ESG Report 2025

31 Risk/ Opportunity Type Affected Area 1 Level of significance Potential Financial Impact Impact on Business Model and Value Chain Long- term Short- term Medium- term Tightening policies and regulations The Group's overall compliant operations. Transition Risks Business Model: The Group may need to comply with increasingly stringent climate-related disclosure requirements and energy efficiency standards, increasing the complexity of compliance. Tightening energy efficiency standards may affect operations. Value Chain: The Group may need to track and report carbon emissions throughout its operations. Cost Increase: To meet disclosure requirements, the Group may need to invest in carbon accounting tools, reporting systems and relevant advisory services. A higher proportion of paid carbon allowance allocation or rising carbon prices would also translate directly into compliance costs. Structural increases in raw material and energy costs Global and domestic procurement markets, involving key raw materials. Business Model: Climate policies such as carbon costs, together with extreme weather, may intensify commodity market volatility and directly affect procurement planning. Value Chain: This will test the supply chain's capabilities in strategic procurement and long-term contracting. Cost Increase: The cost of principal business activities may remain under upward pressure, eroding gross margins. Working Capital: Additional inventories maintained to secure supply may increase pressure on working capital turnover. Resource efficiency and energy substitution Business Model: Through deep energy-saving retrofits and replacement with clean energy such as photovoltaic power, the Group can drive production and operating models toward a lower-energy and lower-carbon transition and reduce dependence on conventional energy. Value Chain: As a producer or consumer of green electricity, the Group can enhance the low-carbon attributes of its supply chain, respond to downstream customers' green manufacturing requirements, and potentially create new synergies with the power grid or trading counterparties. Operating Cost Savings: Reduced energy consumption can directly lower major operating expenditure and improve profitability. Capital Efficiency Improvement: Longer equipment life may reduce replacement frequency and capital expenditure. R&D innovation and market expansion Business Model: Climate-driven changes in disease patterns, such as vector-borne diseases and heat-related illnesses, may generate new demand for prevention and treatment medicines, creating new directions for the Group's R&D innovation. The Group's R&D pipeline in endocrinology, metabolism and anti-infectives can respond quickly to emerging market needs. Value Chain: Medicines or intermediates meeting green procurement standards may gain priority for entry into certain premium markets or supply chains, and strengthen ties with ESG-focused investors and customers. Revenue Increase: New growth markets and product lines, such as medicines targeting climate- related diseases, may generate incremental revenue. Green certification or low-carbon products may also command a brand premium and enhance profitability. Lower Financing Costs: Where eligible, the Group may obtain green credit facilities or government subsidies, such as incentives for energy- saving retrofits, thereby reducing capital costs. Opportunities Production bases, involving energy management systems, production equipment and available plant space. The United Laboratories International Holdings Limited Note: 1. Level of significance ： ： Handled through existing standard procedures ； ： Requires continuous monitoring ； ： Requires a dedicated management strategy and follow-up 2025 Environmental, Social and Governance Report Innovative drugs, bulk medicine and bio- pharmaceutical business.