Tiandi Science & Technology Co., Ltd Action Plan of “Improve Quality and Efficiency and Safeguard Returns”in 2024 Seeking guidance from the gist of the 20th National Congress of the CPC, the 3rd Plenary Session of the 20th National Congress of the CPC, and the annual Central Financial Work Conference, Tiandi Science & Technology Co., Ltd (herein after referred to as “TDTEC”or the "Company")faithfully fulfills the requirements that the PRC State Council and the Shanghai Stock Exchange put forward in the "Opinions on Further Improving the Quality of Listed Companies" and the "Initiative on Launching Special Actions to Improve Quality and Efficiency and Ensure Returns for Listed Companies on the Shanghai Stock Exchange," respectively. To this end, TDTEC has formulated its "Action Plan of ‘Improve Quality and Efficiency and Safeguard Returns’ in 2024", which is reviewed and approved at the 14th meeting of its 7th Board of Directors. The contents of the Plan are as follows. 1. A Strong Core Business to Constantly Promote High-Quality Development The Company has established Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as guidance for its action to implement relevant work arrangements made by the State-owned Assets Supervision and Administration Commission (SASAC) of the PRC State Council and relevant decisions adopted at the 20th National Congress of the CPC, the 3rd Plenary Session of the 20th National Congress of the CPC, and the annual Central Financial Work Conference. It has put into practice the "1245" development idea and has steadily increased its composite strength and gained significant momentum in pursuing high-quality development. Since entering into the 14th Five-Year Plan period (2021–2025 period), the Company has achieved continued strong operating performance: The average annual growth rate of its operating revenue is 13.4%; that of its net income attributable to the parent, 20%. Its profitability and operating efficiency have been remarkably improved: The return on equity ratio has been increased to 10.9% from 7.8%; the receivables turnover ratio, to 3x from 2.2x. In 1H 2024, the operating revenue reaches RMB14.89 billion, up 2.3% year-on-year; the net income attributable to the parent totals RMB1.53 billion, up 10.5% year-on-year. The Company will continue focusing on its core business and advancing actions to create value and enhance its value-creation capacity.It will make unremitting efforts to pursue reasonable improvement in both quality and quantity. With the above-mentioned improvements and enhanced ability to judge the macro environment and industry trends, it will be able to timely optimize its business strategy and achieve better performance in terms of efficiency, gross income, net income, net income attributable to the parent, return on net assets, total labor productivity, operating cash flow, R&D investment intensity, sci-tech output efficiency, and asset-liability ratio. By continuously expanding the increment and tapping the potential, it will maximize its performance and step up its management, esp. marketing management, cash flow management, brokerage fee management, accounts receivable management, and inventory management. It will reduce its cost and expenditure and increase its asset turnover ratio through fine management methods. It will drive value creation via strengthened budget management, business-finance integration, and total cost management. 2. Strengthened Sci-Tech Innovation to Maintain Leading Position in Industrial Technology To fulfill the entrusted mission of safeguarding China's energy security and promoting innovation in coal science and technology, the Company takes sci-tech innovation as its core development ideology and makes solid progress in building itself into a leading high-tech enterprise, an original technology source, and a sci-tech force of national strategic significance, striving to actualize high-level self-reliance in science and technology. Since 2021, the Company has worked hard to ensure that its top-level design achieves its intended goals. It has formulated and implemented its "Top-Level Design for Sci-Tech Innovation" and accelerated the construction of an innovation system with a clear division of labor and orderly integration of elements. Its R&D intensity has grown from 7.2% to 8%, and continuous breakthroughs have been made in the fields of advanced technology and high-end equipment. New equipment, materials, and software have been adopted and timely updated, constantly setting new records with improved performance. Relevant application effects have remained positive, which has remarkably improved efficiency. At present, the Company boasts 122 provincial- and ministerial-level laboratories, engineering research centers, technical research centers, and inspection and testing pla