New Home Decoration Gears Up, New Empowerment Drives New Cycle—New Year Speech by Guo Xingtian, Chairman of Wanhua Eco Group

Dear Colleagues,

Time flies, and we are about to bid farewell to the extraordinary and memorable year of 2022. First of all, on behalf of Wanhua Ecological Group, I would like to express my heartfelt thanks to all Wanhua Ecological employees for their hard work and to their families for their strong support! During the past three years of fighting the pandemic, Wanhua Ecology not only successfully maintained normal operations and project expansion, but also uniquely achieved a leap in performance and entered a virtuous cycle of profitability. Our green, formaldehyde-free artificial boards made from agricultural and forestry residues have been widely accepted by the market and are in short supply. The only constraint to further breakthroughs is our own production capacity.

Currently, we are experiencing the first wave of group immunity infection from Omicron, and the various strains are quite unpleasant. Even so, we were still able to achieve the first board off the production line in Xinyang on December 29 and the first green, formaldehyde-free plywood off the Linyi production line on December 31 as planned. Moreover, while others were afraid to gather, we attracted many industry executives to enthusiastically participate in the "New Cycle Home Furnishing Development Summit Forum" held in Xinyang, where we jointly discussed the development direction of the home furnishing industry after the pandemic. This is a miracle created by all Wanhua Ecological colleagues—you are amazing!

In 2006, Wanhua Ecology set out to find a green, formaldehyde-free land, with the original intention that "under the roof, there should be no formaldehyde." After sixteen years of hard work, we have now become the largest supplier of green, formaldehyde-free artificial boards in China, covering all categories of green, formaldehyde-free artificial boards, including straw board, ecological board, MDF, OSB, plywood, and magnesium board. By 2025, when the annual production capacity of 10 million m³ is fully realized, we will become the unicorn of the world's green, formaldehyde-free artificial board industry. At the same time, we have promoted and participated in drafting the new ENF national standard, putting an end to the history of formaldehyde-containing artificial boards polluting indoor air and harming human health in China!

If the persistent efforts of one company have driven the domestic artificial board industry toward formaldehyde-free, green, and sustainable upgrades, then the launch of green industrialized customized home furnishing in Xinyang on the 29th is the declaration of Wanhua Ecology's next goal as a "green home furnishing industry ecosystem operator" to the world: "Providing green home solutions for the better life of Chinese people!" We will begin to thoroughly reconstruct the lifestyles of millions of Chinese families through industrialization, digitalization, and greening, lowering the threshold for a better home life.

Now, at the beginning of a new cycle where domestic demand is king, we will unite the strength of the entire industry and, through distributed industrial clusters, achieve industry-wide synergy and symbiosis based on home, hard furnishings, furniture, soft furnishings, home appliances, and home integration. We will restructure the supply side to provide strong support for the diversity of the consumer side. This will be the main upgrade model for Wanhua Ecology's future industrial clusters.

The theme of the Xinyang conference was a word: "New Enablement." Here, "enablement" means becoming a core stakeholder and, by virtue of this role, giving stakeholders a significant competitive advantage, ultimately resulting in good returns for oneself. Wanhua Ecology acts as an enabler, operating the industrial ecosystem so that partners within the ecosystem gain competitive advantages and achieve greater development.

"While a thousand sails pass by the side of a sunken ship, ten thousand trees blossom ahead of a sick tree." We are fortunate to be living in a time of unprecedented change in a century. The new cycle of the home furnishing industry is beckoning us. Let us once again raise the banner, restructure the home furnishing industry in the era of stock, and use speed, beauty, and greenness to activate the suppressed 10-trillion-yuan stock home improvement market, providing a breakthrough for the domestic demand economy. Wanhua Ecology will certainly contribute to the development of the new cycle, and the future will surely belong to China!

Finally, I wish all Wanhua Ecology colleagues and their families: Happy New Year 2023! May you be safe, smooth, and have a joyful family!

Guo Xingtian

December 31, 2022