The years do not live, the season through. On the occasion of the New Year, on behalf of the company's shareholders, I would like to extend my heartfelt thanks and best wishes to all employees who are struggling in various positions, to leaders at all levels, partners and friends from all walks of life who have given us attention and support! I wish everyone good luck in the Year of the Dragon, good health, family happiness and all the best!

2023 is an extraordinary year for the "Jade Rabbit" to overcome difficulties, and it is also a year in which the entire company's employees gather together, overcome many difficulties, and achieve good results. Chuangda Yutu Company, located in Hengyang, successfully completed the shutdown, relocation and transformation work; most of the ordinary employees and all engineering and management personnel came to the new factory and became the backbone of various departments and production positions. The company has turned from Chuangda Yutu, which has an annual output of 15000 tons/year of anatase titanium dioxide, to Yutu Titanium New Materials Company, which has an annual output of 70000 tons/year of high-grade rutile titanium dioxide (Phase I), and has finally realized the dream of "Yutu people" to make the enterprise bigger and stronger for many years. From the construction of the new project to the trial production, the trial production and continuous rectification have been carried out. Although the perfect results have not been achieved so far, the company has also achieved phased results thanks to the concerted efforts of all employees. Although the company's new project trial production is due to insufficient experience in the first production of rutile products and heavy debugging and rectification workload, compared with the three domestic enterprises that started construction in the same period, our company ranks first in trial production time, production time, production time and product quality; throughout the trial production process, no major safety and quality accidents occurred; once the company's new products were launched, they were recognized by the market. The company completed various indicators throughout the year: 21032.638 tons of titanium dioxide were produced, of which the old factory produced 5079.925 tons of anatase titanium dioxide from January to May, with a qualified rate of 98.98 and a yield of 88.59. The new factory produced 15952.713 tons of titanium dioxide from July to December, including 6719.13 tons of rutile titanium dioxide and 9233.59 tons of crude products. Starting from the trial output of products in July, the output, yield and qualified rate of products increased month by month. By December, the output was 4000.875 tons, the yield was 92.2, and the qualified rate of products was 100. The annual sales of titanium dioxide was 20480.04 tons (including 6375.25 tons of anatase titanium dioxide from the old factory; The new factory has 14104.79 tons of golden red titanium dioxide and 8081.525 tons of crude products), realizing a total sales revenue (excluding tax) of 259.33 million yuan. The recovery rate of payment for goods is 100. Nearly 10 million yuan in taxes.

In 2023, hard work has allowed us to survive and grow in the fierce market competition. With the arrival of 2024, the challenges we face are even more severe. China is the world's largest producer of titanium dioxide, 2023, China's total production capacity of titanium dioxide 4.16 million tons, a record high. According to industry data, there are 11 new and expanded titanium dioxide projects in China, with a total production capacity of 3.66 million tons \year. In the next three years, with the start of new and expanded production projects, the national titanium dioxide production capacity will be increased to at least 7.5 million tons, by then, the market will be oversupply situation.

In the face of cruel market competition, we must always keep a clear mind, continue to innovate in technology, practice hard, reduce costs and increase efficiency; make efforts in the product chain, and constantly develop new products and high-end products that adapt to the market, so as to achieve high-quality and healthy development of enterprises.

In 2024, the company's production and operation target: it plans to produce 65000 tons of rutile titanium dioxide throughout the year, striving to complete 70000 tons, with a qualified rate of 100 and a yield of more than 92%. The sales revenue is more than 1 billion yuan, the loan recovery rate is 100, and the tax 4000 is -50 million yuan.

In the new year, we should improve the corporate governance structure, further establish rules and regulations, and ensure that the system manages people and the process manages affairs. Efforts should be made to implement the 7S management mode, formulate the economic responsibility contract system for each workshop, link the income of production staff with output, consumption, quality, safety, clean and civilized production, get more for more work, reward diligence and punish laziness, while creating benefits for the enterprise, effectively increase the wages of employees and stimulate their enthusiasm for work.

In the new year, we will continue to do a good job in the transformation of equipment that affects the production capacity standard, such as continuous freezing and crystallization, strengthen the inspection and maintenance of equipment, improve the operation rate of equipment, achieve balanced production, and ensure that the production capacity of the whole line reaches the production standard as soon as possible. Make great efforts to save energy and reduce consumption. Various consumption indicators must be implemented on the heads of each employee in each workshop and linked to their income, so as to reduce costs and increase efficiency. On the basis of stabilizing the YTR-808 quality of the main products, production technicians should continue to innovate and develop new products and high-end products with "Jade Rabbit" characteristics. At the same time, strengthen the awareness of safety in production, keep in mind that safety is the greatest benefit; do a good job in environmental protection and adhere to the road of green sustainable development.

In the new year, the sales work should strengthen the market promotion of rutile titanium dioxide, make a reasonable layout, explore the mode of regional agents and direct selling end users, and increase the market share. Good after-sales service, improve customer satisfaction. The supply work should continue to overcome financial difficulties and ensure normal production needs while ensuring the quality and price ratio of raw and auxiliary materials. Financial work should do a good job in capital control, effectively raise and operate funds; supervision should do a good job in sampling inspection and supervision of raw and auxiliary materials to ensure quality; office work should firmly establish the concept of serving production. Continue to strengthen staff training and improve staff professional quality; Starting from strengthening the on-site health management of production workshops, we should earnestly promote 7S management. Care for employees' lives and implement the policy of benefiting employees in enterprises. Carry out labor competition activities among employees, praise advanced models, promote the spirit of labor, and let each employee be proud of the jade rabbit titanium industry.

In the new year's journey, let us concentrate our efforts, keep our feet on the ground, seek progress in stability, seek change in progress, move forward bravely, and jointly create a better tomorrow!

January 2024

Mr. Li Manfu, Chairman of the Company