New Year Address by Guo Xingtian, Chairman of Wanhua Eco Group

As 2022 is approaching, at this wonderful moment of bidding farewell to the old and welcoming the new, on behalf of the Board of Directors and management of Wanhua Eco Group, I would like to extend my best New Year wishes to all hardworking Wanhua Eco employees and their families, to leaders at all levels and friends from all walks of life who have long cared for and supported the development of Wanhua Eco, to our open-minded and inclusive shareholders, and to our partners who advance hand in hand with us!

In 2021, all of us at Wanhua Eco have remained true to our original aspiration, held fast to our dreams, watered our harvests with sweat, and forged ahead with determination, achieving breakthrough progress in many areas.

In 2021, under the strong leadership of the Group, Wanhua Hexiang Board Industry made continuous efforts in raw material procurement, production operations, market sales, innovation and R&D, and logistics support. Digital projects in each production plant were successfully launched, and the construction of the industrial internet began to show results. By resolutely implementing the eight-character policy of "cost reduction, quality improvement, increased production, and profitability" and building the advantage of "five core competencies," we achieved full operating profitability in the fourth quarter, taking a solid first step toward sustained profitability next year, the company's IPO preparation, and the realization of long-term strategic goals.

Over the past year, under the wise decisions of the Group, the fund company, together with social capital, has continuously optimized industrial layout and promoted the rapid development of the wood-based panel industry using agricultural and forestry residues. We have successively introduced Baobi Fund and other social capital, continued to rely on the industrial fund to acquire and build new formaldehyde-free wood-based panel factories, successively acquired Shaoguan Wulian Wood Industry and Chenzhou Anren Factory, invested in the construction of Wanhua Eco New Materials (Chenzhou) Company with an annual output of 500,000 cubic meters, laid out in Linyi, Shandong, and signed an investment agreement for the Leshan Green Building Materials Integration Project with Qianwei County, Leshan City, Sichuan. These efforts have laid a solid foundation for the continuous expansion and strengthening of the green wood-based panel industry and for achieving the Group's strategic goals.

Over the past year, business segments such as Sikong, New Home Furnishing, Yunzhuo, and Eco-Tech have closely focused on the development concept of "under the roof, there should be no formaldehyde," continuously building a green industrialized customized home furnishing industry internet platform and jointly creating a green home furnishing industry ecosystem. After five years of continuous trial and error and correction, the Sikong digital platform version 930 was finally officially launched and is being continuously improved. The green industrialized customized home furnishing industry internet platform has finally seen the dawn of victory, taking a solid first step toward commercial operation. After a year of exploration, the Sikong business model and overall plan have been clarified, and the Sikong operation system has been successfully implemented and is ready to go. The Yunzhuo team achieved break-even in adversity, gradually integrated into the Sikong new home furnishing operation system by leveraging its advantages in the woodwork field, and is playing an increasingly synergistic role. The wall, ceiling, floor, water, electricity, and bathroom production lines of the new home furnishing company have been successfully put into production, and the construction of new production bases such as the Juancheng production line is progressing steadily as planned. The headquarters base of the new home furnishing company has reached a preliminary landing intention with the government and relevant institutions of Foshan City, Guangdong Province, and the future development is promising. The sales volume and profit of adhesives and various home furnishing building materials of Eco-Tech have continued to grow, showing strong development momentum.

Over the past year, Daosheng Leasing Company's traditional leasing business has developed steadily, and the newly added photovoltaic and supply chain segments have continued to make efforts, strongly supporting the Group's strategic development. The Equipment Company is responsible for the integration of the entire Group's production lines, overcoming difficulties such as extreme weather and funding, and completed the full process from design to equipment installation and commissioning for new production line projects in Lankao, Yangxin, and Juancheng as planned, making great contributions to the Group's industrial cluster layout. Changyuan Company has overcome various difficulties, gradually resolved historical issues, fully restored production, and carried out all work in an orderly manner.

There is no turning back once the bow is drawn. 2022 will surely be a milestone year, a year in which the Group's strategic goals are fully implemented. The Hexiang Board segment must build sustainable profitability and advance the IPO process. 2022 is also the decisive year for Sikong, which must build core digital systems, logistics and delivery systems, and intelligent manufacturing capabilities, achieve marketing breakthroughs, and realize the commercialization of the Sikong digital platform system. In the new year, the distributed industrial cluster bases for new home furnishing will continue to be laid out. The four bases in Lankao, Henan; Binzhou, Shandong; Heze, Shandong; and Chenzhou, Hunan must be completed and put into production to build the competitiveness of new home furnishing products. At the same time, preparations for five cluster bases in Yantai, Shandong; Leshan, Sichuan; Baicheng, Jilin; Shangrao, Jiangxi; and Linyi, Shandong will be strengthened, and supply chain construction will be enhanced. With planned and step-by-step efforts, Wanhua Eco will be developed into a green and environmentally friendly new home furnishing unicorn enterprise.

In the new year, let us be full of hope and confidence, hold fast to our dreams, work together with one heart and one mind, overcome all obstacles, forge ahead, and work together to achieve the company's strategic goals on schedule! Let us leave the mark of Wanhua Eco on the road to a better life!

Finally, I once again wish all Wanhua Eco colleagues and friends from all walks of life a happy New Year, good health, smooth work, and family happiness!