ESG Report 2025

82 9.3.4 Supply Chain Stability Assurance A stable and reliable supply chain is a critical foundation for The United Laboratories to ensure production continuity and product supply capability. In the face of market fluctuations, changes in logistics and external uncertainties, the Group continues to enhance its supply assurance mechanisms. It strengthens supply chain resilience from multiple aspects, including procurement planning, supplier allocation, inventory management and collaborative communication, so as to mitigate the impact of raw material shortages, delivery delays or unexpected disruptions on production and operations. In terms of supplier allocation, the Group promotes an appropriate diversification of supply sources based on material criticality, procurement frequency and supply risk levels, thereby avoiding excessive reliance on any single supplier. For key raw and auxiliary materials, packaging materials and equipment-related materials, the Group continues to develop and reserve alternative supply resources to enhance supply flexibility and emergency allocation capabilities. Leveraging its vertically integrated business model covering pharmaceutical intermediates, bulk medicine and finished products, The United Laboratories has also strengthened its overall control over the supply of key raw materials and production scheduling to a certain extent, thereby supporting the stable operation of the supply chain. With respect to procurement and inventory management, the Group continuously optimises procurement arrangements and stocking strategies based on production plans, material consumption and market supply dynamics. It implements dynamic monitoring for critical materials and sets reasonable safety stock levels to balance supply assurance with inventory efficiency. For materials that may be affected by market volatility, seasonal factors or logistics conditions, the Group conducts advance assessments of supply risks and adjusts procurement schedules in a timely manner to reduce the risk of supply disruptions. At the same time, the Group places emphasis on establishing stable and transparent collaborative relationships with suppliers. Through routine communication, demand forecasting alerts and delivery coordination, it maintains timely visibility over suppliers’ production, delivery and inventory status, thereby enhancing the efficiency of information sharing. In the event of anomalies that may affect supply stability—such as fluctuations in production capacity, delivery delays, logistics disruptions or significant raw material price volatility—The United Laboratories will promptly activate coordination mechanisms, engaging procurement, quality, production and relevant business units to formulate response plans. Where necessary, measures such as alternative sourcing, adjustment of delivery schedules or optimisation of inventory allocation will be implemented to ensure the continuity of production and supply. The United Laboratories recognises that the supply chain is not only critical to the stable supply of raw materials and key inputs, but also has a direct impact on the Group’s environmental performance, resource efficiency and overall sustainability. Accordingly, the Group continues to integrate green principles throughout the entire procurement and supplier management process, encouraging suppliers to enhance their performance in compliant operations, environmental protection, product safety and resource management, and working together to build a more responsible, resilient and sustainable supply chain. At the Group level, The United Laboratories has established a “Sustainable Procurement Policy”, and has explicitly incorporated requirements relating to environmental protection and climate resilience in its “Supplier Code of Conduct”, embedding sustainability principles into supplier management and procurement decision-making processes. These requirements cover, among others, suppliers’ compliance with applicable environmental laws, regulations and standards; the acquisition and maintenance of necessary environmental permits, licences and registrations; and the encouragement for suppliers to identify and assess environmental and climate-related risks in their operations, and progressively enhance resource efficiency and business continuity management capabilities. Through these Group- level frameworks, the Group continues to extend its green supply chain philosophy from its own operations to the management of its business partners. 9.4 Green Supply Chain The United Laboratories International Holdings Limited 2025 Environmental, Social and Governance Report