The year 2023 was of special significance in the history of Sinopec. This year, General Secretary Xi Jinping visited Jiujiang Petrochemical to point out the direction for the high-quality development of the Company. This was his second inspection tour to Sinopec in two years. All of our employees felt the warmth and support and were greatly encouraged and motivated. Over the past year, we kept in mind General Secretary Xi Jinping's earnest instructions, took thematic education and disciplinary inspections as driving forces, further implemented high-quality development actions, and accelerated building a world-leading company. We managed risks, overcame difficulties, adapted to various situations, and blazed new growth patterns. Progress was made in all aspects of our performance. After restoring policy-related extra-budgetary factors, we outperformed our annual targets. Domestic oil and gas production, refining throughput, ethylene production, PX production, total labor productivity, and R&D investment all reached historic highs. Oil production, marketing volume, and retail volume all reached their best levels since the 14th Five Year Plan period. We delivered gratifying results with high quality and good performance in the opening year of fully implementing the principles of the 20th National Congress of the Communist Party of China and at the milestone when we celebrated the 40th anniversary of Sinopec's establishment.

We made new achievements in ensuring energy security, with a good momentum of increasing reserve and production.  We actively sought ways to sustain resource succession, made efforts to guard and expand mining rights, carried forward the seven-year E&P campaign, and achieved a number of major breakthroughs in ultra -deep, tight, and unconventional fields. The "Deep Earth Engineering" project drilled the deepest onshore well in Asia, and the construction of the Jiyang Shale Oil National Demonstration Zone smoothly went on. We discovered new shale oil resources in Sichuan Basin with a capacity of billions of tonnes, stabilized production in brown fields and achieved good results in increasing reserve, production and profitability while cutting costs. We promoted international energy cooperation by signing contracts for projects such as Qatar Northern Field Expansion and continuously optimizing the overseas asset portfolio. Sinopec International Petroleum Exploration and Production Corporation hit the "billion yuan" goals for both its net profit attributable to the parent company and free cash flow respectively.

We made new achievements in industrial transformation, with breakthroughs in quality improvement and upgrading.  We actively undertook the strategically emerging and future industrial development tasks deployed by SASAC, firmly moved towards the mid to high end, and focused on consolidating our market competitiveness. We expedited the implementation of a number of refining structural adjustments, transformation and development, as well as integration and exit projects. We continued to develop advanced ethylene production capacity and the number of ethylene projects enlisted into the national petrochemical industrial plan reached the highest in history. With a clear top-level design in place for the charging business, we promoted the construction of comprehensive energy stations for "fuel, gas, hydrogen, electricity and services". Breakthroughs were also made in the overseas market refining, chemicals, and marketing. The Kuqa Green Hydrogen Demonstration Project was completed and put into operation, and the "Demonstration Project of Hydrogen Transmission Pipeline from Ulanqab to Beijing-Tianjin-Hebei Region" was included in the national plan. Our wind and solar power generation business continued to grow, with geothermal heating capacity still ranking first in the world. We successfully hosted the World Geothermal Conference, achieved breakthroughs in CCUS industrialization, and built China's first integrated smart energy system in the oil and gas field, which integrated source, network, load, and storage. The level of green and low-carbon development continued to improve. The capital and financial services actively facilitated the development of major business segments, acting as the engine to drive industrial transformation and upgrading.

We made new achievements in scientific and technological self-reliance, with innovative results constantly emerging.  We endeavored to act as the national strategic scientific and technological development force and actively integrated into the national scientific and technological innovation system. The number of national key laboratories owned by Sinopec ranked first in China's energy and chemical industry. The National Key Laboratory for Shale Oil and Gas Enrichment Mechanism and Efficient Development was successfully restructured, and the Key Laboratory for National Energy Carbonate Oil and Gas was officially unveiled. We beefed up for national key research and development plan, "1025 Special Project" phase II, and the "Weakness Shoring Up" project, accelerated the efforts to seek original technology sources, and completed the medium and long-term development plans of basic research. Significant progress was made in a number of key and core technologies such as continental shale oil and gas, 5G intelligent node instruments, rotary geological directional drilling, high-temperature logging, heavy oil catalytic cracking, aviation lubricants, liquid rubber, PVA optical films, and hydrogen fuel cell catalysts, etc. We ranked sixth in the world's top 250 patents list and also stayed top among Chinese companies. We completed the national pilot demonstration project of "Industrial Internet +Safe Production" and "Beidou Comprehensive Application", becoming the "chain leader"of software industry chain in the petrochemical sector.

We made new achievements in deepening reform with development vitality continuously unleashed.  We completed the three-year action of state-owned enterprise reform with high quality and won an A-level assessment. We fully launched the reform deepening and enhancement action. The headquarters and functional settings were continuously optimized, breakthroughs were made in subsidiary restructuring and integration, new steps were taken in specialized subsidiary development, and efforts were sped up for building a new type of operation accountability system. By focusing on becoming a world-leading company, we perfected the strategically intensive financial management and control system, promoted the construction of the treasury system with high quality, strengthened equity investment management, deepened asset classification evaluation, and vigorously cracked down on false trade. We prudently responded to changes in the capital market, intensified company value management, and significantly improved the quality of listed companies under Sinopec Group such as Sinopec Corp., all leading to continuous progress in ESG. We actively promoted the transformation and development of long-established subsidiaries with operating difficulties and helped them to turn around. We achieved the historic goal of basically eliminating loss making subsidiaries. Measure were taken to strengthen comprehensive risk management, continue to apply the rule of law and compliance management, fully leverage the functions of audit, finance, law, and corporate management, and focus on risk prevention and control in key areas for safeguarding the bottom line of preventing systemic risks. We persisted in strengthening the "three basics" work, and actively carried out safety management strengthening and the green and low-carbon "weakness shoring up" actions, contributing to overall stable operation and clean production.

We made new achievements in the Party's full and rigorous self-governance with political ecology going up steadily.  We studied and implemented the important thoughts of General Secretary Xi Jinping on Party building, took thematic education as a driving force, persistently applied the innovative theories of the Party, held rounds of training sessions on the guiding principles of the 20th National Congress of the Party, thus enhancing the political judgment, understanding, and execution of Party members and cadres. We kept improving the Party's full and rigorous self-governance, sought ways and methods to ensure Party building in various subsidiaries and elevated the organizational functions of Party organizations. For three consecutive years, we had been rated as Grade A in the assessment of Party building responsibility system among central SOEs. We paid close attention to the need of gathering talents for career succession and took effective measures to select and promote talents. The proportion of cadres selected and appointed with an overall evaluation of "good" maintained a high level for consecutive years and the implementation of talent development plans paced up. Apart from growing our business organically, we also strengthened external publicity. We celebrated the 40th anniversary of the establishment of Sinopec in a grand yet simple manner and shouldered social responsibility in assisting rural revitalization and disaster relief etc. Our brand building capability ranked first among central SOEs for three consecutive years. We strengthened inspection and supervision work, carried special rectification actions, and ensured a political ecology featuring uprightness and entrepreneurship.

The remarkable achievements were hard won, thanks to the dedication and concerted efforts of all the management and employees of the Company under the care and support of the Central Committee of the CPC with General Secretary Xi at its core, under the guidance of the authorities and friends from all walks of life, under the trust given by our clients and consumers and under the collaboration with partners from home and abroad. Hereby, on behalf of the Board of Directors, the management and all employees of the Company, I would like to express my heartfelt appreciation to all friends who have been supporting and helping Sinopec!

2024 marks the 75th anniversary of the founding of the People's Republic of China and is a crucial year for achieving the goals and tasks of the 14th Five Year Plan. It is of great significance to deliver good performance in all aspects of work throughout the year. We will rally closely around the Central Committee of the CPC with General Secretary Xi at its core, fully implement the guiding principles of the 20th CPC National Congress and the important instructions given by General Secretary Xi Jinping during his visits to Shengli Oilfield and Jiujiang Petrochemical. We will forge ahead to enhance our core functions and competitiveness and focus on transformation and upgrading, business efficiency, reform and innovation, risk prevention and control, and Party building. We will step up to create new paths for high quality development, make new and greater contributions to the construction of a strong country and the great cause of national rejuvenation, and celebrate the 75th anniversary of the founding of the PRC with excellent results.