responsibility Linkage

In 2024, the company’s panel procurement contributed to green environ-

mental protection and carbon sequestration efforts.

Total Carbon SequestrationTotal Production Carbon Emissions

Net Carbon Benefit

Indicators

785,500 tons COe102,100 tons COe683,400 tons COe

Particleboard

88,100 tons COe15,800 tons COe72,300 tons COe

MDF (Medium Density Fiberboard)

Packaging for Aluminum

Frame Doors

Before ChangeAfter Change

4142

QUALITY

INNOVATION

As a leading company in China's customized home furnishing industry, Suofeiya continues toiterate and upgrade various standards in response to increasing market competition, consis-tently regulating itself with stricter requirements. In 2024, the company released and imple-mented two major standards: the Childcare and Infant Living Environment Safety ControlSpecifications (referred to as the "Infant and Toddler Standard") and Custom WoodenCabinet Core Indicator Quality Grading (referred to as the "Super One-Level Quality Stan-dard"). These upgrades focus on solving consumer pain points, rebuilding market trust andcustomer loyalty, and further enhancing market competitiveness.

Standard Iteration LeadingIndustry Upgrades

Technological innovation is the fundamental driving force behind high-quality development. Since its founding, Suofeiya has alwaysplaced high emphasis on innovative development, constantly breaking through industry technological bottlenecks, growing into acompany with a worth of more than 10 billions, and driving the development of China's customized home furnishing industry with thepower of innovation.

Technological Innovation LeadingIndustry Transformation

In July 2024, Suofeiya's "Beautiful Lifestyle 2.0" was launched, along with the release of the"Childcare and Infant Living Environment Safety Control Specifications." The formaldehydeemission limit defined in the Infant and Toddler Standard, which is 24H+ ≤ 0.020mg/m, ismuch better than the highest level of the new national standard (ENF level). The formalde-hyde release limit is 20% lower than the ENF level, making it extremely strict. Monthlyenvironmental testing data shows that Suofeiya's Kang-Chun-Ban products not onlyrelease formaldehyde levels far below the new national standard ENF level, but alsocomfortably within the standard set in the Infant and Toddler Standard. This illustratesSuofeiya's commitment to its own strict environmental protection standards.

The first batch of entities awarded with the"Infant and Toddler Health Care ProjectRecommended Product" certificate by theNational Infant and Toddler Network.

"Infant and Toddler Standard" SupportingIndustry Environmental Upgrades

In September 2024, Suofeiya launched the "Super One-Level Quality Standard" in response to consumers' shifting demands from basicfunctionality to a dual focus on environmental protection and high quality. The company also addressed the issues of market disparityand information asymmetry. This new standard introduces 12 stringent core quality indicators across three dimensions—environmentalprotection, durability, and hardware—precisely addressing the pain points of "too many standards, messy information, and difficulty indecision-making." It provides consumers with a more comprehensive, systematic, and scientific guide to home furnishing purchases,ensuring they enjoy superior quality. This important initiative not only restructured the comprehensive quality evaluation system, but alsorectified the market's long-standing focus on environmental protection of materials while neglecting overall quality, shattering thepractice of single-dimensional competition.

"Super One-Level Quality Standard" Refreshesthe Industry's "Quality Concept"

Secured Child Safe Product Certification, becoming the firstcompany in the industry to gain seven major domestic andinternational authoritative recognitions.

2022

Launched the industry-first "Infant and Toddler EnvironmentalProtection Standard" and "Super One-Level Quality Standard,"raising the market competitiveness with even higher standards.2024

Suofeiya's formaldehyde-free Kang-Chun-Ban earned threeadditional international environmental certifications, becomingthe first company in the industry to receive five major interna-tional environmental recognitions

2020

Officially launched the formaldehyde-free Kang-Chun-Ban

2016

Suofeiya was one of the first in the industry to secure theTen-Ring Certification

2007

Two new national standards for engineered wood products,drafted by Suofeiya, were officially implemented on October 1st.Suofeiya's Kang-Chun-Ban was recognized as a green productby the National Infant and Toddler Network

2021

Suofeiya's formaldehyde-free Kang-Chun-Ban was the first inthe industry to receive the NAF (No Added Formaldehyde)Exemption Certification from the U.S. Environmental ProtectionAgency (EPA) and passed multiple tests by SGS Switzerland

2019

Successfully developed the formaldehyde-free Kang-Chun-Banwith stable quality and formulated the product standards

2015

The "Kang-Chun-Ban Whole Home" underwent an environmen-tal upgrade, and Suofeiya, in collaboration with upstream anddownstream suppliers, established the "Kang-Chun-Ban WholeHome" Environmental Alliance. This alliance set entrance thresh-olds for whole-house products based on environmental require-ments much higher than national standards, creating an entireenvironmental ecosystem for whole-house products

2023

Eighteen Years of Environmental Innovation and Upgrades (2007-2024)

4546

Adhering to Process and Technology R&D to Build Competitive Strength

According to market research, consumers have a strong demand for high-end powder-coat-ed products, but the price barrier has limited their universal presence. The company, startingfrom the market pain points, boldly proposed an innovative solution using particleboard as thebase material, making the product more price-competitive.During the R&D process, several innovations and breakthroughs were achieved—strictlycontrolling the ratio of glue and fillers, accurately adjusting production parameters such astemperature, pressure, and moisture content to ensure the base material's surface achievesthe optimal smoothness; to enhance quality and aesthetics, the engineering team experi-mented with various edge banding materials, including paper, PVC, PP, and natural woodveneer, evaluating their performance, cost, and appearance, ultimately selecting paper edgebanding; for surface coating, precise control of coating equipment parameters and paintformulations was implemented to ensure uniform and stable application, resulting in a delicateand smooth surface; the use of 69-inch powder-coated particleboard was increased, improv-ing board utilization by 6% to 9%, optimizing resource allocation; in terms of environmentalprotection, zero-VOC emission powder coatings were adopted, aligning with the company'scommitment to sustainable development.

The company has launched a modular product promotion project for categories such ascabinets, whole-house combination wall panels, and Milanna wardrobes under the full brandmatrix. The goal is to further improve product quality and delivery efficiency through standard-ized design and regulated production processes.The project includes solutions such as the "standard unit cabinet + modular unit cabinet +non-standard unit cabinet or panel adjustment" for cabinets, the "one-click drag-out largecombination" and "self-assembled small combination" solutions for whole-house combinationwall panels, and the "unit cabinet + functional component package" standard structural unit forMilanna wardrobes as a pilot.

Powder Coating Process R&D to Meet Consumer Demand

Standardization is the key to Suofeiya's efficient operations, enhancing product stability andcompetitiveness. We always maintain a user-centered approach, embedding standardizationthroughout the entire product development process.Standardized Modular R&D to Improve Product Delivery Efficiency

Particleboard Handle-Free PowderCoating Process Details

Wardrobe StructureStandardization Solutions

Standard UniversalStructureTemplate Units

Configured asNeededComponents

MultipleSolutionsFinished Products+＝

The IPD system reform has significantly improved the company's product research and development, organizational management, andsupply chain collaboration.

Apply the strategic "Five Looks andThree Determinations" methodology,deeply explore the customer's "corevalue" and "core demands" with userdemand value at the center, shapinga whole-house lifestyle.

1.Innovation & Transformation Driven by the IPD System

Brand Product Planning

Concept and planning phase → Product development phase →Market preparation phase → Product launch phase

Concept and Plan

Focus on the performance afterproduct launch, maintaincontinuous operation to achievecommercial success.

LifecycleProduct launchpreparation

Publish

Development

Jointly conduct business argumentation anddevelopment evaluation for the top application.

Charter Development

Through the IPD system reform, Suofeiya optimized its product development process, strengthened process structuring, and enabledparallel development across functional areas. Under the IPD model, the product development process change rate dropped to 0.4%, andthe overall cycle from product planning to development launch was shortened by 34%- 52%. The product development cycle wasreduced by 39%- 79%, achieving the goal of focused and efficient output.

Process and Efficiency Innovation

The IPD system also played a crucial role in cost control. The average development cost of surface materials was reduced by 10%,effectively achieving the cost reduction target. At the same time, the product quality significantly improved, with complaints about newproducts decreasing by 16% year-over-year and the error rate for new product samples decreasing by 24% year-over-year. Theproduct change rate was reduced from 13.4% to 0.4%, significantly enhancing product quality stability. This improved consumer satis-faction and reduced after-sales costs, enhancing the brand image.

Cost and Quality Innovation

The IPD system encourages early multi-functional involvement in decision-making, and cross-department teams operate in a strongmatrix model. By establishing quality planning and review mechanisms, potential issues, risks, resource inputs, and correspondingsolutions are identified early, ensuring the scientific nature of decisions. In supply chain management, the company reduced informationasymmetry starting from demand, improving supply chain efficiency. It emphasized collaboration across supply chain stages, promotingcoordination through information sharing and synchronized decision-making.

Forecasting and Collaboration Innovation

4748

The standardized structure ensures unified and stable design, reduces errors, and guarantees delivery quality. This initiative has broughthigher efficiency and quality assurance to product design and production.

In the manufacturing process of panel furniture, the edge banding process directly affects the product's appearance, durability, andoverall quality. Traditional edge banding inspection primarily relies on manual labor, which is inefficient and susceptible to human error,leading to misjudgement and missed inspections.The visual inspection system, on the other hand, replaces the human eye with industrial camer-as, performing complex tasks such as identification, measurement, and positioning through anintelligent system. The company combines the demands of the edge banding process with visualinspection technology to accurately identify various defects in the edge banding process, suchas edge chipping, corner loss, adhesive failure, glue lines, short bands, scraping marks, andmore. Using high-precision image acquisition and processing technology, the system achievescomprehensive monitoring of edge banding quality, ensuring that every product meets qualitystandards.

Edge Banding Visual Inspection System, Achieving "Smart Eyes" in Intelligent Manufacturing

ProductStandardization

Material Configuration

Standardization

Structural TechnologyStandardization

Production Technology

Standardization

IntelligentAutomation

Efficient Production Implementation Path

Transformation of InnovativeR&D Achievements, ContinuouslyStimulating Innovation Vitality

In March 2024, the "14th Five-Year" National Key R&D Plan project, "Key Technolo-gies for Smart Manufacturing of Forest Products Based on Digital Collaboration",held its launch meeting in Zengcheng, Guangzhou. This project is led by Suofeiyaand jointly undertaken by 10 leading research institutions, universities, and indus-try-leading enterprises, including the Research Institute of Wood Industry of theChinese Academy of Forestry, Nanjing Forestry University, Central South ForestryUniversity, Southwest Forestry University, among others. As the leading entity ofthe project, Suofeiya was approved for this national key R&D project, making it theonly one in the industry led by an enterprise.

Leading the "14th Five-Year" National Key R&DProject, Supporting Talent Cultivation

On October 17, 2024, the CPC Guangdong Provincial Committee and Guangdong ProvincialGovernment held the Guangdong Province Science and Technology Award Ceremony andProvincial Science and Technology Innovation Conference in Guangzhou, announcing thewinners of the 2023 Guangdong Provincial Science and Technology Awards. The project "KeyTechnologies and Industrialization of Mass Customized Personalized Panel Furniture SmartManufacturing", led by Suofeiya, took the lead in the custom home furnishing industry and wonFirst Prize of the 2023 Guangdong Provincial Science and Technology Progress Award. Thisis the highest honor for scientific achievements in the province and positions the company atthe forefront of high-quality development in the custom home furnishing industry.Innovation knows no boundaries. In this era of rapid intelligent transformation, Suo-feiya continues to accelerate the cultivation of new economic growth drivers throughsustained technological innovation, providing customers with higher-quality prod-ucts and solutions, and maintaining its vitality.

Awarded First Prize in Guangdong ProvinceScience and Technology Progress, Stimulatingthe Company's Innovation Vitality

Invention Patents

Utility Model Patents

Design Patents

Technology Awards:

Appraisal of Achieve-ments

Invention Patents

Industry Standard

Group Standard

Published Papers:

papersRegistered SoftwareCopyrights:

PatentsStandard

AchievementAwards

Soft copies oftheses anddissertations

4950

服务升级

SERVICE

UPGRADES

To implement the core strategy of "Customer-Centered," in March 2024, the company released the Suofeiya Service Guidelines, cover-ing the entire business process from sales, design, production, distribution, and installation to after-sales service. The guidelines include84 standardized service regulations, aiming to shift service issues from "passive resolution" to "active prevention." The purpose of theseguidelines is to:

In 2024, 102 service-related training sessions were held around China, covering the three major areasof design (55 sessions), installation (40 sessions), and operations (7 sessions). A total of 6,428 partici-pants attended, with 100% coverage of key positions.

Service Guidelines Leading the ContinuousDevelopment of Industry Service Standards

The general provisions clarify the purpose andobjectives of the service guidelines, with a focuson the service relay race based on customertheory and the service philosophy of regionalautonomy. They provide clear guidance for theother six chapters.The sales section requires that whenreceiving customers, not only should sales beconducted in compliance with the law and withclear pricing, but also that a strong serviceawareness should be demonstrated, ensuringcustomers feel our professionalism andenthusiasm.The design section provides comprehensive anddetailed requirements, enhancing design skills andabilities from four dimensions: product appear-ance, details, current use, and future use. Thegoal is to ensure that a satisfactory design solutionis provided to customers.

Enhance the end customerexperience and strengthenbrand trust;

Optimize dealer operationalefficiency and reduceservice costs;

Promote the efficient utilization ofcompany resources to supportsustainable business development.

General Provisions

The after-sales section provides full protectionfor customer rights, requiring timely responsesfrom after-sales staff, high-quality homefurnishing management services, and enhancedcustomer satisfaction.

After-Sales Section

The installation section focuses on customerexperience, standardizing the behavior ofinstallation and delivery personnel to ensureefficient and high-quality installation services.

Installation Section

The logistics section clarifies the responsibili-ties and behavior standards for the deliveryprocess, ensuring on-time delivery,standardized operations, and enhancingcustomer satisfaction.

Logistics Section

The production section emphasizes strictcontrol over product quality, details, and ordercompleteness ratio, ensuring that both dealersand customers receive a high-quality serviceexperience.

Production Section

Sales Section

Design Section

Established ServiceCenter

ImplementedCSI/DSI Assessment

Upgraded CSI/DSI

Assessment

Published Operational

Guidance Textbooks

New Service Approach,

Effortlessly Managing

the Entire Home

Sales Expand Market Shares,Service Secures the Foundation

Released the "Suofeiya Super

6+1 Service" Standard

2018Proposed making service suofei-ya's core competitive advantage

2019

Launched mini-program, and estab-lished regional advisory teams

2020Created a service TikTok account,and introduced the French-styleCabinet Butler service

2021

Promoted the Cabinet Butlerassessment

2022Unified service personnel VIimage, launched "One WechatGroup for Each Customer" andservice mini-program, andpromoted "As Far As Possible"service

2023Promoted dealer responsi-bility review and assess-ment, and launched ServiceProvider System 1.0

2024Released and trained on serviceguidelines, advanced full-catego-ry CSI/DSI assessment, one-stopcustomer service, and promotedrepeat purchase recommendationprojects

Note: CSI Consumer Service Index System; DSI Dealer Service Index System

For 10 Consecutive Years, National Installation Competition Held, ContinuouslyAdvancing Design, Installation, Operations, and Training...

5354

Smart Service Upgrades for Full-Chain Efficiency

Full-Process Relay Service Collaboration

Based on the order category progress and installation team skill levels, the system manages scheduling for 10 major product categories,including wardrobes, cabinets, and more. The "one door-visit + flexible disassembly" model shortens the construction cycle, improvesthe completion ratio of the first visit, and effectively reduces the customer's time cost.

Deepen the "Suofeiya Super 6+1 Service" standard, converting six major stages—sales, design, production, etc.—into relay nodes thatcan be quantified and assessed. Establish a supervision mechanism for handover processes (e.g., the installation team checks thedesign team's product design standards, and the supervision team checks the installation team's standards).

An installation service real-time feedback mechanism has been established, with feedbackdata directly linked to the "Customer Voice" platform. A positive cycle is formed by visualizingservice cases through property location mapping: customer supervision → team improve-ment → service optimization.

Service Process Standard Management

Implement a pre-service demand mechanism, embedding service pain point solutions on transportation, installation, after-sales, andother aspects into the R&D phase. Through the IPD integrated development strategy, enhance product-service compatibility and reduceafter-sales repair rates.

Customer Lifecycle Management

Intelligent Scheduling System Optimization

Establishment of Service IndicatorMeteorological Station

A service data model for dealers is established (based on scale and region), enabling real-timevisualization of CSI rankings within the same level. Grouping and ranking dealers of similarscales drive healthy competition within groups and encourage communication and mutuallearning between dealers.

Graded Dynamic Assessment

Creating a high-quality serviceassessment systemTo implement the company's "multi-brand, full-category, omnichannel" development strategy and respond to the demands of "customerforemost" and "leaving the difficulties to ourselves and the convenience to our dealers," Suofeiya has developed a one-stop servicesystem to address the pain points of dealers dealing with multiple touchpoints across product categories. This system effectivelyenhances both customer and dealer experiences and satisfaction.

The one-stop service resolves the pain points of dealers dealingwith multiple touchpoints across all product categories, reducingdealer operational costs, improving service efficiency, and effec-tively enhancing customer satisfaction and happiness, therebyreducing the effort required by dealers in coordinating with multipledepartments.For Dealers

For Factories

Increases the stickiness with dealers with a more comprehensivedata collection dimension. The support provided to dealers is moretargeted and comprehensive. After implementing the project,dealer satisfaction with the one-stop customer service continuesto rise.

The dealer data hub is opened, integrating trend tracking of five core indicators, includingcustomer satisfaction and complaint rate. The cost attribution model identifies the serviceweakness points for rectification and improvement. Based on the data, the headquartersservice center develops empowerment measures to reduce dealers' annual service costs.

Data Diagnostics of Service StatusCustomer Feedback Closed-Loop Management

Customer TheoryCustomized home furnishing servicesare a relay race.

After-Sales

Delivery

Installation

Sales

Production

Design

Service satisfaction scoreof 4.68 (target value: 4.5)

Satisfaction rate of 97.99%

(target value: 96%)

5556

Service Skill Training Implementation

To enhance the skill level of installation and delivery professionals nationwide and lead the industry in valuing the cultivation of skilledtalent and improving service standards, Suofeiya has held the National Installation and Delivery Professional Skills Competition for tenconsecutive years. The company organizes regional competitions at different levels, encouraging nationwide installation and deliveryprofessionals to improve their skills through competition, thus enhancing their professional expertise.

At the same time, the company regularly holds specialized training sessions titled "Sales Expand Market Shares, Service Secures theFoundation", with seven training sessions having been launched across the company's seven major production bases, covering 1,082participants. The training involves key positions such as owners, project managers, installation directors, design directors, and marketingdirectors. Through systematic learning, the training enhances the service capabilities of various positions.

5758

JOINT

GROWTH

In the face of economic fluctuations and market uncertainties, the value of talent has become increasingly prominent. Suofeiya hasimplemented a series of measures to promote talent development and seek breakthroughs. In an environment where talent is prioritized,the company ensures alignment across all levels, with shared values and a collective mindset, working together towards common goals.

AAA-level Harmonious Labor Relations Enterprise

Suofeiya strictly adheres to relevant laws and regulations in the People's Republic of China, including the Labor Law of the PRC, theLabor Contract Law of the PRC, the Regulations on the Implementation of the Labor Contract Law of the PRC, and the Social SecurityLaw of the PRC, to lawfully protect employees' rights and interests.The company standardizes labor contract management by signing labor contracts with employees in accordance with the law, achievinga 100% labor contract signing rate. The signing and renewal processes are standardized. The company legally prohibits the employmentof child labor and continuously improves the company's labor management system. It also complies with labor protection departmentrequirements to standardize labor employment practices and safeguard the legitimate rights of both employees and the company.The company strictly implements national regulations on social insurance, making full monthly payments for social insurance and hous-ing provident fund, ensuring that employees can timely enjoy relevant benefits.

Employee Benefits ProtectionCompliance with Labor Relation Regulations

Suofeiya has established a standardized yet flexible organizational structure and a diverse talent pool. The workforce includes compre-hensive management talents whose careers developed from the production line, as well as professionals with advanced managementconcepts in specialized fields. The company focuses on meeting the needs of its continuous and rapid development, aiming to build ahealthy, harmonious, and equal employee employment system.Suofeiya resolutely opposes discrimination based on gender, region, religion, or other factors and strictly prohibits the employment ofchild labor and forced labor. The company promotes equal pay for equal work for both men and women, along with a human-centeredlabor policy, creating a work environment of mutual respect, inclusion, and close camaraderie. This continuous effort enhances employ-ees' sense of happiness and satisfaction.Total number of employees during the reporting period: 12,901

Harmonious and Equal Employment Relationships

Benefits

Annual LeaveParental leave

Marriage Leave

Paternity Leave Factory Leave

Maternity Leave

Breastfeeding Leave

Holidays

Pension

MedicalInsurance

AnnualTravel

UnemploymentInsurance

EmployeeDormitoriesWork InjuryInsurance

EmployeeCafeteria

MaternityInsurance

Housing ProvidentFundAccidental Injury Insurance,

Employee HealthCheck-Ups

60.60%

17.15%13.04%

1.30%

4.47%

3.43%

ProductionStaff

Master'sDegreeand AboveBachelor'sDegreeAssociateDegree

Female

Management

StaffAdministrative

Staff

31-40Male

High Schooland BelowFinance StaffTechnical Staff

Sales Staff

51 and Above

41-5030 and Below

Professional Composition

Category

Age Distribution

Education LevelCategory

57.53%

22.83%

18.70%

0.95%

Gender Distribution

50.49%

30.06%

16.40%

3.05%

71.79%

28.21%

AAAA-level Harmonious Labor Relations Enterprise

6162

A Deeper Focus on Whole-House Talent Development

Suofeiya has established the Remuneration Management Measures for employees, setting up competitive remuneration standards anda reasonable incentive mechanism. Based on safeguarding employee rights, the company fully motivates employees, stimulates theirpotential, and maintains the internal driving force for the organization's continuous development. The company clearly defines its valuedistribution orientation, effectively aligning personal development with corporate growth. It has created a competitive remunerationsystem that attracts, motivates, and retains talents.

Suofeiya focuses on "Strategy-Driven, Technology-Enabled, and Talent-Driven" as its core approach. In 2024, based on the full lifecy-cle talent development system, the company further promotes the "AI + Talent" model and deepens the "Business + Talent" developmentstrategy. This fosters the deep collaboration between talent development and business goals. Under the talent development strategy,the company has established different training and development paths for various employee groups based on their levels and needs.

In the new generation era, focusing onintergenerationalleadership and stimulating employees' energy and vitality. At the same time, thecompany taps employees' potential and strengths, empowering their career planning. The company enhances office efficiency by integrating AI tools, thereby improving the breadth and depth of talent development and training. Addition-ally, the company leverages "Online Learning Platform - Talent Development Academy" and "Internal and External Online Learning Resources" to improve training efficiency.

Launch of Advanced Training Program

In 2024, the company, in collaboration with Renmin University of China,launched the "Renmin Business School & Suofeiya CMO Advanced Train-ing Program." The CMO Advanced Training Program was carefullyplanned by integrating the deep academic foundation of Renmin Universi-ty's renowned professors and advanced marketing methodologies fromboth domestic and international sources. This training program allowsteam members to enhance their ability to cope with market volatilitythrough systematic learning and practical application, collectively buildingthe company's sustainable growth capacity to better address marketchallenges.

Each department determines salary based on job responsibilities, following the principles of value, market standards, performance, anddiversity. The salary is comprehensively considered based on factors such as delivery, responsibility, and efficiency. Quantifiable andassessable indicators are established based on work quantity, quality, efficiency, and economic value, reflecting the principle of fairdistribution based on labor and rewarding higher contributions. This motivates employees to improve work efficiency and creates awin-win situation for both the company and its employees.

Incentive System

Employee Growth

ManagementDevelopment

Division/Intermediate Talent Development Map

Empowerment of Talent Development Systems for Each Division +

Business Support Empowerment

OutstandingTalent/Senior

ManagersHuangpu/Executives

ExcellentTalent/NewlyPromotedManagersSupervisor/ReserveBasic Staff

General Competence for FrontlineEmployees - Super Individual

Digital Learning Platform: External Learning Platform Renting + Internal Easy Learning Platform Development

Education and Training Mechanism: "Employee Training Management Measures" +

"Internal Trainer Management Measures"

Campus Recruitment Training

Supporting Strategic Development,Strengthening Management Foundations, Building a Learning Organization

ClearThinking

ClearCommunication

EffectiveExecution

HappyCollaborationEfficiencyActivationPotential ActivationEnergy Activation

InternalCertification

EfficiencyImprovement

WorkshopTeamIntegrationWorkshopCommitmentEnhancementWorkshopMarketing BasicManagementTraining

CustomerService SkillEnhancementTraining

Frontline TeamLeaderTraining SystemChiefMarketingOfficer (CMO)

ProfessionalTrainers(Advanced)SeniorTrainers(IntermediateTraineeTrainers(Beginner)

TalentStandards

Evaluation

System

TalentInventory

Talent Pool(Echelon)

TrainingSystem

Career Path

Evaluation dimensions

evaluation toolsevaluation methods

Competency modeljob qualifications

Nine-box grid talent review meetingstalent map

Learning mapknowledge extraction techniquescombining training and practical experience,

mentorship system rotation system

Career development path dual-channel pathTalent pool constructionhigh-potential talent poolsuccession planning

Instruments for Suofeiya Talent Development System Implementation

Stage 1:

Understandthe Team

Stage 2:

Integrate intothe Team

Stage 3:

PerformanceBenchmark-ing

Stage 4:

BuildStrengths

Quality CenterNingji Intelligent SystemSmart HomeIDC CenterResearch InstituteNew Retail CenterService CenterManufacturing CenterOverseas DivisionEngineering DivisionSuofeiya Whole HomeDirect Retail Division

Qualification CertificationPublic Courses

Mentorship System

External Learning

Schmidt Retail BusinessDivisionHuahe Retail BusinessDivision

Human ResourceMechanism Guarantee

PromotionMechanism

RotationMechanism

Mentormechanism

AppraisalMechanism

6364

To show care for female employees, the company ensures maternity leave, breastfeedingleave, and other rights for female employees, and has established a mother-and-baby roomin office areas. The company organizes various cultural, entertainment, and sports activitiesfor female employees to enrich their leisure time. On International Women's Day, the compa-ny and its regional subsidiaries carefully plan warm holiday activities, offering holiday benefitsto all female employees. Moving forward, the company will continue to focus on the needs offemale employees and support each individual in achieving better development.

Care for Female Employees

Employee Activities

During the New Year holiday, coinciding with thecompany's relocation to a new office, the companyprepared a delightful tea break, relocation-themedgames, and gifts for employees. The event washeld in a warm atmosphere, where everyonecelebrated the move together, and the scene wasoverwhelmed with liveliness and joyfulness.

New Year's Eve Event

Team Building

Birthday Parties

Employee Tourism

The company carefully organized the music festivalto create a dedicated stage for employees, allowingthem to fully unleash their passion, showcase theirinterests, and display their talents.

Golden Autumn Music Festival

To promote the concept of a healthy lifestyle and happy work, and to helpemployees maintain a strong physique and vibrant spirit, the companyregularly organizes sports and cultural activities for employees.Sports and Culture Festival

6566

SOCIAL

RESPONSIBILITY

Suofeiya makes in-depth efforts to implement the "Healthy China 2030" strategic plan, fulfilling its social responsibility and assisting increating a more friendly and healthy medical service environment. To date, the company has partnered with multiple urban operators andactively participated in public welfare projects aimed at creating healthcare-friendly environments in national children's medical centers,maternal and child health hospitals, community hospitals, and other medical institutions at various levels. These initiatives have coveredregions including the Yangtze River Delta, Pearl River Delta, and Central China.The project includes institutions such as Shanghai Children's Medical Center, Shanghai Fudan University Affiliated Pediatric Hospital,Zhejiang Provincial Maternal and Child Health Hospital, Wuhan University Zhongnan Hospital, Wuhan University People's Hospital,Jiangsu Provincial Maternal and Child Health, Shenzhen Maternal and Child Health Hospital, Xiangyang Central Hospital in Hubei Prov-ince, Wuhan Union Hospital Pediatric Hematology Department, Nanjing Children's Hospital, and Haizhu District Maternal and ChildHealth Hospital in Guangzhou, among others. The project uses environment-friendly ENF-grade Kang-Chun-Ban, providing patientsand medical staff with an eco-friendly, healthy, and safe environment for treatment and work, supporting national efforts to improvehealthcare infrastructure. Recently, Suofeiya was awarded the "Guangzhou Women and Children Charity Model" by the GuangzhouWomen and Children Welfare Association.Looking ahead, Suofeiya will adhere to the concept of sustainable development and support the growth of more medical institutionsthrough donations and other means. The company will further expand the coverage of its public welfare projects, continuously fulfillingits commitment to society.

Actively Fulfilling Social Responsibility andFacilitating the Development of a FriendlyHealthcare Environment.

"A strong youth means a strong China." Following the National Action Plan for Youth andStudents' Reading issued in 2023 by the Ministry of Education, the Publicity Department ofthe CPC Central Committee, and other eight departments, which focuses on "deeply promot-ing all-people reading and building a China with reading ethos," Suofeiya officially launchedthe "Suofeiya Children's Book House" public welfare project. Through this initiative, thecompany actively contributes to building " campuses with reading ethos" by creating comfort-able and environment-friendly reading environments. The project aims to foster a joyfulreading atmosphere, encouraging enjoyment of and participation in reading, and effectivelyigniting children's interest in reading.From Wuhan in Hubei to Haikou in Hainan, from Liuzhou in Guangxi to Liangshan in Sichuan,and further to Shangluo in Shaanxi, Ji’ning in Shandong, Taiyuan in Shanxi, Huizhou inGuangdong, Zunyi in Guizhou, Lu'an in Anhui, and Puyang in Henan, Suofeiya has travelledthrough mountains, rivers and rural towns, bringing hope to thousands of children in remoteareas—by setting up new libraries and donating a large number of books.So far, "Children's Book Houses" have been established and are now in operation acrossvarious regions nationwide, with a total of over 30 Children Book Houses benefiting 20,000teachers and students. These libraries are lighting up a nationwide reading map in cities likeBeijing, Hangzhou, Shanghai, Wuhan, Shenzhen, Changsha, Harbin, Guiyang, Zunyi,Baoding, Huizhou, Chengde, Zhaoqing, Lu'an, Puyang, Yichang, Huangshi, Xinxiang,Ji’ning, Ganzhou, Fuyang, Jiande, Lanzhou and more. Suofeiya's Children's Book Housenot only provides children with an environment-friendly, safe, and comfortable readingenvironment, but also aims to plant the seeds of reading and love in their hearts. In the future,the "Children's Book House" will be available in more cities. By focusing on future educationin rural areas and contributing to rural revitalization, Suofeiya will continue to deliver sustain-able corporate values to society as part of its unwavering commitment.The company has been aware of universal scarcity of reading resources among rural children. According to the 2022 Survey on theReading Conditions of Rural Primary Schools in China, the average extracurricular reading volume per rural primary school student isonly 3.27 books, less than one-third of the national average. The reading spaces must meet the requirements of a comfortable environ-ment, healthy and environment-friendly materials, natural and harmonious designs, and durable quality.Suofeiya has taken proactive action by mobilizing its nationwide dealer resources and leveraging the "Happy Homes" Village and Com-munity Mutual Aid Project initiated by the China Charity Federation. This initiative of Children’s Book House, jointly launched by SuofeiyaHome Collection, the China Charity Federation, and Suofeiya dealers across the country, aims to build public reading rooms in ruralschools. It provides high-quality reading resources to help rural children cultivate reading habits, enhance their cultural literacy, andstimulate intrinsic learning motivation.

Illuminating the World with ReadingThe "Children's Book House" Public Welfare Project Supporting the Development of " Campuses with Reading Ethos"

6970

报告后言

CLOSING

REMARKS

With the advancement and development of green energy technologies, the company willplace greater emphasis on integrating environmental sustainability with social welfare infuture explorations. The company plans to gradually increase its use of renewableenergy in the next phase, aiming to build a low-carbon operation model. At the sametime, by introducing intelligent management systems, the company will further optimizeresource usage efficiency and reduce environmental impact.To enhance supply chain transparency and promote responsible business practices, thecompany will unswervingly commit itself to developing partner relationships and encour-aging common progress among suppliers and all parties in the production chain. Bypromoting the sharing of best practices, the company seeks to improve the entire supplychain's green and ethical standards.To deliver better returns to society and promote individual employee growth, the compa-ny will expand its employee training programs and encourage cultural diversity. Addition-ally, it will establish more community engagement mechanisms to ensure the companyactively contributes to the comprehensive development of the regions in which itoperates. We believe that through continuous efforts and the pursuit of excellence in theESG field, the company will not only create long-term business value, but also make apositive contribution to global sustainable development.

ESG Key Performance IndicatorsIndicators

Operating IncomeNet ProfitTotal Tax PaidTotal Cash Dividends (Including Tax)Cash Dividend per 10 SharesPublic Welfare Expenditure

RMBRMBRMBRMBRMBRMB

10,494,353,781.39

1,370,944,152.081,198,776,988.03963,047,164.00

10.00

1,405,343.98

Unit2024

Environmental Indicators

Indicators

Environmental InvestmentNatural GasDieselElectricityPhotovoltaic Power GenerationReduction of CO2 EmissionsStandard Coal SavingsWastewater Emissions Compliance RateNoise Emissions Compliance RateHazardous Waste Generation

Ten Thousand RMBCubic MetersLiterskWhkWhTonsTons

%%Tons

1,387

3,847,549

6,107134,433,67721,284,77618,5236,810

590.78

Unit2024

IndicatorsHazardous Waste Compliance Disposal RateTotal Exhaust EmissionsExhaust Emissions Compliance RateParticulate MatterBenzeneTolueneXyleneNon-Methane Total HydrocarbonsNitrogen OxidesSulfur DioxideTotal Wastewater Emissions

%Cubic Meters%TonsTonsTonsTonsTonsTonsTons

2,582,971

123.22

2.98

0.61

0.97

25.66

10.55

3.18

Unit2024

Wastewater Emissions Compliance RateChemical Oxygen Demand (COD)Five-Day Biochemical Oxygen Demand (BOD5)Suspended SolidsAmmonia NitrogenTotal PhosphorusProduction Wastewater Reuse (Regenerated Water)Direct Greenhouse Gas Emissions (Scope 1)South China Production CenterCentral China Production CenterEast China Production Center

Tons

%TonsTonsTonsTonsTonsTons

tCO2etCO2etCO2e

667.53

470.31

366.17

255.50

500,190.20

144.58

33.24

33.32

6.98

0.84

5,797

Western Production CentertCO2e255.50

Energy Consumption

Water Pollutants Emissions

Greenhouse Gas EmissionsPhotovoltaic Power Generation

7374

Governance Performance Indicators

Indicators

Board of DirectorsProposals Deliberated by Board of DirectorsBoard of SupervisorsProposals Deliberated by Board of SupervisorsGeneral Meeting of ShareholdersProposals Deliberated by General Meeting of ShareholdersBoard of Directors Audit CommitteeProposals Deliberated by Audit CommitteeNumber of Ad Hoc Announcements (with Announcement Number)Number of Regular ReportsShenzhen Stock Exchange Information Disclosure Assessment ResultNew and Revised RegulationsRoutine Supervisory InspectionsTender SupervisionReport Clues HandledReport Handling Completion RateOffline Integrity TrainingIntegrity Training CoverageIntegrity Education Coverage RateNumber of Approved Registered TrademarksTrademark Protection RecordsMajor Information Security IncidentsHost AvailabilityDatabase Availability

Sessions

PcsSessions

PcsSessions

PcsSessions

Pcs

Pcs

PcsLevel

Pcs

PcsSessions

Pcs

%SessionsPersons%

PcsEntriesPcs

%%

A

14,000

1,934

99.99

99.99

Unit2024North China Production CenterLankao Production BaseQiqihar Production BaseJinhua Production BaseIndirect Greenhouse Gas Emissions (Scope 2)South China Production CenterCentral China Production CenterEast China Production CenterWestern Production CenterNorth China Production CenterLankao Production BaseQiqihar Production Base

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

206.22

260.26

44.02

29.03

7073.994984.013880.362707.532185.352758.02

466.44

Jinhua Production BaseTotal Greenhouse Gas Emissions (Scope 1 + Scope 2)South China Production CenterCentral China Production CenterEast China Production CenterWestern Production CenterNorth China Production CenterLankao Production BaseQiqihar Production BaseJinhua Production Base

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

tCO2e

7741.525454.324246.532963.032391.573018.28

510.46

336.65

307.62

IndicatorsUnit2024

7576

Employee Information

IndicatorsTotal Number of EmployeesLabor Contract Signing Rate

Production StaffSales StaffTechnical StaffFinance StaffAdministrative StaffManagement StaffMaster's Degree and AboveBachelor's DegreeAssociate DegreeHigh School and Below30 and Below31-4041-5051 and AboveMaleFemale

ProfessionalComposition

Categories

Age Distribution

Education Level

Gender Structure

Persons

%PersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersonsPersons

12,901

7,8182,2131,682

2,4122,9457,4223,8786,5142,116

9,2623,639

Unit2024Indicators

Network AvailabilityNumber of SuppliersPercentage of Strategic SuppliersSupplier Procurement Contracts SignedAnti-Bribery Agreement CoverageNumber of R&D PersonnelR&D InvestmentAuthorized Valid PatentsValid Invention PatentsUtility Model PatentsDesign PatentsStandards in Whose Formulation Suofeiya ParticipatedPapers PublishedSoftware Copyrights Registered

%Companies

%

%

%Persons

RMBPcsPcsPcsPcsPcsArticles

Pcs

99.99300+

1,017375,025,435.96

Unit2024

Internationally Advanced Technology AchievementsAppraised by ExpertsTechnology Awards ReceivedService-Related TrainingNumber of TraineesKey Position Training Coverage Rate

PcsSessionsPersons

%

6,428

Pcs

7778

Criminal Law of the People's Republic of ChinaCriminal Procedure Law of the People's Republic of ChinaSecurities Law of the People's Republic of ChinaCompany Law of the People's Republic of ChinaAnti-Unfair Competition Law of the People's Republic of ChinaAnti-Money Laundering Law of the People's Republic of ChinaShenzhen Stock Exchange Listing RulesShenzhen Stock Exchange Self-Regulatory GuidelinesNo.1 for Listed Companies on the Main Board

Institutional Survey Reception ManagementGuidelines

Articles of Association of Suofeiya Home Co., Ltd.Rules of Procedure for Shareholders' MeetingsIndependent Director SystemBoard of Directors' Rules of ProcedureGeneral Manager's Work GuidelinesInvestor Relations Management System

Listing Rules of Listed CompaniesCorporate Governance Code for Listed Companies

Information Disclosure Management SystemInternal Audit System

Energy Conservation Law of the People's Republic of ChinaWater Law of the People's Republic of China

Group EHS Responsibility SystemSafety Accident Management MeasuresEHS Meeting Management MeasuresEnvironmental Protection Management SystemEnergy-saving Management System

Information Security Management ProceduresData Security Management SpecificationsConfidentiality Management SystemSuofeiya Home Co., Ltd. Financial Management System

ReportChapters

Laws and Regulations ObservedSome of Internal Policies

ReportChapters

Laws and Regulations ObservedSome of Internal Policies

Common Types of Mobile Internet Applications NecessaryPersonal Information Range Provisions

Suofeiya Employee Integrity Management Guidelines

Articles of Association for Listed CompaniesPersonal Information Protection LawConsumer Protection LawAnti-Unfair Competition Law of the People's Republic of China

Contract Management SystemContract Management GuidelinesIntellectual Property Management SystemPhysical Stamp Management SystemEnterprise Internal Control Application GuidelinesSuofeiya Employee Handbook

Suofeiya's Eight Red LinesConflict of Interest Declaration and Filing NoticeInformation Systems Emergency PlanData Center Security Management System

Air Pollution Prevention and Control Law of the People'sRepublic of China

Energy Management System

Group EHS Committee Structure and Responsibilities

Factory General Industrial Waste Recycling andDisposal Management MeasuresFixed Asset Disposal and Scrapping ImplementationDetailsFactory Solid Waste Disposal ManagementSpecificationsEnergy Management System Manual

Carbon Peaking Action Plan Before 2030Pollution Discharge Permit Management Regulations

Promoting

GreenDevelopment

SustainableGovernance

SustainableGovernance

Conduct Guidelines for Directors, Supervisors, andSenior Management

Independent Director Management Guidelines for ListedCompanies

App Illegal Collection and Use of Personal InformationSelf-Assessment Guidelines

Suofeiya Home Co., Ltd.’s Whistleblower Manage-ment GuidelinesBusiness System Online Security ManagementGuidelines

Terminal Equipment and Network ManagementRegulations

Group Patent Infringement Risk Prevention ManagementMeasures

Rainwater and Sewage Drainage ManagementMeasuresRainwater and Sewage Drainage ManagementMeasures

Water Pollution Prevention and Control Law of thePeople's Republic of China

Circular Economy Promotion Law of the People's Republic ofChina

Environmental Protection Law of the People's Republic ofChina

Opinions of the Central Committee of the Communist Partyof China (CPC) and the State Council on the Complete andAccurate Implementation of the New Development Conceptand the Proper Implementation of Carbon Peaking andCarbon Neutral Work

Environmental Management System Requirementsand Guidelines (GB/T24001-2016)Urban Drainage and Sewage Treatment RegulationsIndustrial Enterprise Boundary Environmental NoiseEmission StandardsEnvironmental Labeling Product Technical Require-ments - Cabinets (HJ/T432-2008)

Pollutant Emissions Declaration RegistrationManagement MeasuresEnvironmental Labeling Product Technical Require-ments - Furniture (HJ/2547-2016)

7980

ReportChapters

Laws and Regulations ObservedSome of Internal Policies

ReportChapters

Laws and Regulations ObservedSome of Internal Policies

Production Material Procurement ManagementGuidelinesSupplier Quality Management SystemSupplier Review Management GuidelinesLogistics Vendor Evaluation Operation GuidelinesSuofeiya Service Guidelines

Corporate Culture Implementation Management MeasuresEmployee Handbook

Supply Chainwith Sense ofResponsibility

Joint Growth

Labor Law of the People's Republic of ChinaLabor Contract Law of the People's Republic of ChinaSocial Security Law of the People's Republic of ChinaEmployment Promotion Law of the People's Republic of ChinaEmployment Service and Employment Management Provisions

Quality Star Evaluation Management GuidelinesProduct Optimization Management GuidelinesRemuneration Management GuidelinesOccupational Safety and Health Control ProceduresEmployee Training Management SystemPerformance Management GuidelinesHuman Resources Management SystemCorporate Culture Management System

Product Quality Law of the People's Republic of ChinaCivil Code of the People's Republic of ChinaConsumer Protection Law of the People's Republic of ChinaEnvironmental Labeling Product Technical RequirementsGroup Quality Evaluation GuidelinesQualityInnovation

Joint Growth

PromotingGreenDevelopment

Formaldehyde Release Grading for Engineered Woodand Their Products (GB/T39600-2021)

Bidding and Tendering Law of the People's Republic ofChinaBidding and Tendering Law Implementation Regulations(2019 Revision)Electronic Commerce Law of the People's Republic ofChina

Environmental Monitoring and Measurement ControlProcedures Emergency Plan for Sudden EnvironmentalIncidents

Suofeiya Home Co., Ltd.’s Four Major SystemManagement ManualCustom Wooden Cabinet Core Quality GradingStandardsRegulations on Monitoring Chemicals Management inthe People's Republic of China

Childcare and Infant Living Environment SafetyControl Specifications

Customer Complaints and Goods Rejection Process-ing ProceduresTechnology Achievement Application ManagementGuidelines

Regulations on Implementation of Labor Contract Lawof the People's Republic of China

Quarterly Excellent Employee Selection ManagementGuidelines

Suofeiya Employee General Health Examination Manage-ment Guidelines

8182

COMPANY HONORS

2024 Glories

Official HonorsLeading the Chinese Custom Home Industry2023 Guangdong Provincial Science and Technology ProgressAward --- First Prize2024 Guangdong Provincial Single-Product Champion Enterprise2025 Guangdong 3.15 Consumer Rights Protection Anti-Counter-feiting Project --- Nominated Brand

Quality Recognitions

Creating Industry Leading Examples

Energy Management System CertificationNational Product and Service Quality Integrity DemonstrationEnterpriseNational Furniture Manufacturing Industry Quality Leading EnterpriseNational Consumer Quality Credit Guarantee Product2023 Certification and Accreditation Inspection Industry AnnualOutstanding Certified Organization

Reputation in the Market

Building a Strong Brand Influence2024 Healthy China Innovation Practice Case (People's Daily)2024 Top 100 New Quality Home BrandsCCTV-1 National Brand2024 Greater Bay Area Furniture and Building Materials 20Influential BrandsAnnual Quality Home Brand2023-2024 Top Ten Custom Furniture Brands - Suofeiya

Stable Development

High Recognition in Capital Markets

Listed Company Investor RelationsManagement --- Best PracticeAward

18th Annual Chinese ListedCompany Value Rankings ---Top 100 Main Board Companies2024 15th Annual Investor RelationsTianma Award

TOP 300 Most Popular ListedCompaniesPanoramic Investor Relations GoldAward (2023) --- Excellence in IRCompanies

Panoramic Investor RelationsGold Award (2023) ---Outstanding IR TeamAwardPanoramic Investor Relations GoldAward (2023) --- OutstandingSmall and Medium Investor Interac-tion Award

Top 100 Investor RelationsCompanies in Board SecretaryRole

International Fame · Leading Home Aesthetic Wisdom

German IF Design Award

MUSE Gold Winner

2024 American MUSEDesign Award

·Huahe - Puyue·Schmidt - C Series Yiman·Huahe Yunxi·Schmidt - S Series Seine River·Integrated Home - Qingyan

·Anya Bond Anya·Champs-Elysées Schmidt·Cruze Bond Cruze·Fashion π Milan·Finding Fun Milan·Mocha Suofeiya Home Mocha·Waltz Suofeiya Home Nilang Pro·Yueying Huahe Yueying

·Design Center - Liuguang Gangyun·Suofeiya Home - NINI·Design Center - Xingyun·Suofeiya Home - Caesar

Gold Award

·NINI ·Liman Qi Gu ·SelleGold Award

·Caesar ·Liuguang Gangyun ·Mis·XingyunPlatinum Award

A'Design AwardA'Design Award,Italy

·Huahe YunxiBronze Medal

·silver medalSilver Medal

International Design Awards

·Zhiran Milanna·Schmidt - S Series Rosa·Schmidt - S Series Riemann·Suofeiya Home - NINI·Suofeiya Home - Caesar

Honorary Award

·ImanSilver Award

Seasonal WordsFinalist AwardSuofeiya Product Manual APP UI DesignFinalist Award

CGDA Visual Communi-cation Design Award

Design Center - Lijiang Garden

Bronze Award14th China Space DesignCompetition

Suofeiya Home Exhibition Hall A

32nd APIDA Hong Kong AsiaPacific Interior Design Award

Suofeiya Home - Mocha

14th China SpaceDesign Competition

Outstanding Residential Apartment Designof the Year - Luhu Islet House

JinTang Award - ChinaInterior Design AnnualAwards

Huahu Customised Showroom

Customised Home IndustryAwards·Night Sky ·Soshua Flower Language

Finalist Award

Intergalactic DomainExcellent Award

5th Global Surface Decora-tion Original Design Show