About KINETIC DEV Company

Strength Development Group Limited (“Force Development” or the “Group”) was incorporated in the Cayman Islands in July 2010. Listed on the main board of the Hong Kong Stock Exchange in March 2012, stock code 1277. The Group is an integrated coal enterprise with operations covering the entire coal production, washing, loading, transportation and coal trade industry chain. The Group's vision is to become China's leading private integrated coal supplier. coal resources Strength development focuses on developing the Dahanpu coal mine. The Dahanpu Coal Mine is an underground coal mine located in Huaigeerqi, Ordos City, Inner Mongolia, China. The mining area is about 9.6 square kilometers. As of December 31, 2021, the Dahanpu coal mine had coal resources of about 389.77 million tons (including proven coal resources of 154.79 million tons, controlled coal resources of 216.34 million tons, and estimated coal resources of 18.64 million tons); coal reserves of about 183.72 million tons (including confirmed coal reserves of 83.13 million tons and approximate coal reserves of 100.59 million tons). The Group holds mining rights for the Dahanpu coal mine and can apply to the relevant authorities for renewal before they expire in November 2039. Coal production and operation The Group strives to operate efficient and safe coal mines. The Group is now adopting comprehensive mechanized full-thickness topping coal mining technology to replace the original stratified roof coal mining technology. Coal mining production efficiency is at the leading level in the industry. Thanks to the Dahanpu Coal Mine's full use of mechanized production processes and the Group's comprehensive optimization of the coal production workforce structure, the Group's employee costs have remained low in the industry. The Dahanpu coal mine is also supporting the construction of a coal washing plant with an annual processing capacity of 5 million metric tons. Furthermore, the Group holds a 45% interest in the Xiaojia loading station and its supporting railway branch line. The Xiaojia loading station is located 1,200 meters north of the Dahanpu Coal Mining Industrial Plaza, with an excellent and convenient location. The average processing capacity of Xiaojia Station is about 5,000 tons per hour. The Group can transport its self-produced and outsourced coal to Qinhuangdao for sale along the Dazhun Railway and Daqin Railway to meet the logistics needs brought about by the Group's ever-growing coal sales and trading business. The Group has set up a coal trade center in Qinhuangdao. The price of coal sold at Qinhuangdao Port was higher than that of Kengkou in Inner Mongolia. By increasing the price per ton reported at Xiaojia Station, the gross margin of the Group's coal products increased dramatically. Furthermore, by directly participating in Qinhuangdao's coal trade business, the Group can keep closer to the latest trends in pricing, marketing, transportation needs, technology, safety and management, so as to enhance profits and efficiency and strengthen the Group's position in the coal industry. Group honors Strength development is frequently recognized by the capital community and industry through its strong advantages. The Dahanpu Coal Mine received the highest “Class A Mine” rating from the Geerqi Energy Administration for 6 consecutive years. The Dahanpu Coal Mine has been included in the “Level 1 Safety and Quality Standardized Coal Mine List (Second Batch)” by the State Administration of Safety Supervision and the China Coal Mine Safety Supervision Administration for 6 consecutive years. The Dahanpu Coal Mine was awarded the honorable title of “Premium Safe and Efficient Mine for the Coal Industry” by the China Coal Industry Association. The Dahanpu coal mine was officially included in the “National Green Mine List” by the Ministry of Natural Resources of China.