I. Chairman’s Address

2025 is a pivotal year for the company as it deepens its commitment to green manufacturing and further refines its full‑chain circular economy system. As a national-level green factory, the company remains steadfast in driving innovation, embracing green manufacturing, and fostering synergistic development among economic performance, environmental stewardship, and social responsibility. It is also dedicated to advancing high‑performance cemented carbide materials and fulfilling its corporate social responsibilities.

This year, the company fully implemented a 100% packaging‑material recycling management system and issued guidelines for the disassembly and recycling of used cemented carbide products by downstream customers, thereby establishing a closed-loop spanning “raw material procurement — production and manufacturing — finished‑product packaging — end‑use — waste‑material recovery and regeneration.” The company continued to increase investment in smart production lines, energy‑saving technological upgrades, and environmental protection measures, steadily reducing per‑unit product energy consumption and carbon intensity. Upholding a commitment to technological innovation, it leverages high‑performance, low‑carbon cemented carbide products to help downstream manufacturers improve quality and cut costs. In compliance with the law, the company ensures fair compensation and occupational health and safety for its employees, collaborates with upstream and downstream partners to build a transparent, green supply chain, and actively participates in local industrial support initiatives and public‑welfare projects.

Going forward, the company will continue to refine its ESG governance framework, expand its reverse‑logistics network, and deepen efforts in packaging reduction and resource recycling, leveraging its specialized, distinctive, and innovative strengths to fulfill its corporate social responsibility and contribute to the circular‑economy development of the new materials industry.

II. Report Description and Substantive Issues

(1) Reporting Boundaries

Covering the company’s headquarters production site, R&D center, warehousing and logistics operations, as well as all upstream and downstream partners and raw material suppliers, the report discloses corporate responsibility practices across five key dimensions: economic performance, environmental impact, workforce management, supply chain governance, and community engagement.

(II) Core Substantive Issues (Key Focus for 2025)

Dual Carbon Goals, Energy Conservation and Emission Reduction, Greenhouse Gas Management

End-to-end recycling and resource recovery of industrial packaging (comprehensive recovery rate: 100%)

Reverse recycling of waste cemented carbide products and guidance on disassembly and recycling for downstream customers.

Standardized storage, transportation, and compliant disposal of hazardous waste

Smart manufacturing, green product R&D, and tungsten resource recycling and regeneration

Employee occupational health and safety, compensation and benefits, and talent development

Green supply chain management and upstream–downstream circular collaboration

Compliant operations, anti‑commercial bribery, and information transparency

III. Company Overview

Zhuzhou Kingtal Cemented Carbide Co., Ltd. was established in December 2006 and is located at No. 99 Jinyue Road, Tianyuan District, Zhuzhou City. Its stock abbreviation is Kingtal Alloy (874696).

The company specializes in the R&D, manufacturing, and sales of cemented carbide products for drilling applications, CNC cutting tools, tool materials, and precision components. Its products are widely used in oil and gas drilling and production, mining, tunneling, wind power, rail transit, and precision machining. The cemented carbide ball teeth for deep‑well drilling have been recognized as a Hunan Province Single‑Item Champion Product.

Core corporate qualifications: National-level Specialized, Refined, Distinctive and Innovative “Little Giant” Enterprise; National Green Factory; National High-Tech Enterprise; Hunan Provincial Enterprise Technology Center. The company has obtained certifications under the five major management systems: ISO 9001 Quality Management, ISO 14001 Environmental Management, ISO 45001 Occupational Health and Safety, Energy Management, and Intellectual Property Management.

Major milestones for 2025: Successfully becoming a NOV Global Platinum‑Level Supplier, achieving a significant breakthrough in the high‑end international market; and launching the construction of a 3,900 kW rooftop distributed photovoltaic power generation project to accelerate the transition to clean energy across the plant site.

By the end of 2025, it will have steadily created 333 jobs, taking root in Zhuzhou and contributing to the high-quality development of the region’s new materials industry.

IV. Governance and Economic Responsibility: Prudent Operations, Creating Industry Value

4.1 Enhance corporate governance and adhere to compliant operations.

We strictly comply with the Company Law, the Securities Law, and the regulatory rules governing the New Third Board, standardize the operating mechanisms of the shareholders’ meeting, the board of directors, the supervisory board, and the management team—the “three meetings and one layer”—and establish a robust system of internal controls, risk management, procurement oversight, and anti‑commercial bribery measures. We also strengthen collective decision‑making on major matters to safeguard the legitimate rights and interests of shareholders.

We remain committed to lawful tax compliance and ethical business practices, ensure transparent information disclosure, and will implement cash dividends in 2025, sharing the fruits of corporate growth with our investors and fostering long-term, stable, mutually trusting, and win-win investor relations. Throughout the year, no material violations of laws or regulations, significant contract breaches, or instances of untrustworthiness occurred.

4.2 Enhancing Quality and Efficiency to Strengthen Industrial Value

In 2025, amid a complex external market environment, the company continued to optimize its product mix and expanded its market presence for high‑value‑added alloy products, resulting in substantial growth in both operating revenue and net profit. The company also pressed ahead with domestic substitution efforts, breaking the long‑standing monopoly of overseas firms in the high‑end drilling carbide segment, thereby providing a stable and reliable supply of advanced materials for major domestic projects in mining, oil and gas, infrastructure, and other sectors, and ensuring the security of the industrial and supply chains.

4.3 Driving Regional Industrial Development

Leveraging the locational advantages of Zhuzhou’s cemented carbide industry cluster, we actively coordinate with local suppliers of raw and auxiliary materials, equipment, and testing services to facilitate collaborative procurement, thereby fostering synergistic development among upstream and downstream SMEs, stabilizing local employment, and helping Zhuzhou establish itself as a world-class hub for the cemented carbide industry, thus contributing industrial momentum to regional economic growth.

V. Environmental Responsibility: Green Manufacturing, Pursuing Dual-Carbon Development

As a national-level green factory, the company strictly adheres to ecological and environmental protection standards, implements the green manufacturing principles of “energy conservation, resource reduction, pollution mitigation, and efficiency enhancement,” and integrates environmental protection into every stage of the value chain—raw material procurement, production, and waste management.

5.1 Enhancing the Environmental Management System

We maintain continuous operation of the ISO 14001 environmental management system, fulfill our primary responsibility for environmental protection, establish environmental records and a regular hazard‑identification mechanism, and rigorously implement standardized management of exhaust gases, wastewater, noise, general solid waste, and hazardous waste. We also conduct routine maintenance, operation, and inspection of environmental protection facilities to ensure that all pollutants are consistently discharged in compliance with applicable standards.

A closed-loop recycling system has been established for tungsten and cobalt production waste, enabling resource circulation and reuse and enhancing the rate of recycled utilization of rare metals. All hazardous wastes are entrusted to qualified disposal entities, with full‑process record‑keeping and traceability.

5.2 Energy Conservation, Carbon Reduction, and Clean Energy Development

In 2025, a 3,900 kW distributed photovoltaic power generation project will be officially filed and constructed, utilizing the rooftops of factory buildings and carports to install photovoltaic modules. The system will operate on a self‑consumption‑with‑excess‑power‑to‑the‑grid model. Upon completion, it is expected to generate approximately 3.0576 million kWh of clean electricity annually, reducing reliance on thermal power and lowering the plant’s production‑related carbon emissions.

We will continue to implement energy‑saving technological upgrades in high‑energy‑consumption processes such as sintering and drying, promote the substitution of electricity for other energy sources, optimize production scheduling and heat recovery, reduce the comprehensive energy intensity per unit of product, and steadily achieve our targets for lowering energy intensity. We will also keep advancing digital and intelligent manufacturing transformations, leveraging precise control of process parameters to minimize raw material losses and energy waste.

5.3 Green Supply Chain and Conflict Minerals Management

Establish a raw-material traceability management system, issue a conflict minerals policy statement, rigorously control the origin of minerals in the supply chain, and prevent conflict minerals from entering the production process. Prioritize suppliers that hold green‑production certifications and comply with environmental regulations, thereby encouraging upstream and downstream partners to jointly implement green‑production standards.

Strengthen landscaping within the plant premises and improve the production-site environment, creating a clean, low-carbon, modern new-materials manufacturing facility.

VI. Employee Responsibility: People-Oriented, Co-Creating a Platform for Growth

Employees are a company’s most valuable asset. The company upholds equal employment practices, safeguards employees’ legitimate rights and interests, establishes pathways for talent development, enhances the work environment, and fosters a greater sense of well-being and belonging among its workforce.

6.1 Safeguarding Employees’ Basic Rights and Interests

In accordance with the law, we have entered into labor contracts with all employees, made full contributions to social insurance, strictly adhered to national regulations on working hours and leave, and established a fair and transparent system for salary adjustments and performance evaluations, ensuring that compensation grows in tandem with the company’s financial performance while eliminating employment discrimination. By the end of 2025, the number of insured employees stood at 333, and the workforce remained generally stable.

6.2 Strengthening the Safeguards for Occupational Health and Workplace Safety

We rigorously operate the ISO 45001 occupational health and safety management system and implement the responsibility system for production safety. We conduct regular inspections and remediation of workplace safety hazards, enhance protective equipment at dust‑ and noise‑exposed workstations, and organize annual specialized occupational health examinations for all employees on duty, while maintaining comprehensive employee health records.

Regularly conduct safety‑operation training, fire‑fighting drills, and emergency‑response exercises to strengthen frontline employees’ safety awareness and refine safety operating procedures. As a result, no major production‑safety accidents or significant occupational‑health incidents occurred in 2025.

6.3 Enhance the talent development system and promote the spirit of craftsmanship.

We have established a multi‑dimensional talent incentive system featuring “Kingtal Craftsmen, Technology Stars, Management Stars, and Marketing Stars,” and put in place regular mechanisms for internal technical training, process‑innovation initiatives, and skills competitions.

Tiered training programs are offered to skilled workers, R&D personnel, and managers, covering topics such as advanced cemented carbide materials processing, quality control, equipment operation and maintenance, R&D innovation, and management capability enhancement. These initiatives aim to establish clear career pathways for skill advancement among technical staff and to cultivate versatile talent capable of driving the new materials industry. Furthermore, we are deepening industry–university–research collaboration by partnering with universities to attract R&D talent and by establishing an innovation‑and‑practice platform for young researchers.

6.4 Corporate Culture and Employee Care

We enrich employees’ extracurricular cultural life by organizing team-building activities, cultural and sports events, and holiday visits; continuously improve workshop working conditions and employee rest facilities; actively listen to staff concerns; maintain open channels for feedback; and foster a corporate culture that respects labor, encourages innovation, and promotes unity and progress.

VII. Technological Innovation and Product Responsibility: Meticulous R&D, Upholding the Highest Standards of Quality

7.1 Uphold R&D innovation and break through technological bottlenecks.

Leveraging the Hunan Provincial Enterprise Technology Center platform, the company has steadily increased its R&D investment and focused on tackling key technological challenges in areas such as ultra‑coarse, high‑toughness drilling alloys, gradient cemented carbides, and high‑performance cutting inserts. By the end of 2025, the company will hold 25 authorized patents, including 15 invention patents.

Deepen industry–university–research collaborative innovation, conduct joint research projects with the new materials departments of leading domestic universities, overcome numerous critical process challenges in the industry, and promote the domestic substitution of an increasing number of high-end cemented carbide products.

7.2 Strictly uphold product quality and fulfill product liability.

We rigorously implement the ISO 9001 quality management system, establishing a comprehensive quality‑control framework that covers every stage—from raw material receipt and forming, through sintering and post‑processing, to final product dispatch—and have refined a rapid response mechanism for customer feedback. We deliver stable, high‑performance products to support major projects in mining, oil and gas, infrastructure, and other sectors, while strictly managing product‑quality risks to ensure the operational safety of our downstream customers. We continuously optimize our after‑sales service system, providing global clients with integrated technical support for material selection and process optimization.

VIII. Supply Chain and Market Responsibility: Integrity for Mutual Success, Empowering the Upgrading of the Industrial Chain

8.1 Sunshine Procurement: Building a Fair and Collaborative Ecosystem

We are implementing a transparent procurement system and refining mechanisms for supplier onboarding, evaluation, and exit management. Supplier assessments are conducted across multiple dimensions, including business qualifications, quality capabilities, environmental compliance, and labor protection. We uphold fair bidding and collaborative practices based on honesty and integrity, eliminate improper transactions, and safeguard a healthy, well‑ordered supply chain ecosystem.

Support the growth of local supplier enterprises, giving priority to fostering collaborative development among Zhuzhou-based suppliers of raw and auxiliary materials, components, and testing services.

8.2 Uphold market order and adhere to fair competition.

We uphold business ethics, participate in market competition in compliance with the law, respect the intellectual property rights of our peers, reject cut‑throat price competition, and remain committed to creating market value through technology, quality, and service. We actively engage in industry‑standard dialogue, contributing to the standardized, high‑quality development of the cemented carbide sector.

IX. Community and Social Responsibility: Rooted in the Local Community, Fulfilling Our Obligations as a Responsible Corporate Citizen

The company is headquartered in Tianyuan District, Zhuzhou, and actively integrates into the development and construction of both the industrial park and the local community.

Proactively cooperate with the park in carrying out local initiatives such as safety‑production inspections, ecological‑environmental remediation, the creation of a civilized city, and public outreach on industrial science; give priority to hiring local workers, thereby providing stable employment opportunities for the community; and actively participate in the Cemented Carbide Industry Expo and the New Materials Industry Forum, showcasing Zhuzhou’s innovative achievements in the new materials sector and helping to enhance the national and global profile of Zhuzhou’s cemented carbide industry.

Actively responding to the government’s industrial policy directives, we are helping drive the transformation and upgrading of the manufacturing sector and optimize regional industrial development. We remain committed to nurturing industry talent by providing local vocational institutions with platforms for industry‑practice exchange, thereby supporting the in‑region cultivation of skilled professionals in new materials.

X. Gaps in Accountability and Directions for Improvement

Looking back at the company’s CSR initiatives in 2025, there remains room for further improvement:

1. A comprehensive, systematic ESG-specific management framework has yet to be established, and the corporate social responsibility management system still requires further refinement.

2. Forms of social participation, such as public welfare and charity, and volunteer service, remain relatively limited, and channels for philanthropic investment still need to be broadened.

3. Carbon inventory and carbon footprint accounting are still in their early stages, and refined management of carbon emissions requires further enhancement.

4. A dedicated external communication and disclosure mechanism for corporate social responsibility has not yet been fully established.

Going forward, the company will develop tailored improvement plans for each area, address its weaknesses, and advance the institutionalization and normalization of its corporate social responsibility management.

XI. Outlook for Social Responsibility Work in 2026

In 2026, the company will further integrate corporate social responsibility into its medium- and long-term development strategy, with a focus on advancing the following initiatives:

1. Governance and Economic Dimensions: Continuously enhance corporate governance, steadily expand the scale of operations, remain committed to technological innovation, further strengthen the domestic supply capacity for high-end cemented carbides, and foster coordinated development across the industry chain.

2. Green and Low-Carbon Initiatives: Promote in-depth energy-saving upgrades for key production processes, gradually implement product carbon‑footprint accounting, and fully align with the dual‑carbon strategy.

3. Employee Development: Enhance talent pipeline development, expand skills‑training programs, continuously improve employees’ work and living conditions, and foster more harmonious and stable labor‑management relations.

4. In the realm of scientific and technological innovation: continue to increase R&D investment, deepen industry–university–research collaboration, overcome more “bottleneck” technologies in advanced cemented carbide materials, and help ensure the independent and controllable development of China’s new materials industry.

5. Social Contribution: Actively explore new models for public‑benefit support, industry‑wide science communication, and university–enterprise collaboration; proactively engage in local public‑interest initiatives to further contribute to the social development of the regions where we operate; and, when appropriate, refine our ESG management framework, continuously enhance our corporate social responsibility (CSR) governance, and establish a regularized CSR reporting mechanism as needed.

XII. Conclusion

The times bestow upon enterprises both opportunities for growth and a sense of responsibility.

In 2025, the company will uphold its social responsibility through prudent operations and remain true to its original mission as it pursues innovative growth. Looking ahead, we will continue to stay committed to our core industrial values, deepen our expertise in the advanced hard‑metal materials sector, and strike a balance among economic performance, environmental protection, and social development. We will leverage technological innovation to drive industrial upgrading, champion green manufacturing to safeguard the ecological environment, and give back to society through responsible stewardship. Our goal is to become a model enterprise for sustainable development in our niche market, contributing Kingtal’s strength to the high‑quality advancement of the manufacturing sector.