天地科技：关于2024年度“提质增效重回报”行动方案(英文版)
Tiandi Science & Technology Co., LtdAction Plan of “Improve Quality and Efficiency
and Safeguard Returns”in 2024
Seeking guidance from the gist of the 20th National Congress of theCPC, the 3rd Plenary Session of the 20th National Congress of theCPC, and the annual Central Financial Work Conference, TiandiScience & Technology Co., Ltd (herein after referred to as“TDTEC”or the "Company")faithfully fulfills the requirements thatthe PRC State Council and the Shanghai Stock Exchange putforward in the "Opinions on Further Improving the Quality of ListedCompanies" and the "Initiative on Launching Special Actions toImprove Quality and Efficiency and Ensure Returns for ListedCompanies on the Shanghai Stock Exchange," respectively. To thisend, TDTEC has formulated its "Action Plan of ‘Improve Qualityand Efficiency and Safeguard Returns’ in 2024", which is reviewedand approved at the 14th meeting of its 7th Board of Directors. Thecontents of the Plan are as follows.
1. A Strong Core Business to Constantly Promote High-QualityDevelopment
The Company has established Xi Jinping Thought on Socialismwith Chinese Characteristics for a New Era as guidance for its
action to implement relevant work arrangements made by theState-owned Assets Supervision and Administration Commission(SASAC) of the PRC State Council and relevant decisions adoptedat the 20th National Congress of the CPC, the 3rd Plenary Sessionof the 20th National Congress of the CPC, and the annual CentralFinancial Work Conference. It has put into practice the "1245"development idea and has steadily increased its compositestrength and gained significant momentum in pursuing high-qualitydevelopment. Since entering into the 14th Five-Year Plan period(2021–2025 period), the Company has achieved continued strongoperating performance: The average annual growth rate of itsoperating revenue is 13.4%; that of its net income attributable to theparent, 20%. Its profitability and operating efficiency have beenremarkably improved: The return on equity ratio has beenincreased to 10.9% from 7.8%; the receivables turnover ratio, to 3xfrom 2.2x. In 1H 2024, the operating revenue reaches RMB14.89billion, up 2.3% year-on-year; the net income attributable to theparent totals RMB1.53 billion, up 10.5% year-on-year.The Company will continue focusing on its core business andadvancing actions to create value and enhance its value-creationcapacity.It will make unremitting efforts to pursue reasonableimprovement in both quality and quantity. With theabove-mentioned improvements and enhanced ability to judge themacro environment and industry trends, it will be able to timely
optimize its business strategy and achieve better performance interms of efficiency, gross income, net income, net incomeattributable to the parent, return on net assets, total laborproductivity, operating cash flow, R&D investment intensity,sci-tech output efficiency, and asset-liability ratio. By continuouslyexpanding the increment and tapping the potential, it will maximizeits performance and step up its management, esp. marketingmanagement, cash flow management, brokerage fee management,accounts receivable management, and inventory management. Itwill reduce its cost and expenditure and increase its asset turnoverratio through fine management methods. It will drive value creationvia strengthened budget management, business-financeintegration, and total cost management.
2. Strengthened Sci-Tech Innovation to Maintain LeadingPosition in Industrial TechnologyTo fulfill the entrusted mission of safeguarding China's energysecurity and promoting innovation in coal science and technology,the Company takes sci-tech innovation as its core developmentideology and makes solid progress in building itself into a leadinghigh-tech enterprise, an original technology source, and a sci-techforce of national strategic significance, striving to actualizehigh-level self-reliance in science and technology. Since 2021, theCompany 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 theconstruction of an innovation system with a clear division of laborand orderly integration of elements. Its R&D intensity has grownfrom 7.2% to 8%, and continuous breakthroughs have been madein the fields of advanced technology and high-end equipment. Newequipment, materials, and software have been adopted and timelyupdated, constantly setting new records with improvedperformance. Relevant application effects have remained positive,which has remarkably improved efficiency. At present, theCompany boasts 122 provincial- and ministerial-level laboratories,engineering research centers, technical research centers, andinspection and testing platforms. It has set up a scientific researchand innovation platform system of national importance, which isheaded by State Key Laboratories, national-level engineeringresearch centers, enterprise technology centers, etc. In 1H 2024,the Company obtains 1,021 patents, including 697 inventionpatents, and two of its scientific and technological achievementswin the State Science and Technology Awards. A transparentanalytical technique for analysis of stress field in rock mass in deepenergy exploitation and its application, a research projectcompleted with the participation of CCTEG China Coal ResearchInstitute, wins the first prize of the National Technological InventionAward. The complete set of highly-efficient intelligent deep-set coal
mining technology and its application, a project accomplished withthe participation of CCTEG Beijing Tianma Intelligent ControlTechnology Co., Ltd. and CCTEG Coal Mining Research Institute,wins the second prize of the National Science & TechnologyProgress Award. With breakthroughs in more than 40 key coretechnologies such as transparent mine, driving and boltingintegration for efficient mining, and preparation of high-value newmaterial from coal tar, the Company's sci-tech contribution to theindustry has significantly grown.The innovation ideology that the Company adheres to entails thepursuit of truth, the search into the unknown, the courage toinnovate, and the feeling of commitment to the nation. Under itsguidance, the Company will profoundly reform its sci-techinnovation systems and mechanisms and see that its researchmanagement system conforms to the laws of scientific researchand technology development, creating a new paradigm for scientificresearch in the coal industry. It will continue setting its sights on theworld's scientific and technological frontiers and keeping up withthe economic trends, working arduously to satisfy the primaryneeds of the country and safeguard people's lives and health. Onthis basis, it will solidly promote continuous sci-tech innovation andbasic research and strive to solve crucial common technicalproblems in critical fields. It will push forward the in-depthintegration of sci-tech and industrial innovations and make greater
efforts to capitalize on its intellectual properties, exploring apractical path that utilizes scientific and technological achievementsto empower reform and practice. TDTEC strengthens its scientificresearch capabilities and optimize its professional talent teambuilding. By developing a high-level sci-tech innovation team, it willaccomplish its assigned tasks such as highlighting the central roleof sci-tech innovation and accelerating the development of strategicemerging industries and the upgrading of traditional industries.
3. Standardized Operations to Continuously OptimizeManagementTo continuously improve the governance system, the Company hasbuilt a corporate governance structure comprised of theShareholders' General Meeting, the Board of Directors, the Boardof Supervisors, and corporate managers, which features clearlydefined rights and responsibilities, coordinated operation, androbust checks and balances. The structure ensures that thepersonnel of the listed Company is independent from its controllingshareholders. The Company has actively fulfilled the requirementsto reform the independent director system: It has revised 11corporate regulations and rules such as the "Work Rules forIndependent Directors" to support and facilitate independentdirectors' participation in decision-making activities of the Board ofDirectors and enhance their role in conducting supervision,
ensuring checks and balances, and providing professionalconsultation. To protect the legitimate interests of investors, theCompany strictly keeps inside information confidential via arigorous registration and management system that prevents insideinformation disclosure.The Company plans to actively organize internal training sessionsthat publicize laws and regulations such as the amended CompanyLaw of the PRC and the "Opinions of the PRC State Council onStrengthening Regulation, Forestalling Risks, and Promoting theHigh-Quality Development of the Capital Market." It will continueperfecting its modern corporate system with Chinesecharacteristics and sending its directors, supervisors, and seniormanagers and advisers to training sessions held by the ChinaSecurities Regulatory Commission and the Shanghai StockExchange. Its independent directors and audit committee shall givefull play to their roles, and its "key minority," i.e. directors,supervisors, senior managers, and controlling shareholders shallhave a stronger sense of responsibility. Solid work shall be done toensure operational compliance and prevent major risks and hiddendangers. Concrete progress shall be made in the drive to improvecorporate governance and governance efficiency.
4. Enhanced Investor Relations to Effectively CommunicateCorporate Values
The Company strictly complies with the laws, regulations, andnormative documents related to information disclosure of listedcompanies: It works ceaselessly to enhance its informationdisclosure mechanism; It earnestly fulfills its information disclosureobligations on truthful, accurate, complete, timely, and fair bases. Ithas been rated "A" in the SSE annual evaluation of the informationdisclosure work of listed companies. The Company keepsimproving its ESG performance, with its first-ever ESG reportreleased in March 2024 in response to the concerns andexpectations of various stakeholders. The Company attaches greatimportance to the management of investor relations and conductsmulti-level communication with investors through channels such asroadshows, reverse roadshows, performance briefings, calls frominvestors, the reception of visiting investors, the Shareholders'General Meeting, and the SSE E-Interaction. It communicates withmore than 600 investors on average annually, effectively conveyingthe Company's pursuit of high-quality development and high-techvalue and enhancing investors' confidence in the Company'sdevelopment. At the end of June 2024, the total number ofshareholders in the Company stood at 37,000, a decrease of27,000 from the same period five years ago.
The Company will conscientiously implement the PRC StateCouncil's "Opinions on Further Improving the Quality of Listed
Companies" and continuously optimize relevant systems andmechanisms to meet its quality improvement requirements forlisted companies owned by state-owned enterprises. To satisfyinvestor needs, the Company will disclose information throughmultiple channels, platforms, and methods and enhance the valueand readability of its publicly released reports. It will actively andvoluntarily disclose information within the scope of practicepermitted under relevant laws and regulations. Guided by theprinciple that highlights novel forms and effective communication,the Company will further strengthen its management of investorrelations. It will fully integrate internal and external resources of theindustry and utilize visual technology and digital technology tocommunicate with investors, paying close attention to their opinionsand timely responding to their demands, which will be conducive tothe Company's market value recognition and realization.
5. Safeguarded Shareholder Returns to Share High-QualityDevelopment BenefitsThe Company safeguards investor returns. Since the listing, it hasdistributed a total of RMB5.34 billion in cash dividends (taxinclusive). The cash dividends (tax inclusive) distributed in therecent five years have amounted to RMB3.77 billion, accounting for70% of the total amount distributed since listing, and the annualdividend rate has increased from 3.1% to 5.2% over the years. The
annual dividend (tax inclusive) for 2023 is RMB2.8 per 10 shares.For the year, the Company has distributed RMB1.16 billion(taxinclusive) in cash dividends, accounting for 49.1% of the net profitattributable to shareholders in the 2023 consolidated financialstatements. The dividend payout ratio has increased by 6.7percentage points compared with the previous year.In the future, the Company will insist on actively benefiting itsshareholders and further strengthening its awareness of rewardingshareholders. Based on strict compliance with relevant laws andsupervisory regulations and upon comprehensive consideration ofits strategy, development goals, business planning, profitability,cash flow status, and external environment, the Company will striveto provide shareholders with sustainable, stable, and reasonableinvestment returns and share with them the fruits of its high-qualitydevelopment.The Company will evaluate specific implementation measures forthis Plan and fulfill its information disclosure obligations in a timelymanner. In the future, it will stick to the "1245" development idea,esp. the two strategies emphasizing innovation-driven developmentand focus on main businesses, respectively. It will remaindedicated to enhancing its core competitiveness, profitability, andrisk management capabilities. With better performance, morestandardized corporate governance, and higher investor returns, itwill earnestly fulfill the responsibilities and obligations of listed
companies and contribute to the drive that develops new qualityproductive forces, maintains market stability, and boosts investorconfidence.Forward-looking statements such as those regarding developmentstrategies and work plans in this Plan do not constitute theCompany's substantive commitment to investors. Investors areadvised to pay attention to relevant risks.