Profile of Hubei Kailong Chemical Group Co., Ltd.

Hubei Kailong Chemical Group Co., Ltd. (hereinafter referred to as the "Company") was established in 1994 through the main-body restructuring of the former provincial military-industrial enterprise, State-run Xiangsha Chemical Plant (Code No. 9615 Factory). After over 50 years of pioneering development, the Company has grown from a single local military-industrial enterprise into a corporate group with a diversified structure. It is a leading civil explosive enterprise in Hubei Province and a key backbone enterprise in China's civil explosive industry. The Company was listed on the Shenzhen Stock Exchange on December 9, 2015.

The company has a registered capital of RMB 499 million and over 4,000 employees, with 3 branch offices and 63 holding subsidiaries. Its branches and subsidiaries are distributed across Xinjiang, Ningxia, Shandong, Guizhou, Liaoning, Guangdong, as well as Wuhan, Jingmen, Xiaogan, Huanggang, Shiyan and other cities within Hubei Province.

The company is one of the few enterprises in China's civil explosive industry with a complete industrial chain. It has formed a full industry chain development model encompassing synthetic ammonia, ammonium nitrate and compound fertilizers, civil explosive equipment, blasting services, mining operations, and transportation of hazardous and dangerous chemicals. Currently, its production and operation business mainly consists of five major segments:Civil Explosives Equipment Segment, Modern Chemical Industry Segment, Green Mining Segment, Blasting Services Segment, and New Materials Segment. In the Civil Explosives Equipment Segment, the production licensed capacity for industrial explosives is over 280,000 tons/year (including 87,100 tons of bulk explosive capacity), possessing four major varieties: emulsion explosive, expanded explosive, modified ANFO explosive, and seismic charge; the production licensed capacity for digital electronic detonators is 70.08 million units, for detonating cord detonators (export only) is 5 million units, for plastic detonating cord is 370 million meters, for industrial detonating cord is 20 million meters, and for relay boosters is 4,500 tons; in the Modern Chemical Industry Segment, the comprehensive production capacity for ammonium nitrate and compound fertilizer is 800,000 tons/year, and synthetic ammonia production capacity is 200,000 tons/year; in the Green Mining Segment, the production capacity for construction stone aggregate is 14 million tons/year, calcium oxide (lime) production capacity is 1 million tons/year, and nano calcium carbonate production capacity is 50,000 tons/year; the Blasting Services Segment has 14 blasting companies with various qualification levels, including 3 Grade I qualification blasting companies; the New Materials Segment has 2 new materials companies, one of which is a listed company on the NEEQ, primarily producing PE film, PE and PET protective film, light-shielding adhesive, plastic hollow containers, special packaging film for explosives, and paper packaging products.

The Company boasts excellent R&D capabilities and formidable technical strength, with over 400 professional technical personnel of various specialties, including 62 senior-level professionals. It has established four major R&D institutions: Kailong Wuhan Research Institute, Wuhan Smart Agriculture Research Institute, Calcium Carbonate Products Research Institute, and Blasting Technology Research Institute, and built four major technology platforms: a Provincial-level Technical Center, Hubei Provincial Civil Explosive Equipment Engineering Technology Research Center, Hubei Provincial Postdoctoral Kailong Industrial Base, and Kailong Chuxing Academician Expert Workstation. Through years of independent R&D, it has developed 552 new products and technologies, obtained 410 patents (including 38 invention patents), undertaken research under the National Torch Program for expanded ammonium nitrate seismic charges and emulsified seismic charge series. In partnership with Nanjing University of Science and Technology, it pioneered the development of expanded ammonium nitrate seismic charges, recognized as a national-level new product. The JK-type emulsified explosive process technology and equipment, co-developed with Shenzhen Jin Aobo Co., Ltd., filled a domestic and international gap, reaching domestic-leading and internationally advanced levels. Its independently developed intelligent, low-manpower emulsified explosive seismic charge production process technology and equipment has achieved domestic-leading status. The Industrial Internet + intelligent safety monitoring system for civil explosive production and storage, co-developed with Jianghan University, has reached internationally advanced levels. The Company has achieved remarkable technological innovation, being recognized as a National High-tech Enterprise and a National Demonstration Enterprise for Integration of Informatization and Industrialization. Six subsidiaries have been successively identified as high-tech enterprises, five subsidiaries selected as Provincial-level "Specialized, Refined, Special, and New" "Giant" enterprises and Provincial-level Specialized, Refined, Special, and New SMEs, one subsidiary granted National Integration of Informatization and Industrialization Demonstration Enterprise status, and another granted Hubei Provincial Integration of Informatization and Industrialization Demonstration Enterprise status. The Company has repeatedly won first and second prizes for Science and Technology from the China Explosive Materials Industry Association, second and third prizes for Provincial Science and Technology Progress, and first and second prizes for Municipal Science and Technology Progress, among other accolades.

The company has established a robust quality management system and obtained ISO9001:2015 quality system certification. The "Kailong" brand explosives produced by the company have received the honorary titles of "Hubei Famous Brand Product" and "New China 60 Years Hubei High-tech Product Quality Award". The "Kailong" trademark has been awarded the titles of "Hubei Famous Trademark" and "China Well-known Trademark". The "Kailong" brand seismic charges have won the title of "National Customer Satisfied Product".

The Company has firmly established the safety philosophy that "Safety is the foundation for survival of both the enterprise and its employees," insisting on strengthening safety through people-oriented approaches, safeguarding safety through sound systems, ensuring safety via strict inspection and assessment, and enhancing safety with increased investment. It is dedicated to building a safety value system of "Safety Subconsciousness," which has successfully applied for a management patent. The Company has been consecutively awarded for nine sessions as the Hubei Province Work Safety Red Banner Unit by the Hubei Provincial Government, and has won honors including the first "Top Ten Work Safety Demonstration Enterprises" in Hubei Province. It has also been recognized as a "National Demonstration Enterprise for Safety Culture Construction" by the State Administration of Work Safety. The Company continuously improves its environmental management level, actively undertakes corporate social responsibility, and implements clean and civilized production, having passed the ISO14001:2015 environmental management system certification. 

The Company continuously strengthens corporate culture construction focusing on reform and development. On the basis of inheriting the qualities of unity, dedication, and perseverance from its military-industrial heritage, it promotes mainstream values and shapes a new image, aspiring to the corporate vision of a "Century-old Enterprise, Civil Explosive Flagship." It has distilled the core values of "Responsibility, Dedication, Innovation, and Initiative," constructed a "Value Community" among leaders at and above the middle management principal level, and formed the "Shared Values" of this community. Among all employees, it has established the work principle of "Pursuing Excellence Every Day, Everyone Striving Upward," making Kailong Culture a powerful spiritual pillar for the enterprise's extraordinary development.

The company has achieved rapid economic growth and excellent operating performance, having received honors such as the "China Listed Companies Golden Bull Award," "China Listed Companies Outstanding Industrial Chain Innovation Award," "Hubei Province Enterprise Outstanding Contribution Unit for Thirty Years of Reform and Opening-up," "Hubei Province Yangtze River Quality Award," "Hubei Province Advanced Unit for Economic Efficiency," "Hubei Province Best-selling Gold Award for Similar Products," "Top 100 Hubei Manufacturing Enterprises," and "Jingmen City Outstanding Contribution Enterprise for High-quality Development." The company maintains good social credit, having been granted titles including "China Listed Companies Top 100 Trustworthy Enterprises Award," "National Enterprise of Observing Contracts and Valuing Credit," "National May 1st Labor Certificate," "Provincial First Top 100 Trustworthy Taxpayers," "National Market Quality Credit User Satisfaction Enterprise," "Hubei Province Excellent Credit Trustworthy Client," "Hubei Province Consumer Satisfaction Unit," "Hubei Province Excellent Trustworthy Enterprise," "Hubei Province Labor and Social Security Trustworthy Unit," and "Hubei Province Civilized and Trustworthy Demonstration Enterprise."

The Company looks forward to joining hands with friends at home and abroad to pursue common development and repay customers and society with better products and services.