Company Governance

Management strategies and objectives

Management strategies and objectives

In light of the severe and volatile global industrial and economic environment—characterized by prolonged weak market demand, fluctuating inflation, the continued U.S.-China technology disputes, and escalating geopolitical conflict risks—along with increasingly stringent domestic and international requirements for carbon neutrality and sustainable transformation, these present both challenges and opportunities.

The management team adheres to a pragmatic attitude and leverages its competitive advantages to formulate operational plans and strategies. In 2025, the company will aim to increase its non-industry income annually by stabilizing industry profits and leveraging the benefits of land asset activation, thereby strengthening the overall operating performance and ensuring financial security. At the same time, considering the development trends of sustainability issues both domestically and internationally, we will link the company's core business to formulate and promote specific plans for sustainable development (ESG) on a yearly basis.

Grasp the economic situation, strengthen and monitor the operation of production, marketing and storage, and improve the operating performance of the industry.

Goal
  • Stabilize the annual gross profit margin and create profits for the industry.
Strategy 1
Strengthen the construction of domestic and foreign sales channels, and maintain stable production and sales planning and operation.
Strategy 2
Establish a profit and loss estimation and product profit analysis system, through early prediction and planning, provide a reference for making real-time operational decisions.
Strategy 3
By adopting a flexible model that utilizes both self-produced and externally purchased black hot-rolled coils (slabs), the Company strengthens cost competitiveness and enhances product profitability.
Strategy 4
Implement lean management for various variable processing expenditures to maintain stable variable processing costs; seek the development of differentiated products to reduce losses from idle capacity.
Strategy 5
Monitor the latest developments in domestic and international carbon fees or carbon tariffs, formulate corresponding response strategies early, and reduce the impact on core business operations.
Strategy 6
Consolidate and develop niche products, expand customized product development, promote lowcarbon circular economy products, and meet the quality requirements of customized products.
Strategy 7
Strengthen inventory management to reduce the risk of price decline caused by price fluctuations.

Group leadership based on the principles of fairness, openness and transparency, revitalize idle assets, and increase fixed income outside the industry

Goal
  • Increase annual rental income and safeguard the lawful rights related to asset expropriation.
Strategy 1
Develop plans for the utilization of idle assets according to the characteristics of different regions to increase non-operating fixed income.
Strategy 2
During the expropriation negotiation process, strive for better prices to ensure the company's asset interests.

Strengthen financial monitoring and warning mechanisms to control financial risks

Goal
  • Strengthen cash management to ensure financial stability, and continuously monitor indicators such as current ratio, debt ratio, and annual net inflow of operating cash on a monthly basis.
Strategy 1
Monitor key ratios and cash flow.
Strategy 2
Strengthen financial and liquidity risk management and response.
Strategy 3
Pay close attention to the trend and forecast of interest rate and exchange rate, and take corresponding measures in time.

Implementing Corporate Governance and Strengthening the Sustainable Management Value of Enterprises

Goal
  • Deepen the culture of corporate sustainable governance and promote energy saving and carbon reduction to achieve net zero.
Strategy 1
Collaborate with the relevant authorities to promote and gradually promote the Action Plan for Sustainable Development (2023-2026) according to the established timeline.
Strategy 2
Implement sustainable information management and gradually align with IFRS Sustainability Disclosure Standards.
Strategy 3
Continue planning energy conservation and carbon reduction and developing green energy, following the path of sustainable development to demonstrate commitment to sustainability.
Strategy 4
Committed to zero waste through resource circulation and the implementation of environmental protection efforts such as pollution prevention.
Strategy 5
Continuously improve the provision of a healthy and safe workplace, strengthen occupational safety and health management, enhance workers’ safety culture awareness, and create a happy and inclusive workplace.
Summary

Looking ahead to 2025, although global stainless steel market demand is expected to recover, weak demand in China's steel market and persistent overcapacity are unlikely to improve in the short term. Ongoing geopolitical conflicts, tariff barriers, and the increasing impact of climate change present multiple environmental challenges, leaving the stainless steel market facing severe challenges. The strategic plan for 2025 will actively respond by striving to expand domestic and international sales channels, improve capacity utilization to reduce idle capacity, and adjust procurement and production-sales operation models to strengthen the company's core business competitiveness. On the non-operating side, efforts will be made to revitalize assets and increase non-operating fixed income to enhance overall company performance. Additionally, to implement sustainable corporate management, the company will continue to integrate ESG with business strategies through a rigorous governance framework, starting from core business competencies to maximize resource utilization efficiency, while incorporating green energy development to strengthen the company's sustainable competitiveness.