梅花生物(600873):梅花生物2024年度环境、社会及公司治理报告（英文版）
原标题:梅花生物:梅花生物2024年度环境、社会及公司治理报告（英文版） Introduction 01ESG Governance02Prioritizing Products About This Report01Sustainable development strategyProduct and service safety1527and quality Message from Chairman05 Customer rights protectionESG statement of the Board1937 About Meihua Group07 Data security and customerESG compliance governance1938 privacy protection Main achievements in ESG20 Dual importance assessment of issuesInnovation-driven development2139and technology ethics Appendix 03Environmental Protection04Social Responsibility ESG data sheets103Addressing climate change49Supply chain security69Benchmark Index Table114 Environmental compliance management57Human resources management74Green packaging materialsWork safety6685 Biodiversity conservation66Rural revitalization and social 93contribution 05Business Ethics and Anti-corruption Business ethics and anti-corruption management system99 Business ethics and anti-corruption whistleblowing mechanism100Business ethics and anti-Corruption management measures101 About This Report Reporting FrequencyThis is the third environmental, social, and governance (ESG) report released by Meihua Holdings Group Co., Ltd. (hereinafter referred to as "this Report"), which outlines the Company's strategic This Report is released once a year, consistent with the annual report. sustainability goals, mission, and commitments, as well as significant initiatives and outstanding performance in the fields of ESG. It aims to disclose the Company's ESG practices and achievements to Data Sources key stakeholders. The key financial data in this Report is derived from audited 2024 Annual Report of Meihua Holdings Group Co., Ltd. Other data is sourced from internal documents, audit reports, and other Organizational Boundaries relevant materials of the company.
120 tons The average trainingOverall employee satisfactionThe training ratio of allAs of the end of 2024, the total weight of all types of packaging materials reduced byhours per employeescore (full score is 5 points)employees 100% Social Contribution Scope of ISO 45001 Occupational Health and Safety Management System Certification100%76% Addressing Climate ChangeProportion of products with raw materials Proportion of suppliers signing the Supplier traceable to the place of originCode of Conduct 304,874,044.71 Kwh42% 2.46million RMB2,765 people351,555 hours Coverage of supplier carbon reduction Clean energy usage programTotal amount of socialNumber of beneficiaries of Hours of participation in donationsrural revitalization measuresemployee volunteer activitiesTongliao?No. 32 of the Top Tongliao?No. 23 of the Top Tongliao - Behavioral Style Best ESG Practice Award No. 16 of the Top 100 No. 18 of the Top 100 100 Privately-owned 50 Privately-owned Observation Point for Listed Companies in Privately-owned Privately-owned Companies in Inner Manufacturing Companies 2024Companies in Hebei Companies in Hebei Mongoliain Inner Mongolia Province for Invention Province for R&D Patents in 2024Investment in 2024No. 34 of the Top 100 No. 34 of the Top 100 Jilin?National Tongliao?National Privately-owned Privately-owned Benchmark Enterprise Benchmark Enterprise Manufacturing Companies in Hebei for Energy Conservation for Energy-saving and Sustainable development strategy The green action routeThe responsibility action route Meihua Group combined the beautiful vision of "focusing on biotechnology and creating a better future" with the The green action route is our bottom line, The responsibility action route is our foundation; which guarantees that we minimize the impact it ensures that our trust with stakeholders concept of sustainable development. The analysis was carried out through four strategic levels, including the on the natural environment and is the continues to deepen and is the premise for our direction level, target level, path level, and demand level, which covered the external environment and background foundation of our developmentjoint progress analysis, industry demand and peer benchmark analysis, the analysis of stakeholders' demands, and the analysis of the Company's strategic development needs. It was combined with the United Nations' sustainable development goals (SDGs). In the end, we built our strategy of "Nurturing the Future GROWTH". The low-carbon action routeThe health action routeSDGs The Strategy Committee of the Company's Board of Directors has established an ESG Leadership Group, authorized the Sustainable Development Office as the dedicated department for sustainable development, responsible for We obtain resources we need from the nature. Through the development of synthetic biotechnology, we produce all promoting ESG concepts, project establishment, and performance management, strongly driving the kinds of amino acid products to ensure people's healthy lives and promote human's sustainable development. It implementation of the Company's sustainable development strategy. Meanwhile, led by the Sustainable allows each of us to care about and improve the environment, achieving harmonious co-existence. Development Office, the Company has established a cross-departmental ESG coordination mechanism in the form of an ESG Working Group, which gradually integrates ESG concepts into the routine management of departments in a top-down manner, promotes the execution and implementation of the ESG strategy, and thereby enhances ESG Sustainable development pillars management levels at the source of business. On the path of achieving a harmonious future for both people and the environment, we need to take specific and Meihua Group continuously implements ESG-related work based on the Environmental, Social, and Governance effective actions to ensure the realization of Meihua Group's ultimate goal.(ESG) Rules of Meihua Holdings Group Co., Ltd. The Sustainable Development Office continuously monitors policy In addition, we focus on both the internal and external perspectives of the Company. Starting from ourselves, we do needs, regularly updates and improves the indicator database, and collaborates with various business departments to integrate ESG concepts into the Company's entire industrial chain operation management, continuously our best to pursue higher action results, extend to our external world through the value chain, and promote the Meihua Group's ESG Governance StructureRoles and Responsibilities of Members of the Board of DirectorsBusiness integrationInformation transparency StrengtheningStrengthening BC ESG managementinternal and external communication ooNameWang AijunHe JunLiang YuboLu ChuangLiu Xinghua ma r pAlign business operations precisely with the ESG Timely disclose the Company's progress in do Director and Ge-Director and DeputyIndependent Independent oindicator system, deeply integrate the concept of sustainable development to the public and sPositionChairman f isustainable development into various business actively respond to and participate in neral ManagerGeneral Managerdirectordirector tD i lines through enhanced training, orderly carry out communication activities of various platforms and oi r neESG practice work, and continuously strengthen institutions. cGenderFemaleMaleMaleMaleMaleo the normalization of ESG management. t fo t r h s e Age5351614558 ESG statement of the BoardMain Achievements in ESG Commitment by the Board of DirectorsParticipation in the Formulation of ESG Industry Standards The Company and the Board of Directors always adhere to compliance governance and steady development, strictly follow the Code of Corporate Governance for Listed Companies of the China Securities Date of ReleaseReleased byName of Standard Regulatory Commission and the various requirements of the Shanghai Stock Exchange to continuously improve the ESG management system. The Board of Directors attaches great importance to the significant role of ESG in the Greenhouse Gas Emission Accounting and China Biotech Fermentation December 2022Company's long-term development, actively fulfills its supervisory and decision-making responsibilities, Reporting Requirements—Bio-fermentation Industry Association continuously strengthens its supervision and participation in the Company's ESG affairs, and actively integrates ESG Production Enterprises concepts into the Company's development strategy, major decisions, operational management, and risk control system, so as to promote the Company's steady progress on the path of sustainable development, and to create Energy Consumption Quota for MSG Unit Inner Mongolia July 2023 greater value for its shareholders, employees, partners, and society.ProductsAutonomous Region Evaluation Standard of Energy-saving and China Biotech Fermentation December 2023 Environmental Protection Benchmark Enterprises Board of Directors' StatementIndustry Association in Bio-fermentation Industry This Report is published by Meihua Group for the third year, and aims to present the efforts and achievements of Meihua Group in the fields of sustainability, including environment, labor and community, and value chain, to all State Administration for Water-saving Enterprise Fermenting Industry December 2023stakeholders in an objective, standardized, transparent, and comprehensive manner. The Company always insists Market Regulation National (GB/T 32165-2023) on integrating ESG concepts into its business operations and strategic layout, continuously optimizing the Standardization Administration governance system, and enhancing the Company's risk management capabilities to achieve long-term stable ESG Disclosure Guidelines for Chinese development. 2024 (not yetChina Biotech Fermentation Bio-fermentation Enterprises The Company's Board of Directors places great importance on ESG governance, incorporates ESG into the ESG Evaluation Guidelines for Chinese publicly available)Industry Association responsibilities of the Strategy Committee, and regularly reviews relevant policies, goals, and implementation Bio-fermentation Enterprises progress to ensure that various sustainable development measures are effectively promoted. The Company will continue to strengthen information disclosure, actively communicate with stakeholders, and continuously improve Meihua Group has always adhered to the principle of standardized operations, has continuously optimized its Shareholders, the Board of Directors, the Board of Supervisors, and the management, so as to continuously standardize work processes, and effectively enhance the operational efficiency of the Board of Directors. The Company strictly fulfils its information disclosure obligations in accordance with the Information Disclosure Honorary awards Management System, actively carries out investor relationship management, strengthens interactive exchanges with investors, and fully guarantees investors' right to equal access to Company's information. In order to effectively China Track and ESG Forbes China Sustainable Development Conferencerespond to various risks arising from changes in the external environment, the Company gradually integrates ESG concepts into all aspects of its management. By establishing a sound risk prevention and control mechanism, the The Best ESG Practice AwardForbes China's Top 10 Company continuously improves its compliance governance level, laying a solid foundation for sustainable for Listed Companies 2024"ESG Inspirational Cases" for 2024 Product and Service Safety and QualityQuality management system As a leading global provider of amino acid nutrition and health solutions, Meihua Group always regards product Quality is the red line and the lifeline of business development. The Company strictly abides by the relevant laws quality and service as a cornerstone for the survival and development of the Company. In the process of continuously and regulations of the People's Republic of China, such as the Product Quality Law of the People's Republic of expanding production scale and market share, we constantly strengthen the quality and safety management system, China, the Food Safety law of the People's Republic of China, and the Regulation on the Administration of Feeds and relying on the rigorous R&D processes, the comprehensive quality system, and the continuously improving quality Feed Additives. Based on the relevant management system standards such as the GB/T19001 Quality Management and safety risk prevention measures, we strictly implement quality control standards to provide customers with System Requirements, the ISO 22000 Food Safety Management System, the BRC Global Standards for Food Safety, high-quality and trustworthy products and services. In 2024, we worked on three core directions of standardization of the Company has formulated the Integrated Quality Management Manual and related procedure documents. In line daily management, intelligent quality control, and full-process quality monitoring, and driven by technological with the Company's actual situation, the Company updates internal systems such as the Quality Standard of innovation, we upgraded our quality and continuously optimized our quality management system to ensure safer, Materials and Excipient Materials, the Quality Standard of Products, and the Inspection Guide of Products every healthier, and higher quality products for global customers, contributing to the global food health industry.year, promoting the coordinated advancement of quality standardization and process management standardization. In addition, relying on the problem database system, the Company focuses on solving key quality issues in business management to ensure the efficient operation of the quality management system. The Company continues to promote the supervision of quality Governance - Quality governance structure certification and the replacement of certificates. All production Product and Service Safety and QualityQuality management system As a leading global provider of amino acid nutrition and health solutions, Meihua Group always regards product Quality is the red line and the lifeline of business development. The Company strictly abides by the relevant laws quality and service as a cornerstone for the survival and development of the Company. In the process of continuously and regulations of the People's Republic of China, such as the Product Quality Law of the People's Republic of expanding production scale and market share, we constantly strengthen the quality and safety management system, China, the Food Safety law of the People's Republic of China, and the Regulation on the Administration of Feeds and relying on the rigorous R&D processes, the comprehensive quality system, and the continuously improving quality Feed Additives. Based on the relevant management system standards such as the GB/T19001 Quality Management and safety risk prevention measures, we strictly implement quality control standards to provide customers with System Requirements, the ISO 22000 Food Safety Management System, the BRC Global Standards for Food Safety, high-quality and trustworthy products and services. In 2024, we worked on three core directions of standardization of the Company has formulated the Integrated Quality Management Manual and related procedure documents. In line daily management, intelligent quality control, and full-process quality monitoring, and driven by technological with the Company's actual situation, the Company updates internal systems such as the Quality Standard of innovation, we upgraded our quality and continuously optimized our quality management system to ensure safer, Materials and Excipient Materials, the Quality Standard of Products, and the Inspection Guide of Products every healthier, and higher quality products for global customers, contributing to the global food health industry.year, promoting the coordinated advancement of quality standardization and process management standardization. In addition, relying on the problem database system, the Company focuses on solving key quality issues in business management to ensure the efficient operation of the quality management system. The Company continues to promote the supervision of quality Governance - Quality governance structure certification and the replacement of certificates. All production Strategy Note: we define short-term, medium-term and long-term impact cycles as 1-3 years, 3-5 years, and more than 5 years, respectively; large, medium and low impact levels as serious, moderate and slight impacts on the Based on the current industry and the operational status of the industrial chain, the Company assessed the risks, Company's production and operations, respectively; and high, medium and low likelihoods of occurrence as very opportunities, and impacts it faces, clarifying the strategic guidance direction. likely to occur, more likely to occur, and less likely to occur, respectively. Risks/Oppor- RisksRisksOpportunities tunities Procurement risksOperational risksPolicy risksMarket opportunitiesPolicy opportunitiesType The supply of major raw materials such as Inadequate quality control during the The regulations and policies related to Consumers are paying more Demonstrate outstanding corn may experience quality fluctuations due production process, such as improper control food, feed additives, and other attention to sustainable performance in regulatory to climate and market supply and demand of fermentation process parameters and failure industries are constantly being products, a sustainable raw compliance to obtain relevant Description changes, such as droughts or supplier to address equipment malfunctions in a timely updated, such as the improvement of material procurement certifications and qualifications, of Risks production issues leading to a decline in raw manner, leading to product quality issuesenvironmental standards and changes system, such as purchasing such as organic product material qualityin additive usage norms, which result organic raw materials, may be certification and HACCP system in products not meeting new established to meet market certification, enhancing market requirementsdemandtrust Financial Cost increase，Revenue decreaseCost increase，Revenue decreaseRevenue increaseRevenue increaseCost increase，Revenue decrease Impact Impact Medium to long-termMedium to long-termMedium to long-termMedium to long-term Medium to long-term PeriodImpacts, Risks, and OpportunitiesProcess control Products are the core carriers for an enterprise to establish itself in the market, and Meihua Group deeply understands the In terms of process quality control, the company has always adhered to the quality management philosophy of " importance of product management. To maintain a competitive advantage in a complex and changing market prevention first", focusing on design, raw materials, personnel, equipment, and production processes. It has built a environment, the Company follows a management process of identifying, assessing and responding to all aspects of the stringent and efficient control system, strictly implementing process indicator control and improving the production site risks and opportunities faced by its products and the resulting impact.according to the system requirements, thereby reducing the defect rate and customer complaints. Meanwhile, the Company closely follows the trend of intelligent development in the industry and continuously With reference to market trends, changes in consumer demand, updates in industry standards and introduces automation and intelligent technologies in the production process. By widely applying automated competitor dynamics, identify the quality risks, technology substitution risks and market competition risks equipment and deeply integrating intelligent systems, the Company improves the controllability and stability of the faced by the products. Based on the Company's strategic planning, R&D capabilities and resources, and in production process, minimizes human interference and ensures the consistency and stability of product quality. conjunction with the direction of policy support and emerging market demand, define and describe the Identification market expansion opportunities, product upgrading opportunities and brand enhancement opportunities that the product will bring to the Company. Enhance On-site ControlImplement the MES Alarm System For identified risks or opportunities, assess the key contributing factors, such as shifts in consumer To Eliminate the Foreign Objects in ProductsTo Strengthen Process Quality Control preferences, the speed of emergence of new technologies, and adjustments in competitors' strategies. Analyze the potential major impacts, covering sales, profits, market share, customer satisfaction, etc., as well The management and control of the foreign objects in food is a To accurately control the production process, we have Assessmentkey point in ensuring product quality and consumer health. The established a comprehensive quality control table for the as the time horizon of the impacts, to determine whether they are short-term shocks or long-term trends. Company attaches great importance to the management and production process to deeply analyze each control point, and control of major foreign object risk sources, identifies risks based on the risk level of control points, established a according to processes and clarifies the key monitoring points, hierarchical responsibility model. By monitoring data trends inspection frequency, and operating procedures for each area. through reports, we can promptly correct quality hazards, In view of the risks, formulate measures such as product quality management and control, technological Since the implementation of GMP in the food workshop, through effectively preventing potential issues. R&D follow-up, and differentiated competition to enhance the Company's ability to respond to product risks. basic management of the production site and control of major In view of the opportunities, formulate strategies for product optimization, market promotion, and In order to adapt to the trend of intelligent development and Responseforeign object risk sources, the Company has achieved empower process quality control with technological innovation, partnership expansion to seize product opportunities, achieve business growth, and enhance brand value. significant results in foreign object management and control, The Company vigorously promotes the development of quality culture that involves all Product testingDevelopment of employees, enhancing their skill levels through diverse quality training activities. quality culture Relying on the "Lighthouse Factory" construction project, the Company integrates Product quality testing 2024quality management with the LIMS system to achieve real-time monitoring of quality parameters throughout the entire production process, placing quality control at the In 2024, the Company "Quality Month" eventQuality Analysis PKforefront of the production process, which significantly reduces the probability of conducted product quality unqualified products occurring during production, and further enhances the stability training for employees The coverage rate of and safety of the products.In 2024, the Group launched a "Quality Carry out quality analysis PK product quality testingMonth" event with the theme of "creating activities in all branches, where The Company regularly conducts quality testing of raw materials and products, and quality with craftsmanship, respecting problems will be deeply analyzed has formulated the Quality Standard of Materials and Excipient Materials, the Quality Accumulatingprinciples and keeping standards," with the for the purpose of training and Standard of Product, and the Inspection Guide of Products for different types of 100%guiding principle of "taking process as the consolidation. products, and carries out comprehensive incoming and outgoing management and core and equipment as the basis to ensure control to ensure that the products meet the quality standards.47,295 the best quality of products," aiming at returning to principles, strengthening Taking Jilin Base as a pilot, we upgrade the laboratory testing business, personnel Quality Knowledge Q&Ahours of training quality awareness, and enhancing The pass rate of quality testingmanagement, equipment management, consumable management, and employees' participation in quality. Through environmental management to an information-based system according to the CNAS for incoming products the analysis and evaluation of quality Through the exceptionally popular Management System for Testing and Calibration Laboratories, which eliminates incidents and testing incidents over the quality knowledge quiz, employees offline paper documents, prevents human interference, and ensures the authenticity, Involvingyears, and quality quiz competitions, will reap both quality knowledge 99.80%accuracy, and efficiency of testing results through automatic data collection, internalize the sense of responsibility for and material rewards.automatic calculation of testing processes, automatic uploading of results, and early product quality issues to promote the The number of participants in the warning analysis, while optimizing efficiency and improving management levels. 2,373 activity reached 18495, with construction of employee quality awareness In addition, the Company formulates external inspection plans for all finished achieving full marks 914from top to bottom, ensuring stable employees products at the beginning of each year, regularly sends products to internationally improvement in product quality. authoritative third-party organizations for comprehensive testing to assess food and feed safety risks, while benchmarking the accuracy of internal testing. Unqualified Products Management and ControlParticipation in Formulation of Public Policies The Company has established the Unqualified Products Control System, which clearly The finished product qualification rateWhile strengthening its own quality control, the Company actively participates in industry exchanges and cooperation. Meihua defines the management responsibilities and standards to strictly regulate the Group is currently the member of the Industrial Fermentation Sub-Technical Committee of the Technical Committee 64 on Food handling process of unqualified products, including identification, cause analysis, Industry of Standardization Administration of China, the China Biotech Fermentation Industry Association, and other industry of Meihua Group 2024100% and emergency handling, so as to ensure that product quality risks are effectively organizations, and is deeply involved in the construction of industry standard systems. In 2024, the Company participated twice in prevented and controlled. the formulation and revision of national standards and group standards. Product recall Published byName of StandardStatusDisclosure of ChemicalsChemical safety management The Company strictly follows the requirements for chemical safety management to establish and maintain a complete safety Strengthening the safety management of hazardous chemicals is not only an important guarantee for the stable and sustainable ledger for chemicals, and files with government departments in accordance with the safety ledger to ensure that government development of enterprises, but also a necessary measure to protect the life and health of employees and to maintain the reporting and review work complies with the relevant provisions of the Regulations on the Safety Management of Hazardous ecological environment. The Company strictly adheres to national laws and regulations, continuously optimizes the management Chemicals, achieving 100% coverage of information disclosure and ensuring compliance and transparency. system for the entire lifecycle of hazardous chemicals, so as to ensure that all work meets the latest safety standards, and constantly improve the capability for chemical safety management and control. IndicatorUnit2024 Hazardous Chemical Management System Proportion of chemicals identified/classified by the The Company continuously improves the Regulations on the Safety Management of Hazardous Chemicals, and has established a Percentage2.2%Company to all chemicals listed in the Hazardous comprehensive management mechanism for the entire lifecycle of chemicals, including comprehensive control over the Chemicals Information List (2024) procurement, storage, application, and disposal of chemicals involved in the production process, so as to ensure 100% coverage of the identification, assessment, and government reporting of all hazardous chemicals. From the source of hazardous chemicals entering the Company to the end of proper disposal, the Company implements strict control over the whole process, and makes every effort to ensure the safety of production, personnel and the environment.Disclosure scope of chemicalsPercentage100% Assessment scope of chemical hazardsPercentage100% Identification, Classification, and Assessment of Hazardous Chemicals In 2024, the Company continued to promote the general survey of hazardous chemicals, systematically identifying and classifying physical dangers, health risks, environmental risks, inhibiting poisoned, inhibiting explosion, highly toxic drugs, etc. According to the General Rules for the Hazardous Chemicals Warehouse Storage (GB15603-2022), and considering our actual situation, the Substitution and Elimination of Chemicals Company further optimized the Taboo Matrix of Hazardous Chemicals to ensure the more scientific and standardized management of chemicals. Meanwhile, the Company completed the re-certification work in accordance with the Regulations on the Safety Management of Hazardous Chemicals, and strengthened on-site management, prepared and improved safety labels of The Company will continue to carry out actions for the substitution of high-risk chemicals and the elimination of chemicals, hazardous chemicals, and applied QR code traceability functions to enhance information transparency and traceability. incorporating environmental and health standards into the product design process to promote sustainable development for both the enterprise and the environment.The Company has formulated the Sales Office Work Standard Manual to refine customer service processes and standards, clarify leakage incidents occurred in 2024.Privacy Protection Measures the different types of customer demands, and ensure that contract management, plan implementation, financial management, and after-sales service are efficient and standardized throughout the entire process. To ensure high-quality service to customers, the Company organizes special training for customer service positions every month. System constructionIntranet isolation and access The training content includes job responsibilities, product knowledge, and communication skills, helping customer service controlpersonnel quickly and accurately answer customers' inquiries about product usage and storage methods. Meanwhile, the Company emphasizes the cultivation of employees' service awareness. Through real case analysis, employees gain a deep The Company formulates and strictly Establish an independent intranet system understanding of customer needs, enhancing the relevance and responsiveness of services.implements the Regulations on the to ensure the connection and access by Management of the Use of Office authorized internal personnel, effectively In addition, the Company values the professional quality of customer service and sales personnel, formulates and implements the Computer and takes multiple security limiting unauthorized external access and Anti-Bribery Agreement, and by providing training for all employees and signing agreements, ensures strict adherence to the measures to ensure the confidentiality, reducing potential security risks of Company's Sales Standardization Manual to provide customers with open and fair services. integrity, and availability of internal and customer data being obtained externally. customer data. Office computer security Prohibiting the use of external Customer complaint management managementstorage devices To ensure that customer complaints are handled properly and efficiently, Meihua Group has formulated the Customer Complaint Set strict access permissions for office To prevent data leakage and virus Handling Process and set up a scientific tiered handling mechanism. Depending on the nature and severity of the complaint, the computers, and employees can obtain intrusion, the use of external USB drives or Company will initiate corresponding level of handling process to investigate, verify, and resolve customer requests as quickly as specific permissions in certain areas other external storage devices on office possible, significantly improving service efficiency and ensuring the timeliness of customer service, while comprehensively through a formal application process, computers is prohibited, and it is required safeguarding the quality of customer service. ensuring that the flow of information to cut off the transmission path of data on complies with the Company's data security unauthorized devices to avoid the outflow policies.of customer privacy data through external Accept customer Complaint infor-Relevant departments 89 customer complaintsstorage devices; complaintsmation classificationlaunched an investigation (including sales and division com- Information security training plaint data) was handled in 2024. the total number of employees. Meihua Group actively promotes innovative development and continuously improves the management system for R&D and innovation to fully stimulate the innovative vitality of all employees. In 2024, to standardize the full-process management of R&D projects from strategic initiation to technical production implementation, clarify the responsibilities of all relevant personnel, IndicatorQuantityProportion improve project success rates, and ensure that R&D work is carried out efficiently and orderly, the Company revised the Full-Process Management Regulations for R&D Projects to promote collaboration among departments in identifying opportunities, rigorously validate the implementation process, and effectively control risks to ensure the smooth advancement of R&D projects, Total number of R&D personnel402100% providing a solid guarantee for the Company's continuous progress in technological innovation.the total number of employees. Meihua Group actively promotes innovative development and continuously improves the management system for R&D and innovation to fully stimulate the innovative vitality of all employees. In 2024, to standardize the full-process management of R&D projects from strategic initiation to technical production implementation, clarify the responsibilities of all relevant personnel, IndicatorQuantityProportion improve project success rates, and ensure that R&D work is carried out efficiently and orderly, the Company revised the Full-Process Management Regulations for R&D Projects to promote collaboration among departments in identifying opportunities, rigorously validate the implementation process, and effectively control risks to ensure the smooth advancement of R&D projects, Total number of R&D personnel402100% providing a solid guarantee for the Company's continuous progress in technological innovation.Master9323.13% 12 research and product innovation, aligning with the each base optimizes R&D Company's strategy to drive technological breakthroughs. achievements in practice Bachelor13934.58%serving as the ultimate resolver for all technical of R&D achievements in Strategy Based on the R&D layout across the entire industrial chain, Meihua Group has formulated a long-term technological innovation Note: we define short-term, medium-term and long-term impact cycles as 1-3 years, 3-5 years, and more than 5 years, strategy. In the future, the Company will further connect the upstream and downstream industrial chains, strengthen cooperation respectively; large, medium and low impact levels as serious, moderate and slight impacts on the Company's production with raw material suppliers and product sales channels, and achieve coordinated development of the industrial chain. Meanwhile, and operations, respectively; and high, medium and low likelihoods of occurrence as very likely to occur, more likely to the Company closely monitors industry trends and market demands and adjusts R&D directions in a timely manner to provide occur, and less likely to occur, respectively. strong technical support for the Company's sustainable development. Risks/Oppor-t RisksRisksOpportunities unities TypeTechnical risksTechnical risksTechnical risksTechinical opportunitiesTechinical opportunities Due to the emergence of new technologies in the In the process of R&D in synthetic biology and During the process of transforming Breakthroughs in synthetic biology Strengthen the cooperation among industry, if the Company's process technology is other technologies, due to technical R&D achievements into actual technology may bring new R&D enterprises, universities, and not updated in a timely manner, it may lead to low difficulties that cannot be overcome, products or productivity, there may directions and product innovation research institutions in the Description production efficiency, high energy consumption, deviation in R&D direction, etc., the R&D be challenges such as the difficulties opportunities for Meihua Group, bio-fermentation industry to share of Risks/ and uncompetitive product quality and costsprojects fail to achieve expected goals, such in realizing the production such as developing more efficient technology, talents, and resources, Opportuni-ti as the failure of new amino acid product processes and the low market strains to improve product quality promoting overall technological es development.acceptance, which can hinder and yieldprogress in the industry, bringing effective commercialization of R&D more innovative ideas and achievementscooperation opportunities to Meihua Group Financial Management of impacts, risks, and opportunitiesAchievements in technological innovationTo effectively manage the uncertainties in the R&D process, the Company systematically manages the impacts, risks, and As a global leader in amino acid production, Meihua Group's technological innovation achievements provide references and opportunities related to R&D through three key steps: identification, assessment, and response.demonstrations for the development of the entire amino acid industry, which strongly promotes technological progress and industrial upgrading across the industry, and makes the Company become an important engine driving the vigorous development of the amino acid industry. The new strain of glutamic acid independently developed by the Company has shown remarkable results in practical production applications, reducing the production cost per ton by nearly RMB 100, significantly improving the production efficiency and product quality. IdentificationAssessmentResponse In 2024, the Company added 39 new patent authorizations, with the newly acquired invention patents involving the Company's core products such as glutamic acid, lysine, and threonine, By referencing the cutting-edge Assess the main driving factors of For the identified and assessed forming a full lifecycle intellectual property "moat" from product design, R&D, large-scale technology trends and market the identified risks or opportunities risks, develop countermeasures production to market promotion. As of December 31, 2024, the Company had a total of 160 valid demand dynamics, identify the on a case-by-case basis, such as such as technological R&D patents (including 109 invention patents, 49 utility model patents, and 2 design patents). The technological risks, market risks, technology maturity, market cooperation, talent training and Company has achieved full coverage in the technical fields of strain design and modification, talent risks, etc., faced in R&D. competition situation, and the incentive mechanisms, market fermentation process control, and downstream processing. Patent achi- Meanwhile, based on the Company's possibility of talent loss. Analyze the research, and adjustments to strategic planning and resource potential impacts it may cause, marketing strategies, to enhance the evements reserves, and in conjunction with including those on product Company's ability to withstand R&D national technological innovation development cycles, cost control, risks. For opportunities, develop policies and industrial development market share, and brand image, as strategies to seize them, such as orientations, define and describe well as the time frame of these increasing R&D investment, the innovation opportunities, impacts.optimizing R&D resource allocation, By continuously optimizing fermentation and extraction processes, combined with its strong product upgrade opportunities, and and accelerating the transformation strain construction capabilities, the Company can complete the performance iteration of a new market development of achievements, to fully utilize R&D generation of strains within 6-9 months, significantly improving the production efficiency and opportunities that R&D brings to the opportunities to promote the quality of products, and thus further consolidating the Company's technological leadership in the Company.Company's development. industry.  |