Yunnan Baiyao Group Co., Ltd.
Annual Report 2024
March 2025
Section IImportant Notes, Contents, and DefinitionsThe Board of Directors (the “Board”), the Supervisory Committee and the directors, supervisors andsenior management of the Company confirm the truthfulness, accuracy and completeness of the contentsof this Annual Report and there are no misrepresentations, misleading statements or material omissionsfrom this Annual Report, and they accept joint and several responsibilities for the truthfulness, accuracyand completeness of the contents herein.Mr. Dong Ming, the person in charge of the Company, Mr. Ma Jia, the accounting officer, and Ms.Xu Jing, the head of accounting center (accounting supervisor), hereby declare that they warrant thetruthfulness, accuracy, and completeness of the financial statements in this Annual Report.All directors of the Company attended the Board meeting in respect of considering and approvingthis Annual Report.The Company kindly requests investors to read through this Annual Report and pay special attentionto “XI. Outlook of the Company” in the “Section III Management Discussion and Analysis.” This partdoes not constitute our substantial commitments to investors. Investors are advised to pay attention toinvestment risks.The profit distribution plan considered and approved by the Board of Directors is as follows: Basedon the total share capital of the Company of 1,784,262,603 shares at the end of 2024, a cash dividend ofRMB 11.85 (tax inclusive) for every 10 shares will be paid to all shareholders, with no bonus shares issued(tax inclusive), and no capital reserve to increase the share capital. At the same time, the Companycompleted the special dividend distribution for 2024 in November 2024, with a cash dividend of RMB 12.13(tax inclusive) for every 10 shares, totaling RMB 2,164,310,537.44 (tax inclusive). The cash dividend to beimplemented this time will be combined with the special dividend already distributed in 2024. Based onthe total share capital of 1,784,262,603 shares at the end of 2024, the total cash dividend for 2024 will beRMB 23.98 (tax inclusive) per 10 shares, with a total cash dividend of RMB 4,278,661,722.00 (tax inclusive),accounting for 90.09% of the Company’s net profit attributable to shareholders of the listed company for2024.This report has been prepared in Chinese and translated into English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Contents
Section I Important Notes, Contents, and Definitions ...... 0
Section II Company Profile and Key Financial Indicators ...... 4
Section III Management Discussion and Analysis ...... 9
Section IV Corporate Governance ...... 59
Section V Environmental and Social Responsibilities ...... 92
Section VI Significant Events ...... 106Section VII Changes in Shareholdings and Particulars about Shareholders..139Section VIII Preference Shares ...... 150
Section IX Bonds ...... 151
Section X Financial Statements ...... 155
Documents Available for Inspection
(I) Financial statements affixed with the signatures and stamps of the person incharge of the Company, the accounting officer, and the general manager of FinancialManagement Department;(II) Originals of the audit report containing the stamps of the external accountingfirm and the signatures and stamps of the registered accountants;(III) Originals of all the Company’s documents and announcements publiclydisclosed on the Securities Times, Shanghai Securities News, China Securities Journal,and http://www.cninfo.com.cn during the reporting period;(IV) Other related materials.
Definitions
| Term | Definitions |
| CSRC | China Securities Regulatory Commission |
| SZSE | Shenzhen Stock Exchange |
| Hong Kong Stock Exchange | The Stock Exchange of Hong Kong Limited |
| SASAC of Yunnan Province | State-owned Assets Supervision and Administration Commission of YunnanProvincial People’s Government |
| The Company or Yunnan Baiyao | Yunnan Baiyao Group Co., Ltd. |
| New Huadu | New Huadu Industrial Group Co., Ltd. |
| State-owned Equity Management Company | Yunnan State-owned Equity Operation Management Co., Ltd. |
| Yunnan Hehe | Yunnan Hehe (Group) Co., Ltd. |
| Jiangsu Yuyue | Jiangsu Yuyue Science & Technology Development Co., Ltd. |
| Baiyao Holdings | Yunnan Baiyao Holdings Co., Ltd. |
| YNBY International or Ban Loong Holdings | YNBY International Limited (Formerly Ban Loong Holdings Limited) |
| Shanghai Pharma | Shanghai Pharmaceuticals Holding Co., Ltd. |
| Mixed ownership reform | Baiyao Holdings, former controlling shareholder of Yunnan Baiyao, introduced strategic investors New Huadu and Jiangsu Yuyue by capital increase |
| Merger and overall listing | A transaction that Yunan Baiyao merged with Baiyao Holdings by issuing shares to all shareholders of Baiyao Holdings, including SASAC of Yunnan Province, New Huadu and Jiangsu Yuyue |
| Health Products Company | Yunnan Baiyao Group Health Products Co., Ltd. |
| Yunnan Pharma | Yunnan Pharmaceutical Co., Ltd. |
| CEO | Chief Executive Officer |
| IP | Intellectual Property |
| ESG | Environmental, Social and Governance |
| NMPA | National Medical Products Administration |
| AI | Artificial Intelligence |
| OTC | Over-the-counter drug |
| Reporting period | The period from January 1, 2024 to December 31, 2024 |
| RMB, RMB’0,000, RMB’00,000,000 | Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi, expressed in hundreds of millions of Renminbi |
Section IICompany Profile and Key Financial IndicatorsI. Company Profile
| Stock Abbreviation | Yunnan Baiyao | Stock Code | 000538 |
| Stock Abbreviation before Change (if any) | None | ||
| Stock Exchange | Shenzhen Stock Exchange | ||
| Company Name in Chinese | 云南白药集团股份有限公司 | ||
| Company Abbreviation in Chinese | 云南白药 | ||
| Company Name in English (if any) | YUNNAN BAIYAO GROUP CO., LTD. | ||
| Company Abbreviation in English (if any) | YUNNAN BAIYAO | ||
| Legal Representative of the Company | Dong Ming | ||
| Registered Address | No. 3686 Yunnan Baiyao Street, Chenggong District, Kunming City, Yunnan Province | ||
| Postal Code of the Registered Address | 650500 | ||
| Historical Changes in the Company’s Registered Address | No. 51 Xiba Road, Kunming City, Yunnan Province, National High-tech Industrial Development Zone, Kunming City, Yunnan Province (registered address of the Group); No. 222 Second Ring West Road, Kunming City, Yunnan Province (registered address of the parent company of the Group); No. 3686 Yunnan Baiyao Street, Chenggong District, Kunming City, Yunnan Province | ||
| Office Address | No. 3686 Yunnan Baiyao Street, Chenggong District, Kunming City, Yunnan Province | ||
| Postal Code of the Office Address | 650500 | ||
| Company Website | www.yunnanbaiyao.com.cn | ||
| Email Address | 000538@ynby.cn | ||
II. Contact Person and Contact Information
| Secretary of the Board of Directors | Representative of Securities Affairs | |
| Name | Qian Yinghui | Li Mengjue |
| Contact Address | No. 3686 Yunnan Baiyao Street, Chenggong District, Kunming City, Yunnan Province | No. 3686 Yunnan Baiyao Street, Chenggong District, Kunming City, Yunnan Province |
| Tel | 0871-66226106 | 0871-66226106 |
| Fax | 0871-66203531 | 0871-66203531 |
| 000538dm@ynby.cn | 000538@ynby.cn |
III. Information Disclosure and Location
| Website of the stock exchange where the Company discloses its Annual Report | http://www.cninfo.com.cn |
| Name and website of the media where the Company discloses its Annual Report | Securities Times, Shanghai Securities News, China Securities Journal |
| Location where the Company prepares and places its Annual Report | Company Archives Room |
IV. Changes in Registration
| Unified Social Credit Code | 9153000021652214XX |
| Changes in the principal businesses of the Company since it was listed (if any) | None |
| Changes in the Company’s controlling shareholders (if any) | 1997: Yunnan Pharmaceutical Corporation1999: Yunnan Pharmaceutical Group Co., Ltd.2003: Yunnan Yunyao Co., Ltd.2010: Yunnan Baiyao Holdings Co., Ltd (“Baiyao Holdings”)In 2017, Baiyao Holdings was the controlling shareholder but the Company had no de facto controller.In 2019, after the cancellation of the Company’s shares held by Baiyao Holdings, the Company had no controlling shareholders and no de facto controller. |
V. Other InformationThe accounting firm engaged by the Company
The sponsor engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable ? Not applicable
The financial advisor engaged by the Company to perform continuous supervision duties during the reporting period
□ Applicable ? Not applicable
VI. Key Accounting Data and Financial IndicatorsWhether the Company needs retroactive adjustment or restatement of accounting data in prior years or not
□Yes ? No
| 2024 | 2023 | Increase/decrease compared to the previous year | 2022 | |
| Operating revenue (RMB) | 40,033,300,814.72 | 39,111,292,156.00 | 2.36% | 36,488,372,649.73 |
| Net profit attributable to shareholders of the listed company (RMB) | 4,749,415,499.55 | 4,093,782,074.02 | 16.02% | 3,001,125,887.45 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses (RMB) | 4,523,057,538.23 | 3,763,605,361.07 | 20.18% | 3,232,024,514.64 |
| Net cash flows from operating activities (RMB) | 4,297,003,142.27 | 3,502,742,348.02 | 22.68% | 3,209,410,032.57 |
| Basic earnings per share (RMB/share) | 2.66 | 2.29 | 16.16% | 1.90 |
Name of the accounting firm
| Name of the accounting firm | Mazars Certified Public Accountants (SGP) |
| Office address of the accounting firm | 2-9/F, No. 169, Donghu Road, Wuchang District, Wuhan, Hubei Province |
| Name of signing accountants | Fang Ziwei, Yang Yanling |
| Diluted earnings per share (RMB/share) | 2.66 | 2.29 | 16.16% | 1.90 |
| Weighted average ROE | 11.99% | 10.51% | Up 1.48 percentage points | 7.87% |
| End of 2024 | End of 2023 | Increase/decrease compared to the end of the previous year | End of 2022 | |
| Total assets (RMB) | 52,914,181,333.05 | 53,784,293,183.93 | -1.62% | 53,320,943,868.74 |
| Net assets attributable to shareholders of the listed company (RMB) | 38,831,946,424.51 | 39,879,122,031.51 | -2.63% | 38,503,673,731.86 |
The lower of the Company’s net profits before and after deducting non-recurring profits and losses in the latest three accountingyears are all negative, and the Company’s audit report for the previous year shows uncertainties in the Company’s ability to continue as agoing concern
□Yes ? No
The lower of the Company’s net profits before and after deducting non-recurring profits and losses is negative
□Yes ? No
Total share capital of the Company as at the trading day prior to the disclosure:
| Total share capital of the Company as at the trading day prior to the disclosure (shares) | 1,784,262,603.00 |
Fully diluted earnings per share calculated based on the latest share capital:
| Preferred share dividend paid | 0.00 |
| Perpetual bond interest paid (RMB) | 0.00 |
| Fully diluted earnings per share calculated based on the latest share capital (RMB/share) | 2.6618 |
VII. Differences in Accounting Data under Chinese Accounting Standards (CAS) and OverseasAccounting Standards
1. Differences in the net profits and net assets in financial statements disclosed respectively under InternationalFinancial Reporting Standards (IFRS) and CAS
□Applicable ?Not applicable
During the reporting period, there was no difference in net profits and net assets in financial statements disclosed respectively underIFRS and CAS.
2. Differences in the net profit and net assets in financial statements disclosed respectively under overseasaccounting standards and CAS
□Applicable ?Not applicable
During the reporting period, there was no difference in the net profits and assets in financial statements disclosed respectively underoverseas accounting standards and CAS.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Whether there is any significant difference between any of the above-mentioned financial indicator or their total number and thosedisclosed in the Company’s any quarterly statements or interim statements
□ Yes ?No
IX. Non-recurring Profits and Losses and their Amounts
?Applicable □Not applicable
Unit: RMB
| Item | Amount in 2024 | Amount in 2023 | Amount in 2022 | Remarks |
| Profits and losses from disposal of non-current assets (including the write-offs for the accrued impairment of assets) | 2,527,905.42 | 110,477,911.97 | -62,684,387.81 | |
| Government subsidies included in the current profits and losses (excluding the government subsidies closely related to regular businesses of the Company in line with national policies and received by a determined standard, with a continuous impact on the Company’s profits and losses) | 84,203,749.10 | 75,375,220.16 | 99,898,358.75 | |
| Profits and losses from changes in fair value of financial assets and liabilities held for trading by non-financial enterprises, and from disposal of such financial assets and liabilities, except for effective hedging operations related to regular businesses of the Company | 150,994,732.81 | 199,779,795.08 | -403,800,800.93 | |
| Profits and losses arising from entrusted investment or asset management | 6,589,832.78 | 3,146,335.87 | ||
| Reversal of impairment provision of accounts receivable subject to individual impairment test | 1,738,612.00 | |||
| Profits and losses arising from contingencies unrelated to regular businesses of the Company | 4,190,474.35 | |||
| Non-operating revenue and expenses other than the above | -28,939,412.06 | -1,919,286.26 | 3,035,335.64 | |
| Other profits and losses satisfying the definition of non-recurring profits and losses | 47,186,324.01 | 41,588,740.24 | 80,566,869.79 | |
| Less: Amount affected by the income tax | 37,938,914.49 | 69,955,013.92 | -48,913,488.78 | |
| Amount affected by minority interests (after tax) | 4,868.25 | 28,316,990.19 | 1,017,965.76 | |
| Total | 226,357,961.32 | 330,176,712.95 | -230,898,627.19 | -- |
Other profits and losses satisfying the definition of non-recurring profits and losses:
?Applicable □Not applicable
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 10,774,290,921.49 | 9,680,995,366.03 | 9,459,868,782.32 | 10,118,145,744.88 |
| Net profit attributable to shareholders of the listed company | 1,701,931,446.00 | 1,486,898,457.10 | 1,137,898,164.95 | 422,687,431.50 |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profits and losses | 1,690,411,601.12 | 1,444,603,739.81 | 1,129,859,005.45 | 258,183,191.85 |
| Net cash flows from operating activities | 527,059,804.98 | 2,734,557,587.01 | 811,521,353.35 | 223,864,396.93 |
Other non-recurring profits and losses that meet the definition of non-recurring profits and losses mainly includeother non-recurring profits and losses such as interest on fixed deposits and value added tax credit.Note for the definition of non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information Disclosurefor Companies Offering Their Securities to the Public - Non-recurring Profits and Losses, as recurring profits and losses
□Applicable ?Not applicable
The Company does not define any non-recurring profits and losses set out in the No.1 Explanatory Announcementon Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Lossesas recurring profits and losses.
Section IIIManagement Discussion and AnalysisI. Industry Landscape of the Company during the Reporting Period
(I) Industry landscape and development trendsIn 2024, as the reform of the pharmaceutical and healthcare system deepens and the industry undergoestransformation and upgrading, China’s pharmaceutical and healthcare sector has entered a critical period of changeand adjustment. Due to the combined impact of many factors, the pharmaceutical and healthcare sector is experiencingslow growth. According to the China Pharmaceutical Enterprises Association, pharmaceutical industrial enterprisesabove designated size achieved flat year-on-year revenue in 2024, while profits decreased by 0.9% year on year. Drivenby policy support, technological innovation and market demand, the pharmaceutical industry faces both opportunitiesand challenges. In terms of demand, on one hand, the accelerating aging of the population has led to an increased needfor the diagnosis and treatment of chronic diseases, driving the expansion of both the medical services andpharmaceutical markets. At the same time, public recognition of traditional Chinese medicine (TCM) continues to rise,with TCM consumption scenarios extending into daily healthcare, driving continuous market growth. On the otherhand, with the rising health consciousness, people are placing higher demands on the accessibility, safety, cost-effectiveness, and personalization of medical resources. In terms of supply, scientific and technological innovationcontinues to empower medicine and health. The application of artificial intelligence (AI), information technology, andother fields in TCM is continuously expanding, providing new opportunities for the innovative development of TCM.With the continued implementation of policies such as healthcare insurance and centralized procurement,pharmaceutical products need to further focus on clinical value to better meet the demands of modern society.Pharmaceutical companies are facing more challenges in quality management, innovation and R&D, and cost control.In terms of channels, there have been structural changes in the online and offline sales channels for pharmaceuticaland healthcare products. Online channels continue to expand, with the exploration of “patient-centered” multi-modelsand scenarios emerging as a new trend. As the trend of offline retail chain and centralization is becoming more evident,retail channels differentiate themselves through more professional and meticulous services. With the regionallybalanced deployment of high-quality medical resources, pharmaceutical products and services are extending furtherinto grassroots areas, benefiting a wider range of patients.China attaches great importance to the development of TCM, continuously improving the mechanism for boththe inheritance and innovation of TCM, and promoting the high-quality development of the TCM industry. In 2024,
several national ministries and commissions jointly issued the Opinions on Further Strengthening the Construction ofHealthcare Culture in the New Era, stating that it is necessary to adhere to the inheritance and innovation, and promotethe integration of TCM into production and life. The General Office of the State Council issued the Key Tasks Listedfor Deepening Medical System Reform in 2024, proposing to promote the development of TCM inheritance andinnovation, and support the entire industrial chain deployment of the leading enterprises in the TCM industry. TheNational Administration of Traditional Chinese Medicine issued the Action Plan for Standardization of TraditionalChinese Medicine (2024-2026) to provide strong support for promoting the modernization and industrialization ofTCM and the high-quality development of TCM. The Several Opinions on Promoting the Development of DigitalTraditional Chinese Medicine was issued with the aim of utilizing digital technology to empower the high-qualitydevelopment of TCM. With the introduction of various policies, the TCM industry continues to move toward greaterstandardization. The leading enterprises in the TCM industry have accelerated the deployment across the industrialchain, further integrating the industry resources and accelerating the pace of industrial upgrading.
In the “Big Health (holistic wellness)” industry, affected by macroeconomic fluctuations, ongoing economicstructural adjustments, and other factors, consumer decision-making has become more cautious, and the consumersector is facing increasing pressure. In 2024, the total retail sales of consumer goods for the year grew by 3.5%compared to the previous year, a slowdown from the 7.2% growth in 2023 (Source: National Bureau of Statistics). Theoverall performance of the consumer market has led to numerous challenges for the development of the “Big Health”industry. In addition to the demand for traditional medical services and medicines, there has been a diversified growthin the demand for health management, rehabilitation, physiotherapy, and healthcare services. The relevance of TCMto health management has been further reinforced, and consumers are increasingly seeking better ingredients, quality,and efficacy in “Big Health” products. In terms of channels, there is a clear trend toward the integration of online andoffline platforms. Emerging channels such as social e-commerce and interest-based e-commerce have become crucialavenues for sales conversion, while offline chain channels are shifting focus toward disease prevention, healtheducation, and health management. The penetration of health consumption demand into sub-county areas has creatednew growth opportunities for the industry.Based on the development trends in TCM and the “Big Health” industry across such aspects as demand, supply,and segmentation, pharmaceutical and “Big Health” enterprises must align with these trends and enhance theircompetitiveness through strategies such as R&D and innovation, product upgrading, management optimization, marketexpansion, thus achieving high-quality development.(II) Industry position
The Central Committee of the Communist Party of China and the State Council attach great importance to thedevelopment of TCM, positioning the inheritance and innovation of TCM as an important aspect of the socialist causewith Chinese characteristics in the new era. The report to the 20
th
National Congress of the Communist Party of Chinahas explicitly stated that we should “promote the inheritance and innovation of TCM.” The Yunnan ProvincialCommittee of the Communist Party of China and the provincial government place great emphasis on the developmentof the TCM industry, positioning the TCM industry as the key focus for developing agriculture of Yunnan plateaucharacteristics and an important part of the growth of “resource-driven economy.” The Three-year Action Work Planfor the High-quality Development of the TCM Industry in Yunnan Province (2025-2027) outlines the goal of buildingindustrial clusters with Yunnan Baiyao Group serving as the “chain leader” to expand and strengthen the TCM industry.
Yunnan Baiyao has always been committed to the inheritance and innovation of TCM, continuously exploringthe intrinsic potential of traditional medicinal products, and promoting the integration of TCM into modern life. TheCompany continuously injects new vitality into its brand and products, forming a product portfolio with 40 categoriesand 416 varieties. In the pharmaceutical products domain, Yunnan Baiyao holds 567 drug approval numbers and 316product varieties, including 222 types of Chinese patent medicines, 43 of which are exclusive varieties. The Companystarted with the century-old Yunnan Baiyao powder as its foundation and has gradually created a series of corepharmaceutical products in the field of musculoskeletal and minor wound care, covering all kinds of product formssuch as aerosols, plasters, tinctures and woundplast, and has formed a competitive matrix of branded TCM in the areasof cold and anti-inflammatory, gastrointestinal digestion, cardiovascular medicines, and gynecological and pediatricmedicines. In the field of health products, combining traditional Yunnan Baiyao products with oral care products, wehave successfully created a group of oral care products, with the flagship product of Yunnan Baiyao Toothpaste, whichhas become a classic case of cross-sector innovation and reshaping of consumption by TCM enterprises. Based on thepharmaceutical science and technology, and drawing on the essence of natural plants, we have successfully createdthe scalp health care brand “Yangyuanqing.” Leveraging its successful development in pharmaceutical and healthproduct sectors, the Company has expanded its business footprint into various domains, including natural medicine,TCM decoction pieces, special medicines, medical devices, personal care products, and healthcare food. This moveenables the Company’s evolution from a TCM manufacturing enterprise to a modern, Big Health-oriented entity. In2024, Yunnan Baiyao continued to maintain its market leadership in multiple business sectors. The Company’s coreproduct, Yunnan Baiyao Aerosol, holds a 91.8% market share in the retail market for topical aerosols of Chinese patentmedicine used for joint and muscle pain in the musculoskeletal system, ranking first in the market. Yunnan BaiyaoWoundplast account for 72.4% of the retail market share in the external hemostatic (including medicated) woundplast
segment, also ranking first in the market. Yunnan Baiyao (Powder) holds a 14.9% retail market share in the full-bodyChinese patent medicine for bone injuries in the musculoskeletal system, ranking first in the market (Source:
Sinohealth CHIS). Yunnan Baiyao Toothpaste continues to maintain the No.1 market share in the Chinese full-channelmarket in 2024 (Source: Nielsen Retail Data IQ 202412).
In 2024, Yunnan Baiyao was selected as one of the top 25 companies in the 2024 Healthcare - The World’s MostValuable and Strongest Pharmaceutical, Medical Device and Healthcare Service Brand Value Rankings published byBrand Finance, an international authoritative brand value consulting company, and once again ranked No.5 in the Listof Top 100 Enterprises in China’s Pharmaceutical Industry. Yunnan Baiyao was also listed on the Fortune China 500List published by Fortune China for the 15
th consecutive year, ranking 385
th; and was ranked 33
rdin the List of Top 50Global Pharmaceutical Companies by Pharmaceutical Executive in US.II. Principal Businesses of the Company during the Reporting Period
(I) Product and business
The Company has four business groups, namely Pharmaceutical Business Group, Health Products BusinessGroup, TCM Resources Business Group and Yunnan Pharmaceutical Co., Ltd (“Yunnan Pharma”). These businessgroups serve as the foundation for the Company’s production and operations.
Pharmaceutical Business Group focuses on the products of Yunnan Baiyao series, (For example, Yunnan BaiyaoAerosol, Yunnan Baiyao Plaster, Yunnan Baiyao Woundplast, etc.), which are mainly used for hemostasis, pain relief,swelling reduction, and blood stasis elimination. The BG extends its offerings to include other branded TCMs withnatural characteristics, covering areas such as tonifying Qi and blood, treating colds and flu, cardiovascular health,gynecology, pediatrics, and more. The BG is also actively involved in the development of Panax notoginseng-basedbotanical supplements.
Health Products Business Group, with its core focus on the toothpaste category, relies on its robust brandinfrastructure encompassing people, products, and consumer scenarios. Embracing a user-centric approach, the BGactively explores new consumer scenarios and introduces innovative product categories, particularly in the realms oforal care and Yangyuanqing anti-hair loss solutions, aiming to become the benchmark of the new concept of Chinesehealthy lifestyle.
By making full use of the characteristic medicinal plant resources of Yunnan Province, TCM Resources BusinessGroup, while ensuring high quality, high efficiency and low cost supply of raw materials for Chinese medicines, hasbuilt a digitalized industrial chain ecosystem for TCM materials with the model of “1+1+N,” which consists of “1
TCM production, research and marketing integrated digital intelligence platform + 1 new specialized market for TCMmaterials at the origin + multi-dimensional synergies,” so as to support “excellent TCM products” by “excellentYunnan TCM resources.”Yunnan Pharma remains steadfast in pursuit of maintaining its leading market share among pharmaceuticaldistribution companies in Yunnan Province. It has achieved full coverage in all 16 prefectures and cities of YunnanProvince, with its channels radiating across major retail chain pharmacies. It also assists governments and medicalinstitutions in building better management and service systems, providing high-quality and modern pharmaceuticalsupply chain service solutions for upstream and downstream customers. (II) Business model
1. Transformation from a Chinese leading TCM enterprise to a “Chinese leading, world-class” modernpharmaceutical industry groupAs a “chain leader,” the Company is committed to promoting coordinated development across the industrial chain,refining its focus on core areas, expanding the leadership of advantageous products, and accelerating the constructionof the industrial system. Centered on the principles of “strengthening principal businesses, stabilizing growth, andensuring sustainability,” we aim to create a comprehensive industrial chain for Yunnan-branded TCM materials. Wewill focus on expanding the long-term potential of pharmaceuticals, health products, TCM resources, and commerciallogistics, thus achieving self-driven leapfrog development. In addition, based on the development strategy, theCompany will scientifically validate and rapidly promote the Group’s internationalization strategy, and fully leveragethe synergistic and promotional effects of “two markets” and “two resources” at home and abroad, focusing onexpanding the reach of TCM products abroad, creating new growth opportunities for health products, and integratinginternational resources for the development of innovative medicines, so as to drive our sustained high-qualitydevelopment through internationalization, and support the transformation of Yunnan Baiyao from a Chinese leadingTCM enterprise to a “Chinese leading, world-class” modern pharmaceutical industry group.
2. Transformation of the development model from “endogenous growth” to “intensive and extensive growth”
The Company adopts a two-pronged growth strategy as the main growth model that combines internal efficiencyimprovement (“intensive growth”) with external market expansion (“extensive growth”). “Intensive growth” focuseson tapping potential and increasing efficiency to stabilize the fundamental base. It concentrates on the developmentfoundations of the pharmaceutical, health, and distribution industries. Following the approach of maximizing overallbenefits, it aims for systematic improvement and optimization across the industrial chain, value chain, and productionfactors, continuously promoting the high-quality development of the Company’s principal businesses. “Extensive
growth” emphasizes foresight and insight. Based on the overall strategic requirements and orientation, we activelyexplore strategic mergers and acquisitions, strategic cooperation and other models to complement and strengthen theexisting industrial segments, and quickly break through the existing growth bottlenecks. This dual approach enablesthe Company to build a healthy and sustainable industrial portfolio system, and achieve high-quality and sustainabledevelopment.
3. Transformation from training internal talents to the model of “training internal talents + introducing externaltalents”The Company believes in the pivotal role of talent in driving its development. It has established a systematic andscientific training system that offers diverse career development pathways, fostering both specialized knowledge andcomprehensive skills, with the mutual development of talents and the Company as the objective. The Companyconcentrates its superior resources and actively introduces high-level professionals from multiple fields, includingdrug R&D, digital construction, and strategic investment. It continues to enhance its business capabilities in multipledimensions, such as innovative R&D, lean operations, and investment and mergers & acquisitions. By nurturinginternal talents, actively recruiting external experts, and fully utilizing its organizational environment for talentdevelopment and market resources, the Company strives to build a high-quality talent pool aligned with its futuregrowth requirements.
4. Transformation from a traditional manufacturing enterprise to a smart enterprise based on digital operations
The Company is committed to building a digital driving force and actively seeking transformation to digitaloperations with a strong customer-centric approach to enhance customer value and experience. By leveraging cutting-edge digital technologies such as cloud computing, big data, AI, 5G, and the Internet of Things, the Company drivesinnovation and development. The Company also seeks for transformation from a function-oriented process to a processthat connects customer scenarios to drive the Company’s management change and organizational development. Also,the Company is moving beyond a unified “data base” and governance strategy to build a data-driven intelligentdecision-making system “based on facts.”III. Analysis on Core Competitiveness
(I) Brand strength
Yunnan Baiyao is a well-established Chinese heritage brand with a history of over 123 years. Centered aroundthe Yunnan Baiyao brand, the Company has expanded from a pharmaceutical brand into a multi-brand ecosystem
covering personal healthcare products, crude drugs, and “Big Health” products. We have built a diverse portfolio ofbrands and continuously expanded our reach to target audiences, enhancing our brand value over the long term. TheCompany has been consistently listed in the brand value rankings of internationally authoritative organizations. Duringthe reporting period, it was selected as one of the top 25 companies in the Healthcare - The World’s Most Valuableand Strongest Pharmaceutical, Medical Device and Healthcare Service Brand Value Rankings published by BrandFinance, ranked 33
rdin the List of Top 50 Global Pharmaceutical Companies by Pharmaceutical Executive in US,ranked 45
th
in the List of China’s Best Brands published by Interbrand, and ranked 71
stin the Kantar BrandZ Top 100Most Valuable Chinese Brands list and 1
st in the healthcare industry, etc.(II) Full industrial chain advantageIn terms of TCM resources, we will further uphold our responsibilities as a chain leader, based on the strategicpositioning of “the ‘chain leader’ with high-quality development of Yunnan TCM resources.” Relying on the authenticmedicinal resources and location advantages of Yunnan Province, we will leverage Yunnan Baiyao’s accumulatedexpertise in in technology, brand, channel, capital and talent, as well as the demonstration, leading and driving role ofthe leading enterprise in industrial development. We have built a digitalized industrial chain ecosystem for TCMmaterials with the model of “1+1+N,” which consists of “1 TCM production, research and marketing integrated digitalintelligence platform + 1 new specialized market for TCM materials at the origin + multi-dimensional synergies,” topromote the standardization, scaling, branding and digitalization of the TCM industry and transform resourceadvantages into industrial competitive advantages and long-term sustainable development advantages, so as to support“excellent TCM products” by “excellent Yunnan TCM resources.”Driven by its long-term and continuous investment in key strategic varieties of TCM materials, the Company hasachieved a complete and closed-loop industrial chain from seed selection and cultivation to production and processing.This has established a robust supply system for strategic medicinal materials, effectively ensuring the quality stabilityof TCM raw materials and controlling the price fluctuations of strategic TCM raw materials. This system has laid thegroundwork for the long-term and sustainable development of Yunnan Baiyao.(III) Continuous innovation capabilityYunnan Baiyao consistently meets the rapidly evolving and upgrading consumer demand through continuousinnovation. The Company is committed to integrating TCM into modern life through the consumer-centered“customer-oriented innovation,” “social innovation” based on government-industry-academia-research-medicinecollaboration and “digital innovation” powered by advanced technologies such as AI, big data, and cloud computing.”We have evolved from a single hemostatic product to a vast Yunnan Baiyao industrial group, covering various sectors
of the health industry, and created classic examples of innovation and the integration of TCM products into daily life,such as “Yunnan Baiyao Woundplast” and “Yunnan Baiyao Toothpaste.”
Looking ahead, the Company will continue to enhance its innovation capabilities by continuously improving thelevel of R&D and promoting digital and intelligent reform. We have set up more than 10 national and provincialscientific research platforms and R&D centers with many research institutions and universities, focusing on the fieldof medicine, strengthening the introduction of talents, scientific research and cooperation and exchanges, andenhancing collaboration between basic and clinical research to truly achieve the effective transformation of researchachievements into cross-disciplinary innovation and development. The Company has positioned “AI+Medicine” asthe core direction of its strategic transformation, deeply integrating advanced technologies such as AI, big data andcloud computing into planting, processing, R&D, production, marketing and other aspects, accelerating thetransformation of digital intelligence, and focusing on the modernization of TCM and the intelligent upgrading ofhealth products.(IV) Talent team strengthsThe Company has established a long-term mechanism for talent security to deepen the market-oriented selectionand employment mechanism, improve the mechanisms for talent introduction, training, and selection, and foster anenvironment conducive to the growth of its talent pool. By focusing on both internal team development and thecontinuous external introduction of outstanding talents, we have built management teams with high professionalismand strong market awareness across business areas. The Company is committed to enhancing the specialization,professionalism, and market orientation of its cadre and talent teams, continuously optimizing their professional andknowledge structures to create a supportive environment for talent growth, and enhance the loyalty, contribution andsense of fulfillment among our talents. The Company continually refines its efficient incentive mechanism based onits strategic goals, and gives priority to those who have made significant contributions, as well as key front-linepositions in emerging industries, R&D, innovation, reform, and other critical areas when allocating resources, tomaximize the enthusiasm and creativity of cadres and employees, promote the Company towards high-qualitydevelopment, and lay a strong foundation for achieving win-win cooperation among all stakeholders.(V) Channel advantagesIn terms of pharmaceuticals, the Company has built a marketing network covering medical institutions and retailpharmacies across various provinces, regions, counties, and towns in China. In the advantageous over-the-counter(“OTC”) channels, we have nationwide coverage, serving 5,000 top-tier chains and reaching over 400,000 retail stores.Especially in areas with well-developed chain pharmacies such as East China, Hunan Province, Hubei Province, and
Yunnan Province, the Company has achieved the high coverage, the penetration rate, and strong market controlcapabilities, and implemented the special marketing cooperation under the principle of “One Province, One Strategy”or even “One Chain Store, One Strategy.” The Company also has conducted extensive cooperation with major e-commerce platforms such as Alibaba, JD.com, and Douyin, for expansion of online OTC sales channels, and achievedefficient reach to modern consumers by virtue of customized digital marketing.
Regarding health products, Yunnan Baiyao has established a comprehensive nationwide sales team dedicated toBig Health products, covering all terminals. Yunnan Baiyao Toothpaste continues to maintain a leading market sharein China with a high brand penetration in the oral product category. Through ongoing optimization of its full chainchannels, the Company has not only strengthened its position in traditional offline channels but also experiencedsignificant growth in emerging business models such as on-demand retail, community group purchases, and interest-based e-commerce. This demonstrates the Company’s willingness to experiment and adapt, taking measured stepsforward and learning from any mistakes along the way, all of which enhance its ability to quickly respond to evolvingbusiness trends. Such channel advantages have driven significantly enhancement to Yunnan Baiyao’s marketcompetitiveness, laying the foundation for the Company to continuously commercialize new products.IV. Analysis on Principal Businesses
1. Overview
(I) Overview of business dataIn 2024, the Company overcame the challenges posed by significant changes in the external environment andfocused on the core pharmaceutical business. Through excellent operation across the industrial chain, value chain, andproduction factors, the Company maintained strong growth. During the reporting period, the Company achieved anoperating revenue of RMB 40.033 billion, a 2.36% increase compared to the same period last year; net profitattributable to the parent company was RMB 4.749 billion, a 16.02% year-on-year increase from RMB 4.094 billion;and net profit attributable to the parent company after deducting non-recurring profits and losses was RMB 4.523billion, a 20.18% increase compared to RMB 3.764 billion last year, setting a new historical high.In terms of growth quality, the Company generated net operating cash flow of RMB 4.297 billion, a 22.68%increase compared to the same period last year; the weighted average return on net assets was 11.99%, an increase of
1.48 percentage points from the previous year; and basic earnings per share were RMB 2.66, a 16.16% increasecompared to last year. Meanwhile, the Company’s business structure continued to optimize. The proportion of
industrial revenue in total operating revenue has further increased to 36.14%, with the growth rate of industrial revenuereaching 5.30%. The gross margin of the industrial business is 65.93%, which is 1.69 percentage points higher thanthe same period of the previous year. The Company’s efforts to improve quality and efficiency were effective, withsales expenses decreasing by 2.26% and management expenses decreasing by 1.98% compared to the previous year.The Company continued to maintain a healthy asset structure. At the end of the reporting period, the Companyhad total assets of RMB 52.914 billion, net assets attributable to the shareholders of the listed Company amounted toRMB 38.832 billion, the asset-liability ratio was 26.55%, and the cash and bank balance stood at RMB 10.888 billion.(II) Review of the main work and prospects
(1) Breakthroughs in organizational capacity building under the leadership in Party building and strategicorientation
1) Fully leveraging the leadership in Party building to promote high-quality development of the CompanyDuring the reporting period, the Company adhered to the guidance of Xi Jinping’s Thought on Socialism withChinese Characteristics for a New Era, firmly embracing the concept of “Leadership in Party building driving theconvergence of development momentum.” The Company emphasized strengthening leadership in Party building,focusing on deepening “integration and inclusion,” uniting and leading all employees to raise their positions, strengthenconfidence, and take responsibilities, thus promoting stable development. Efforts were made to enhance grassrootsorganizational strength, optimize organizational structure and personnel allocation, and ensure that grassroots Partyorganizations have tangible, effective, and comprehensive coverage. The Company also focused on strengtheningsystem support and built a responsibility implementation system, a Party-building institutional guarantee system, a“list-based” target task implementation system, and a “multi-dimensional integration” evaluation and assessmentsystem.
2) Implementing strategic orientation with high standards to ensure efficient execution of the principal businessesStrategic goals focus on implementation, necessitating both the “attitude and capabilities” to consistently driveprogress and foster a strong commitment to the strategy. In March 2024, the Company’s Board of Directors consideredand approved the Strategic Plan Outline for 2024-2028. Based on clear strategic positioning, Yunnan Baiyao furtherconcentrated on its core “pharmaceutical” foundation in 2024, focusing on four key business areas: pharmaceuticals,TCM resources, health products, and pharmaceutical distribution. The Company continued to focus on its principalbusinesses, tap potential and enhance efficiency. While persistently advancing its principal business focus andimprovement in quality and efficiency, the Company continuously refined and improved the Strategic Plan Outline,taking into account internal development foundation and external industry dynamics. In December 2024, the Board of
Directors considered and approved the Strategic Plan for 2024-2028 as the guiding document for Yunnan Baiyao’swork in the next five years. The Company will follow the guidelines set out in the Plan, embrace inheritance andinnovation, surpass ourselves to embark on a new journey, and drive the century-old Baiyao toward becoming aChinese leading and world-class modern pharmaceutical industry group, achieving synergistic growth in scale, quality,and structure. Also, the Company continues to strengthen the implementation of its strategy, and responds to externaluncertainties with the certainty of its strategic direction and the effectiveness of its execution. The Company hascontinuously enhanced its strategic leadership capability, and the focus on principal business execution has yieldedsignificant results. On one hand, the Company has solidified its principal business market, and on the other hand, newgrowth areas have achieved breakthroughs.
3) Enhancing group management efficiency and aligning synergies to energize the workforceDuring the reporting period, based on the requirements for strategy implementation, the Company significantlyenhanced group management efficiency and operational effectiveness through organizational restructuring,comprehensive budget management, and innovation in incentive mechanisms. First, the Company redefined andrepositioned its business segments, and strengthened the development of its central capabilities in areas such as marketdevelopment, supply chain, branding, marketing, and e-commerce, effectively supporting the business units in marketcompetition. Second, the Company established a more focused, streamlined, and efficient organizational structure,optimized financial management responsibilities and reinforced the vertical leadership capabilities of functionaldepartments such as strategy, investment, supervision, and human resources, further improving the synergy of businessoperations. Third, the Company standardized the talent management system, and initially built a leadership team withstrong aspirations and capabilities, and a well-structured talent pool aligned with strategic plans, industry layout, anddevelopment goals, constantly enhancing the standardized management capability across the human resources process.At the same time, the Company effectively leveraged “precise” incentives to achieve greater results in workforcemanagement. Fourth, the Company implemented comprehensive budget management with a closed-loop approach.The budget formulation process was strategically driven, identifying growth drivers for each business segment andensuring the target achievement supported by comprehensive budget. The cross-departmental collaboration was guidedby a positive management approach, achieving the initial goal of resource optimization through budget management.Fifth, the Company strengthened budget execution monitoring and established a performance analysis mechanism.Business analysis was extended from the group level to business units, with regular reviews of market changes,ensuring that timely responses were in place and the budget was both guiding and flexible. (2) Focusing on the principal businesses, optimizing the structure, and achieving high-quality development
1) Pharmaceutical Business Group
During the reporting period, the Pharmaceutical Business Group achieved a principal business revenue of RMB
6.924 billion, representing a year-on-year growth of 11.8%. Ten products have each achieved sales exceeding RMB100 million. Among the core products, Yunnan Baiyao Aerosol achieved sales revenue of more than RMB 2.1 billion,with a year-on-year growth of over 26%. The sales revenue of Yunnan Baiyao Plaster, Yunnan Baiyao Capsule,Yunnan Baiyao Woundplast and Yunnan Baiyao (Powder) has significantly increased compared to the previous year.Other branded TCM products showed impressive growth. The sales revenue of Pudilan Anti-inflammatory Tabletsreached nearly RMB 200 million, representing a significant year-on-year growth of over 22%, while the revenue ofXuesaitong Capsule, Baotaikang Granule for Children, and Ginseng and Tuckahoe Spleen and Stomach StrengtheningGranule exceeded RMB 100 million respectively. Botanical supplements also maintained a growth trend, with thesales revenue of Qixuekang Oral Liquid growing 14% year-on-year.In 2024, based on the strategic positioning of being “the ‘leading’ brand of pain management in the field oftraumatology,” the Pharmaceutical Business Group, by fully leveraging its product and brand strengths, introduced anew model for injury management, delved deeply into the efficacy mechanism of the core products of Baiyao in thefield of pain management. By tapping into the potential of “Baiyao + pain relief + traumatology” products in academicand clinical fields, the Company has strengthened the popularity and leadership of the core products of Baiyao inorthopedics and pain management, and created an expansive product ecosystem. Meanwhile, the PharmaceuticalBusiness Group further optimized the operation platform of “High-quality TCM,” focusing on high-potential segmentssuch as cardiovascular, respiratory system, and obstetrics and pediatrics, and continued to enrich the product pipelineto build a large ecosystem in the pharmaceutical industry. During the reporting period, the Pharmaceutical BusinessGroup continued to promote key tasks from academic and clinical, marketing, channel segmentation, productionefficiency and other aspects. In terms of academic and clinical study, we have made steady progress in clinical researchon Yunnan Baiyao (Powder) and Yunnan Baiyao Capsule in the treatment of diabetic foot and bone pain, GongxueningCapsule in the treatment of abnormal uterine bleeding and the reduction of vaginal bleeding after medication abortion,and Qixuekang Oral Liquid in the improvement of heart and blood vessel health and the prevention and treatment ofplateau reaction, expanding the application scenarios for the products. In terms of marketing, the cultivation of ourown sports IP “Let’s Play Basketball” was successful, promoting brand rejuvenation and further increasing thepenetration rate of single product. The packaging of Qixuekang was refreshed and upgraded, promoting the rapid salesgrowth of Qixuekang Oral Liquid in the important marketing nodes in autumn and winter nourishment. In terms ofchannel segmentation, the in-hospital channel was expanded steadily thanks to continuous cultivation, our dominance
was maintained in the offline OTC channel, and new breakthroughs were made in online exploration. In terms ofimproving production efficiency, we established online business processes, promoted the achievement of precisemarketing, ecological channel construction, and user data ownership, and created a large back-office operation systemwith standardized systems, scientific processes, simplicity and high efficiency, achieving remarkable results inimproving quality and efficiency throughout the year.Moving forward, with the goal of becoming “a model of TCM inheritance and innovation development,” thePharmaceutical Business Group will inherit, safeguard and develop the superior products of Baiyao, optimize theexisting product system and provide a comprehensive operational plan to achieve strategic growth of the products onother high-potential core areas, focusing on major disease treatment fields such as cardiovascular, respiratory system,and obstetrics and pediatrics. On the other hand, the BG will continuously conduct secondary development of existingproducts around strategic goals and selectively extend external projects to strengthen and expand the pharmaceuticalsystem.
2) Health Products Business Group
During the reporting period, the Health Products Business Group achieved an operating income of RMB 6.526billion and a profit of RMB 2.191 billion, with a year-on-year growth of 1.6% and 8.36% respectively. In the oral caresegment, Yunnan Baiyao Toothpaste maintained the top market share across all channels in China in 2024 (Source:
Nielsen Retail Data IQ202412). During the “618” and “Double 11” period in 2024, Yunnan Baiyao has consistentlyheld the top position as the leading oral care brand across all online platforms for many years (Source:
shangzhizhen.com). In the hair care and anti-hair loss segment, Yangyuanqing recorded sales revenue of RMB 422million during the reporting period, up 30.3% year on year. Boasting the special makeup certificate of hair care andthe national invention patent certificate of hair care and anti-hair loss and the differentiated technology advantages, wehave successfully created the core brand of Yangyuanqing - “To control oil and prevent hair loss, use Yangyuanqing.”Thanks to the increasing penetration rate, Yangyuanqing achieved a growth higher than the industry average of theanti-hair loss category in the fierce market competition, and won the top 1 Chinese anti-hair loss shampoo brand onTmall during the “618” and “Double 11” period consecutively in 2024 (Source: shangzhizhen.com).
During the reporting period, the Health Products Business Group achieved end-to-end connectivity from suppliersto market launch, from enterprise management to user services, and from product development to user needs byoptimizing the R&D management, channel management, production management and supply management processesof the Health Products Business Group. In terms of R&D and innovation, the Health Products Business Group obtained22 patent authorizations, submitted 6 applications, and published 2 papers in top international SCI journals during the
reporting period. In terms of content marketing, we carried out special programs in key nodes, focusing on thekeywords of the brand, such as “gum protection” for Yunnan Baiyao Toothpaste, and “anti-hair loss” for hair care andanti-hair loss series. On World Oral Health Day, we launched the “Healthy Oral 123 Plan.” Upholding the concept of“integrating TCM into modern life,” we enhanced the brand’s influence and empowered the brand’s business growthacross the region through the “Amazing Chinese Heritage” project and high-quality cultural content. We co-brandedthe “National Museum of Chinese Writing,” tracing the lineage of characters and accomplishing brand culturebreakthroughs. The series of brand campaigns strengthened the brand’s national popularity and professionalism,precisely reached the audience, and achieved a total exposure of more than 6.43 billion.In the future, with the goal of becoming “the benchmark for the new concept of Chinese healthy lifestyle,” theHealth Products Business Group will build a health ecosystem centered around quality of life. On the one hand, wewill leverage our oral business as the foundation and benchmark, maintain and expand our industry leadership, deployprofessional market while stabilizing the existing business, develop the hospitality business, expand oral non-toothpaste products, enhance new product R&D and iteration capabilities, and strengthen the ecosystem. On the otherhand, we will rapidly increase the scale and volume of the washing and care business, steadily strengthen our focus onscalp ecology, and expand into the field of skin management in an orderly manner, so as to continuously improve theeffectiveness of the organization and management, and enhance the efficiency of business development and the growthmomentum.
3) TCM Resources Business Group
During the reporting period, the TCM Resources Business Group achieved an operating revenue of RMB 1.751billion, representing a year-on-year increase of about 3.13%. The TCM Resources Business Group continued to ensurethe supply and price stability of the Company’s strategic varieties, with the price increase of the herbal materials forfeeding significantly lower than the average price increase of TCM materials in the industry. Through supply chaincollaboration, we built an integrated “Big Procurement” management platform, reducing procurement costs of RMB31 million year on year. Focusing on Yunnan’s local herbs and Baiyao’s strategically advantageous varieties, weachieved significant year-on-year growth in the sales revenue of Panax notoginseng extract, maintaining our marketleadership. In terms of natural plant extraction business, our sales revenue increased by 8.71% year-on-year during thereporting period. In terms of pharmaceutical services, we built and operated the largest decoction center in Yunnan,and opened up the channel of “diagnosis and treatment - prescription - prescription examination - decoction -distribution - delivery to household,” providing patients with a full range of personalized and efficient pharmaceuticalservices. During the reporting period, the decoction center has served over 20 medical institutions and prepared more
than 7 million bags of decoction.
During the reporting period, in accordance with the decision-making and deployment of the Yunnan ProvincialCommittee of the Communist Party of China and the provincial government to cultivate Yunnan’s TCM industry intoa world-class modernized industry, Yunnan Baiyao firmly shouldered the responsibility of a “chain leader” of theTCM industrial chain in Yunnan Province. The Company has clarified the objectives and detailed measures in theareas of seed industry, planting, processing, marketing and branding, and accelerated the efforts related to the high-quality development of the TCM industry. In terms of seed industry, Yunnan Baiyao Group Seed Industry TechnologyCo., Ltd, the first company engaged in the TCM seed industry in Yunnan Province, was established to providegermplasm source control and resource support for the industry. In terms of planting, 7 GAP varieties were declaredin 2024, with a base area of 4,593 mu. In terms of processing, the Lijiang Wenshan Platform has realized open sharing,and the Jinggu, Ludian and Pingbian primary processing platforms have been initially constructed. Among them, theQixuekang Oral Liquid from the Wenshan Company was awarded the title of “Single Champion of Manufacturing” inYunnan Province. The Lijiang platform has promoted the fresh processing of medicinal materials in western Yunnan,with production increasing by 180% during the reporting period, and food and healthcare food production rising by182%. These measure not only lead high-quality development but also support the deep cultivation of nutritionalproducts. In terms of market development, the industry internet platform for Yunnan TCM - “Digital Intelligence ofYunnan TCM” platform was officially launched. In addition to the basic trading functions, there are also testing,logistics, finance and other industry support services, fully open to the farmers, processing enterprises, buyers,regulatory agencies. The total value of transactions during the reporting period exceeded RMB 100 million. Bybuilding a three-tier product system of “Baiyao Preferred,” “Baiyao Certified” and “Baiyao Owned,” we helpedupgrade traditional agricultural products to standardized “industrial products.” In terms of brand building, YunnanBaiyao was selected as one of the “Green Yunnan Products” brand catalogs in Yunnan Province in 2024, “2024 BrandEnterprise for TCM Decoction Pieces” and “2024 Authentic Medicinal Material Brand.” In terms of standardformulation, we participated in the revision of the standard of Panax notoginseng and Atractylodes lancea in theChinese Pharmacopoeia (2025 Edition), and led the 18 standard researches of freshly processed varieties in Yunnan,which accounts for 90% of the total number of freshly processed varieties in Yunnan Province. We madebreakthroughs in the R&D of national standard variety formula granule technology, and completed the filing of 158varieties.
Looking to the future, the TCM Resources Business Group will continue to undertake the strategic positioningand responsibility of Yunnan Baiyao Group as the “chain leader” for the high-quality development of the TCM industry
in Yunnan Province, tap into the advantages of Yunnan’s medicinal resources, and push forward the high-qualitydevelopment of the resources economy in an orderly manner, so as to turn Yunnan’s endowment of TCM materialsinto a competitive advantage for the industry, as well as an advantage for the long-term sustainable development ofthe region, and support “excellent TCM products” by “excellent Yunnan TCM resources.”
4) Yunnan Pharmaceutical Co., Ltd (pharmaceutical distribution)
During the reporting period, Yunnan Pharma took multiple measures to stabilize the revenue base, realizing mainbusiness income of RMB 24.607 billion, representing a year-on-year increase of 0.48%. At the product level, theexpansion of non-pharmaceutical businesses, such as medical devices, pharmaceutical cosmetics and specializedmedical foods, has been significant, a year-on-year increase of 14% in sales. The model of pharmaceutical brandoperation services has started to yield results, and the project scale has grown by 37% year on year. At the channellevel, we continued to tap into the potential of primary healthcare institutions, with a year-on-year increase of 12% insales. We also made steady progress in the OTC segment with a year-on-year increase of 18% in sales, and rapidlyadvanced the development of specialized pharmacies for new specialties under the wholesaler-retailer integrationmodel, with a year-on-year increase of 29% in sales. In terms of management, leveraging the support of our digitalinfrastructure, we achieved lean process optimization, managed improvements in quality and efficiency, and improvedseveral operational indicators. In terms of risk control, the overall scale and structure of accounts receivable remainedat a benign level, which not only helped consolidate market share and enhance customer stickiness, but also allowedus to meet our stage-by-stage control targets, outperforming the industry average. We further implemented the riskmanagement system across the business process.During the reporting period, Yunnan Pharma actively responded to significant changes in national medical reformpolicies, including centralized drug procurement, medical insurance cost control, and public hospital evaluations,continuously enhanced its pharmaceutical supply chain operations and customer service capabilities, explored andpracticed value creation in the supply chain in the new era. By implementing over hundreds of projects focused onmulti-warehouse operations, collaborative sourcing, operational synergy between parent and subsidiary companies,and quality-sharing platforms, we expanded its service capabilities and range. On the upstream side, we promoted datainterconnectivity and sharing with manufacturers, achieving seamless business connections and transitioningprocurement orders to full lifecycle digital management. At the hospital level, an intelligent drug management platformfor medical communities was established, utilizing “Internet+” to drive transformation and innovation in drugmanagement, integrating such processes as procurement, supply, distribution, storage, usage, payment, and supervisionfor efficient and unified management. For patients, the “Cloud Drug Store No. 29” project was advanced to integrate
retail store resources, providing a more comprehensive and convenient online service for patients to find and purchasemedications through integrated online and offline operations.Toward the future, Yunnan Pharma will continue to focus on customers’ health needs, integrate upstream anddownstream service resources, and provide value-based pharmaceutical business services. Based on the perspective ofindustry change, we will build a clearer pharmaceutical service product matrix covering full commercialization cycleof drugs and all channel types for Yunnan Pharma, make in-hospital and out-of-hospital multi-channel deployment,actively promote the product-oriented total lifecycle management, customer-oriented supply chain value-based servicesolutions, and market-oriented innovative business models, so as to build a closed loop of patient-centered diagnosisand treatment ecosystem, and renew and upgrade the value network through the synergy of the entire supply chain.
5) Continuously advancing the business deployment optimization and the operational quality enhancement ofnew business unitsDuring the reporting period, the Company promoted the deployment optimization of new business units, rapidlyfacilitated business development of the Medical Devices BU and the Tonic Healthcare Products BU by means of modeland product innovation.Medical Devices BU focused on the three key categories of pain therapy, plasters and eye care and divested fromsome underperforming businesses, realizing an operating revenue of RMB 425 million, a year-on-year increase of 61%.By focusing on the supply chain, we optimized our production teams and improved efficiency, thus reducingprocurement costs and increasing profitability. Tonic Healthcare Products BU continued to optimize brand buildingand actively promoted online and offline market development, achieving an operating revenue of RMB 99.07 million,a year-on-year increase of 101%, and marking the first profitable year. Among them, the entire series of Panaxnotoginseng products, especially the TCM decoction pieces and agricultural and sideline products, health functionalfoods, have grown rapidly through measures such as unified packaging upgrading, online and offline regionalmarketing deployment, and the construction of front-, middle- and back-end organization and guarantee system.
(3) Strengthening R&D and innovation management to enhance the driving force by focusing on R&D
The Company focuses on TCM and innovative drugs. On the one hand, we uphold inheritance and innovation,and develop the TCM business. We solidified the development of germplasm resources by establishing a seed industrycompany. Through a combined model of independent and collaborative R&D, we aim to quickly build a “breeding,propagation, and promotion integration” system for seed source development, focusing on breeding research for localmedicinal materials such as Panax notoginseng and Paris polyphylla. We strengthened the innovation of TCM andconducted research on ethnic medicine, achieving significant progress in TCM R&D. On the other hand, we strive to
make differentiated deployment in innovative drugs. Based on the criteria of technology frontier, clinical demand andresource endowment, we take the initiative to integrate into the national and local biomedical strategies, and deployand develop innovative drugs with more competitiveness and market prospects. During the reporting period, upholdingthe innovation-driven strategy, the Company has promoted the transformation of results, continuously improved thedevelopment momentum, and promoted scientific planning of short -, medium - and long-term projects in an orderlymanner.
For short-term projects, we will dedicate our efforts to the secondary innovative development of marketedvarieties and the development of drugs and medical devices. Eleven large varieties of TCM involving secondarydevelopment are currently under research, and 25 projects are in progress. During the reporting period, the progress ofseveral key projects is as follows:
| Project Cycle | Project Name | Progress Overview |
| Qixuekang project | The clinical study on Qixuekang Oral Liquid for improving heart and vascular health has completed data collection for 109 patients, statistical analysis, and submission of a summary report. | |
| The study on Qixuekang Oral Liquid for treating Qi deficiency and blood stasis-type hypertension has completed the project application to the Science and Technology Department of Yunnan Province and internal project initiation. | ||
| The multicenter RCT clinical study on the efficacy and safety of Gongxuening Capsule in reducing post-abortion bleeding has been completed. | ||
| The multicenter RCT clinical study on the efficacy and safety of Gongxuening Capsule in reducing vaginal bleeding after medical abortion has successfully enrolled 269 cases. |
Secondarydevelopmentproject ofGongxuening
Secondarydevelopmentproject ofGongxueningStudies on pharmacokinetics, pharmacology and toxicology, and safety evaluations havebeen completed.
| Studies on pharmacokinetics, pharmacology and toxicology, and safety evaluations have been completed. | |
| Yunnan Baiyao Capsule | Multiple studies are steadily advancing, including clinical efficacy observation and mechanism research of Yunnan Baiyao in different stages of diabetes, randomized controlled trials on the efficacy of Yunnan Baiyao in alleviating fracture pain, clinical pharmacological exploratory research on Yunnan Baiyao for fracture healing, and clinical efficacy evaluation of Yunnan Baiyao combined with basic treatment for patients with periodontitis. |
Short-term
Short-term
Otherprojects
| Other projects | Research on sugar-free granules, second development of Qian Cao Nao Mai Tong formulation, and post-marketing re-evaluation clinical pre-trial of Shuliean Capsule are all progressing steadily. |
For medium-term projects, we made every effort to promote the development of innovative TCMs and continued
Short termMedium term
Medium termLong term
Long term
To actively deploy secondary innovative development ofmarketed varieties and quicker development of medical devices
| To actively deploy secondary innovative development of marketed varieties and quicker development of medical devices | To vigorously promote development of innovative TCM and achieve breakthroughs in Baiyao transdermal preparation | To vigorously promote development of innovative TCM and achieve breakthroughs in Baiyao transdermal preparation | ||
to build star products of Yunnan Baiyao transdermal preparations. During the reporting period, the progress of severalkey projects is as follows:
| Project Cycle | Project Name | Progress Overview |
| Pan-Panax notoginseng Tablets | 362 subjects were enrolled in phase II clinical trials, with 578 subjects enrolled in total. The pharmaceutical related research was completed, and the commercial production process and quality control system were established. | |
| Fuqi Guben Ointment | The preparatory work for the phase III clinical trial was completed, including the study protocol, investigator’s brochure, etc. Communication materials with CDE have been submitted. | |
| Plaster project | There are 4 varieties under research in the plaster project, and a total of 4 patents have been obtained, of which the Flurbiprofen Cataplasms have been approved for clinical trials, the clinical pre-tests have been completed. The Loxoprofen Sodium Cataplasms has completed pilot studies. The Yunnan Baiyao gel plaster has successfully explored a formulation process with excellent adhesion properties. The new rubber plaster from Yunnan Baiyao has completed preliminary pilot research. |
Medium-term
Medium-termNew woundhemostaticmaterial andarterial hemostaticgel
| New wound hemostatic material and arterial hemostatic gel | The registration application for one first-aid hemostatic bandage product was completed with a Class II medical device registration certificate obtained. |
For long-term projects, especially the project for innovative drugs, we will focus on addressing social needs andleveraging technological advancements, and deploy the development of multiple innovative drugs to enhance thesustainable growth momentum of the Company. During the reporting period, the progress of several key projects is asfollows:
| Project Cycle | Project Name | Progress Overview |
| Project INR101 | The INR101 diagnostic radiopharmaceutical project for PET/CT imaging in suspected prostate cancer patients received clinical approval in May 2024. By November, the phase I/IIa clinical summary report was completed, showing that the product demonstrates excellent stability and safety. An EOP2 communication application was submitted at the end of November. | |
| Project INR102 | The INR102 therapeutic radiopharmaceutical project in patients with metastatic denervation-resistant prostate cancer, we initiated non-clinical studies in advance and completed the pre-IND communication application submission in November, and simultaneously completed the first draft of the IND filing, initiated and completed the enrollment of 10 subjects in the IIT study and the first cycle of dosing. |
Long-term
Long-term
Project KA-1641
| Project KA-1641 | The Company has introduced the relevant patents for the antibody drug KA-1641, which is currently in the preclinical R&D stage. Ongoing activities include pharmaceutical development, pharmacology and efficacy studies, preclinical pharmacokinetic research, and related species toxicology studies. |
In 2025, the Company will further build the R&D and innovation system and R&D operation and managementcapability suitable for the strategic development stage of Baiyao, focusing on both “TCM” and “innovative drugs,”and acquire first-class talents matching with the first-class hardware platform, including first-class R&D talents andmanagement talents. The Company will continue to expand the scope of innovation. Leveraging lean management anddigital intelligence, we will introduce positive incentives to foster innovation, cultivate a supportive innovation culture,build a strong project pipeline, and accelerate the execution of innovative projects to drive the result transformation.
(4) Continuously deepening the digital intelligence transformation strategy to help the Company enhancequality and efficiencyDuring the reporting period, the Company continued to implement the Digital Development Plan for 2022-2026of Yunnan Baiyao Group. By leveraging cutting-edge data and AI technologies, it has empowered all segments of theindustry chain, promoting industrial transformation, upgrading, and business innovation. Applications of AI haveachieved significant results in various scenarios. Key projects include focusing on the industrial supply chain, unifiedoperations aimed at consumers, the mid-platform establishment based on data insights and marketing capabilities, anddigital upgrades for business and functional sectors, all of which comprehensively support the Company’s strategicdevelopment. In the digitization of TCM, the creation of the “Digital Intelligence of Yunnan TCM” platform hasstreamlined the entire process from planting to distribution, building a digital ecosystem from cultivation toconsumption, and advancing the TCM industry toward intelligence and sustainability. AI-assisted product R&D hasimproved research efficiency. The Company has also made continuous progress in data governance, financial andoperational integration, lighthouse factories, and other special projects, further empowering the business and enhancingmanagement capabilities.Looking ahead, the Company will continue to empower the effective development of its business and providecompetitive advantages through its digital intelligence capabilities, explore the direction of transformation of“AI+Medicine,” and accelerate the transformation of digital intelligence by deeply integrating advanced technologiessuch as AI, big data, and cloud computing into various aspects such as planting, processing, R&D, production, andmarketing. We will define “innovation” through digital transformation, integrate data elements with TCM forcontinuous deep fusion, forge new quality productive forces, revitalize TCM and infuse it with new vitality.
2. Revenue and cost
(1) Operating revenue structure
Unit: RMB
| 2024 | 2023 | ||
| Amount | Proportion in operating revenue | Amount | Proportion in operating revenue |
Year-on-yearincrease/decrease
| Year-on-year increase/decrease | |||||
| Total operating revenue | 40,033,300,814.72 | 100% | 39,111,292,156.00 | 100% | 2.36% |
| By industries | |||||
| Industry sales income | 14,468,250,214.38 | 36.14% | 13,740,557,061.12 | 35.13% | 5.30% |
| Commercial sales | 25,472,886,013.94 | 63.63% | 25,295,257,277.35 | 64.68% | 0.70% |
| income | |||||
| Technical services | 26,297,797.46 | 0.07% | 10,743,024.62 | 0.03% | 144.79% |
| Hospitality industry | 14,108,732.07 | 0.04% | 14,426,628.18 | 0.04% | -2.20% |
| Income from plantation sales | 2,393,337.40 | 0.01% | 1,436,078.20 | 0.00% | 66.66% |
| Income from other businesses | 49,364,719.47 | 0.12% | 48,872,086.53 | 0.12% | 1.01% |
| By products | |||||
| Industrial products (Self-made) | 14,468,250,214.38 | 36.14% | 13,740,557,061.12 | 35.13% | 5.30% |
| Wholesale and retail | 25,472,886,013.94 | 63.63% | 25,295,257,277.35 | 64.68% | 0.70% |
| Agricultural products | 2,393,337.40 | 0.01% | 1,436,078.20 | 0.00% | 66.66% |
| Other services | 40,406,529.53 | 0.10% | 25,169,652.80 | 0.06% | 60.54% |
| Others | 49,364,719.47 | 0.12% | 48,872,086.53 | 0.12% | 1.01% |
| By region | |||||
| Domestic | 39,674,627,530.94 | 99.10% | 38,477,107,385.74 | 98.38% | 3.11% |
| Overseas | 358,673,283.78 | 0.90% | 634,184,770.26 | 1.62% | -43.44% |
| By sales model | |||||
| Industrial model | 14,468,250,214.38 | 36.14% | 13,740,557,061.12 | 35.13% | 5.30% |
| Commercial model | 25,472,886,013.94 | 63.63% | 25,295,257,277.35 | 64.68% | 0.70% |
| Others | 92,164,586.40 | 0.23% | 75,477,817.53 | 0.19% | 22.11% |
(2) The industries, products, or regions that account for more than 10% of the Company’s operating revenue or operating profit
?Applicable □Not applicable
Unit: RMB
| Operating revenue | Operating cost | Gross margin | Increase/Decrease in operating revenue as compared with the same period of the previous year | Increase/Decrease in operating cost as compared with the same period of the previous year | Increase/Decrease in gross margin as compared with the same period of the previous year | |
| By industries | ||||||
| Income from industrial sales | 14,468,250,214.38 | 4,929,338,570.84 | 65.93% | 5.30% | 0.32% | 1.69% |
| Income from commercial sales | 25,472,886,013.94 | 23,891,275,361.45 | 6.21% | 0.70% | 0.51% | 0.18% |
| By products | ||||||
| Industrial products (Self-made) | 14,468,250,214.38 | 4,929,338,570.84 | 65.93% | 5.30% | 0.32% | 1.69% |
| Wholesale and retail | 25,472,886,013.94 | 23,891,275,361.45 | 6.21% | 0.70% | 0.51% | 0.18% |
| By region | ||||||
| Domestic | 39,674,627,530.94 | 28,532,978,958.41 | 28.08% | 3.11% | 1.35% | 1.25% |
| By sales model | ||||||
| Industrial model | 14,468,250,214.38 | 4,929,338,570.84 | 65.93% | 5.30% | 0.32% | 1.69% |
| Commercial model | 25,472,886,013.94 | 23,891,275,361.45 | 6.21% | 0.70% | 0.51% | 0.18% |
When the statistical caliber of the Company’s principal business data is adjusted in the reporting period, the Company’s principalbusiness data should be subject to the one after the statistical caliber at the end of the reporting period is adjusted in the latest year
□Applicable ?Not applicable
(3) Whether the Company’s revenue from in-kind sales is greater than its revenue from labor services
?Yes □No
| Industry Classification | Item | Unit | 2024 | 2023 | Year-on-year increase/decrease |
| Income from industrial sales | Sales | RMB | 14,468,250,214.38 | 13,740,557,061.12 | 5.30% |
| Income from commercial sales | Sales | RMB | 25,472,886,013.94 | 25,295,257,277.35 | 0.70% |
Explanations on reasons for year-on-year changes of above 30% in the relevant data
□Applicable ?Not applicable
(4) Fulfillment of significant sales contracts and significant purchase contracts entered into by the Company as of the reportingperiod
□Applicable ?Not applicable
(5) Operating cost structure
Industry Classification
Unit: RMB
| Industry Classification | Item | 2024 | 2023 | ||
| Amount | Percentage in operating cost | Amount | Percentage in operating cost | ||
Year-on-yearincrease/decrease
| Year-on-year increase/decrease | ||||||
| Industry sales | Direct materials | 4,173,980,104.81 | 14.46% | 4,225,537,847.00 | 14.70% | -1.22% |
| Industry sales | Direct salary | 202,255,370.65 | 0.70% | 133,775,797.05 | 0.47% | 51.19% |
| Industry sales | Other direct expenses | 35,793.11 | 0.00% | 7,079,064.15 | 0.02% | -99.49% |
| Industry sales | Manufacturing costs | 553,067,302.27 | 1.92% | 547,360,010.03 | 1.90% | 1.04% |
| Commercial sales | Purchase cost | 23,891,275,361.45 | 82.77% | 23,769,165,686.54 | 82.69% | 0.51% |
| Technical services | Technology development | 20,496,861.16 | 0.07% | 7,388,761.76 | 0.03% | 177.41% |
| Planting | Planting cost | 1,150,809.47 | 0.00% | 848,028.41 | 0.00% | 35.70% |
| Others | Others | 22,504,602.18 | 0.08% | 53,362,445.35 | 0.19% | -57.83% |
Explanations: None.
(6) Whether there was any change in the scope of consolidation during the reporting period? Yes □NoFor details, please refer to “IX. Changes in the Consolidation Scope” under Section X.
(7) Significant change or adjustment of the business, product or service of the Company during the reporting period
□Applicable ?Not applicable
(8) Major customers and major suppliers
Major customers
| Total sales amount of top 5 customers (RMB) | 5,966,799,965.94 |
| Percentage of total sales amount of top 5 customers in annual total sales amount | 14.90% |
| Among the sales amount of top 5 customers, percentage of the sales to the related parties in the annual sales amount | 0.00% |
Information of top 5 customers
| No. | Customer name | Sales amount (RMB) | Percentage in annual total sales amount |
| 1 | Customer A | 1,891,458,483.99 | 4.72% |
| 2 | Customer B | 1,805,423,531.43 | 4.51% |
| 3 | Customer C | 940,389,559.71 | 2.35% |
| 4 | Customer D | 674,723,124.95 | 1.69% |
| 5 | Customer E | 654,805,265.86 | 1.64% |
| Total | -- | 5,966,799,965.94 | 14.90% |
Other information of the major customers
□Applicable ?Not applicable
Major suppliers
| Total purchase amount of top 5 Suppliers (RMB) | 2,092,612,212.96 |
| Percentage of total purchase amount of top 5 Suppliers in annual total purchase amount | 7.30% |
| Among the purchase amount of top 5 suppliers, percentage of the purchase from the related parties in the annual purchase amount | 0.00% |
Information of top 5 suppliers
| No. | Supplier name | Purchase amount (RMB) | Percentage in annual total purchase amount |
| 1 | Supplier A | 455,180,923.84 | 1.59% |
| 2 | Supplier B | 426,169,743.37 | 1.49% |
| 3 | Supplier C | 420,333,708.03 | 1.47% |
| 4 | Supplier D | 397,991,203.80 | 1.39% |
| 5 | Supplier E | 392,936,633.92 | 1.37% |
| Total | -- | 2,092,612,212.96 | 7.30% |
Other information of major suppliers
□Applicable ?Not applicable
3. Expenses
Unit: RMB
| 2024 | 2023 | Year-on-year increase/decrease | Explanations on significant changes | |
| Sales expenses | 4,879,502,036.91 | 4,992,157,591.11 | -2.26% | The Company continued to promote cost reduction and efficiency improvement during the period, resulting in a decrease in sales expenses. |
| Administrative expenses | 1,037,553,483.87 | 1,058,503,523.90 | -1.98% | The Company continued to promote cost reduction and efficiency improvement during the period, resulting in a decrease in sales expenses. |
| Financial expenses | -155,555,109.85 | -259,243,744.88 | -40.00% | Interest income during the period decreased by 29.94% compared to the previous year, while interest expenses increased by 27.37% compared to the previous year. |
| R&D expenses | 337,413,301.03 | 336,013,434.83 | 0.42% | No significant changes. |
4. R&D investment
?Applicable□Not applicable
| R&D project name | Objective of the project | Project progress | Goals to be achieved | Expected impact on the future development of the Company |
| Fuqi Guben Ointment | To explore and validate the clinical research methodology and marketing registration pathway for the development of a new TCM for warming the kidneys and consolidating the fundamentals, which is designed to treat the symptoms of frequent nocturnal urination in middle-aged and elderly people due to kidney Yang deficiency, and improve the quality of life of middle-aged and elderly people. | The discussion meeting for the Phase III clinical trial protocol has been held, and the ethical approval has been obtained. Communication with the CDE has been completed, and the clinical protocol is currently being revised. | To complete Phase III clinical study on Fuqi Guben Ointment, clarify its clinical therapeutic characteristics, diagnostic criteria for treatment of disease, effective dosage for treatment, drug administration program and course of treatment, and register and market it as new TCM of Category 1.1. | This project is the first new TCM of the evidence-based class approved for clinical use in China, and this R&D project is a strong proof of the Company’s ability to develop and industrialize innovative drugs of the TCM of evidence-based class. In the future, it is expected to add a new TCM drug of evidence-based class in line with the overall healing characteristics of TCM, and enrich the Company’s TCM innovative drug product matrix. |
| Panax notoginseng Tablets (PSQ project) | To tap into the characteristics of Panax notoginseng in disease prevention and treatment, and develop Category 1 innovative TCM for the prevention and treatment of chest tightness, heart pain, palpitation and dizziness in middle-aged and elderly people due to the evidence of stasis in the heart veins, and reducing the incidence of cardiovascular events. | The Phase II clinical study is currently underway, with 471 cases enrolled in 2024 and a total of 687 cases enrolled, achieving 97% of the enrollment target. In 2024, 359 cases have been discharged, with a total of 545 cases discharged. | To comprehensively utilize the resources of the whole Panax notoginseng plant and further explore the synergistic mechanism of saponins, flavonoids, polysaccharides and other components, and market the product as innovative TCM of Category 1.1. | This product is the first innovative drug R&D project for cardiovascular diseases under the Company’s “Big Health” strategy, which is conducive to the treatment of symptoms related to cardiovascular stasis. In the future, it is expected to add a new TCM drug of evidence class in line with the overall healing characteristics of TCM, and enrich the Company’s TCM innovative drug product matrix. |
| INR102 Project | To develop innovative radiopharmaceuticals for prostate cancer treatment. | The non-clinical research and report that meet the IND application requirements have been completed. A pre-IND communication application was submitted in November 2024. | To obtain the approval for marketing from National Medical Products Administration (“NMPA”). | This project is the Company’s first innovative therapeutic radiopharmaceutical product, indicated for prostate cancer. It will add a new innovative radiopharmaceutical product to the Company’s portfolio and help expand into new markets. It will drive the development of the Company’s innovative |
| R&D project name | Objective of the project | Project progress | Goals to be achieved | Expected impact on the future development of the Company |
| drug segment and improve the Company’s deployment in cutting-edge technology. | ||||
| INR102 Project | To develop innovative radiopharmaceuticals for prostate cancer diagnosis. | In May 2024, the drug clinical trial notification was obtained from the National Medical Products Administration. In November 2024, the Phase I/IIa clinical research report was completed, and an EOP2 communication application was submitted. | To obtain the approval for marketing from NMPA. | This project is the Company’s first innovative therapeutic radiopharmaceutical product, indicated for prostate cancer. It will add a new innovative radiopharmaceutical product to the Company’s portfolio and help expand into new markets. It will drive the development of the Company’s innovative drug segment and improve the Company’s deployment in cutting-edge technology. |
| Development of four plasters | To expand the clinical choice of plaster products. It is planned to develop 2 new improved TCM (Yunnan Baiyao Gel Plaster and Yunnan Baiyao Hot Melt Adhesive Plaster) and 2 generic plasters. | The plaster project includes four varieties under research, with a total of four patents obtained. Flurbiprofen Cataplasms have been approved for clinical trials, the clinical pre-tests have been completed. The Loxoprofen Sodium Cataplasms has completed pilot studies. The Yunnan Baiyao gel plaster has successfully explored a formulation process with excellent adhesion properties. The new rubber plaster from Yunnan Baiyao has completed preliminary pilot research. | To obtain the drug registration certificate. | To expand the clinical choice of plaster products, maintain Yunnan Baiyao’s industry advantage in the field of topical preparations through formulation deployment, new product selection and dosage form improvement, and help the Company explore new growth drivers. |
| Secondary development of large varieties of TCM | To carry out in-depth research on existing large varieties in the areas of pharmacology, non-clinical, clinical and economics to improve the efficacy and safety evaluation system of the products, expand and clarify the indications of the products and the applicable population, guide the clinical medication, and introduce new technologies for the improvement of the existing products. | Currently, there are 11 large TCM varieties involved in secondary development. Key projects include: Gongxuening Capsule for treating abnormal uterine bleeding. As of the end of February, 36 sites have been initiated, with 1,493 cases enrolled. A clinical trial report is expected in 2025. Qixuekang Oral Liquid for improving heart and vascular health. Statistical analysis has been completed, and a clinical trial summary report has been submitted. The results indicate that Qixuekang Oral Liquid can significantly improve endothelial function. The research findings were presented at the 21st Chinese International Congress of Vascular Medicine and the 19th Asia Pacific Congress of International Society of Vascular Health, with two papers submitted to SCI journals. | Taking 2 projects as an example: To further indicate the safety and efficacy of Gongxuening Capsule for gynecological hemostasis and collect extensive clinical evidence; To explore the therapeutic effects of Qixuekang Oral Liquid in cardiovascular system diseases. | This will expand or refine the clinical application of the product in a disease area, guide clinical medication, tap into growth potential, and facilitate the product’s entry into guidelines, pathways and consensus. |
| Development of two Chinese medicinal preparations | To develop and market two classic famous prescriptions (PZ-018 and PZ-019) with clinical value and market prospect through regulated and | Two varieties have completed toxicology studies. Currently, commercial-scale production validation and application documentation preparation are underway for two additional varieties. | According to the registration and market approval requirements for new TCMs of Category 3.1. |
This will practice the Company’s strategyof deep cultivation in the field of TCM,contribute to maintaining integrity andpromoting innovation in the field of TCM,enrich the Company’s TCM product
| R&D project name | Objective of the project | Project progress | Goals to be achieved | Expected impact on the future development of the Company |
| with classic prescriptions (PZ-018 and PZ-019) | standardized research, with the help of modern science and technology. | echelon, and help the Company explore new growth drivers, and enhance market competitiveness. In addition, it will accumulate technology and project management experience for the development of new TCMs for the Company, and continuously improve the core competitiveness of TCM in Yunnan Province. | ||
| Nutritional Formula for Special Medical Purposes | To develop 1 medical nutritional support supplement for people with limited eating, digestive and absorption disorders, and metabolic disorders (over 10 years of age). | The registration application materials have been submitted, and an acceptance notification has been received. In response to the supplementary notice issued by the review department, additional studies have been completed and submitted. Key information regarding the production process and formulation has been clarified and refined through telephone communication. | To complete the registration of a nutritional formula for special medical purposes and obtain the production permit; To construct a knowledge and technology system and industrial platform for R&D and registration of special medical food. | In line with the Company’s strategic objectives, this project is an effective complement to the echelon of Big Health products. It can greatly enrich the Company’s product groups, and help the Company explore new growth drivers and enhance market competitiveness. |
| Productivity Improvement Project (Technology Reform Project) | To carry out product power enhancement studies on the Company’s marketed varieties to improve the quality and qualification of the existing varieties. | The supplementary application submissions for Xiao Chaihu Granules (sugar-free) and Xiangsha Pingwei Granules (sugar-free) have been completed, and acceptance numbers have been obtained. | To complete the declaration of supplemental registration of drugs and obtain the approval of supplemental application. | 1. This will practice the Company’s strategy of focusing on the field of TCM, promote inheritance and innovation in the field of TCM development, and further stabilize and enhance our competitiveness in the target product market. 2. It will help to explore the market of sugar-free granules, provide a new direction to solve the medication limitations of diabetes and other patients with prohibited sugar medication, expand the scope of application of the product to meet the health needs of more patient populations, and enhance the quality and competitiveness of the product. |
| New wound hemostatic | A series of emergency medical device products has been | Product process design, research on technical requirements, registration application and on-site assessment of the quality system | To obtain the medical device registration | Focusing on the innovation of wound hemostatic materials will enrich the |
| R&D project name | Objective of the project | Project progress | Goals to be achieved | Expected impact on the future development of the Company |
| material and arterial hemostatic gel | developed for the temporary control of bleeding, aimed at achieving rapid hemostasis, wound dressing, and care. | has been completed for the emergency hemostatic bandage. It has received a Class II medical device registration certificate from the Jiangsu Medical Products Administration. | certificate. | Company’s medical device product line and meet the demand for efficient hemostatic solutions in medical institutions and emergency settings. This aims to establish a leading platform in China for trauma emergency care in medical devices. |
R&D team member profile
| 2024 | 2023 | Change rate | |
| Number of R&D team members (persons) | 619 | 527 | 17.46% |
| Percentage of R&D team members in total head counts | 6.67% | 6.00% | 0.67% |
| Educational background structure of R&D team members | |||
| Bachelor | 322 | 287 | 12.20% |
| Master | 220 | 157 | 40.13% |
| Below Bachelor | 44 | 71 | -38.20% |
| Above Master | 33 | 12 | 175.00% |
| Age structure of R&D team members | |||
| Aged below 30 | 139 | 135 | 2.96% |
| Aged 30-40 | 354 | 300 | 18.00% |
| Aged 40 and above | 126 | 92 | 17.00% |
R&D Investment
| 2024 | 2023 | Change rate | |
| R&D investment amount (RMB) | 348,383,287.59 | 344,441,461.28 | 1.14% |
| Percentage of R&D investment in operating revenue | 0.87% | 0.88% | -0.01% |
| Capitalized R&D investment amount (RMB) | 10,969,986.56 | 8,428,026.45 | 30.16% |
| Percentage of capitalized R&D investment in total R&D investment | 3.15% | 2.45% | 0.70% |
Reason for the significant change in the composition of R&D team and its impact
□Applicable ?Not applicable
Reason for significant change in percentage of R&D investment in operating revenue as compared with the previous year
□Applicable ?Not applicable
Reason for significant change in capitalization rate of R&D investment and its rationality
□Applicable ?Not applicable
5. Cash flow
Unit: RMB
| Item | 2024 | 2023 | Year-on-year increase/decrease |
| Subtotal of cash inflows from operating activities | 43,880,006,829.37 | 41,332,606,952.24 | 6.16% |
| Subtotal of cash outflows from operating activities | 39,583,003,687.10 | 37,829,864,604.22 | 4.63% |
| Net cash flows from operating activities | 4,297,003,142.27 | 3,502,742,348.02 | 22.68% |
| Subtotal of cash inflows from investing activities | 8,019,213,440.17 | 4,973,097,122.26 | 61.25% |
| Subtotal of cash outflows from investing activities | 9,218,214,486.64 | 4,454,516,459.62 | 106.94% |
| Net cash flows from investing activities | -1,199,001,046.47 | 518,580,662.64 | -331.21% |
| Sub-total of cash inflows from financing activities | 1,962,072,461.45 | 1,378,858,273.49 | 42.30% |
| Subtotal of cash outflows from financing activities | 8,939,807,625.33 | 4,296,900,513.08 | 108.05% |
| Net cash flow from financing activities | -6,977,735,163.88 | -2,918,042,239.59 | -139.12% |
| Net increase in cash and cash equivalents | -3,876,235,893.15 | 1,105,605,456.02 | -450.60% |
Explanations on main factors of influence of significant year-on-year changes in related data?Applicable □Not applicable
1. Net cash flows from operating activities increased by 22.68% year on year, with a net increase of RMB 794 million.The main reason was an increase of RMB 2.616 billion in cash receipts from sales of goods and services compared to thesame period last year, and an increase of RMB 1.524 billion in cash payments for the purchase of goods and labor servicescompared to the same period last year.
2. Net cash flows from investment activities decreased by 331.21% year on year, with a net decrease of RMB 1.718billion. The main reason was that the amount of fixed-term deposits maturing this period increased by RMB 3.727 billioncompared to the previous period, and RMB 3.4 billion was invested in financial products, while the amount from thedisposal of stocks and financial investments decreased by RMB 2.005 billion compared to the previous period.
3. Net cash flows from financing activities decreased by 139.12% year on year, with a net decrease of RMB 406million. The main reason was an increase of RMB 511 million in cash receipts from borrowing compared to the sameperiod last year, an increase of RMB 1.409 billion in cash payments for debt repayment compared to the same period lastyear, and an increase of RMB 3.184 billion in cash payments for the distribution of dividends, profits, or payment ofinterest compared to the same period last year.
Explanation on the main factors behind the material difference between the net cash flow from operating activities of the Companyduring the reporting period and the net profit for the current year
□Applicable ?Not applicable
V. Analysis of Non-principal Businesses?Applicable □Not applicable
Unit: RMB
| Amount | Percentage in total profit | Reasons | Sustainable or not | |
| Investment income | 776,937,495.06 | 13.67% | It consisted mainly of the gains on investment in Shanghai Pharmaceuticals | No |
| Holding Co., Ltd (“Shanghai Pharma”). | ||||
| Gains (losses) from changes in fair value | 136,837,009.94 | 2.41% | It consisted mainly of changes in the net value of financial assets held for trading and other non-current financial assets held by the Company. | No |
| Asset impairment | -91,230,709.62 | -1.60% | It consisted mainly of provisions for inventory impairment and fixed asset impairment. | No |
| Non-operating revenue | 15,483,338.73 | 0.27% | It consisted mainly of the income unrelated to the Company’s day-to-day operating activities. | No |
| Non-operating expenses | 42,385,497.02 | 0.75% | It consisted mainly of the expenses unrelated to the Company’s day-to-day operating activities. | No |
| Credit impairment losses (loss is indicated with “-”) | -39,925,926.62 | -0.70% | It consisted mainly of the provision for bad debt related to accounts receivable in the commercial sector. | No |
| Other income | 102,009,773.65 | 1.79% | It consisted mainly of government subsidies. | No |
| Gains from disposal of assets | 490,651.65 | 0.01% | It consisted mainly of gains from the disposal of non-current assets and gains from the disposal of rights to use assets. | No |
VI. Analysis on Assets and Liabilities
1. Significant changes in assets composition
Unit: RMB
| End of 2024 | Beginning of 2024 | ||
| Amount | Proportion in total assets | Amount | Proportion in total assets |
Increase/decreasein proportion
| Increase/decrease in proportion | Explanations on significant changes | |||||
| Cash and bank balance | 10,887,983,161.30 | 20.58% | 14,218,343,076.67 | 26.44% | -5.86% | During the reporting period, the Company implemented the 2023 annual dividend and a special dividend for 2024, a total cash dividend of RMB 5.87 billion, which represents an increase compared to previous years. |
| Accounts receivable | 9,923,361,104.39 | 18.75% | 9,966,170,447.21 | 18.53% | 0.22% | No significant changes. |
| Inventories | 6,294,368,316.30 | 11.90% | 6,442,194,823.67 | 11.98% | -0.08% | An improvement in inventory management efficiency, with turnover days reduced by 11 days compared to the previous period. |
| Investment property | 49,884,012.15 | 0.09% | 44,104,145.97 | 0.08% | 0.01% | New external rental assets added during the reporting period. |
| Long-term equity investments | 12,561,276,081.35 | 23.74% | 11,536,660,992.93 | 21.45% | 2.29% | To optimize the Company’s industrial layout and business portfolio, the Company initiated the establishment of an industry fund. Shanghai Pharma continued to generate investment income. |
| Fixed assets | 3,012,878,828.09 | 5.69% | 2,662,900,014.03 | 4.95% | 0.74% | Some projects in construction were completed and transferred to fixed assets during the reporting period. |
| Construction in progress | 703,439,112.24 | 1.33% | 529,708,553.58 | 0.98% | 0.35% | Increased investment in construction in progress during the reporting period. |
| Right-of-use assets | 291,177,021.52 | 0.55% | 258,319,485.58 | 0.48% | 0.07% | New leases added during the reporting period. |
| Short-term borrowings | 423,380,272.64 | 0.80% | 1,747,303,700.34 | 3.25% | -2.45% | Decrease in credit borrowings and internal unit note discounts during the reporting period. |
| Contractual liabilities | 1,916,123,387.16 | 3.62% | 1,739,865,228.75 | 3.23% | 0.39% | Increase in advance payments received by the Pharmaceutical Business Group. |
| Long-term borrowings | 2,100,000.00 | 0.00% | 2,100,000.00 | 0.00% | 0.00% | No significant changes. |
| Lease liabilities | 190,656,990.23 | 0.36% | 172,347,309.72 | 0.32% | 0.04% | New leases added during the reporting period. |
| Financial assets held for trading | 2,547,113,523.40 | 4.81% | 149,366,687.56 | 0.28% | 4.53% | Safer, more liquid bank financial products and broker financial products during the period. |
| Notes receivable | 929,651,911.37 | 1.76% | 227,542,572.56 | 0.42% | 1.34% | Increase in domestic letters of credit and banker’s acceptance bills held at the end of the period. |
| Receivable financing | 1,887,789,780.16 | 3.57% | 1,590,749,810.74 | 2.96% | 0.61% | Increase in banker’s acceptance bills held at the end of the period. |
| Other current assets | 788,108,579.54 | 1.49% | 2,862,076,217.20 | 5.32% | -3.83% | Decrease in fixed deposits during the period. |
| Development expenses | 25,422,461.13 | 0.05% | 14,452,474.57 | 0.03% | 0.02% | Continuous investment in capitalized projects during the reporting period. |
| Other non-current assets | 116,374,395.93 | 0.22% | 541,475,331.17 | 1.01% | -0.79% | Decrease in time deposits with maturity dates greater than one year from the balance sheet date. |
| Payroll payable | 1,283,950,828.82 | 2.43% | 1,067,190,665.08 | 1.98% | 0.45% | Increase in outstanding employee compensation payable at the end of the period. |
| Taxes and duties payable | 466,603,767.14 | 0.88% | 339,670,850.02 | 0.63% | 0.25% | Increase in unpaid income taxes due at the end of the period. |
| Other payables | 1,386,632,676.75 | 2.62% | 1,025,085,879.54 | 1.91% | 0.71% | Increase in accrued but unpaid expenses. |
| Long-term payroll payable | 1,296,365.44 | 0.00% | 4,090,687.99 | 0.01% | -0.01% | Decrease in outstanding employee compensation payable at the end of the period. |
| Provisions | 12,726,280.09 | 0.02% | 0.00 | 0.00% | 0.02% | Reclassification of return payables during the period. |
| Other non-current liabilities | 1,931,554.36 | 0.00% | 17,296,814.41 | 0.03% | -0.03% | Reclassification of return payables during the period. |
| Treasury shares | 0.00 | 0.00% | 707,428,892.15 | 1.32% | -1.32% | Canceled treasury stock during the period. |
The proportion of overseas assets is relatively high
□Applicable ?Not applicable
2. Assets and liabilities at fair value
?Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Profits or losses on changes in fair value during the reporting period | Cumulative changes in fair value included in equity | Impairment accrued during the reporting period | Purchase amount during the reporting period | Sales amount during the reporting period | Other changes | Closing balance |
| Financial assets | |||||||
| 1. Financial assets held for trading (derivative financial assets excluded) | 149,366,687.56 | 73,822,492.46 | 2,900,000,000.00 | 569,800,656.62 | -6,275,000.00 | 2,547,113,523.40 | |
| 2. Other equity instrument investments | 71,745,000.00 | 71,745,000.00 | |||||
| 3. Other non-current financial assets | 324,674,379.63 | 63,014,517.48 | 387,688,897.11 | ||||
| Subtotal of financial assets | 545,786,067.19 | 136,837,009.94 | 2,900,000,000.00 | 569,800,656.62 | -6,275,000.00 | 3,006,547,420.51 | |
| Total | 545,786,067.19 | 136,837,009.94 | 2,900,000,000.00 | 569,800,656.62 | -6,275,000.00 | 3,006,547,420.51 | |
| Financial liabilities | 0.00 | 0.00 | |||||
Other variations: NoneWhether the Company had significant changes in measurement attributes of main assets during the reporting period
□ Yes ?No
3. Restrictions on asset rights as of the end of the reporting period
| Item | Closing book value | Reason of restriction |
| Cash and bank balance | 2,648,389.00 | Specifically designated for the maintenance of housing related to housing reform |
| Cash and bank balance | 21,699,196.16 | Guarantee deposits, banker’s acceptance deposit, performance bond, etc. |
| Assets of the restructured special account | 588,106,000.80 | Specifically used to cover the costs of identity conversion for employees of state-owned enterprises |
| Long-term equity investments | 12,061,376,588.76 | Shares of Shanghai Pharma cannot be transferred within 36 months from the end of the private placement |
| Total | 12,673,830,174.72 | -- |
VII. Investment Analysis
1. Overview
?Applicable □Not applicable
| Investment during the reporting period (RMB) | Investment during the same period of the previous year (RMB) | Percentage of change |
| 9,218,214,486.64 | 4,454,516,459.62 | 106.94% |
2. Significant equity investments made during the reporting period
?Applicable □Not applicable
Unit: RMB
| Investee name | Principal business | Investment method | Investment amount | Shareholding ratio | Source of funds | Partners | Term of investment | Product category | Progress as of the balance sheet date | Estimated income | Investment gain and loss during the reporting period | Litigation involved or not | Disclosure date (if any) | Disclosure index (if any) |
| Yunnan TCM Big Health Innovation Equity Investment Fund Partnership (Limited Partnership) | General items: Engaging in equity investment, investment management, asset management, and other activities through private equity funds (operations can only commence after registration with the Asset Management Association of China). (Except for projects that require legal approval, businesses may operate independently based on their business licenses.) | Newly established | 500,000,000.00 | 71.43% | Self-funded | BOC International Capital Limited | Long-term | Equity investment fund shares | Established | -110,316.95 | No | November 29, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?orgId=gssz0000538&announcementId=1221892813&announcementTime=2024-11-30 | |
| Total | -- | -- | 500,000,000.00 | 0.00 | -110,316.95 | -- | -- | -- |
3. Significant non-equity investments in progress during the reporting period?Applicable □Not applicable
Unit: RMB
| Project name | Investment method | Investment in fixed assets or not | Involved industry in investment projects | Total amountinvestedduring thereportingperiod | Amount invested in the reporting period | Source of funding | Progress of project | Estimated income | Cumulative actual investment as of the end of reporting period | Reasons for unmet progress and estimated income | Disclosure date (if any) | Disclosure index (if any) |
| Yunnan Baiyao Shanghai International Center | Self-established | Yes | Pharmaceuticals, daily chemical products | 329,556,518.78 | 877,178,833.11 | Self-funded | 90.00% | N/A | June 9, 2021 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1210206330&orgId=gssz0000538&announcementTime=2021-06-09 | ||
| Yunnan Baiyao R&D Platform - Kunming Center Construction Project | Self-established | Yes | Pharmaceuticals | 205,896,321.05 | 288,474,642.15 | Self-funded | 54.00% | N/A | ||||
| Total | -- | -- | -- | 535,452,839.83 | 1,165,653,475.26 | 0.00 | 0.00 | -- | -- | -- |
4. Financial assets investment
(1) Securities investment
?Applicable □Not applicable
Unit: RMB
| Type of securities | Stock code | Stock Abbreviation | Initial investment cost | Accounting measurement model | Opening book value | Profits or losses on changes in fair value during the reporting period | Cumulative changes in fair value included in equity | Purchase amount during the reporting period | Sales amount during the reporting period | Profits and losses during the reporting period | Closing book value | Accounting item | Source of funding |
| Domestic and overseas stocks | HK.02633 | Jacobson Pharma | 238,699,200.00 | Fair value | 115,996,160.00 | 74,768,080.00 | 86,714,510.00 | 190,764,240.00 | Other non-current financial assets | Self-funded | |||
| Domestic and overseas stocks | HK.02161 | JBM (Healthcare) | 25,039,800.00 | Fair value | 72,221,202.90 | 61,323,025.50 | 67,994,315.20 | 133,544,228.40 | Financial assets held for trading | Self-funded | |||
| Domestic and overseas stocks | HK.03681 | SinoMab BioScience | 354,119,828.19 | Fair value | 72,545,484.66 | -10,709,158.34 | 16,133,556.62 | -23,697,174.56 | 45,702,769.70 | Financial assets held for trading | Self-funded | ||
| Total | 617,858,828.19 | -- | 260,762,847.56 | 125,381,947.16 | 0.00 | 0.00 | 16,133,556.62 | 131,011,650.64 | 370,011,238.10 | -- | -- | ||
Note: On March 31, 2025, the Company held the first session of its Tenth Board of Directors and considered and approved the Proposal on Transfer of Shares inJacobson Pharma and JBM (Healthcare). The Company is authorized to sign the Share Purchase Agreement for the Transfer of Ordinary Shares in Jacobson PharmaCo., Ltd and JBM (Healthcare) Co., Ltd and relevant documents. According to the agreement, 200,000,000 shares of Jacobson Pharma Co., Ltd (stock code: 02633.HK,hereinafter referred to as “Jacobson Pharma”) will be sold at HKD 1.30 per share, and 75,900,000 shares of JBM (Healthcare) Co., Ltd (stock code: 02161.HK,hereinafter referred to as “JBM (Healthcare)”) will be sold at HKD 2.10 per share, with a total transaction value of HKD 419.39 million. After this transfer, the Companywill no longer hold shares in Jacobson Pharma or JBM (Healthcare).
(2) Investment in derivatives
□Applicable ?Not applicable
The Company had no investments in derivatives during the reporting period.
5. Use of proceeds
□Applicable ?Not applicable
The Company had no use of proceeds during the reporting period.
VIII. Significant Assets and Equity Sales
1. Significant assets sales
□Applicable ?Not applicable
The Company had no significant assets sales during the reporting period.
2. Significant equity sales
□Applicable ?Not applicable
The Company had no significant equity sales during the reporting period.
IX. Analysis on the Major Holding Companies and Joint-stock Companies?Applicable □Not applicableMajor subsidiaries and joint-stock companies with a net profit impact of over 10%
Unit: RMB
| Company name | Company type | Principal Business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net Profit |
| Yunnan Pharmaceutical, Co., Ltd. | Subsidiary | Wholesale and retail of pharmaceuticals | 1,000,000,000.00 | 16,306,782,988.84 | 6,487,839,805.27 | 24,607,231,662.23 | 736,092,757.11 | 617,293,737.08 |
| Yunnan Baiyao Group Health Products Co., Ltd. | Subsidiary | Production and sales of oral hygiene products | 84,500,000.00 | 8,357,348,360.54 | 5,886,356,312.16 | 6,525,835,244.13 | 1,501,007,701.79 | 1,249,077,014.31 |
| YNBY International | Subsidiary | Specialized in trade of finished cooking oil, sugar, personal care products, and cosmetics. | 340,764,709.45 | 240,715,280.26 | 689,091,622.71 | 21,459,144.17 | 16,683,866.18 |
| Limited | ||||||||
| Shanghai Pharmaceuticals Holding Co., Ltd. | Joint-stock company | R&D, manufacturing, and sales of API, pharmaceutical products (including but not limited to chemical Active Pharmaceutical Ingredients (APIs), chemical preparations, TCM materials, Chinese patent medicines, TCM decoction pieces, biochemical drugs, biological products, narcotics, psychotropic drugs, and toxic drugs for medical use [Adapted to the scope of business], vaccines) of various dosage forms (including but not limited to tablets, capsules, aerosols, immune preparations, granules, plasters, pills, oral liquids, inhalants, injections, liniments, tinctures, suppositories) health products, medical devices, and related products, manufacturing and sales of pharmaceutical equipment, engineering installation and maintenance, warehousing and logistics, sea, land, and air freight forwarding business, industrial investment, asset management, provision of international economic and trade information and consulting services, self-owned house leasing, import and export business of various self-operated and agent drugs and related goods and technologies. | 3,696,414,318.00 | 221,209,430,148.17 | 83,742,363,721.07 | 275,250,934,889.66 | 8,140,712,946.17 | 5,870,011,314.88 |
Acquisition and disposal of subsidiaries during the reporting period
□Applicable ?Not applicable
Explanation on companies subject to control or share participation of the Company
According to the Company’s relevant policies, the Yunnan Baiyao Group Health Products Co., Ltd(“Health Products Company”) confirmed a brand usage fee of RMB 1.108 billion payable to the parentcompany for the use of the “Yunnan Baiyao main brand trademark.” Excluding the brand usage fee, theHealth Products Company is projected to achieve a profit of RMB 2.191 billion in 2024.X. Structured Entities Controlled by the Company?Applicable □Not applicableFor details, please refer to “X. Interest in Other Entities” under Section X.XI. Outlook of the CompanyThe Company will fully and deeply implement the spirit of the Central Committee of the Communist Party ofChina and conferences held in Yunnan Province, integrating the Company’s development into the national andprovincial growth. We will identify functional positioning and value contribution points, and consistently upholdthe overall tone and measurement standards of “effective value creation” throughout all processes, continuouslyenhancing management capabilities to elevate the century-old Baiyao from “excellence” to “outstanding.”In terms of objectives, we will collaboratively promote the main themes of “growth,” “efficiency,” and “valueadded,” focusing on development goals that are beneficial, high-quality, and sustainable. In terms of scale, we willconcentrate on products related to our principal businesses that have competitive advantages to achieve high-qualitygrowth. Structurally, we will continue to deepen the “Flagship Product” strategy around core products, focusing onbreakthroughs in the secondary development of key varieties, continuously optimizing the industry and productmix, and creating new growth drivers. As for quality, we will drive operational efficiency to new heights throughlean operations, cost reduction and efficiency improvement, enhancing the Company’s core competitiveness andachieving a new pattern of coordinated development in scale, structure, and quality.
(1) Strengthening leadership in Party building, leveraging political strengths, and fostering collaborativedevelopment
The Company will thoroughly implement Xi Jinping’s Thought on Socialism with Chinese Characteristics fora New Era and focus on the study and promotion of General Secretary Xi Jinping’s important speeches anddirectives during his visit to Yunnan. We will consistently uphold the Party’s leadership and strengthen Partybuilding, striving to transform the political and organizational advantages of strict Party governance into competitiveadvantages that drive the development of new quality productive forces. We will continuously integrate Party’sleadership into the entire process and all aspects of corporate governance and development. Furthermore, we willearnestly advance the initiatives “Year for Promoting High-Quality Development through Party Building” and“Strengthening Foundations and Improving Quality,” with a focus on ensuring that high-quality Party buildingcontinuously leads and supports the high-quality development of Yunnan Baiyao.
(2) Strengthening strategic orientation, focusing on implementation, and driving sustainable growth
Strategic management is vital for executing strategic planning. The Company will implement its strategicmanagement by shifting the focus from “strategic planning” to full-chain “strategic management.” Key elements
will include systematic decomposition of strategies, efficient execution, regular monitoring, and strategic reviews.Building on the Announcement on Strategic Plan for 2024-2028, we will ensure the effective execution and reviewof strategies to achieve our established goals. Also, we will adapt strategies in response to changes in internal andexternal environments, shaping our “14
th
Five-Year Plan.” By solidifying strategic management and implementingstrategy breakdown, efficient execution, regular monitoring and strategic reviews, we will create an effectiveevaluation system and a feedback loop for adjustments. Any shortcomings or deviations during execution will bepromptly corrected to ensure thorough and effective implementation of strategies.
(3) Adhering to goal orientation, focusing on major project implementation, and achieving annualtargetsIn 2025, the Company will take a goal-oriented approach, leveraging key strategic projects to continuouslyenhance the execution efficiency of critical tasks. First, we will integrate both intensive and extensive growth. Wewill firmly commit to “intensive” growth, focusing on maximizing potential, improving efficiency and enhancingthe awareness of cost reduction and efficiency improvement. Comprehensive efforts will be made to reduce the costand improve efficiency across the industry and value chains, enhancing supply chain contributions. At the sametime, we will pursue “extensive” growth to strengthen our existing business structure. Second, we will identify newgrowth drivers within existing industries, rapidly advancing projects like “Flagship Product” and “SecondaryDevelopment” for tangible results. This will involve defining products, goals, responsible parties, success indicators,and evaluation criteria, alongside regular oversight, specialized management and reporting to ensure effectiveimplementation. Third, we will strive to elevate the TCM industry. As a leading enterprise in this sector, theCompany will seize significant development opportunities and guide the entire industry chain toward collaborativegrowth with an ecological perspective. Finally, we will continually enhance our international business, effectivelyimplementing national and provincial strategies. By leveraging the advantages of the Mohan-Moding port hub andsupportive cross-border economic policies, along with Hong Kong’s open economic framework and geographicaladvantages, we aim to rapidly increase overseas market sales, establishing a new growth driver for the Company.
(4) Implementing innovation management, empowering healthy industry development, and ensuringsteady progress
The Company’s R&D efforts will focus on preserving the essence of TCM, enabling industry upgrades, andstrengthening innovative drug development, and AI-assisted drug design. We will refine and optimize our R&Dsystem. In line with strategic development requirements, we will promptly establish a scientific, efficient, andpractical R&D management system. Specifically, we will set up a scientific R&D management system and acompensation and incentive mechanism to constantly enhance both process and outcome management of R&Dprojects. This will maximize the contribution of innovation to business growth, competitive capability, and profitenhancement. For major R&D projects, we will concentrate on key areas such as innovative TCM, secondarydevelopment of TCM, innovative radiopharmaceuticals, transdermal preparations, and medical devices,accelerating project advancement. As for TCM R&D, we aim to achieve substantial progress on the secondarydevelopment of products like Baoyao capsules, Qixuekang, Shuliean, Gongxuening, and Qian Cao Nao Mai Tong,while also expediting clinical trials for products such as Panax notoginseng Tablets and Fuqi Guben Ointment. Inthe realm of innovative drugs, based on the current circumstance, we will identify strong business leaders,
implement a positive incentive mechanism to foster innovation, create a collaborative atmosphere, establish a robustproject reserve library, and track the transformation of innovative projects. For health product R&D, we will ensuretimely launches of new products while deepening research on patent formulas for anti-hair loss, continuouslyenhancing our leading advantage in this field.
(5) Focusing on value management, returning to shareholders and society, and delivering a win-winresultValue management is the foundation of market value management, derived from the certainty, growth potential,and sustainability of our strategy. Management capability reflects the overall governance level, management skills,and development quality of the Company. We actively respond to regulatory requirements for value managementin listed companies, maintaining strategic focus, concentrating on principal responsibilities and businesses, andensuring efficient execution. Our aim is to establish the Company as a benchmark enterprise with strongcompetitiveness and high returns, continuously creating value for shareholders and giving back to society. Movingforward, we will enhance our investor relations management and continually improve our market value managementcapabilities, fostering a collaborative ecosystem that benefits all stakeholders.The year 2025 marks a significant milestone as the concluding year of the “14
th
Five-Year Plan,” the planningyear for the “15
thFive-Year Plan,” and the year for achieving the “3815” strategic development goals in YunnanProvince. It is also a critical year for the first phase of the Company’s “2+3” strategy. With unwaveringdetermination and a results-oriented mindset, we will ensure that all major initiatives and reform measures are fullyimplemented, ushering in a new chapter for the century-old Baiyao to elevate from “excellence” to “outstanding.”XII. Survey, communication, interviews and other activities received during the reporting period?Applicable □Not applicable
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| January 11, 2024 | Office building at the headquarters | Field research | Institution | 7 persons from China Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1218868274&announcementTime=2024-01-12%2018:11 |
| January 16, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from Abu Dhabi Investment Authority | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1218930760&announcementTime=2024-01-17%2015:37 |
| January 24, 2024 | Office building at the headquarters | Field research | Institution | 3 persons from Huatai Securities. etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219001368&announcementTime=2024-01-25%2017:17 |
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| January 30, 2024 | Office building at the headquarters | Telephone communication | Institution | 2 persons from Morgan Stanley | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219065071&announcementTime=2024-02-01%2017:01 |
| February 26, 2024 | Office building at the headquarters | Telephone communication | Institution | 6 persons from Guosheng Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219208504&announcementTime=2024-02-28%2018:03 |
| April 1, 2024 | Office building at the headquarters | Telephone communication | Others | 226 persons, including those from institutional investors and individual investors | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219516527&announcementTime=2024-04-03%2017:09 |
| April 8, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from Sumitomo Mitsui | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219565147&announcementTime=2024-04-10%2017:23 |
| April 15, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from Pictet Asset Management | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219646856&announcementTime=2024-04-17%2017:01 |
| April 15, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from HSBC Global Asset Management (Uk) Limited | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219646898&announcementTime=2024-04-17%2017:01 |
| April 16, 2024 | Office building at the headquarters | Telephone communication | Institution | 4 persons from China Life Asset Management | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219665329&announcementTime=2024-04-18%2017:45 |
| April 16, 2024 | Office building at the headquarters | Telephone communication | Institution | 5 persons from Taiping Asset Management | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219665336&announcementTime=2024-04-18%2017:47 |
| April 16, 2024 | Office building at the headquarters | Telephone communication | Institution | 5 persons from China Universal Asset Management | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219665339&announcementTime=2024-04-18%2017:47 |
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| April 18, 2024 | Shenzhen Stock Exchange | Others | Others | All the investors attending the second collective performance presentation on “Forging new quality productive forces” of the Shenzhen Stock Exchange | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219737336&announcementTime=2024-04-22%2018:36 |
| April 29, 2024 | Office building at the headquarters | Telephone communication | Institution | 5 persons from Everbright Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1219983930&announcementTime=2024-05-06%2017:44 |
| May 10, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from Broad Peak | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220042459&announcementTime=2024-05-13%2019:36 |
| May 10, 2024 | Office building at the headquarters | Telephone communication | Institution | 4 persons from Haitong Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220042462&announcementTime=2024-05-13%2019:36 |
| May 13, 2024 | Investor Relations Interactive Platform of Quanjing.com | Online exchange through Internet platform | Others | Investors making inquiry at the Investor Relations Interactive Platform of Quanjing.com | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220051725&announcementTime=2024-05-14%2017:54 |
| May 13, 2024 | Office building at the headquarters | Field research | Institution | 4 persons from Southwest Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220061177&announcementTime=2024-05-15%2017:20 |
| May 13, 2024 | Office building at the headquarters | Field research | Institution | 3 persons from Fanhai Capital, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220061303&announcementTime=2024-05-15%2017:24 |
| May 13, 2024 | Meeting room on the second floor of the Group’s Baiyao Park | Field research | Institution | 2 persons from Changjiang Securities | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220061428&announcementTime=2024-05-15%2017:36 |
| May 14, 2024 | Office building at the headquarters | Field research | Institution | 4 persons from Zheshang Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220073306&announcementTime=2024-05-16%2017:32 |
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| May 15, 2024 | Meeting room on the second floor of the Group’s Baiyao Park | Field research | Institution | 11 persons from CITIC Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220090611&announcementTime=2024-05-17%2020:06 |
| May 16, 2024 | Meeting room on the second floor of the Group’s Baiyao Park | Field research | Others | Investors participating in the 2024 Investors Visiting Listed Companies Event of Here Come Shareholders | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220107825&announcementTime=2024-05-20%2017:42 |
| May 17, 2024 | Office building at the headquarters | Field research | Institution | 7 persons from Guolian Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220120376&announcementTime=2024-05-21%2018:02 |
| May 20, 2024 | Office building at the headquarters | Telephone communication | Institution | 4 persons from China Merchants Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220133283&announcementTime=2024-05-22%2019:18 |
| May 21, 2024 | Office building at the headquarters | Telephone communication | Institution | 7 persons from Everbright Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220144230&announcementTime=2024-05-23%2017:40 |
| May 29, 2024 | Office building at the headquarters | Telephone communication | Institution | 7 persons from Everbright Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220211452&announcementTime=2024-05-30%2017:30 |
| May 30, 2024 | Office building at the headquarters | Field research | Institution | 1 person from BlackRock | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220245135&announcementTime=2024-06-03%2017:46 |
| May 30, 2024 | Office building at the headquarters | Telephone communication | Institution | 3 persons from China Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220245152&announcementTime=2024-06-03%2017:46 |
| May 31, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from Hotland Innovation Asset Management | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220256566&announcementTime=2024-06-04%2018:20 |
| June 3, 2024 | Office building at the headquarters | Field research | Institution | 7 persons from Eastmoney Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220272291&announcementTime=2024-06-05%2018:34 |
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| June 4, 2024 | Office building at the headquarters | Field research | Institution | 4 persons from Soochow Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220289334&announcementTime=2024-06-06%2019:14 |
| June 14, 2024 | Office building at the headquarters | Telephone communication | Institution | 3 persons from Haitong International, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220390832&announcementTime=2024-06-18%2017:46 |
| June 14, 2024 | Office building at the headquarters | Telephone communication | Institution | 3 persons from Haitong International, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220390834&announcementTime=2024-06-18%2017:48 |
| June 14, 2024 | Office building at the headquarters | Telephone communication | Institution | 5 persons from Haitong International, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220390837&announcementTime=2024-06-18%2017:50 |
| June 25, 2024 | Office building at the headquarters | Telephone communication | Institution | 2 persons from TF Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220468045&announcementTime=2024-06-26%2018:58 |
| June 26, 2024 | Office building at the headquarters | Field research | Institution | 5 persons from Allianz Asia, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220496116&announcementTime=2024-06-28%2017:17 |
| June 28, 2024 | Office building at the headquarters | Telephone communication | Institution | 1 person from E Fund | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220520219&announcementTime=2024-07-02%2017:58 |
| July 1, 2024 | Office building at the headquarters | Telephone communication | Institution | 12 persons from Guolian Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220526528&announcementTime=2024-07-03%2017:44 |
| July 1, 2024 | Office building at the headquarters | Telephone communication | Institution | 4 persons from Guolian Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220526553&announcementTime=2024-07-03%2017:46 |
| July 3, 2024 | Office building at the headquarters | Field research | Others | A group of 24 investors who participated in the Visiting Listed Company Event of Huafu Securities Yunnan Branch | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220540763&announcementTime=2024-07-05%2017:32 |
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| July 23, 2024 | Office building at the headquarters | Field research | Institution | 4 persons from Guosen Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1220719320&announcementTime=2024-07-24%2017:12 |
| August 27, 2024 | Office building at the headquarters | Telephone communication | Institution | 306 persons from CITIC Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221052237&announcementTime=2024-08-29%2018:12 |
| September 12, 2024 | Office building at the headquarters | Field research | Institution | 8 persons from China Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221222096&announcementTime=2024-09-13%2017:18 |
| September 12, 2024 | Office building at the headquarters | Field research | Institution | 3 persons from Bosera Funds | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221222098&announcementTime=2024-09-13%2017:18 |
| September 19, 2024 | Office building at the headquarters | Telephone communication | Institution | 8 persons from Haitong Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221256903&announcementTime=2024-09-20%2017:10 |
| November 11, 2024 | Office building at the headquarters | Telephone communication | Institution | 3 persons from Macquarie Capital Securities | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221711579&announcementTime=2024-11-13%2017:22 |
| November 29, 2024 | Office building at the headquarters | Field research | Others | A group of 5 investors who participated in the Visiting Listed Company Event of Wanlian Securities Yunnan Branch | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221906513&announcementTime=2024-12-02%2016:58 |
| December 4, 2024 | Office building at the headquarters | Field research | Institution | 21 persons from Hua Chuang Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1221956024&announcementTime=2024-12-06%2017:10 |
| December 11, 2024 | “Baiyao Park” Building at the headquarters of the Company | Field research | Others | A group of 25 investors who participated in the “Visiting Listed Companies Series - Visiting Yunnan Baiyao” organized by Guotai Jun’an and Quanjing.com | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1222015856&announcementTime=2024-12-13%2017:28 |
| Time of reception | Place of reception | Mode of reception | Type of guests | Guests | Discussions and information provided | Basic information index of the survey |
| December 12, 2024 | Office building at the headquarters | Telephone communication | Institution | 5 persons from Shenwan Pharmaceutical, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1222016036&announcementTime=2024-12-13%2017:34 |
| December 24, 2024 | Office building at the headquarters | Field research | Institution | 8 persons from China Securities, etc. | To understand the business situation of the Company and other related issues | http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000538&stockCode=000538&announcementId=1222143382&announcementTime=2024-12-25%2017:34 |
XIII. Development and implementation of market value management system and valuation enhancementplanWhether the Company has a market value management system in place.?Yes □NoWhether the Company has disclosed plans for valuation enhancement.
□ Yes ?No
In response to the State Council’s Opinions on Strengthening Supervision and Risk Prevention and PromotingHigh-Quality Development of the Capital Market, which encourage listed companies to establish a market valuemanagement system, we held the first session of the Tenth Board of Directors for 2025 on March 31, 2025 toconsider and approve the Market Value Management System of Yunnan Baiyao Group, in a bid to effectivelyenhance the Company’s investment value, standardize market value management behaviors, ensure the compliance,scientific rigor and effectiveness of the Company’s market value management activities, and maximize theCompany’s value and shareholders’ interests. For details, please refer to the system disclosed by the Company atwww.cninfo.com.cn on the same day.XIV. Implementation of the “Enhancement of Quality and Returns” InitiativeWhether the Company disclosed the “Enhancement of Quality and Returns” Initiative?Yes □NoThe Company disclosed the Announcement on “Enhancement of Quality and Returns” Initiative on March 9,2024 (Announcement No.: 2024-12).With established awareness of returning value to shareholders, focusing on its principal businesses, andensuring prudent operations, the Company continues to drive high-quality development while enhancingshareholder returns. In alignment with its actual situation, the Company has employed a comprehensive range ofmeasures, including improving the quality of information disclosure, strengthening investor relations management,implementing cash dividends, canceling repurchased shares, and increasing shareholdings by major shareholders topromote that the Company’s high-quality development is accurately reflected in its market performance.(I) Constantly improving the quality and efficiency of production and operationIn 2024, the Company overcame the challenges posed by significant changes in the external environment and
focused on the core pharmaceutical business. Through excellent operation across the industrial chain, value chain,and production factors, the Company maintained strong growth. During the reporting period, the Company achievedan operating revenue of RMB 40.033 billion, a 2.36% increase compared to the same period last year; net profitattributable to the parent company was RMB 4.749 billion, a 16.02% year-on-year increase from RMB 4.094 billion;and net profit attributable to the parent company after deducting non-recurring profits and losses was RMB 4.523billion, a 20.18% increase compared to RMB 3.764 billion last year, setting a new historical high.
In terms of growth quality, the Company generated net operating cash flow of RMB 4.297 billion, a 22.68%increase compared to the same period last year; the weighted average return on net assets was 11.99%, an increaseof 1.48 percentage points from the previous year; and basic earnings per share were RMB 2.66, a 16.16% increasecompared to last year. Meanwhile, the Company’s business structure continued to optimize. The proportion ofindustrial revenue in total operating revenue has further increased to 36.14%, with the growth rate of industrialrevenue reaching 5.30%. The gross margin of the industrial business is 65.93%, which is 1.69 percentage pointshigher than the same period of the previous year. The Company’s efforts to improve quality and efficiency wereeffective, with sales expenses decreasing by 2.26% and management expenses decreasing by 1.98% compared tothe previous year.The Company continued to maintain a healthy asset structure. At the end of the reporting period, the Companyhad total assets of RMB 52.914 billion, net assets attributable to the shareholders of the listed Company amountedto RMB 38.832 billion, the asset-liability ratio was 26.55%, and the cash and bank balance stood at RMB 10.888billion.
(II) Enhancing shareholder returns through multiple dimensions
The Company has taken multiple measures to enhance shareholders’ sense of gain by means of cash dividends,cancellation of repurchased shares and increase in shareholdings by major shareholders.
During the reporting period, the Company’s cumulative cash dividends amounted to RMB 4.279 billion,accounting for 90.09% of the annual net profit attributable to the parent company in 2024. A special dividend wasimplemented in the third quarter of 2024. The dividend program was to distribute a cash dividend of RMB 12.13per 10 shares, with a total dividend amount of RMB 2.164 billion, accounting for 50.02% of the net incomeattributable to the parent company in the first three quarters of 2024. The annual dividend program for 2024 was todistribute a cash dividend of RMB 11.85 per 10 shares, with an annual total cash dividend amount of RMB 2.114billion.
The Company held a shareholders’ meeting in February 2024, which considered and approved change of useof the 12,599,946 repurchased shares to “for the cancellation to reduce the registered capital,” with the cancelledshares accounting for approximately 0.7015% of the Company’s total share capital. The repurchase cost exceededRMB 700 million. In April 2024, the Company completed the cancellation of the 12,599,946 repurchased sharesmentioned above.
In August 2024, Yunnan State-owned Equity Operation Management Co., Ltd (“State-owned EquityManagement Company”), our shareholder, planned to increase its shareholding in the Company within six monthsfrom the date of the first increase (August 6, 2024), and planned to increase its shareholding in a cumulative amountof not less than RMB 500 million and not more than RMB 1 billion. From August 6, 2024 to February 5, 2025,
State-owned Equity Management Company cumulatively increased its shareholding in the Company by 17,807,463shares through the trading system of Shenzhen Stock Exchange (SZSE) by means of centralized bidding transactions,accounting for 0.9980% of the total share capital of the Company, and the cumulative amount of the increase inshareholding was RMB 950,379,399.02. As of the February 5, 2025, the term of the Shareholding Increase Planexpired and the Shareholding Increase Plan was completed.(III) Continuously improving the information disclosure qualityThe Company consistently adheres to the principles of truthfulness, accuracy, completeness, timeliness, andfairness in information disclosure, strictly following applicable laws, regulations, and corporate policies. Activelyengaging with investors, the Company carefully considers their needs and suggestions regarding periodic reports.The Company discloses annual report data across multiple dimensions, including segments and channels, ensuringcompliance while offering a comprehensive view of its operations and development. Meanwhile, the Companypractically engages in voluntary information disclosure, proactively sharing information that aids investors in valueassessment and decision-making, thereby enhancing the relevance and transparency of disclosures. In addition, theCompany employs various methods to present and interpret periodic reports, including graphics, videos, andPowerPoint presentations, to communicate information in a clear, engaging, and easy-to-understand manner. As ofthe end of the reporting period, Yunnan Baiyao has been awarded the Class A rating in the information disclosureassessment by the Shenzhen Stock Exchange for the 17
th consecutive time.(IV) Fully protecting the rights and interests of investors and ensuring smooth communication channelsThe Company has established smooth investor communication channels to effectively safeguard the rights andinterests of investors and continuously improves the effectiveness of positive interaction with investors. During thereporting period, the Company held a total of four performance briefings, setting a record high in investorparticipation. We received investors for a total of 52 times (online and offline), involving 93 organizations and morethan 200 investors, and survey records were released in a timely manner in accordance with information disclosurerequirements. We responded to 156 inquiries at irm.cninfo.com.cn, with a response ratio of 100%. Specializedpersonnel were assigned to answer investor relations hotline calls in earnest, ensuring the effective operation of theinvestor relations hotline. In addition, the Company has scientifically built a professional financial media matrixthrough text, video and other forms, and actively engages in multi-channel information dissemination, thus buildingand maintaining the Company’s multi-dimensional value in the capital market.(V) Exploring and practicing the path of high-quality developmentThe Company has a clear strategic plan. For intensive growth, we will focus on the foundational developmentof the three key segments, that is pharmaceutical, health and distribution, and systematically explore potential andenhance efficiency across the industrial chain, value chain, and production factors. For extensive growth, we will,in line with the overall strategic requirements and orientation, actively explore ways to complement and strengthenexisting industrial segments through strategic mergers and acquisitions, strategic partnerships, and other approaches,enabling us to rapidly overcome current growth bottlenecks and achieve sustained growth. The Company aims toachieve growth in revenue, profit, asset scale, and other key indicators through the two-phase “2+3” strategy, whichwill drive the century-old Baiyao toward becoming a Chinese leading and world-class modern pharmaceuticalindustry group, achieving synergistic growth in scale, quality, and structure.
Creating value, managing value, and realizing value are essential steps in the value enhancement journey forlisted companies. The Company will strictly remain committed to fulfilling its responsibilities and obligations as alisted company. Through focusing on our principal businesses, continuous innovation, and operationalimprovements to enhance our intrinsic value, we aim to promote the healthy and sustainable development of theCompany by continuously exploring and practicing the methodology of high-quality development. We will adhereto the “investor-oriented” principle, striving to safeguard investors’ rights and interests through various means,enhance investment returns and bolster investors’ sense of achievement. By effectively implementing the“Enhancement of Quality and Returns” initiative, we seek to boost market confidence and contribute to the positiveand healthy development of the capital market.
Section IVCorporate Governance
I. Basic Information of Corporate Governance
In strict accordance with the requirements of the Company Law, the Securities Law, the Code of Governancefor Listed Companies, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange, the Self-RegulatoryGuidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standardized Operation of Listed Companieson the Main Board, and other laws and regulations, as well as internal rules and regulations, such as the Articles ofAssociation, the Company keeps improving corporate governance and strengthening the awareness of compliantoperation, and optimizing internal control. By constantly strengthening the learning of the relevant laws andregulations of listed companies by all directors, supervisors, senior management, and relevant responsible personneland continuously improving their ability to perform their duties, we have continuously improved our governancecapacity, management efficiency and standardized operation, and promoted the high-quality and sustainabledevelopment of the Company. The basic information of the Company’s corporate governance during the reportingperiod is as follows:
1. Shareholders and Shareholders’ Meetings
The Company protects the rights of shareholders in accordance with the law, paying special attention toprotecting the legitimate rights and interests of minority shareholders, and protects the rights of shareholders toknow and participate in decision-making and supervision of significant events of the Company. The Company heldits first extraordinary general meeting for 2024 on February 23, 2024, the annual general meeting for 2023 on April23, 2024, the second extraordinary general meeting for 2024 on June 11, 2024, the third extraordinary generalmeeting for 2024 on September 11, 2024, and the fourth extraordinary general meeting for 2024 on November 14,2024, respectively. The convening of the meetings, the convening procedures, the qualifications of the participants,the qualifications of the convenor, the voting procedures and the voting results of the meetings complied with theprovisions of laws and regulations and the Articles of Association of the Company, and all the motions were votedon and approved.
2. Directors and Board of Directors
The number and composition of the Board of Directors of the Company are in compliance with therequirements of laws and regulations, the professional structure is reasonable, and the directors are fully equippedwith the necessary time and energy, knowledge reserves, professional skills and comprehensive qualities to performtheir duties. The directors abide by the relevant laws and regulations and the Articles of Association, and performtheir duties faithfully, diligently and prudently. The independent directors independently perform their dutiesaccording to laws, fully understand the Company’s operation and the contents of Board meetings, and safeguard theinterests of the Company and all shareholders, paying particular attention to the protection of the legitimate rightsand interests of minority shareholders.
The Board of Directors earnestly performs the duties prescribed by the relevant laws and regulations and theArticles of Association, and operates in strict accordance with the Rules of Procedure for the Board of Directors to
ensure the standardized and efficient operation of the Board and prudent and scientific decision-making. The Boardof Directors consists of four special committees on audit, strategy, nomination, remuneration and appraisal, whichare responsible to the Board of Directors and perform their duties in accordance with the Articles of Association andthe implementation rules of the special committees. During the reporting period, the tenth Board of Directors of theCompany held a total of 12 sessions, and all the motions were voted on and approved. All the sessions wereconvened and held in strict accordance with the Rules of Procedure for the Board of Directors, all the directorswere notified in advance as required, and sufficient meeting materials were provided. The meeting minutes weretrue, accurate and complete.
3. Supervisors and Supervisory Committee
The supervisors strictly abide by the relevant laws, regulations and norms, independently and effectivelyperform the supervision function, and urge the Board of Directors and the management to operate in a standardizedmanner and make scientific decisions, thus effectively safeguarding the interests of the Company, shareholders andemployees. During the reporting period, the tenth Supervisory Committee of the Company held a total of 6 sessions,and all the motions were voted on and approved. The Supervisory Committee obtained a full understanding of theCompany’s production and operation situation, comprehensively inspected the Company’s finance, supervised thedirectors and senior management to perform their duties in a standardized manner, reviewed the Company’s periodicreports and put forward written review opinions.
4. Senior management and operation team
During the reporting period, the tenth Board of Directors appointed Mr. He Tao, Mr. Shen Shi, and Mr. LiSheng Li as Senior Vice Presidents. The Company appointed senior management in strict accordance with therelevant laws and regulations and the Articles of Association, performed legal procedures and made timelydisclosure.
The operation team has clear responsibilities and strictly implements the resolutions of the general meeting ofshareholders, resolutions of the Board of Directors and other relevant resolutions. The senior management membersabide by the relevant laws and regulations and the Articles of Association, and perform their duties faithfully,diligently and prudently.
5. Revision of corporate governance related systems
During the reporting period, in accordance with the latest provisions of the Securities Law of the People’sRepublic of China, the Measures for the Administration of Independent Directors of Listed Companies, the RulesGoverning the Listing of Shares on Shenzhen Stock Exchange, the Self-Regulatory Guidelines No. 1 for CompaniesListed on Shenzhen Stock Exchange - Standardized Operation of Listed Companies on the Main Board, theGuidelines on Investor Relations Management for Listed Companies, the Rules on the Management of the SharesHeld by Directors, Supervisors and Senior Management of Listed Companies and Their Changes and other lawsand regulations and normative documents, and based on the actual situations of the Company, the Companysystematically revised the Rules of Procedure for the Board of Directors and the Rules of Procedure for OfficeMeetings after consideration and approval by the Board of Directors, to further improve the governance structureof the Board of Directors of the Company. In addition, during the reporting period, the Company also revised suchbasic management systems as the Internal Audit System, the Investment and Financial Management System, and
the Public Welfare Donation Management Measures, and formulated such basic management systems as theCompliance Management Measures of Yunnan Baiyao Group Co., Ltd. (Trial), the Accounting Firm Selection andEmployment System, and the Intellectual Property Management System.
6. Largest shareholder and listed company
As of the end of the reporting period, State-owned Equity Management Company was the largest shareholderof the Company, and the Company has no de facto controller and no controlling shareholders. The above-mentionedlargest shareholder shall exercise its rights as shareholders in accordance with law, fulfill its obligations asshareholders, and earnestly fulfill its commitments. The largest shareholder of the Company is independent fromthe Company in terms of personnel, assets and finance, and has independent institutions and businesses. There areno cases in which the Company’s funds have been appropriated by the largest shareholder and its subsidiaries orthrough other means, or the Company has provided guarantees for the largest shareholder and its subsidiaries inviolation of the law. During the reporting period, the decision-making procedures and information disclosureobligations were strictly fulfilled for the related party transactions between the Company and the related parties inaccordance with relevant regulations, and the related party transactions had commercial substance and fair pricing.
7. Information disclosure and transparency
During the reporting period, the Company and other information disclosure obligators disclosed informationin a true, accurate, complete, timely and fair manner in strict accordance with laws and regulations, self-regulatoryrules and the Articles of Association of the Company, and the disclosures were concise, clear and easy to understand.The Company’s designated information disclosure media are China Securities Journal, Shanghai Securities News,Securities Times and http://www.cninfo.com.cn, so that users can quickly and conveniently obtain information ofthe Company. Attaching importance to the management of insider information, the Company strictly controls thescope of persons with knowledge of insider information, registers the information of persons with knowledge ofinsider information truthfully, accurately and completely, and reports to the Exchange in a timely manner.
8. Internal control and regulation system
The Company has established a sound internal control system. With the form and content in line with therequirements of the Basic Standard for Enterprise Internal Control, its supplementary guidelines, and other relevantlaws, regulations and normative documents, the internal control self-evaluation can truly and accurately reflect theimplementation status of the Company’s internal controls.
The Company has, according to the actual situation and management needs, established and improved internalcontrol to reasonably ensure the legal compliance of operation and management, asset safety, the truth and integrityof financial reports and related information, improve the operation efficiency and effect, promote the realization ofdevelopment strategies, and meet the objectives of internal control. The Company has established a series of internalcontrol systems for the business and matters included in the scope of internal control evaluation, which have beenimplemented in the operation and management activities, effectively preventing and controlling the Company’sinternal business risks in major aspects, and ensuring the safety and integrity of the Company’s assets and the orderlydevelopment of operation and management activities. The internal control systems are reasonable, complete andeffective, and conducive to achieving the strategic objectives of operation and development of the Company. TheCompany has introduced a third-party consulting agency to assist in the construction of a comprehensive risk
management system, and promoted the integration of risk management into each business management link throughrisk identification, risk assessment, clarification of risk early warning indicators, development of risk reporting andresponse mechanisms, and the construction of a corporate responsibility and assessment system. The Company willconstantly improve the internal control system and standardize the implementation of the internal control systemaccording to the changes of internal and external environment and management requirements, and based on theguidelines of comprehensive risk management. Through the operation, analysis and evaluation of the internalcontrol system, we will provide guarantee for the Company’s legal and compliant operation and asset safety,effectively prevent risks in operation and management, and promote the steady implementation of the Company’sstrategy.
9. Stakeholders and social responsibilities
The Company fully respects and safeguards the legitimate rights and interests of stakeholders, with an aim torealize the coordination and balance of the interests of society, shareholders, the Company, employees and otherparties. Yunnan Baiyao actively fulfills its social responsibilities in terms of environmental protection, disaster reliefand relief assistance, and public welfare, while maintaining the Company’s sustainable development, improving itsoperating results and protecting the interests of its shareholders. In 2024, Yunnan Baiyao was again awarded an Arating in the MSCI-ESG rating for the 4
thconsecutive year. Based on the corporate attributes of inheritance andinnovation, excellent quality, technology empowerment, co-construction and sharing, social responsibility andsustainable development, the Company will continue to optimize the governance system and governance level,constantly upgrade the industrial deployment, adhere to the environmentally friendly development path, and createlong-term sustainable value for the society, the environment and various stakeholders.
We firmly believe that good corporate governance is the cornerstone and guarantee for the sustainable andhealthy development of enterprises, and standardized operation is the basic requirement for the sustainable andhealthy development of the Company. Insisting on standardized operation in accordance with laws and regulationsand the requirements of the corporate governance system, the Company has continuously improved its governancecapacity and management effectiveness. Thanks to scientific decision-making and sound operation, we effectivelysafeguard the interests of the Company and the general investors, and achieve the Company’s high-quality andsustainable development.
Whether there were any significant differences between the Company’s actual governance status and laws, administrativeregulations and the rules issued by China Securities Regulatory Commission (“CSRC”) on listed company governance?
□ Yes ?No
There was no significant difference between the Company’s actual governance status and laws, administrative regulations and therules issued by CSRC on listed company governance.II. Details Regarding the Company’s Separation from the Controlling Shareholder and DeFacto Controller across Assets, Personnel, Finance, Institutions, and Business OperationsState-owned Equity Management Company is the largest shareholder of the Company, and the Company hasno de facto controller and no controlling shareholders. In strict accordance with the requirements of the Company
Law, the Articles of Association and other laws, regulations and rules, the Company and its foregoing largestshareholder are completely separated in terms of business, personnel, assets, institutions, finance and other aspects.The Company has an independent and complete business system and the ability to operate independently in themarket. The Company will continue to ensure the separation between the Company and the aforesaid largestshareholder in terms of personnel, assets, finance, institutions and business operations according to the requirementsof the relevant laws and regulations.
1. In terms of personnel: The Company operates completely independently in terms of labor, personnel andwage management system and has developed an independent management system. The directors, supervisors andsenior management of the Company are lawfully selected and employed in accordance with the Company Law, theArticles of Association and other relevant laws, regulations and provisions. All senior executives of the Companywork in the Company and receive remuneration. There is no situation in which senior executives hold dual positionsin the Company and the companies of the aforesaid largest shareholder. There is no situation in which finance staffhas cross appointments in related organizations.
2. In terms of assets: The Company has a clear division of property rights with its aforesaid largest shareholder,has the ability to operate independently in the market, and has full control over the production system, supportingfacilities, land use rights and other assets, and there is no situation where the aforesaid largest shareholder occupiesor dominates the assets.
3. In terms of finance: The Company has established an independent, complete and standardized financialaccounting system and financial management system, as well as the corresponding internal control system andinternal audit system to independently make financial decisions in accordance with the requirements of theAccounting Standards for Business Enterprises.
4. In terms of institutions: The Board of Directors, Supervisory Committee and other internal organs of theCompany have sound structure, operate independently, make scientific decisions, and the internal organizationsoperate independently from the aforesaid largest shareholder. All the institutions of the Company are set accordingto the requirements of listed companies’ norms and the Company’s actual business needs and characteristics. TheCompany and its largest shareholder have independent office addresses, and there is no mixed operation and co-office. The aforesaid largest shareholder exercises its rights and undertakes corresponding obligations according tolaw.
5. In terms of business: The Company has a completely independent business operation system, businessdeployment and the ability to operate independently in the market, with independent procurement system,production system and sales system. There is no dependence on majority shareholder to obtain profits, and there isno horizontal competition with aforesaid largest shareholder and its subsidiaries.III. Horizontal Competition
□Applicable ?Not applicable
IV. Annual General Meeting and Extraordinary General Meeting Held during the ReportingPeriod
1. Shareholders’ meetings held during the reporting period
| Sessions | Meeting type | Proportion of attendance of the investors | Meeting date | Disclosure date | Resolutions |
| First Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 63.39% | February 23, 2024 | February 24, 2024 | The following proposals had been considered and approved: 1. Proposal on Electing Non-Independent Directors of the Tenth Board of Directors; 2. Proposal on Change of Use and Cancellation of the Repurchased Shares |
| Annual General Meeting for 2023 | Annual General Meeting | 62.19% | April 23, 2024 | April 24, 2024 | The following proposals had been considered and approved: 1. Proposal on the 2023 Annual Work Report of the Board of Directors; 2. Proposal on the 2023 Annual Work Report of the Supervisory Committee; 3. Proposal on the 2023 Final Financial Report; 4. Proposal on the 2023 Annual Report and its Summary; 5. Proposal on the 2023 Profit Distribution Plan; 6. Proposal on the 2024 Financial Budget Report; 7. Proposal on Expected Daily Related Transactions for 2024; 8. Proposal on Revising the Rules of Procedure of the Board of Directors of Yunnan Baiyao |
| Second Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 55.89% | June 11, 2024 | June 12, 2024 | The following proposals had been considered and approved: 1. Proposal on Electing Supervisors of the Tenth Supervisory Committee; 2. Proposal on Electing Non-Independent Directors of the Tenth Board of Directors |
| Third Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 61.91% | September 11, 2024 | September 12, 2024 | The following proposal had been considered and approved: 1. Proposal on Renewal of the Company’s Auditor for 2024 (Including Internal Control Audit) |
| Fourth Extraordinary General Meeting for 2024 | Extraordinary General Meeting | 63.09% | November 14, 2024 | November 15, 2024 | The following Proposal had been considered and approved: 1. Proposal on Special Dividend Plan |
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed votingrights
□Applicable?Not applicable
V. Directors, Supervisors and Senior Management
1. Basic information
| Name | Gender | Age | Title | Service status | Date of commencement of service term | Date of end of service term | Number of shares held at the beginning of the period (shares) | Increase in number of shares held in the current period (shares) | Decrease in number of shares held in the current period (shares) | Other changes (shares) | Number of shares held at the end of the period (shares) | Reasons for changes in shares |
| Zhang Wenxue | Male | 62 | Secretary of the Company’s Party Committee, Chairman | Incumbent | February 23, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Dong Ming | Male | 49 | Vice Chairman, CEO and President | Incumbent | March 3, 2021 | November 7, 2025 | 13,280 | 0 | 0 | 0 | 13,280 | N/A |
| Li Hongshen | Male | 46 | Director | Incumbent | November 7, 2022 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Guo Xin | Male | 54 | Director | Incumbent | June 11, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| You Guanghui | Male | 54 | Director | Incumbent | June 11, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Xie Yunshan | Male | 50 | Director | Incumbent | November 7, 2022 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Shangguan Changchuan | Male | 58 | Director | Incumbent | June 11, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Liu Guo’en | Male | 68 | Independent Director | Incumbent | May 25, 2021 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Dai Yang | Male | 56 | Independent Director | Incumbent | August 21, 2019 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zhang Yongliang | Male | 57 | Independent Director | Incumbent | August 21, 2019 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| He Yong | Male | 55 | Independent Director | Incumbent | November 7, 2022 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Dai Pujun | Male | 45 | Vice Chairman of Supervisory Committee | Incumbent | June 11, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Qu Huaxi | Male | 59 | Supervisor, Chairman of | Incumbent | August 21, 2019 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Trade Union | ||||||||||||
| He Yingxia | Female | 53 | Supervisor, Vice Chairperson of Trade Union | Incumbent | August 21, 2019 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zhu Zhaoyun | Female | 71 | TCM Strategy Scientist | Incumbent | August 21, 2019 | November 7, 2025 | 56,000 | 0 | 0 | 0 | 56,000 | N/A |
| Zhang Ning | Male | 54 | Chief Scientist | Incumbent | January 24, 2022 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Li Shengli | Male | 52 | Senior Vice President | Incumbent | October 11, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Ma Jia | Male | 48 | CFO | Incumbent | June 1, 2022 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| He Tao | Male | 49 | Senior Vice President | Incumbent | August 26, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Shen Shi | Male | 44 | Senior Vice President | Incumbent | August 26, 2024 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Li Jin | Male | 60 | Secretary of the Discipline Inspection Commission, Chief Quality and Process Officer | Incumbent | August 21, 2019 | November 7, 2025 | 56,000 | 0 | 0 | 0 | 56,000 | N/A |
| Qian Yinghui | Male | 41 | Secretary of Board of Directors | Incumbent | January 17, 2022 | November 7, 2025 | 0 | 0 | 0 | 0 | 0 | N/A |
| Chen Fashu | Male | 65 | Former Director | Resigned | August 21, 2019 | May 22, 2024 | 12,527,495 | 0 | 0 | 0 | 12,527,495 | N/A |
| Lu Hongdong | Male | 58 | Former Director, Deputy Secretary of the Company’s Party Committee | Resigned | November 7, 2022 | May 22, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
| Chen Yanhui | Male | 39 | Former Director | Resigned | August 21, 2019 | May 22, 2024 | 177,345 | 0 | 0 | 0 | 177,345 | N/A |
| Qin Wanmin | Male | 61 | Former Chief Innovation Officer, Senior Vice President, President of Health Products BG | Resigned | August 21, 2019 | January 26, 2025 | 504,000 | 0 | 0 | 0 | 504,000 | N/A |
| Yang Yong | Male | 61 | Former Chief Compliance Officer, Senior Vice President, Executive Director of Yunnan Pharma | Resigned | August 21, 2019 | February 26, 2025 | 101,024 | 0 | 0 | 0 | 101,024 | N/A |
| Zhao Yingming | Male | 53 | Former Chief Commercial Officer, Senior Vice President | Resigned | March 13, 2023 | August 26, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
| Zhong Jie | Male | 61 | Former Vice Chairman of Supervisory Committee | Resigned | August 21, 2019 | June 11, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
| You Guanghui | Male | 54 | Former Chairman of Supervisory Committee | Resigned | August 21, 2019 | May 22, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
| Yin Pinyao | Male | 56 | Former Chief Operation Officer, Senior Vice President, President of TCM Resources BG | Resigned | August 21, 2019 | February 7, 2024 | 336,000 | 0 | 84,000 | 0 | 252,000 | He resigned and undertook to manage his shares held in the Company in accordance with relevant provisions |
| Yu Juan | Female | 53 | Former Chief Human Resources Officer | Resigned | August 21, 2019 | February 7, 2024 | 140,000 | 0 | 0 | 0 | 140,000 | N/A |
| Total | -- | -- | -- | -- | -- | -- | 13,911,144 | 0 | 84,000 | 0 | 13,827,144 | -- |
Whether there was any departure of directors and supervisors and dismissal of senior management during the term of office duringthe reporting period?Yes□NoOn February 7, 2024, the Company disclosed the Announcement on Resignation of Senior Management(Announcement No.: 2024-06), stating that Mr. Yin Pinyao resigned from the Chief Operating Officer and SeniorVice President of the Company and all positions in the Company and its controlling subsidiaries due to personalreasons; and Ms. Yu Juan resigned from the Company’s Chief Human Resources Officer and all the positions inthe Company and its controlling subsidiaries due to personal reasons. According to the relevant provisions of theCompany Law and the Articles of Association, the resignation application of Mr. Yin Pinyao and Ms. Yu Juan shalltake effect from the date of the service to the Board of Directors.On May 24, 2024, the Company disclosed the Announcement on Changes in the Company’s Directors(Announcement No.: 2024-32), stating that due to work adjustments, Mr. Chen Fashu applied for resignation fromthe Director of the Company’s Tenth Board of Directors, the Chairman of the Strategy Committee and the Memberof the Remuneration and Appraisal Committee of the Board of Directors, and after resignation from these positions,Mr. Chen Fashu would hold no positions in the Company and its controlling subsidies. According to the relevantprovisions of the Company Law and the Articles of Association, the resignation application of Mr. Chen Fashu shalltake effect from the date of the service to the Board of Directors. Due to work adjustments, Mr. Lu Hongdongapplied for resignation from the Director of the Company’s Tenth Board of Directors and the Member of the StrategyCommittee of the Board of Directors, and after resignation of these positions, Mr. Lu Hongdong would still serveas the Deputy Secretary of the Company’s Party Committee. According to the relevant provisions of the CompanyLaw and the Articles of Association, the resignation application of Mr. Lu Hongdong shall take effect from the dateof the service to the Board of Directors. Due to work adjustments, Mr. Chen Yanhui applied for resignation fromthe Director of the Company’s Tenth Board of Directors and the Member of the Nomination Committee of theBoard of Directors, and after resignation from these positions, Mr. Chen Yanhui would hold no positions in theCompany and its controlling subsidies. According to the relevant provisions of the Company Law and the Articlesof Association, the resignation application of Mr. Chen Yanhui shall take effect from the date of the service to theBoard of Directors.On May 24, 2024, the Company disclosed the Announcement on Changes in the Company’s Supervisors(Announcement No.: 2024-33), stating that due to work adjustments, Mr. You Guanghui applied for resignationfrom the Supervisor of the Company’s Tenth Supervisory Committee and the Chairman of the SupervisoryCommittee, and the resignation application of Mr. Chen Fashu shall take effect from the date of the service to theBoard of Directors. Due to reaching the statutory retirement age, Mr. Zhong Jie applied for resignation from theSupervisor of the Company’s Tenth Supervisory Committee and the Vice Chairman of the Supervisory Committee,as well as all positions in the Company and its controlling subsidiaries, and after resignation from these positions,Mr. Zhong Jie would hold no positions in the Company and its controlling subsidies. According to the relevantprovisions of the Company Law and the Articles of Association, Mr. Zhong Jie fulfilled his duties until June 11,2024 when the Company held a general meeting of shareholders to elect the new supervisor.On August 26, 2024, the Company disclosed the Announcement on Changes in the Company’s Senior
Management (Announcement No.: 2024-44), stating that the Company’s Tenth Board of Directors received theResignation Application from Mr. Zhao Yingming, the Company’s Chief Commercial Officer and Senior VicePresident, stating that due to his personal career development plan adjustments, he applied for resignation from theChief Commercial Officer and Senior Vice President of the Company, as well as all positions in the Company andits controlling subsidiaries. According to the relevant provisions of the Company Law and the Articles of Association,the resignation application of Mr. Zhao Yingming shall take effect from the date of the service to the Board ofDirectors.
Changes of directors, supervisors and senior management of the Company?Applicable □Not applicable
| Name | Position held | Type | Date | Reason |
| Zhang Wenxue | Chairman | Elected | February 23, 2024 | For improving the governance structure of the Company’s Board of Directors further, he was elected as Chairman |
| Yin Pinyao | Former Chief Operation Officer, Senior Vice President | Resigned | February 7, 2024 | Resigned as Chief Operation Officer and Senior Vice President due to personal reasons |
| Yu Juan | Former Chief Human Resources Officer | Resigned | February 7, 2024 | Resigned as Chief Human Resources Officer due to personal reasons |
| Chen Fashu | Former Director | Resigned | May 22, 2024 | Resigned as Director of the Company’s Tenth Board of Directors, Chairman of the Strategy Committee and Member of the Remuneration and Appraisal Committee of the Board of Directors due to work adjustments |
| Lu Hongdong | Former Director | Resigned | May 22, 2024 | Resigned as Director of the Company’s Tenth Board of Directors and Member of the Strategy Committee of the Board of Directors due to work adjustments |
| Chen Yanhui | Former Director | Resigned | May 22, 2024 | Resigned as Director of the Company’s Tenth Board of Directors and Member of the Nomination Committee of the Board of Directors due to work adjustments |
| You Guanghui | Former Chairman of the Supervisory Committee | Resigned | May 22, 2024 | Resigned as Supervisor of the Company’s Tenth Supervisory Committee and Chairman of Supervisory Committee due to work adjustments |
| Zhong Jie | Former Vice President of the Supervisory Committee | Resigned | June 11, 2024 | Resigned as Supervisor of the Company’s Tenth Supervisory Committee |
| and Vice Chairman of the Supervisory Committee, as well as all positions in the Company and its controlling subsidiaries, due to reaching the statutory retirement age | ||||
| Guo Xin | Director | Elected | June 11, 2024 | Elected in the Company’s Second Extraordinary General Meeting for 2024 after refer by State-owned Equity Management Company, a shareholder of the Company, and nomination by the Company’s Board of Directors |
| You Guanghui | Director | Elected | June 11, 2024 | Elected in the Company’s Second Extraordinary General Meeting for 2024 after refer by New Huadu Industrial Group Co., Ltd (“New Huadu”), a shareholder of the Company, and nomination by the Company’s Board of Directors |
| Shangguan Changchuan | Director | Elected | June 11, 2024 | Elected in the Company’s Second Extraordinary General Meeting for 2024 after referral by New Huadu, a shareholder of the Company, and nomination by the Company’s Board of Directors. |
| Dai Pujun | Vice Chairman of the Supervisory Committee | Elected | June 11, 2024 | Elected in the Company’s Second Extraordinary General Meeting for 2024 after referral by State-owned Equity Management Company, a shareholder of the Company, and nomination by the Company’s Supervisory Committee. |
| He Tao | Senior Vice President | Appointed | August 26, 2024 | Appointed by the Company’s Board of Directors to be the Company’s Senior Vice President for a term from the date when the Board of Directors considered and approved it until the expiration of the Tenth Board of Directors after nomination by the Company’s Chief |
| Executive Officer and review by the Nomination Committee of the Board of Directors in terms of the nominee’s qualification for taking the position | ||||
| Shen Shi | Senior Vice President | Appointed | August 26, 2024 | Appointed by the Company’s Board of Directors to be the Company’s Senior Vice President for a term from the date when the Board of Directors considered and approved it until the expiration of the Tenth Board of Directors after nomination by the Company’s Chief Executive Officer and review by the Nomination Committee of the Board of Directors in terms of the nominee’s qualification for taking the position |
| Zhao Yingming | Chief Commercial Officer, Senior Vice President | Resigned | August 26, 2024 | Resigned as Chief Commercial Officer and Senior Vice President of the Company, as well as all positions in the Company and its controlling subsidiaries, due to his personal career development plan adjustments |
| Li Shengli | Senior Vice President | Appointed | October 11, 2024 | Appointed by the Company’s Board of Directors to be the Company’s Senior Vice President for a term from the date when the Board of Directors considered and approved it until the expiration of the Tenth Board of Directors after nomination by the Company’s Chief Executive Officer and review by the Nomination Committee of the Board of Directors in terms of the nominee’s qualification for taking the position |
2. Appointment
Professional background, main working experience and main duties in the Company of current directors, supervisors, and
senior management of the Company
Resume of Members of the Board of Directors:
Zhang Wenxue, male, Han nationality, born in June 1963, a native of Shiping, Yunnan, a member of theCommunist Party of China, holding an on-the-job master’s degree, is a Senior Economist. He was a member of theTenth Yunnan Provincial Committee of the Communist Party of China and then a member of the 12
th
YunnanProvincial Committee of the Chinese People’s Political Consultative Conference. He has been recognized as aModel Worker of Yunnan Province (19
thSession) and an Outstanding Professional and Technical Talent withSignificant Contributions in Yunnan Province. He is a recipient of the Second Prize of the State Scientific andTechnological Progress Award, and was named one of the “Outstanding Entrepreneurs in China (2021–2022).” In2024, he was selected for the “Manufacturing Talent Support Program – Innovative Entrepreneur List by theMinistry of Industry and Information Technology.” He served as Deputy General Manager of Yunnan PhosphorusChemical Industry (Group) Corporation, General Manager and Deputy Secretary of the Party Committee of YunnanPhosphate Chemical Group Co., Ltd, Secretary of the Party Committee and General Manager of Yunnan PhosphateChemical Group Co., Ltd, Director, Deputy General Manager and Standing Committee Member of Party Committeeof Yuntianhua Group Co., Ltd, General Manager, Deputy Secretary of the Party Committee and Vice Chairman ofYuntianhua Group Co., Ltd, Chairman of Chongqing Polycomp International Corporation, Secretary of the PartyCommittee and Chairman of Yuntianhua Group Co., Ltd. He is currently Secretary of the Party Committee andChairman of Yunnan Baiyao.Dong Ming, male, Han nationality, born in October 1976, holding a bachelor’s degree, is a doctoral candidatein management. He served as Vice President of the CIS Regional Department, Director of VIP System Department,General Manager of Beijing Branch, Director of Mobile System Department, and Vice President for China ofHuawei Technologies Co., Ltd. He is currently Legal Representative, Vice Chairman, President and CEO of YunnanBaiyao.
Li Hongshen, male, Han nationality, born in August 1978, is a doctor of economics, and an engineer. Heserved as Vice President (presiding over work) of Chuncheng Road Sub-branch of China Merchants Bank, GeneralManager of International Business Department of Kunming Branch of China Merchants Bank, Factory DirectorAssistant, Deputy Factory Director and Factory Director of Qujing Cigarette Factory of Hongyun Honghe Tobacco(Group) Co., Ltd, Factory Director of Kunming Cigarette Factory of Hongyun Honghe Tobacco (Group) Co., Ltd,Vice President and Deputy General Manager of Hongyun Honghe Tobacco (Group) Co., Ltd. He is currentlyGeneral Manager of Yunnan Hehe (Group) Co., Ltd (“Yunnan Hehe”), and Director of Yunnan Baiyao, ViceChairman of KPC Pharmaceuticals, Inc, Director of Hongta Securities Co., Ltd, Director of Yunnan Hongta BankCo., Ltd, and Director of Zhongwei Capital Holdings Co., Ltd.Guo Xin, male, Han nationality, born in September 1970, is a member of the Communist Party of China,holding a bachelor’s degree, and an on-the-job master’s degree, and a professional technical position as an associateresearcher. He served as Manager of Business Development Department of Kunming Zhenhua PharmaceuticalFactory Co., Ltd, Manager of Human Resources Department of Yunnan Pharmaceutical Industry Co., Ltd, AssistantGeneral Manager, and Manager of Business Development Department of Kunming Zhenhua PharmaceuticalFactory Co., Ltd, Manager of Investment Development Department, Assistant General Manager, Manager of
Investment Operation Department, and Director of Administration Department of Yunnan Pharmaceutical IndustryCo., Ltd, Member of Party Committee, Deputy General Manager, Secretary of the Comprehensive Party Branchand Dean of the Research Institute of Yunnan Plant Pharmaceutical Co., Ltd, General Manager of BiomedicalDepartment of Yunnan Industrial Investment Holding Group Co., Ltd, General Manager of Yunnan Gongtou TCMMaterials and Decoction Pieces Industry Development Co., Ltd, Secretary of the Party Committee and Chairman ofYunnan Bohao Biotechnology Group Co., Ltd, Secretary of the Party Branch and Chairman of Yunnan RuibaoBiotechnology Co., Ltd. He is currently Full-time Equity Representative of State-owned Equity ManagementCompany and Director of Yunnan Baiyao.
You Guanghui, male, Han nationality, born in December 1971, holding a bachelor’s degree, is a CertifiedManagement Accountant (CMA), Senior Corporate Culture Manager, and Senior Corporate Compliance Manager.He was Chief Accountant of Fujian Industrial Bank Wuyishan Sub-branch, Chief Accountant and Head of theFinance Section of New Huadu Engineering Co., Ltd, Supervisor, Deputy Manager and Manager of the Planningand Finance Department of Fujian Wuyishan Travel Development Co., Ltd, Supervisor of Xinjiang Kanas TourismDevelopment Co., Ltd, Director and Chief Financial Officer of Fujian Wuyishan Travel Development Co., Ltd,Chief Financial Officer of Baiyao Holdings, and Chairman of the Supervisory Committee of Yunnan Baiyao. He iscurrently Director of Yunnan Baiyao.
Xie Yunshan, male, Han nationality, born in September 1975, is a member of the Communist Party of China,a doctor of economics, postdoctoral and Certified Public Accountant. He once worked at the SouthwestManagement Headquarters of Xiangcai Securities, the First Secretary of the General Office of the YunnanProvincial Government, the Investment Research Institute of Yunnan University of Finance and Economics, theFinance Research Institute of the People’s Bank of China, Zhonghe Zhengxin Accounting Firm, the InvestmentBanking Department of Hongta Securities, the Investment Banking Department of Dongguan Securities, and theInvestment Banking Headquarters of Pacific Securities. He is currently Full-time Equity Representative of State-owned Equity Management Company and Director of Yunnan Baiyao.
Shangguan Changchuan, male, Han nationality, born in September 1966, holding an EMBA degree. Hetaught in Xianghua School District, Anxi County and served as HR Manager, Purchasing Manager and GeneralManager of New Huadu Department Store, General Manager of Quanzhou New Huadu Supercenter Co., Ltd,Director and Executive Deputy General Manager of New Huadu Supercenter Co., Ltd, and Chairman and GeneralManager of New Huadu Supercenter Co., Ltd. He is currently Vice President of New Huadu and Director of YunnanBaiyao.
Resume of Independent Directors:
Liu Guo’en, male, Qiang nationality, born in October 1957, a doctor of economics, is a Special Professor ofEconomics Changjiang Scholar of Ministry of Education. He used to teach at the University of Southern Californiaand the University of North Carolina, and served as President of the “Chinese Economist Society” and President ofthe “Asia-Pacific Federation of International Society for Pharmacoeconomics and Outcomes Research.” He iscurrently a Distinguished Professor of Liberal Arts of Peking University, Dean of Global Health DevelopmentInstitute of Peking University, Member of Faculty of Chinese Academy of Medical Sciences, Chinese Convener ofChina-US Track II Dialogue on Health, Chairman of Pharmacoeconomics Professional Committee of Chinese
Pharmaceutical Association, Independent Director of MicroPort Scientific Corporation, and Independent Directorof Yunnan Baiyao.Dai Yang, male, Han nationality, born in January 1969, holding a bachelor’s degree, served as DeputyPrincipal Staff, Principal Staff, Deputy Director of General Affairs Department, Deputy Director of General Office(Party Office), Director and Head of Department of Listed Company Supervision of Tibet Bureau of ChinaSecurities Regulatory Commission, Deputy Secretary of the Party Committee, General Manager, Secretary of theParty Committee and Chairman of Tibet Mineral Development Co., Ltd, Vice President of Yongtai Group Co., Ltd,Chairman and Vice Chairman of Hainan Haide Industrial Co., Ltd, and Independent Director of Tibet WaterResources Limited. He is currently Independent Director of KSEC Intelligent Technology Co., Ltd, Wondershare,and Yunnan Baiyao.Zhang Yongliang, male, Han nationality, born in March 1968, holding a master’s degree in law and legalstudies, is a practicing lawyer. He was a member of the fourth and fifth Review Committees of Listed CompanyM&A and Restructuring of China Securities Regulatory Commission. He is currently Independent Director ofYunnan Baiyao, and Partner of King & Wood Law Firm. His main practice areas are corporate mergers andacquisitions, securities, debt restructuring, etc.He Yong, male, Han nationality, born in October 1970, holding a bachelor’s degree, is a partner of ShineWingCertified Public Accountants, Deputy Chief Accountant of Chengdu Branch of ShineWing Certified PublicAccountants, Chinese Certified Public Accountant (senior member of the Chinese Institute of Certified PublicAccountants), Chinese Certified Asset Appraiser, Leading Accounting Talent of the Ministry of Finance, andMember of the First Listing Committee of ChiNext of Shenzhen Stock Exchange. He is currently IndependentDirector of Yunnan Baiyao.Resume of Shareholder Supervisors:
Dai Pujun, male, Han nationality, born in September 1979, a member of the Communist Party of China,holding an on-the-job master’s degree. He served as Office Senior Business Manager of Yunnan ProvincialInvestment Holdings Group Co., Ltd (“Yunnan Investment Group”); Assistant General Manager of Yunnan MedicalInvestment Management Group Co., Ltd; Office Deputy Director of Yunnan Investment Group during which hetemporarily served as Deputy Magistrate of Maguan County Wenshan Prefecture; Secretary of the Party Committeeand Chairman of Yunnan Medical Investment Management Co., Ltd, during which he temporarily served as Directorof Yunnan Kunhua Hospital Investment Management Co., Ltd, Chairman of Yunnan Fuwai Cardiovascular HospitalInvestment Management Co., Ltd and Chairman of Hangzhou Yunyi Health Services Co., Ltd; and ComprehensiveManagement Department Manager and Head of Board Office of Yunnan Investment Group. He is currently Full-time Equity Representative of State-owned Equity Management Company and Vice Chairman of the SupervisoryCommittee of Yunnan Baiyao.Resume of Employee Supervisors:
Qu Huaxi, male, Han nationality, born in June 1966, a member of the Communist Party of China, holding aprovincial Party School university degree, and a lecturer. He served as a cadre in the Office of Menglian CountyParty Committee of Simao City, Deputy Secretary of the Party Committee of Lalei Township of Menglian Countyof Simao City, Principal Staff (Director) of the Comprehensive Division of the Yunnan Provincial Poverty
Alleviation Office, Deputy Researcher of the Micro-credit Division of the Yunnan Provincial Poverty AlleviationOffice, Deputy Director of the Project Management Office of the Yunnan Provincial Poverty Alleviation Office,Director of the Program and Financial Affairs Division of the Yunnan Provincial Poverty Alleviation Office (duringwhich he served as Head of the New Rural Development Task Force of Wuding County of Chuxiong Prefecture,and as Deputy Secretary of the County Party Committee), Director of Non-local Poverty Alleviation andDevelopment Division of the Yunnan Provincial Poverty Alleviation Office, Director of the Discipline InspectionGroup and Member of the Party Group of the Yunnan Provincial Federation of Supply and Marketing Cooperatives.In August 2016, he was transferred to Baiyao Holdings. He is currently Chairman of the Trade Union and Supervisorof Yunnan Baiyao.He Yingxia, female, Han nationality, born in March 1972, holding an on-the-job master’s degree, is a Partymember and a political engineer. She was a workshop worker of Yunnan Baiyao, Deputy Sales Manager ofSouthwest region of China, Deputy Secretary of the Youth League Committee of the Group, Vice Chairman of theTrade Union, Director of the Party and Mass Work Department, Deputy Secretary of the Discipline InspectionCommission, Chairman of the Trade Union and Secretary of the First Party Branch of the Group Headquarters,Member of the 17
thExecutive Committee of the All-China Federation of Trade Unions (ACFTU) and Member ofthe 7thWomen Workers’ Committee of the ACFTU. She is currently a Member of the Party Committee of YunnanBaiyao, Vice Chairman of the Trade Union, and Director of the Organization and Publicity Department. She is alsoa Member of the Standing Committee of the Fourth Session of the People’s Congress of Chenggong District,Kunming City, Member of the Twelfth Session of the Provincial Federation of Trade Unions, Executive CommitteeMember of the Sixth Women’s Workers Commission, and Supervisor of Yunnan Baiyao.Resume of Senior Management:
Zhu Zhaoyun, female, Han nationality, born in March 1954, is a Senior Engineer and Academician of theChinese Academy of Engineering. She served as Secretary of the Party Committee and Director of Yunnan Instituteof Materia Medica, Member of the Party Committee, R&D Director, Director of TCM R&D of Yunnan Baiyao.She is currently Member of the Party Committee and TCM Strategy Scientist of Yunnan Baiyao.
Zhang Ning, male, Han nationality, born in November 1970, is a professor at Peking University and a doctorof biochemistry, Cell and Molecular Biology at School of Medicine, Johns Hopkins University. He served as DeputyDirector of Health Science Center of Peking University, Director of the Office of Scientific Research of PekingUniversity, Vice President of Tianjin Medical University, Professor of Affiliated Cancer Hospital of Tianjin MedicalUniversity, Deputy Director of Tianjin Cancer Research Institute, and Deputy Director of Department of ChemicalBiology of School of Chemistry of Peking University. He is currently Deputy Director of Peking University-YunnanBaiyao International Medical Research Center, Deputy Director of Peking University International Cancer Institute,Executive Deputy Director of the Center for Translational Tumor Research at Peking University First Hospital,Deputy Director of National Institute of Health Data Science at Peking University, and Chief Scientist of YunnanBaiyao.
Li Shengli, male, Han nationality, born in 1973, holding a master’s degree. He served as District Manager,Regional Manager, Sales Director, General Manager, Vice President, Senior Vice President, and Co-CEO of FosunWanbang (Jiangsu) Pharmaceutical Group Co., Ltd (formerly Jiangsu Wanbang Biochemical Pharmaceutical Co.,
Ltd), General Manager of Biochemical Oncology Division, President, CEO, and Chairman of Fosun Wanbang(Jiangsu) Health Development Co., Ltd (formerly Jiangsu Wanbang Pharmaceutical Marketing Co., Ltd), VicePresident and General Manager of Chinese Marketing Headquarters, Senior Vice President of Shanghai FosunPharmaceutical Industry Development Co., Ltd, Co-President, President and Chairman of Fosun Yaohong (Jiangsu)Pharmaceutical Technology Co., Ltd (formerly Jiangsu Fosun Pharmaceutical Sales Co., Ltd), Assistant President,Vice President, Senior Vice President, Executive President and Chief Development Officer of Shanghai FosunPharmaceutical (Group) Co., Ltd, and President, CEO and Co-Chairman of Shanghai Fosun Health Technology(Group) Co., Ltd. He is currently Senior Vice President of Yunnan Baiyao.Ma Jia, male, Han nationality, born in March 1977, is a master and Party member. He served as Director ofFinancial Management Department of Beijing Panasonic Lighting Co., Ltd, Financial Director of CIS Regionalsubsidiary of Huawei Technologies, IFS Transformation Project Manager (China), CFO of ShandongRepresentative Office, CFO of China Operator BG, CFO of China Region/Member of China Region AdministrativeManagement Team, responsible for ICT operation management, risk control, sales and financing, taxation,subsidiaries and other financial business of Huawei China (excluding Hong Kong, Macao and Taiwan), as well asfinancial organization construction. He is currently CFO of Yunnan Baiyao.He Tao, male, Han nationality, born in December 1975, holding a master’s degree and is a Senior Accountant,Certified Management Accountant (CMA), expert awarded Yunnan Provincial Government Special Allowance,Member of Yunnan Provincial Senior (Deputy Senior) Accountant Professional Title Review Committee, expert inResearch-Based Audit Think Tank of Yunnan Provincial Audit Office, Executive Director of the 6
thCouncil ofChina Federation of Logistics and Purchasing, and Member of the Expert Committee of the Modern Supply ChainResearch Institute of China Federation of Logistics and Purchasing. He served as Deputy General Manager ofFinance Department (presiding over the work) and General Manager of Marketing Department of China TelecomGroup Yunnan Branch, Secretary of the Party Committee and General Manager of China Telecom Group YuxiBranch, Director and Deputy General Manager of Yunnan Yuntianhua Co., Ltd, and Secretary of the PartyCommittee and General Manager of Yunnan Yuntianhua United Business Co., Ltd. He is currently Senior VicePresident of Yunnan Baiyao.Shen Shi, male, Han nationality, born in December 1980, holding a master’s degree. He served as anautomation engineer of Liaoyang Spring Factory, a subsidiary of China’s FAW Group Co., Ltd, R&D Engineer andCapacity Expansion Project Manager of Midea Group Co., Ltd, Consulting Manager of Guangzhou KaipuleEnterprise Management Consulting Co., Ltd, Consulting Director of Beijing Zhenglve Junce Consulting Group Co.,Ltd, Consulting Manager of Mercer, Consulting Director of Aon Hewitt Consulting Co., Ltd, Human ResourcesExpert of Huawei Technologies Co., Ltd, Head of Organizational Development at Midea Group Co., Ltd, andDirector of Management Department at Servotronix Motion Control Company, a subsidiary of Midea Group Co.,Ltd. He is currently Senior Vice President of Yunnan Baiyao.Li Jin, male, Hui nationality, born in August 1965, a master of business administration, licensed pharmacist,and senior engineer. He served as Deputy Chief Engineer and Director of Technology Department of YunnanBaiyao, general manager of Yunnan Baiyao Tianzihong Pharmaceutical Co., Ltd, and Technical Quality Directorof Yunnan Baiyao. He is currently Director of the Discipline Inspection Commission and Chief Quality and Process
Officer of Yunnan Baiyao.Qian Yinghui, male, Han nationality, born in September 1983, is a master of law. He served as ProjectManager of the Strategy Committee Office of Yunnan Baiyao and Project Director of the Strategy DevelopmentCenter of Yunnan Baiyao. He is currently Secretary of the Board of Directors of Yunnan Baiyao.Engagement in shareholding companies?Applicable □Not applicable
| Name of person | Name of shareholding company | Position held in shareholding company | Date of commencement of service term | Date of end of service term | Whether to receive remuneration and allowances from the shareholding company |
| Guo Xin | Yunnan State-owned Equity Operation Management Co., Ltd. | Full-time Equity Representative | Yes | ||
| Xie Yunshan | Yunnan State-owned Equity Operation Management Co., Ltd. | Full-time Equity Representative | Yes | ||
| Dai Pujun | Yunnan State-owned Equity Operation Management Co., Ltd. | Full-time Equity Representative | Yes | ||
| Shangguan Changchuan | New Huadu Industrial Group Co., Ltd. | Vice President | October 1, 2019 | Yes | |
| Li Hongshen | Yunnan Hehe (Group) Co., Ltd. | Deputy Secretary of the Company’s Party Committee, General Manager | May 25, 2022 | Yes |
Position at other entities?Applicable □Not applicable
| Name of person | Name of other entity | Position held in other entity | Date of commencement of service term | Date of end of service term | Whether to receive remuneration and allowances from the other entity |
| Zhang Wenxue | Chongqing Polycomp International Corporation | Chairman | December 20, 2017 | May 28, 2024 | No |
| Zhang Wenxue | Shanghai Pharmaceuticals Holding Co., Ltd. | Non-Executive Director | June 28, 2024 | No | |
| Dong Ming | Shanghai Pharmaceuticals Holding Co., Ltd. | Executive Director | June 29, 2023 | No | |
| Li Hongshen | Hongta Securities Co., Ltd. | Director | August 19, 2024 | No | |
| Li Hongshen | Yunnan Hongta Bank Co., Ltd | Director | May 1, 2022 | No | |
| Li Hongshen | Zhongwei Capital Holdings Co., Ltd. | Director | June 28, 2023 | No | |
| Li Hongshen | KPC Pharmaceuticals, Inc. | Director, Vice Chairman | February 2, 2024 | No | |
| Dai Yang | KSEC Intelligent Technology Co., Ltd | Independent Director | March 22, 2021 | June 1, 2026 | Yes |
Penalties to the current directors, supervisors and senior management of the Company and those leaving office during the reportingperiod by securities regulatory agencies in the latest three years
□Applicable ?Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedures, determination basis and actual payment of remuneration for directors, supervisors, and seniormanagement
| Decision-making procedures of remuneration of directors, supervisors, and senior management | The Remuneration Management Committee shall submit the proposal to the board of directors for consideration and approval prior to implementation. |
| Basis for determination of the remuneration of directors, supervisors, and senior management | Remuneration shall be determined based on operating conditions, industry standard, responsibilities assumed, and other relevant factors. |
| Actual payment of remuneration of directors, supervisors, and senior management | Allowances for directors and supervisors will be paid monthly, while those for senior management will be paid based on established assessment standards. |
| Composition of remuneration of directors, supervisors, and senior management | The remuneration received by directors, supervisors, and senior management of the Company in 2023 includes a basic salary, performance bonus, allowances, and other cash income. |
Remuneration for directors, supervisors, and senior management during the reporting period
Unit: RMB0’000
| Name | Gender | Age | Title | Service status | Total pre-tax remunerations received from the Company | Whether remuneration was received from related parties of the Company |
Dai Yang
| Dai Yang | Wondershare | Independent Director | May 17, 2021 | May 16, 2025 | Yes |
| Liu Guo’en | Peking University | Professor | January 1, 2006 | Yes | |
| Liu Guo’en | MicroPort Scientific Corporation | Independent Director | September 3, 2010 | Yes | |
| Zhang Yongliang | Beijing King & Wood Mallesons | Partner | October 20, 1997 | Yes | |
| He Yong | ShineWing Certified Public Accountants (SGP) | Partner | July 1, 2009 | Yes | |
| He Yong | Chengdu Branch of ShineWing Certified Public Accountants (SGP) | Deputy Chief Accountant | July 25, 2024 | Yes | |
| Zhang Ning | Peking University | Professor | October 9, 2017 | Yes | |
| Zhang Ning | Affiliated Cancer Hospital of Tianjin Medical University | Part-time Professor | October 9, 2017 | Yes | |
| Ma Jia | Shanghai Pharmaceuticals Holding Co., Ltd. | Supervisor | June 29, 2023 | No | |
| He Tao | Yunnan Yuntianhua Co., Ltd. | Director | July 26, 2019 | June 11, 2024 | Yes |
| He Tao | Yunnan Yuntianhua Co., Ltd. | Deputy General Manager | March 26, 2021 | June 11, 2024 | Yes |
| He Tao | Yunnan Yuntianhua United Business Co., Ltd. | Executive Director, General Manager | February 26, 2020 | June 24, 2024 | Yes |
| Li Shengli | Shanghai Fosun Pharmaceutical (Group) Co., Ltd. | Executive President | January 1, 2020 | September 13, 2024 | Yes |
| Zhang Wenxue | Male | 62 | Secretary of the Company’s Party Committee, Chairman | Incumbent | 0 | No |
| Dong Ming | Male | 49 | Vice Chairman, CEO and President | Incumbent | 425.37 | No |
| Li Hongshen | Male | 46 | Director | Incumbent | 0 | Yes |
| Guo Xin | Male | 54 | Director | Incumbent | 5.19 | Yes |
| You Guanghui | Male | 54 | Director | Incumbent | 112.28 | No |
| Xie Yunshan | Male | 50 | Director | Incumbent | 98.33 | Yes |
| Shangguan Changchuan | Male | 58 | Director | Incumbent | 66.51 | Yes |
| Liu Guo’en | Male | 68 | Independent Director | Incumbent | 25.71 | No |
| Dai Yang | Male | 56 | Independent Director | Incumbent | 25.71 | No |
| Zhang Yongliang | Male | 57 | Independent Director | Incumbent | 25.71 | No |
| He Yong | Male | 55 | Independent Director | Incumbent | 25.71 | No |
| Dai Pujun | Male | 45 | Vice Chairman of the Supervisory Committee | Incumbent | 4.46 | Yes |
| Qu Huaxi | Male | 59 | Supervisor and Chairman of the Trade Union | Incumbent | 106.3 | No |
| He Yingxia | Female | 53 | Supervisor and Deputy Chairman of the Trade Union | Incumbent | 57.57 | No |
| Zhu Zhaoyun | Female | 71 | TCM Strategic Scientist | Incumbent | 181.02 | No |
| Zhang Ning | Male | 54 | Chief Scientist | Incumbent | 361.01 | No |
| Li Shengli | Male | 52 | Senior Vice President | Incumbent | 106.19 | No |
| Ma Jia | Male | 48 | Chief Financial Officer | Incumbent | 184.15 | No |
| He Tao | Male | 49 | Senior Vice President | Incumbent | 76.73 | No |
| Shen Shi | Male | 44 | Senior Vice President | Incumbent | 76.73 | No |
| Li Jin | Male | 60 | Secretary of the Discipline Inspection Commission, and Chief Quality and Process Officer | Incumbent | 124.04 | No |
| Qian Yinghui | Male | 41 | Secretary of the Board of Directors | Incumbent | 112.13 | No |
| Chen Fashu | Male | 65 | Former Director | Resigned | 0 | Yes |
| Lu Hongdong | Male | 58 | Former Director, Deputy Secretary of the Company’s Party Committee | Resigned | 48.11 | No |
| Chen Yanhui | Male | 39 | Former Director | Resigned | 46.83 | Yes |
| Qin Wanmin | Male | 61 | Former Chief Innovation Officer, Senior Vice President, and President of the Health Products Business Group | Resigned | 364.03 | No |
| Yang Yong | Male | 61 | Former Chief Compliance Officer, Senior Vice President, and Executive Director of Yunnan Pharma | Resigned | 363.97 | No |
| Zhao Yingming | Male | 53 | Former Chief Business Officer & Senior Vice President | Resigned | 258.45 | No |
| Zhong Jie | Male | 61 | Former Vice Chairman of the Supervisory Committee | Resigned | 46.16 | No |
| Yin Pinyao | Male | 56 | Former Chief Operation Officer, Senior Vice President, and President of the TCM Resources Business Group | Resigned | 33.96 | No |
| Yu Juan | Female | 53 | Former Chief Human Resources Officer | Resigned | 15.33 | No |
| Total | -- | -- | -- | -- | 3,377.69 | -- |
Explanation on other matters □Applicable ?Not applicable
VI. Duty Performance of Directors during the Reporting Period
1. Board meetings held during the reporting period
| Sessions | Meeting date | Disclosure date | Resolutions |
| The first session of the Tenth Board of Directors for 2024 | February 7, 2024 | February 8, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1219122495&orgId=gssz0000538&announcementTime=2024-02-08 |
| The second session of the Tenth Board of Directors for 2024 | February 23, 2024 | February 24, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1219171885&orgId=gssz0000538&announcementTime=2024-02-24 |
| The third session of the Tenth Board of Directors for 2024 | March 28, 2024 | March 30, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1219474050&orgId=gssz0000538&announcementTime=2024-03-30 |
| The fourth session of the Tenth Board of Directors for 2024 | April 26, 2024 | April 27, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1219860289&orgId=gssz0000538&announcementTime=2024-04-27 |
| The fifth session of the Tenth Board of Directors for 2024 | May 24, 2024 | May 27, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1220160072&orgId=gssz0000538&announcementTime=2024-05-27 |
| The sixth session of the Tenth Board of Directors for 2024 | June 11, 2024 | June 12, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1220324360&orgId=gssz0000538&announcementTime=2024-06-12 |
| The seventh session of the Tenth Board of Directors for 2024 | June 27, 2024 | June 29, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1220497311&orgId=gssz0000538&announcementTime=2024-06-29 |
| The eighth session of the Tenth Board of Directors for 2024 | August 26, 2024 | August 27, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1220987154&orgId=gssz0000538&announcementTime=2024-08-27 |
| The nineth session of the Tenth Board of Directors for 2024 | October 11, 2024 | October 12, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1221368221&orgId=gssz0000538&announcementTime=2024-10-12 |
| The tenth session of the Tenth Board of Directors for 2024 | October 29, 2024 | October 30, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1221560394&orgId=gssz0000538&announcementTime=2024-10-30 |
| The eleventh session of the Tenth Board of Directors for 2024 | November 29, 2024 | November 30, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1221892814&orgId=gssz0000538&announcementTime=2024-11-30 |
| The twelfth session of the Tenth Board of Directors for 2024 | December 27, 2024 | December 28, 2024 | http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000538&announcementId=1222166319&orgId=gssz0000538&announcementTime=2024-12-28 |
2. Attendance of directors at the Board meetings and general meetings
| Attendance of directors at the Board meetings and general meetings | |||||||
| Name of directors | Number of attendances required for the reporting period | Number of on-site attendances to Board meetings | Number of attendances to Board meetings through communication | Number of Board meetings attended by directors appointed as the proxy | Number of absences from Board meetings | Non-attendance in person for two consecutive times or not | Number of attendances to general meetings |
| Zhang Wenxue | 11 | 6 | 5 | 0 | 0 | No | 5 |
| Dong Ming | 12 | 5 | 7 | 0 | 0 | No | 5 |
| Li Hongshen | 12 | 3 | 9 | 0 | 0 | No | 5 |
| Guo Xin | 7 | 4 | 3 | 0 | 0 | No | 3 |
| You Guanghui | 7 | 4 | 3 | 0 | 0 | No | 3 |
| Xie Yunshan | 12 | 6 | 6 | 0 | 0 | No | 5 |
| Shangguan Changchuan | 7 | 4 | 3 | 0 | 0 | No | 3 |
| Dai Yang | 12 | 3 | 9 | 0 | 0 | No | 5 |
| Zhang Yongliang | 12 | 4 | 8 | 0 | 0 | No | 5 |
| Liu Guo’en | 12 | 1 | 11 | 0 | 0 | No | 5 |
| He Yong | 12 | 2 | 10 | 0 | 0 | No | 5 |
| Chen Fashu | 4 | 0 | 4 | 0 | 0 | No | 0 |
| Lu Hongdong | 4 | 2 | 2 | 0 | 0 | No | 2 |
| Chen Yanhui | 4 | 1 | 3 | 0 | 0 | No | 1 |
Explanation on two consecutive absences from Board meetings: Not applicable.
3. Objections raised by directors to relevant matters of the Company
Did directors object to relevant matters of the Company??Yes □ No
| Name of the Director | The matter to which the director raised objections | Content of the Objections |
| Li Hongshen | Proposal on the treatment of the convertible bonds of YNBY International Limited (“YNBY International”) at its maturity | Director Li Hongshen voted against it for conversion is not beneficial for the Company’s development. The other directors all voted in favor. |
| Li Hongshen | Proposal on joint investment with professional investment institutions to establish a fund | Director Li Hongshen cast an abstention vote. The reason for abstention is that establishing the fund is beneficial for the long-term development of Yunnan Baiyao, but the control mechanisms for the fund’s specific operations still need further improvement. The other directors all voted in favor. |
| Explanation on objections raised by the director to relevant matters of the Company | Not applicable | |
4. Other circumstances in the performance of duties by directors
Was advice to the Company from directors adopted??Yes □ NoExplanation on whether advice to the Company from directors was adopted or notDuring the reporting period, in strict accordance with the Company Law, the Securities Law, the Code ofCorporate Governance for Listed Companies, the Several Provisions on Strengthening the Protection of the Rightsand interests of Shareholders of Public Shares and other laws, regulations and normative documents, as well as theArticles of Association, the Rules of Procedure for the Board of Directors and other relevant requirements, all themembers of the Tenth Board of Directors of the Company, honoring the principles of integrity, faithfulness anddiligence, and abiding by the code of conduct for the performance of duties as a director, attended the Boardmeetings and the general meetings of shareholders in earnest, actively understanding the operation of the Companyand fully expressing our opinions, and carefully, independently and objectively considering 55 motions, includingthe revision of the Company’s corporate governance documents, organizational structure, related party transactions,misappropriation of funds, and the appointment of senior management personnel. They carefully understood thecontents for consideration during the Board meetings and expressed corresponding opinions and suggestions, whichhave played a positive role in promoting the Board of Directors to make strategic decisions that are more in linewith the development of the Company and more scientific and reasonable, and have effectively safeguarded thelegitimate rights and interests of the Company and all the shareholders, in particular the minority shareholders.
VII. Performance of Special Committees under the Board of Directors during the Reporting Period
| Name of Committee | Members | Number of Meetings | Date of convention | Agenda of meeting | Important opinions and recommendations proposed | Other circumstances in the performance of duties | Particulars of objections (if any) |
| Strategy Committee | Chen Fashu, Dong Ming, Lu Hongdong, Li Hongshen, Liu Guo’en | 6 | March 25, 2024 | (I) The first meeting of Strategy Committee of the Tenth Board of Directors for 20241. Proposal on the 2024 Organizational Structure Plan of Yunnan Baiyao.2. Proposal on the Plan of Delegation of Power by the Board of Directors3. Proposal on 2023 Profit Distribution Plan4. Proposal on the Strategic Plan Outline for 2024-2028 of Yunnan BaiyaoResult: 5 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Strategy Committee | Chen Fashu, Dong Ming, Lu Hongdong, Li Hongshen, Liu Guo’en | 6 | April 22, 2024 | (II) The second meeting of Strategy Committee of the Tenth Board of Directors for 20241. Proposal on the Company’s Declaration of the Budge for the Lighthouse Enterprise Project Result: 5 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Strategy Committee | Zhang Wenxue, Dong Ming, Guo Xin, You Guanghui, Li Hongshen, Liu Guo’en | 6 | June 11, 2024 | (III) The third meeting of Strategy Committee of the Tenth Board of Directors for 20241. Proposal on the Election of the Chairman of the Committee Result: 6 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Strategy Committee | Zhang Wenxue, Dong Ming, Guo Xin, You Guanghui, Li Hongshen, Liu Guo’en | 6 | June 21, 2024 | (IV) The fourth meeting of Strategy Committee of the Tenth Board of Directors for 20241. Proposal on the Introduction of Project KA-1641Result: 6 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Strategy Committee | Zhang Wenxue, Dong Ming, Guo Xin, You Guanghui, Li Hongshen, Liu Guo’en | 6 | November 22, 2024 | (V) The fifth meeting of Strategy Committee of the Tenth Board of Directors for 20241. Proposal on Proposed Establishment of a Fund Jointly Invested with Professional Investment InstitutionsResult: 5 voted in favor, 0 voted against, 1 abstained | None | None | Director Li Hongshen cast an abstention vote. The reason for abstention is that establishing the fund is beneficial for the long-term development of Yunnan Baiyao, but the control mechanisms for the fund’s specific operations still need further improvement. |
| Strategy Committee | Zhang Wenxue, Dong Ming, Guo Xin, You Guanghui, Li Hongshen, Liu Guo’en | 6 | December 20, 2024 | (VI) The sixth meeting of Strategy Committee of the Tenth Board of Directors for 20241. Proposal on the Strategic Plan for 2024-2028 of Yunnan Baiyao2. Proposal on the Use of Self-owned Idle Funds for Investment and | None | None | None |
| Financial Management in 20253. Proposal on Lijiang Company’s Relocation Plan of Health Food Production Line Result: 6 voted in favor, 0 voted against, 0 abstained | |||||||
| Nomination Committee | Dai Yang, Zhang Yongliang, Chen Yanhui | 5 | February 5, 2024 | (I) The first meeting of Nomination Committee of the Tenth Board of Directors for 20241. Proposal on Nominating Candidates for the Tenth Board of DirectorsResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Nomination Committee | Dai Yang, Zhang Yongliang, Chen Yanhui | 5 | May 24, 2024 | (II) The second meeting of Nomination Committee of the Tenth Board of Directors for 20241. Proposal on Electing Non-independent Directors for the Tenth Board of DirectorsResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Nomination Committee | Dai Yang, Zhang Wenxue, Zhang Yongliang | 5 | July 5, 2024 | (III) The third meeting of Nomination Committee of the Tenth Board of Directors for 20241. Proposal on Appointment of Senior Management for the Tenth Board of DirectorsResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Nomination Committee | Dai Yang, Zhang Wenxue, Zhang Yongliang | 5 | July 30, 2024 | (IV) The fourth meeting of Nomination Committee of the Tenth Board of Directors for 20241. Proposal on Appointment of Senior Management for the Tenth Board of DirectorsResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Nomination Committee | Dai Yang, Zhang Wenxue, Zhang Yongliang | 5 | August 15, 2024 | (V) The fifth meeting of Nomination Committee of the Tenth Board of Directors for 20241. Proposal on Appointment of Senior Management for the Tenth Board of DirectorsResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Remuneration and Appraisal Committee | Zhang Yongliang, Dai Yang, Chen Fashu | 2 | March 18, 2024 | (I) The first meeting of Remuneration and Appraisal Committee of the Tenth Board of Directors for 20241. Proposals on 2023 Short-term Incentive and Provision for Incentive Fund to be specified in the Measures for the Remuneration and Appraisal of Core Personnel such as Directors, Supervisors and Senior Management in 2023Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Remuneration and Appraisal Committee | Zhang Yongliang, Dai Yang, Shangguan Changchuan | 2 | February 14, 2024 | (II) The second meeting of Remuneration and Appraisal Committee of the Tenth Board of Directors for 20241. Proposal on the Implementation of Short-term Incentive Distribution for Directors, Supervisors and Senior Management in 20232. Proposal on the Implementation of Short-term Incentive Distribution for Senior Management in 2023Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | March 13, 2024 | (I) The first meeting of Audit Committee of the Tenth Board of Directors for 20241. Proposal on Preliminary Audit Opinion on the 2023 Annual Report Issued by the Certified Public Accountant2. The Company’s Internal Audit Work Summary for 2023 and Internal Audit Work Plan for 2024Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | March 25, 2024 | (II) The second meeting of Audit Committee of the Tenth Board of Directors for 20241. 2023 Annual Report and its summary 2. Annual Final Account Report for 20233. Proposal on the special audit report of the accounting firm on the summary of the non-operational funds occupied by the related parties and the transactions of other related funds4. 2023 Profit Distribution Plan5. Proposal on Estimation of the Daily Related Party Transactions in 20246. Report on the Company’s Financial Budget for 20247. Self-evaluation Report on the Company’s Internal Control for 20228. Proposal on paying the audit fees (including internal control audit) of Mazars Certified Public Accountants LLP in 2022Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | April 23, 2024 | (III) The third meeting of Audit Committee of the Tenth Board of Directors for 20241. Proposal on the Report of the First Quarter in 2024Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | July 19, 2024 | (IV) The fourth meeting of Audit Committee of the Tenth Board of Directors for 20231. Proposal on Formulating Accounting Firm Selection and Employment System of Yunnan Baiyao GroupResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | August 23, 2024 | (V) The fifth meeting of Audit Committee of the Tenth Board of Directors for 20241. Proposal on Interim Report for 2024 and its summary 2. Proposal on Renewing the Engagement with the Company’s Audit Organization (Including Internal Control Audit) for 20243. Proposal on Revising the Internal Audit Systems of Yunnan BaiyaoResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | October 25, 2024 | (VI) The sixth meeting of Audit Committee of the Tenth Board of Directors for 20241. Proposal on the Report of the Third Quarter in 20242. Proposal on Special Dividend PlanResult: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | December 2, 2024 | (VII) The seventh meeting of Audit Committee of the Tenth Board of Directors for 20241. Proposal on 2024 Annual Report Audit Plan Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
| Audit Committee | He Yong, Xie Yunshan, Zhang Yongliang | 8 | December 20, 2024 | (VIII) The eighth meeting of Audit Committee of the Tenth Board of Directors for 20241. Proposal on Estimation of the Daily Related Party Transactions in 2025Result: 3 voted in favor, 0 voted against, 0 abstained | None | None | None |
VIII. Work of the Supervisory Committee
Whether the Supervisory Committee identified any risks to the Company in its supervisory activities during the reporting period
□Yes ?No
The Supervisory Committee had no objections to the supervisory matters during the reporting period.
IX. Employees of the Company
1. Number of employees, professional composition, and education
| Number of in-service employees of the parent company at the end of the reporting period (person) | 4,187 |
| Number of in-service employees of major subsidiaries at the end of the reporting period (person) | 5,090 |
| Total number of in-service employees at the end of the reporting period (person) | 9,277 |
| Total number of salaried employees in the current period (person) | 9,277 |
| Number of retired pensioners whose expenses shall be borne by the parent company and its main subsidiaries (person) | 1, 910 |
| Professional Composition | |
| Category of Professional Composition | Number of Professional Composition (Person) |
| Production staff | 1,760 |
| Sales staff | 5,433 |
| Technical staff | 1,276 |
| Financial staff | 277 |
| Administrative staff | 531 |
| Total | 9,277 |
| Education | |
| Category of Education | Number (person) |
| Doctor | 38 |
| Master | 585 |
| Undergraduate | 4,267 |
| College | 3,242 |
| Technical secondary school and below | 1,145 |
| Total | 9,277 |
2. Remuneration policy
Driven by strategic goals and a positive incentive philosophy, the Company has cultivated a positivecorporate culture that effectively attracts, motivates, and retains core talents, thereby fueling business innovationand sustainable development. The Company has implemented measures to improve quality and efficiency, andenabled employees to deeply participate in the sharing of corporate achievements, thereby stimulating teamvitality and supporting the joint development of the Company and its employees. Guided by the labor cost rate,
the Company has standardized its labor cost budgeting and planning, and refined its methods for labor cost controland management, which allows the Company to concentrate its human resources investment on key positionswithin the value chain, thereby achieving an efficient alignment between investment and performance.In accordance with relevant laws and regulations, Yunnan Baiyao has fulfilled its social responsibility tokeep optimizing employee welfare and caring plans. It has purchased pension, medical, unemployment, work-related injury, maternity, and other insurance for employees, as well as has provided housing provident fund andenterprise annuity to fully ensure that employees enjoy the rights and interests stipulated by law. In addition, theCompany has purchased commercial insurance to effectively avoid the risk of accidental injury andcomprehensively protect the health and benefits of employees.
3. Training program
Yunnan Baiyao adheres to the concept of “People-first, Talent-integrated,” and mainly keeps training talentsinternally, and introduces external talents as a supplement. The Company focuses on having talents with diverseknowledge systems and composite talent teams. So, it establishes and improves the talent training system throughscientific talent strategy planning and has formulated and implemented a special training plan for managementcadres, professional technical talents, and skilled talents, to offer employees diverse avenues for developmentand comprehensive training support, enabling them to continuously enhance their skills and capabilities toachieve their personal growth, which in turn promotes the development of the Company. The Company hasconducted a dynamic talent inventory based on competency models, post competence and talent assessment,focusing on the identification and training of key talents. By implementing effective management mechanismsand talent pool management tools, we cultivate a high-quality composite talent team who align with theCompany’s future development needs.During the reporting period, in response to the needs of strategic planning, business development, andorganizational capability building, and guided by the goal of establishing a strategic human resource managementsystem, the Company has focused on building a team of ambitious and capable managers and a well-structuredtalent pool, thus enhancing organizational capabilities and providing significant support and fundamentalassurance for the implementation of strategies. The Company has continuously upgraded its talent cultivationsystem, focusing on the alignment of “people” and “professional” aspects with the Company’s overall objectives,both vertically and horizontally, and across short-term and long-term goals. It has integrated a series of trainingprograms covering leadership, professional skills, and technical abilities, and provided customized trainingprojects. Specific initiatives organized and implemented include the Successor Development and AssessmentProgram for Managers, the New Promoted Middle Management Training Program under the “Paris polyphyllaFlower” initiative, the Middle Management “Xuanjia Army” Training Program under the “Paris polyphyllaFlower” initiative, the R&D Project Management Training Program, the Special Training Camp for Supply ChainOperations, and the New Apprenticeship Program.
4. Labor outsourcing
□Applicable ?Not applicable
X. Profit Distribution and Conversion of Capital Reserve into Share Capital of theCompanyFormulation, implementation, or adjustment of profit distribution policies, especially cash dividend policies during thereporting period?Applicable □Not applicableThe Company’s ongoing commitment revolves around creating value and ensuring reasonable returns forinvestors. The Company extensively gathers and incorporates shareholders’ perspectives regarding profitdistribution. It follows sustainable, stable, compliant, and transparent distribution policies that prioritize theprotection of minority shareholders’ legitimate rights and interests. The standards and ratios for dividenddistribution are clearly defined. The profit distribution plan of the Company is submitted to the general meetingof shareholders for consideration, and the decision-making and implementation of profit distribution comply withthe relevant provisions of the Articles of Association and the requirements of the resolutions of the generalmeeting of shareholders.
The Company’s annual equity distribution plan for 2023 is as follows: Based on the total share capital of theCompany of 1,796,862,549 shares as at the end of 2023 less 12,599,946 shares repurchased from the specialsecurities account for share repurchase, i.e., on the basis of 1,784,262,603 shares, a cash dividend of RMB 20.77(tax inclusive) for every 10 shares would be paid to all shareholders, 0 bonus shares (tax inclusive) would bedistributed, and no share capital would be converted from capital reserve. In accordance with the distributionproportion of this plan, the total amount of distribution was finally determined based on the number of sharesentitled to profit distribution on the equity registration date when the distribution plan was implemented in thefuture. The remaining undistributed profits were reserved for distribution in subsequent years. On May 19, 2024,the Company completed the implementation of equity distribution for 2023, with a total cash dividend of RMB3,705,913,426.431 distributed.The special dividend distribution plan for 2024 is as follows: Based on the total share capital of the Companyof 1,784,262,603 shares as at the end of the third quarter in 2024, a cash dividend of RMB 12.13 (tax inclusive)for every 10 shares would be paid to all shareholders, 0 bonus shares (tax inclusive) would be distributed, and noshare capital would be converted from capital reserve. In accordance with the distribution proportion of this plan,the total amount of distribution was finally determined based on the number of shares entitled to profit distributionon the equity registration date when the distribution plan was implemented in the future. The remainingundistributed profits were reserved for distribution in subsequent years. On November 25, 2024, the Companycompleted the implementation of dividend distribution for 2024, with a total cash dividend of RMB2,164,310,537.439 distributed.
| Special Description of Cash Dividend Policy | |
| Whether it complies with the provisions of the Articles of Association or the requirements of resolutions of general meeting of shareholders: | Yes |
| Whether the standards and ratios for dividend distribution are clearly defined: | Yes |
| Whether relevant decision-making procedures and mechanisms are complete: | Yes |
| Whether the independent directors perform their duties and play their due role: | Yes |
| If the Company does not pay cash dividends, it shall disclose the specific reasons and the next steps to be taken to enhance the return of investors: | No |
| Whether minority shareholders have sufficient opportunities to express their opinions and demands, and whether their legitimate rights and interests are fully protected: | Yes |
| Whether the conditions and procedures for adjusting or changing the cash dividend policies are compliant and transparent: | Yes |
The Company made profits during the reporting period and the profit available for distribution to shareholders of the parentcompany was positive, but no cash dividend distribution plan was proposed
□Applicable ?Not applicable
Distribution of profits and capital reserve converted into share capital during the reporting period
?Applicable □Not applicable
| Number of bonus shares for every 10 shares (share) | 0 |
| Number of dividends for every 10 shares (RMB) (tax included) | 11.85 |
| Base of share capital of the distribution plan (share) | 1,784,262,603 |
| Cash dividend amount (RMB) (tax included) | 2,114,351,184.56 |
| Cash dividend amount in other ways (such as repurchase of shares) (RMB) | 0.00 |
| Total cash dividend (including other methods) (RMB) | 2,114,351,184.56 |
| Distributable profits (RMB) | 2,287,686,657.27 |
| Proportion of total cash dividends (including other methods) to total profit distribution | 100% |
| This Cash Dividend | |
| If the Company is in the mature phase and there is no significant capital expenditure arrangement, the cash dividend shall account for at least 80% of the profit distribution when profit distribution is made. | |
| Details of Plan on Profit Distribution and Conversion of Capital Reserve into Share Capital | |
| The profit distribution plan of the Company considered and approved by the Board of Directors is as follows: Based on the total share capital of the Company of 1,784,262,603 shares as at the end of 2024, a cash dividend of RMB 11.85 (tax inclusive) for every 10 shares will be paid to all shareholders, 0 bonus shares (tax inclusive) will be distributed, and no share capital would be converted from capital reserve. At the same time, the Company completed the special dividend distribution for 2024 in November 2024, with a cash dividend of RMB 12.13 (tax inclusive) for every 10 shares, totaling RMB 2,164,310,537.44 (tax inclusive). The cash dividend to be implemented this time will be combined with the special dividend already distributed in 2024. Based on the total share capital of 1,784,262,603 shares at the end of 2024, the total cash dividend for 2024 will be RMB 23.98 (tax inclusive) per 10 shares, with a total cash dividend of RMB 4,278,661,722.00 (tax inclusive), accounting for 90.09% of the Company’s net profit attributable to shareholders of the listed company for 2024. | |
XI. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan(ESOP), or Other Employee Incentive Measures
□Applicable ?Not applicable
During the reporting period, the Company implemented no equity incentive plan, employee stock ownership plan or other employeeincentive measures.
XII. Establishment and Implementation of Internal Control System during the ReportingPeriod
1. Establishment and implementation of internal control
The Company, in accordance with the Company Law, the Basic Standard for Enterprise Internal Control andits related guidelines and other related laws and regulations, and by reference to the industry characteristics and thepractice of the Company, has continuously improved its internal control system and promoted risk management ofkey business areas to improve its overall risk defense capability.In 2024, the Company had an improved internal control system, which had been effectively implemented andhelped the Company disclose information timely and accurately and prepare financial reports truly and reliably,ensuring the legal and compliant operation of the Company and the safety and integrity of assets, achieving theexpected objectives of internal control and safeguarding the interests of the Company and all shareholders.
2. Details of significant internal control defects discovered during the reporting period
□Yes ?No
XIII. Management Control of Subsidiaries during the Reporting Period
None.
XIV. Internal Control Evaluation Report or Internal Control Audit Report
1. Internal Control Evaluation Report
| Full-text disclosure date of Internal Control Evaluation Report | April 1, 2025 | ||
| Full-text disclosure index of Internal Control Evaluation Report | http://www.cninfo.com.cn/new/index | ||
| Total assets of units included in the evaluation scope as a percentage of total assets of the Company’s consolidated financial statements | 98.84% | ||
| Operating income of units included in the scope of evaluation as a percentage of operating income of the Company’s consolidated financial statements | 99.91% | ||
| Defect Identification Criteria | |||
| Category | Financial Report | Non-Financial Report | |
| Qualitative Criteria | 1. Major defects: Frauds among directors, supervisors, and senior managers of the Company are discovered; Significant internal control deficiencies identified and reported to management are not corrected after a reasonable time; Control environment is ineffective; The oversight of internal controls by Audit Committee and internal audit bodies is ineffective; There are defects affecting earnings trends; Material misstatements detected by external audit are not first detected by the Company; The Company corrects published financial statements.2. Important defects: Accounting policies fail to be selected and applied by GAAP; Controls or compensatory measures for non-conventional or special transaction accounting treatment fail to be established or implemented. 3. General defects: Defects other than major defects and important defects are classified as general defects. | 1. Major defects: Those defects that have been formally disclosed and have a negative impact on the Company’s periodic reporting disclosure; and have violated national laws and regulations, causing heavy losses to the Company.2. Important defects: Those defects that are punished by national government authorities but have not had a negative impact on the Company’s periodic report disclosures.3. General defects: Those defects are punished by provincial (including provincial) and below government departments but do not have a negative impact on the disclosure of the Company’s periodic reports. | |
| Quantitative Criteria | Internal control defects with financial misstatement amount less than 3% of total profit shall be identified as general defects; Internal control defects with an absolute amount greater than or equal to 3% but less than 5% of total profit shall be identified as important defects; Internal control defects with an absolute amount greater than or equal to 5% of total profit shall be identified as major defects. | By reference to the identification criteria for internal control defects in financial reports, internal control defects that may cause direct property losses with an absolute amount less than 3% of total profits are identified as general defects; Internal control defects with an absolute amount greater than or equal to 3% but less than 5% of total profit shall be identified as important defects; Internal control defects with an absolute amount greater than or equal to 5% of total profit shall be identified as major defects. |
| Number of Major Defects in Financial Reports (Item) | 0 | |
| Number of Major Defects in Non-Financial Reports (Item) | 0 | |
| Number of Important Defects in Financial Reports (Item) | 0 | |
| Number of Important Defects in Non-Financial Reports (Item) | 0 | |
2. Internal Control Audit Report
?Applicable □Not applicable
| Considerations about Internal Control Audit Report | |
| We believe that Yunnan Baiyao has maintained effective internal control over financial reports in all material respects as of December 31, 2024, in accordance with the Basic Standard for Enterprise Internal Control and relevant regulations. | |
| Disclosure of Internal Control Audit Report | Disclosed |
| Full-text disclosure date of Internal Control Audit Report | April 1, 2025 |
| Full-text disclosure index of Internal Control Audit Report | http://www.cninfo.com.cn/new/index |
| Opinion type of Internal Control Audit Report | Unqualified opinion |
| Whether there are major defects in non-financial reports | No |
Does the accounting firm issue internal control audit reports with qualified opinion?
□Yes ?No
Whether the internal control audit report issued by the accounting firm is consistent with the self-evaluation report of the Boardof Directors?
?Yes□No
XV. Rectification of Self-inspection Issues in Special Actions for Governance of ListedCompaniesNot applicable.
Section VEnvironmental and Social ResponsibilitiesI.Significant Environmental IssuesWhether the listed company and its subsidiaries are the key pollutant discharge unit announced by the environmental protectiondepartments?Yes□NoEnvironmental protection related policies and industry standards 1. Related laws, regulations and policies
Yunnan Baiyao Group Co., Ltd has strictly complied with laws and regulations such as the Environmental ProtectionLaw of the People’s Republic of China, the Law of the People’s Republic of China on the Prevention and Control ofAtmospheric Pollution, the Water Pollution Prevention and Control Law of the People’s Republic of China, the Law ofthe People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes and the Lawof the People’s Republic of China on the Prevention and Control of Noise Pollution, and internally formulated andimplemented environmental management policies such as the Environmental Protection Management System,Environmental Protection Responsibility System, Environmental Protection Approval Management System, andHazardous Waste Management System.
2. Administrative permits for environmental protection
(1) Yunnan Baiyao Group Co., Ltd.
Environmental Impact Assessment (EIA) Approvals: YHXZH (2008) No.255
Approval for Acceptance of Completed Environmental Protection Projects: Phase I YH Acceptance (2013) No. 1,Phase II YH Acceptance (2015) No. 30
Pollution discharge permit No.: 9153000021652214XX001Q, effective from July 2, 2023 until July 1, 2028.
(2) Yunnan Baiyao Group TCM Resources Co., Ltd.
Environmental Impact Assessment (EIA) Approvals: YHSH (2009) No.261, YHSHP (2014) No. 1
Approval for Acceptance of Completed Environmental Protection Projects: Phase I YH Acceptance (2014) No. 16,Phase II Acceptance (Self-acceptance on March 20, 2021), YHSH Acceptance (2016) No. 4
Pollution discharge permit No.: 91530100216583890U001U, effective from May 13, 2024 until May 12, 2029.
(3) Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd.
Environmental Impact Assessment (EIA) Approvals: DHSH (2010) No.21
Approval for Acceptance of Completed Environmental Protection Projects: DHSH (2015) No.32
Pollution discharge permit No.: 91532900218671552P001V, effective from August 26, 2024 until August 25, 2029.
(4) Yunnan Baiyao Group Wenshan Qihua Co., Ltd.
Environmental Impact Assessment (EIA) Approvals: WHSH (2017) No.53
Approval for Acceptance of Completed Environmental Protection Projects: Self-acceptance on January 5, 2021
Pollution discharge permit No.: 91532600709893942X002R, effective from August 3, 2021 until August 2, 2026.
3. Industry emission standards and specific situations of pollutant emissions involved in production andoperation activities
| Name of Company or Subsidiary | Types of Main Pollutants and Characteristic Pollutants | Names of Main Pollutants and Characteristic Pollutants | Emission Method | Number of Discharge Outlets | Distribution of Discharge Outlets | Emission Concentration/Intensity | Pollutant Emission Standards Implemented | Total Emissions | Approved Total Emissions | Emissions Exceeding Standards |
| Yunnan Baiyao Group Co., Ltd. | Exhaust gas | Particulate matter, non-methane total hydrocarbons | Organized emissions | 4 | Discharge outlet for alcohol extraction exhaust gas | Discharge outlet 1 for alcohol extraction exhaust gas (with an average particulate matter concentration of 3mg/m?);Discharge outlet 2 for alcohol extraction exhaust gas (with an average particulate matter concentration of 2.95mg/m?);Discharge outlet 3 for alcohol extraction exhaust gas (with an average particulate matter concentration of 3.75mg/m?);Discharge outlet 4 for alcohol extraction exhaust gas (with an average particulate matter concentration of 3.15mg/m?);Discharge outlet 1 for alcohol extraction exhaust gas (with an average non-methane total hydrocarbons concentration of 3.13mg/m?);Discharge outlet 2 for alcohol extraction exhaust gas (with an average non-methane total hydrocarbons concentration of 10.13mg/m?);Discharge outlet 3 for alcohol extraction exhaust gas (with an average non-methane total hydrocarbons concentration of 8.86mg/m?);Discharge outlet 4 for alcohol extraction exhaust gas (with an average non-methane total hydrocarbons concentration of 13.36mg/m?) | Standards for the Emission of Air Pollutants in the Pharmaceutical Industry (GB37823-2019): Particulate matter<30mg/m3, and non-methane total hydrocarbons<100mg/m3 | With no total emission indicator available | None | None |
| Yunnan Baiyao Group Co., Ltd. | Exhaust gas | NOX, particulate matter,SO2 | Organized emissions | 3 | Main discharge outlet for boiler exhaust gas | 4t/h boiler (with an average NOX concentration of 49.25 mg/m?);10t/h boiler (with an average NOX concentration of 78.182 mg/m?);15t/h boiler (with an average NOX concentration of 79.857 mg/m?).4t/h boiler (with an average particulate matter concentration of 5.6 mg/m?);10t/h boiler (with an average particulate matter concentration of 2.6 mg/m?);15t/h boiler (with an average particulate matter concentration of 5.9 mg/m?).4t/h boiler (with an average SO2 concentration of <3mg/m?);10t/h boiler (with an average SO2 concentration of <3mg/m?);15t/h boiler (with an average SO2 concentration of <3mg/m?). | Standards for the Emission of Air Pollutants from Boilers (GB13271-2014): NOX<400mg/m3, Particulate matter<30mg/m3, SO2<100mg/m3 | The NOX emissions in 2024 were 2.961 tons | Annual approved NOX emissions total 11.0667 tons | None |
| Yunnan Baiyao Group Co., Ltd. | Waste water | Total nitrogen, ammonia nitrogen, COD, suspended solids, BOD5, total phosphorus | Drainageoutlet | 1 | Main drainage outlet | Total nitrogen 2.425mg/L; ammonia nitrogen 1.94mg/L; COD 38.04mg/L; suspended solids <4mg/L; BOD5 3.45mg/L; total phosphorus 4.37mg/L | Wastewater Quality Standard for Discharge to Municipal Sewers (GB/T 31962-2015); Integrated Wastewater Discharge Standards (GB8978-1996): Total nitrogen<70mg/L, ammonia nitrogen<45mg/L, COD <500mg/L, suspended solids<400mg/L, BOD5 <350mg/L, and total phosphorus<8mg/L | With no total emission indicator available | None | None |
| Yunnan Baiyao Group TCM Resources Co., Ltd. | Exhaust gas | Non-methane total hydrocarbons | Organized emissions | 1 | Combustion exhaust emission outlet | Non-methane total hydrocarbons 5.55mg/m ? | Standards for the Emission of Air Pollutants in the Pharmaceutical Industry (GB37823-2019): Non-methane total hydrocarbons < 100mg/m? | With no total emission indicator available | None | None |
| Yunnan Baiyao Group TCM Resources Co., Ltd. | Exhaust gas | Non-methane total hydrocarbons | Organized emissions | 1 | Combustion exhaust emission outlet | Non-methane total hydrocarbons 5.55mg/m ? | Standards for the Emission of Air Pollutants in the Pharmaceutical Industry (GB37823-2019): Non-methane total hydrocarbons<100mg/m? | With no total emission indicator available | None | None |
| Yunnan Baiyao Group TCM Resources Co., Ltd. | Exhaust gas | SO2, NOX, particulate matter, Ringelmann smoke | Organized emissions | 3 | Boiler main exhaust gas outlet | SO2<2mg/m3 (1st quarter average concentration), NOX: 64.89mg/m3 (1st and 2nd quarters average concentrations), particulate matter: 2.45mg/m3 (1st quarter average concentration), Ringelmann smoke:<level 1 (1st quarter average concentration) | Standards for the Emission of Air Pollutants from Boilers (GB13271-2014): SO2<50mg/m?, NOX:<200mg/m?, particulate matter:<20mg/m ?, Ringelmann smoke: level 1 | The NOX emissions in 2024 were 2.723 tons (In May 2024, the pollutant discharge permit was subject to simplified management after change, the boiler exhaust gas outlet was deleted, and the boiler-related environmental protection matters were managed by Kunming Tanyue New Energy Co., Ltd) | Annual approved NOX emissions total 32.18 tons (as set in the original pollutant discharge permit) | None |
| Yunnan Baiyao Group TCM Resources Co., Ltd. | Waste water | Total nitrogen, ammonia nitrogen, COD, suspended solids, BOD5, total phosphorus | Drainage outlet | 1 | Main drainageoutlet | Total nitrogen: 6.66 mg/L; Ammonia nitrogen: 0.27 mg/L; COD: 61.95 mg/L; Suspended solids: 14.00 mg/L; BOD5: 8.52 mg/L; Total phosphorus: 3.76 mg/L | Wastewater Quality Standard for Discharge to Municipal Sewers (GB/T 31962-2015); Integrated Wastewater Discharge Standards (GB8978-1996): Total nitrogen<70mg/L, ammonia nitrogen<45mg/L, COD <500mg/L, suspended solids<400mg/L, BOD5 <350mg/L, and total phosphorus<8mg/L | With no total emission indicator available | None | None |
| Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd. | Exhaust gas | SO2, NOX, particulate matter, Ringelmann smokes | Organized emissions | 1 | Boiler main exhaust gas outlet | SO2: <3mg/m3; NOX: 47mg/m3; Particulate matter: 7.1mg/m3; Ringelmann smoke: <1 | Standards for the Emission of Air Pollutants from Boilers (GB13271-2014):SO2:<50mg/m?, NOX:<200mg/m?, Particulate matter:<20mg/m?, Ringelmann smoke: level 1 | With no total emission indicator available | None | None |
| Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd. | Wastewater | Total nitrogen, ammonia nitrogen, COD, suspended solids, BOD5, total phosphorus | Drainage outlet | 1 | Main drainage outlet | Total nitrogen: 5.93mg/L; Ammonia nitrogen: 4.79mg/L; COD:68.24mg/L; Suspended solids: 4mg/L; BOD5:11.8mg/L; Total phosphorus: 0.22mg/L | Wastewater Quality Standard for Discharge to Municipal Sewers (GB/T 31962-2015); Integrated Wastewater Discharge Standards (GB8978-1996):Total nitrogen<70mg/L, ammonia nitrogen<45mg/L, COD <500mg/L, suspended solids<400mg/L, BOD5 <350mg/L, and total phosphorus<8mg/L | With no total emission indicator available | None | None |
| Yunnan Baiyao Group Wenshan Qihua Co., Ltd. | Exhaust gas | Particulate matter, SO2, NOX, Ringelmann smoke | Organized emissions | 2 | Boiler main exhaust gas outlet | Boiler 2 (With an average particulate matter concentration of 3.02mg/m?); Boiler 3 (With an average particulate matter concentration of 3.2mg/m?); Boiler 2 (With an average SO2 | Standards for the Emission of Air Pollutants from Boilers (GB13271-2014):SO2:<50mg/m?, NOX:<200mg/m?, Particulate matter:<20mg/m ?, | Emissions in 2024: SO2<0.099t、NOX: 1.514t、 Particulate matter: 0.104t | Annual total approved emissions: SO2: 0.3t, NOX: 14.02t, particulate | None |
| concentration of <3mg/m?); Boiler 3 (With an average SO2 concentration of <3mg/m?); Boiler 2 (With an average NOX concentration of 43.5mg/m?); Boiler 3 (With an average NOX concentration of 47.25mg/m?); Boiler 2 (With an average smoke density of <1); Boiler 3 (With an average smoke density of <1) | Ringelmann smoke: level 1 | matter: 2.14t | ||||||||
| Yunnan Baiyao Group Wenshan Qihua Co., Ltd. | Wastewater | Total nitrogen, ammonia nitrogen, COD, suspended solids, BOD5, total phosphorus | Drainage outlet | 1 | Main sewage discharge outlet | Total nitrogen: 6.43mg/L; Ammonia nitrogen: 2.05mg/L; COD: 62mg/L; Suspended solids 9.5mg/L; BOD5:19.5mg/L; Total phosphorus: 0.445mg/L | Wastewater Quality Standard for Discharge to Municipal Sewers (GB/T 31962-2015); Integrated Wastewater Discharge Standards (GB8978-1996):Total nitrogen<70mg/L, ammonia nitrogen<45mg/L, COD <500mg/L, suspended solids<400mg/L, BOD5 <350mg/L, and total phosphorus<8mg/L | With no total emission indicator available | None | None |
4. Treatment of pollutants
(1) Treatment of exhaust gas
The Company equips with corresponding environmental protection facilities for all exhaust gas discharge links,installs end-of-pipe treatment facilities, periodically checks the exhaust emission outlet, and entrusts professional thirdparties to carry out regular tests to ensure a stable standard emission of all kinds of exhaust gas.
(2) Treatment of wastewater
The wastewater is treated in a centralized way in the sewage treatment station. In the sewage treatment stationof Yunnan Baiyao Group TCM Resources Co., Ltd, the A
/O process is applied, enabling its sewage treatmentsystem to have a capability of sewage treatment of 1,700m?/day. In the sewage treatment station of Yunnan Baiyaothe A
/O process is applied as well, enabling its sewage treatment system to have a capability of sewage treatmentof 2,000m?/day. In the sewage treatment station of Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd, thediatomaceous earth + activated sludge process is applied, enabling its sewage treatment system to have a capabilityof sewage treatment of 150m?/day. In the sewage treatment station of Yunnan Baiyao Group Wenshan Qihua Co.,Ltd, the A
/O process is applied, enabling its sewage treatment system to have a capability of sewage treatment of2,250m?/day. The sewage treatment system of each unit operates stably, with effluent quality up to dischargestandard. After treatment, the sewage is discharged into the municipal sewage pipeline network.
(3) Treatment of solid waste
Upholding the principle of “Waste Minimization, Waste Valorization and Environmentally SoundManagement,” the Company entrusts professional third parties to treat the sludge and drug residue in the non-hazardous waste generated during production and operations. In this way, fermented sludge will be used forlandscape architecture soil improvement, while the fermented drug residue will be used for producing organicfertilizers. Household waste is cleaned, transported and treated by the environmental sanitation station. Hazardouswaste is managed by a designated person, with accounts established and appropriate labeling and signage improved.All hazardous waste is stored in a designated area for classified collection before being treated by a qualified third-party company.
(4) Noise
The noise detection results at the factory boundary comply with environmental regulatory requirements.
5.Environmental self-monitoring plan
Each unit itself prepared an environmental self-monitoring plan and carried out self-monitoring in strictaccordance with this plan, with all indicators of pollutants meeting the required emission standards.
6.Emergency plans for sudden environmental events
(1)Yunnan Baiyao Group TCM Resources Co., Ltd prepared its emergency plans for sudden environmentalevents on June 13, 2024 and filed with Yangzonghai Branch of Kunming Municipal Ecology and EnvironmentBureau.
(2)Yunnan Baiyao Group prepared its emergency plans for sudden environmental events on July 9, 2024 andfiled with Chenggong Branch of Kunming Municipal Ecology and Environment Bureau.
(3)Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd prepared its emergency plans for suddenenvironmental events on December 8, 2023 and filed with Jingkai District Branch of Dali Prefecture Ecology and
Environment Bureau.
(4)Yunnan Baiyao Group Wenshan Qihua Co., Ltd prepared its emergency plans for sudden environmentalevents on July 15, 2024 and filed with Wenshan Prefecture Branch of Wenshan Prefecture Ecology and EnvironmentBureau.
7.Investment in environmental governance and protection and payment of environmental protectiontaxes
Yunnan Baiyao Group TCM Resources Co., Ltd paid an amount of RMB 19,926.56 for environmentalprotection taxes.
Yunnan Baiyao Group paid an amount of RMB 6,613.50 for environmental protection taxes.
Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd paid an amount of RMB 1,614.55 for environmentalprotection taxes.
Yunnan Baiyao Group Wenshan Qihua Co., Ltd paid an amount of RMB 36,803.08 for environmentalprotection taxes.
8.Measures taken to reduce carbon emissions and their effects during the reporting period
?Applicable Not applicable
(1)“Biomass Gasification Gas and Natural Gas” Dual-Energy Centralized Intelligent Heating Project at QidianRaw Material Center
Under the overall background that positive measures are taken to respond to climate change globally forachieving the goal of carbon and emission reduction, the Qidian Raw Material Center of the PharmaceuticalBusiness Group actively advanced Qidian Raw Material Center’s Biomass Gasification Gas Heating Project. Thisproject has received RMB 25 million from a third party, with 200,000 tons of steam produced as expected per yearafter it is built. From the perspective of carbon emission and energy transformation, this project may efficiently useabout 5,3400 tons of agricultural and forestry residues annually. This initiative will not only achieve resourcerecycling but also significantly reduce the consumption of traditional fossil energy. Specifically, the use of standardcoal is expected to reduce by 26,700 tons; CO
emissions significantly are expected to reduce by 6,900 tons; SO
emissions are expected to reduce by 226 tons; and nitrogen oxide emissions are expected to reduce by 197 tons. Allthese will guide the Company toward a path of green, low-carbon development. In terms of economic benefits andcarbon asset transformation, this project may help save energy expense at an amount of RMB 8 million to RMB 10million per year. In the future, the reduced emissions may be converted into carbon assets, which can be traded incarbon markets, creating a new source of economic growth and generating additional income for the Company.
Due to its outstanding performance in energy saving and carbon reduction, this project was nominated for theFirst Prize in Science and Technology by the Science and Technology Department of Yunnan Province and includedin China’s national major project library. This not only enhances Yunnan Baiyao’s influence and reputation in thefield of ecological civilization construction, but also highlights the Company’s commitment to social responsibilityand boosts the “green value” of the Baiyao brand. Furthermore, it establishes a solid foundation for the Company’sfuture development of zero-carbon factories.
In the future, the project will also explore new ways for treating drug residues, aiming to achieve the green useof industrial solid wastes. Meanwhile, the Company, as a partner, participates in formulating the biomass carbonmethodology, and provides industrial standards and norms for biomass energy use and carbon emission management,
thus leading the industry on a stable path toward carbon emission reduction.
(2)Armacell Thermal Station Pipeline Insulation Project
Due to the aging of the thermal insulation layer and outer protection layer, the thermal insulation system atQidian Raw Material Center Thermal Station of Yunnan Baiyao (including the Extraction I System, Extraction IISystem, Washing and Baking System, steam main, and pre-treatment pipeline) experienced a decrease in energy-saving efficiency. The steam main thermal insulation materials had a surface temperature of 55-60°C, which led toincreased energy loss. As a result, the main thermal insulation materials were replaced. After multiple consultationswith technicians from Armacell, we opted for a thermal insulation solution using Arma GelHTL, a high-temperature-resistant powder aerogel, and ArmaFlex HT-C, a high-temperature-resistant foamed diene insulationmaterial. The selected materials and thickness were designed to meet both energy-saving and burn preventionrequirements, ensuring optimal energy savings while minimizing maintenance costs. The project yielded significantenergy-saving results. Following the transformation, the project is expected to save 1,106.65 GJ of energy annually,reducing costs by RMB 103,500, and cutting carbon emissions by 121.73 tons. In addition, the transformationreduced system thermal loss, saved energy, improved the aesthetics of the thermal station, and lowered maintenancecosts.
(3)Circulating Cooling Water Extraction Transformation Project at Qidian Raw Material Center:
Circulating Cooling Water Extraction System at Qidian Raw Material Center of Yunnan Baiyao faced seriousequipment aging and design defects, resulting in reduced extraction and concentration efficiency, as well asincreased energy and alcohol consumption. This failure to meet national production capacity policy requirementsprompted a transformation of the system. Following the transformation, the equipment power center demonstratedsignificant improvements in efficiency. In terms of energy conservation and consumption reduction, the inlet watertemperature of the cooling tower was notably reduced, leading to a decrease in daily water replenishment and savingapproximately RMB 80,000 annually in water costs. The installation of a temperature control system for the coolingtower fan is expected to save around RMB 258,000 per year in electricity costs, further contributing to a reductionin carbon emissions.
(4)Extraction III Condensed Water System Heat Recovery Project:
The condensate water contains significant residual heat. Previously, the pre-stage condensate water wasdirectly discharged into the sewage treatment station, which not only wasted energy but also increased the volumeof sewage to be treated, thereby raising environmental risks and indirectly contributing to higher carbon emissions.To address this issue and effectively recover and reuse the waste heat from the condensate water, we independentlyresearched and developed a treatment device. We used a plate heat exchanger for the heat exchange process ofcondensate water, with drinking water serving as the heat exchange medium. The treated drinking water is then usedas a source for workshop production, while the low-temperature condensate water, after heat exchange, is used toreplenish the circulating water system. This solution not only provides an efficient method for recovering waste heatfrom condensate water but also supplies high-quality water for the circulating water system, helping to reducescaling problems, extend the service life of the equipment, and lower energy consumption and carbon emissionsduring equipment maintenance. After the implementation of the project, it is expected to save over 2,100 tons ofsteam, reduce heat costs by RMB 585,000, save 100m?/day of drinking water, cut water fees by RMB 200,000
annually, and decrease sewage treatment fees by RMB 445,000 annually.
(5)Optimization and Retrofit of Air Compression System Project at Yuhua Preparation CenterAt Yuhua Preparation Center, all air compressors were aging, with the specific power of new machines at 7.5,and all equipment had been in operation for over ten years. During peak hours, each air compressor station operatedat full load, facing issues such as low operational efficiency, high fault rates, and elevated gas supply pressures.Through comprehensive research and data analysis of the air compression system, an optimization and renovationplan was developed to address these pain points. Specifically, first, the high-pressure gas supply for Workshop IVwas separated, and a new 160KW variable frequency air compressor (with permanent magnet variable frequencyand a specific power of 5.8) was purchased and installed to provide a separate gas supply. Other air compressorswere then set to operate at reduced supply pressure. Second, the air compressor supply network for Workshop I,Workshop II, and Workshop III was interconnected, and another new 160KW variable frequency air compressor(with permanent magnet variable frequency and a specific power of 5.8) was purchased and installed to form anintegrated gas supply system with the existing equipment. This created an energy-saving operational model for thegas supply. After the project implementation, the system efficiency increased by more than 10%, resulting in asignificant decrease in power supply and consumption, thereby achieving a reduction in carbon emissions.
(6)Vacuum System Renovation Project in Workshop I
The vacuum system in Workshop I is equipped with 7 vacuum pumps (6 vacuum pumps with 15KW each + 1vacuum pump with 55KW). Following the expansion of the granular production capacity, the total vacuum demandis expected to reach 94m?/min, while the existing equipment can only provide a theoretical gas supply of 79m?/min,resulting in a shortfall of 15m?/min. The existing equipment has been in operation for more than ten years, but itsperformance has significantly declined. Issues such as blockage in the cooling tower packing and the aging ofpipelines have caused the water temperature in the cooling circulating system to remain above 30°C, resulting inpoor cooling efficiency. The aging components and other issues have also posed significant safety hazards in thecontrol system, leading to the failure of energy-saving operations and further exacerbating energy waste. Theseissues not only caused insufficient pumping capacity and high failure rates during production but also resulted inlow operational efficiency, increased energy consumption, and higher carbon emissions. After extensive technicaldiscussions during the early stages of the project, we developed a new vacuum system renovation plan based on ouractual situation. Specifically, first, we purchased three 45KW vacuum pumps, cancelled the separate gas-liquidseparators in the original equipment, and integrated a large separator into a set of equipment systems. Second, wereplaced the cooling tower with a spray type according to the characteristics of the original cooling water. Thirdly,we redesigned a set of constant pressure-based gas supply control system. The project has yielded excellentoperational results, with significant energy savings. It is estimated to save more than 20% of energy compared tothe old system, achieving the goals of energy conservation and carbon reduction. The mechanical and electricalinstallation, along with material procurement, was completed independently by the mechanical maintenance team,saving the Company over RMB 200,000 in costs and achieving both economic and environmental benefits.
(7)Air Suspension Fan Replacement Project of Sewage Treatment Station for Energy-saving and NoiseReduction
Yuhua Phase I Sewage Treatment Station originally used three Roots blowers, each with a power of 45KW
and a noise level of about 85 decibels. Yuhua Phase II Sewage Treatment Station used three centrifugal fans, eachwith a power of 45KW and a noise level around 75 decibels. The high-power consumption of these motors, alongwith the excessive noise levels, had a significant impact on the surrounding environment. To address this, wereplaced the fans at both Phase I and Phase II with variable-frequency air suspension fans to improve fan operatingefficiency. This upgrade has led to a reduction in electricity consumption by 180,000 KWh annually, savingapproximately RMB 100,000 in annual costs. The noise level has been reduced from 80 decibels to below 60decibels, achieving the desired effect while also reducing carbon emissions.
(8)Production Line Optimization and Renovation Project at Dali Manufacture CenterThe Company has been committed to energy conservation and emission reduction by phasing out outdated,high-energy-consuming equipment, exploring new processes, and minimizing pollutant generation. In 2024, theCompany upgraded and transformed three production lines with intelligent manufacturing, phasing out old andoutdated equipment, and further implemented its energy conservation and emission reduction initiatives.
(9)Implementation Results of Photovoltaic Project of Yunnan Baiyao Group Wenshan Qihua Co., Ltd.Yunnan Baiyao Group Wenshan Qihua Co., Ltd’s Roof Distributed Photovoltaic Power Generation Project islocated at No. 1 Baiyao Road, Denggao Area, Sanqi Industrial Park, Wenshan City, Yunnan Province. The projectuses a combination of Building Integrated Photovoltaic (BIPV) and Building Attached Photovoltaic (BAPV)systems to construct a distributed photovoltaic power station. The initial processing workshop adopts the BIPVmethod, covering a usable roof area of 10,275m? with a 3° slope. Meanwhile, the comprehensive preparationworkshop, decoction piece workshop, and power center employ the BAPV method, covering a total roof area of15,997m? with the same 3° slope. Spanning four buildings, the project has a total usable roof area of 26,272m? anda planned installed capacity of 3.05942MWp. It is equipped with 11 sets of 225kW string inverters connected to a2500kVA boost box transformer. A new outdoor switch station has been constructed and integrated into the 10kVuser line, ensuring that “the electricity generated by the distributed photovoltaic power system is primarily for self-consumption, with surplus energy fed into the power grid.”The photovoltaic station of Yunnan Baiyao Group Wenshan Qihua Co., Ltd has been built and put intooperation, with an annual power generation of more than 3.65 million kWh, and an average daily power generationof over 10,000 kWh. Each year, it may help save about 1,460 tons of standard coal combustion, reduce carbondioxide emissions by about 3,639 tons, and reduce sulfur dioxide emissions by about 109 tons, equivalent to plantingabout 12.5 hectares of trees, showing its significant energy-saving and emission reduction benefits.For utilization of renewable energy produced from photovoltaic station, Yunnan Baiyao Group Wenshan QihuaCo., Ltd’s photovoltaic station has been built and put into operation, which is a significant step for Yunnan Baiyao,a century-old company, in implementing its “carbon peak and carbon neutrality” strategy. Yunnan Baiyao remainscommitted to the principle that “lucid waters and lush mountains are invaluable assets” to support its sustainableand healthy development.
9.Administrative punishments for environmental issues during the reporting period: None.
10. Other environmental information that should be disclosed
(1) The Company’s related environmental protection information has been disclosed on the System forEnterprise Environmental Information Legally Required to be Disclosed (Yunnan)
(2) Pollutant discharge permit implementation reports (annual reports) have been disclosed on theNational Pollutant Discharge Permit Management Information Platform
(3) Self-monitoring data have been disclosed on the National Pollution Source Monitoring DataManagement and Sharing System.
11. Other environmental protection related information: None.
II.Social Responsibility
For details, please refer to the 2024 Sustainability Report disclosed by the Company on the same day atwww.cninfo.com.cn.
III.Consolidated and Expanded Achievements in Poverty Alleviation and Rural Revitalization
In 2024, under the guidance of President Xi Jinping’s Thought on Socialism with Chinese Characteristics fora New Era, Yunnan Baiyao diligently implemented the rural revitalization policies set forth by the Party CentralCommittee, the State Council, the Yunnan Provincial Committee of the Communist Party of China, and theprovincial government. Leveraging its industrial strengths, the Company adopted a targeted strategy combining“organizational leadership, Party building, technical guidance, leading wealth generation, talent cultivation, andconsumer support.” With clearly defined objectives, Yunnan Baiyao developed precise plans and refined strategies,focusing on the variety, area, and timing of planting TCM materials using innovative methods. Also, the Companysignificantly enhanced its support for poverty alleviation in Chazhiluo Village and Xinle Village in PantiangeTownship, Weixi Lisu Autonomous Prefecture, successfully completing its annual tasks.
First, overall planning and consolidated efforts for rural revitalization. The Party Committee of YunnanBaiyao attaches such importance to its targeted poverty alleviation task that had been included into its annual keywork scope for overall planning. In 2024, Zhang Wenxue, the Company’s secretary of Party Committee andChairman successively paid 2 visits to Weixi Lisu Autonomous Prefecture, accompanied by his team, to conductinvestigations. Through on-site visits, discussions around desks, and other means, they fully understood the localactual situations and then, by combining with the Company’s construction across the TCM industrial chain, madeoverall planning for rural revitalization and the TCM industry development. Zhang Wenxue engaged in severalroundtable discussions with local leaders from the county, township, and village levels on topics such as industrialsupport, project construction, and other related initiatives, so as to solve practical problems in the process ofassistance and carefully develop assistance measures for the next steps. In the principle of “Strict management andcomprehensive safeguard as needed,” Yunnan Baiyao Group revised the Management Rules for Funds Expenditurefor the Rural Revitalization Work Team Dispatched to Weixi County, and in combination of the actual situation,determined reasonably the team member’s salary to ensure they work there with peace of mind and give play totheir roles. Meanwhile, the Company also established a monthly work reporting system to track their work and theprogress of the project in real time.
Second, integration with the Party building for fully leading rural revitalization. To assist grassroots Partyorganizations and villager self-governance organizations in strengthening grassroots organizational construction,improving and enhancing village appearance, inheriting and protecting intangible cultural heritage and local uniqueethnic life culture, and building a “beautiful countryside” with ethnic characteristics, Yunnan Baiyao Group investedRMB 300,000 to repair and construct the Party member activity room/prefecture-level inheritance exhibition hall
of peacock dance, an intangible cultural heritage in Chazhiluo Village. For strengthening the construction ofgrassroots Party organizations in Pantiange Township and assisting the stationed villages in carrying out partyorganization activities, Yunnan Baiyao Group, by relying on the office of the Villager Committee of Xinle Village,invested more than RMB 50,000 to renovate the Xinle Village Party member activity base, purchase videoequipment and Party member education and publicity materials, and create a Party member activity battlefield.Meanwhile, firstly, the resident work teams collaborated with the two village committees to regularly prevent flashfloods, landslides, mudslides, mountain collapses, and forest fires, conduct comprehensive analysis and judgmentof early warning and monitoring of returning to poverty, and do well in “two assurances and three guarantees” anddrinking water safety work. Secondly, the resident work teams also assisted the two village committees in initiatingthe special activity of “Celebrating the 75th anniversary of the founding of the People’s Republic of China,strengthening the foundation, ensuring stability, and promoting development.” Thirdly, the resident work teamsassisted the two village committees in organizing the masses to learn earthquake related knowledge and activelyconduct earthquake emergency drills. Fourthly, the resident work teams assisted grassroots Party organizations andvillager self-governance organizations in strengthening grassroots organizational construction, improving villageappearance, revising village rules and regulations, conducting visits to people living in hardship, mediating villagerconflicts, and other tasks. These efforts demonstrated their commitment to conducting in-depth, practical, andmeticulous work for the villagers, supporting the construction and comprehensive governance of the villages, andensuring the safety and stability of the assisted communities.Third, technical guidance to provide impetus and vitality to rural revitalization. Yunnan Baiyao hasalways been committed to leveraging its corporate strengths across the TCM industrial chain, achieving the precisemanagement of TCM materials, such as traceable sourcing, verifiable destinations, accountability, and full-processmonitoring, which has been connected to Lijiang Digital Processing Platform and Market Channels for Fresh TCMMaterials in a high-quality and high-yield way, with an aim to develop the quality TCM. Based on the actualsituation of Xinle Village and Chazhiluo Village in Pantiange Township, Dolomiaea costus and Bletilla striata wereplanted to promote rural revitalization and development. In 2024, Yunnan Baiyao’s planting technique expertsprovided the farmers with training on “Dolomiaea costus cultivation techniques” and compiled Baiyao’s SpecialTechnique Solutions to Dolomiaea costus Planting, which provided the overview of Dolomiaea costus variety,cultivation water and fertilizer management, usage of pesticide and prevention and control of plant diseases andinsect pests, for the purpose of giving comprehensive planting guidance to further improve the planting efficiency.Four leading figures in wealth creation selected by the resident work teams conducted more than 10 training sessionsin the fields to promote the planting of Dolomiaea costus and Bletilla striata, and by making full use of the themedParty days and cadre training activities of the two villages’ Party branches, carried out special training on theplanting techniques of Dolomiaea costus and Bletilla striata. At the same time, invited by the Yunnan Branch ofthe Bank of Communications and the Yunnan Technician College work team, Yunnan Baiyao dispatched expertsof TCM planting techniques and the members of the resident work teams in Labashan Village and Lari Village tooffer training on Dolomiaea costus planting by plastic film mulch and interplanting corn, helping local farmerspromote planting technique, improve breeding, seedling cultivation and field management. This innovative plantingmethod received unanimous praise from local farmers.
Fourth, leading figures in wealth creation to rejuvenate rural revitalization. In 2024, based on a deepunderstanding of the actual situation of the two villages, the resident work teams cultivated a total of 10 leadingfigures in wealth creation to first innovatively plant TCM. The resident work teams also conducted techniquetraining and guidance in the fields. Under the guidance of the resident work teams, the leading figures in wealthcreation, by the innovative method of covering with plastic film mulch and intercropping corn, planted a total of 30mu of Dolomiaea costus. These innovative farmers received a subsidy of RMB 200 per mu, totaling RMB 6,000,effectively solving the problem of insufficient funds. During the year, this innovative method contributed to agratifying harvest, with a yield of 500 jin of corn and 800 jin of Dolomiaea costus per mu, compared to aninvestment cost of RMB 1,500 per mu, and an increase of RMB 3,500 in income per mu. In addition, this innovativemethod also contributed to shortening the growth cycle of Dolomiaea costus from 2 years to 1 year, and increasingthe farmers’ income by RMB 50,000. Such large-scale planting in 2024 effectively solved the pain points of farmers’“inability to wait and invest,” and was widely recognized by farmers. By 2025, we can promote 100 households toplant Dolomiaea costus on over 200 mu of land by this innovative method, so as to create economies of scale anddriving sustained income growth for farmers. In addition to the cultivation of TCM materials, Yunnan Baiyao Groupis also committed to nurturing leading figures in wealth creation by guiding farmers to increase their income throughbreeding. During the year, Yunnan Baiyao provided a total of RMB 16,000 in subsidies for forage to cattle farmers,addressing the practical challenges faced by these leading figures in wealth creation. This support helped alleviatethe significant losses suffered by farmers due to the sharp decline in beef cattle prices in Weixi County, enablingthem to temporarily overcome these difficulties.Fifth, Golden Autumn Scholarship to support rural talent revitalization. Yunnan Baiyao Group alwaysfirmly believes in the concept of “To revitalize talent, education must come first,” actively participates in ruraleducation assistance, and encourages rural students to use the power of knowledge to give back to their hometownand promote the development and revitalization of their hometown. After the completion of the 2024 collegeentrance examination, Yunnan Baiyao Group conducted a comprehensive survey of college entrance examinationadmissions in Pantiange Township. After visiting 86 students who were successfully admitted to universities andcolleges in the township and understanding their actual situations, the Company awarded a total of RMB 153,000for scholarships to these students through the “Golden Autumn Scholarship” program, helping them take a solidstep forward in their studies. To ensure that targeted assistance combines both long-term and short-term solutionsand addresses both symptoms and root causes, while providing industrial support, Yunnan Baiyao Group activelyfulfills its corporate social responsibility by continuously carrying out various forms of educational assistance. From2015 to 2024, Yunnan Baiyao, through its “Golden Autumn Scholarship” program, assisted 436 students fromeconomically disadvantaged families in smoothly transitioning to university, with an investment of about RMB650,000 for such scholarship. At the same time, before the Children’s Day, to care for and help children in need,Yunnan Baiyao Group organized its TCM Resources Business Group to carry out the “Student Scholarship onChildren’s Day” activity respectively in Xinle Village and Chazhiluo Village, as well as Tai’an Village, Tai’anTownship, Yulong County, Lijiang City. In these activities, a total of 67 children were given school bags, markers,painting books and other stationery supplies. These practical actions warmed the children’s hearts, and escortedtheir growth.
Sixth, consumer assistance to jointly shaping the vision of rural revitalization. In 2024, Yunnan BaiyaoGroup invested RMB 300,000 to optimize and upgrade the configuration and services of the convenience servicecenter, and establish convenience health service stations, occupational health stations, worker stations, disputemediation rooms, and Party and mass activity centers, so as to continuously promote the reforms to “delegate power,streamline administration and optimize government services,” further enhance the grassroots government servicecapability in Pantiange Township, provide convenience for grassroots people for dealing with affairs, and bettermeet their basic public service needs. At the same time, through the online sales platform for agricultural andsideline products in poverty-stricken areas (“832” platform), the Company purchased RMB 223,000 worth ofagricultural and sideline products. Before the Spring Festival in 2025, the Company purchased a total of 4,637agricultural and sideline products from Diqing Prefecture through the “832 platform,” totaling RMB 436,700,effectively helping farmers solve the problem of no agricultural and sideline product sales channels and increasingtheir income and wealth. Yunnan Baiyao Group fully leveraged its industrial advantages and, through Shangri LaTianquan Chuanbei Technology Co., Ltd, Hezheng Tibetan Medicine Pharmaceutical Co., Ltd, and JingxiangBreeding and Planting Co., Ltd, purchased a total of 36,286.4 kilograms of Fritillaria cirrhosa, Fritillariaunibracteata, fresh Fritillaria, and Dolomiaea costus, as well as 1.5863 million units of Dolomiaea costus(seedlings), amounting to a total investment of RMB 2.316 million, effectively addressing the problem of difficultsales of TCM materials for local farmers and expanding their path to wealth and income increase.
Section VI Significant EventsI.Performance of Commitments
1. Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other RelatedEntities Fulfilled during the Reporting Period or Ongoing at the Period-End?Applicable □Not applicable
| Commitments | Commitment Party | Commitment Type | Contents | Commitment Time | Commitment Period | Performance Status |
| Commitments made in the acquisition report or equity change report | Yunnan Investment Group | Commitments regarding horizontal competition | 1. Our company is not engaged in any business or activity that is the same as, similar to, or resembling, and constitutes or may constitute directly or indirectly a competition in any aspect with, the listed company’s any existing business, nor will we actively provide, in any way, any assistance in finance, business, management, etc. or any trade secrets such as technical information, business operations, sales channels, to any enterprises, agencies or other economic organizations that compete with the listed company in any of its existing business. 2. As of the date of issuance of this commitment letter, our company will legally take necessary and possible measures to avoid, and urge any other enterprises under our actual control to avoid, any businesses or activities that may in any way substantially or potentially constitute a horizontal competition or a conflict of interest, with the principal businesses of the listed company. If, in the future, a material conflict of interest arising from substantial or potential horizontal competition between our company and any enterprises under our control and the listed company, our company and such enterprises under our actual control will | December 10, 2021 | Remain effective during the period of holding indirect stake in Yunnan Baiyao | In progress |
| give up that business opportunity that may result in a material horizontal competition and thus lead to a substantial conflict of interest or take appropriate measures permitted by other laws and regulations to eliminate the potential impact of material horizontal competition. 3. Our company will not, by virtue of any information learned or known from the listed company, assist our company itself or any third party in engaging in any business activities that may in any way substantially or potentially constitute a horizontal competition with the principal businesses of the listed company. | ||||||
| Commitments made in the acquisition report or equity change report | Yunnan Investment Group | Commitments to maintain the independence of the listed company | To protect the legitimate rights and interest of any and all of the shareholders of the listed company, our company undertakes to warrant: 1. The personnel independence of the listed company, that is: (1) The general manager, deputy general manager, CFO, secretary of the Board of Directors, and other senior management personnel of the listed company will work full-time and receive compensation in the listed company, with holding no positions other than directors or supervisors or receiving no compensation in any other enterprises under the control of our company, for continuously maintaining the independence of personnel of the listed company; (2) The listed company has a complete and independent labor, personnel, and salary management system, which is fully independent from our company and any other enterprises under our control; (3) The directors, supervisors, and senior management personnel of the listed company are elected or appointed in accordance with legal procedures, and our company will not interfere with the personnel appointment and removal decisions already made by the Board of Directors and the general meeting of the listed company. 2. The asset independence of the listed company, that is: (1) The listed company has independent and complete assets, all of which are under the control of the listed company and are independently owned and operated by the listed company; | December 10, 2021 | Remain effective during the period of holding indirect stake in Yunnan Baiyao | In progress |
| related party transactions between our company and any other enterprises under our control and the listed company as much as possible, and fairly carry out necessary and inevitable related party transactions at fair prices in accordance with market-oriented principles, with transaction procedures and information disclosure obligations fulfilled in accordance with relevant laws, regulations, and normative documents. 6. The listed company maintains independence from our company and any other enterprises under our control in any other aspects. | ||||||
| Commitments made in the acquisition report or equity change report | Yunnan Investment Group | Commitments regarding related party transactions | 1. After the completion of this equity transfer, our company will consciously safeguard the interest of the listed company and any and all of its shareholders, and minimize and avoid related party transactions with the listed company. We will not, by virtue of our indirect stake in the listed company, seek for improper benefits or harm any interest of the listed company and any and all of its shareholders in related party transactions. 2. Our company does not and will not, by virtue of our indirect stake in the listed company and its own controlling influence, seek from the listed company for better commercial terms for business cooperation than that given to the third parties in the market for itself or for any other enterprises under our control. 3. Our company does not and will not, by virtue of our indirect stake in the listed company and its own controlling influence, seek for privileges for itself or any other enterprises under our control to enter into transactions with the listed company. 4. After completing this equity transfer, our company will strictly adhere to the provisions of the Company Law of the People’s Republic of China, the Articles of Association of Yunnan Baiyao Group, the Rules of Procedure for the General Meetings, and the Decision System for Related Party Transactions of the Listed Company when engaging in inevitable related party transactions with the listed company. We are committed to | December 10, 2021 | Remain effective during the period of holding indirect stake in Yunnan Baiyao | In progress |
| conducting these transactions in a transparent, fair, and equitable manner. This involves adhering to commercial principles such as “fairness, impartiality, and voluntariness.” We will enter into fair and reasonable transaction contracts with the listed company, ensuring that pricing policies are developed based on market fairness, impartiality, and openness. This approach guarantees the fairness of transaction prices. 5. After the completion of this equity transfer, our company and any other enterprises under our control will not illegally occupy the funds and assets of the listed company, and under no circumstances will the listed company be required to provide any form of guarantees to our company or any other enterprises under our control. | ||||||
| Commitments made in the acquisition report or equity change report | State-owned Assets Supervision and Administration Commission of Yunnan Provincial People’s Government (“SASAC of Yunnan Province”), New Huadu | Commitments regarding horizontal competition | In the future, when the time is ripe, SASAC of Yunnan Province and New Huadu shall urge Baiyao Holdings to gradually inject the high-quality assets related to Yunnan Baiyao’s existing business and future development areas into Yunnan Baiyao Group. Both SASAC of Yunnan Province and New Huadu will also strictly comply with the regulations to avoid horizontal competition. | March 23, 2017 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | In progress |
| Commitments made in the acquisition report or equity change report | New Huadu | Commitments regarding related party transactions | 1. New Huadu and any other enterprises under our control will try the best to avoid related party transactions with Yunnan Baiyao. For inevitable related party transactions or those occurring for reasonable reasons, New Huadu will undertake to conduct such transactions on an equal and voluntary basis in the principles of fairness, impartiality, and compensation for equal value, with the transaction prices to be determined based on the reasonable prices recognized in the market. 2. New Huadu and any other enterprises under our control will strictly comply with the avoidance provisions on related party transactions set out in Yunnan Baiyao’s articles of association and in other relevant regulations. All related party transactions | March 23, 2017 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | In progress |
| involved will be carried out in accordance with the decision-making procedures for related party transactions for Yunnan Baiyao, and legal procedures will be followed to ensure not to harm any legitimate rights and interest of Yunnan Baiyao and any other shareholders through related party transactions. 3. If New Huadu and any other enterprises under our control violate any of the above statements and commitments, leading to any damages to any rights and interest of Yunnan Baiyao, New Huadu agrees to bear any and all of the corresponding compensation liabilities for such damages so caused to Yunnan Baiyao. | ||||||
| Commitments made during asset restructuring | State-owned Equity Management Company,New Huadu and its acting-in-concert parties | Commitments regarding related party transactions | 1. State-owned Equity Management Company has undertaken the previous commitments of SASAC of Yunnan Province: After the completion of this significant asset restructuring, SASAC of Yunnan Province will try its best to avoid related party transactions with the listed company. For inevitable related party transactions or those occurring for reasonable reasons, SASAC of Yunnan Province will undertake to conduct such transactions on an equal and voluntary basis in the principles of fairness, impartiality, and compensation for equal value, with the transaction prices to be determined based on the reasonable prices recognized in the market. SASAC of Yunnan Province will strictly comply with the provisions of relevant laws, regulations, normative documents, and the articles of association of the listed company, perform the decision-making procedures and information disclosure obligations for related party transactions, and warrant not to harm any legitimate rights and interest of the listed company and any other shareholders through related party transactions. This commitment letter shall come into effect and be irrevocable as of the date of official signature by SASAC of Yunnan Province. SASAC of Yunnan Province warrants the effective fulfillment of these commitments, and the listed company has the right to supervise its fulfillment of this | October 31, 2018 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | In progress |
| commitment letter. If SASAC of Yunnan Province fails to effectively fulfill this commitment letter, leading to any actual losses to the listed company, SASAC of Yunnan Province will compensate for any and all of such direct or indirect losses so caused to the listed company.2. New Huadu and its acting-in-concert parties undertake that: after the completion of this merger and overall listing, our company/I and any enterprises under our/my control will try the best to avoid related party transactions with the listed company. For inevitable related party transactions or those occurring for reasonable reasons, our company/I undertake (s) to conduct such transactions on an equal and voluntary basis in the principles of fairness, impartiality, and compensation for equal value, with the transaction prices to be determined based on the reasonable prices recognized in the market. Our company/I and any other enterprises under our/my control will strictly comply with the provisions of relevant laws, regulations, normative documents, and the articles of association of the listed company, perform the decision-making procedures and information disclosure obligations for related party transactions, and warrant not to harm any legitimate rights and interest of the listed company and any other shareholders through related party transactions. This commitment letter shall come into effect and be irrevocable as of the date of official signature by our company/me. Our company/I warrant(s) the effective fulfillment of these commitments, and the listed company has the right to supervise the fulfillment of this commitment letter. If our company/I fail(s) to effectively fulfill this commitment letter, leading to any actual losses to the listed company, our company/I will compensate for any and all of such direct or indirect losses so caused to the listed company. | ||||||
| Commitments made during | Jiangsu Yuyue Science & Technology | Commitments regarding related | Jiangsu Yuyue undertakes that: after the completion of this merger and overall listing, our company/I and any enterprises | October 31, 2018 | Remain effective during | Completed |
| asset restructuring | Development Co., Ltd (“Jiangsu Yuyue”) | party transactions | under our/my control will try the best to avoid related party transactions with the listed company. For inevitable related party transactions or those occurring for reasonable reasons, our company undertakes to conduct such transactions on an equal and voluntary basis in the principles of fairness, impartiality, and compensation for equal value, with the transaction prices to be determined based on the reasonable prices recognized in the market. Our company and any other enterprises under our control will strictly comply with the provisions of relevant laws, regulations, normative documents, and the articles of association of the listed company, perform the decision-making procedures and information disclosure obligations for related party transactions, and warrant not to harm any legitimate rights and interest of the listed company and any other shareholders through related party transactions. This commitment letter shall come into effect and be irrevocable as of the date of official signature by our company. Our company warrants the effective fulfillment of these commitments, and the listed company has the right to supervise the fulfillment of this commitment letter. If our company fails to effectively fulfill this commitment letter, leading to any actual losses to the listed company, our company will compensate for any and all of such direct or indirect losses so caused to the listed company. | the period of holding the shares of Yunnan Baiyao (directly and indirectly) | ||
| Commitments made during asset restructuring | State-owned Equity Management Company, New Huadu | Commitments to maintain the independence of the listed company | After the completion of this merger and overall listing, our company/institution will maintain independence from the listed company in terms of personnel, assets, business, institutions, and finance in accordance with relevant laws, regulations, and normative documents. We will not, by virtue of the identity as a related party of the listed company, engage in the acts that affect the independence of the listed company’s personnel, assets, business, institutions, and finances, or harm any rights and interest of the listed company and any other shareholders. Instead, we will effectively ensure the | October 31, 2018 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | In progress |
| independence of the listed company in terms of personnel, assets, business, institutions, finance, etc. This commitment letter shall come into effect and be irrevocable as of the date of official signature by our company/institution. Our company/institution warrants the effective fulfillment of these commitments, and the listed company has the right to supervise the fulfillment of this commitment letter. If our company/institution fails to effectively fulfill this commitment letter, leading to any actual losses to the listed company, our company/institution will compensate for any and all of such direct or indirect losses so caused to the listed company. | ||||||
| Commitments made during asset restructuring | Jiangsu Yuyue | Commitments to maintain the independence of the listed company | After the completion of this merger and overall listing, our company/institution will maintain independence from the listed company in terms of personnel, assets, business, institutions, and finance in accordance with relevant laws, regulations, and normative documents. We will not, by virtue of the identity as a related party of the listed company, engage in the acts that affect the independence of the listed company’s personnel, assets, business, institutions, and finances, or harm any rights and interest of the listed company and any other shareholders. Instead, we will effectively ensure the independence of the listed company in terms of personnel, assets, business, institutions, finance, etc. This commitment letter shall come into effect and be irrevocable as of the date of official signature by our company/institution. Our company/institution warrants the effective fulfillment of these commitments, and the listed company has the right to supervise the fulfillment of this commitment letter. If our company/institution fails to effectively fulfill this commitment letter, leading to any actual losses to the listed company, our company/institution will compensate for any and all of such direct or indirect losses so caused to the listed company. | October 31, 2018 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | Completed |
| Commitments made during | Baiyao Holdings, State-owned Equity | Commitments regarding real | If Yunnan Baiyao and its subsidiaries within the scope of its consolidated financial statements, and, Baiyao Holdings and | December 11, 2018 | Remain effective during | In progress |
| asset restructuring | Management Company, New Huadu | estate business | its subsidiaries within the scope of its consolidated financial statements engaged in any illegal activities in the domestic real estate development business during the reporting period, such as undisclosed land vacancy, speculation of land, property hoarding, and price gouging, which have caused any losses to Yunnan Baiyao and investors, our company/institution will bear any and all of corresponding compensation liabilities for such losses as required by relevant laws, regulations and securities regulatory authorities. | the period of holding the shares of Yunnan Baiyao (directly and indirectly) | ||
| Commitments made during asset restructuring | Jiangsu Yuyue | Commitments regarding real estate business | If Yunnan Baiyao and its subsidiaries within the scope of its consolidated financial statements, and, Baiyao Holdings and its subsidiaries within the scope of its consolidated financial statements engaged in any illegal activities in the domestic real estate development business during the reporting period, such as undisclosed land vacancy, speculation of land, property hoarding, and price gouging, which have caused any losses to Yunnan Baiyao and investors, our company/institution will bear any and all of corresponding compensation liabilities for such losses as required by relevant laws, regulations and securities regulatory authorities. | December 11, 2018 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | Completed |
| Commitments made during asset restructuring | Directors and senior management of the listed company | Commitments regarding real estate business | If Yunnan Baiyao and its subsidiaries within the scope of its consolidated financial statements, and, Baiyao Holdings and its subsidiaries within the scope of its consolidated financial statements engaged in any illegal activities in the domestic real estate development business during the reporting period, such as undisclosed land vacancy, speculation of land, property hoarding, and price gouging, which have caused any losses to Yunnan Baiyao and investors, I will bear any and all of the corresponding compensation liabilities for such losses as required by relevant laws, regulations and securities regulatory authorities. | December 11, 2018 | Remain effective | In progress |
| Commitments made during asset | Baiyao Holdings, State-owned Equity Management Company, | Commitments regarding compensatory | 1.Our company/institution will not interfere with any operation and management activities of the listed company beyond authority, nor will it encroach on any interest of the | December 11, 2018 | Remain effective during the period of | In progress |
| restructuring | New Huadu | measures after dilution of immediate returns | listed company.2.After the date of issuance of this commitment letter, if the securities regulatory authorities make other regulatory requirements regarding compensatory measures and related commitments, and the above commitments fail to meet such new regulatory regulations of the securities regulatory authorities, our company/institution will undertake to issue supplementary commitments in accordance with their then latest relevant regulations.3.Our company/institution undertakes to effectively fulfill the relevant compensatory measures formulated by the listed company and the relevant commitments made by our company/institution. If our company/institution violates these commitments and causes any losses to the listed company or investors, our company/institution is willing to legally bear any and all of the corresponding compensation liabilities for such losses. | holding the shares of Yunnan Baiyao (directly and indirectly) | ||
| Commitments made during asset restructuring | Jiangsu Yuyue | Commitments regarding compensatory measures after dilution of immediate returns | 1.Our company/institution will not interfere with any operation and management activities of the listed company beyond authority, nor will it encroach on any interest of the listed company.2.After the date of issuance of this commitment letter, if the securities regulatory authorities make other regulatory requirements regarding compensatory measures and related commitments, and the above commitments fail to meet such new regulatory regulations of the securities regulatory authorities, our company/institution will undertake to issue supplementary commitments in accordance with their then latest relevant regulations.3.Our company/institution undertakes to effectively fulfill the relevant compensatory measures formulated by the listed company and the relevant commitments made by our company/institution. If our company/institution violates these commitments and causes any losses to the listed company or | December 11, 2018 | Remain effective during the period of holding the shares of Yunnan Baiyao (directly and indirectly) | Completed |
| investors, our company/institution is willing to legally bear any and all of the corresponding compensation liabilities for such losses. | ||||||
| Commitments made during asset restructuring | Directors, supervisors, and senior management of the listed company | Commitments regarding compensatory measures after dilution of immediate returns | 1. I undertake not to transfer benefits to any other units or individuals without compensations or under unfair conditions, nor to harm any interest of the listed company in any other way. 2. I undertake to restrain my official consumption. 3. I undertake not to use the assets of the listed company to engage in investment or consumption activities unrelated to my duties. 4. I undertake that the compensation system to be formulated by the Board of Directors or Remuneration Committee in the future will be linked to the implementation of compensatory measures taken by the listed company. 5. I undertake that the exercise conditions of the listed company’s equity incentives to be announced in the future will be linked to the implementation of the compensatory measures taken by the listed company. 6. I undertake to effectively fulfill the relevant compensatory measures formulated by the listed company and any commitments made by myself regarding compensatory measures. If I violate or refuse to fulfill any of the above commitments, leading to any losses to the listed company or any and all of its shareholders, I’m willing to legally bear any and all of the corresponding compensation liabilities. This commitment letter shall come into effect as of the date of my signature and shall constitute a binding legal document on me upon its effectiveness. If I violate this commitment letter, I’m willing to bear any and all of the corresponding legal liabilities. | December 11, 2018 | Remain effective | In progress |
| Commitments made during asset restructuring | State-owned Equity Management Company, New Huadu | Commitments regarding horizontal competition | 1. State-owned Equity Management Company has undertaken the previous commitments of SASAC of Yunnan Province: In order to avoid horizontal competition with the listed company and safeguard the legitimate rights and interest of the listed company and other shareholders, State-owned Equity Management Company solemnly makes the following | October 31, 2018 | Remain effective during the period of holding the shares of Yunnan Baiyao | In progress |
| statements and commitments: After the completion of this transaction, State-owned Equity Management Company will not directly engage in any businesses that are the same as or similar to, and constitute a competition with, the principal businesses of the listed company.2. New Huadu undertakes that: As of the issuance date of this commitment letter, our company and any enterprises under our control have not invested in any company, enterprise or other operating entity engaged in any business the same as, or similar to, the principal businesses of the listed company or co-operating or co-engaged, with others, in business the same as, or similar to, the principal businesses of the listed company.After the completion of this transaction, our company and any enterprises under our control will not directly or indirectly engage in any form (including but not limited to investment, M&A, affiliation, joint ventures, cooperation, partnership, contracting or leasing operations, and equity participation) in businesses that are the same as or similar to, and constitute a competition with, the principal businesses of the listed company, nor will we directly or indirectly own any absolute or relative control over any other companies, enterprises or operating entities that engage in businesses that are the same as or similar to, and constitute a competition with the principal businesses of the listed company.During the commitment period mentioned above, if the listed company actually further expands its existing principal businesses, and our company and any enterprises under our control have not yet engaged in production or operation of such new businesses, our company and any enterprises under our control will not engage in such new businesses that compete with the principal businesses of the listed company unless the listed company notifies us in writing that it would no longer engage in such new businesses.During the aforementioned commitment period, if our | (directly and indirectly) |
| company and any enterprises under our control obtain from any third party any business opportunity that competes or may compete with the principal businesses of the listed company, we shall immediately notify the listed company. If the listed company provides a positive response that it is willing to take advantage of that business opportunity within the reasonable period specified in the notice, our company and any enterprises under our control will abandon that business opportunity. If our company and any enterprises under our control violate any of the above statements and commitments, leading to any damages to any rights and interest of the listed company, our company agrees to bear any and all of the corresponding compensation liabilities for such damages so caused to the listed company. | ||||||
| Commitments made during asset restructuring | Directors, supervisors, and senior management of the listed company | Commitments regarding the authenticity, accuracy, and completeness of the information provided | Our company/I has/have provided necessary, authentic, accurate, complete, and effective documents, materials, or oral statements and explanations for this transaction at this stage, without any concealments, false records, or significant omissions. The provided copy materials or photocopies are consistent and aligned with the original materials or originals. The signatures and seals on the provided documents and materials are authentic, with necessary legal procedures for such signatures and seals having been fulfilled, and legal authorizations having been obtained. All statements and explanations of facts are consistent with the facts that occurred. According to the progress of this transaction, our company/I will provide relevant information and documents in a timely manner in accordance with relevant laws, regulations, rules, and relevant provisions of the CSRC and the stock exchange, and ensure that the information and documents to be constantly provided still meet the requirements of authenticity, accuracy, completeness, and effectiveness. Our company/I undertake (s) and warrant (s) the information provided or disclosed in this transaction is authentic, accurate, | June 10, 2021 | Remain effective | In progress |
| complete, and effective, without false records, misleading statements, or material omissions, and is/am willing to bear any and all of the corresponding individual and joint legal liabilities for that. | ||||||
| Commitments made during asset restructuring | State-owned Equity Management Company | Commitments regarding the authenticity, accuracy, and completeness of the information provided | As of the date of the issuance of this commitment, our company has provided necessary, authentic, accurate, complete, and effective documents, materials, or oral statements and explanations for this transaction at this stage, without any concealments, false records, or significant omissions. The provided copy materials or photocopies are consistent and aligned with the original materials or originals. The signatures and seals on the provided documents and materials are authentic, with necessary legal procedures for such signatures and seals having been fulfilled, and legal authorizations having been obtained. All statements and explanations of facts are consistent with the facts that occurred. According to the progress of this transaction, our company will provide relevant information and documents in a timely manner in accordance with relevant laws, regulations, rules, and relevant provisions of the CSRC and the stock exchange, and ensure that the information and documents to be constantly provided still meet the requirements of authenticity, accuracy, completeness, and effectiveness. Our company undertakes and warrants the information provided or disclosed in this transaction is authentic, accurate, complete, and effective, without false records, misleading statements, or material omissions, and is willing to bear any and all of the corresponding individual and joint legal liabilities for that. | June 10, 2021 | Remain effective | In progress |
| Commitments made during asset restructuring | New Huadu and its acting-in-concert parties | Commitments regarding the authenticity, accuracy, and completeness of the information | Our company and our acting-in-concert parties have provided necessary, authentic, accurate, complete, and effective documents, materials, or oral statements and explanations for this transaction at this stage, without any concealments, false records, or significant omissions. The provided copy materials or photocopies are consistent and aligned with the original | June 10, 2021 | Remain effective | In progress |
| provided | materials or originals. The signatures and seals on the provided documents and materials are authentic, with necessary legal procedures for such signatures and seals having been fulfilled, and legal authorizations having been obtained. All statements and explanations of facts are consistent with the facts that occurred. According to the progress of this transaction, our company and our acting-in-concert parties will provide relevant information and documents in a timely manner in accordance with relevant laws, regulations, rules, and relevant provisions of the CSRC and the stock exchange, and ensure that the information and documents to be constantly provided still meet the requirements of authenticity, accuracy, completeness, and effectiveness. Our company and our acting-in-concert parties undertake and warrant the information provided or disclosed in this significant asset restructuring is authentic, accurate, complete, and effective, without false records, misleading statements, or material omissions, and are willing to bear any and all of the corresponding individual and joint legal liabilities for that. | |||||
| Commitments made during asset restructuring | Directors, supervisors, and senior management of the listed company | Commitments regarding compensatory measures after diluting immediate returns by this restructuring | 1. I undertake not to transfer benefits to any other units or individuals without compensations or under unfair conditions, nor to harm any interest of the listed company in any other way. 2. I undertake to restrain my official consumption. 3. I undertake not to use the assets of the listed company to engage in investment or consumption activities unrelated to my duties. 4. I undertake that the compensation system to be formulated by the Board of Directors or Remuneration Committee in the future will be linked to the implementation of compensatory measures taken by the listed company. 5. If the listed company subsequently introduces equity incentive policies, I undertake that the exercise conditions of the listed company’s equity incentives to be announced in the future will be linked to the implementation of the compensatory measures taken by the listed company. 6. If, during the period after the date of | June 10, 2021 | Remain effective | In progress |
| issuance of this commitment letter and before the completion of this transaction by the listed company, the CSRC makes other regulatory requirements regarding compensatory measures and related commitments, and the above commitments fail to meet such new regulatory regulations of the CSRC, I undertake to issue supplementary commitments in accordance with the then latest CSRC regulations. 7. If I violate any of the above commitments, leading to any losses to the listed company or investors, I’m willing to legally bear any and all of the corresponding compensation liabilities for such losses so caused to the listed company or investors. | ||||||
| Commitments made during asset restructuring | State-owned Equity Management Company | Commitments to maintain the independence of the listed company, reduce and regulate related party transactions, and avoid horizontal competition | 1. On October 31, 2018, SASAC of Yunnan Province, as a shareholder of the listed company, issued the Commitment Letter of SASAC of Yunnan Province on Maintaining the Independence of the Listed Company, Commitment Letter of SASAC of Yunnan Province on Reducing and Regulating Related Party Transactions, and Commitment Letter of SASAC of Yunnan Province on Avoiding Horizontal Competition. On April 7, 2020, our company issued the Commitment Letter of State-owned Equity Management Company on Its Undertaking of the Relevant Commitments Made in the Process of Yunnan Baiyao’s Merger Transaction by SASAC of Yunnan Province (hereinafter referred to as the “Commitment Letter on Undertaking”), committing to fully undertake, as of the date of completion of this equity transfer (calculated from the date of registration of the underlying equity in the name of our company), the responsibilities and obligations specified in the commitment documents previously made by SASAC of Yunnan Province and continuously effective at the time of this equity transfer as set out in the following list. The list includes the foregoing three commitment letters issued by SASAC of Yunnan Province. 2. As of the date of signing this commitment letter, our company has always strictly fulfilled the commitments to maintain the independence of the listed | June 10, 2021 | Remain effective | In progress |
| company, reduce and regulate related party transactions, and avoid horizontal competition in accordance with the requirements of the Commitment Letter on Undertaking, and has not violated any of the commitments made. After the completion of this transaction, our company will continue to strictly fulfill the Commitment Letter on Undertaking to safeguard the interest of the listed company and any and all of its shareholders. | ||||||
| Commitments made during asset restructuring | New Huadu and itsacting-in-concert parties | Commitments to maintain the independence of the listed company, reduce and regulate related party transactions, and avoid horizontal competition | 1.As of the date of signing this commitment letter, our company has always strictly fulfilled the Commitment Letter on Maintaining the Independence of the Listed Company, Commitment Letter on Reducing and Regulating Related Party Transactions, and Commitment Letter on Avoiding Horizontal Competition all issued on October 31, 2018. Our company’s acting-in-concert parties have always strictly fulfilled the Commitment Letter on Reducing and Regulating Related Party Transactions issued on October 31, 2018, and have not violated any of the commitments made. After the completion of this transaction, our company and our acting-in-concert parties will continue to strictly fulfill this commitment letter to safeguard the interest of the listed company and any and all of its shareholders.2.After the completion of this transaction, our company’s acting-in-concert parties will maintain independence from the listed company in terms of personnel, assets, business, institutions, and finance in accordance with relevant laws, regulations, and normative documents, and will not, by virtue of the identity as a shareholder and a related party of the listed company, engage in the acts that affect the independence of the listed company’s personnel, assets, business, institutions, and finances, or harm any rights and interest of the listed company and other shareholders. Instead, they will effectively ensure the independence of the listed company in terms of personnel, assets, business, institutions, finance, etc. | June 10, 2021 | Remain effective | In progress |
| 3.As of the date of signing this commitment letter, our company’s acting-in-concert parties and any other companies or enterprises under their control have not engaged in any business that constitute a horizontal competition with the principal businesses of the listed company and any other companies or enterprises under its control. In order to avoid horizontal competition with the listed company and safeguard the legitimate rights and interest of the listed company and other shareholders, after the completion of this transaction, our company’s acting-in-concert parties and any other companies or enterprises under their control will not directly engage in businesses that are the same as, or similar to, and constitute a competition with, the principal businesses of the listed company.4. This commitment letter shall come into effect and be irrevocable as of the date of official signature by our company and our acting-in-concert parties. Our company and our acting-in-concert parties warrant the effective fulfillment of these commitments, and the listed company has the right to supervise their fulfillment of this commitment letter. If our company and our acting-in-concert parties fail to effectively fulfill this commitment letter, leading to any actual losses to the listed company, our company and our acting-in-concert parties will compensate for any and all of such direct or indirect losses so caused to the listed company. | ||||||
| Commitments made during asset restructuring | Listed company | Commitments to reduce and regulate related party transactions | During the period when our company is a related party of Shanghai Pharma, our company and any other companies or enterprises under our control will try the best to avoid and reduce related party transactions with Shanghai Pharma and its subsidiaries. For inevitable related party transactions or those occurring for reasonable reasons, our company undertakes to conduct such transactions on an equal and voluntary basis in the principles of fairness, impartiality, and compensation for equal value, with the transaction prices to be determined based | June 10, 2021 | Remain effective | In progress |
| on the reasonable prices recognized in the market. Our company will strictly comply with the provisions of relevant laws, regulations, normative documents, and the Articles of Association of Shanghai Pharma, perform the decision-making procedures and information disclosure obligations for related party transactions, and warrant not to harm any legitimate rights and interest of Shanghai Pharma and any other shareholders through related party transactions. This commitment letter shall come into effect and be irrevocable as of the date of official signature by our company. Our company warrants the effective fulfillment of these commitments, and Shanghai Pharma has the right to supervise the fulfillment of this commitment letter. If our company fails to effectively fulfill this commitment letter, leading to any actual losses to Shanghai Pharma, our company will compensate for any and all of such direct or indirect losses so caused to Shanghai Pharma. | ||||||
| Commitments made during asset restructuring | Listed company | Commitments regarding lock-up shares | Shanghai Pharma’s shares subscribed by our company through this transaction shall not be transferred within 36 months from the end of the issuance of these shares. After the expiration of the aforementioned lockup period, the transfer and trading of such shares shall be handled in accordance with the then effective laws and regulations, as well as the regulations and rules of the CSRC, SZSE, and SHSE. After the completion of this transaction, our company will also arrange a lockup period as described above for our any increased stake in Shanghai Pharma after it issues bonus shares or convert public reserve funds into share capital. | May 11, 2021 | Thirty-six months from the end of the issuance of new shares by Shanghai Pharma | In progress |
| Whether the commitments are fulfilled asscheduled | Yes | |||||
2. Statement of the Company that the assets or projects have met the original profit forecast and the reasons for that if there is a profit forecast for theCompany’s assets or projects and the reporting period is still in the profit forecast period
□Applicable ?Not applicable
II.Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for Non-Operating Purposes
□Applicable ?Not applicable
During the reporting period, there was no occupation of the Company’s capital by the controlling shareholder or any of its related parties for non-operating purposes.III.Non-compliant Provision of External Guarantees
□Applicable ?Not applicable
There was no non-compliant provision of external guarantees during the reporting period.IV.Explanation of the Board on the “Modified Audit Report” for the Latest Period
□Applicable ?Not applicable
V.Explanations Given by the Board of Directors, the Supervisory Committee and Independent Director (if any) Regarding theAuditor’s “Modified Audit Report” on the Financial Statements of the Reporting Period
□Applicable ?Not applicable
VI. Explanation on Changes in Accounting Policies and Accounting Estimates or Rectificationon Significant Accounting Errors as Compared with the Financial Report for the PreviousYear
□Applicable ?Not applicable
There was no change in the accounting policies and accounting estimates or rectification on significant accounting errorsduring the reporting period.VII. Explanation on the Change in Consolidation Scope as Compared with the FinancialReport for the Previous Year?Applicable □Not applicableFor details, please refer to “IX. Changes in the Consolidation Scope” under Section X.VIII. Appointment and Removal of Accounting FirmCurrently engaged accounting firm
| Name of domestic accounting firm | Mazars Certified Public Accountants (SGP) |
| Remuneration for domestic accounting firm (RMB0’000) | 249.8 |
| Number of consecutive years of audit services of the domestic accounting firm | 9 |
| Names of certified public accountants of the domestic accounting firm | Fang Ziwei, Yang Yanling |
| Number of consecutive years of audit services of certified public accountants of the domestic accounting firm | 1 |
Whether to change the accounting firm in the current period?
□ Yes ?No
Engagement of internal control audit accounting firms, financial advisors or sponsors
?Applicable □Not applicable
Thanks to its strong comprehensive strength, Mazars Certified Public Accountants (SGP) has ranked first inthe comprehensive industry ranking of Yunnan Institute of Certified Public Accountants and the bidding ranking ofYunnan SASAC for many years, and fully possesses the experience and ability to provide audit services for listedcompanies. To ensure the smooth progress of the Company’s auditing work, the Company appointed MazarsCertified Public Accountants (SGP) as the Company’s auditor for 2024 (including internal control audit).IX. Delisting after Disclosure of Annual Report
□Applicable ?Not applicable
X. Bankruptcy and Reorganization
□Applicable ?Not applicable
There was no bankruptcy or restructuring related events during the reporting period.XI. Legal Matters?Applicable □Not applicable
| Basic Information of Litigation (Arbitration) | Amount Involved (RMB’0,000) | Any Estimated Liability Caused or Not | Litigation (Arbitration) Progress | Litigation (Arbitration) Trial Results and Impacts | Enforcement of Litigation (Arbitration) Judgments | Disclosure Date | Disclosure Index |
| Yunnan Baiyao Group TCM Resources Co., Ltd (one of the Company’s subsidiaries) vs Chuxiong Linxin Mushroom Developing Co., Ltd. (Contract Dispute) | 368.6 | No | The Supreme People’s Court has disallowed the request for a retrial by Chuxiong Linxin Mushroom Developing Co., Ltd | If payments of both parties payable to each other can be offset against each other, in accordance with the content of the civil judgments, Chuxiong Linxin Mushroom Developing Co., Ltd shall also need to pay Yunnan Baiyao Group TCM Resources Co., Ltd an outstanding payment loss of RMB 2,876,484.81, together with an interestcalculated from the offsetting date based on the above outstanding payment loss and Loan Prime Rate (LPR) published by the National Interbank Funding Center.Meanwhile, Chuxiong Linxin Mushroom Developing Co., Ltd shall also need to compensate Yunnan Baiyao Group TCM Resources Co., Ltd for the prepaid litigation fee of RMB 34,332.00. | The claims were transmitted by means of communication, written reports and other forms through the liaison channel of the Kunming Intermediate Court of the rule of law business environment. The enforcement for debt offsetting was completed on October 24, 2023, with RMB 34.8934 million offset, and RMB 3.686 million subject to further enforcement after discovery of property clues in the future. (In final enforcement, enforcement proceedings will be resumed if continuous follow-up reveals enforceable property) | March 31, 2023 | Annual Report for 2022, Interim Report for 2023, Annual Report for 2023 and Interim Report for 2024 For details, please refer to http://www.cninfo.com.cn. |
| Summary of events not meeting the disclosure standards for beingincluded in significant litigation (arbitration) | 86,224.4 | No | Some cases have been filed to be tried; some are being under trials to be adjudicated; some have been adjudicated; some have been closed. | Summary of litigation events has no significant impact on the Company | Some judgments have come into effect and have been enforced or are being enforced |
XII. Punishments and Rectifications
□Applicable ?Not applicable
There was no punishment or rectification involving the Company during the reporting period.
XIII. Credit Quality of the Company as well as its Controlling Shareholder and De FactoController
□Applicable ?Not applicable
XIV. Significant Related Party Transactions
1. Connected transactions in relation to daily operations
□Applicable ?Not applicable
There were no related party transactions related to daily operations during the reporting period.
2. Related party transactions arising from acquisition or sale of assets or equity
□Applicable ?Not applicable
There were no related party transactions arising from acquisition or sale of assets or equity during the reporting period.
3. Related party transactions regarding joint investments in third parties
□Applicable ?Not applicable
There were no related party transactions regarding joint investments in third parties during the reporting period.
4. Amounts due to and from related parties
□Applicable ?Not applicable
There were no amounts due to and from related parties during the reporting period.
5. Transactions with related finance companies
□Applicable ?Not applicable
There were no deposit, loan, credit or other financial business occurring between the Company and its related financecompanies/related parties.
6. Transactions with related parties by finance company controlled by the Company
□Applicable ?Not applicable
There were no deposit, loan, credit or other financial business occurred between any finance companies under the control of theCompany and related parties.
7. Other significant related party transactions
?Applicable □Not applicableThe Company has made reasonable estimates on various other related party transactions, including purchasesand sales of goods, related to its daily operations, based on the needs of its daily operations in 2024. It is expectedthat the aggregate total amount of daily related party transactions between the Company and Shanghai Pharma, TibetJiushi Zhihe Marketing Co., Ltd and Yuyue Medical in 2024 will be RMB 2,230,000,000, accounting for 5.59% ofthe Company’s audited net assets of RMB 39,879,122,000 as at the end of 2023, which do not need to be reported to
the 2023 shareholders’ meeting for consideration.
The matter has been considered and approved at the third session of the Tenth Board of Directors of theCompany in 2024 and the Shareholders’ Meeting for 2023, details of which are set out in the Announcement on theEstimation of Daily Related Party Transactions for 2024 (Announcement No. 2024-18), the Announcement onResolutions of the Third Session of the Tenth Board of Directors of the Company for 2024 (Announcement No.2024-15), and the Announcement on Resolutions of the Annual General Meeting for 2023 (Announcement No. 2024-
22).
Enquiries on the online disclosure of interim announcement of significant related party transactions
| Name of interim announcement | Date of disclosure of interim announcement | Website on which interim announcement is disclosed |
| Announcement on the Estimation of Daily Related Party Transactions for 2024 | March 29, 2024 | http://www.cninfo.com.cn |
| Announcement on Resolutions of the Third Session of the Tenth Board of Directors of the Company for 2024 | March 29, 2024 | http://www.cninfo.com.cn |
| Announcement on Resolutions of the Annual General Meeting for 2023 | April 24, 2024 | http://www.cninfo.com.cn |
XV. Major Contracts and Their Performance
1.Entrustment, contracting and leases
(1) Entrustment
□Applicable ?Not applicable
There were no entrustment events of the Company during the reporting period.
(2) Contracting
□Applicable ?Not applicable
There were no contracting events of the Company during the reporting period.
(3) Leases
□Applicable ?Not applicable
There were no leases of the Company during the reporting period.
2.Major guarantees
?Applicable ?Not applicable
Unit: RMB’0,000
| Guarantees provided by the Company and its subsidiaries (excluding the guarantees to subsidiaries) | ||||||||||
| Guaranteed party | Disclosure date of related announcement of guarantee quota | Guarantee quota | Actual occurrence date | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Fulfilled or not | Guarantee for a related party or not |
| Yunnan Yuncheng Hospital Management Co., Ltd. | November 24, 2017 | 150,000 | Joint and several liability guarantee | 12 years | Yes | No | ||||
| Total approved limit for guarantees for others during the reporting period (A1) | 0 | Total amount of guarantees for others incurred during the reporting period (A2) | 0 | |||||||
| Total approved limit for guarantees for others at the end of the reporting period (A3) | 0 | Total actual balance of guarantees for others at the end of the reporting period (A4) | 0 | |||||||
| The Company’s guarantee to its subsidiaries | ||||||||||
| Guaranteed party | Disclosure date of related announcement of guarantee quota | Guarantee quota | Actual occurrence date | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Fulfilled or not | Guarantee for a related party or not |
| Guarantee between subsidiaries | ||||||||||
| Guaranteed party | Disclosure date of related announcement of guarantee quota | Guarantee quota | Actual occurrence date | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Fulfilled or not | Guarantee for a related party or not |
| Total amount of guarantees by the Company (i.e., sum of the above 3 items) | ||||||||||
| Total approved limit for guarantees at the end of the reporting period (A3+B3+C3) | 0 | Total actual balance of guarantees at the end of the reporting period (A4+B4+C4) | 0 | |||||||
Note: On April 22, 2024, Yunnan Yuncheng Hospital Management Co., Ltd held a shareholders’ meeting,where the shareholders unanimously agreed to terminate the PPP project for the First Affiliated Hospital of KunmingMedical University Chenggong Hospital (Phase I). They also unanimously agreed to terminate the PPP projectcontract, investment agreement, and the pharmaceutical distribution project agreement. The project company iscurrently in the liquidation stage.Explanations on the specific situation of guarantees provided by composite methods: None.
3. Cash entrusted for wealth management
(1) Entrusted wealth management
?Applicable □Not applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB’0,000
| Type | Source of funding | Amount | Undue amount | Unrecovered overdue amount | Provision for impairment on unrecoveredoverdue amount |
| Bank financial products | Self-owned capital | 290,624.5 | 235,624.5 | 0 | 0 |
| Brokerage financial products | Self-owned capital | 10,000 | 10,000 | 0 | 0 |
| Total | 300,624.5 | 245,624.5 | 0 | 0 | |
Details of high-risk entrusted wealth management products with a significant amount per single item or of low safety andpoor liquidity
□Applicable ?Not applicable
Cases under which it is expected that the principal of entrusted financing cannot be recovered, or there may be othercircumstances that may result in impairment
□Applicable ?Not applicable
(2) Entrusted loan
□Applicable ?Not applicable
The Company did not have any entrusted loan during the reporting period.
4. Other Significant Contracts
□Applicable
?Not applicable There were no other significant contracts of the Company during the reporting period.XVI. Explanation for Other Significant Events
?Applicable □Not applicable
(I) System update
1. On March 28, 2024, the Company held the third session of the Tenth Board of Director in 2024, consideringand approving the Proposal on Revising the Rules of Procedure of the Board of Directors and the Proposal onRevising the Rules of Procedure of the Office Meeting. For details, please refer to the Announcement on Resolutionsof the Third Session of the Tenth Board of Directors of the Company in 2024 (Announcement No. 2024-15) disclosedby the Company on March 30, 2024 at http://www.cninfo.com.cn, the Rules of Procedure of the Board of Directorsand the Rules of Procedure of the Office Meeting.
2. On April 26, 2024, the Company held the fourth session of the Tenth Board of Directors in 2024,considering and approving the Proposal on Formulating the Compliance Management Measures of YunnanBaiyao Group (Trial). For details, please refer to the Announcement on Resolutions of the Fourth Session of the
Tenth Board of Directors of the Company in 2024 (Announcement No. 2024-23) disclosed by the Company athttp://www.cninfo.com.cn and the Compliance Management Measures of Yunnan Baiyao Group (Trial).
3. On August 26, 2024, the Company held the eighth session of the Tenth Board of Directors in 2024,
considering and approving the Proposal on Formulating the Accounting Firm Selection and Employment System,the Proposal on Revising the Internal Audit System, and the Proposal on Revising the Investment and FinancialManagement System. For details, please refer to the Announcement on Resolutions of the Eighth Session of the TenthBoard of Directors of the Company in 2024 (Announcement No. 2024-41) disclosed by the Company on August27, 2024 at http://www.cninfo.com.cn, the Accounting Firm Selection and Employment System of Yunnan BaiyaoGroup, the Internal Audit System of Yunnan Baiyao Group and the Investment and Financial Management Systemof Yunnan Baiyao Group.
4. On October 29, 2024, the Company held the tenth session of the Tenth Board of Directors in 2024,considering and approving the Proposal on Formulating the Intellectual Property Management System and theProposal on Revising the Public Welfare Donation Management Measures. For details, please refer to theAnnouncement on Resolutions of the Tenth Session of the Tenth Board of Directors of the Company in 2024(Announcement No. 2024-49) disclosed by the Company at http://www.cninfo.com.cn, the Intellectual PropertyManagement System of Yunnan Baiyao Group, and the Public Welfare Donation Management Measures of YunnanBaiyao Group.
(II) Shareholding change
1.Expiration of the shareholding reduction plan
On January 17, 2024, the Company disclosed the Announcement on Expiration of the Shareholding ReductionPlan (Announcement No. 2024-01). The Company received the Notice of Voluntary Information Disclosure onExpiration of the Bidding-based Shareholding Reduction Plan and Its Implementation Progress from Jiangsu Yuyue.As of January 13, 2024, the shareholding reduction plan of Jiangsu Yuyue expired and Jiangsu Yuyue completedthis shareholding reduction plan. During the period from July 17, 2023 to January 13, 2024, Jiangsu Yuyuecumulatively reduced, via centralized bidding transactions, its holdings of 35,936,638 outstanding shares of theCompany not subject to trading moratorium, accounting for 1.99997% of the total share capital of the Company.The reduction was consistent with the previously disclosed reduction plan and the amount of the reduction waswithin the scope of the reduction plan.
2. Pledge of certain shares by shareholders and lifting of pledge
(1) On February 28, 2024, the Company disclosed the Announcement on Lifting of Pledge of Certain Sharesby Shareholders (Announcement No. 2024-10). On February 27, 2024, the Company received a notice from theCompany’s shareholder, State-owned Equity Management Company, that State-owned Equity ManagementCompany lifted the pledge of its 71,400,000 shares of the Company (accounting for 3.97% of the total share capital).
(2) On May 17, 2024, the Company disclosed the Announcement on Pledge of Certain Shares by Shareholders(Announcement No. 2024-29). The Company recently received a notice from the Company’s shareholder, NewHuadu, that New Huadu pledged its 46,380,000 shares of the Company (accounting for 2.60% of the total sharecapital).
3. Shareholding increase by shareholders
On August 8, 2024, the Company disclosed the Announcement on Increase in Shareholdings of the Companyby Shareholders of 5% or More and the Subsequent Shareholding Increase Plan (Announcement No. 2024-40).State-owned Equity Management Company increased its shareholding in the Company by 788,660 shares throughthe trading system of Shenzhen Stock Exchange by way of centralized bidding on August 6, 2024, accounting forapproximately 0.0442% of the total share capital of the Company, and the amount of the increase was RMB 40.0168million. State-owned Equity Management Company planned to continue to increase its holdings of the Company’sshares within six months from the date of the first increase (August 6, 2024), and increase its holdings in anaggregate amount (including the amount disclosed herein as having been increased) of not less than RMB 500million and not more than RMB 1,000 million. State-owned Equity Management Company has undertaken not toreduce its holdings of the Company’s shares during the period of increase in holdings and within the statutory period,and it will complete the plan of increase in holdings within the implementation period mentioned above. Thisincrease in shareholding will not result in the Company’s shareholding distribution failing to meet the conditionsfor listing, will not change the situation that the Company has no controlling shareholders or de facto controllers,and will not have a significant impact on the Company’s governance structure.
On November 7, 2024, the Company disclosed the Announcement on Halfway Progress of the ShareholdingIncrease Plan (Announcement No. 2024-54). Yunnan Baiyao recently received the Notice on the Halfway Point ofthe Shareholding Increase Plan for Yunnan Baiyao Group from State-owned Equity Management Company. As atthe date of disclosure of the Announcement, half of the time of the plan to increase the shareholding in YunnanBaiyao Group passed. State-owned Equity Management Company cumulatively increased its shareholding in theCompany by 17,485,863 shares through the trading system of Shenzhen Stock Exchange by way of centralizedbidding transactions, accounting for 0.98% of the total share capital of the Company, and the cumulative amount of
the increase in shareholding was RMB 931,745,852.22 (excluding all kinds of fees and handling charges). As of thedate of disclosure of the Announcement, State-owned Equity Management Company held 467,110,174 shares ofthe Company, representing 26.18% of the total issued shares of the Company.On February 7, 2025, the Company disclosed the Announcement on Expiration and Completion of theShareholding Increase Plan (Announcement No. 2025-07). From August 6, 2024 to February 5, 2025, State-ownedEquity Management Company increased its shareholding in the Company by 17,807,463 shares through the tradingsystem of the Shenzhen Stock Exchange by way of centralized bidding transactions, the number of shares increasedaccounted for 0.9980% of the total share capital of the Company, and the cumulative amount of the increase inshareholding amounted to RMB 950,379,399.02. As of the date of disclosure of the Announcement, the term of theShareholding Increase Plan expired and the Shareholding Increase Plan was completed.(III) Change of use and cancellation of repurchased sharesOn February 8, 2024, the Company disclosed the Announcement on Change of Use and Cancellation of theRepurchased Shares (Announcement No. 2024-04), stating that the Company intends to change the use of the sharesthat have been repurchased by the Company to safeguard the interests of the general investors. The use of therepurchased shares was changed from “for the implementation of the employee stock ownership plan or the shareincentive plan” to “for the cancellation to reduce the registered capital”, i.e., it is proposed to cancel all the12,599,946 shares in the special securities account for repurchase and reduce the registered capital of the Companyaccordingly. The aforesaid matters were considered and approved at the first session of the Tenth Board of Directorsof the Company for 2024 on February 7, 2024 and at the first extraordinary general meeting of the Company for2024 on February 23, 2024, respectively. For details, please refer to the Announcement of Resolutions of the FirstSession of the Tenth Board of Directors in 2024 (Announcement No. 2024-03), the Announcement on Change ofUse and Cancellation of the Repurchased Shares (Announcement No. 2024-04), the Announcement of Resolutionsof the First Extraordinary General Meeting of 2024 (Announcement No. 2024-07) and the Announcement onChange of Use and Cancellation of the Repurchased Shares and Notification to Creditors (Announcement No.2024-08) disclosed by the Company at http://www.cninfo.com.cn. On April 23, 2024, the Company disclosed theAnnouncement on Completion of Cancellation of the Repurchased Shares and Changes in Shares (AnnouncementNo. 2024-21). The Company completed the cancellation of the aforesaid 12,599,946 repurchased shares at theShenzhen Branch of China Securities Depository and Clearing Corporation Limited on April 19, 2024. Uponcompletion of the cancellation of the shares repurchased, the total number of shares of the Company was1,784,262,603.00.
(IV) Application for registration and issuance of ultra short-term financing bondsOn February 26, 2024, the Company received the Notice of Acceptance of Registration (Zhong Shi Xie Zhu[2024] SCP63) from National Association of Financial Market Institutional Investors (the “NAFMII”), which statedNAFMII’s agreement to accept the registration of the Company’s ultra-short-term financing bonds, and indicatedthat the Company registered an amount of RMB 3 billion in the ultra-short-term financing bonds, which will bevalid for 2 years from the date of the notice, and underwritten by the Industrial and Commercial Bank of ChinaLimited. The Company may issue these ultra-short-term financing bonds in tranches during the registered validityperiod, and upon completion of the issuance, the issuance results will be disclosed through the channels recognizedby the Dealers Association. For details, please refer to the Announcement on Approval on Registration of Issuanceof Ultra-short-term Financing Bonds (Announcement No. 2024-11) disclosed by the Company on February 28,2024 at http://www.cninfo.com.cn.On March 20, 2024, the issuance of the Company’s First Tranche of Ultra Short-Term Financing Bonds for2024 valued RMB 1 billion (Sci-Tech Innovation Notes/Rural Revitalization) was completed and the proceeds werereceived in full. For details, please refer to the Announcement on Results of Issuance of the First Tranche of UltraShort-Term Financing Bonds (Sci-Tech Innovation Notes/Rural Revitalization) (Announcement No. 2024-14)disclosed by the Company on March 21, 2024 at http://www.cninfo.com.cn.The First Tranche of Ultra Short-Term Financing Bonds (Sci-Tech Innovation Notes/Rural Revitalization) ofthe Company for 2024 expired on December 15, 2024. The Company completed the payment of principal andinterest of the First Tranche of Ultra Short-Term Financing Bonds (Sci-Tech Innovation Notes/Rural Revitalization)for 2024 on schedule, and the actual amount of the interest payment was RMB 1,017,013,698.63. The documentsin relation to the payment can be found on the website of ChinaMoney (www.chinamoney.com.cn) and the websiteof Shanghai Clearing House (www.shclearing.com). For details, please refer to the Announcement on Completionof Payment for the First Tranche of Ultra Short-Term Financing Bonds (Sci-Tech Innovation Notes/RuralRevitalization) for 2024 (Announcement No. 2024-59) disclosed by the Company at http://www.cninfo.com.cn.(V) R&D projects
1. On May 11, 2024, the Company disclosed the Announcement on the Approval of INR101 Injection for DrugClinical Trial (Announcement No. 2024-26). Yunhe Pharmaceutical (Tianjin) Co., Ltd (“Yunhe Pharmaceutical”),a wholly-owned subsidiary of the Company, recently received the Notification of Approval for Drug Clinical Trial(Notification No. 2024LP01109) issued by the National Medical Products Administration (“NMPA”), which statedthat after examination, the clinical trial application of INR101 Injection (“the Product”) of Yunhe Pharmaceutical
complied with the relevant requirements for drug registration, and it was approved for clinical trials in healthypeople and patients with prostate cancer. For details, please refer to the Interim Report of Yunnan Baiyao Group for2024.
2. On May 11, 2024, the Company disclosed the Announcement on Approval of Flurbiprofen Cataplasms forDrug Clinical Trial (Announcement No. 2024-27). Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd, a wholly-owned subsidiary of the Company, recently received the Notification of Approval for Drug Clinical Trial(Notification No. 2024LP00886) issued by the NMPA, which stated that after examination, Flurbiprofen Cataplasmswas approved for clinical trials for pain relief.
3. On June 27, 2024, the Company held the seventh session of the Tenth Board of Directors for 2024, whichconsidered and approved the Proposal on Introduction of Project KA-1641. The Company was approved to licensein the relevant patents of the antibody drug KA-1641 (the “Underlying Product”) from KYinno Biotechnology Co.,Ltd and carry out the R&D, production and commercialization activities of the Underlying Product worldwide. Fordetails, please refer to the Announcement on Resolutions of the Seventh Session of the Tenth Board of Directors in2024 (Announcement No. 2024-38) and the Announcement on Introduction of Project KA-1641 (AnnouncementNo. 2024-39) disclosed by the Company at http://www.cninfo.com.cn.
(VI) Participation in fund establishment
On November 29, 2024, the Company held the eleventh session of the Tenth Board of Directors, whichconsidered and approved the Proposal on Joint Investment with Professional Investment Institutions to Establish aFund. Under the premise of not affecting the Company’s daily operations and development, and effectivelycontrolling investment risks, the Company agreed to jointly invest with BOC International Capital Limited(hereinafter referred to as “BOC International Capital”) to establish the Yunnan Provincial TCM Big HealthInnovation Fund (provisional name, with the final name subject to approval by the market supervision andadministration authority; hereinafter referred to as the “Fund” or the “Partnership”). The total subscribed capital forthe Partnership is planned to be RMB 7 billion. The Company, as a limited partner, intends to contribute RMB 5billion in its own funds, accounting for 71.43% of the total subscribed capital of the partnership. BOC InternationalCapital, as the general partner, intends to contribute RMB 2 billion in its own funds, accounting for 28.57% of thetotal subscribed capital of the Partnership. For more details, please refer to the Announcement on Resolutions ofEleventh Session of the Tenth Board of Directors (Announcement No. 2024-57) and the Announcement on JointInvestment with Professional Investment Institutions to Establish a Fund (Announcement No. 2024-58) disclosedby the Company at http://www.cninfo.com.cn.
XVII. Significant Events of the Company’s Subsidiaries
?Applicable □Not applicableOn January 30, 2024, YNBY International published announcement according to Listing Rules of Hong KongStock Exchange and the provisions of the laws of Hong Kong that as of the date of announcement, YNBYInternational met the requirements under the resumption guidelines. Trading in its shares had been suspended onthe Hong Kong Stock Exchange with effect from 9:00 a.m. on June 21, 2022 at its own request. As the resumptionguidelines had been fully met to the satisfaction of the Hong Kong Stock Exchange, YNBY International applied tothe Hong Kong Stock Exchange for the resumption of trading in the shares with effect from 9:00 a.m. on January31, 2024. For details, please refer to the Announcement on Progress of Matters Relating to YNBY International(Announcement No. 2024-02) disclosed by the Company on February 1, 2024 at http://www.cninfo.com.cn.On October 29, 2024, the convertible bonds of YNBY International expired. As considered and approved bythe tenth session of the Tenth Board of Directors of Yunnan Baiyao in 2024, it was agreed that the convertible bondsof YNBY International held by the Company would be exercised and converted into shares, in accordance with theprovisions of the Supplementary Agreement to the Convertible Bond Subscription Agreement and other relevantagreements entered between the Company and YNBY International. Pursuant to the relevant agreement arrangement,the Company will exercise the right to convert the shares and the related matters of the trust products involved inaccordance with the determined scheme and operational procedures after the amount of public shareholding ofYNBY International meets the conversion requirements. For details, please refer to the Announcement onResolutions of the Tenth Session of the Tenth Board of Directors in 2024 (Announcement No. 2024-49) disclosedby the Company on October 30, 2024 at http://www.cninfo.com.cn.
Section VIIChanges in Shareholdings and Particulars about
Shareholders
I. Changes in Shares
1. Changes in shares
Unit: share
| Before this change | Increase/decrease (+, -) | After this change | |||||||
| Quantity | Proportion | New shares | Bonds Shares | Capital reserve converted into share capital | Others | Subtotal | Quantity | Proportion | |
| I. Shares subject to trading moratorium | 11,567,358 | 0.64% | 0 | 0 | 0 | 0 | 0 | 11,567,358 | 0.65% |
| 1. State-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. Shares held by state-owned legal persons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Shares held by other domestic shareholders | 11,567,358 | 0.64% | 0 | 0 | 0 | 0 | 0 | 11,567,358 | 0.65% |
| Of which: shares held by domestic legal persons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by domestic natural persons | 11,567,358 | 0.64% | 0 | 0 | 0 | 0 | 0 | 11,567,358 | 0.65% |
| 4. Foreign-invested shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Of which: shares held by overseas legal persons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by overseas natural persons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Shares not subject to trading moratorium | 1,785,295,191 | 99.36% | 0 | 0 | 0 | -12,599,946 | -12,599,946 | 1,772,695,245 | 99.35% |
| 1. RMB-denominated ordinary shares | 1,785,295,191 | 99.36% | 0 | 0 | 0 | -12,599,946 | -12,599,946 | 1,772,695,245 | 99.35% |
| 2. Domestic- | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| listed foreign shares | |||||||||
| 3. Overseas-listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total number of shares | 1,796,862,549 | 100.00% | 0 | 0 | 0 | -12,599,946 | -12,599,946 | 1,784,262,603 | 100.00% |
Reasons for changes in shareholdings?Applicable □Not applicableTo safeguard the interests of investors, the Company held a general meeting of shareholders in February 2024and approved to change the use of the 12,599,946 shares repurchased to “for the cancellation to reduce the registeredcapital”, with the cancelled shares accounting for approximately 0.7015% of the Company’s total share capital. InApril 2024, the Company completed the cancellation of the 12,599,946 repurchased shares mentioned above.
Approval of changes in shareholdings?Applicable □Not applicableAt the first session of the Tenth Board of Directors in 2024 held on February 7, 2024 and the First ExtraordinaryGeneral Meeting in 2024 held on February 23, 2024, the Proposal on Change of Use and Cancellation of theRepurchased Shares was considered and approved, agreeing the Company to change the use of the 12,599,946shares that had been repurchased as mentioned above in the special securities account for repurchases. The use ofthe repurchased shares was changed from “for the implementation of the employee stock ownership plan or theshare incentive plan” to “for the cancellation to reduce the registered capital.” The Company completed thecancellation of 12,599,946 shares in the special securities account for repurchase at the Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited on April 19, 2024.
Transfers for changes in shareholdings
□Applicable ?Not applicable
The impact of changes in shareholdings on financial indicators such as basic and diluted earnings per share, net assets per shareattributable to the Company’s ordinary shareholders for the latest year and period?Applicable □Not applicableTo safeguard the interests of investors, the Company held a general meeting of shareholders in February 2024and approved to change the use of the 12,599,946 shares repurchased to “for the cancellation to reduce the registeredcapital”, with the cancelled shares accounting for approximately 0.7015% of the Company’s total share capital. InApril 2024, the Company completed the cancellation of the 12,599,946 repurchased shares mentioned above.Before the cancellation was completed, the Company’s total share capital was 1,796,862,549 shares. After thecancellation, the total share capital of the Company was 1,784,262,603 shares. Based on the total share capitalbefore the cancellation, the Company’s basic earnings per share for 2024 were RMB 2.64 per share, diluted earnings
per share were RMB 2.64 per share, and the net assets per share attributable to ordinary shareholders were RMB
21.61 per share. Based on the total share capital after the cancellation, the basic earnings per share were RMB 2.66per share, diluted earnings per share were RMB 2.66 per share, and the net assets per share attributable to ordinaryshareholders were RMB 21.76 per share. Other disclosures the Company deems necessary or required by securities regulators □Applicable ?Not applicable
2.Changes in shares subject to trading moratorium
?Applicable □Not applicable
Unit: share
| Name of shareholder | Number of shares subject to trading moratorium at the beginning of the reporting period | Increase in shares subject to trading moratorium during the reporting period | Number of shares released from trading moratorium during the reporting period | Number of shares subject to trading moratorium at the end of the reporting period | Reason for moratorium | Date of shares released from trading moratorium |
| Yu Juan | 105,000 | 35,000 | 35,000 | 105,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Yin Pinyao | 252,000 | 84,000 | 84,000 | 252,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Yang Yong | 75,768 | 0 | 0 | 75,768 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Wang Minghui | 756,000 | 0 | 0 | 756,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Wang Jin | 378,000 | 0 | 0 | 378,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Qin Wanmin | 378,000 | 0 | 0 | 378,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Li Jin | 42,000 | 0 | 0 | 42,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Chen Yanhui | 133,009 | 44,336 | 44,336 | 133,009 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Chen Fashu | 9,395,621 | 3,131,874 | 3,131,874 | 9,395,621 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Dong Ming | 9,960 | 0 | 0 | 9,960 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Zhu Zhaoyun | 42,000 | 0 | 0 | 42,000 | Locked-up shares held by senior management | Implemented in accordance with regulatory requirements |
| Total | 11,567,358 | 3,295,210 | 3,295,210 | 11,567,358 | -- | -- |
II. Issuance and Listing of Securities
1. Issuance of securities (preferred shares excluded) during the reporting period
□Applicable ?Not applicable
2. Changes in the Company’s total number of shares, structure of shareholders and structure of assets andliabilities?Applicable □Not applicableAt the first session of the Tenth Board of Directors in 2024 held on February 7, 2024 and the First ExtraordinaryGeneral Meeting in 2024 held on February 23, 2024, the Proposal on Change of Use and Cancellation of theRepurchased Shares was considered and approved, agreeing the Company to change the use of the 12,599,946shares that had been repurchased as mentioned above in the special securities account for repurchases. The use ofthe repurchased shares was changed from “for the implementation of the employee stock ownership plan or theshare incentive plan” to “for the cancellation to reduce the registered capital.” The Company completed thecancellation of 12,599,946 shares in the special securities account for repurchase at the Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited on April 19, 2024. The total share capital of the Companywas changed from 1,796,862,549 shares to 1,784,262,603 shares.
3. Existing staff shares
□Applicable ?Not applicable
III. Particulars about shareholders and de facto controller
1. Number of shareholders of the Company and their shareholdings
Unit: share
| Total number of ordinary shareholders at the end of the | 162,132 | The total number of ordinary shareholders at the end of the preceding month prior to the disclosure date of the annual | 167,861 | Total number of preferred shareholders with resumed voting rights at the end of the reporting period (if | 0 | The total number of preferred shareholders with resumed voting rights at the end of the preceding month prior to the disclosure date | 0 |
| reporting period | report | any) | of the annual report (if any) | ||||||
| Shareholdings of shareholders holding more than 5% of the shares or the top 10 shareholders (excluding share lending via securities financing) | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Number of shares held at the end of the reporting period | Change during the reporting period | Number of shares subject to trading moratorium | Number of shares not subject to trading moratorium | Pledged, marked or frozen | ||
| Status | Quantity | ||||||||
| Yunnan State-owned Equity Operation Management Co., Ltd. | State-owned legal person | 26.18% | 467,110,174 | 17485863 | 0 | 467,110,174 | Pledged | 119,343,840.00 | |
| New Huadu Industrial Group Co., Ltd. | Domestic non state-owned legal person | 24.42% | 435,742,244 | 0 | 0 | 435,742,244 | Pledged | 336,894,000.00 | |
| Yunnan Hehe (Group) Co., Ltd. | State-owned legal person | 8.19% | 146,185,851 | 0 | 0 | 146,185,851 | Not applicable | 0 | |
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 3.65% | 65,212,729 | -1,648,336 | 0 | 65,212,729 | Not applicable | 0 | |
| China Securities Finance Corporation Limited | Domestic non state-owned legal person | 2.09% | 37,373,108 | 0 | 0 | 37,373,108 | Not applicable | 0 | |
| Central Huijin Asset Management Ltd. | State-owned legal person | 0.93% | 16,617,440 | 0 | 0 | 16,617,440 | Not applicable | 0 | |
| China Construction Bank - E Fund CSI 300 Health & Medicine Traded Open-ended Index Securities Investment Fund | Others | 0.92% | 16,478,306 | 5,178,540 | 0 | 16,478,306 | Not applicable | 0 | |
| ICBC - Huatai PineBridge CSI 300 Open-ended Index Securities Investment Fund | Others | 0.86% | 15,319,784 | 8,829,000 | 0 | 15,319,784 | Not applicable | 0 | |
| UBS Asset Management (Singapore) Ltd.-UBS LuxInvestment SICAV | Others | 0.73% | 13,099,628 | -3,169,000 | 0 | 13,099,628 | Not applicable | 0 | |
| Chen Fashu | Domestic natural person | 0.70% | 12,527,495 | 0 | 9,395,621 | 3,131,874 | Not applicable | 0 | |
| Strategic investors or general legal persons who become the top | Not applicable | ||||||||
| 10 shareholders due to rights issue (if any) | |||
| Related or acting-in-concert parties among the shareholders above | Chen Fashu is the de facto controller of New Huadu Industrial Group Co., Ltd. It is unclear whether there are any related relationships among other shareholders or whether there is any concerted action as defined by the Administrative Measures for Information Disclosure of Changes in Shareholdings of Shareholders of Listed Companies. | ||
| Above shareholders involved in entrusting/being entrusted with voting rights and giving up voting rights | Not applicable | ||
| Special account for share repurchases (if any) among the top 10 shareholders (if any) | Not applicable | ||
| Shareholdings of the top 10 shareholders not subject to trading moratorium (excluding share lending via securities financing and lock-up shares for senior management) | |||
| Name of shareholder | Number of shares not subject to trading moratorium held at the end of the reporting period | Type of shares | |
| Type | Quantity | ||
| Yunnan State-owned Equity Operation Management Co., Ltd. | 467,110,174.00 | RMB-denominated ordinary shares | 467,110,174.00 |
| New Huadu Industrial Group Co., Ltd. | 435,742,244.00 | RMB-denominated ordinary shares | 435,742,244.00 |
| Yunnan Hehe (Group) Co., Ltd. | 146,185,851.00 | RMB-denominated ordinary shares | 146,185,851.00 |
| Hong Kong Securities Clearing Company Limited | 65,212,729.00 | RMB-denominated ordinary shares | 65,212,729.00 |
| China Securities Finance Corporation Limited | 37,373,108.00 | RMB-denominated ordinary shares | 37,373,108.00 |
| Central Huijin Asset Management Ltd. | 16,617,440.00 | RMB-denominated ordinary shares | 16,617,440.00 |
| China Construction Bank - E Fund CSI 300 Health & Medicine Traded Open-ended Index Securities Investment Fund | 16,478,306.00 | RMB-denominated ordinary shares | 16,478,306.00 |
| ICBC - Huatai PineBridge CSI 300 Open-ended Index Securities Investment Fund | 15,319,784.00 | RMB-denominated ordinary shares | 15,319,784.00 |
| UBS Asset Management (Singapore) Ltd.-UBS LuxInvestment SICAV | 13,099,628.00 | RMB-denominated ordinary shares | 13,099,628.00 |
| National Social Security Fund 110 | 11,568,514.00 | RMB-denominated ordinary shares | 11,568,514.00 |
| Related or acting-in-concert parties among the top 10 circulating shareholders not subject to trading moratorium, and between the top 10 circulating shareholders not subject to trading moratorium and the top 10 shareholders | It is unclear whether there are any related relationships among the above-mentioned shareholders or whether there is any concerted action as defined by the Administrative Measures for Information Disclosure of Changes in Shareholdings of Shareholders of Listed Companies. |
| Top 10 ordinary shareholdersinvolved in securities margin trading (if any) | Not applicable |
Shareholders holding more than 5% of the shares, top 10 shareholders and top 10 circulating shareholders not subject to tradingmoratorium involved in lending of shares through refinancing?Applicable □Not applicable
Unit: share
| Shareholders holding more than 5% of the shares, top 10 shareholders and top 10 circulating shareholders not subject to trading moratorium involved in lending of shares through refinancing | ||||||||
| Name of shareholder (full name) | Shareholdings in general and credit accounts at the beginning of the period | Shares lent through refinancing and unreturned at the beginning of the period | Shareholdings in general and credit accounts at the end of the period | Shares lent through refinancing and unreturned at the end of the period | ||||
| Total | Percentage of the total share capital | Total | Percentage of the total share capital | Total | Percentage of the total share capital | Total | Percentage of the total share capital | |
| ICBC - Huatai PineBridge CSI 300 Open-ended Index Securities Investment Fund | 6,490,784 | 0.36% | 312,300 | 0.02% | 15,319,784 | 0.86% | 0 | 0.00% |
| China Construction Bank - E Fund CSI 300 Health & Medicine Traded Open-ended Index Securities Investment Fund | 11,299,766 | 0.63% | 2,242,900 | 0.12% | 16,478,306 | 0.93% | 0 | 0.00% |
Change in top 10 shareholders and top 10 circulating shareholders not subject to trading moratorium from the previous periodresulting from lending/return of shares through refinancing
□Applicable ?Not applicable
Whether the top 10 ordinary shareholders and the top 10 ordinary shareholders not subject to trading moratorium of the Companyconducted any agreed repurchase transactions during the reporting period
□ Yes ?No
The top 10 ordinary shareholders and the top 10 ordinary shareholders not subject to trading moratorium of the Company did notconduct any agreed repurchase transactions during the reporting period.
2. Details about the controlling shareholder
Nature of controlling shareholder: No controlling entityType of controlling shareholder: Does not exist
Description of no controlling shareholders of the Company
On July 3, 2019, the Company purchased 668,430,196 new shares from Baiyao Holdings, its controllingshareholder, and issued these shares in the public market, of which 321,160,222 shares were issued to the SASACof Yunnan Province, 275,901,036 shares to New Huadu, and 71,368,938 shares to Jiangsu Yuyue. Meanwhile, theshares held by Baiyao Holdings in the listed company were cancelled. After this issuance, the SASAC of YunnanProvince, New Huadu, and its acting-in-concert parties both hold 25.14% of the Company’s shares, resulting in noshareholders having control over the Company actually or via shareholdings and the Company becoming anenterprise with no de facto controllers and controlling shareholders.On August 8, 2024, the Company disclosed the Announcement on the Shareholding Increase by ShareholdersHolding More Than 5% of the Company’s Shares and Subsequent Shareholding Increase Plan (Announcement No.2024-40). On August 6, 2024, the State-owned Equity Management Company increased its holdings of theCompany’s shares by 788,660 shares through the Shenzhen Stock Exchange’s trading system via a centralizedbidding transaction, representing approximately 0.0442% of the total share capital, with an investment amount ofRMB 40.0168 million. The State-owned Equity Management Company plans to continue increasing itsshareholding within six months from the initial increase date (August 6, 2024), with a total investment amount(including the already disclosed increase) not less than RMB 50 million and not exceeding RMB 100 million. OnFebruary 7, 2025, the Company disclosed the Announcement on Expiration and Completion of the Shareholder’sShareholding Increase Plan (Announcement No. 2025-07). From August 6, 2024, to February 5, 2025, the State-owned Equity Management Company increased its holdings of the Company’s shares by 17,807,463 shares throughthe Shenzhen Stock Exchange’s trading system via a centralized bidding transaction, representing 0.9980% of thetotal share capital, with a cumulative investment amount of RMB 950,379,399.02. As of the date of thisannouncement, the shareholding increase plan has been completed within the stipulated period. This shareholdingincrease does not result in the Company’s shareholding distribution failing to meet the listing conditions, nor doesit change the Company’s situation of having no controlling shareholder or de facto controller, and it will not have asignificant impact on the Company’s corporate governance structure.After the merger and overall listing completed in July 2019, Baiyao Holdings no longer had any personneland has not conducted any actual operations, only retaining its business registration status. Due to objective reasonssuch as certain land and property not being included in the merger scope and awaiting government designation forthe receiving party, Baiyao Holdings had not yet canceled its corporate status by the end of 2024. According to theReply on Proposed Transfer of Three Assets for Entrusted Management by Yunnan Baiyao Holdings Co., Ltd issuedby the State-owned Assets Supervision and Administration Commission of Kunming Municipal Government,Yunnan Baiyao Holdings Co., Ltd has transferred the three assets with ownership defects involved in the mergerprocess to Kunming State-owned Assets Management Co., Ltd, which was designated by the government fortakeover. In the future, all rights, obligations, benefits, and risks related to these properties will be owned and borneby the receiving party, Kunming State-owned Assets Management Co., Ltd. On March 5, 2025, the YunnanAdministration for Market Regulation issued the Registration Notice ((Yun) Deng Zi [2025] No. 120) regarding thecancellation registration of Baiyao Holdings. As of the date of this report, the cancellation registration proceduresfor Baiyao Holdings have been completed, and the shareholder change registration for the 66.67% equity in
Shanghai Xinhou Asset Management Co., Ltd and the 100% equity in Shenzhen Jurong Commercial Factoring Co.,Ltd, which were spun off from Baiyao Holdings’ wholly-owned subsidiary, Yunnan Baiyao Holdings InvestmentCo., Ltd before the merger and overall listing, has also been completed.Changes in controlling shareholders during the reporting period
□Applicable ?Not applicable
There was no change in the controlling shareholders of the Company during the reporting period.
3. The Company’s de facto controllers and their respective acting-in-concert partiesNature of de facto controllers: No de facto controllersType of de facto controllers: Does not exist.Description of no de facto controllers of the CompanyOn July 3, 2019, the Company purchased 668,430,196 new shares from Baiyao Holdings, its controllingshareholder, and issued these shares in the public market, of which 321,160,222 shares were issued to the SASACof Yunnan Province, 275,901,036 shares to New Huadu, and 71,368,938 shares to Jiangsu Yuyue. Meanwhile, theshares held by Baiyao Holdings in the listed company were cancelled. After this issuance, the SASAC of YunnanProvince, New Huadu, and its acting-in-concert parties both hold 25.14% of the Company’s shares, resulting in noshareholders having control over the Company actually or via shareholdings and the Company becoming anenterprise with no de facto controllers and controlling shareholders.Whether the Company has any shareholders at the ultimate control level with a shareholding of more than 10%
□ Yes ?No
□Shareholders at the ultimate control level with a shareholding of more than 5% ? Shareholders at the ultimate control levelwith a shareholding of less than 5%The Company has no de facto controllers.Change of de facto controllers during the reporting period
□Applicable ?Not applicable
There was no change in the de facto controllers of the Company during the reporting period.
Diagram of property rights and control relationship between the Company and the de facto controller
The de facto controllers of the Company control the Company via trust or other asset management methods
□Applicable ?Not applicable
4. The cumulative number of pledged shares held by the controlling shareholder or the largest shareholderof the Company and their acting-in-concert parties accounts for up to 80% of the total number of shares heldby them in the Company
□Applicable ?Not applicable
5. Other legal-person shareholders holding more than 10% of the shares
?Applicable □Not applicable
| Name of corporate shareholder | Legal representative/Head of the organization | Date of establishment | Registered capital | Main business operations or management activities |
| Yunnan State-owned Equity Operation Management Co., Ltd. | Wang Hongxin | June 21, 2019 | RMB 20,977,469,085.95 | Holding and managing state-owned equity; Equity (including listed company equity) investment, operation, and transfer; Fundraising; Research and consulting services on the structural layout of state-owned capital and industrial development (Business activities that require approval according to the law may be conducted only after obtaining approval from the relevant departments.) |
| New Huadu Industrial Group Co., Ltd. | Chen Fashu | May 4, 1996 | RMB 139,800,000.00 | Wholesale and retail of pre-packaged and bulk food products; Investment, management, and consulting services in the retail industry, interior and exterior decoration, hotel industry, mining industry, hydropower engineering, road and bridge engineering projects, real estate industry, and industrial sector (Business activities that require approval according to the law may be conducted only after obtaining approval from the relevant departments.) |
6. Restricted reduction of shares held by controlling shareholders, de facto controllers, restructuring parties,and other committed entities
□Applicable ?Not applicable
IV. Detailed implementation of share repurchase during the reporting periodImplementation of share repurchase
□Applicable ?Not applicable
Implementation of reduction in repurchased shares via centralized bidding
□Applicable ?Not applicable
Section VIIIPreference Shares
□ Applicable? Not applicable
There were no preference shares in the Company during the reporting period.
Section IX Bonds?Applicable □Not applicableI. Enterprise bonds
□Applicable ?Not applicable
The Company did not have enterprise bonds during the reporting period.II. Corporate bonds
□Applicable ?Not applicable
The Company did not have corporate bonds during the reporting period.III. Debt financing instruments for non-financial enterprises
?Applicable □Not applicable
1. Basic information on debt financing instruments for non-financial enterprises
Unit: RMB 0’000
| Bond name | Abbreviation | Bond code | Issue date | Interest starting date | Maturity date | Bond balance | Interest rate | Debt service method | Trading place |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | 2024 Yunnan Baiyao SCP001 (SciTech Notes) | 012480938 | March 18, 2024 | March 20, 2024 | December 15, 2024 | 100,000 | 2.30% | Lump-sum debt service on maturity | Interbank market |
| Investor suitability arrangements (if any) | For qualified institutional investors | ||||||||
| Applicable trading mechanism | Bid, offer, request for quotation and agreement trading | ||||||||
| Risk of termination of listing and trading (if any) and countermeasures | No | ||||||||
Overdue bonds
□Applicable ?Not applicable
2. Triggering and enforcement of issuer or investor option clauses, investor protection clauses
□Applicable ?Not applicable
3. Information about agents
| Bond name | Agent name | Office address | Name of the undersigned accountant | Contact of the agent | Tel |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | Lead underwriter: Industrial and Commercial Bank of China Limited | No.55 Fuxingmen Inner Street, Xicheng District, Beijing | / | Li Jianing | 010-66108574 |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | Joint underwriter: China CITIC Bank Corporation Limited | Block 1, Courtyard 10, Guanghua Road, Chaoyang District, Beijing | / | Zhao Meixing | 010-66635913 |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | DeHeng (Kunming) Law Offices | 3/F and 4/F, Block B5, Rongcheng Youjun, Xishan District, Kunming City | / | Wang Xiaolei | 0871-63172192 |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | Mazars Certified Public Accountants (SGP) | MAZARS Building, No. 169, Donghu Road, Wuchang District, Wuhan City | Yang Manhui, Yang Fan | Liu Ronghui, Wang Kunbi | 027-86791215 |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | China Lianhe Credi Rating Co., Ltd. | 17/F, PICC Property and Casualty Building, No.2, Jianguomen Wai Street, Chaoyang District, Beijing | / | Pu Yaxiu, Wang Xinglong | 010-85679696 |
Were there any changes in the above agents during the reporting period
□Yes ?No
4. Usage of the funds raised
Unit: RMB0’000
| Name of bond | Total funds raised | Agreed purpose of the funds raised | Amount used | Amount unused | Raised funds’ special account operation information (if any) | Rectification of the violated use of the raised funds (if any) | Consistence with the purpose, usage plan and other agreements as undertaken in the Offering Circular or not |
| 2024 First Tranche of Ultra-short-term Financing Bonds (Sci-Tech Notes/Rural Revitalization) of Yunnan Baiyao Group Co., Ltd. | 100,000 | Used for a supplement to the working capital of the Company and some of its subsidiaries, 30% of which were used for rural revitalization | 100,000 | 0 | None | None | Yes |
The funds raised were used for construction projects
□Applicable ?Not applicable
Changes in the purpose of the funds raised by the above bonds during the reporting period of the Company
□Applicable ?Not applicable
5. Adjustments to credit rating results during the reporting period
□Applicable ?Not applicable
6. Implementation and changes in guarantees, debt-servicing plans and other debt-servicing safeguards duringthe reporting period and their impact on the rights and interests of bond investors
□Applicable ?Not applicable
IV. Convertible corporate bonds
□Applicable ?Not applicable
The Company did not have convertible corporate bonds during the reporting period.
V. Losses in the scope of the consolidated statements during the reporting period exceeding 10% of net assetsat the end of the previous year
□Applicable ?Not applicable
VI. Overdue interest-bearing debts other than bonds at the end of the reporting period
□Applicable ?Not applicable
VII. Violations of rules and regulations during the reporting period
□Yes ?No
VIII. Major accounting data and financial indicators of the Company for the latest two years as at the endof the reporting period
Unit: RMB0’000
| Item | At the end of the reporting period | At the end of the previous year | Increase/decrease at the end of the reporting period compared to the end of the previous year |
| Current ratio | 2.66 | 2.85 | -6.67% |
| Gearing ratio | 26.55% | 25.80% | 0.75% |
| Quick ratio | 2.17 | 2.35 | -7.66% |
| The reporting period | The same period last year | Increase/decrease in the reporting period over the same period last year |
| Net profit after extraordinary profits and losses | 454,071.44 | 379,238.44 | 19.73% |
| EBITDA total debt ratio | 32.32% | 27.32% | 5.00% |
| Interest coverage multiple | 90.98 | 98.13 | -7.29% |
| Cash interest coverage multiple | 70.42 | 100.48 | -29.92% |
| EBITDA interest coverage multiple | 71.87 | 76.46 | -6.00% |
| Loan repayment ratio | 100.00% | 100.00% | 0.00% |
| Interest repayment ratio | 100.00% | 100.00% | 0.00% |
Section XFinancial Statements
I. Audit Report
Body Text of Audit Report
ZHS Zi (2025) No. 1600190To All shareholders of Yunnan Baiyao Group Co., Ltd:
I. Audit OpinionsWe have audited the financial statements of Yunnan Baiyao Group Co., Ltd (“Yunnan Baiyao”), whichcomprise the consolidated and balance sheets of the Company as of December 31, 2024, as well as the consolidatedand income statements of the Company, the consolidated and cash flow statements of the Company, the consolidatedand statements of changes in shareholders’ equity of the Company for 2024 and notes to the financial statements.
In our opinion, the attached financial statements have been prepared in accordance with the provisions of theAccounting Standards for Business Enterprises in all major aspects, and present fairly the consolidated financialposition of Yunnan Baiyao as of December 31, 2024, and the results of its operations and cash flows in 2024.II. Basis for the Audit OpinionWe conduct our audit in accordance with the PRC Standards on Auditing for Certified Public Accountants.Our responsibilities under these standards are further described in the section on “the Certified Public Accountants’Responsibilities for the Audit of the Financial Statements” of our audit report. We are independent of YunnanBaiyao in accordance with the PRC Code of Ethics for Certified Public Accountants and have fulfilled our otherethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.III. Key Audit MattersKey audit matters are those, in our professional judgment, of most significance in our audit of the financialstatements of the current period. The treatment of these matters is based on an audit of the financial statements as awhole and audit opinions therefrom, and we do not express an opinion on these matters separately. We haveidentified the following matters as the key audit matters stated in our audit report.(I) Revenue recognition
| Key Audit Matters | How to treat this matter in the audit? |
| Please refer to Note VI.49 in the financial statements. Yunnan Baiyao’s annual operating income in 2024 was RMB 40.033 billion, of which the main business income was | Our audit procedures for revenue recognition from the principal businesses mainly include:(1) To understand key internal controls relevant to revenue recognition, evaluate the effectiveness of their design and implementation, and test the operational effectiveness of relevant internal controls; |
Type of Audit Opinion
| Type of Audit Opinion | Unqualified opinion |
| Signature Date of Audit Report | March 31, 2025 |
| Name of Audit Body | Mazars Certified Public Accountants (SGP) |
| Document No. of Audit Report | ZHS Zi (2025) No. 1600190 |
| Name of Certified Public Accountant | Fang Ziwei, Yang Yanling |
| Key Audit Matters | How to treat this matter in the audit? |
| RMB 39.984 billion, accounting for 99.88% of the total operating income. Due to the amount of revenue from the main business being significant and a key performance indicator, and thus there was an inherent risk that the Management tends to manipulate the timing of revenue recognition to meet specific objectives or expectations, we identified revenue recognition as a key audit matter. | (2) To examine the Company’s major sales contracts, identify key contract terms and performance obligations related to revenue recognition, and evaluate whether the Company’s revenue recognition policies comply with the requirements of the Accounting Standards for Business Enterprises and are consistently applied;(3) To perform sampling checks on annual sales agreements, sales contracts, delivery notes, invoices, customer receipt documents, and other supporting documents against the corresponding accounting records, evaluate whether the revenue complies with the Company’s revenue recognition accounting policy and verify the accuracy of the recognized revenue amount;(4) To obtain the sales list of the Company for the current year, and analyze procedures for operating income, including analyzing the annual and monthly income of major products, changes in major customers and sales prices, changes in the gross profit margin of major products, and judging the rationality of changes in revenue and gross profit margin of the current year;(5) To select distributor clients, use the National Enterprise Credit Information Publicity System and other resources to query the information on shareholders, directors, and supervisors of the distributors, and check for any undisclosed related party relationships;(6) To conduct confirmation procedure for sales volume, accounts receivable, or contract liabilities of customers based on the sampling;(7) To select a sample for income transactions recorded before and after the balance sheet date, check shipping invoices and other supporting documents, and check subsequent settlements and returns to evaluate whether revenue is recorded in the appropriate accounting period. |
(II) Provision for bad debts of accounts receivable
| Key Audit Matter | How to deal with this matter in the audit? |
| Please refer to Note VI.4 in the financial statements.As of December 31, 2024, Yunnan Baiyao had a balance of accounts receivable of RMB 10.804 billion, and a balance of bad debt reserve of RMB 880 million, all of which were high book value over RMB 9.924 billion. Due to the high book value of accounts receivable, the provision for bad debts of accounts receivable involves significant accounting estimates and judgments, and the recoverability of accounts receivable had a significant impact on the financial statements, we identified the provision for bad debts of accounts receivable as a key audit matter. | Our audit procedures for the provision for bad debts of accounts receivable mainly include:(1) To understand, evaluate, and test the effectiveness of the design and operation of the Company’s internal control key control points related to accounts receivable management;(2) To analyze and confirm the rationality of accounting estimation of bad debt provision of accounts receivable, including the basis for determining the combination of accounts receivable and expecting credit loss rate, and judge of impairment test of accounts receivable assessed individually;(3) To use a sampling method and check the accuracy of the aging analysis table for accounts receivable prepared by the Company;(4) To recalculate the accuracy of the allowance for bad debts as of the balance sheet date based on the Company’s expected credit loss model, independently test recoverability, and examine relevant supporting evidence, including but not limited to post-balance sheet collections, customer credit conditions, business performance, and post-balance sheet transactions, to comprehensively assess their repayment ability. |
IV. Other InformationThe management of Yunnan Baiyao is responsible for the other information, which includes the informationcovered in the annual report, but does not include the financial statements and our audit report.Our audit opinion on the financial statements does not cover the other information and we do not express anyform of verification conclusion thereon.
Given our audit of financial statements, our responsibility is to review other information, and in such process,to judge whether other information is significantly inconsistent with the financial statements or what we learned inthe audit process, or that information seems to be significantly misstated.Where we identify that there is a material misstatement of other information, based on the work we have performed,we will report that fact, but have nothing to report in this regard.V. The Management and the Governance’s Responsibilities for the Financial Statements
The management of Yunnan Baiyao (the “Management”) is responsible for the preparation of financialstatements according to Accounting Standards for Business Enterprises in a fair view, and for designing,implementing, and maintaining necessary internal control to be absent from material misstatement in the financialstatements, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing Yunnan Baiyao’s ability tocontinue as a going concern, disclosing matters related to going concern (as applicable), and applying the going-concern assumption, unless the management intends to liquidate Yunnan Baiyao or cease operations or has norealistic alternative but to do so.
The governance team is responsible for overseeing the financial reporting of Yunnan Baiyao.
VI. Responsibilities of Certified Public Accountants for the Audit of Financial Statements
Our purpose is to obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement due to fraud or error, and to issue an audit report that includes an audit opinion. Ourreasonable assurance is of high level, but is not a guarantee that an audit conducted in accordance with auditingstandards will always detect a material misstatement. Misstatements can result from fraud or error and are generallyconsidered material if, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users made based on these financial statements.
We exercise professional judgment and maintain professional skepticism in performing the audit in accordancewith auditing standards. At the same time, we also conduct the following work:
(I) To identify and assess the risks of material misstatement of the financial statements due to fraud or error,design and implement audit procedures to address these risks, and obtain sufficient and appropriate audit evidenceas the basis for expressing audit opinions. The risk of failing to detect a material misstatement due to fraud is higherthan the risk of failing to detect a material misstatement due to an error, as fraud may involve collusion, forgery,intentional omissions, misrepresentation, or overriding internal controls.
(II) To understand the internal control related to audit to design appropriate audit procedures.
(III) To evaluate the appropriateness of accounting policies adopted and the reasonableness of accountingestimates and related disclosures made by the management.
(IV) A conclusion is made on the appropriateness of the going-concern assumption adopted by theManagement. At the same time, based on the audit evidence obtained, a conclusion is reached on whether there ismaterial uncertainty as to the matters or circumstances that may give rise to significant doubt about Yunnan Baiyao’sability to continue as a going concern. Where we conclude that a material uncertainty exists, auditing standardsrequire us to draw the attention of statement users to the related disclosures therein; where the disclosures areinadequate, no unqualified opinion shall be issued. Our conclusion is based on the information available as of thedate of the audit report. However, future events or circumstances may cause Yunnan Baiyao to be unable to continueas a going concern.
(V) To evaluate the overall presentation, structure, and content of the financial statements and whether thefinancial statements present fairly the underlying transactions and events.
(VI) To obtain sufficient and appropriate audit evidence on the financial information of entities or businessactivities in Yunnan Baiyao to express opinions on the financial statements. We are responsible for the direction,
supervision, and execution of the Group audits. We take full responsibility for the audit opinion.We communicate with the governance team on matters such as planned audit scope, timing, and significantaudit findings, including communicating internal control deficiencies of concern identified in our audit.We also provide a statement to the governance team that we have complied with the ethical requirementsrelated to independence, and communicate with the governance team all relationships and other matters that mayreasonably be perceived to affect our independence, as well as related precautions (if applicable).We determine the matters that are most significant to the audit of the current financial statements in the matterscommunicated to the governance team and therefore such matters constitute key audit matters. We disclose thesematters in our audit report except where public disclosure of the matters is prohibited by law or regulation, or inrare instances, we determine that a matter shall not be disclosed in the audit report if it is reasonably expected thatthe negative consequences of disclosure of the matter in the report will outweigh the benefits to the public interest.
| Mazars Certified Public Accountants (SGP) | Chinese Certified Public Accountants: |
| (Project Partner): | |
| Fang Ziwei | |
| Chinese Certified Public Accountants: | |
| Yang Yanling | |
| Wuhan, China | March 31, 2025 |
II.Financial StatementThe units in the Notes to the Financial Statements are presented in RMB.
1.Consolidated balance sheet
Prepared by Yunnan Baiyao Group Co., Ltd.
December 31, 2024
Unit: RMB
| Item | Closing balance | Opening balance |
| Current assets: | ||
| Cash and bank balance | 10,887,983,161.30 | 14,218,343,076.67 |
| Provision of settlement fund | ||
| Placements with banks and other financial institutions | ||
| Financial assets held for trading | 2,547,113,523.40 | 149,366,687.56 |
| Derivative financial assets | ||
| Notes receivable | 929,651,911.37 | 227,542,572.56 |
| Accounts receivable | 9,923,361,104.39 | 9,966,170,447.21 |
| Accounts receivable financing | 1,887,789,780.16 | 1,590,749,810.74 |
| Prepayment | 303,563,844.07 | 312,298,727.01 |
| Premium receivable | ||
| Reinsurance premium receivable | ||
| Reserves for reinsurance contract receivable | ||
| Other receivables | 108,427,198.33 | 104,050,709.53 |
| Including: Interest receivable | ||
| Dividends receivable | 10,348,033.98 | 4,531,100.00 |
| Financial assets held under resale agreements | ||
| Inventory | 6,294,368,316.30 | 6,442,194,823.67 |
| Including: Data resources | ||
| Contractual assets | ||
| Held-for-sales assets | ||
| Non-current assets due within one year | 480,295,722.22 | 442,772,777.78 |
| Other current assets | 788,108,579.54 | 2,862,076,217.20 |
| Total current assets | 34,150,663,141.08 | 36,315,565,849.93 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Debt investments | ||
| Other debt investment |
| Long-term receivables | ||
| Long-term equity investments | 12,561,276,081.35 | 11,536,660,992.93 |
| Investment in other equity instruments | 71,745,000.00 | 71,745,000.00 |
| Other non-current financial assets | 387,688,897.11 | 324,674,379.63 |
| Investment properties | 49,884,012.15 | 44,104,145.97 |
| Fixed assets | 3,012,878,828.09 | 2,662,900,014.03 |
| Construction in progress | 703,439,112.24 | 529,708,553.58 |
| Productive biological assets | 816,524.85 | 988,424.85 |
| Oil and gas assets | ||
| Right-of-use assets | 291,177,021.52 | 258,319,485.58 |
| Intangible assets | 561,795,787.78 | 583,372,000.59 |
| Including: Data resources | ||
| Development expenses | 25,422,461.13 | 14,452,474.57 |
| Including: Data resources | ||
| Goodwill | 96,963,241.17 | 104,121,771.67 |
| Long-term deferred expenses | 127,081,811.91 | 105,335,550.31 |
| Deferred income tax assets | 756,975,016.74 | 690,869,209.12 |
| Other non-current assets | 116,374,395.93 | 541,475,331.17 |
| Total non-current assets | 18,763,518,191.97 | 17,468,727,334.00 |
| Total assets | 52,914,181,333.05 | 53,784,293,183.93 |
| Current liabilities: | ||
| Short-term loans | 423,380,272.64 | 1,747,303,700.34 |
| Borrowings from the central bank | ||
| Placements from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 1,913,702,684.41 | 1,850,863,313.78 |
| Accounts payable | 4,758,352,403.87 | 4,359,632,642.20 |
| Receipts in advance | 446,673.78 | 486,612.12 |
| Contractual liabilities | 1,916,123,387.16 | 1,739,865,228.75 |
| Financial assets sold under repurchase agreements | ||
| Deposits from customers and interbank | ||
| Customer brokerage deposits | ||
| Acting underwriting of securities | ||
| Payroll payable | 1,283,950,828.82 | 1,067,190,665.08 |
| Taxes and duties payable | 466,603,767.14 | 339,670,850.02 |
| Other payables | 1,386,632,676.75 | 1,025,085,879.54 |
| Including: Interest payable | ||
| Dividends payable | 86,490,742.04 | 86,490,742.04 |
| Fees and commissions payable | ||
| Reinsurance amounts payable | ||
| Held-for-sales liabilities | ||
| Non-current liabilities due within one year | 88,436,075.74 | 74,736,102.58 |
| Other current liabilities | 620,862,624.93 | 532,943,904.40 |
| Total current liabilities | 12,858,491,395.24 | 12,737,778,898.81 |
| Non-current liabilities: | ||
| Reserves for insurance contract | ||
| Long-term loans | 2,100,000.00 | 2,100,000.00 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 190,656,990.23 | 172,347,309.72 |
| Long-term payables | 591,533,288.57 | 631,735,908.04 |
| Long-term payroll payable | 1,296,365.44 | 4,090,687.99 |
| Estimated liabilities | 12,726,280.09 | |
| Deferred income | 295,493,565.32 | 238,811,111.04 |
| Deferred income tax liabilities | 93,867,331.53 | 74,772,071.70 |
| Other non-current liabilities | 1,931,554.36 | 17,296,814.41 |
| Total non-current liabilities | 1,189,605,375.54 | 1,141,153,902.90 |
| Total liabilities | 14,048,096,770.78 | 13,878,932,801.71 |
| Owners’ equity | ||
| Share capital | 1,784,262,603.00 | 1,796,862,549.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 17,637,148,823.48 | 18,246,619,742.09 |
| Less: Treasury stock | 707,428,892.15 | |
| Other comprehensive income | -101,263,356.31 | -89,538,172.13 |
| Special reserves | ||
| Surplus reserves | 2,530,458,968.58 | 2,530,458,968.58 |
| Provision for general risk | ||
| Undistributed profit | 16,981,339,385.76 | 18,102,147,836.12 |
| Total owners’ equity attributable to parent company | 38,831,946,424.51 | 39,879,122,031.51 |
| Minority interests | 34,138,137.76 | 26,238,350.71 |
| Total owners’ equity | 38,866,084,562.27 | 39,905,360,382.22 |
| Total liabilities and owners’ equity | 52,914,181,333.05 | 53,784,293,183.93 |
Legal representative: Dong Ming Accounting officer: Ma Jia Head of accounting center: Xu Jing
2.Balance sheet of parent company
Unit: RMB
| Item | Closing balance | Opening balance |
| Current assets: | ||
| Cash and bank balance | 8,385,552,777.48 | 11,558,478,370.89 |
| Financial assets held for trading | 2,496,810,753.70 | 72,221,202.90 |
| Derivative financial assets | ||
| Notes receivable | 675,593,542.66 | 6,112,294.09 |
| Accounts receivable | 1,940,715,863.84 | 1,330,908,560.96 |
| Accounts receivable financing | 591,699,974.35 | 602,881,796.61 |
| Prepayment | 1,351,285,270.04 | 1,600,931,041.18 |
| Other receivables | 6,501,863,512.27 | 4,127,088,902.76 |
| Including: Interest receivable | ||
| Dividends receivable | 10,348,033.98 | 4,531,100.00 |
| Inventory | 1,160,234,826.84 | 1,462,389,548.82 |
| Including: Data resources | ||
| Contractual assets | ||
| Held-for-sales assets | ||
| Non-current assets due within one year | 480,295,722.22 | 442,772,777.78 |
| Other current assets | 443,410,111.63 | 3,156,374,029.15 |
| Total current assets | 24,027,462,355.03 | 24,360,158,525.14 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 14,927,341,039.68 | 13,882,263,332.22 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 387,188,897.11 | 324,174,379.63 |
| Investment properties | 350,771,014.59 | 319,279,203.56 |
| Fixed assets | 1,657,360,463.22 | 1,406,905,437.93 |
| Construction in progress | 63,945,254.57 | 127,864,253.80 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 195,572,313.66 | 259,635,687.65 |
| Intangible assets | 232,180,054.34 | 283,913,499.08 |
| Including: Data resources | ||
| Development expenses | 25,422,461.13 | 14,452,474.57 |
| Including: Data resources | ||
| Goodwill | ||
| Long-term deferred expenses | 40,087,609.94 | 19,333,368.56 |
| Deferred income tax assets | 387,502,971.84 | 374,888,819.41 |
| Other non-current assets | 404,946,229.16 | 467,069,694.11 |
| Total non-current assets | 18,672,318,309.24 | 17,479,780,150.52 |
| Total assets | 42,699,780,664.27 | 41,839,938,675.66 |
| Current liabilities: | ||
| Short-term loans | 400,133,333.33 | 19,002,863.01 |
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 4,018,681,496.23 | 3,247,231,002.57 |
| Receipts in advance | 355,324.62 | 368,860.80 |
| Contractual liabilities | 1,534,629,073.69 | 1,316,384,668.74 |
| Payroll payable | 940,019,555.32 | 742,388,264.48 |
| Taxes and duties payable | 207,921,216.70 | 53,940,771.05 |
| Other payables | 10,071,969,063.28 | 9,513,887,394.94 |
| Including: Interest payable | ||
| Dividends payable | 86,490,742.04 | 86,490,742.04 |
| Held-for-sales liabilities | ||
| Non-current liabilities due within one year | 15,543,095.75 | 17,766,112.27 |
| Other current liabilities | 102,375,999.95 | 86,664,716.45 |
| Total current liabilities | 17,291,628,158.87 | 14,997,634,654.31 |
| Non-current liabilities: | ||
| Long-term loans | 1,100,000.00 | 1,100,000.00 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 184,260,902.19 | 247,778,172.74 |
| Long-term payables | 591,533,288.57 | 631,735,908.04 |
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 198,493,435.95 | 147,405,764.87 |
| Deferred income tax liabilities | 51,548,686.57 | 48,751,418.36 |
| Other non-current liabilities | 1,931,554.36 | 1,931,554.36 |
| Total non-current liabilities | 1,028,867,867.64 | 1,078,702,818.37 |
| Total liabilities | 18,320,496,026.51 | 16,076,337,472.68 |
| Owners’ equity: |
| Share capital | 1,784,262,603.00 | 1,796,862,549.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 17,839,540,148.42 | 18,449,011,067.03 |
| Less: Treasury stock | 707,428,892.15 | |
| Other comprehensive income | -61,502,389.01 | -54,646,721.46 |
| Special reserves | ||
| Surplus reserves | 2,529,297,618.08 | 2,529,297,618.08 |
| Undisturbed profits | 2,287,686,657.27 | 3,750,505,582.48 |
| Total owners’ equity | 24,379,284,637.76 | 25,763,601,202.98 |
| Total liabilities and owners’ equity | 42,699,780,664.27 | 41,839,938,675.66 |
3.Consolidated income statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Total operating revenue | 40,033,300,814.72 | 39,111,292,156.00 |
| Including: Operating revenue | 40,033,300,814.72 | 39,111,292,156.00 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| II. Total operating cost | 35,206,797,286.50 | 35,082,749,923.97 |
| Including: Operating cost | 28,864,766,205.10 | 28,744,517,640.29 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net provision for insurance liability | ||
| Bond insurance expenses | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 243,117,369.44 | 210,801,478.72 |
| Selling expenses | 4,879,502,036.91 | 4,992,157,591.11 |
| Administrative expenses | 1,037,553,483.87 | 1,058,503,523.90 |
| R&D expenses | 337,413,301.03 | 336,013,434.83 |
| Financial expenses | -155,555,109.85 | -259,243,744.88 |
| Including: Interest expenses | 63,177,001.07 | 49,601,252.93 |
| Interest income | 221,210,259.84 | 315,758,812.17 |
| Plus: other income | 102,009,773.65 | 83,315,147.32 |
| Investment income (loss is indicated with “-”) | 776,937,495.06 | 779,010,728.82 |
| Including: Income from investment in associates and joint ventures | 774,279,535.69 | 628,531,524.35 |
| Investment income from derecognition of financial assets at amortized cost | ||
| Exchange gains (loss is indicated with “-”) | ||
| Net exposure hedging income (loss is indicated with “-”) | ||
| Income from change in fair value (loss is indicated with “-”) | 136,837,009.94 | 123,566,330.46 |
| Credit impairment losses (loss is indicated with “-”) | -39,925,926.62 | -136,455,204.36 |
| Asset impairment losses (loss is indicated with “-”) | -91,230,709.62 | -58,127,562.23 |
| Gains from asset disposal (loss is indicated with “-”) | 490,651.65 | 10,654,438.38 |
| III. Operating profit (loss is indicated with “-”) | 5,711,621,822.28 | 4,830,506,110.42 |
| Plus: Non-operating revenue | 15,483,338.73 | 12,234,049.26 |
| Less: Non-operating expenses | 42,385,497.02 | 24,728,403.02 |
| IV. Total profit (total loss is indicated with “-”) | 5,684,719,663.99 | 4,818,011,756.66 |
| Less: Income tax expenses | 917,647,303.71 | 695,450,660.17 |
| V. Net profit (net loss is indicated with “-”) | 4,767,072,360.28 | 4,122,561,096.49 |
| (I) Classification by operation continuity | ||
| 1. Net profit from continuing operations (net loss is indicated with “-”) | 4,767,072,360.28 | 4,122,561,096.49 |
| 2. Net profit from discontinued operations (net loss is indicated with “-”) | ||
| (II) Classification by ownership | ||
| 1. Net profits attributable to the shareholders of the parent company (net loss to be listed with “-”) | 4,749,415,499.55 | 4,093,782,074.02 |
| 2. Minority interests (net loss to be listed with “-”) | 17,656,860.73 | 28,779,022.47 |
| VI. Other comprehensive income, net of tax | -13,441,329.34 | -21,847,821.78 |
| Other comprehensive income attributable to owners of parent company, net of tax | -11,725,184.18 | -21,450,521.18 |
| (I) Other comprehensive income that cannot be reclassified into profits or losses | -2,067,513.33 | -8,280,710.37 |
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be reclassified into profits or losses under the equity method | -2,067,513.33 | -8,280,710.37 |
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of the enterprise’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified into profits or losses | -9,657,670.85 | -13,169,810.81 |
| 1. Other comprehensive income that can be reclassified into profits or losses under the equity method | -4,787,910.02 | -14,144,538.73 |
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of the financial asset reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserves |
| 6. Exchange differences from translation of statements denominated in foreign currencies | -4,869,760.83 | 974,727.92 |
| 7. Others | ||
| Other comprehensive income attributable to minority interests, net of tax | -1,716,145.16 | -397,300.60 |
| VII. Total comprehensive income | 4,753,631,030.94 | 4,100,713,274.71 |
| Total comprehensive income attributable to owners of parent company | 4,737,690,315.37 | 4,072,331,552.84 |
| Total comprehensive income attributable to minority interests | 15,940,715.57 | 28,381,721.87 |
| VIII. Earnings per share | ||
| (I) Basic earnings per share | 2.66 | 2.29 |
| (II) Diluted earnings per share | 2.66 | 2.29 |
Net profit realized by the combined party in business combination under common control before the business combination in thecurrent period was RMB 0.00, and net profit realized by the combined party in the previous period was RMB 0.Legal representative: Dong Ming Accounting officer: Ma Jia Head of accounting center: Xu Jing
4.Income statement of parent company
Unit: RMB
| Item | 2024 | 2023 |
| I. Operating revenue | 8,867,834,592.37 | 6,881,456,920.60 |
| Less: Operating cost | 3,390,069,517.10 | 3,165,134,772.87 |
| Taxes and surcharges | 108,199,807.24 | 83,265,593.34 |
| Selling expenses | 2,539,960,910.51 | 2,294,245,758.98 |
| Administrative expenses | 565,692,698.02 | 660,823,121.05 |
| R&D expenses | 306,956,428.26 | 250,038,194.42 |
| Financial expenses | -189,731,558.54 | -288,843,660.25 |
| Including: Interest expenses | 22,136,071.12 | 2,525,713.85 |
| Interest income | 210,518,129.74 | 289,024,747.89 |
| Plus: Other income | 33,206,855.90 | 27,816,279.64 |
| Investment income (loss is indicated with “-”) | 2,695,886,407.92 | 741,892,987.96 |
| Including: Income from investment in associates and joint ventures | 772,732,477.51 | 628,517,050.64 |
| Derecognized financial assets measured by amortized cost (loss is indicated with “-”) | ||
| Net exposure hedging income (loss is indicated with “-”) | ||
| Income from changes in fair value (loss is indicated with “-”) | 141,271,168.28 | 107,345,538.18 |
| Credit impairment losses (loss is indicated with “-”) | 1,435,538.26 | -2,956,484.71 |
| Asset impairment losses (loss is indicated with “-”) | -93,877,728.93 | -26,559,432.53 |
| Gains from asset disposal (loss is indicated with “-”) | -771,908.75 | -157,621.90 |
| II. Operating profit (loss is indicated with “-”) | 4,923,837,122.46 | 1,564,174,406.83 |
| Plus: Non-operating revenue | 4,333,688.14 | 5,136,425.36 |
| Less: Non-operating expenses | 29,013,380.31 | 11,785,458.74 |
| III. Total profit (total loss is indicated with “-”) | 4,899,157,430.29 | 1,557,525,373.45 |
| Less: Income tax expenses | 491,752,405.59 | 145,814,042.63 |
| IV. Net profit (net loss is indicated with “-”) | 4,407,405,024.70 | 1,411,711,330.82 |
| (I) Net profit from continuing operations (net loss is indicated with “-”) | 4,407,405,024.70 | 1,411,711,330.82 |
| (II) Net profit from discontinued operations (net loss is indicated with “-”) | ||
| V. Other comprehensive income, net of tax | -6,855,667.55 | -22,425,249.10 |
| (I) Other comprehensive income that cannot be reclassified into profits or losses | -2,067,513.33 | -8,280,710.37 |
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be reclassified into profits or losses under the equity method | -2,067,513.33 | -8,280,710.37 |
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of the enterprise’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income that will be reclassified into profits or losses | -4,788,154.22 | -14,144,538.73 |
| 1. Other comprehensive income that can be reclassified into profits or losses under the equity method | -4,788,154.22 | -14,144,538.73 |
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of the financial asset reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserves | ||
| 6. Exchange differences from translation of statements denominated in foreign currencies | ||
| 7. Others | ||
| VI. Total comprehensive income | 4,400,549,357.15 | 1,389,286,081.72 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5.Consolidated cash flow statement
Unit: RMB
| Item | 2024 | 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services | 43,254,436,486.53 | 40,638,627,018.49 |
| Net increase in customer deposits and placements from financial institutions | ||
| Net increase in borrowings from central bank | ||
| Net increase in placements from other financial institutions |
| Cash received from premiums of original insurance contracts | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits of the insured and investment | ||
| Cash received from interest, fees and commissions | ||
| Net increase in placements from banks and other financial institutions | ||
| Net increase in repurchase business funds | ||
| Net cash received from acting trading of securities | ||
| Receipts from tax refunds | 13,465,000.80 | 4,858,426.21 |
| Other cash receipts related to operating activities | 612,105,342.04 | 689,121,507.54 |
| Subtotal of cash inflows from operating activities | 43,880,006,829.37 | 41,332,606,952.24 |
| Cash paid for goods purchased and services received | 31,321,052,292.37 | 29,797,492,545.65 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits with central bank and other financial institutions | ||
| Cash paid for claim settlements on original insurance contract | ||
| Net increase in placements to banks and other financial institutions | ||
| Cash paid for interest, fees and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 2,787,102,422.47 | 2,585,937,678.63 |
| Payments of all types of taxes | 2,490,279,928.72 | 2,465,312,635.54 |
| Other cash paid relating to operating activities | 2,984,569,043.54 | 2,981,121,744.40 |
| Subtotal of cash outflows from operating activities | 39,583,003,687.10 | 37,829,864,604.22 |
| Net cash flows from operating activities | 4,297,003,142.27 | 3,502,742,348.02 |
| II. Cash flows from investment activities: | ||
| Cash received from disposal of investments | 553,145,988.51 | 2,558,487,934.50 |
| Cash received from returns on investments | 420,227,984.66 | 436,150,493.91 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,832,967.00 | 282,170.75 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Other cash received relating to investment activities | 7,043,006,500.00 | 1,978,176,523.10 |
| Subtotal of cash inflows from investment activities | 8,019,213,440.17 | 4,973,097,122.26 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 675,074,486.64 | 575,507,137.90 |
| Cash paid for acquisition of investments | 3,400,000,000.00 | 73,700,000.00 |
| Net increase in pledged loans | ||
| Net cash paid for acquisition of subsidiaries and other business units | ||
| Other cash paid relating to investment activities | 5,143,140,000.00 | 3,805,309,321.72 |
| Subtotal of cash outflows from investment activities | 9,218,214,486.64 | 4,454,516,459.62 |
| Net cash flows from investment activities | -1,199,001,046.47 | 518,580,662.64 |
| III. Cash flows from financing activities: | ||
| Cash received from absorption of investments | 2,670,000.00 | |
| Including: Cash received from subsidiaries’ absorbing minority shareholder investment | 2,670,000.00 | |
| Cash received from borrowings | 1,886,779,951.02 | 1,376,188,273.49 |
| Other cash received relating to financing activities | 75,292,510.43 | |
| Subtotal of cash inflows from financing activities | 1,962,072,461.45 | 1,378,858,273.49 |
| Cash payments for settlement of debts | 2,833,409,772.47 | 1,424,233,267.77 |
| Cash payments for distribution of dividends and profits or repayment of interest | 5,951,560,088.74 | 2,767,483,369.05 |
| Including: Dividends and profits paid to minority shareholders by subsidiaries | 8,040,928.52 | 19,857,165.96 |
| Other cash payments relating to financing activities | 154,837,764.12 | 105,183,876.26 |
| Subtotal of cash outflows from financing activities | 8,939,807,625.33 | 4,296,900,513.08 |
| Net cash flow from financing activities | -6,977,735,163.88 | -2,918,042,239.59 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 3,497,174.93 | 2,324,684.95 |
| V. Net increase in cash and cash equivalents | -3,876,235,893.15 | 1,105,605,456.02 |
| Plus: Opening balance of cash and cash equivalents | 14,151,765,468.49 | 13,046,160,012.47 |
| VI. Closing balance of cash and cash equivalents | 10,275,529,575.34 | 14,151,765,468.49 |
6.Cash flow statement of parent company
Unit: RMB
| Item | 2024 | 2023 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services | 8,301,980,471.69 | 5,929,733,284.63 |
| Receipts from tax refunds | ||
| Other cash receipts related to operating activities | 5,802,561,355.53 | 5,099,663,267.49 |
| Subtotal of cash inflows from operating activities | 14,104,541,827.22 | 11,029,396,552.12 |
| Cash paid for goods purchased and services received | 2,068,505,819.43 | 1,876,454,451.95 |
| Cash paid to and on behalf of employees | 1,289,767,253.56 | 1,191,675,173.28 |
| Payments of all types of taxes | 1,021,449,917.67 | 858,867,113.63 |
| Other cash paid relating to operating activities | 7,147,859,678.29 | 4,152,898,161.48 |
| Subtotal of cash outflows from operating activities | 11,527,582,668.95 | 8,079,894,900.34 |
| Net cash flows from operating activities | 2,576,959,158.27 | 2,949,501,651.78 |
| II. Cash flows from investment activities: | ||
| Cash received from disposal of investments | 560,000,000.00 | 2,427,269,469.67 |
| Cash received from returns on investments | 420,217,009.66 | 424,094,233.80 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 2,745,268.39 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Other cash received relating to investment activities | 7,042,506,500.00 | 1,772,731,569.97 |
| Subtotal of cash inflows from investment activities | 8,025,468,778.05 | 4,624,095,273.44 |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 272,704,559.21 | 174,741,908.64 |
| Cash paid for acquisition of investments | 3,420,000,000.00 | 108,100,000.00 |
| Net cash paid for acquisition of subsidiaries and other business units | ||
| Other cash paid relating to investment activities | 5,142,640,000.00 | 3,804,472,300.00 |
| Subtotal of cash outflows from investment activities | 8,835,344,559.21 | 4,087,314,208.64 |
| Net cash flows from investment activities | -809,875,781.16 | 536,781,064.80 |
| III. Cash flows from financing activities: | ||
| Cash received from absorption of investments | ||
| Cash received from borrowings | 1,647,553,068.31 | 19,000,000.00 |
| Other cash received relating to financing activities | 75,292,510.43 | |
| Subtotal of cash inflows from financing activities | 1,722,845,578.74 | 19,000,000.00 |
| Cash payments for settlement of debts | 1,267,153,068.31 | |
| Cash payments for distribution of dividends and profits or repayment of interest | 5,891,507,647.80 | 2,712,079,156.56 |
| Other cash payments relating to financing activities | 77,774,307.15 | 2,220,005.75 |
| Subtotal of cash outflows from financing activities | 7,236,435,023.26 | 2,714,299,162.31 |
| Net cash flow from financing activities | -5,513,589,444.52 | -2,695,299,162.31 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 286,219.52 | -473,889.11 |
| V. Net increase in cash and cash equivalents | -3,746,219,847.89 | 790,509,665.16 |
| Plus: Opening balance of cash and cash equivalents | 11,541,299,802.72 | 10,750,790,137.56 |
| VI. Closing balance of cash and cash equivalents | 7,795,079,954.83 | 11,541,299,802.72 |
7.Consolidated statement of changes in owners’ equity
Amount for the current period
Unit: RMB
| 2024 | |||
| Owner’s equity attributable to parent company | |||
| Other equity instruments | |||
Item
ItemShare capital
Share capitalPreferredshares
| Preferred shares | Perpetual bonds | Others |
Capital reserves
| Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Provision for general risk | Undisturbed profits | Others | Subtotal |
Minority
interests
| Minority interests | Total owners’ equity | ||||||||||||
| I. Closing balance of the previous year | 1,796,862,549.00 | 18,246,619,742.09 | 707,428,892.15 | -89,538,172.13 | 2,530,458,968.58 | 18,102,147,836.12 | 39,879,122,031.51 | 26,238,350.71 | 39,905,360,382.22 | ||||
| Plus: Changes in accounting policies | |||||||||||||
| Correction of errors in the prior period | |||||||||||||
| Others | |||||||||||||
| II. Opening balance of the current period | 1,796,862,549.00 | 18,246,619,742.09 | 707,428,892.15 | -89,538,172.13 | 2,530,458,968.58 | 18,102,147,836.12 | 39,879,122,031.51 | 26,238,350.71 | 39,905,360,382.22 | ||||
| III. Increase/decrease for the period (decrease is indicated with “-”) | -12,599,946.00 | -609,470,918.61 | -707,428,892.15 | -11,725,184.18 | -1,120,808,450.36 | -1,047,175,607.00 | 7,899,787.05 | -1,039,275,819.95 | |||||
| (I) Total comprehensive income | -11,725,184.18 | 4,749,415,499.55 | 4,737,690,315.37 | 15,940,715.57 | 4,753,631,030.94 | ||||||||
| (II) Contribution and withdrawal of capital by owners | -12,599,946.00 | -694,828,946.15 | -707,428,892.15 | ||||||||||
| 1. Ordinary shares invested by owners | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||
| 3. Amount of share payment credited to owners’ equity | |||||||||||||
| 4. Others | -12,599,946.00 | -694,828,946.15 | -707,428,892.15 | ||||||||||
| (III) Profit distribution | -5,870,223,949.91 | -5,870,223,949.91 | -8,040,928.52 | -5,878,264,878.43 | |||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||
| 2. Withdrawal of general risk provision |
| 3. Distribution to owners (or shareholders) | -5,870,223,949.91 | -5,870,223,949.91 | -8,040,928.52 | -5,878,264,878.43 | |||||||||
| 4. Others | |||||||||||||
| (IV) Internal carry-over of owner’s equity | |||||||||||||
| 1. Transfer of capital reserves to capital (or share capital) | |||||||||||||
| 2. Transfer of surplus reserves to capital (or share capital) | |||||||||||||
| 3. Covering loss with surplus reserves | |||||||||||||
| 4. Change of defined benefit plan carried forward to retained earnings | |||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||
| 6. Others | |||||||||||||
| (V) Special reserves | |||||||||||||
| 1. Provision for the period | |||||||||||||
| 2. Utilization for the period | |||||||||||||
| (VI) Others | 85,358,027.54 | 85,358,027.54 | 85,358,027.54 | ||||||||||
| IV. Closing balance for the period | 1,784,262,603.00 | 17,637,148,823.48 | -101,263,356.31 | 2,530,458,968.58 | 16,981,339,385.76 | 38,831,946,424.51 | 34,138,137.76 | 38,866,084,562.27 |
Amount for the previous year
Unit: RMB
| 2023 | |||
| Owner’s equity attributable to parent company | |||
| Other equity instruments | |||
Item
ItemShare capital
Share capitalPreferred
shares
| Preferred shares | Perpetual bonds | Others |
Capital reserves
| Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Provision for general risk | Undisturbed profits | Others | Subtotal |
Minorityinterests
| Minority interests | Total owners’ equity | ||||||||||||
| I. Closing balance of the previous year | 1,796,862,549.00 | 18,231,423,838.72 | 707,428,892.15 | -68,087,650.95 | 2,530,458,968.58 | 16,720,444,918.66 | 38,503,673,731.86 | 23,323,529.93 | 38,526,997,261.79 | ||||
| Plus: Changes in accounting policies | |||||||||||||
| Correction of errors in the prior period | |||||||||||||
| Others | |||||||||||||
| II. Opening balance of the current period | 1,796,862,549.00 | 18,231,423,838.72 | 707,428,892.15 | -68,087,650.95 | 2,530,458,968.58 | 16,720,444,918.66 | 38,503,673,731.86 | 23,323,529.93 | 38,526,997,261.79 | ||||
| III. Increase/decrease for the period (decrease is indicated with “-”) | 15,195,903.37 | -21,450,521.18 | 1,381,702,917.46 | 1,375,448,299.65 | 2,914,820.78 | 1,378,363,120.43 | |||||||
| (I) Total comprehensive income | -21,450,521.18 | 4,093,782,074.02 | 4,072,331,552.84 | 28,381,721.87 | 4,100,713,274.71 | ||||||||
| (II) Contribution and withdrawal of capital by owners | -3,648,728.86 | -3,648,728.86 | -8,532,477.14 | -12,181,206.00 | |||||||||
| 1. Ordinary shares invested by owners | -2,230,000.00 | -2,230,000.00 | |||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||
| 3. Amount of share payment credited to owners’ equity | |||||||||||||
| 4. Others | -3,648,728.86 | -3,648,728.86 | -6,302,477.14 | -9,951,206.00 | |||||||||
| (III) Profit distribution | -2,712,079,156.56 | -2,712,079,156.56 | -16,934,423.95 | -2,729,013,580.51 | |||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||
| 2. Withdrawal of general risk provision | |||||||||||||
| 3. Distribution to owners (or shareholders) | -2,712,079,156.56 | -2,712,079,156.56 | -16,934,423.95 | -2,729,013,580.51 | |||||||||
| 4. Others | |||||||||||||
| (IV) Internal carry- |
| over of owner’s equity | |||||||||||||
| 1. Transfer of capital reserves to capital (or share capital) | |||||||||||||
| 2. Transfer of surplus reserves to capital (or share capital) | |||||||||||||
| 3. Covering loss with surplus reserves | |||||||||||||
| 4. Change of defined benefit plan carried forward to retained earnings | |||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||
| 6. Others | |||||||||||||
| (V) Special reserves | |||||||||||||
| 1. Provision for the period | |||||||||||||
| 2. Utilization for the period | |||||||||||||
| (VI) Others | 18,844,632.23 | 18,844,632.23 | 18,844,632.23 | ||||||||||
| IV. Closing balance for the period | 1,796,862,549.00 | 18,246,619,742.09 | 707,428,892.15 | -89,538,172.13 | 2,530,458,968.58 | 18,102,147,836.12 | 39,879,122,031.51 | 26,238,350.71 | 39,905,360,382.22 |
8.Statement of changes in owners’ equity of parent company
Amount for the current period
Unit: RMB
| 2024 | ||
| Other equity instruments | ||
Item
ItemShare capital
Share capitalPreferredshares
| Preferred shares | Perpetual bonds | Others |
Capital reserves
| Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Undisturbed profits | Others | Total owners’ equity | |||
| I. Closing balance of the previous year | 1,796,862,549.00 | 18,449,011,067.03 | 707,428,892.15 | -54,646,721.46 | 2,529,297,618.08 | 3,750,505,582.48 | 25,763,601,202.98 | |||
| Plus: Changes in accounting policies | ||||||||||
| Correction of errors in the prior period | ||||||||||
| Others | ||||||||||
| II. Opening balance of the current period | 1,796,862,549.00 | 18,449,011,067.03 | 707,428,892.15 | -54,646,721.46 | 2,529,297,618.08 | 3,750,505,582.48 | 25,763,601,202.98 | |||
| III. Increase/decrease for the period (decrease is indicated with “-”) | -12,599,946.00 | -609,470,918.61 | -707,428,892.15 | -6,855,667.55 | -1,462,818,925.21 | -1,384,316,565.22 | ||||
| (I) Total comprehensive income | -6,855,667.55 | 4,407,405,024.70 | 4,400,549,357.15 | |||||||
| (II) Contribution and withdrawal of capital by owners | -12,599,946.00 | -694,828,946.15 | -707,428,892.15 | |||||||
| 1. Ordinary shares invested by owners | ||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||
| 3. Amount of share payment credited to owners’ equity | ||||||||||
| 4. Others | -12,599,946.00 | -694,828,946.15 | -707,428,892.15 | |||||||
| (III) Profit distribution | -5,870,223,949.91 | -5,870,223,949.91 | ||||||||
| 1. Withdrawal of surplus reserves | ||||||||||
| 2. Distribution to owners (or shareholders) | -5,870,223,949.91 | -5,870,223,949.91 | ||||||||
| 3. Others | ||||||||||
| (IV) Internal carry-over of owner’s equity |
| 1. Transfer of capital reserves to capital (or share capital) | ||||||||||
| 2. Transfer of surplus reserves to capital (or share capital) | ||||||||||
| 3. Covering loss with surplus reserves | ||||||||||
| 4. Change of defined benefit plan carried forward to retained earnings | ||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||
| 6. Others | ||||||||||
| (V) Special reserves | ||||||||||
| 1. Provision for the period | ||||||||||
| 2. Utilization for the period | ||||||||||
| (VI) Others | 85,358,027.54 | 85,358,027.54 | ||||||||
| IV. Closing balance for the period | 1,784,262,603.00 | 17,839,540,148.42 | -61,502,389.01 | 2,529,297,618.08 | 2,287,686,657.27 | 24,379,284,637.76 |
Amount for the previous year
Unit: RMB
| 2023 | ||
| Other equity instruments | ||
Item
ItemShare capital
Share capitalPreferred
shares
| Preferred shares | Perpetual bonds | Others |
Capital reserves
| Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Undisturbed profits | Others | Total owners’ equity | |||
| I. Closing balance of the previous year | 1,796,862,549.00 | 18,430,166,434.80 | 707,428,892.15 | -32,221,472.36 | 2,529,297,618.08 | 5,050,873,408.22 | 27,067,549,645.59 | |||
| Plus: Changes in accounting policies | ||||||||||
| Correction of errors in the prior period | ||||||||||
| Others | ||||||||||
| II. Opening balance of the current period | 1,796,862,549.00 | 18,430,166,434.80 | 707,428,892.15 | -32,221,472.36 | 2,529,297,618.08 | 5,050,873,408.22 | 27,067,549,645.59 | |||
| III. Increase/decrease for the period (decrease is indicated with “-”) | 18,844,632.23 | -22,425,249.10 | -1,300,367,825.74 | -1,303,948,442.61 | ||||||
| (I) Total comprehensive income | -22,425,249.10 | 1,411,711,330.82 | 1,389,286,081.72 | |||||||
| (II) Contribution and withdrawal of capital by owners | ||||||||||
| 1. Ordinary shares invested by owners | ||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||
| 3. Amount of share payment credited to owners’ equity | ||||||||||
| 4. Others | ||||||||||
| (III) Profit distribution | -2,712,079,156.56 | -2,712,079,156.56 | ||||||||
| 1. Withdrawal of surplus reserves | ||||||||||
| 2. Distribution to owners (or shareholders) | -2,712,079,156.56 | -2,712,079,156.56 | ||||||||
| 3. Others | ||||||||||
| (IV) Internal carry-over of owner’s equity |
| 1. Transfer of capital reserves to capital (or share capital) | ||||||||||
| 2. Transfer of surplus reserves to capital (or share capital) | ||||||||||
| 3. Covering loss with surplus reserves | ||||||||||
| 4. Change of defined benefit plan carried forward to retained earnings | ||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||
| 6. Others | ||||||||||
| (V) Special reserves | ||||||||||
| 1. Provision for the period | ||||||||||
| 2. Utilization for the period | ||||||||||
| (VI) Others | 18,844,632.23 | 18,844,632.23 | ||||||||
| IV. Closing balance for the period | 1,796,862,549.00 | 18,449,011,067.03 | 707,428,892.15 | -54,646,721.46 | 2,529,297,618.08 | 3,750,505,582.48 | 25,763,601,202.98 |
III. Basic Information of the Company
1. Place of registration, form of organization and address of headquarters of the CompanyThe registered address of Yunnan Baiyao Group Co., Ltd is No.3686 Yunnan Baiyao Street, ChenggongDistrict, Kunming, Yunnan Province. The Company is established as a joint-stock limited company with its headoffice located at No.3686 Yunnan Baiyao Street, Chenggong District, Kunming, Yunnan Province.
2. History of the Company
The Company was formerly known as Yunnan Baiyao Factory, which was established in June 1971. On May3, 1993, Yunnan Provincial System Reform Committee approved the establishment of Yunnan Baiyao IndustrialCo., Ltd in the Document Yun Ti Gai [1993] No.48. The Company’s sponsors were Yunnan Baiyao Factory,Yunnan Fudian Trust and Investment Company and Lianjiang International Trade Co., Ltd. On June 18, 1993,the Economic System Reform Commission and the Planning Commission of Yunnan Province jointly issued theDocument Yun Ti Gai [1993] No.74 to approve the Company’s public offering of RMB 20 million of individualshares (in the par value of the shares). On June 24, 1993, the Administration of State-owned Assets of YunnanProvince issued the Document Yun Guo Zi Zi (1993) No.37 to confirm the appraisal results of Yunnan BaiyaoFactory and decided to set up RMB 40 million of national capital stock, amounting to 40 million shares. YunnanBaiyao Industrial Co., Ltd was approved by CSRC under the Document Zheng Jian Fa Shen Zi (1993) No.55 toissue 20 million RMB-denominated ordinary shares to the public. Yunnan Baiyao issued 20 million shares to thepublic in November 1993, of which 18 million shares were issued to the public individuals and 2 million sharesto the Company’s internal employees.On November 30, 1993, the Company was registered as a joint-stock limited company with theAdministration for Industry and Commerce of Yunnan Province, and on December 15, 1993, the public sharesissued by the Company were listed on the Shenzhen Stock Exchange, with a total share capital of 80 millionshares and a stock code of “000538.”In accordance with the resolutions passed at the third Extraordinary General Meeting of the fifth Board ofDirectors of the Company in 2008 on August 11, 2008, and at the first Extraordinary General Meeting of theCompany in 2008 on August 27, 2008, and the approval by the CSRC on the Document (2008) No.1411 Reply onApproving the Private Issuance of Shares of Yunnan Baiyao Group Co., Ltd, the Company issued 50,000,000 newshares to Ping An Life Insurance Company of China Limited in a private offering, raising funds of RMB1,393,500,000.00 (including issuance expenses), all of which were subscribed in cash. The share capital of theCompany increased from 484,051,138 shares to 534,051,138 shares after the implementation of the aboveprivate offerings.In accordance with the 2009 Annual Equity Distribution Plan approved at the General Meeting of the Companyin May 2010, 3 shares were issued to all shareholders from the capital reserve as a bonus for every 10 shares held.The Company’s share capital amounted to 534,051,138 shares prior to the distribution, and the total share capitalincreased to 694,266,479 shares after the distribution.The 2013 Annual General Meeting was held on May 8, 2014, and in accordance with the resolution of themeeting and the amended articles of association, the shareholders of the Company increased the registered capitalby RMB 347,133,239.00. The newly registered capital would be increased by the distribution of 5 bonus shares for
every 10 shares to all shareholders based on the Company’s existing total share capital of 694,266,479 shares. Afterthe change, the share capital of the Company increased from 694,266,479 shares to 1,041,399,718 shares.The Company underwent a merger and overall listing with Baiyao Holdings by issuing shares to threeshareholders of Baiyao Holdings: SASAC of Yunnan Province, New Huadu and Jiangsu Yuyue. This merger andoverall listing were successfully completed on June 1, 2019, with the Company as the existing entity. As a result,the Company acquired all the assets, liabilities, businesses, contracts, and other rights and obligations of BaiyaoHoldings. Following the completion of the transaction, the 432,426,597 shares of the listed company previouslyheld by Baiyao Holdings were canceled. The merger and overall listing brought in a newly registered capital ofRMB 236,003,599.00, and the Company’s total share capital amounted to RMB 1,277,403,317.00 after this change.A total of 236,003,599 newly issued shares subject to trading moratorium were issued, with a listing date of July 3,2019, and the shares were listed on the Shenzhen Stock Exchange. Upon completion of this transaction, SASAC ofYunnan Province and New Huadu with its acting-in-concert parties, were equally the largest shareholder of theCompany, and neither of them obtained control over the Company.On May 22, 2020, SASAC of Yunnan Province transferred its 321,160,222 shares of the Company to State-owned Equity Management Company at nil consideration. Upon completion of this transfer, State-owned EquityManagement Company and New Huadu with its acting-in-concert parties, were equally the largest shareholder ofthe Company, and there was no change in the Company’s situation of not having a de facto controller or controllingshareholder.On December 8, 2021, SASAC of Yunnan Province transferred 100% of its shares of State-owned EquityManagement Company into Yunnan Investment Group. After the equity transfer, Yunnan Investment Group held321,160,222 shares of the Company through the State-owned Equity Management Company, accounting for 25.04%of the total share capital of the Company. State-owned Equity Management Company and New Huadu with its acting-in-concert parties, were equally the largest shareholder of the Company, and there was no change in the Company’ssituation of not having a de facto controller or controlling shareholder.On April 20, 2022, the Company’s 2021 Annual Equity Distribution Plan had been considered and approvedat the Company’s 2021 Annual General Meeting, and the details of 2021 Annual Equity Distribution Plan were asfollows: Based on the total share capital on the equity registration date when the distribution plan was implementedin the future, a cash dividend of RMB 16.00 (including tax) for every 10 shares and 4.00 bonus shares (includingtax) for every 10 shares would be distributed to all shareholders, and there would be no conversion of share capitalfrom the capital reserve. On April 21, 2020, the fourth session of the ninth Board of Directors of the Company in2020 and the third session of the ninth Supervisory Committee of the Company in 2020 respectively consideredand approved the Proposal on Granting Stock Options (Initially Granted Part) to Incentive Participants of the 2020Equity Incentive Plan. As of December 31, 2022, the Company had completed distributing dividends of513,206,278 shares and stock exercises of 941,029 shares, increasing its share capital to 1,796,862,549 shares.On April 23, 2024, the Company disclosed the Announcement on Completion of Cancellation of theRepurchased Shares and Changes in Shares (Announcement No. 2024-21). The Company completed thecancellation of the aforesaid 12,599,946 repurchased shares at the Shenzhen Branch of China Securities Depositoryand Clearing Corporation Limited on April 19, 2024. Upon completion of the cancellation of the shares repurchased,the total number of shares of the Company was 1,784,262,603.00. The shares repurchased for cancellation will not
have a material impact on the Company’s financial condition and operating results.
As of December 31, 2024, the Company has a total capital of 1,784,262,603 shares, with 0 shares in treasury.The situation that the Company has no de facto controller and no controlling shareholder remain unchanged.
3. Business nature and principal businesses of the Company
The business nature and operating activities of the Company and its subsidiaries (collectively referred to asthe “Group”) mainly include: R&D, manufacturing, and sales of chemical APIs, chemical preparations, Chinesepatent medicines, TCM materials, biological products, medical devices, healthcare food, food, beverages, speciallabor protection products, non-household textile products, daily chemical products, cosmetics, outdoor products;Sales of rubber pastes, plasters, disinfectant products, electronic and digital products; Information technology,science and technology and economic and technological consulting services; Import and export of goods; Propertyoperation and management (carrying out business activities with qualification certificates), wholesale and retail ofdrugs, logistics and distribution, etc (For items that require approval according to law, business activities of theseprojects can only be carried out after approval by relevant departments).
4. These financial statements were approved for reporting by a resolution of the Board of Directors ofthe Company dated March 31, 2025.
As of December 31, 2024, there were 111 subsidiaries and structured entities included in the scope of theGroup’s consolidated financial statements. For details, please refer to Note IX “Interest in Other Entities.” TheGroup had 5 new entities included in its consolidated financial statements compared to the end of the previousyear, while 1 entity were excluded. For details, please refer to Note IX “Changes in the Consolidation Scope.
IV. Basis for Preparation of Financial Statements
1. Basis for preparation
The financial statements of the Group are prepared on the basis of going concern assumptions, based on actualtransactions and events that occur and in accordance with the Accounting Standards for Business Enterprises - BasicStandards issued by the Ministry of Finance (issued by Decree No. 33 of the Ministry of Finance, revised by DecreeNo. 76 of the Ministry of Finance), 40 specific accounting standards, Guidelines for the Application of AccountingStandards for Business Enterprises, interpretations of Accounting Standards for Business Enterprises and otherrelevant provisions promulgated and revised on and after February 15, 2006 (collectively “Accounting Standardsfor Business Enterprises” or “ASBEs”), as well the disclosure provisions of the Rules No.15 for Governing theDisclosure of Information by Companies Issuing Public Securities - General Provisions for Financial Reporting(Revised in 2023) issued by CSRC.
In accordance with the relevant provisions of the Accounting Standards for Business Enterprises, the Group’saccounting is based on the accrual basis. Except for certain financial instruments, these financial statements areprepared at historical cost. In case of asset impairment, provision for impairment would be made according to therelevant regulations.
2. Going concern basis
The Company and the Group evaluated their abilities to continue as a going concern for the 12 months fromthe end of the reporting period and there are no material matters affecting their abilities to continue as a goingconcern.
V．Significant Accounting Policies and Accounting EstimatesNotes on specific accounting policies and accounting estimates:
Based on the actual production and operation characteristics and in accordance with the provisions of relevantaccounting standards for enterprises, the Group has formulated a number of specific accounting policies andaccounting estimates for transactions and matters such as revenue recognition and R&D expenses. For details, seethe descriptions under Section 31 “Revenue” under this Note V. For the descriptions of significant accountingjudgments and estimates made by the management, please refer to Section 36 “Other Significant AccountingPolicies and Accounting Estimates” under this Note V.
1. Statement of compliance with the ASBEs
The financial statements prepared by the Company are in compliance with the requirements of the AccountingStandards for Business Enterprises (ASBEs), and have reflected truly and completely such relevant information asthe financial positions of the Company and the Group as of December 31, 2024 as well as the business results andcash flows of the Company and the Group for 2024. In addition, all significant aspects of the financial statementsof the Company and the Group also comply with the disclosure requirements about the financial statements andtheir notes in the Rules No.15 for Governing the Disclosure of Information by Companies Issuing Public Securities- General Provisions for Financial Reporting as amended by the CSRC in 2023.
2. Accounting period
The Group’s accounting periods are divided into annual and interim periods. An interim period refers to areporting period less than a full accounting year. The accounting year of the Group is the calendar year that startsfrom January 1 and ends on December 31.
3. Operating cycle
The normal operating cycle refers to the period from purchasing the assets for processing to realizing the cashor cash equivalents. The operating cycle of the Group consists of 12 months which is the standard of theclassification for the liquidity of the assets and liabilities.
4. Reporting currency
RMB is the currency used in the major economic environment where the Company and its domesticsubsidiaries operate. The reporting currency of the Company and its domestic subsidiaries is RMB. The Company’sforeign subsidiaries select HKD as their reporting currencies based on the currency of the primary economicenvironment in which they operate. The currency used by the Group in preparing the financial statements is RMB.
5. Determination method and selection basis of materiality standards
?Applicable□Not applicable
| Item | Materiality standards |
| Significant accounts receivable, bad debt provisions to be recovered or reversed | The single provision amount accounts for more than 10% of the total amount of bad debt provision for various types of receivables and the amount is greater than RMB 5 million. |
| Actual write-off of significant receivables | The value of a single item is greater than RMB 5 million |
| Significant construction in progress | Projects with budgets exceeding RMB 50 million or deemed to be of significance. |
6. Accounting treatment for business combination under common control and not under common controlA business combination refers to the transaction or matter in which one reporting subject formed due to thecombination of two or above separate entities. A business combination can be classified as the combination undercommon control and not under common control.
(1) Business combination under common control
A business combination under common control is a business combination in which all of the combining entitiesare ultimately controlled by the same party or parties both before and after the combination, and that control is nottransitory. For a business combination under common control, the party that obtains the control of the other partieson the combination date is the acquirer, and other parties involving in the business combination are the acquirees.The combination date is the date on which the acquirer effectively obtains the control of the acquirees.Assets and liabilities that are obtained by the acquirer in a business combination shall be measured at their bookvalue at the combination date as recorded by the acquirees. The difference between the book value of the net assetsobtained and the book value of the consideration paid by the acquirer for the combination (or the aggregate par valueof the issued shares) shall be adjusted to share premium under capital reserve (or capital premium). If the sharepremium under capital reserve (or capital premium) is not sufficient to absorb the difference, any excess shall beadjusted against retained earnings.Expenses that are directly attributable to the business combination by the acquirer are charged to the current
| Significant advance receipts | The amount of a single advance receipt with an age of more than 1 year is greater than RMB 5 million |
| Significant contract liabilities | A single contractual liability with an age of more than 1 year accounts for more than 10% of the total contractual liabilities and the amount is greater than RMB 100 million |
| Significant accounts payable aged over one year or overdue | The amount of a single account payable is greater than RMB 5 million |
| Significant other payables aged over one year or overdue | The amount of a single item is greater than RMB 5 million |
| Significant dividends payable outstanding for over one year | The amount of a single item is greater than RMB 100 million |
| Receipts and payments of significant cash related to investment activities | The amount of a single item is greater than RMB 100 million |
| Significant offshore operating entity | The net assets of the economic entity exceed RMB 100 million |
| Significant structured entity | The net assets of the structured entity exceed RMB 2 million |
| Significant non-wholly-owned subsidiaries | The net assets of the subsidiary exceed RMB 100 million |
| Significant capitalized R&D projects | The year-end balance of a single project exceeds RMB 50 million |
| Significant outsourced project under research | The amount of a single project accounts for more than 20% of the total R&D investment |
| Significant investment activities | A single investment activity accounts for more than 10% of the total cash inflow or outflow related to the investment activities and the amount is greater than RMB 1 billion |
| Significant joint ventures or associates | The book value of long-term equity investment in a single investee accounts for more than 5% of the Group’s net assets and the amount is greater than RMB 1 billion, or the investment profit and loss under the long-term equity investment equity method accounts for more than 10% of the Group’s consolidated net profit |
| Significant subsidiaries | The net assets of the subsidiary account for more than 10% of the Group’s net assets, or the net profits of subsidiary account for more than 10% of the Group’s consolidated profits, and the subsidiaries with significant strategic position |
profits and losses in which they are incurred.
(2) Business combination not under common control
A business combination not under common control is a business combination in which all of the combiningentities are not ultimately controlled by the same party or parties both before and after the combination. For abusiness combination not under common control, the party that obtains the control of the other parties on theacquisition date is the acquirer; other parties involving in the business combination are the acquirees. The acquisitiondate is the date on which the acquirer effectively obtains control of the acquirees.For a business combination not under common control, the cost of business combination is the fair value ofassets paid, liabilities incurred or undertaken, and equity securities issued by the acquirer for obtaining the controlof the acquirees at the acquisition date. Expenses that are attributable to the business combination such as audit fees,legal services fees, consultancy fees and other administration expenses incurred by the Company as acquirer areexpensed in the current profits and losses in which they are incurred. Transaction fees of equity securities or debtsecurities issued by the acquirer as consideration for a business combination are included in the initially recognizedamount of equity securities or debt securities. Contingent consideration involved is recorded as the combination costat its fair value on the acquisition date. Should any new or further evidence in relation to the circumstances existingon the acquisition date arise within 12 months after the acquisition date, making it necessary to adjust the contingentconsideration, the goodwill arising from the business combination shall be adjusted accordingly. The cost ofcombination incurred and identifiable net assets obtained by the acquirer in a business combination are measured atfair value on the acquisition date. Where the cost of the combination exceeds the acquirer’s interest in the fair valueof the acquiree’s identifiable net assets on the acquisition date, the difference is recognized as goodwill; Where thecost of combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets onthe acquisition date, the difference is recognized in current profits and losses after a review of measurement for thefair value of identifiable assets, liabilities and contingent liabilities of the acquiree and the combination cost.In relation to the deductible temporary difference acquired from the acquiree, which was not recognized asdeferred tax assets due to non-fulfillment of the recognition criteria at the date of the acquisition, if new or furtherinformation that is obtained within 12 months after the acquisition date indicates that related conditions at theacquisition date already existed, and that the realization of the economic benefits brought by the deductibletemporary difference of the acquiree on the acquisition date can be expected, the relevant deferred tax assets shallbe recognized and goodwill shall be deducted accordingly. When the amount of goodwill is less than the deferredtax assets that shall be recognized, the difference shall be recognized in the current profits and losses. Except for theabove circumstances, deferred tax assets in relation to business combination are recognized in the current profitsand losses.For a business combination involving entities not under common control that is achieved in stages, theCompany shall determine whether the business combination shall be treated as “a bundle of transactions” inaccordance with the determination standards as contained in the Circular on the Publishment of Interpretation No.5on Accounting Standards for Business Enterprises Issued by the Ministry of Finance (Finance and Taxation (2012)No. 19) and Section 51 of Accounting Standards for Business Enterprises No.33 - Consolidated FinancialStatements (See Item (2) of Section 6 “Preparation of the consolidated financial statements” under this Note V).
Where the business combination is treated as “a bundle of transactions,” the business combination shall be accountedfor in accordance with the previous paragraphs and Section 17 “Long-term equity investments” of this Note V;where the business combination does not fall within “a bundle of transactions,” the business combination in theCompany’s and the consolidated financial statements shall be accounted for as follows:
In the Company’s financial statements, the initial cost of the investment shall be the sum of the book value ofequity investment held in the acquiree prior to the acquisition date and the amount of additional investment made tothe acquiree at the acquisition date. Other comprehensive income relating to the equity interest held in the acquireeprior to the acquisition date shall be, upon disposal of the investment, accounted for in accordance with the samebasis as that the acquiree adopts in directly disposing of relevant assets or liabilities.In the consolidated financial statements, the equity interest held in the acquiree prior to the acquisition date isre-measured according to its fair value at the acquisition date; the difference between the fair value and the bookvalue is recognized as investment income for the current period. Other comprehensive income relating to the equityinterest held in the acquiree prior to the acquisition date shall be accounted for in accordance with the same basis asthat the acquiree adopts in directly disposing of relevant assets or liabilities.
7. Judgement criteria of control and preparation of consolidated financial statements
(1) Criteria for the recognition of scope of consolidated financial statements
The scope of consolidation shall be determined based on the concept of control. Control means that the Grouphas power over the investee, enjoys variable returns through its participation in the investee’s related activities, andhas the ability to use its power over the investee to influence the amount of its returns. The consolidated financialstatements comprise the financial statements of the Company and all of its subsidiaries, which are defined as thoseentities controlled by the Group.
Once any change in the facts and circumstances arises which leads to a change in the elements involved in thedefinition of control, the Group will conduct an assessment.
(2) Preparation of consolidated financial statements
Subsidiaries are consolidated from the date on which the Group obtains their net assets and actual control overtheir operating decisions, and are deconsolidated from the date when such control ceases. For subsidiaries beingdisposed of, the business results and cash flows prior to the date of disposal are duly included in the consolidatedincome statement and consolidated cash flow statement; for subsidiaries disposed of during the period, the openingbalances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a businesscombination not under common control, their operating results and cash flows subsequent to the acquisition dateare included in the consolidated income statement and consolidated cash flow statement, and the opening balancesand comparative figures in the consolidated financial statements would not be restated. For subsidiaries acquiredfrom a business combination under common control and acquirees from a merger by absorption, their operatingresults and cash flows from the date of commencement of the period in which the combination occurred to the dateof combination are included in the consolidated income statement and consolidated cash flow statement, and thecomparative figures in the consolidated financial statements would be restated.
In preparing the consolidated financial statements, where the accounting policies or the accounting periods are
inconsistent between the Company and subsidiaries, the financial statements of subsidiaries are adjusted inaccordance with the accounting policies and accounting period of the Company. For subsidiaries acquired from abusiness combination involving enterprises not under common control, the financial statements of the subsidiariesare adjusted based on the fair value of the identifiable net assets at the acquisition date.All significant intra-group balances, transactions and unrealized profits are offset in preparing the consolidatedfinancial statements.
The portion of a subsidiary’s equity and the portion of a subsidiary’s net profits and losses for the period notattributable to the Company are recognized as minority interests and profits and losses attributable to minorityinterests respectively, which are presented under shareholders’ equity and net profit separately, in the consolidatedfinancial statement. A subsidiary’s net current profits and losses attributable to minority interests is recognized as“share of profits and losses of minority interests” under net profit in the consolidated income statement. When theamount of a subsidiary’s loss attributable to the minority shareholders exceeds the minority shareholders’ share ofthe opening balance of shareholders’ equity of the subsidiary, the excess is deducted from the minority interests.In event of loss of control over a former subsidiary due to disposal of certain equity investments or other reasons,any retained equity is re-measured at its fair value on the date when the control is lost. The surplus of the aggregateconsiderations received upon disposal of equity plus the fair value of any retained equity less the share of net assetsin the former subsidiary calculated cumulatively from the acquisition date based on the original shareholdingpercentage is included in the investment income for the period when the control is lost. Other comprehensive incomerelated to the equity investment in the former subsidiary shall be accounted for on the same basis at the time of lossof control as the subsidiary directly disposed of the related asset or liability. Then, the remaining equity shall bemeasured subsequently in accordance with the Accounting Standards for Business Enterprises No. 2 - Long-termEquity Investments or Accounting Standards for Business Enterprises No. 22 - The Recognition and Measurementof Financial Instruments and other regulations. For details, please see Section 17 “Long-term equity investments”or Section 11 “Financial instruments” under this Note V.For disposal of the Group’s equity investments in a subsidiary in phases through multiple transactions untilloss of control, it is determined based on whether such transactions should be regarded as a bundle of transactions.If the terms, conditions and economic effects of all transactions are conducted for the purpose of disposing of theequity investments in a subsidiary and meet the following one or more criteria, it is usually shown that such multipletransactions are deemed as a bundle of transactions for accounting treatment: ① These transactions were enteredinto at the same time or upon the consideration of the effects therebetween; ② These transactions can only generateone complete business result when conducted all together; ③ The occurrence of one transaction depends on theoccurrence of at least one other transaction; and ④ One transaction alone is not economical, but is economical whenconsidered with other transactions. When the transactions do not constitute a bundle of transactions, each transactionthereof shall be accounted in accordance with principles applicable to the “disposal of part of long-term equityinvestments in a subsidiary that does not result in the loss of control” (please see Item (2) ④ of Section 17 “Long-term equity investments” under this Note V for details) and “loss of control over a former subsidiary due to disposalof certain equity investments or other reasons” (please see the preceding paragraph for details). If such transactionsfall under a bundle of transactions, those transactions are accounted for as one deal under which the subsidiary is
disposed of and control is lost. However, before the control over the subsidiary is lost, the surplus betweenconsideration received for each disposal and the value of corresponding share of net assets in the subsidiary entitledby the investment underlying the disposal shall be recognized as other comprehensive income in the consolidatedfinancial statements, and, when control is lost, converted into investment income or loss for the period in whichcontrol is lost.
8. Classification of joint venture arrangements and accounting treatment method for joint operationsJoint venture arrangement means an arrangement under the common control of two or more parties. The Groupclassifies the joint venture arrangement into joint operations and joint ventures based on the rights and obligationsit enjoys and assumes in the joint venture arrangement. Joint operation means a joint venture arrangement in whichthe Group owns the assets and assumes the liabilities associated with the arrangement. Joint venture means a jointventure arrangement in which the Group only has rights to the net assets of the arrangement.The Group’s investments in joint ventures are accounted for using the equity method and are treated inaccordance with the accounting policies described in Item (2) ② “Long-term equity investments accounted forusing the equity method” in Section 17 “Long-term equity investments” under this Note V.For the joint operations, the Group, as a joint venture party, recognizes the assets and liabilities separately heldby the Group, as well as the assets and liabilities jointly held by the Group in accordance with the Group’s share;recognizes the income arising from the disposal of the Group’s share of joint operation output; recognizes the incomefrom the sale of outputs from joint operations based on the Group’s share; and recognizes the expenses incurred bythe Group alone and the expenses incurred based on the Group’s share in the joint operation.When the Group, as a joint venture party, invests in or sells assets to the joint venture (which do not constitutea business, the same below), or purchases assets from the joint operation, the Group recognizes only those portionsof the profits and losses arising from the transaction that are attributable to other participants in the joint operation,prior to the sale of such assets to a third party. In the event that such assets incur asset impairment losses inaccordance with the provisions of Accounting Standard for Enterprises No. 8 - Asset Impairment, the Group willfully recognize such losses if the assets are invested or sold by the Group to the joint operation; In the case of assetspurchased by the Group from the joint operation, the Group will recognize such losses on the basis of its share ofcommitment.
9. Determination standards for cash and cash equivalents
Cash and cash equivalents of the Group include the cash on hand, deposits that can be used for payment at anytime, the investments that are held for a short period of time (generally maturing within three months from the dateof purchase) which are highly liquid, easily convertible to known amounts of cash, and having minimal risk ofchanges in value.
10. Foreign currency business and foreign currency statement translation
The method for determining the conversion exchange rate in foreign currency transactions
Upon initial recognition, the foreign currency transactions of the Group are converted into the amount ofreporting currency according to the spot exchange rate of the trading day (usually referring to the median price ofthe foreign exchange rate of the day published by the People’s Bank of China, the same below).
(1) Translation of foreign currency monetary items and foreign currency non-monetary itemsOn the balance sheet date, if the foreign currency monetary items are translated at the spot rate of the balancesheet date, the resulting exchange difference, except for ① Exchange differences arising from special loans inforeign currencies related to the acquisition and construction of assets eligible for capitalization, which shall betreated in accordance with the principle of capitalization of borrowing costs; ② Exchange differences of hedginginstruments used to operate effective hedging of net investment abroad (this difference is included in othercomprehensive income and is not recognized as current profits and losses until the net investment is disposed of)and ③ foreign currency monetary items classified as measured at fair value through other comprehensive income,shall be recorded into current profits and losses, provided that exchange differences resulting from changes in otherbook balances other than amortized costs (including impairment) shall be recorded in other comprehensive income.The non-monetary foreign currency items measured at historical cost shall be measured at the amount ofreporting currency that is translated into based on the spot rate on the transaction date. For non-monetary foreigncurrency items measured at fair value, the exchange rate prevailing at the date when the fair value is determined isused for translation, and the difference between the translated amount of the reporting currency and the originalamount of the reporting currency shall be treated as the change in fair value (including change of exchange rate) andrecorded in current profits and losses or recognized as other comprehensive income.
(2) Translation of foreign currency financial statement
Foreign currency financial statements of overseas operations are translated into RMB statements in thefollowing ways: The items of assets and liabilities in the balance sheet were translated at the spot exchange rate onthe balance sheet date. The shareholders’ equity items are translated at the spot rate at the time of occurrence exceptfor the “undistributed profit” items. The income and expense items in the income statement are converted using theaverage exchange rate of the current period on the date of occurrence of the transaction. The undistributed profit atthe beginning of the year is the undistributed profit at the end of the year after the conversion of the previous year;The undistributed profit at the end of the period is calculated and shown on the basis of each item of profitdistribution after translation; The difference between the total amount of asset items and liability items andshareholders’ equity items after translation is treated as the difference in the translation of foreign currencystatements and recognized as other comprehensive income. Upon disposal of an overseas operation and loss ofcontrol, the conversion difference of the foreign currency statement related to the overseas operation, as shownunder the shareholders’ equity item in the balance sheet, shall be transferred to the profits and losses of the disposalof the current period in full or in proportion to the disposal of the overseas operation.Foreign currency cash flow and cash flow of overseas subsidiaries shall be translated at the spot exchange ratein the period when the cash flow is generated. The effect of exchange rate changes on cash is presented separatelyin the cash flow statement as an adjustment item.
The figures for the beginning of the year and the actual figures for the previous year are presented in accordancewith the amounts of the financial statements of the previous year after translation.
Upon the disposal of all the owners’ equity of the Group’s overseas operations or the loss of control overoverseas operations due to the disposal of part of the equity investment or other reasons, the translation difference
of the foreign currency statement related to the owners’ equity of the overseas operations attributable to the parentcompany, as shown under the shareholders’ equity item in the balance sheet, shall be fully transferred to the profitsand losses of the disposal period.When part of the equity investment is disposed of or the proportion of overseas operating interest is reducedfor other reasons but the control of overseas operations is not lost, the difference in the translation of foreign currencystatements related to the disposal part of the overseas operation will be attributed to the minority shareholders’equity and will not be transferred to the current profits and losses. Upon disposal of part of the equity of the overseasoperation as an associate or joint venture, the translation difference of the foreign currency statement related to theoverseas operation shall be transferred to the profits and losses of the disposal period in proportion to the disposalof the overseas operation.If there are foreign currency monetary items that substantially constitute net investments in overseas operations,the exchange difference resulting from changes in exchange rates shall be recognized as other comprehensiveincome in the consolidated financial statements as “translation difference in foreign currency statements;” Upondisposal of the overseas operations, it shall be included in the profits and losses of the disposal period.
11. Financial instruments
When the Group becomes a party to a financial instrument contract, it shall recognize a financial asset orfinancial liability.
(1) Classification, recognition and measurement of financial assets
The Group has classified the financial assets as financial assets at amortized cost; financial assets at fair valuethrough other comprehensive income and financial assets at fair value through profits and losses based on thebusiness model for managing financial assets and the contractual cash flow characteristics of the financial assets.
Financial assets are measured at fair value on initial recognition. For financial assets at fair value throughprofits and losses, the related transaction costs are recognized directly in profits and losses; and for other categoriesof financial assets, the related transaction costs are recognized in initial recognition amounts. For the accountsreceivable or notes receivable arising from the sale of products or the provision of services that do not contain ortake into account a significant financing component, the amount of consideration to which the Group is expected tobe entitled shall be taken as the initial recognition amount.
① Financial assets at amortized cost
The Group’s business model of managing financial assets at amortized cost is aimed at the collection ofcontractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent with thebasic borrowing arrangement, that is, the cash flows generated on a specific date are only payments of principal andinterest based on the outstanding principal amount. For such financial assets, the effective interest rate method isused for subsequent measurement at amortized cost, and any profits or losses arising from amortization orimpairment is included in the current profits and losses.
② Financial assets at fair value through other comprehensive income
The Group’s business model of managing such financial assets is aimed at the collection and disposal of
contractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent with thebasic borrowing arrangement. The Group measures such financial assets at fair value and their changes arerecognized in other comprehensive income, but impairment losses or gains, exchange profits and losses and interestincome calculated under the effective interest rate method are recognized in current profits and losses.
In addition, the Group has designated certain non-trading equity instrument investments as financial assets atfair value through other comprehensive income. The Group recognizes the relevant dividend income of suchfinancial assets in current profits and losses and the fair value changes in other comprehensive income. Upon thederecognition of the financial assets, the accumulated profits and losses previously recognized in othercomprehensive income are transferred from other comprehensive income to retained earnings and are not recognizedin the current profits and losses.
③ Financial assets at fair value through profits and losses
The Group’s financial assets other than those at amortized cost and those at fair value through othercomprehensive income as described above are classified as financial assets at fair value through profits and losses.In addition, at the time of initial recognition, in order to eliminate or significantly reduce accounting misalignments,the Group designated certain financial assets as financial assets at fair value through profits and losses. Suchfinancial assets are subsequently measured at fair value, with changes in fair value recognized in the current profitsand losses.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities are classified as financial liabilities at fair value through profits and losses and otherfinancial liabilities at the time of initial recognition. For financial liabilities at fair value through profits and losses,the related transaction costs are recognized directly in profits or losses, and for other financial liabilities, the relatedtransaction costs are recognized in their initial recognition amounts.
① Financial liabilities at fair value through profits and losses
The financial liabilities at fair value through profits and losses include financial liabilities held for trading(including derivatives that are financial liabilities) and those designated as financial liabilities at fair value throughprofits and losses at the initial recognition.
Financial liabilities held for trading (including derivatives that are financial liabilities) are subsequentlymeasured at fair value, with changes in fair value recognized in current profits and losses, except for those relatedto hedge accounting.
For those designated as financial liabilities at fair value through profits and losses, the change in fair value ofsuch liabilities caused by changes in the Group’s own credit risk is included in other comprehensive income, andthe cumulative change in its fair value caused by changes in its own credit risk included in other comprehensiveincome is transferred to retained earnings when such liabilities are derecognized. Other changes in fair value areincluded in current profits and losses. If the treatment of the effect of the change in the credit risk of the financialliabilities in the manner described above would cause or widen the accounting mismatch in profits and losses, theGroup would recognize the full profits or losses of the financial liabilities (including the amount affected by thechange in the credit risk of the enterprise) in the current profits and losses.
② Other financial liabilities
Financial liabilities other than those resulting from the transfer of financial assets that does not meet theconditions for derecognition or continues to be involved in the transfer of financial assets, and other financialliabilities excluding financial guarantee contracts are classified as financial liabilities at amortized cost, which aresubsequently measured at amortized cost, and the profits and losses resulting from the derecognition or amortizationare included in current profits and losses.
(3) Recognition basis and measurement method for transfer of financial assets
A financial asset is derecognized if it meets any of the following conditions: ① The contractual right to receivethe cash flow of the financial asset is terminated; ② The financial asset has been transferred, and substantially allthe risks and returns of ownership of the financial asset have been transferred to the transferee; ③ The financialasset has been transferred, substantially all the risks and returns of ownership of the financial asset have neither beentransferred nor retained, but the control over the financial asset has been relinquished.
If neither substantially all the risks and returns of ownership of a financial asset are transferred nor retained,and the control over the financial asset is not relinquished, the underlying financial asset shall be recognized to theextent of its continuing involvement in the transferred financial asset, and the related liability shall be recognizedaccordingly. The extent of continued involvement in the transferred financial asset is the level of risk to which theenterprise is exposed as a result of changes in the value of that financial asset.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between thebook value of the transferred financial assets and the consideration received as a result of the transfer and thecumulative change in the fair value originally included in other comprehensive income is included in the currentprofits and losses.
If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferredfinancial assets shall be apportioned between the portion derecognized and the portion not for derecognitionaccording to their relative fair value. The difference between the sum of the consideration received as a result of thetransfer and the cumulative changes in fair value originally included in other comprehensive income that should beapportioned to the portion derecognized and the above-mentioned book value apportioned are recognized in currentprofits and losses.
If the Group sells the financial assets by recourse or makes endorsement transfer of the financial assets it holds,it is necessary to determine whether virtually all risks and returns in the ownership of the financial asset have beentransferred. If the Group has transferred substantially all the risks and returns related to the ownership of a financialasset to the transferee, the Group shall derecognize the financial asset. If substantially all the risks and returns relatedto the ownership of a financial asset are retained, the financial assets shall not be derecognized. If substantially allthe risks and returns related to the ownership of the financial asset are neither transferred nor retained, whether theenterprise retains control of the asset shall be determined and accounting treatment shall be made in accordance withthe principles described in the preceding paragraphs.
(4) Derecognition of financial liabilities
A financial liability (or a portion thereof) is derecognized when the present obligation is discharged. If an
agreement is entered into between the Group (the borrower) and the lender to replace the original financial liabilityby assuming a new financial liability, and the contractual terms of the new financial liability are materially differentfrom those of the original financial liability, the original financial liability is derecognized and the new financialliability is recognized at the same time. If the Group materially modifies the contractual terms of the originalfinancial liability (or part thereof), it shall derecognize the original financial liability and recognize a new financialliability in accordance with the modified terms.
If a financial liability is derecognized in whole or in part, the difference between the book value of thederecognized portion and the consideration paid (including non-cash assets transferred or liabilities assumed) isrecognized in current profits and losses.
(5) Offsetting of financial assets and financial liabilities
When the Group has the legal rights to offset the financial assets and financial liabilities whose amounts havebeen recognized, the legal rights are currently exercisable, and the Group plans to settle with net amount or realizethe financial asset and repay the financial liability simultaneously, the financial assets and financial liabilities canbe presented in the balance sheet with the net amount after they are mutually offset. Apart from this, financial assetsand financial liabilities shall be presented separately in the balance sheet and not be offset against each other.
(6) Methods for determining the fair value of financial assets and financial liabilities
Fair value is the price that a market participant would receive to sell an asset or pay to transfer a liability in anorderly transaction occurring on the measurement date. Regarding the financial instruments for which there is anactive market, the Group uses quoted prices in an active market to determine their fair values. A quoted price in anactive market is a price that is readily available on a regular basis from an exchange, broker, trade association,pricing service agency, etc., and represents the price of a market transaction that actually takes place in a fair trade.If there is no active market for the financial instrument, the Group uses valuation techniques to determine its fairvalue. The valuation techniques include reference to prices used in recent market transactions by the parties who arefamiliar with the situation and willing to deal, reference to the current fair value of other substantially identicalfinancial instruments, the discounted cash flow method, and option pricing models. In the valuation, the Group willadopt the valuation techniques applicable in the current situation and supported by sufficiently available data andother information, select the input values that are consistent with the characteristics of the asset or liabilityconsidered by market participants in the transaction of the relevant asset or liability, and give priority to the relevantobservable input values when possible. The non-observable input values will be used only when the relevantobservable input values are unavailable or not practicable to obtain.
(7) Equity instruments
Equity instruments are contracts that demonstrate ownership of the remaining interest in the Group’s assetsafter deducting all liabilities. The Group’s issuance (including refinancing), repurchase, sale or cancellation of equityinstruments is treated as changes in equity, and the transaction expenses related to equity transactions are deductedfrom equity. The Group does not recognize the changes in fair value of equity instruments.
Dividends (including “interest” on instruments classified as equity instruments) distributed during the existenceof the Group’s equity instruments are treated as profit distributions.
(8) Impairment of financial assets
The financial assets for which the Group needs to recognize impairment losses are financial assets at amortizedcost, debt instruments at fair value through other comprehensive income, lease receivables, which mainly includenotes receivable, accounts receivable, receivables financing, other receivables, debt investments, other debtinvestments, long-term receivables, etc. In addition, for contractual assets and certain financial guarantee contracts,impairment provisions are made and credit impairment losses are recognized in accordance with the accountingpolicies described in this section.
① Recognition of provision for impairment losses
On the basis of expected credit losses, the Group makes an impairment provision and recognizes creditimpairment losses for each of the above items in accordance with its applicable expected credit losses measurementmethod (general method or simplified method).
Credit losses represent the difference between all contractual cash flows receivable under the contract and allcash flows expected to be received by the Group, discounted at the original effective interest rate, i.e., the presentvalue of all cash shortfalls. Financial assets purchased or originated by the Group that are credit impaired shall bediscounted at the credit-adjusted effective interest rate of the financial assets.
The general method of measurement of expected credit losses means that the Group assesses at each balancesheet date whether the credit risk of financial assets (including contractual assets and other applicable items, thesame below) has increased significantly since the initial recognition. If the credit risk has increased significantlysince the initial recognition, the Group measures the loss provision at an amount equivalent to the expected creditlosses over the entire duration; If credit risk does not increase significantly since the initial recognition, the Groupmeasures the loss provision at an amount equivalent to expected credit losses over the next 12 months. The Groupwill consider all the reasonable and evidence-based information, including forward-looking information, whenassessing expected credit losses.
For financial instruments with low credit risk on the balance sheet date, the Group assumes that their credit riskhas not increased significantly since initial recognition, and measures the provision for losses based on expectedcredit losses over the next 12 months.
② Criteria for determining whether credit risk has increased significantly since the initial recognition
If the probability of default of a financial asset during the estimated duration determined on the balance sheetdate is significantly higher than the probability of default during the estimated duration determined at the time ofinitial recognition, it indicates that the credit risk of the financial asset has significantly increased. Except inexceptional circumstances, the Group uses the change in default risk occurring over the next 12 months as areasonable estimate of the change in default risk occurring over the duration to determine whether credit risk hasincreased significantly since the initial recognition.
③ The portfolio-based approach to assessing expected credit risk
The Group assesses credit risk individually for financial assets with significantly different credit risks, such asreceivables that are in dispute with other parties or involved in litigation or arbitration; or where there are clear
indications that the debtor is likely to be unable to meet its repayment obligations.Apart from financial assets that are individually assessed for credit risk, the Group classifies financial assetsinto different groups based on common risk characteristics and assesses credit risk on a portfolio basis.
④ Accounting treatment of impairment of financial assets
At the end of the period, the Group will calculate the estimated credit losses of various financial assets, and ifthe estimated credit losses are greater than the book value of its current impairment provision, the difference isrecognized as an impairment loss; If it is less than the book value of the current impairment provision, the differenceis recognized as an impairment gain.
⑤ Determination of credit losses of various financial assets
a. Notes receivable
The Group measures the loss provision for notes receivable at the amount equivalent to expected credit lossesin the entire duration. Based on the credit risk characteristics of notes receivable, they are divided into differentportfolios:
b. Accounts receivable and contractual assets
For the accounts receivable and contractual assets that do not have a significant financing component, theGroup measures the loss provision at the amount equivalent to expected credit losses in the entire duration.
For the accounts receivable, contractual assets and lease receivables that have a significant financingcomponent, the Group chooses to always measure the loss provision at an amount equivalent to expected creditlosses over the duration.
Apart from the accounts receivable for single assessment of credit risk, they are divided into different portfoliosbased on their credit risk characteristics:
Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the agingyears of accounts receivable based on the principle of First Occurrence, First Recovery.
Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separateimpairment tests on accounts receivable with significantly different credit risk characteristics, such as significantlydeteriorating credit status of the debtor, low possibility of future repayment, and credit impairment that has occurred.
c. Accounts receivable financing
| Item | Basis for determining the portfolio |
| Banker’s acceptance bill | Banks with less credit risk in relation to acceptors |
| Commercial acceptance bill | Divided according to the acceptor’s credit risk |
Item
| Item | Basis for determining the portfolio |
| Related party within the consolidation scope | This portfolio represents amounts receivable of the Company within thescope of consolidation. |
| Account age portfolio | The portfolio takes the age of receivables as the credit risk characteristics. |
Notes and accounts receivable measured at fair value through other comprehensive income are presented asaccounts receivable financing if their maturities are within one year (including one year) from the initial recognitiondate. The Group measures the loss provision at the amount equivalent to expected credit losses in the entire duration.
Apart from the accounts receivable financing for single assessment of credit risk, they are divided into differentportfolios based on their credit risk characteristics:
Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates theaging years of accounts receivable based on the principle of First Occurrence, First Recovery.
Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separateimpairment tests on accounts receivable with significantly different credit risk characteristics, such as significantlydeteriorating credit status of the debtor, low possibility of future repayment, and credit impairment that has occurred.
d. Other receivables
Based on whether the credit risk of other receivables has increased significantly since initial recognition, theGroup measures the loss provision at the amount equivalent to expected credit losses in the next 12 months or theentire duration. Apart from the other receivable for single assessment of credit risk, they are divided into differentportfolios based on their credit risk characteristics:
| Item | Basis for determining the portfolio |
| Related party within the consolidation scope | This portfolio represents amounts receivable of the Company within the scope of consolidation. |
| Account age portfolio | The portfolio takes the age of receivables as the credit risk characteristics. |
Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates theaging years of accounts receivable based on the principle of First Occurrence, First Recovery.
Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separateimpairment tests on accounts receivable with significantly different credit risk characteristics, such as significantlydeteriorating credit status of the debtor, low possibility of future repayment, and credit impairment that has occurred.
12. Notes receivable
Please refer to “11. Financial instruments.”
13. Accounts receivable
Please refer to “11. Financial instruments.”
14. Accounts receivable financing
Notes and accounts receivable at fair value through other comprehensive income are presented as accountsreceivable financing if their maturities are within one year (including one year) from the initial recognition date.
| Item | Basis for determining the portfolio |
| Related party within the consolidation scope | This portfolio represents amounts receivable of the Company within thescope of consolidation. |
| Account age portfolio | The portfolio takes the age of receivables as the credit risk characteristics. |
The Notes and accounts receivable with the maturity of more than 1 year since the initial recognition date arepresented as other debt investments. For the relevant accounting policies, please refer to “11. Financial instruments”under this Note.
15. Other receivables
Method of determining expected credit losses on other receivables and the accounting treatmentFor the method of determining expected credit losses on other receivables and the accounting treatment, pleaserefer to “11. Financial instruments.”
16. Inventories
(1) Categories of inventories
Inventories mainly include raw materials, packaging and low-value consumable goods, products in process,goods in stock, consumable biological assets, development costs, development products, etc.
(2) Pricing of inventories
Inventories are initially measured at actual cost. The cost of inventories includes procurement cost, processingcost and other costs. Inventories are measured by the weighted average method upon delivery.
(3) Determination of net realizable value of inventories and method of making provision forinventory impairment
The net realizable value of inventories refers to the estimated selling price deducted by estimated costs untilthey are made into finished goods, estimated selling expense and relevant taxes in daily activities. The determinationof the net realizable value of inventories is based on conclusive evidence obtained, taking into account the purposefor which the inventories are held and the effect of events after the balance sheet date.
Inventories are measured at the lower of cost or net realizable value at the balance sheet date, and provisionfor their impairment shall be made when the net realizable value is below the cost of inventories. Provision forinventory impairment is made on the basis of the difference whereby the cost of one single inventory item exceedsits net realizable value. For inventories with large quantities and low unit prices, provision for inventory impairmentshall be made according to inventory categories. Inventories that are related to product series produced and sold inthe same region and have the same or similar end use or purpose, and are difficult to be documented separately fromother items that shall be combined for making provision for inventory impairment.
After provision for inventory impairment is made, if the factors that once resulted in the impairment disappear,leading to the net realizable value of inventories higher than their book value, the provision of inventory impairmentshall be reversed to the extent of provision previously made, and the reversed amount shall be recognized in currentprofits and losses.
(4) The inventory system shall be the perpetual inventory system.
(5) Amortization of low-value consumables and packaging materials
The low-value consumables and packaging materials are amortized using a one-off amortization method.
17. Long-term equity investments
Long-term equity investments in this section refers to any equity investment by which the Group has control,
common control or significant influence over the investee. Long-term equity investments by which the Group doesnot have control, common control or significant influence over the investee are accounted for as financial assets atfair value through profits or losses. If they are non-trading, the Group may elect to designate them as financial assetsat fair value through other comprehensive income at the time of initial recognition. For the accounting policies,please refer to “11. Financial instruments” under Note IV.
Common control is the Group’s contractually agreed sharing of control over an arrangement, and the activitiesunder which must be decided by unanimous agreement from parties who share the control. Significant influence isthe power of the Group to participate in the decision-making for financial and operating policies of an investee, butnot to control or common control the formulation of such policies together with other parties.
(1) Determination of investment cost
For long-term equity investments acquired relating to business combination under common control, the initialinvestment cost is determined on the date of consolidation according to the percentage of shareholders/owners’equity from the combined party as a part of the book value of total shareholders/owners’ equity set forth in theconsolidated financial statements of the ultimate controlling party. The difference between the said initial investmentcost and the sum of cash being paid, non-cash assets being transferred and book value of liabilities being assumedshall be adjusted against the capital reserve; or, in case of insufficient capital reserve to cover the difference, againstthe retained earnings accordingly. In case that the consideration of the business combination is satisfied by issuingequity securities, the initial investment cost of the long-term equity investments is determined on the date ofconsolidation according to the percentage of shareholders’ equity from the combined party as a part of the bookvalue of total shareholders’ equity set forth in the consolidated financial statements of the ultimate controlling party.With the sum of par values of shares being issued as the share capital, the difference between the said initialinvestment cost and the sum of par values of shares being issued shall be adjusted against the capital reserve; or, incase of insufficient capital reserve to cover the difference, against the retained earnings accordingly. Where abusiness combination under common control is achieved by acquiring the equity of a combined party under commoncontrol in phases through multiple transactions, following policies shall apply depending on whether thosetransactions are “a bundle of transactions”: if so, the Company shall account for all transactions together as the onedeal to obtain the control; if not, the initial investment cost of the long-term equity investments shall be determinedon the date of consolidation according to the percentage of shareholders/owners’ equity from the combined party asa part of the book value of total shareholders’ equity set forth in the consolidated financial statements of the ultimatecontrolling party, while the difference between the initial investment cost and the sum of book value of long-termequity investments before the consolidation and that of consideration newly paid to acquire additional equities onthe date of consolidation shall be adjusted against the capital reserve, or, in case of insufficient capital reserve tocover the difference, against retained earnings accordingly. Accounting treatment is currently not required for othercomprehensive income that has been recognized due to the adoption of equity method in accounting or theclassification as financial assets at fair value through other comprehensive income in respect of equity investmentsheld before the date of consolidation.
For the long-term equity investments acquired relating to business combination not under common control, theinitial investment cost is the cost of combination on the date of acquisition which equals to the aggregate fair value
of assets transferred, liabilities incurred or assumed and equity securities issued by the acquirer. Where a businesscombination not under common control is achieved by acquiring the equity of a combined party under commoncontrol in phases through multiple transactions, following policies shall apply depending on whether thosetransactions are “a bundle of transactions”: if so, the Group shall account for all transactions together as the onedeal to obtain the control; if not, the initial investment cost of the long-term equity investments that is re-accountedfor using the cost method shall be the sum of book value of long-term equity investments previously held by theacquirer in the acquiree and new investment cost. Accounting treatment is currently not required for othercomprehensive income in respect of equity investments that have been accounted for using the equity method.
The intermediary expenses on items such as audit, legal service and valuation advisory for businesscombination and other related administrative expenses incurred by the combining party or acquirer are recognizedin current profits and losses upon their occurrence.
Long-term equity investments other than those formed by business combination is initially measured at costwhich varies depending on the different ways of acquiring the long-term equity investments and is determined byconsidering the amount of actual cash paid by the Group, the fair value of the equity securities issued by the Group,the conventional value stipulated in the investment contract or agreement, the fair value or original book value ofthe assets surrendered in the non-cash and bank balance swap transaction, the fair value of the long-term equityinvestments itself, and etc. The expenses, taxes and other necessary expenses directly related to the acquisition ofthe long-term equity investments are also included in the investment cost. For additional long-term equityinvestments that entitles the Company with significant influence or common control but not control over the investee,its cost of investment is the sum of fair value of equity investments that have been held plus new cost of investmentpursuant to the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstrument.
(2) Subsequent measurement and recognition method of profits and losses
A long-term equity investment with common control (excluding that constituting a joint venture) over orsignificant influence on the investee is accounted for by using the equity method, and a long-term equity investmentwith control over the investee is accounted for in the Company’s financial statements by using the cost method.
①Long-term equity investment accounted for with cost method
When a long-term equity investment is accounted for with cost method, its price is measured at initialinvestment cost, and when the long-term equity investment is added or disposed, its cost is adjusted accordingly.The cash dividend or profit declared by the investee, except for the cash dividend or profit declared but not yetgranted that is included in the price or consideration actually paid upon the acquisition of the investment, shall berecognized as investment income for the period.
②Long-term equity investment accounted for with equity method
When a long-term equity investment is accounted for with equity method and its initial investment cost ishigher than the proportion of fair value of the investee’s identifiable net assets attributable to the investor becauseof the investment, its initial cost shall not be adjusted; if lower, the difference shall be recognized in the currentprofits and losses, and its cost shall be adjusted accordingly.
When a long-term equity investment is accounted for with equity method, the investment income and othercomprehensive income arising therefrom are recognized in accordance with the proportion of net profits and lossesand other comprehensive income of the investee attributable to the investor, and the book value of long-term equityinvestments is adjusted accordingly; if any profit or cash dividend is declared by the investee, the book value oflong-term equity investments shall be reduced according to the part of profit or dividends attributable to the investor;if there is any other changes in shareholders’ equity other than net profits and losses, other comprehensive incomeand profit distribution, such change shall be adjusted against the book value of long-term equity investments andrecognized in the capital reserve. The Group recognizes its share of the investee’s net profits and losses based onfair value of the investee’s identifiable assets at the time of acquisition, after making appropriate adjustments to netprofits thereto. In case of any inconsistency between the accounting policies and accounting periods adopted by theinvestee and by the Group, the financial statements of the investee shall be adjusted in accordance with theaccounting policies and accounting periods of the Group, and the gain on investment and other comprehensiveincome shall be recognized accordingly. In respect of the transactions between the Group and its associates and jointventures in which the assets invested or disposed of are not part of the business, the share of unrealized profits andlosses arising from inter-group transactions shall be offset by the portion attributable to the Group, and the profitsand losses on investment shall be recognized accordingly. However, any unrealized loss arising from inter-grouptransactions between the Group and an investee is not offset to the extent that the loss is impairment loss of theassets transferred. Where the Group invests to its joint ventures or associates an asset forming part of a business,giving rise to the acquisition of a long-term equity investment by the investor without obtaining control, the initialinvestment cost of the additional long-term equity investments shall be recognized at fair value of the businessinvested. The difference between initial investment cost and book value of the business invested will be fullyincluded in current profits and losses. Where the Group disposes of an asset forming part of a business to itsassociates or joint ventures, the difference between the consideration received and the book value of the businessshall be fully included in current profits and losses. Where the Group acquires from its associates or joint venturesan asset forming part of a business, the profits or losses related to the transaction shall be accounted for andrecognized in accordance with the Accounting Standards for Business Enterprises No. 20 - Business Combination.The Group’s share of net loss of the investee shall be recognized to the extent that the book value of the long-term equity investment and any long-term equity that substantially forms part of the investor’s net investment in theinvestee are written down to zero. If the Group has to assume additional obligations to the loss of the investee, theestimated liabilities shall be recognized for the estimated obligation assumed and charged to investment loss for theperiod. Where the investee makes profits in subsequent periods, the Group shall re-recognize its share of the profitsafter setting off against the share of unrecognized losses.
③ Acquisition of minority interests
When preparing the consolidated financial statements, the Company adjusts the capital reserve and, if thecapital reserve is insufficient, adjusts the retained earnings based on the difference between the additional long-termequity investments arising on acquisition of minority interests and the Company’s share in the net assets of thesubsidiary accrued from the acquisition date (or consolidation date) in proportion to the additional shareholdings.
④ Disposal of long-term equity investments
In the consolidated financial statements, if the parent company disposes part of the long-term equity investmentin the subsidiary without losing its control, the difference between the disposal price and the Company’s share inthe net assets of the subsidiary attributable to the disposal of the long-term equity investment is recognized in theshareholders’ equity; if the parent company disposes part of the long-term equity investment in the subsidiaryresulting in the loss of its control over the subsidiary, the accounting treatment shall be in accordance with thepolicies as set out in Item (2) of Section 6 “Accounting treatment for business combination under common controland not under common control” under this Note V.In other cases, upon the disposal of a long-term equity investment, the difference between the book value ofthe investment and the price received is recognized in the current profits and losses.For a long-term equity investment that is accounted for using the equity method where the remaining equityafter disposal continues to be accounted for using the equity method, the portion of other comprehensive incomepreviously included in shareholder’s equity shall be treated in accordance with the same basis as the investee directlydisposes of relevant asset or liability on pro rata basis at the time of disposal. The owners’ equity recognized for thechange in owners’ equity of the investee other than net profits and losses, other comprehensive income and profitdistribution, shall be transferred to current profits and losses on pro rata basis.For a long-term equity investment accounted for using the cost method where the remaining equity afterdisposal continues to be accounted for using cost method, other comprehensive income recognized using the equitymethod or in accordance with the standard for recognition and measurement of financial instruments prior to theacquisition of control over the investee shall be treated in accordance with the same basis as the investee directlydisposes of relevant asset or liability, and transferred to current profits and losses on pro rata basis. The change inowners’ equity recognized in net assets of the investee by using the equity method other than net profits and losses,other comprehensive income and profit distribution shall be transferred to current profits and losses on pro ratabasis.In preparing separate financial statements, if control is lost over the investee upon partial disposal of equityinvestment, the remaining equity with common control or an ability to impose a significant influence over theinvestee after disposal shall be accounted for using the equity method, and shall be adjusted as if it has beenaccounted for using the equity method since it was acquired. The remaining equity without common control or anability to impose a significant influence over the investee after disposal shall be accounted for based on the standardfor recognition and measurement of financial instruments, and the difference between its fair value and book valueon the date of loss of control shall be included in current profits and losses. In respect of other comprehensive incomerecognized using the equity method or in accordance with the standard for recognition and measurement of financialinstruments prior to the acquisition of control over the investee, it shall be accounted for in accordance with thesame basis as the investee directly disposes of relevant asset or liability when the control is lost. The change inowners’ equity recognized in net assets of the investee by using the equity method other than net profits and losses,other comprehensive income and profit distribution shall be transferred to current profits and losses at the time whenthe control over investee is lost. Where the remaining equity after disposal is accounted for using the equity method,other comprehensive income and other owners’ equity shall be carried forward on pro rata basis. Where theremaining equity after disposal is accounted for in accordance with the standard for recognition and measurement
of financial instruments, other comprehensive income and other owners’ equity shall be fully carried forward.
If the common control or significant influence of the Group over the investee is lost upon partial disposal ofequity investment, the remaining equity after disposal shall be accounted for in accordance with the standard forrecognition and measurement of financial instruments. The difference between its fair value and book value on thedate of loss of common control or significant influence shall be included in current profits and losses. For othercomprehensive income recognized previously for the equity investment using equity method, it shall be accountedfor in accordance with the same basis as the investee directly disposes of relevant asset or liability at the time whenthe equity method is ceased to be used. The owners’ equity recognized arising from the change in owners’ equity ofthe investee other than net profits and losses, other comprehensive income and profit distribution shall be transferredto current profits and losses at the time when the equity method is ceased to be used.
Where the Group disposes of its equity investment in a subsidiary in a series of transactions until the control islost, and such transactions form “a bundle of transactions,” each transaction shall be accounted for as a disposal ofequity investment of the subsidiary resulting in a loss of control. The difference between the consideration for eachtransaction and the book value of the long-term equity investment attributable to the equity interests disposed priorto loss of control shall be initially recognized as other comprehensive income, and upon loss of control, transferredto current profits and losses when the loss of control takes place.
18. Investment properties
Measurement model for investment property
Cost model
Depreciation or amortization method
Investment properties are real estate held for rental income or capital appreciation, or both, including land userights that have been leased, land use rights that are held and intended to be transferred after appreciation, andbuildings that have been leased. In addition, vacant buildings held by the Group for operating leases are reported asinvestment properties if the Board of Directors (or similar organization) makes a written resolution that they will beused for operating leases and the intention to hold them will not change in the near future.
Investment properties shall be initially measured at cost. The subsequent expenses related to investmentproperties shall be recognized as cost of the investment properties only if it is probable that economic benefitsassociated with the assets will flow to the Group and the cost of the assets can be measured reliably. Other subsequentexpenses shall be recognized in the current profits and losses when incurred.
The Group uses the cost model for subsequent measurement of investment properties and depreciates oramortizes them according to the policies consistent with that for buildings or land use rights.
For the method of impairment test and provision for impairment loss of investment properties, please refer toSection 25 “Impairment of long-term assets” under Note V.
When the purpose of an investment property changes to self-use, from the date of the change, the investmentproperty shall be reclassified as a fixed asset or intangible asset. When the purpose of a self-use property changesto earning rental income or capital appreciation, from the date of the change, the fixed asset or intangible asset shall
be reclassified as an investment property. Upon reclassification, for investment properties measured using the costmodel, the carrying value before reclassification is recognized as the carrying value after reclassification. Forinvestment properties measured using the fair value model, the fair value on the date of reclassification is recognizedas the carrying value after reclassification.An investment property is derecognized upon disposal or when it is permanently withdrawn from use and nofuture economic benefits are expected from its disposal. The net proceeds from sale, transfer, retirement or damageof an investment property after its book value and related taxes and expenses are recognized in the current profitsand losses.
19. Fixed assets
(1)Recognition criteria
Fixed assets refer to the tangible assets held by the Company for producing goods, rendering services, rentingor operation and administration purposes with useful life of over one accounting year. The fixed assets arerecognized only when the economic interests related thereto are likely to flow into the Group and its cost can bemeasured reliably. The fixed assets are initially measured at cost with consideration of the impact of estimateddisposal costs.
(2)Depreciation method
The expected residual value refers to the anticipated condition of the fixed asset at the end of its estimateduseful life. It represents the estimated amount that the Group would receive from the disposal of the asset, net ofany expected disposal costs incurred.
(3)Impairment test method and provision for impairment of fixed assets
The impairment testing method and provision for impairment of fixed assets can be found in Section 25 ofNote V “Impairment of Long-term Assets.”
(4)Other Information
| Category | Depreciationmethod | Depreciation life(year) | Rate of residualvalue (%) | Annual depreciationrate (%) |
| Building for production | Straight-line method | 39 | 5 | 2.44 |
| Machine and equipment for production | Straight-line method | 10 | 5 | 9.5 |
| Transportation equipment | Straight-line method | 10 | 5 | 9.5 |
| Electronic deviceand management tools | Straight-line method | 5 | 5 | 19 |
| Machine andequipment for non-production purpose | Straight-line method | 10 | 5 | 9.5 |
| Building for non-production purpose | Straight-line method | 45 | 5 | 2.11 |
| Others | Straight-line method | 5 | 5 | 19 |
Subsequent expenditures related to fixed assets that are expected to generate economic benefits and can bereliably measured are capitalized as part of the fixed asset's cost, and the carrying value of the replaced portion isderecognized. Other subsequent expenditures are recognized in the current period's income statement uponoccurrence.When a fixed asset is classified as held for disposal or is expected to no longer generate economic benefitsthrough use or disposal, it is derecognized. Proceeds from the sale, transfer, scrapping, or destruction of fixed assets,net of their carrying value and related taxes, are recognized in the current period’s income statement.The Group reviews the useful lives, estimated residual values, and depreciation methods of fixed assets at leastannually. Changes in these estimates are treated as changes in accounting estimates.
20.Construction in progress
The cost of construction in progress is measured according to the actual expense for the construction in progress,including all the necessary expenses incurred in the process of construction, borrowing costs to be capitalized beforethe project is ready for its intended use and other related costs.
The construction in progress is transferred to fixed assets after it is ready for its intended use.
For the method of impairment test and provision for impairment loss of construction in progress, please referto Section 25 “Impairment of long-term assets” under Note V.
21.Borrowing costs
Borrowing costs include interest on borrowings, amortization of discounts or premiums, ancillary costs, andexchange differences arising from foreign currency borrowings. Where the borrowing costs can be directlyattributable to the acquisition and construction or production activities of assets eligible for capitalization, it shallbe capitalized on the basis that the expense for the asset has already been incurred, the borrowing costs have beenincurred and the acquisition and construction or production activities necessary to prepare the asset for its intendeduse or for sale have already commenced; after the acquired or produced asset eligible for capitalization is availablefor its intended use or for sale, the capitalization shall be stopped. Other borrowing costs shall be recognized asexpenses at the time when they are incurred.
The actual interest cost incurred in the period of specific-purpose borrowing net of any interest income fromthe borrowed funds not used and deposited in bank or any investment income from the temporary investment ofthose funds shall be capitalized; the amount of interest of general-purpose borrowings to be capitalized is determinedby multiplying the weighted average of the amounts of cumulative expenses on the asset over and above the amountsof specific-purpose borrowings by the capitalization rate of the corresponding general-purpose borrowings.Capitalization rate is calculated and determined based on the weighted average rate of general-purpose borrowings.
During the capitalization period, exchange differences related to specific-purpose borrowings denominated inforeign currencies are fully capitalized; exchange differences related to general-purpose borrowings denominatedin foreign currencies are recognized in the current profits and losses.
Assets eligible for capitalization refer to the fixed assets, investment properties, inventories and other assetsthat require a substantially long period of time of acquisition and construction or production activities for intended
use or for sale.Where the acquisition and construction or production activities of an asset eligible for capitalization isinterrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowingcosts shall be suspended until the acquisition and construction or production of the asset is resumed.
22.Biological assets
(1) Consumptive biological assets
Consumptive biological assets are the biological assets held for sale or harvested for agricultural products inthe future, including growing field crops, vegetables, timber stands and livestock stored for sale. Consumptivebiological assets shall be initially measured at cost. The cost of a consumptive biological asset that is cultivated,constructed, propagated or farmed by the Company is the necessary expense incurred before the asset isharvested/closed/sold/sold or placed in storage that is directly attributable to the asset, including borrowing coststhat are eligible for capitalization. Subsequent expenses such as management and feeding costs incurred afterharvesting/closing/storage of consumptive biological assets are included in current profits and losses.Consumptive biological assets are carried forward at book value using the weighted average method whenharvested or sold.On the balance sheet date, consumptive biological assets are measured at the lower of cost or net realizablevalue, and the provision for impairment of consumptive biological assets shall be calculated and recognized basedon the methods consistent with those for the recognition of the provision for inventory impairment. Where theimpairment factors disappear, the amount written down shall be restored and reversed from the original provisionfor depreciation, with the amount reversed recognized in the current profits and losses.
(2) Productive biological assets
Productive biological assets refer to the biological assets held for the purpose of producing agricultural products,providing services or leasing, including economic forests, firewood forests, production animals and draft animals.Productive biological assets shall be initially measured at cost. The cost of a self-created or propagated productivebiological asset is the necessary expense incurred before the asset achieves the intended purpose of production andoperation that can be directly attributable to the asset, including borrowing costs that meet the capitalizationconditions.
The Group reviews the useful life and estimated net residual value of a productive biological asset and thedepreciation method applied at least at each year-end. Any change shall be accounted for as a change in accountingestimate.
The difference between the disposal proceeds from the sale, liquidation, death or destruction of productivebiological assets less their book value and related taxes and charges is included in the current profits and losses.
The Group determines whether a productive biological asset has any signs of impairment on each balance sheetdate. If the asset shows signs of impairment, the recoverable amount is estimated. The recoverable amount isestimated on a single asset basis. If it is difficult to estimate the recoverable amount of a single asset, the recoverableamount of the asset group to which the asset belongs shall be determined. If the recoverable amount of an asset islower than its book value, the provision for asset impairment shall be made according to the difference and recorded
in the current profits and losses.Once the above asset impairment loss is recognized, it shall not be reversed in subsequent accounting periods.If a productive biological asset changes its use and becomes a consumptive biological asset, the cost of thechange of use is determined at the book value at the time of the change of use. If the productive biological assetchanges its use and becomes a public welfare biological asset, whether there is any impairment is determined inaccordance with the provisions of Accounting Standard for Business Enterprises No. 8 - Asset Impairment. Whenan impairment occurs, an impairment provision shall be first made and then determined on the basis of the bookvalue after such provision is made.
23.Oil and gas assets
Not applicable.
24.Intangible assets
(1)Useful life and its basis for determination, estimate, amortization method or review procedureAn intangible asset is an identifiable non-monetary asset without physical substance owned or controlled bythe Group.An intangible asset shall be initially measured at cost. The expenses incurred on an intangible asset shall berecognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset willflow to the Group and the cost of the asset can be measured reliably. Other expenses shall be recognized in thecurrent profits and losses when incurred.
Land use right acquired shall normally be recognized as an intangible asset. For self-constructed buildings (e.g.plants), the expenses on the land use right and cost of the buildings shall be separately accounted for as an intangibleasset and fixed asset. For buildings and structures purchased, the purchase consideration shall be allocated amongthe land use right and the buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation,the consideration shall be recognized in full as a fixed asset.An intangible asset with a definite useful life is amortized on average and by stages using the straight linemethod by deducting the estimated net residual value and accrued provision for impairment loss from the originalvalue over the estimated useful life from the time when it is available for use. An intangible asset with an indefiniteuseful life is not amortized.
During the end of the period, the Company shall check the useful life and the amortization method of intangibleassets with limited useful life and carry out accounting estimate change in case that a change happens. In addition,the Company shall check the useful life of intangible assets with indefinite useful life. If there are evidences showingthat the intangible assets can bring economic benefit for the Company within the foreseeable period, the Companyshall estimate the useful life and carry out amortization according to the amortization policy for intangible assetswith finite useful life.
The Group’s intangible assets include land use rights, software, franchise rights, patent technology, non-patenttechnology, and trademarks. The amortization periods and conditions for the main intangible assets are as follows:
① Land use rights are amortized over the remaining useful life specified in the land use right certificate, with
an average annual amortization period of 30-50 years. When the purchase price of land and buildings cannotbe reasonably allocated between land use rights and buildings, the entire amount is treated as fixed assets.
② Software, patent technology, and non-patent technology are amortized over the estimated useful life of 10years, with an average annual amortization period.
③ Franchise rights are amortized over the estimated useful life of 30 years, with an average annualamortization period.
(2)Scope of R&D expenses and related accounting treatment
The scope of our Company’s R&D expenses is primarily determined based on the Company’s R&D projects.It includes R&D personnel salaries, direct input costs, depreciation and amortization expenses, design and testingexpenses, outsourced R&D expenses, and other expenses.The Group classifies the expense on an internal R&D project into expense at the research phase and expenseat the development phase.Expense at the research phase is recognized in the current profits and losses when incurred.Expense at the development phase is recognized as an intangible asset if all of the following conditions aresatisfied at the same time, and otherwise, it is recognized in the current profits and losses:
① It is technically feasible to complete the intangible asset so that it will be available for use or sale;
② It is intended to complete and to use or sell the intangible asset;
③It can be demonstrated how the intangible asset will generate economic benefits, including demonstratingthat there is an existing market for products produced by the intangible asset or for the intangible asset itself, andthat it can be proven to be useful if the intangible asset is to be used internally;
④There are adequate technical, financial and other resources to complete the development and the ability touse or sell the intangible assets;
⑤The expense attributable to the intangible asset at its development phase can be reliably measured.
All the expenses on R&D which cannot be distinguished between the research phase and development phaseare recognized in the profits and losses when incurred.
The specific criteria for dividing internal R&D projects into research phase and development phase are asfollows: Once the corresponding project meets the aforementioned conditions and is approved through a reviewprocess, it enters the development phase and begins capitalization.
(3)The impairment testing method and provision for impairment of intangible assets
For the impairment testing method and provision for impairment of intangible assets, please refer to Section25 of “Impairment of long-term assets” under Note V.
25.Impairment of long-term assets
For non-current non-financial assets such as fixed assets, construction in progress, right of use assets, intangibleassets with limited useful life, investment real estate measured at cost and long-term equity investments insubsidiaries, joint ventures and associates, the Group determines whether there are signs of impairment on the
balance sheet date. If the asset shows signs of impairment, the recoverable amount is estimated, and impairment testis conducted. Goodwill, intangible assets with indefinite useful lives and intangible assets that have not yet readyfor use are tested annually for impairment regardless of whether there is an indication of impairment.If the impairment test results show that the recoverable amount of an asset is lower than its carrying value, theimpairment provision shall be made and the impairment loss shall be recorded according to the difference. Therecoverable amount is the higher between the net value of the fair value of the asset less the disposal expense andthe present value of the estimated future cash flow of the asset. The fair value of the asset is determined based onthe sales agreement price in fair transactions. Where there is no sales agreement but there is an active market for theasset, the fair value shall be determined according to the buyer’s bid for the asset. Where there is neither salesagreement nor active market for the asset, the fair value of the asset is estimated based on the best informationavailable. Disposal costs include legal costs associated with the disposal of the asset, related taxes, removal costsand direct costs incurred to bring the asset to marketable status. The present value of the expected future cash flowof the asset shall be determined according to the discounted amount of the expected future cash flow generated bythe asset in the process of continuous use and final disposal, which is converted according to the appropriate discountrate. The asset impairment provision is calculated and recognized on a single asset basis. If it is difficult to estimatethe recoverable amount of a single asset, the recoverable amount of the asset group to which the asset belongs shallbe determined. An asset group is the smallest portfolio of assets that can independently generate cash inflows.For the goodwill presented separately in the financial statements, when tested for impairment, the book valueof goodwill will be apportioned to the asset group or combination of asset groups expected to benefit from thesynergies of the business combination. Where the test results indicate that the recoverable amount of an asset groupor combination of asset groups containing the apportioned goodwill is less than its book value, the correspondingimpairment loss is recognized. The impairment loss amount is first set off against the book value of the goodwillapportioned to the asset group or combination of asset groups and then set off against the book value of other assetsbased on the proportion of the book value of each asset other than goodwill in the asset group or combination ofasset groups.Once the above asset impairment loss is recognized, it shall not be reversed in subsequent accounting periodsfor the part whose value is restored.
26.Long-term deferred expenses
Long-term unamortized expenses are the expenses that have been incurred but shall be borne in the reportingperiod and subsequent periods for a period of assessment of more than one year. The Group’s long-term deferredexpenses mainly consist of building renovations and project improvements. These long-term deferred expenses areamortized using the straight-line method over the estimated period of benefit.
27.Contractual liabilities
The contractual liabilities refer to the obligation of the Group to transfer goods to customers for considerationreceived or receivable. If the customer has paid the contractual consideration or the Group has obtained anunconditional right of collection prior to the transfer of goods by the Group to the customer, the Group presents theamount received or receivable as a contractual liability on the date when the actual payment is made by the customer
or the payment due date, whichever is earlier. Contractual assets and contractual liabilities under the same contractare presented on a net basis, and contractual assets and contractual liabilities under different contracts are not offset.
28.Employee compensation
(1)Accounting treatment for short-term employee compensation
The employee compensation of the Group includes short-term compensation, post-employment benefits,termination benefits and other long-term employee benefits. Where:
Short-term compensation mainly includes wages, bonuses, allowances and subsidies, employee welfareexpenses, medical insurance premiums, maternity insurance premiums, work-related injury insurance premiums,housing provident funds, union funds and employee education funds, non-monetary benefits, etc. The Grouprecognizes short-term employee compensation actually incurred during the accounting period in which employeesprovide services to the Group as a liability and includes it in current profits and losses or related asset cost. Non-monetary benefits are measured at fair value.
(2)Accounting treatment for post-employment benefits
Post-employment benefits mainly include basic pension insurance, unemployment insurance and annuity. Thepost-employment benefits plan includes the establishment of a defined contribution plan and the establishment of adefined benefit plan. If a defined contribution plan is adopted, the corresponding amount due is included in therelevant asset cost or current profits and losses at the time of occurrence.
If the employment relationship with the employee is terminated before the expiration of the employee’semployment contract, or a compensation proposal is made to encourage the employee to voluntarily accept thereduction, the employee compensation liabilities arising from termination benefits shall be recognized and includedin current profits and losses when the Group cannot unilaterally withdraw the termination benefits provided as aresult of the termination plan or the reduction proposal, or the Group recognizes the costs associated with thereorganization involving the payment of termination benefits, whichever is earlier. However, if the terminationbenefits cannot be fully paid within 12 months after the end of the annual reporting period, they shall be treated asother long-term employee compensations.
(3)Accounting treatment for termination benefits
Internal employee retirement plans are treated in the same way as the termination benefits mentioned above.The Group will recognize the salary of internal retirees and social insurance premiums to be paid during the periodfrom the date the employee ceases to provide service to the normal retirement date in the current profits and losses(termination benefits) when the conditions for recognition of the estimated liabilities are met.
(4)Accounting treatment for other long-term employee benefits
Other long-term employee benefits provided by the Group to employees that meet the defined contributionplan are accounted for in accordance with the defined contribution plan. Other benefits shall be accounted for inaccordance with the defined benefit plan.
29.Estimated liabilities
An obligation relating to a contingency is recognized as an estimated liability when the following conditionsare met: (1) The obligation is a current obligation undertaken by the Group; (2) The performance of the obligation
is likely to result in the outflow of economic benefits; (3) The amount of the obligation can be measured reliably.On the balance sheet date, estimated liabilities are measured according to the best estimate of expenses requiredto meet the relevant current obligations, taking into account factors such as risks, uncertainties and the time valueof money associated with contingencies.If all or part of the expenses required to pay off the estimated liabilities are expected to be compensated by athird party, the compensation amount shall be recognized separately as an asset when it is basically determined thatit can be received, and the recognized compensation amount shall not exceed the book value of the estimatedliabilities.
(1) Loss-making contract
A loss-making contract is a contract in which the cost of fulfilling the contractual obligation inevitably exceedsthe expected economic benefit. If the contract to be executed becomes a loss-making contract and the obligationsarising from the loss-making contract meet the conditions for recognition of the above-mentioned estimatedliabilities, the portion of the estimated loss of the contract exceeding the recognized impairment loss (if any) of theunderlying asset of the contract is recognized as an estimated liability.
(2) Reorganization obligation
For a detailed, formal reorganization plan that has been announced to the public, the estimated liability amountis determined on the basis of direct expenses related to the reorganization, subject to meeting the conditions forrecognition of the estimated liabilities described above.
30.Share-based payments
(1) Accounting treatment for share-based payment
Share-based payments are transactions in which equity instruments are granted or liabilities are assumed onthe basis of equity instruments in exchange for services rendered by employees or other parties. The share-basedpayments are divided into equity-settled share-based payment and cash-settled share-based payment.
① Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees shall be measured at daysthe fair value of the equity instruments granted to employees. For the equity-settled share-based payment that canonly be vested after services during a waiting period are provided, or required performance conditions are met, theamount of such fair value is calculated on a straight-line basis, based on the best estimate of the number of equityinstruments that can be vested during the waiting period, and is included in the relevant costs or expenses, or ifavailable immediately after grant, included in the relevant costs or expenses on the grant date, increasing capitalreserves accordingly.
On each balance sheet date during the waiting period, the Group makes the best estimate based on the latestfollow-up information such as changes in the number of employees that satisfy vesting conditions, and revises thenumber of equity instruments expected to be vested. The impact of the above estimates is included in the relevantcosts or expenses for the period, and capital reserves are adjusted accordingly.
The equity-settled share-based payments in exchange for services rendered by other parties shall be measured
at the fair value of the services on the acquisition date if the fair value of services rendered by other parties can bereliably measured. However, if the fair value of services rendered by other parties cannot be reliably measured, butthe fair value of the equity instruments can be reliably measured, the equity-settled share-based payments shall bemeasured at the fair value of the equity instruments on the acquisition date of the services, and included in therelevant costs or expenses, increasing shareholders’ equity correspondingly.When the fair value of equity instruments granted cannot be reliably measured, the intrinsic value of the equityinstruments is used to measure their value on the grant date, subsequent balance sheet dates, and settlement dates.Changes in the intrinsic value are recognized in the current period’s income statement.
② Cash-settled share-based payments
A cash-settled share-based payment shall be measured in accordance with the fair value of liability determinedbased on the shares or other equity instruments undertaken by the Group. If the cash-settled share-based paymentcan be vested immediately after granting, it shall be included in the relevant costs or expenses on the grant date,increasing the liabilities correspondingly. For the cash-settled share-based payment that can only be vested afterservices during a waiting period are provided or required performance conditions are met, on each balance sheetdate during the waiting period, the services obtained during the current period are included in the cost or expenseat the fair value of the liabilities assumed by the Group based on the best estimate of the situation of vesting,increasing the corresponding liabilities correspondingly.The Group shall, on each balance sheet date and each account date prior to the settlement of the relevantliabilities, re-measure the fair values of the liabilities and include the changes in the current profits and losses.(2)Accounting treatment for modification and termination of share-based payment planWhen the Group makes a modification to the share-based payment plan, if the modification increases the fairvalue of the equity instrument granted, the increase in services obtained is recognized in accordance with the increasein the fair value of the equity instrument. The increase in the fair value of equity instruments refers to the differencebetween fair values of the equity instruments before and after the modification on the date of modification. If amodification reduces the total fair value of share-based payments or is otherwise unfavorable to the employees, theacquired services continue to be accounted for as if the change never occurs, unless the Group cancels some or allof the equity instruments granted.If a grant of equity instruments is canceled during the waiting period, the Group treats the cancellation of thegranted equity instruments as accelerated exercise of right and includes the amount to be recognized over theremaining waiting period in the current profits and losses immediately, and recognizes the capital reserve at thesame time. If employees or other parties can choose to meet the non-vesting conditions but have not met theconditions within the waiting period, the Group treats it as cancellation of equity instruments granted.(3)Accounting treatment for share-based payment transactions involving the shareholders or de factocontrollers of the Group and CompanyTransactions involving share payments between the shareholders or de facto controllers of the Group andCompany are accounted for in the Group’s consolidated financial statements in accordance with the followingprovisions if either one of the settlement enterprises and receiving enterprises is within the Group, while the other
one is outside the Group:
① If the settlement enterprise settles by its own equity instruments, the share-based payment transaction shallbe treated as the equity-settled share-based payment; otherwise, they shall be treated as the cash-settled share-basedpayment.If the settlement enterprise is an investor of the enterprise receiving the services, it shall be recognized as along-term equity investment in the enterprise receiving the services according to the fair value of the equityinstrument on the grant date or the fair value of the liability assumed, and the capital reserve (other capital reserve)or liability shall be recognized at the same time.
② If the enterprise receiving the services has no settlement obligation or the equity instrument granted to itsemployees is its own equity instrument, the share-based payment transaction shall be treated as the equity-settledshare-based payment. If the enterprise receiving the services has settlement obligation and the equity instrumentgranted to its employees is not its own equity instrument, the share-based payment transaction shall be treated asthe cash-settled share-based payment.
For the share-based payment transaction occurring among the enterprises within the Group, where theenterprise receiving the services and the settlement enterprise are not the same enterprise, the recognition andmeasurement of the share-based payment transaction in the individual financial statements of the enterprisereceiving the services and the settlement enterprise shall be processed in accordance with the above principles.
31.Revenue
Disclose the accounting policies for revenue recognition and measurement by business type
Revenue is the total inflow of economic benefits arising from the Group’s ordinary activities that would resultin an increase in shareholders’ equity and are unrelated to capital contributions by shareholders. When the contractbetween the Group and the customer meets the following conditions, revenue is recognized when the customerobtains control of the relevant goods (including services, the same below) : The parties to the contract have approvedthe contract and undertake to perform their obligations; The contract specifies the rights and obligations of theparties to the contract in relation to the goods transferred or the provision of services; The contract has clear paymentterms related to the transferred goods; The contract is commercial in nature, i.e. the performance of the contract willchange the risk, timing or amount of the Group’s future cash flows; The consideration to which the Group is entitledas a result of the transfer of goods to customers is likely to be recovered. Gaining control of the relevant goodsmeans being able to dominate the use of that goods and derive almost all of the economic benefits from it.
On the commencement date of the contract, the Group identifies the individual performance obligation existingin the contract and allocates the transaction price to each individual performance obligation in proportion to theindividual selling price of the goods promised by each individual performance obligation. Factors such as variableconsideration, significant financing elements in the contract, non-cash consideration, and consideration payable tocustomers are considered in determining the transaction price.
For each individual performance obligation in the contract, the Group will recognize the transaction priceallocated to the individual performance obligation in accordance with the performance progress during the relevantperformance period as revenue if one of the following conditions is met: The customer acquires and consumes the
economic benefits arising from the Group’s performance at the same time as the Group fulfills its obligations; Thecustomer can control the goods under construction in the course of the Group’s performance; The goods producedin the course of the Group’s performance have irreplaceable uses and the Group is entitled to receive paymentthroughout the contract period for the cumulative part of the performance completed to date. The performanceprogress is determined by the input or output method, depending on the nature of the goods transferred. When theperformance progress cannot be reasonably determined, and the costs incurred by the Group are expected to becompensated, revenue is recognized at the amount of the costs incurred until the progress of performance can bereasonably determined.If one of the above conditions is not met, the Group recognizes revenue at the point at which the customerobtains control of the relevant goods at the transaction price apportioned to the individual performance obligation.In determining whether a customer has acquired control of the goods, the Group considers the following indications:
The enterprise has the current right of collection in respect of the goods, that is, the customer has the current paymentobligation in respect of the goods; The enterprise has transferred the legal ownership of the goods to the customer,that is, the customer has the legal ownership of the goods; The enterprise has physically transferred the goods to thecustomer, that is, the customer has physically possessed the goods; The enterprise has transferred the main risks andreturns in the ownership of the goods to the customer, that is, the customer has obtained the main risks and returnsin the ownership of the goods; The customer has accepted the goods; Other indications that the customer has takencontrol of the goods.Revenue recognition principles for specific scenarios are as follows:
(1) Domestic sales:
Revenue is recognized when control is transferred to the customer upon delivering the products to thecustomer’s specified location and obtaining customer acknowledgement through a signed confirmation, as stipulatedin the sales contract or order.Revenue is recognized when control is transferred to the customer upon delivering the products to thecustomer’s specified location and completing the customer's inspection based on relevant standards, as stipulated inthe sales contract or order.Revenue is recognized when the services have been provided, and the right to collect service fees is obtained.
(2) International sales:
Revenue is recognized when control is transferred to the customer upon the products being dispatched andcustoms clearance procedures being completed, as stipulated in the sales contract or order.
Situations where similar businesses adopt different operation models involving different revenue recognition methods andmeasurement methods:
Not applicable
32.Contract cost
Incremental cost incurred by the Group to acquire contract that is expected to be recovered is taken as thecontract acquisition cost and recognized as an asset. However, if the amortization period of the asset does not exceed
one year, it is included in the current profits and losses when it occurs.The cost incurred for the performance of the contract is recognized as an asset if it does not fall within thescope of Accounting Standard for Business Enterprises No. 14 - Revenue (Revised in 2017) and meets the followingconditions: ① The cost is directly related to a current or anticipated contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), cost expressly borne by the customer, and other costs incurred solelyas a result of the contract; ② This cost increases the Group’s future resources to meet its performance obligations;
③ This cost is expected to be recovered.
Assets related to contract costs are amortized on the same basis as for the recognition of the commodity revenueassociated with the assets and are recognized in current profits and losses.When the carrying amount of an asset related to contract costs exceeds the difference between the followingtwo amounts, an impairment provision is recognized for the excess amount, and an asset impairment loss isrecognized: (1) The expected remaining consideration to be obtained from transferring the goods related to thatasset. (2) The estimated costs necessary to complete the transfer of the related goods. If there is a change in thefactors that led to impairment in previous periods, resulting in the difference between (1) minus (2) exceeding thecarrying amount of the asset, the previously recognized impairment provision is reversed and recognized in thecurrent period’s income statement. However, the carrying amount of the asset after the reversal should not exceedthe carrying amount of the asset on the date of the reversal, assuming no impairment provision had been recognized.
33.Government subsidy
Government subsidy refers to the cash and bank balance and non-cash and bank balance that the Group obtainsfrom the government free of charge, excluding the capital invested by the government as an investor with thecorresponding owners’ equity. Government subsidies are divided into asset-related government subsidies andincome-related government subsidies. The Group defines government subsidies obtained for the acquisition orotherwise formation of long-term assets as asset-related government subsidies. Other government subsidies aredefined as income-related government subsidies. If the government document does not specify the recipients of thesubsidies, the subsidies divided into asset-related government subsidies and income-related government subsidiesin the following way: (1) If the government documents specify the specific project for which the subsidy is targeted,the division shall be made according to the relative proportion of the disbursement amount forming assets and thedisbursement amount included in the expenses in the budget of the specific project, and the division proportion shallbe reviewed on each balance sheet date and changed if necessary; (2) Where the government document only has ageneral description of the purpose and no specific project is specified, it shall be regarded as an income-relatedgovernment subsidy. For a government subsidy in the form of transfer of cash and bank balance, the subsidy ismeasured at the amount received or receivable. For a government subsidy in the form of transfer of non-cash andbank balance, it is measured at fair value; if the fair value cannot be reliably determinable, the subsidy is measuredat nominal amount. Government subsidies measured at nominal amounts are directly included in current profits andlosses.
The Group usually recognizes and measures government subsidies in accordance with the amount actuallyreceived when they are actually received. However, government subsidies are recognized at the amount receivableif there is evidence that the Group can meet the relevant conditions specified in the financial support policy at the
end of the period and the Group is expected to receive the financial support funds. Government subsidies measuredat the amounts receivable shall also meet the following conditions: (1) The amount of the receivable subsidies hasbeen confirmed by the competent government department in writing, or can be reasonably calculated according tothe relevant provisions of the officially issued measures for the management of financial funds, and there is nosignificant uncertainty in the estimated amount; (2) It is based on the financial support projects and financial fundmanagement measures officially issued by the local financial department and actively disclosed in accordance withthe provisions of the Regulations on the Disclosure of Government Information, and the management measuresshould be inclusive (that is, any enterprise that meets the prescribed conditions can apply), rather than specificallyformulated for specific enterprises; (3) The relevant grant approval has clearly promised the disbursement period,and the disbursement of the amount is guaranteed by the corresponding financial budget, so it can be reasonablyguaranteed that it can be received within the specified period; (4) Other relevant conditions that should be met basedon the specific circumstances of the Group and the grant in question (if any).
Asset-related government subsidies are recognized as deferred income and included in the current profits andlosses over the useful life of the related assets in accordance with a reasonable and systematic method. Income-related government subsidies that compensate the future costs, expenses or losses are recorded as deferred incomeand recognized in current profits and losses in the period in which the related costs, expenses or losses are recognized;Income-related government subsidies that compensate the incurred expenses or losses are included directly in thecurrent profits and losses.For government subsidies that contain both parts related to assets and parts related to income, accountingtreatments shall be made separately for different parts. If it is difficult to distinguish, it shall be classified as theincome-related government subsidy.Government subsidies related to ordinary activities are recorded in other income in accordance the substanceof economic operations. Government subsidies unrelated to daily activities are included in non-operating revenueand expense.When confirmed government subsidies need to be returned and there is a related balance of deferred income,the related deferred income balance is offset. Any excess amount is recognized in the current period’s incomestatement or adjusted against the carrying value of the asset (for government subsidies that were initially offsetagainst the carrying value of the asset); in other cases, it is recognized directly in the current profits and losses.
34.Deferred income tax assets/deferred income tax liabilities
(1)Current income tax
The current income tax liabilities (or assets) generated in the current period and previous periods are measuredon the balance sheet date in accordance with the expected payable (or refunded) income tax amount calculatedaccording to the tax law. The taxable income amount on which the current income tax expense is calculated is basedon the corresponding adjustment of the pre-tax accounting profit of the reporting period in accordance with therelevant provisions of the tax law.
(2)Deferred income tax assets and deferred income tax liabilities
The deferred income tax assets and deferred income tax liabilities can be determined with the balance sheet
liability method, based on the difference between the book value of certain assets and liabilities and the tax basis,as well as the temporary difference between the tax basis and the book value of the items not recognized as assetsand liabilities but whose tax basis can be determined according to the tax law.For taxable temporary differences relating to the initial recognition of goodwill and the initial recognition ofassets or liabilities arising from transactions that are neither a business combination nor affect accounting profit andtaxable income (or deductible losses) at the time of occurrence, the relevant deferred tax liabilities are not recognized(except for individual transactions in which the initial recognition of assets and liabilities results in equal amountsof taxable temporary differences and deductible temporary differences). In addition, for taxable temporarydifferences related to investments in subsidiaries, associates and joint ventures, deferred tax liabilities are notrecognized if the Group is able to control the timing of the reversal of the temporary difference and it is likely thatthe temporary difference will not be reversed in the foreseeable future. Subject to the above exceptions, the Grouprecognizes all other deferred tax liabilities arising from taxable temporary differences.For deductible temporary differences relating to the initial recognition of assets or liabilities arising fromtransactions that are neither a business combination nor affect accounting profit and taxable income (or deductiblelosses) at the time of occurrence, the relevant deferred tax assets are not recognized (except for individualtransactions in which the initial recognition of assets and liabilities results in equal amounts of taxable temporarydifferences and deductible temporary differences). For deductible temporary differences associated withinvestments in subsidiaries, associates and joint ventures, the relevant deferred tax asset is not recognized if it is notlikely that the temporary differences will reverse in the foreseeable future and it is not likely that taxable incomewill be available against which the deductible temporary differences can be utilized in the future. Subject to theabove exceptions, the Group recognizes other deferred income tax assets arising from deductible temporarydifferences to the extent that it is probable that taxable income will be available against which deductible temporarydifferences can be utilized.
For the deductible losses and tax credits that can be carried forward to future years, the Group recognizes thecorresponding deferred tax assets to the extent that it is probable that future taxable income will be available againstwhich the deductible losses and tax credits can be utilized.On the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at thetax rates that are expected to apply in the period in which the asset is recovered or the liability is settled accordingto the tax law.On the balance sheet date, the Group reviews the book value of deferred income tax assets. If no sufficienttaxable income is probably obtained in the future to offset the benefits of deferred income tax assets, the book valueof the deferred income tax assets shall be written down. When it is probable to obtain sufficient taxable incometaxes, such write-off amount shall be reversed.
(3)Income tax expense
Income tax expenses include current income tax expenses and deferred income tax expenses.
Except for current income tax and deferred income tax related to transactions and events recognized as othercomprehensive income or directly included in shareholders’ equity, and the book value of deferred income tax
adjusted goodwill resulting from business combination, the remaining current income tax and deferred income taxexpenses or gains are included in current profits and losses.
(4)Offsetting of income tax
If the Group has the legal right to settle on a net basis, and intends to settle on a net basis or acquire assets andsettle liabilities simultaneously, the current income tax assets and current income tax liabilities are presented on anet basis after offsetting.If the Group has a legally enforceable right to settle current income tax assets and liabilities on a net basis，and the deferred income tax assets and liabilities are related to the income taxes levied by the same taxation authorityon either the same taxable entity or different taxable entities, which intend either to settle current income tax assetsand liabilities on a net basis or to realize the assets and settle the liabilities simultaneously, in each future period inwhich significant amounts of deferred income tax assets and liabilities are expected to be reversed, the deferredincome tax assets and liabilities can be offset and presented on a net basis.
35.Leases
(1)Accounting treatment as the lessee
Leasing refers to contracts in which the Group conveys or acquires the right to control the use of one or moreidentified assets for a specified period in exchange for consideration. At the commencement date of a contract, theGroup assesses whether the contract is a lease or contains a lease component.
(1)Accounting treatment as the lessee
The Group’s lease assets are mainly housing and buildings.
① Initial measurement
On the date of commencement of the lease term, the Group recognizes the right to use the lease asset duringthe lease term as a right of use asset and recognizes the present value of the outstanding lease payments as a leaseliability, except for short-term leases and low value asset leases. When calculating the present value of leasepayments, the interest rate implicit in the lease is used as the discount rate. If the interest rate implicit in the leasecannot be determined, the lessor’s incremental borrowing rate is used as the discount rate.
② Subsequent measurement
The Group shall depreciate the right of use assets in accordance with the relevant depreciation provisions ofAccounting Standard for Business Enterprises No. 4 - Fixed Assets (see Section 19 “Fixed assets” under NoteV for details). If the ownership of the leased asset can be reasonably determined at the end of the lease term, theGroup shall depreciate the leased asset during the remaining useful life. Where it is unable to reasonably determinethe ownership of the leased asset at the end of the lease term, the Group shall make depreciation provision over thelease term or the remaining useful life of the leased asset, whichever is shorter.
The Group calculates the interest expense on lease liabilities for each period of the lease term at a fixed periodicrate, which is included in the current profits and losses, or the relevant asset costs. Variable lease payments that arenot included in the measurement of the lease liability are recognized in current profits and losses, or the relevantasset costs when they are actually incurred.
After the commencement date of the lease term, when there is a change in the substantive fixed payment amount,a change in the amount expected to be payable for the guaranteed residual value, a change in the index or rate usedto determine the lease payment amount, or a change in the evaluation result or actual exercise of the purchase option,renewal option or termination option, the Group remeasures the lease liability at the present value of the changedlease payment amount and adjusts the carrying value of the right-of-use asset accordingly. If the book value of theright-of-use asset has been reduced to zero but the lease liability is subject to further reduction, the Group recognizesthe remaining amount in current profits and losses.
③ Short-term leases and leases of low-value assets
For short-term leases (leases with a lease term of not more than 12 months since the commencement date ofthe lease) and low-value asset leases (the value of a single lease asset, which is a brand-new asset, is lower thaneither RMB 40,000 or USD 5,000), the Group adopts a simplified approach whereby the right of use assets and leaseliabilities are not recognized and the lease payments are recognized in the relevant asset cost or current profits andlosses in accordance with the straight-line method or other systematic and reasonable methods during the variousperiods of the lease term.(2)Accounting treatment as the lessor
On the inception date of the lease, the Group classifies the lease as a finance lease and an operating lease basedon the substance of transaction. A finance lease is a lease that transfers substantially all the risks and returnsassociated with ownership of the leased asset. An operating lease is a lease other than a finance lease.
① Operating lease
Lease receipts under operating leases are recognized as rental income on a straight-line basis over the respectiveperiods of the lease term. Variable lease payments acquired in connection with operating leases that are not includedin the lease receipts are recognized in current profits and losses when they are actually incurred.
② Finance lease
The Group recognizes finance lease receivables and derecognizes finance lease assets on the commencementdate of the lease term. Finance lease receivables are initially measured at the net lease investment (the sum of theunsecured balance and the unreceived lease proceeds on the commencement date of the lease term at the presentvalue discounted with the intrinsic interest rate of the lease), and interest income is recognized during the lease termat a fixed periodic interest rate. Variable lease payments obtained by the Group which are not included in the netlease investment measurement are recognized in current profits and losses when they are actually incurred.
36.Other significant accounting policies and accounting estimates
Share repurchase
Consideration and transaction costs paid in share repurchases reduce shareholders’ equity and no profits orlosses is recognized when shares of the Company are repurchased, transferred or cancelled.
For the transfer of treasury shares, the difference between the amount actually received and the book value oftreasury shares shall be included in the capital reserve. If the capital reserve is insufficient for deduction, the surplusreserve and undistributed profits shall be deducted. For the cancellation of treasury shares, the share capital shall be
reduced according to the par value of the shares and the number of shares cancelled, and the difference between thebook balance and the par value of treasury shares shall be charged to the capital reserve. If the capital reserve isinsufficient for deduction, the surplus reserve and undistributed profits shall be deducted.
37.Changes in significant accounting policies and accounting estimates
(1)Changes in significant accounting policies
? Applicable □ Not applicable
① Interpretation No. 17 of the Accounting Standards for Enterprises
The Ministry of Finance issued Interpretation No. 17 of the Accounting Standards for Enterprises (hereinafterreferred to as “Interpretation No. 17”) on November 9, 2023, which will be effective from January 1, 2024. TheGroup will adopt the provisions of Interpretation No. 17 starting from January 1, 2024. The implementation ofrelevant provisions of Interpretation No. 17 will have no impact on the Group’s financial statements during thereporting period.
② Interpretation No. 18 of the Accounting Standards for Enterprises
The Ministry of Finance issued Interpretation No. 18 of the Accounting Standards for Enterprises (hereinafterreferred to as “Interpretation No. 18”) on December 31, 2024, which will be effective from the date of issuance.The Group will adopt the provisions of Interpretation No. 18 starting from December 31, 2024. The implementationof relevant provisions of Interpretation No. 18 will have no impact on the Group’s financial statements during thereporting period.
(2)Changes in significant accounting estimates
□ Applicable ? Not applicable
(3)First-time implementation of the new accounting standard in 2024 to adjust relevant items in thefinancial statements at the beginning of the year of first-time implementation
□ Applicable ? Not applicable
38.Significant accounting judgment and estimate
As operating activities have inherent uncertainties, the Group needs to make judgments, estimates andassumptions upon report items that cannot be accurately calculated in applying the above accounting policies. Thesejudgments, estimates and assumptions are made based on historical experiences of the management of the Group,taking other related factors into consideration. These judgments and estimates may affect the presented amounts ofincomes, expenses, assets and liabilities and, as well as the disclosure of contingent liabilities on the balance sheetdate. However, the uncertainty in these estimates may result in actual results that differ from the current estimatesof the Group’s management, resulting in material adjustments to the book value of assets or liabilities affected inthe future.The Group reviews the above judgments, estimates and assumptions periodically based on going concern. Ifthe changes of accounting estimates only affect the current period, the influence amount is recognized in the currentperiod. If the changes of accounting estimates affect both of the current year and the future period, the influenceamount is recognized in the current period and the future period.As at the balance sheet date, the significant areas in which the Group is required to make judgments, estimates
and assumptions regarding the amounts of items in the financial statements are as follows:
(1) Revenue recognition
As set out in Section 31 “Revenue” under Note V, the Group’s revenue recognition involves significantaccounting judgments and estimates such as: identifying customer contracts; estimating the recoverability of theconsideration to which the Group is entitled as a result of the transfer of goods to the customer; identifying theperformance obligations in the contract; estimating the variable consideration present in the contract and the amountof accumulated recognized revenue that is highly unlikely to be materially reversed when the related uncertainty iseliminated; whether there is any significant financing component to the contract; estimating the individual sellingprice of the individual performance obligations in the contract; determining whether the performance obligation isto be performed within a certain period of time or at a certain point; determining the implementation progress, etc.The Group mainly relies on past experience and work to make judgments, and these significant judgments andchanges in estimates may have an impact on the operating revenue, operating costs, and profits and losses of theperiod for the current or subsequent periods, and may constitute a material impact.
(2) Leases
① Identification of leases
When identifying whether a contract is a lease or contains a lease, the Group needs to assess whether thereexists an identified asset and the customer controls the use of the asset for a certain period of time. In this assessment,consideration needs to be given to the nature of the asset, substantial replacement rights, and whether the customeris entitled to receive virtually all of the economic benefits arising from the use of the asset during that period andable to direct the use of the asset.
② Classification of leases
When acting as a lessor, the Group classifies leases into operating leases and finance leases. When making theclassification, the management needs to make an analysis and judgment as to whether all the risks and rewardsassociated with ownership of the leased asset have been substantially transferred to the lessee.
③ Lease liabilities
When the Group is the lessee, the lease liabilities shall be initially measured at the present value of theoutstanding lease payment on the commencement date of the lease term. When measuring the present value of leasepayments, the Group estimates the discount rate used and the lease term of a lease contract with a renewal ortermination option. When assessing the lease term, the Group takes into account all relevant facts and circumstancesrelating to the economic benefits arising from the exercise of the option by the Group, including expected changesin facts and circumstances between the commencement date of the lease term and the exercise date of the option.Different judgments and estimates may affect the recognition of lease liabilities and right-of-use assets and willaffect the profits or losses in subsequent periods.
(3) Impairment of financial assets
The Group uses the expected credit loss model to evaluate the impairment of financial instruments, and theapplication of the expected credit loss model requires significant judgments and estimates that take into account allreasonable and evidence-based information, including forward-looking information. When making such judgments
and estimates, the Group extrapolates the expected changes in the debtors' credit risk based on historical data andfactors such as changes in economic policies, macroeconomic indicators, industry risks, external market conditions,technological environment and customer conditions.
(4) Provision for inventory impairment
According to the inventory accounting policy, the Group makes provision for inventory impairment based oneither the cost or the realizable net value of the old and unsalable inventory, whichever is lower, if the cost is higherthan the realizable net value. The impairment of inventory to net realizable value is based on assessing themarketability of the inventory and its net realizable value. Assessment of inventory impairment requires themanagement to make judgments and estimates on the basis of obtaining solid evidence and considering factors suchas the purpose of holding inventory and the impact of events after the balance sheet date. The difference betweenactual results and the original estimate will affect the book value of inventory and the withdrawal or reversal of theprovision for inventory impairment during the period in which the estimate is changed.
(5) Fair value of financial instruments
For financial instruments without active market, the Group will determine their fair values through variousvaluation methods. These valuation methods include discounted cash flow model analysis. In the valuation, theGroup needs to estimate future cash flows, credit risk, market volatility and correlation, and select an appropriatediscount rate. These assumptions are subject to uncertainty, and changes in them can have an impact on the fairvalue of financial instruments. Where equity instrument investments or contracts are publicly quoted, the Groupdoes not use cost as the best estimate of their fair value.
(6) Provision for impairment of long-term assets
On the balance sheet date, the Group makes a judgment on whether there is any sign of possible impairment ofnon-current assets other than financial assets. Intangible assets with uncertain useful life shall be subject toimpairment tests when there are signs of impairment in addition to annual impairment tests. Non-current assets otherthan financial assets shall be subject to impairment tests when there are signs indicating that their book value isuncollectible.
Impairment occurs when the book value of an asset or asset group is greater than the recoverable amount, thatis, the net amount of fair value minus disposal expenses and the present value of expected future cash flow,whichever is higher.
The net amount of fair value minus disposal expenses shall be determined by reference to the sale agreementprice or observable market price of similar assets in an arm’s length transaction, less the incremental cost directlyattributable to the disposal of the asset.
When estimating the present value of future cash flows, it is necessary to make significant judgments about theoutput of the asset (or group of assets), the selling price, the associated operating costs, and the discount rate usedin calculating the present value. When estimating the recoverable amounts, the Group uses all the relevantinformation available, including projections of production volumes, selling prices and related operating costs basedon reasonable and supportable assumptions.
The Group tests goodwill for impairment at least annually. This requires an estimate of the present value of the
future cash flows of the asset group or combination of asset groups to which goodwill has been allocated. Whenestimating the present value of the future cash flow, the Group needs to estimate the expected future cash flowgenerated by the asset group or combination of asset groups, and determine the present value of the future cash flowat an appropriate discount rate.
(7) Depreciation and amortization
The Group depreciates and amortizes the investment real estate, fixed assets and intangible assets on a straight-line basis over their useful lives, taking into account their residual value. The Group periodically reviews the usefullife to determine the amount of depreciation and amortisation expenses to be included in each reporting period. Theuseful life is determined by the Group based on previous experience with similar assets as well as expectedtechnological updates. If there is any material change in previous estimates, an adjustment will be made todepreciation and amortization expense in future periods.
(8) Deferred income tax assets
To the extent that there is likely sufficient taxable profit to offset the loss, the Group recognises deferred taxassets on all unutilised tax losses. This requires the management of the Group to use massive judgments to estimatethe time and amount of taxable profit in the future and then to determine the value of deferred tax assets incombination with tax planning strategies.
(9) Income tax
In the normal business activities of the Group, there are certain uncertainties in the final tax treatment andcalculation of some transactions. Whether some items can be deducted before tax requires the approval of the taxauthority. Where the final tax outcome of these matters is different from the estimated amounts, the differences willimpact the current income tax and deferred income tax in the period in which such determination is made.
(10) Measurement at fair value
Certain assets and liabilities of the Group are measured at fair value in the financial statements. The Group’sBoard of Directors has established a Valuation Committee, led by the Group’s Chief Financial Officer, to determineappropriate valuation techniques and inputs for fair value measurement. When estimating the fair value of an assetor liability, the Group uses available observable market data. If the inputs of level 1 are not available, the Groupwill hire qualified third-party appraisers to perform the valuation. The Valuation Committee works closely withqualified external appraisers to determine appropriate valuation techniques and relevant input values for the models.The Chief Financial Officer reports the findings of the Valuation Committee to the Group’s Board of Directors ona quarterly basis, explaining the reasons for fluctuations in the fair value of relevant assets and liabilities. Relevantinformation on the valuation techniques and input values used in determining the fair value of various assets andliabilities is disclosed in “Note XII.”
39.Others: None.
VI. Taxation
1. Main tax types and tax rates
| Tax type | Taxation basis | Tax rate |
| Value-added tax | Value added from sales of goods or rendering of services | 13%, 9%, 6%, 5%, 3% |
| Consumption tax | Quantity-based collection and price- | Price-based collection: 20%, 10%, 15%; |
| based collection | Quantity-based collection: RMB 0.5 per 0.5kg | |
| Urban maintenance and construction tax | Amount of turnover tax payables | 7%, 5%, 1% |
| Enterprise income tax | Taxable income | 15%, 16.5%, 20%, 25% |
| Education surcharge | Amount of turnover tax payables | 3% |
| Local education surcharge | Amount of turnover tax payables | 2% |
If there are taxable entities with different corporate income tax rates, disclose the description of the situation
| Taxpayer | Income tax rate |
| Yunnan Baiyao Group Co., Ltd. | 15.00% |
| Yunnan Baiyao Group Medicine E-commerce Co., Ltd. | 15.00% |
| Yunnan Institute of Materia Medica | 15.00% |
| Yunbaiyao Zhengwu Technology (Shanghai) Co., Ltd. | 15.00% |
| Yunnan Baiyao Group Health Products Co., Ltd. | 15.00% |
| Yunnan Baiyao Group Lijiang Pharmaceutical Co., Ltd. | 15.00% |
| Yunnan Baiyao Group Wenshan Qihua Co., Ltd. | 15.00% |
| Yunnan Baiyao Group Wuding Pharmaceutical Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Yuxi Sales Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Xingda Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Baoshan Drug Development Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Technology Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Sanfa Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Dehong Development Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Xihui Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Qujing Co., Ltd. | 15.00% |
| Yunnan Baiyao Pharmacy Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Wanhe Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Tianma Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Dali Development Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Xiongyi Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Lincang Sales Co., Ltd. | 15.00% |
| Yunnan Pharmaceutical Dali Co., Ltd. | 15.00% |
| YNBY International Limited | 16.50% |
| Yunbaiyao Hong Kong Co., Limited | 16.50% |
| Beijing Rui’er Testing Technology Co., Ltd. | 20.00% |
| Yunnan Pharmaceutical Jiayuan Co., Ltd. | 20.00% |
| Yunnan Pharmaceutical Tianfu Dahua Co., Ltd. | 20.00% |
| Yunnan Pharmaceutical Diqing Development Co., Ltd. | 20.00% |
| Yunnan Pharmaceutical Pu’er Co., Ltd. | 20.00% |
| Yunnan Pharmaceutical Zhaotong Co., Ltd. | 20.00% |
| Lijiang Yunquan Biological Development Co., Ltd. | 20.00% |
| Yunnan Baiyao Tiancui Business Management Co., Ltd. | 20.00% |
| Beijing Yunzhi Health Management Co., Ltd. | 20.00% |
| Shanghai Wenshu Health Management Co., Ltd. | 20.00% |
| Shanghai Yunzhen Outpatient Department Co., Ltd. | 20.00% |
| Kunming Yunzhen Medical Technology Co., Ltd. | 20.00% |
| Shanghai Yunyi Medical Technology Co., Ltd. | 20.00% |
| Shanghai Yunpu Medical Technology Co., Ltd. | 20.00% |
| Beijing Yunzhen Medical Aesthetic Clinic Co., Ltd. | 20.00% |
| Shanghai Hanshi Health Consulting Co., Ltd. | 20.00% |
| Shanghai Yunzhenni Medical Aesthetic Outpatient Department Co., Ltd. | 20.00% |
| Yunnan Baiyao Yunzhen International Trade Co., Ltd. | 20.00% |
| Shanghai Yunyao Oral Medical Technology Co., Ltd. | 20.00% |
| Yunnan Fengqing Tea Plant Co., Ltd. | 20.00% |
| Yunnan Baiyao Tianyi Chayuan Lincang Manor Co., Ltd. | 20.00% |
| Tianjin Yunshuda Comprehensive Clinic Co., Ltd. | 20.00% |
| Yunnan Tianzheng Testing Co., Ltd. | 20.00% |
| YNBY Healthcare (Shenzhen) Limited | 20.00% |
| Xingzhong Digital Intelligence TCM Service Co., Ltd of Yunnan Baiyao Group | 20.00% |
| Yunnan Yunyao Nuxiang Co., Ltd. | 20.00% |
| Yunhe Pharmaceutical (Tianjin) Co., Ltd. | 20.00% |
| Hangzhou Shanqi Health Industry Co., Ltd. | 20.00% |
2. Preferential tax treatment
(1) A total of 22 companies, including Yunnan Baiyao Group Co., Ltd, Yunnan Baiyao Group Medicine E-commerce Co., Ltd, Yunnan Baiyao Group Health Products Co., Ltd, Yunnan Baiyao Group Lijiang PharmaceuticalCo., Ltd, Yunnan Baiyao Group Wenshan Qihua Co., Ltd, Yunnan Baiyao Group Wuding Pharmaceutical Co., Ltd,Yunnan Pharmaceutical Co., Ltd, Yunnan Pharmaceutical Yuxi Sales Co., Ltd, Yunnan Pharmaceutical Xingda Co.,Ltd, Yunnan Pharmaceutical Baoshan Drug Development Co., Ltd, Yunnan Pharmaceutical Technology Co., Ltd,Yunnan Pharmaceutical Sanfa Co., Ltd, Yunnan Pharmaceutical Hongde Development Co., Ltd, YunnanPharmaceutical Xihui Co., Ltd, Yunnan Pharmaceutical Qujing Co., Ltd, Yunnan Baiyao Pharmacy Co., Ltd,Yunnan Pharmaceutical Wanhe Co., Ltd, Yunnan Pharmaceutical Tianma Co., Ltd, Yunnan Pharmaceutical DaliDevelopment Co., Ltd, Yunnan Pharmaceutical Xiongyi Co., Ltd, Yunnan Pharmaceutical Lincang Sales Co., Ltd,
and Yunnan Pharmaceutical Dali Co., Ltd, enjoy the preferential tax treatment for the Western Development andpay the enterprise income tax at the tax rate of 15%.
(2) Yunnan Institute of Materia Medica, Yunbaiyao Zhengwu Technology (Shanghai) Co., Ltd and YunnanBaiyao Group TCM Resources Co., Ltd enjoy the preferential tax treatment for high-tech enterprises and pay theenterprise income tax at the tax rate of 15%.
(3) For Yunnan Baiyao Group Sanqi Industry Co., Ltd, Yunnan Baiyao Group Tai’an Biotechnology IndustryCo., Ltd and Yunnan Yunyao Flavor and Fragrance Co., Ltd, the primary processing of agricultural products isexempt from enterprise income tax, and the income other than that is taxed at 25%.For Lijiang Yunquan Biological Development Co., Ltd, the primary processing of agricultural products isexempt from enterprise income tax, and the income other than that shall be subject to enterprise income tax for smalland micro enterprises.
(4) The Hong Kong-based company (YNBY International Limited and its subsidiaries in Hong Kong as asingle taxpayer entity) is subject to the “two-tiered tax rate” policy. This means that for annual taxable profits notexceeding HKD 2 million, a tax rate of 8.25% applies; for profits exceeding HKD 2 million, a tax rate of 16.5%applies. 100% of the profits tax for the year 2024/25 can be waived, with a cap of HKD 1,500 for each company.
(5) According to the Announcement of the General Administration of Taxation of the Ministry of Finance onthe Further Implementation of the Preferential Income Tax Policy for Small and Micro Enterprises (Finance andTaxation [2022] No. 13), “the part of the annual taxable income of small and micro profit enterprises exceedingRMB 1 million but not exceeding RMB 3 million shall be included in the taxable income at a reduced rate of 25%,and the enterprise income tax shall be paid at a tax rate of 20%. The period of implementation of this announcementis from January 1, 2022 to December 31, 2024,” the Announcement of the General Administration of Taxation ofthe Ministry of Finance on Preferential Income Tax Policies for Small and Micro Enterprises and IndividualIndustrial and Commercial Households (Finance and Taxation [2023] No. 6), “the part of the annual taxable incomeof small and micro profit enterprises that does not exceed RMB 1 million shall be included in the taxable income ata reduced rate of 25%, and the enterprise income tax shall be paid at a tax rate of 20%. The period of enforcementof this Announcement is from January 1, 2023 to December 31, 2024,” and the Announcement of the GeneralAdministration of Taxation of the Ministry of Finance on Tax Policies for Further Supporting the Development ofSmall and Micro Enterprises and Individual Industrial and Commercial Enterprises (Finance and Taxation [2023]No. 12), “For small, low-profit enterprises, the taxable income amount shall be calculated at a reduced rate of 25%,and the enterprise income tax shall be paid at a tax rate of 20%. The policy shall be continued until December 31,2027.” Twenty-eight companies, including Yunnan Fengqing Tea Plant Co., Ltd, and Beijing Rui’er TestingTechnology Co., Ltd pay enterprise income tax at a tax rate of 20% according to this policy.
3. Others: None.
VII. Notes to Items in Consolidated Financial Statements
1.Cash and bank balance
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 124,469.53 | 258,600.92 |
| Bank deposit | 10,835,027,632.02 | 14,132,709,154.14 |
| Other cash and bank balance | 52,831,059.75 | 85,375,321.61 |
| Total | 10,887,983,161.30 | 14,218,343,076.67 |
| Including: Total amount of money deposited overseas | 172,825,681.17 | 190,267,321.90 |
Other explanations: None.
2.Financial assets held for trading
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profits or losses | 2,547,113,523.40 | 149,366,687.56 |
| Including: | ||
| Investments in debt instruments | ||
| Investments in equity instruments | 179,246,998.10 | 144,766,687.56 |
| Others | 2,367,866,525.30 | 4,600,000.00 |
| Including: | ||
| Total | 2,547,113,523.40 | 149,366,687.56 |
Other explanations: Others include banking products that are characterized by higher safety and better liquidity, as well as wealthmanagement products from brokerage firms.
3.Notes receivable
(1)Notes receivable by type
Unit: RMB
| Item | Closing balance | Opening balance |
| Banker’s acceptance bill | 302,751,911.37 | 227,542,572.56 |
| Domestic letter of credit | 626,900,000.00 | |
| Total | 929,651,911.37 | 227,542,572.56 |
(2)Disclosure by provision for bad debts
Unit: RMB
| Closing balance | Opening balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Category
CategoryAmount
| Amount | Proportion | Amount | Provision proportion |
Book value
Book valueAmount
| Amount | Proportion | Amount | Provision proportion |
Book value
| Book value | ||||||||
| Including: | ||||||||
| Bills receivable with provision for bad debts by portfolio | 929,651,911.37 | 100.00% | 929,651,911.37 | 227,542,572.56 | 100.00% | 227,542,572.56 | ||
| Including: | ||||||||
| Banker’s acceptance bill | 302,751,911.37 | 32.57% | 302,751,911.37 | 227,542,572.56 | 100.00% | 227,542,572.56 | ||
| Domestic letter of credit | 626,900,000.00 | 67.43% | 626,900,000.00 | |||||
| Total | 929,651,911.37 | 100.00% | 929,651,911.37 | 227,542,572.56 | 100.00% | 227,542,572.56 |
Provision for bad debts by portfolio:
Unit: RMB
| Item | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Banker’s acceptance bill | 302,751,911.37 | ||
| Domestic letter of credit | 626,900,000.00 | ||
| Total | 929,651,911.37 | ||
The explanation for determining the basis of this combination: None.If provision was made for bad debts of notes receivable in accordance with the general expected credit loss model:
□ Applicable ? Not applicable
(3)Provision for bad debts accrued, recovered or reversed during the reporting period: None.
(4)Notes receivable pledged by the Company at the end of the reporting period: None.
(5)Notes receivable endorsed or discounted by the Company, which were not yet due on the balancesheet date as at the end of the reporting period
Unit: RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Banker’s acceptance bill | 16,900,192.55 | |
| Domestic letter of credit | 60,000,000.00 | |
| Total | 76,900,192.55 |
(6)Actual write-off of notes receivable for the period: None.
4.Accounts receivable
(1)Disclosure by aging
Unit: RMB
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive of 1 year) | 9,713,443,216.42 | 9,849,981,025.64 |
| 1 to 2 years | 947,991,418.33 | 830,787,332.12 |
| 2 to 3 years | 92,799,887.41 | 86,210,266.13 |
| Above 3 years | 49,403,790.60 | 33,448,661.91 |
| Total | 10,803,638,312.76 | 10,800,427,285.80 |
(2) Disclosure by provision for bad debts
Unit: RMB
| Closing balance | Opening balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Category
CategoryAmount
| Amount | Proportion | Amount | Provision proportion |
Book value
Book valueAmount
| Amount | Proportion | Amount | Provision proportion |
Book value
| Book value | ||||||||||
| Accounts receivable with provision for bad debts on individual basis | 5,666,188.00 | 0.05% | 5,666,188.00 | 100.00% | 0.00 | 7,404,800.00 | 0.07% | 7,404,800.00 | 100.00% | 0.00 |
| Including: | ||||||||||
| Accounts receivable withprovision for bad debts on individual basis | 5,666,188.00 | 0.05% | 5,666,188.00 | 100.00% | 0.00 | 7,404,800.00 | 0.07% | 7,404,800.00 | 100.00% | 0.00 |
| Accounts receivable with provision for bad debts on portfolio basis | 10,797,972,124.76 | 99.95% | 874,611,020.37 | 8.10% | 9,923,361,104.39 | 10,793,022,485.80 | 99.93% | 826,852,038.59 | 7.66% | 9,966,170,447.21 |
| Including: | ||||||||||
| Age-based portfolio | 10,797,972,124.76 | 99.95% | 874,611,020.37 | 8.10% | 9,923,361,104.39 | 10,793,022,485.80 | 99.93% | 826,852,038.59 | 7.66% | 9,966,170,447.21 |
| Total | 10,803,638,312.76 | 100.00% | 880,277,208.37 | 8.15% | 9,923,361,104.39 | 10,800,427,285.80 | 100.00% | 834,256,838.59 | 7.72% | 9,966,170,447.21 |
Provision for bad debts made on an individual basis:
Unit: RMB
| Name | Opening balance | Closing balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision proportion | Reason for provision | |
| Ningbo Qingbing Biotechnology Co., Ltd | 7,404,800.00 | 7,404,800.00 | 5,666,188.00 | 5,666,188.00 | 100.00% | Little chance of recovery |
| Total | 7,404,800.00 | 7,404,800.00 | 5,666,188.00 | 5,666,188.00 | ||
Provision for bad debts made on a portfolio basis:
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Age-based portfolio | 10,797,972,124.76 | 874,611,020.37 | 8.10% |
| Total | 10,797,972,124.76 | 874,611,020.37 | |
Explanation on the basis for determining the portfolio: None.If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□ Applicable ?
Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the reporting period
Provision for bad debts for the period:
Unit: RMB
| Category | Opening balance | Changes in this period | |||
| Provision | Recovery or reversal | Write-off | Others | ||
Closing balance
| Closing balance | ||||||
| Single account receivable with provision for bad debts | 7,404,800.00 | 1,738,612.00 | 5,666,188.00 | |||
| Age-based portfolio | 826,852,038.59 | 48,414,023.57 | 655,041.79 | 874,611,020.37 | ||
| Total | 834,256,838.59 | 48,414,023.57 | 1,738,612.00 | 655,041.79 | 0.00 | 880,277,208.37 |
Provision for bad debts during the reporting period: None.
(4) Actual write-off of accounts receivable for the period:
Unit: RMB
| Item | Amount of write-off |
| Actual write-off of accounts receivable | 655,041.79 |
Significant write-off of accounts receivable: None.
Explanation on write-off of accounts receivable: None.
(5) Top five customers in closing balance of accounts receivable and contractual assets summarized by
debtor
Unit: RMB
| Entity name | Closing balance of accounts receivable | Closing balance of contractual assets | Closing balance of accounts receivable and contractual assets | Percentage of total of closing balance of accounts receivable and contractual assets | Closing balance of provision for bad debts of account receivable and provision for impairment of contractual assets |
| Customer A | 550,186,653.39 | 550,186,653.39 | 5.09% | 72,982,856.20 | |
| Customer B | 545,477,381.28 | 545,477,381.28 | 5.05% | 27,583,365.78 | |
| Customer C | 515,742,722.54 | 515,742,722.54 | 4.77% | 25,787,136.13 | |
| Customer D | 398,827,965.11 | 398,827,965.11 | 3.69% | 89,937,126.32 | |
| Customer E | 277,466,344.49 | 277,466,344.49 | 2.57% | 14,767,531.55 | |
| Total | 2,287,701,066.81 | 0.00 | 2,287,701,066.81 | 21.17% | 231,058,015.98 |
5.Accounts receivable financing
(1) Accounts receivable financing by type
Unit: RMB
| Item | Closing balance | Opening balance |
| Banker’s acceptance bill | 1,887,789,780.16 | 1,081,485,346.18 |
| Domestic letter of credit | 509,264,464.56 | |
| Total | 1,887,789,780.16 | 1,590,749,810.74 |
(2) Classified disclosure according to the method of bad debt provision: None.
(3) The bad debt provisions accrued, recovered, or reversed during the period: None.
(4) Financing of receivable pledged by the Company at the end of the reporting period: None.
(5) Financing of receivable endorsed or discounted by the Company, which was not yet due on the balancesheet date as at the end of the reporting period:
Unit: RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Banker’s acceptance bill | 4,848,527,962.99 | |
| Total | 4,848,527,962.99 |
(6) Financing of receivable pledged by the Company at the end of the period: None.
(7) Increase/decrease in the financing of accounts receivable and in their fair values during their financingperiod: None.
(8) Other explanations: None.
6.Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 10,348,033.98 | 4,531,100.00 |
| Other receivables | 98,079,164.35 | 99,519,609.53 |
| Total | 108,427,198.33 | 104,050,709.53 |
(1)Interests receivable
1)Dividends receivable by type: None.
2)Major overdue interests: None.
3)Disclosure by provision for bad debts
□Applicable ?Not applicable
4) Withdrawal, recovery and reversal of provision for bad debts during the period: None.
5) Actual write-off of dividend receivable during the period: None.
(2)Dividends receivable
1)Dividends receivable by type
Unit: RMB
| Project (or investee) | Closing balance | Opening balance |
| Jacobson Pharma Co., Ltd. | 6,482,280.00 | 4,531,100.00 |
| JBM (Healthcare) Co., Ltd. | 3,865,753.98 | |
| Total | 10,348,033.98 | 4,531,100.00 |
2)Major dividends receivable aged over one year: None.
3)Disclosure by provision for bad debts
□Applicable ??Not applicable
4)Withdrawal, recovery and reversal of provision for bad debts during the period: None.
5)Actual write-off of dividend receivable during the period: None.
(3)Other receivables
1)Other receivables by nature
Unit: RMB
| Deposits and guarantees | 282,011,383.75 | 292,908,411.96 |
| Borrowings | 4,877,211.78 | 6,777,211.78 |
| Petty cash | 4,284,813.75 | 12,098,577.52 |
| Others | 298,950,367.29 | 286,715,486.83 |
| Total | 590,123,776.57 | 598,499,688.09 |
2)Disclosure by aging
Unit: RMB
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive of 1 year) | 91,464,527.37 | 76,994,145.16 |
| 1 to 2 years | 11,521,428.46 | 24,492,402.85 |
| 2 to 3 years | 10,192,068.99 | 101,816,008.74 |
| Above 3 years | 476,945,751.75 | 395,197,131.34 |
| Total | 590,123,776.57 | 598,499,688.09 |
3)Disclosure by provision for bad debts
? Applicable□ Not applicableProvision was made for bad debts in accordance with the general expected credit loss model:
Unit: RMB
| Provision for bad debts | Phase I | Phase II | Phase III |
| Expected credit losses for the next 12 months | Lifetime ECL (not credit-impaired) | Lifetime ECL (credit-impaired) |
Total
| Total | ||||
| Balance as of January 1, 2024 | 228,060,024.02 | 270,920,054.54 | 498,980,078.56 | |
| Balance as of January 1, 2024 in the current period | ||||
| ——Transferred to Phase 2 | 0.00 | |||
| ——Transferred to Phase 3 | 0.00 | |||
| ——Transferred back to Phase 2 | 0.00 | |||
| ——Transferred back to Phase 1 | 0.00 |
| Current provision | 340,620.00 | 340,620.00 | ||
| Current reversal | 7,090,104.95 | 7,090,104.95 | ||
| Current transfer | 0.00 | |||
| Current write-off | 185,981.39 | 185,981.39 | ||
| Other changes | 0.00 | |||
| Balance as of December 31, 2024 | 220,523,937.68 | 271,520,674.54 | 492,044,612.22 |
Division base for each phase and proportion of provision for bad debts: None.Changes in book balance with significant changes in loss reserves in the current period
□ Applicable?
Not applicable
4)Provision for bad debts accrued, recovered or reversed during the current periodProvision for bad debts during the reporting period:
Unit: RMB
| Category | Opening balance | Changes in this period | |||
| Provision | Recovery or reversal | Transfer or write-off | Others | ||
Closing balance
| Closing balance | ||||||
| Other accounts receivable with provision for bad debts by credit risk characteristics portfolio | 498,980,078.56 | 340,620.00 | 7,090,104.95 | 185,981.39 | 492,044,612.22 | |
| Total | 498,980,078.56 | 340,620.00 | 7,090,104.95 | 185,981.39 | 0.00 | 492,044,612.22 |
Recovery or reversal of provision for bad debts with significant amount during the reporting period: None.
5)Actual write-off of other receivables for the period
Unit: RMB
| Item | Amount of write-off |
| The actual write-off of other receivables | 185,981.39 |
Write-off of important other receivables: None.Explanation on write-off of other receivables: None.
6)Top five customers in closing balance of other receivables summarized by debtor
Unit: RMB
| Entity name | Nature of payment | Closing balance | Aging | Percentage of total of closing balance of otherreceivables | Closing balance of provision for bad debt |
| Entity A | Security deposit | 100,000,000.00 | Above 3 years | 16.95% | 100,000,000.00 |
| Entity B | Security deposit | 30,000,000.00 | Above 3 years | 5.08% | 30,000,000.00 |
| Entity C | Security deposit | 18,000,000.00 | Above 3 years | 3.05% | 18,000,000.00 |
| Entity D | Security deposit | 12,000,000.00 | Above 3 years | 2.03% | 12,000,000.00 |
| Entity E | Security deposit | 11,500,000.00 | Within 1 year | 1.95% | 575,000.00 |
| Total | 171,500,000.00 | 29.06% | 160,575,000.00 |
7)Presentation under Other Receivables due to centralized fund management: None.
7.Prepayments
(1)Prepayments by aging
Unit: RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 292,483,526.83 | 96.35% | 274,935,247.83 | 88.04% |
| 1 to 2 years | 3,670,061.07 | 1.21% | 31,179,366.00 | 9.98% |
| 2 to 3 years | 5,838,379.65 | 1.92% | 2,366,049.64 | 0.76% |
| Above 3 years | 1,571,876.52 | 0.52% | 3,818,063.54 | 1.22% |
| Total | 303,563,844.07 | 312,298,727.01 | ||
Explanation on why prepayments with aging of more than 1 year and an important amount not settled in time: None.
(2)Top five suppliers in closing balance of prepayment summarized by payee
| Series No. | Company name | Book balance | Percentage of prepayments (%) |
| 1 | Supplier A | 67,301,786.05 | 22.17% |
| 2 | Supplier B | 16,522,876.50 | 5.44% |
| 3 | Supplier C | 15,272,133.80 | 5.03% |
| 4 | Supplier D | 7,922,725.03 | 2.61% |
| 5 | Supplier E | 7,902,783.42 | 2.60% |
| Total | 114,922,304.80 | 37.86% | |
Other explanations: None.
8.Inventories
Did the Company need to comply with the disclosure requirements of the real estate industry: No.
(1)Categories of inventories
Unit: RMB
| Closing balance | Opening balance |
| Item | Book balance | Provision for decline in value of inventories or provision for impairment of contract fulfillment costs | Book value | Book balance | Provision for inventory impairment or provision for impairment of contract performance costs | Book value |
| Raw materials | 1,592,465,699.05 | 56,078,142.82 | 1,536,387,556.23 | 1,850,907,681.12 | 71,368,550.13 | 1,779,539,130.99 |
| Work in process | 285,385,346.89 | 3,184,218.03 | 282,201,128.86 | 192,411,841.66 | 192,411,841.66 | |
| Finished goods | 4,424,372,412.33 | 52,518,059.87 | 4,371,854,352.46 | 4,444,660,840.07 | 67,539,262.09 | 4,377,121,577.98 |
| Consumptive biological assets | 42,544,762.19 | 42,544,762.19 | 28,031,085.47 | 28,031,085.47 | ||
| Materials outsourced for processing | 193,030.54 | 193,030.54 | 185,148.88 | 185,148.88 | ||
| Packaging materials and low value consumables | 61,945,999.53 | 758,513.51 | 61,187,486.02 | 67,439,762.34 | 2,533,723.65 | 64,906,038.69 |
| Total | 6,406,907,250.53 | 112,538,934.23 | 6,294,368,316.30 | 6,583,636,359.54 | 141,441,535.87 | 6,442,194,823.67 |
(2)Data resources confirmed as inventory: None.
(3)Provision for inventory impairment or provision for impairment of contract performance costs
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | ||
| Provision | Others | Reversal or reselling | Others | ||
Closing balance
| Closing balance | ||||||
| Raw materials | 71,368,550.13 | 11,961,136.59 | 27,251,543.90 | 56,078,142.82 | ||
| Unfinished products | 3,184,218.03 | 3,184,218.03 | ||||
| Stocks | 67,539,262.09 | 37,257,624.83 | 52,278,827.05 | 52,518,059.87 | ||
| Packaging materials and low value consumables | 2,533,723.65 | 11,807.91 | 1,787,018.05 | 758,513.51 | ||
| Total | 141,441,535.87 | 52,414,787.36 | 81,317,389.00 | 112,538,934.23 |
(4)Explanation on closing balance of inventories involving capitalized amount of borrowing costs None.
(5)Explanation on the current amortization amount of contract performance costs None.
9.Non-current assets due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Certificate of deposit and interest | 480,295,722.22 | 442,772,777.78 |
| Total | 480,295,722.22 | 442,772,777.78 |
(1) Debt investments due within one year
□ Applicable? Not applicable
(2) Other debt investments due within one year
□ Applicable? Not applicable
10. Other current assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Cost of returned goods receivable | 156,086,620.09 | 147,880,091.79 |
| Input tax to be deducted and certified | 472,854,544.60 | 397,271,600.13 |
| Time deposits and other wealth management products | 109,329,028.37 | 2,219,049,423.96 |
| Prepaid taxes and fees | 11,082,804.32 | 90,685,070.74 |
| Others | 38,755,582.16 | 7,190,030.58 |
| Total | 788,108,579.54 | 2,862,076,217.20 |
Other explanations: None.
11. Other equity instrument investments
Unit: RMB
| Item name | Closing balance | Opening balance | Gains included in other comprehensive income during the period | Loss included in other comprehensive income during the period | Accumulated gains included in other comprehensive income at the end of the period | Accumulated loss included in other comprehensive income at the end of the period | Dividend income recognized in the current period | Reason for designating measurement at fair value through other comprehensive income |
| ImmuneSensorTherapeutics Inc. | 71,745,000.00 | 71,745,000.00 | The investment is strategic and is a non-trading equity instrument investment | |||||
| Total | 71,745,000.00 | 71,745,000.00 |
Derecognition during the period: None.Itemized disclosure of investment in non-trading equity instruments for the period: None.Other explanations: None.
12. Long-term equity investments
Unit: RMB
| Investee | Opening balance (book value) | Opening balance of impairment provision | Increase and decrease in the current period | |||||||
| Additional investment | Decreased investment | Profits and losses on investments confirmed under theequity method | Adjustment of other comprehensiveincome | Change in other equities | Cash dividends or profit declared to be issued | Provision for impairment | Others | |||
Closing balance
(book value)
| Closing balance (book value) | Closing balance of impairment provision | ||||||||||
| I. Joint ventures | |||||||||||
| II. Associates | |||||||||||
| Shanghai Pharmaceuticals Holding Co., Ltd. | 11,536,646,559.56 | 772,384,799.25 | -6,855,667.55 | 85,358,027.54 | 326,157,130.04 | 12,061,376,588.76 | |||||
| Yunnan TCM Big Health Innovation Equity | 500,000,000.00 | -110,316.95 | 499,889,683.05 | ||||||||
The recoverable amount is determined based on fair value less the disposal expense.
□ Applicable? Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.
□ Applicable? Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous years or external information: None.Reasons for significant differences between the information used in the Company’s impairment tests in previous years and the actual situation in the corresponding year: None.Other explanations: None.
| Investment Fund Partnership (Limited Partnership) | |||||||||||
| Ban Loong Jacobson JBM Pharma Limited | 14,433.37 | -4,868.03 | 244.20 | 9,809.54 | |||||||
| Lijiang Changgengming Trading Co., Ltd. | 0.00 | ||||||||||
| Subtotal | 11,536,660,992.93 | 500,000,000.00 | 772,269,614.27 | -6,855,423.35 | 85,358,027.54 | 326,157,130.04 | 12,561,276,081.35 | 0.00 | |||
| Total | 11,536,660,992.93 | 500,000,000.00 | 772,269,614.27 | -6,855,423.35 | 85,358,027.54 | 326,157,130.04 | 12,561,276,081.35 | 0.00 |
13.Other non-current financial assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profits or losses | 387,688,897.11 | 324,674,379.63 |
| Total | 387,688,897.11 | 324,674,379.63 |
Other explanations: None.
14.Investment properties
(1)Adoption of the cost measurement model for investment properties
?Applicable□Not applicable
Unit: RMB
| Item | Buildings and structures | Land use rights | Total |
| I. Original book value | |||
| 1. Opening balance | 54,966,967.28 | 32,184,799.93 | 87,151,767.21 |
| 2. Increase in the current period | 8,856,632.97 | 3,802,107.80 | 12,658,740.77 |
| (1) Outsourcing | 0.00 | ||
| (2) Transfer frominventory\fixed assets\ construction in progress | 8,856,632.97 | 3,802,107.80 | 12,658,740.77 |
| (3) Increase in business combination | 0.00 | ||
| 3. Decrease in the current period | 0.00 | 0.00 | 0.00 |
| (1) Disposal | 0.00 | ||
| (2) Other transfer out | 0.00 | ||
| 4. Closing balance | 63,823,600.25 | 35,986,907.73 | 99,810,507.98 |
| II. Accumulated depreciation and accumulated amortization | 0.00 | ||
| 1. Opening balance | 35,754,013.96 | 4,855,547.93 | 40,609,561.89 |
| 2. Increase in the current period | 5,686,190.19 | 1,192,684.40 | 6,878,874.59 |
| (1) Provision or amortization | 1,318,265.70 | 685,250.12 | 2,003,515.82 |
| (2) Others | 4,367,924.49 | 507,434.28 | 4,875,358.77 |
| 3. Decrease in the current period | 0.00 | ||
| (1) Disposal | 0.00 | ||
| (2) Other transfer out | 0.00 | ||
| 4. Closing balance | 41,440,204.15 | 6,048,232.33 | 47,488,436.48 |
| III. Provision for impairment | 0.00 | ||
| 1. Opening balance | 2,438,059.35 | 2,438,059.35 |
| 2. Increase in the current period | 0.00 | ||
| (1) Provision | 0.00 | ||
| 3. Decrease in the current period | 0.00 | ||
| (1) Disposal | 0.00 | ||
| (2) Other transfer out | 0.00 | ||
| 4. Closing balance | 2,438,059.35 | 2,438,059.35 | |
| IV. Book value | 0.00 | ||
| 1. Closing book value | 19,945,336.75 | 29,938,675.40 | 49,884,012.15 |
| 2. Opening book value | 16,774,893.97 | 27,329,252.00 | 44,104,145.97 |
The recoverable amount is determined based on fair value less the disposal expense.
□Applicable?Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.
□Applicable?Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previousyears or external information: Not applicable.Reasons for significant differences between the information used in the Company's impairment tests in previous years and theactual situation in the corresponding year: Not applicable.Other explanations: None.
(2) Adoption of the fair value measurement model for investment properties
□Applicable ?Not applicable
(3) Conversion to investment properties and adoption of fair value measurement:
Not applicable
(4) Investment properties for which the title certificate has not been obtained: None. Other explanations: None.
15.Fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 3,012,529,818.52 | 2,662,805,209.03 |
| Liquidation of fixed assets | 349,009.57 | 94,805.00 |
| Total | 3,012,878,828.09 | 2,662,900,014.03 |
(1)Fixed assets
Unit: RMB
| Item | Houses and buildings | Machinery and equipment | Transportation vehicles | Electronic equipment | Others | Total |
| I. Original book value: |
| 1. Opening balance | 2,549,592,791.40 | 1,603,570,594.77 | 65,896,843.49 | 158,127,736.24 | 1,257,593.86 | 4,378,445,559.76 |
| 2. Increase in the current period | 426,619,233.94 | 129,490,820.78 | 1,868,922.80 | 29,271,046.61 | 143,152.08 | 587,393,176.21 |
| (1) Purchase | 28,770,662.96 | 1,868,922.80 | 16,957,982.25 | 143,152.08 | 47,740,720.09 | |
| (2) Transfer from construction in progress | 426,619,233.94 | 100,720,157.82 | 12,313,064.36 | 539,652,456.12 | ||
| (3) Increase in business combination | 0.00 | |||||
| 3. Decrease in the current period | 8,856,632.97 | 12,801,485.97 | 994,233.74 | 8,155,697.45 | 19,380.53 | 30,827,430.66 |
| (1) Disposal or scrapping | 12,801,485.97 | 994,233.74 | 8,155,697.45 | 19,380.53 | 21,970,797.69 | |
| (2) Other transfer-out | 8,856,632.97 | 8,856,632.97 | ||||
| 4. Closing balance | 2,967,355,392.37 | 1,720,259,929.58 | 66,771,532.55 | 179,243,085.40 | 1,381,365.41 | 4,935,011,305.31 |
| II. Accumulated depreciation | 0.00 | |||||
| 1. Opening balance | 558,119,997.35 | 953,150,208.31 | 34,737,774.48 | 101,583,125.64 | 1,036,398.21 | 1,648,627,503.99 |
| 2. Increase in the current period | 57,237,793.07 | 117,337,766.41 | 3,556,206.12 | 22,732,261.68 | 80,235.75 | 200,944,263.03 |
| (1) Provision | 57,237,793.07 | 117,337,766.41 | 3,556,206.12 | 22,732,261.68 | 80,235.75 | 200,944,263.03 |
| 3. Decrease in the current period | 4,367,924.49 | 7,427,972.76 | 894,576.22 | 4,013,117.26 | 15,452.24 | 16,719,042.97 |
| (1) Disposal or scrapping | 7,427,972.76 | 894,576.22 | 4,013,117.26 | 15,452.24 | 12,351,118.48 | |
| (2) Other transfer-out | 4,367,924.49 | 4,367,924.49 | ||||
| 4. Closing balance | 610,989,865.93 | 1,063,060,001.96 | 37,399,404.38 | 120,302,270.06 | 1,101,181.72 | 1,832,852,724.05 |
| III. Provision for impairment | 0.00 | |||||
| 1. Opening balance | 60,577,222.16 | 2,268,381.89 | 4,167,242.69 | 67,012,846.74 | ||
| 2. Increase in the current period | 1,906,976.05 | 23,835,548.75 | 0.00 | 336,545.87 | 0.00 | 26,079,070.67 |
| (1) Provision | 1,905,065.64 | 23,835,548.75 | 0.00 | 336,545.87 | 0.00 | 26,077,160.26 |
| (2) Other transfer-out | 1,910.41 | 1,910.41 | ||||
| 3. Decrease in the current period | 10,535.86 | 0.00 | 0.00 | 3,452,618.81 | 0.00 | 3,463,154.67 |
| (1) Disposal or scrapping | 10,535.86 | 3,452,618.81 | 3,463,154.67 | |||
| 4. Closing balance | 62,473,662.35 | 26,103,930.64 | 0.00 | 1,051,169.75 | 0.00 | 89,628,762.74 |
| IV. Book value | 0.00 | |||||
| 1. Closing book value | 2,293,891,864.09 | 631,095,996.98 | 29,372,128.17 | 57,889,645.59 | 280,183.69 | 3,012,529,818.52 |
| 2. Opening book value | 1,930,895,571.89 | 648,152,004.57 | 31,159,069.01 | 52,377,367.91 | 221,195.65 | 2,662,805,209.03 |
(2) Temporarily idle fixed assets
Unit: RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Remarks |
| Electronic equipment | 3,438,850.57 | 2,043,028.55 | 714,623.88 | 681,198.14 |
| Machinery andequipment | 13,810,219.37 | 10,877,821.34 | 2,932,398.03 | |
| Houses and buildings | 1,530,331.56 | 460,506.59 | 1,069,824.97 |
(3) Fixed assets leased through operating lease: None.
(4) Fixed assets for which the title certificate has not been obtained
Unit: RMB
| Item | Book value | Reasons for not obtaining the title certificate |
| Overall relocation project of Wenshan Qihua | 31,858,783.85 | Partial ownership has been secured, and the remaining is in process |
| Drug Division of Dali Pharmaceutical Economic Development Zone | 30,645,112.43 | In process |
| Yunjian Assets | 2,043,810.36 | Acquired through judicial auction, with land use certificate but no property certificate |
| Buildings in planting base of Yunquan | 1,169,873.98 | The land is a leased land |
| No.51 Xiba Road (general workshop) | 256,800.64 | Historical legacy, currently in process |
Other explanations: None.
(5) Impairment test of fixed assets
? Applicable□ Not applicableThe recoverable amount is determined based on fair value less the disposal expense? Applicable□ Not applicable
Unit: RMB
| Item | Book balance | Recoverable amount | Impairment amount | Determination of fair value and disposal costs | Key parameters | Basis for determining key parameters |
| Machinery and equipment, electronic equipment | 3,583,355.48 | 191,609.06 | 3,391,746.42 | Considered based on the estimated net residual value and disposal rate | Residual value rate of 5%, tax fees and disposal rate | The disposal fee rate is based on the transaction service fee standards set by the Shanghai Public Resources Trading Center |
| Houses and buildings, electronic equipment | 2,138,707.32 | 0.00 | 2,138,707.32 | Expected demolition | The expected fair value is 0 | Not available |
| Total | 5,722,062.80 | 191,609.06 | 5,530,453.74 |
The recoverable amount is determined based on the present value of the estimated future cash flows? Applicable□ Not applicable
Unit: RMB
| Item | Book balance | Recoverable amount | Impairment amount | Duration of forecast period | Key parameters of the forecast period | Key parameters of the stable period | Basis for determining the key parameters of the stable period |
| Machinery and equipment | 29,046,706.52 | 8,500,000.00 | 20,546,706.52 | 2025-2033 | The income growth rate is 10% to 25%, the profit margin ranges from -3.71% to 6.81%, and the pre-tax discount rate is 16.28% |
| Total | 29,046,706.52 | 8,500,000.00 | 20,546,706.52 |
Reasons for significant differences between the foregoing information and information used for impairment testing in previousyears or external informationNot applicable.Reasons for significant differences between the information used in the Company’s impairment tests in previous years and theactual situation in the corresponding year
Not applicable.
Other explanations: None.
(6) Liquidation of fixed assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Machinery and equipment | 302,720.41 | 94,206.37 |
| Electronic equipment | 46,289.16 | 598.63 |
| Total | 349,009.57 | 94,805.00 |
Other explanations: None.
16.Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 703,439,112.24 | 529,708,553.58 |
| Total | 703,439,112.24 | 529,708,553.58 |
(1)Construction in progress
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Project of Yunnan Baiyao Shanghai International Center | 614,608,509.29 | 614,608,509.29 | 389,398,864.33 | 389,398,864.33 | ||
| Yunnan Baiyao Group TCM Pharmaceutical Services Kunming Center Project | 45,024,278.93 | 45,024,278.93 | 2,667,581.02 | 2,667,581.02 | ||
| Radiopharmaceutical R&D Center (Tianjin) Project | 18,464,159.31 | 18,464,159.31 | ||||
| Yunnan Baiyao R&D Platform - Kunming Center Construction Project | 15,417,106.26 | 15,417,106.26 | 82,578,321.10 | 82,578,321.10 | ||
| Separation of Medicinal and Food Production Lines for Sanqi Extraction and Capacity & Process Technology Improvement Project | 1,873,096.24 | 1,873,096.24 | ||||
| Yunnan Baiyao Wenshan Sanqi Smart Technology Park Project | 1,081,007.34 | 1,081,007.34 | ||||
| Government-Enterprise Cooperation Project of Yunnan Baiyao Group in Lijiang Ecological Science and Technology Industrial Park (Phase I) | 5,655,808.43 | 5,655,808.43 | ||||
| Optimization Project of New Factory of Yunnan Baiyao Toothpaste | 23,403,647.03 | 23,403,647.03 | ||||
| Granules Production Increase and Expansion Project of Pharmaceutical Business Group of Yunnan Baiyao Group | 16,649,408.02 | 16,649,408.02 | ||||
| Production Base Construction Project of Yunnan Baiyao Group Shanghai Technology Co., Ltd. | 1,024,787.20 | 1,024,787.20 | ||||
| Health Industry Project (Phase I) of Yunnan Baiyao Group | 593,826.74 | 593,826.74 | ||||
| Yunnan Baiyao Shanghai Project Office Decoration Project | 396,852.43 | 396,852.43 | ||||
| Others | 8,051,962.21 | 8,051,962.21 | 6,258,449.94 | 6,258,449.94 | ||
| Total | 703,439,112.24 | 0.00 | 703,439,112.24 | 529,708,553.58 | 0.00 | 529,708,553.58 |
(2)Changes in important projects of construction in progress for the period
| Unit: RMB | ||||||||||||
| Item name | Budget amount | Opening balance | Increase in the current period | Transfer to fixed assets in the current period | Other decrease in the current period | Closing balance | Proportion of total project investment in budget | Engineeringprogress | Accumulated amount of interest capitalized | Including: Amount of interest capitalized for the period | Capitalization rate of interest for the period | Sourceof funds |
| Project of Yunnan Baiyao Shanghai International Center | 1,389,170,500.00 | 389,398,864.33 | 332,887,538.78 | 107,677,893.82 | 614,608,509.29 | 63.14% | 90.00% | Self-funded | ||||
| Yunnan Baiyao Group TCM Pharmaceutical Services Kunming Center Project | 68,096,000.00 | 2,667,581.02 | 44,831,919.14 | 2,475,221.23 | 45,024,278.93 | 94.90% | 95.00% | Self-funded | ||||
| Radiopharmaceutical R&D Center (Tianjin) Project | 101,750,000.00 | 1,339,572.56 | 70,759,132.69 | 22,319,101.82 | 31,315,444.12 | 18,464,159.31 | 70.86% | 80.00% | Self-funded | |||
| Yunnan Baiyao R&D Platform - Kunming Center Construction Project | 921,670,000.00 | 82,578,321.10 | 205,896,321.05 | 273,057,535.89 | 15,417,106.26 | 32.47% | 54.00% | Self-funded | ||||
| Health Industry Project (Phase I) of Yunnan Baiyao Group | 1,158,174,400.00 | 593,826.74 | 27,899,831.01 | 28,493,657.75 | 91.42% | 100.00% | Self-funded | |||||
| Optimization Project of New Factory of Yunnan Baiyao Toothpaste | 38,000,000.00 | 23,403,647.03 | 4,201,938.31 | 25,468,979.82 | 2,136,605.52 | 93.55% | 100.00% | Self-funded | ||||
| Government-Enterprise Cooperation Project of Yunnan Baiyao Group in Lijiang Ecological Science and Technology Industrial Park (Phase I) | 17,860,000.00 | 5,655,808.43 | 3,927,562.63 | 7,021,470.39 | 2,561,900.67 | 62.06% | 100.00% | Self-funded | ||||
| Total | 3,694,720,900.00 | 505,637,621.21 | 690,404,243.61 | 466,513,860.72 | 36,013,950.31 | 693,514,053.79 | ||||||
(3) Provision for impairment of construction in progress for the period: None.
(4) Impairment test of construction in progress
□ Applicable? Not applicable
(5) Project materials: None.
17.Productive biological assets
(1)Adoption of the cost measurement model for productive biological assets
? Applicable□ Not applicable
Unit: RMB
| Item | Planting | Total |
| Tea plant | ||
| I. Original book value: | ||
| 1. Opening balance | 2,578,500.00 | 2,578,500.00 |
| 2. Increase in the current period | ||
| (1) Outsourcing | ||
| (2) Self-cultivation | ||
| 3. Decrease in the current period | ||
| (1) Disposal | ||
| (2) Others | ||
| 4. Closing balance | 2,578,500.00 | 2,578,500.00 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 1,590,075.15 | 1,590,075.15 |
| 2. Increase in the current period | 171,900.00 | 171,900.00 |
| (1) Provision | 171,900.00 | 171,900.00 |
| 3. Decrease in the current period | ||
| (1) Disposal | ||
| (2) Others | ||
| 4. Closing balance | 1,761,975.15 | 1,761,975.15 |
| III. Provision for impairment | ||
| 1. Opening balance | ||
| 2. Increase in the current period | ||
| (1) Provision | ||
| 3. Decrease in the current period |
| (1) Disposal | ||
| (2) Others | ||
| 4. Closing balance | ||
| IV. Book value | ||
| 1. Closing book value | 816,524.85 | 816,524.85 |
| 2. Opening book value | 988,424.85 | 988,424.85 |
(2)Impairment test of productive biological assets measured at cost
□ Applicable
? Not applicable
(3)Adoption of the fair value measurement model for productive biological assets
□ Applicable
? Not applicable
18. Right-of-use assets
(1)Right-of-use assets
Unit: RMB
| Item | Houses and buildings | Machinery and equipment | Land use rights | Total |
| I. Original book value | ||||
| 1. Opening balance | 505,660,305.98 | 505,660,305.98 | ||
| 2. Increase in the current period | 112,351,465.82 | 4,535,659.59 | 3,637,250.13 | 120,524,375.54 |
| (1) Lease | 112,351,465.82 | 4,535,659.59 | 3,637,250.13 | 120,524,375.54 |
| (2) Others | 0.00 | |||
| 3. Decrease in the current period | 140,003,236.50 | 0.00 | 0.00 | 140,003,236.50 |
| (1) Lease expiration | 91,472,799.11 | 91,472,799.11 | ||
| (2) Disposal | 48,530,437.39 | 48,530,437.39 | ||
| 4. Closing balance | 478,008,535.30 | 4,535,659.59 | 3,637,250.13 | 486,181,445.02 |
| II. Accumulated depreciation | 0.00 | |||
| 1. Opening balance | 247,340,820.40 | 247,340,820.40 | ||
| 2. Increase in the current period | 82,716,562.38 | 420,677.98 | 227,328.13 | 83,364,568.49 |
| (1) Provision | 82,716,562.38 | 420,677.98 | 227,328.13 | 83,364,568.49 |
| 3. Decrease in the current period | 135,700,965.39 | 0.00 | 0.00 | 135,700,965.39 |
| (1) Disposal | 44,228,166.28 | 44,228,166.28 | ||
| (2) Lease expiration | 91,472,799.11 | 91,472,799.11 | ||
| 4. Closing balance | 194,356,417.39 | 420,677.98 | 227,328.13 | 195,004,423.50 |
| III. Provision for impairment | 0.00 | |||
| 1. Opening balance | 0.00 | |||
| 2. Increase in the current period | 0.00 | |||
| (1) Provision | 0.00 | |||
| 3. Decrease in the current period | 0.00 |
| (1) Disposal | 0.00 | |||
| 4. Closing balance | 0.00 | |||
| IV. Book value | 0.00 | |||
| 1. Closing book value | 283,652,117.91 | 4,114,981.61 | 3,409,922.00 | 291,177,021.52 |
| 2. Opening book value | 258,319,485.58 | 0.00 | 0.00 | 258,319,485.58 |
(2) Impairment test of right-of-use assets:
□ Applicable? Not applicable
Other explanations: None.
19.Intangible assets
(1)Intangible assets
Unit: RMB
| Item | Land use rights | Patent Right | Non-patent technology | Software | Trademark | Franchise rights | Total |
| I. Original book value | |||||||
| 1. Opening balance | 689,468,137.84 | 34,492,676.60 | 2,150,381.86 | 75,464,152.76 | 20,000.00 | 154,081,682.57 | 955,677,031.63 |
| 2. Increase in the current period | 138,776.30 | 0.00 | 0.00 | 7,017,783.79 | 0.00 | 0.00 | 7,156,560.09 |
| (1) Purchase | 138,776.30 | 7,017,783.79 | 7,156,560.09 | ||||
| (2) Internal R&D | 0.00 | ||||||
| (3) Increase in business combination | 0.00 | ||||||
| 3. Decrease in the current period | 3,921,375.80 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 3,921,375.80 |
| (1) Disposal | 119,268.00 | 119,268.00 | |||||
| (2) Other transfer-out | 3,802,107.80 | 3,802,107.80 | |||||
| 4. Closing balance | 685,685,538.34 | 34,492,676.60 | 2,150,381.86 | 82,481,936.55 | 20,000.00 | 154,081,682.57 | 958,912,215.92 |
| II. Accumulated amortization | 0.00 | ||||||
| 1. Opening balance | 157,724,667.66 | 26,857,606.79 | 2,150,381.86 | 25,105,090.79 | 3,147.77 | 17,664,216.34 | 229,505,111.21 |
| 2. Increase in the current period | 14,022,544.10 | 2,802,967.77 | 0.00 | 8,184,300.12 | 2,222.22 | 0.00 | 25,012,034.21 |
| (1) Provision | 14,022,544.10 | 2,802,967.77 | 8,184,300.12 | 2,222.22 | 25,012,034.21 | ||
| 3. Decrease in the current period | 532,768.91 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 532,768.91 |
| (1) Disposal | 25,334.63 | 25,334.63 | |||||
| (2) Other transfer-out | 507,434.28 | 507,434.28 | |||||
| 4. Closing balance | 171,214,442.85 | 29,660,574.56 | 2,150,381.86 | 33,289,390.91 | 5,369.99 | 17,664,216.34 | 253,984,376.51 |
| III. Provision for impairment | 0.00 | ||||||
| 1. Opening balance | 6,382,453.60 | 136,417,466.23 | 142,799,919.83 |
| 2. Increase in the current period | 332,131.80 | 332,131.80 | |||||
| (1) Provision | 332,131.80 | 332,131.80 | |||||
| 3. Decrease in the current period | 0.00 | ||||||
| (1) Disposal | 0.00 | ||||||
| 4. Closing balance | 6,382,453.60 | 332,131.80 | 136,417,466.23 | 143,132,051.63 | |||
| IV. Book value | 0.00 | ||||||
| 1. Closing book value | 508,088,641.89 | 4,832,102.04 | 48,860,413.84 | 14,630.01 | 561,795,787.78 | ||
| 2. Opening book value | 525,361,016.58 | 7,635,069.81 | 0.00 | 50,359,061.97 | 16,852.23 | 0.00 | 583,372,000.59 |
The proportion of intangible assets formed through the Company’s internal R&D at the end of the period is 0.00% of thetotal intangible assets balance.
(2)Data resources confirmed as intangible assets
□Applicable ?Not applicable
(3)Land use rights for which the title certificate has not been obtained: None.
(4)Impairment test of intangible assets:
?Applicable□Not applicableThe recoverable amount is determined based on fair value less the disposal expense
□Applicable ?Not applicable
Unit: RMB
| Item | Book value | Recoverable amount | Impairment amount | Determination of fair value and disposal costs | Key parameters | Basis for determining the key parameters |
| Software | 332,131.80 | 0.00 | 332,131.80 | The asset is expected to no longer be usable | The expected fair value is 0 | It is expected to be no longer usable |
| Total | 332,131.80 | 0.00 | 332,131.80 |
The recoverable amount is determined based on the present value of the estimated future cash flows
□Applicable ?Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previousyears or external information
Not applicable.
Reasons for significant differences between the information used in the Company’s impairment tests in previous years and theactual situation in the corresponding year Not applicable.
20. Goodwill
(1)Original book value of goodwill
Unit: RMB
| Name of the investee or items forming goodwill | Opening balance | Increase in the current period | Decrease in the current period |
| Formed by business combination | Disposal |
Closing balance
| Closing balance | |||
| YNBY International Limited | 645,635,327.81 | 645,635,327.81 | |
| Yunnan Baiyao Group Medical Technology Hefei Co., Ltd. | 26,904,931.64 | 26,904,931.64 | |
| Shanghai Hanshi Health Consulting Co., Ltd. | 23,247,992.08 | 23,247,992.08 | |
| Yunnan Baiyao Group WuxiPharmaceutical Co., Ltd. | 12,843,661.62 | 12,843,661.62 | |
| Lijiang Yunquan Biological DevelopmentCo., Ltd. | 721,770.39 | 721,770.39 | |
| Total | 709,353,683.54 | 709,353,683.54 |
(2)Provision for impairment of goodwill
Unit: RMB
| Name of the investee or items forming goodwill | Opening balance | Increase in the current period | Decrease in the current period |
| Provision | Disposal |
Closing balance
| Closing balance | ||||
| YNBY International Limited | 561,515,748.26 | 561,515,748.26 | ||
| Yunnan Baiyao Group Medical Technology Hefei Co., Ltd. | 26,904,931.64 | 26,904,931.64 | ||
| Shanghai Hanshi Health Consulting Co., Ltd. | 16,089,461.58 | 7,158,530.50 | 23,247,992.08 | |
| Lijiang Yunquan Biological DevelopmentCo., Ltd. | 721,770.39 | 721,770.39 | ||
| Total | 605,231,911.87 | 7,158,530.50 | 612,390,442.37 |
(3)Related information on asset group or combination of asset groups containing goodwill
| Name | Composition and basis of the asset group or portfolio to which it belongs | Business segments and basis | Whether consistent with the previous years |
| YNBY International Limited | The asset group consists of “notes and accounts receivable, prepayments, inventories, other receivables, other current assets, fixed assets, right-to-use assets, long-term deferred expenses, accounts payable, contractual liabilities, other payables and goodwill,” which is the smallest portfolio of assets or the smallest portfolio of asset groups that can generate major cash inflows independently | The management’s approach to managing and monitoring business activities | Yes |
| Shanghai Hanshi Health Consulting Co., Ltd. | The asset group consists of “fixed assets, right-of-use assets, long-term deferred expenses and goodwill,” which is the smallest portfolio of assets or the smallest portfolio of asset groups that can generate major cash inflows independently | The management’s approach to managing and monitoring business activities | Yes |
| Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd. | The asset group consists of “fixed assets, intangible assets right-of-use assets and goodwill,” which is the smallest portfolio of assets or the smallest portfolio of asset groups that can generate major cash inflows independently | The management’s approach to managing and | Yes |
Changes in asset group or combination of asset groups: Not applicable.Other explanations: None.
(4) Determination of recoverable amount
The recoverable amount is determined based on fair value less the disposal expense
□Applicable ?Not applicable
Unit: RMB
monitoringbusiness activitiesItem
| Item | Book value | Recoverable amount | Impairment amount | Determination of fair value and disposal costs | Key parameters | Basis for determining the key parameters |
| Shanghai Hanshi Health Consulting Co., Ltd. | 38,164,050.15 | 14,060,000.00 | 23,247,992.08 | The fair value is estimated using the income approach; disposal expenses refer to the expenses associated with the disposal | The revenue growth rate is 10.00%, the profit margin ranges from -16.19% to -5.60%, and the pre-tax discount rate is 13.39% | ① Fair value: The future benefits that can be obtained from the asset group, estimated based on market prices and the participant’s rate of expenses during the period, using the market average level.② Disposal expenses: Includes legal fees related to the disposal of the asset, related taxes, and direct expenses incurred to make the asset ready for sale. |
| Total | 38,164,050.15 | 14,060,000.00 | 23,247,992.08 |
The recoverable amount is determined based on the present value of estimated future cash flows?Applicable□Not applicable
Unit: RMB
| Item | Book value | Recoverable amount | Impairment amount | Forecast period (years) | Key parameters for the forecast period | Key parameters for the stable period | Basis for determining the key parameters for the stable period |
| YNBY International Limited | 1,181,412,080.68 | 460,241,900.00 | 561,515,748.26 | 2025-2029 (followed by the stable period) | The revenue growth rate ranges from 0.54% to 2.73%, profit margin from 3.25% to 4.48%, and the pre-tax discount rate | The growth rate is 0.00%, the profit margin is 4.48%, and the pre-tax discount rate is 9.28% | The income growth rate for the stable period is 0%, the profit margin and discount rate are for the last year of the forecast period, and the discount rate is a pre-tax discount rate that reflects the risks specific to the |
| is 9.28% | relevant asset group or portfolio of asset groups. | ||||||
| Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd. | 34,228,015.85 | 61,000,000.00 | 0.00 | 2025-2029 (followed by the stable period) | The revenue growth rate ranges from -0.62% to 0%, profit margin from 4.90% to 4.96%, and the pre-tax discount rate is 14.07% | The growth rate is 0.00%, the profit margin is 4.90%, and the pre-tax discount rate is 14.07% | The income growth rate for the stable period is 0%, the profit margin and discount rate are for the last year of the forecast period, and the discount rate is a pre-tax discount rate that reflects the risks specific to the relevant asset group or portfolio of asset groups. |
| Total | 1,215,640,096.53 | 521,241,900.00 | 561,515,748.26 |
Reasons for significant differences between the foregoing information and information used for impairment testingin previous years or external informationNot applicable.Reasons for significant differences between the information used in the Company’s impairment tests in previousyears and the actual situation in the corresponding yearNot applicable.
(5) Fulfillment of undertakings and goodwill impairment
Performance commitments existed at the time goodwill was formed and the reporting period, or the previous periodof the reporting period was within the performance commitment period
□ Applicable? Not applicable
Other explanations: None.
21.Long-term deferred expenses
Unit: RMB
| Item | Opening balance | Increase in the current period | Amortization in the current period | Other decrease | Closing balance |
| Building decoration and project renovation | 96,424,121.71 | 68,503,566.21 | 33,493,996.55 | 11,444,108.69 | 119,989,582.68 |
| Nanping Street renovation projectof Yunnan Baiyao | 6,499,119.51 | 3,544,974.31 | 2,954,145.20 | ||
| Others | 2,412,309.09 | 3,090,931.28 | 1,365,156.34 | 4,138,084.03 | |
| Total | 105,335,550.31 | 71,594,497.49 | 38,404,127.20 | 11,444,108.69 | 127,081,811.91 |
Other explanations: None.
22. Deferred income tax assets/deferred income tax liabilities
(1)Deferred tax assets before offset
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Provision for asset impairment | 98,058,482.77 | 19,885,869.32 | 149,391,736.51 | 29,733,789.86 |
| Unrealised profits of intra-group transactions | 264,588,567.67 | 42,769,190.08 | 355,719,960.08 | 56,616,299.10 |
| Contractual liabilities | 1,241,244,032.89 | 188,564,063.04 | 927,324,390.56 | 139,098,658.58 |
| Provision for credit impairment | 1,074,991,838.10 | 165,210,239.51 | 1,031,702,042.48 | 155,456,724.98 |
| Payroll payable andlong-term employee benefits payable | 634,896,697.76 | 95,426,303.19 | 442,302,070.56 | 66,345,310.57 |
| Other payables | 577,259,909.29 | 88,284,205.86 | 390,202,998.08 | 58,530,449.71 |
| Lease liabilities | 268,875,960.32 | 39,373,198.50 | 247,083,412.30 | 33,532,096.13 |
| Deferred income | 236,345,643.60 | 36,433,668.40 | 174,855,238.93 | 26,308,248.51 |
| Losses that can be offset | 153,826,415.38 | 35,665,838.14 | 85,261,634.28 | 12,772,083.95 |
| Estimated revenue from returns | 177,591,180.68 | 26,655,057.25 | 172,763,638.76 | 26,020,408.22 |
| Expenses beyond overall planning for employee status conversion expenses of state-owned enterprises and social security expenses of retirees | 20,779,234.95 | 3,116,885.24 | 488,564,678.84 | 73,284,701.83 |
| Changes in fair value | 31,774,859.47 | 4,766,228.92 | ||
| Others | 89,083,123.75 | 15,590,498.21 | 56,028,058.38 | 8,404,208.76 |
| Total | 4,837,541,087.16 | 756,975,016.74 | 4,552,974,719.23 | 690,869,209.12 |
(2)Deferred tax liabilities before offset
Unit: RMB
| Closing balance | Opening balance |
| Item | Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities |
| Appreciation of assetvaluation | 3,305,149.96 | 826,287.49 | 5,464,293.67 | 1,366,073.41 |
| Right-of-use assets | 281,580,952.55 | 41,832,184.12 | 258,319,485.58 | 34,427,707.34 |
| Changes in fair value | 106,362,930.07 | 15,954,439.51 | ||
| Fixed assets subject to one-time pre-tax deduction | 21,032,160.78 | 3,182,909.00 | 26,760,390.32 | 4,014,058.55 |
| Investment income from business combination not under common control achieved in stages | 2,282,373.90 | 570,593.48 | 2,282,373.90 | 570,593.48 |
| Cost of returned goods receivable | 168,184,195.95 | 25,242,517.92 | 163,264,685.39 | 24,587,573.70 |
| Others | 41,722,666.75 | 6,258,400.01 | 65,373,768.09 | 9,806,065.22 |
| Total | 624,470,429.96 | 93,867,331.53 | 521,464,996.95 | 74,772,071.70 |
(3)Deferred income tax assets or liabilities after offset, net
Unit: RMB
| Item | Offsetting amount of deferred income tax assets and deferred income tax liabilities at the end of the reportingperiod | Closing balance of deferred income tax assets or liabilities after offset | Offsetting amount of deferred income tax assets and deferred income tax liabilities at the beginning of thereporting period | Opening balance of deferred income tax assets or liabilities after offset |
| Deferred income tax assets | 756,975,016.74 | 690,869,209.12 | ||
| Deferred income tax liabilities | 93,867,331.53 | 74,772,071.70 |
(4)Details of unrecognized deferred income tax assets
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible losses | 808,060,703.41 | 697,042,370.78 |
| Provision for asset impairment | 555,344,587.39 | 505,835,499.95 |
| Deferred income | 59,147,921.72 | 63,955,872.11 |
| Others | 9,908,046.96 | 10,735,715.83 |
| Total | 1,432,461,259.48 | 1,277,569,458.67 |
(5)Deductible losses for which deferred income tax assets were unrecognized will expire in the following years
Unit: RMB
| Year | Closing balance | Opening balance | Remarks |
| 2024 | 18,092,739.35 |
| 2025 | 11,001,342.99 | 20,152,321.40 |
| 2026 | 114,735,981.68 | 136,477,740.18 |
| 2027 | 176,920,446.70 | 202,345,894.66 |
| 2028 | 269,325,659.53 | 299,773,438.15 |
| 2029 | 213,417,423.15 | 1,476,119.82 |
| 2030 | 4,028,298.39 | 4,028,298.39 |
| 2031 | 12,861,719.12 | 12,861,719.12 |
| 2032 | 1,599,912.28 | 1,599,912.28 |
| 2033 | 355,122.11 | 234,187.43 |
| 2034 | 3,814,797.46 | |
| Total | 808,060,703.41 | 697,042,370.78 |
Other explanations: None.
23.Other non-current assets
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Cost of returned goods receivable | 12,097,575.84 | 12,097,575.84 | 15,394,540.30 | 15,394,540.30 | ||
| Time deposit and interest | 485,794,233.38 | 485,794,233.38 | 913,499,670.63 | 913,499,670.63 | ||
| Stocks of special materials | 42,000,723.80 | 42,000,723.80 | 42,000,723.80 | 42,000,723.80 | ||
| Value-added tax credit refund | 35,013,974.79 | 35,013,974.79 | 9,867,575.47 | 9,867,575.47 | ||
| Advance payment for the purchaseof fixed assets, etc. | 21,763,610.34 | 21,763,610.34 | 3,485,598.75 | 3,485,598.75 | ||
| Less: the part due within 1 year | -480,295,722.22 | -480,295,722.22 | -442,772,777.78 | -442,772,777.78 | ||
| Total | 116,374,395.93 | 0.00 | 116,374,395.93 | 541,475,331.17 | 0.00 | 541,475,331.17 |
Other explanations: None.
24. Assets with restricted ownership or use rights
Unit: RMB
| Item | At the end of the period | At the beginning of the period | ||||||
| Book balance | Book value | Type of restriction | Restriction | Book balance | Book value | Type of restriction | Restriction | |
| Cash and bank balance | 21,699,196.16 | 21,699,196.16 | Security deposit | Letter of guarantee margin, banker’s acceptance bill margin, performance bond margin, | 48,618,045.43 | 48,618,045.43 | Security deposit | Letter of guarantee margin, banker’s acceptance bill margin, performance bond margin, etc. |
| etc. | ||||||||
| Cash and bank balance | 2,648,389.00 | 2,648,389.00 | Special use | Special fund for housing reform and housing maintenance costs | 2,643,393.65 | 2,643,393.65 | Special use | Special fund for housing reform and housing maintenance costs |
| Cash and bank balance | 500,000.00 | 500,000.00 | Property preservation | The lawsuit has been won, and we are promoting the lifting of the freeze and other related matters | ||||
| Various assets of the restructured special account | 588,106,000.80 | 588,106,000.80 | Special use | Special fund for paying the cost of employee status conversion in state-owned enterprises | 627,116,169.10 | 627,116,169.10 | Special use | Special fund for paying the cost of employee status conversion in state-owned enterprises |
| Long-term equity investments | 12,061,376,588.76 | 12,061,376,588.76 | Within the restricted period | Shares shall not be transferred within 36 months from the completion of the private placement | 11,536,646,559.56 | 11,536,646,559.56 | Within the restricted period | Shares shall not be transferred within 36 months from the completion of the private placement |
| Total | 12,673,830,174.72 | 12,673,830,174.72 | 12,215,524,167.74 | 12,215,524,167.74 |
Other explanations: None.
25. Short-term loans
(1)Classification of short-term loans
Unit: RMB
| Item | Closing balance | Opening balance |
| Loan in credit | 402,133,333.39 | 1,014,634,728.09 |
| Discounted internal bills | 21,246,939.25 | 732,668,972.25 |
| Total | 423,380,272.64 | 1,747,303,700.34 |
Explanation on classification of short-term loans: None.
(2)Overdue and outstanding short-term loans: None.
26. Notes payable
Unit: RMB
| Type | Closing balance | Opening balance |
| Banker’s acceptance bill | 1,913,702,684.41 | 1,850,863,313.78 |
| Total | 1,913,702,684.41 | 1,850,863,313.78 |
Total notes payable due and unpaid at the end of the period were RMB 0.00. Reason for the overdue payment: None.
27. Accounts payable
(1)Accounts payable
Unit: RMB
| Item | Closing balance | Opening balance |
| Payment for goods | 4,504,527,943.71 | 4,326,110,424.11 |
| Payment for engineering equipment and others | 253,824,460.16 | 33,522,218.09 |
| Total | 4,758,352,403.87 | 4,359,632,642.20 |
(2)Major accounts payable aged over one year: None.
28. Other payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividend payable | 86,490,742.04 | 86,490,742.04 |
| Other payables | 1,300,141,934.71 | 938,595,137.50 |
| Total | 1,386,632,676.75 | 1,025,085,879.54 |
(1)Interests payable: None.
(2)Dividend payable
Unit: RMB
| Item | Closing balance | Opening balance |
| State-owned Assets Supervision and Administration Commission of the People’s Government of Yunnan Province, New Huadu Industrial Group Co., Ltd. | 86,490,742.04 | 86,490,742.04 |
| Total | 86,490,742.04 | 86,490,742.04 |
(3) Other payables
1) Other payables by nature of payment
Unit: RMB
| Item | Closing balance | Opening balance |
| Market maintenance fee | 673,934,303.55 | 459,313,752.19 |
| Deposits and guarantees | 298,287,462.43 | 266,970,613.85 |
| Collection and payment | 140,402,907.16 | 20,013,555.07 |
| Other current accounts | 103,612,259.40 | 81,677,453.94 |
| Hospital management fee payable | 51,844,605.65 | 70,325,588.08 |
| Others | 32,060,396.52 | 40,294,174.37 |
| Total | 1,300,141,934.71 | 938,595,137.50 |
2) Other important payables aged over 1 year or overdue: None.
3) Other explanations: None.
29. Receipts in advance
(1)Receipts in advance
Unit: RMB
| Item | Closing balance | Opening balance |
| Receipts in advance - lease | 446,673.78 | 486,612.12 |
| Total | 446,673.78 | 486,612.12 |
(2)Major receipts in advance aged over one year: None.
30. Contractual liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Receipts in advance - goods contract | 1,914,556,130.56 | 1,737,952,687.45 |
| Others | 1,567,256.60 | 1,912,541.30 |
| Total | 1,916,123,387.16 | 1,739,865,228.75 |
Significant contractual liabilities with aging more than 1 year: None.The amount and reasons for significant changes in the book value during the reporting period: None.
31. Payroll payable
(1)Payroll payable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I. Short-term compensation | 1,020,249,830.45 | 2,716,783,357.42 | 2,524,467,706.89 | 1,212,565,480.98 |
| II. Welfare after demission - defined contribution plan | 46,884,565.10 | 257,404,018.75 | 240,912,699.00 | 63,375,884.85 |
| III. Dismissal welfare | 56,269.53 | 18,362,344.50 | 10,409,151.04 | 8,009,462.99 |
| Total | 1,067,190,665.08 | 2,992,549,720.67 | 2,775,789,556.93 | 1,283,950,828.82 |
(2)Short-term compensation
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Salary, bonus, allowance, and subsidy | 534,578,291.58 | 2,018,394,621.30 | 2,007,767,615.86 | 545,205,297.02 |
| 2. Staff welfare | 16,108,411.77 | 131,821,669.66 | 124,172,097.05 | 23,757,984.38 |
| 3. Social insurance contribution | 287,344.93 | 99,695,898.38 | 98,873,628.15 | 1,109,615.16 |
| Of which: Medical insurance premiums | 252,139.10 | 88,208,790.97 | 87,438,407.20 | 1,022,522.87 |
| Industrial injury insurance premiums | 8,887.25 | 8,177,628.31 | 8,140,377.86 | 46,137.70 |
| Maternity insurance premiums | 26,318.58 | 3,309,479.10 | 3,294,843.09 | 40,954.59 |
| 4. Housing provident fund | 406,947.66 | 102,733,910.00 | 101,798,474.31 | 1,342,383.35 |
| 5. Union dues and staff training fees | 30,572,145.70 | 44,585,705.92 | 34,179,997.73 | 40,977,853.89 |
| 6. Short-term paid absence | 0.00 | |||
| 7. Short-term profit-sharing plan | 438,112,558.54 | 184,164,641.30 | 39,653,600.00 | 582,623,599.84 |
| 8. Other short-term compensation | 184,130.27 | 135,386,910.86 | 118,022,293.79 | 17,548,747.34 |
| Total | 1,020,249,830.45 | 2,716,783,357.42 | 2,524,467,706.89 | 1,212,565,480.98 |
(3)Defined contribution plans
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Basic endowment insurance | 520,689.77 | 171,027,035.29 | 169,654,773.18 | 1,892,951.88 |
| 2. Unemployment insurance premiums | 20,881.05 | 6,598,525.70 | 6,547,636.38 | 71,770.37 |
| 3. Corporate pension payment | 46,342,994.28 | 79,778,457.76 | 64,710,289.44 | 61,411,162.60 |
| Total | 46,884,565.10 | 257,404,018.75 | 240,912,699.00 | 63,375,884.85 |
Other explanations: None.
32. Tax payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Value added tax | 63,461,639.78 | 74,507,524.44 |
| Consumption tax | 2,202,350.70 | 9,690.71 |
| Enterprise Income Tax | 312,428,903.46 | 215,055,624.82 |
| Individual income tax | 22,714,512.22 | 13,584,778.64 |
| Urban maintenance and construction tax | 8,407,433.24 | 5,944,928.97 |
| Property tax | 13,699,166.25 | 11,470,392.03 |
| Land use tax | 5,538,344.78 | 5,324,861.58 |
| Stamp duty | 7,385,564.48 | 5,765,684.18 |
| Resource tax | 3,000.00 | |
| Education surcharge | 3,014,717.15 | 2,628,898.41 |
| Local education surcharge | 2,005,874.44 | 1,752,038.22 |
| Environmental protection tax | 3,629.23 | 10,222.02 |
| Water conservancy fund | 56,737.77 | 4,724.15 |
| Collected and remitted taxes and fees | 25,681,893.64 | 3,611,481.85 |
| Total | 466,603,767.14 | 339,670,850.02 |
Other explanations: None.
33. Non-current liabilities due within one year
Unit: RMB
| Item | Closing balance | Opening balance |
| Lease liabilities due within one year | 88,436,075.74 | 74,736,102.58 |
| Total | 88,436,075.74 | 74,736,102.58 |
Other explanations: None.
34. Other current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Returns payable | 164,864,900.59 | 157,398,378.74 |
| Transfer to output tax | 454,197,724.34 | 373,745,525.66 |
| Special financial support funds of “transferring loan to subsidy” for the use of intelligent voice cluster development base in the R&D project of intelligent medical devices based on medical big data | 1,800,000.00 | 1,800,000.00 |
| Total | 620,862,624.93 | 532,943,904.40 |
Changes in short-term bonds payable: None.Other explanations: None.
35. Long-term loans
(1) Long-term loans by type
Unit: RMB
| Item | Closing balance | Opening balance |
| Loan in credit | 2,100,000.00 | 2,100,000.00 |
| Total | 2,100,000.00 | 2,100,000.00 |
Explanation on classification of long-term loans: None.Other explanations, including the range of interest rate: None.
36. Lease liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Buildings and structures | 272,449,967.85 | 247,083,412.30 |
| Machinery and equipment | 2,982,837.50 | |
| Right of land use | 3,660,260.62 | |
| Less: Non-current liabilities reclassified to liabilities due within one year | -88,436,075.74 | -74,736,102.58 |
| Total | 190,656,990.23 | 172,347,309.72 |
Other explanations: None.
37. Long-term payables
Unit: RMB
| Item | Closing balance | Opening balance |
| Long-term payables | 586,694,704.41 | 626,897,323.88 |
| Special payables | 4,838,584.16 | 4,838,584.16 |
| Total | 591,533,288.57 | 631,735,908.04 |
(1)Long-term payables by nature of payment
Unit: RMB
| Item | Closing balance | Opening balance |
| Expenses beyond overall planning for employee status conversion expenses of state-owned enterprises and social security expenses of retirees | 586,694,704.41 | 626,897,323.88 |
Other explanations: None.
(2)Special payables
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Reasons |
| Preliminary funds | 888,468.00 | 888,468.00 | Transfer from Baiyao Holdings due to merger by absorption | ||
| for major | |||||
| technological | |||||
| transformation | |||||
| projects | |||||
| Fulintang chain operating funds | 500,000.00 | 500,000.00 | Transfer from Baiyao Holdings due to merger by absorption | ||
| Funds for Kunming medicine distribution center | 500,000.00 | 500,000.00 | Transfer from Baiyao Holdings due to merger byabsorption | ||
| Yunnan Sanqi brand registration project | 164,272.00 | 164,272.00 | Transfer from Baiyao Holdings due to merger by absorption | ||
| Group company management information system project | 250,978.00 | 250,978.00 | Transfer from Baiyao Holdings due to merger by absorption | ||
| Group company technology center constructionexpenses | 231,265.00 | 231,265.00 | Transfer from Baiyao Holdings due to merger byabsorption |
| Nefuramide oxalate project funding | 85,426.00 | 85,426.00 | Transfer from Baiyao Holdings due to merger by absorption | |
| Yunnan Natural Medicine EngineeringCenter project | 998,506.00 | 998,506.00 | Transfer from Baiyao Holdings due to merger byabsorption | |
| New drug research project for treatment of back pulp injury | 472,062.56 | 472,062.56 | Transfer from Baiyao Holdings due to merger by absorption | |
| Material purchase project research expense | 489,575.00 | 489,575.00 | Transfer from Baiyao Holdings due to merger by absorption | |
| R&D of new drugs for treating cardiovascular and cerebrovasculardiseases (TCM) | 258,031.60 | 258,031.60 | Transfer from Baiyao Holdings due to merger by absorption | |
| Total | 4,838,584.16 | 4,838,584.16 |
Other explanations: None.
38. Long-term payroll payable
(1)Details of long-term payroll payable
Unit: RMB
| Item | Closing balance | Opening balance |
| II. Termination benefits | 417,539.44 | 409,232.99 |
| III. Other long-term benefits | 878,826.00 | 3,681,455.00 |
| Total | 1,296,365.44 | 4,090,687.99 |
(2)Change of defined benefit plan: None.
39. Estimated liabilities
Unit: RMB
| Item | Closing balance | Opening balance | Reasons |
| Returns payable | 12,726,280.09 | Returns payable not settled within one year | |
| Total | 12,726,280.09 |
Other explanations, including important assumptions and estimates related to significant estimated liabilities: None.
40. Deferred income
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Reasons |
| Including: Government subsidies related to income | 80,923,393.38 | 83,257,000.00 | 30,394,212.18 | 133,786,181.20 | |
| Government subsidies related to assets | 157,887,717.66 | 17,638,200.00 | 13,818,533.54 | 161,707,384.12 | |
| Total | 238,811,111.04 | 100,895,200.00 | 44,212,745.72 | 295,493,565.32 | -- |
Other explanations: None.
41. Other non-current liabilities
Unit: RMB
| Item | Closing balance | Opening balance |
| Receipts of real estate sale under staff housing reform | 1,931,554.36 | 1,931,554.36 |
| Returns payable | 15,365,260.05 | |
| Total | 1,931,554.36 | 17,296,814.41 |
Other explanations: None.
42. Share capital
Unit: RMB
| Opening balance | Increase or decrease (＋,－) | ||||
| Issuance of new shares | Share dividend | Capitalization of capital reserve into share capital | Others | Subtotal | |
Closing balance
| Closing balance | |||||
| Total number of shares | 1,796,862,549.00 | -12,599,946.00 | -12,599,946.00 | 1,784,262,603.00 |
Other explanations: The reason for the decrease in the current period: The Company held a shareholders’ meeting in February2024, which considered and approved to change the use of the 12,599,946 repurchased shares “for the cancellation to reduce theregistered capital,” In April 2024, the Company completed the cancellation procedure for the aforementioned 12,599,946 repurchasedshares.
43. Other equity instruments
(1) Basic information on preferred shares, perpetual bonds, and other financial instruments outstanding at the end ofthe period: None.
(2) Statement of changes in preferred shares, perpetual bonds, and other financial instruments outstanding at the endof the period: None.
44. Capital reserves
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (equity premium) | 18,175,016,281.26 | 694,828,946.15 | 17,480,187,335.11 | |
| Other capital reserves | 71,603,460.83 | 85,358,027.54 | 156,961,488.37 | |
| Total | 18,246,619,742.09 | 85,358,027.54 | 694,828,946.15 | 17,637,148,823.48 |
Other explanations, including changes and reasons thereof as at the end of the reporting period:
(1) In the current year, other changes in equity in associates and passive dilution of shares due to the exerciseof rights to issue new shares were recognized, and an increase of RMB 85,358,027.54 in capital surplus - othercapital surplus was recognized in accordance with the proportion of shares held.
(2) At the first session of the Tenth Board of Directors in 2024 held on February 7, 2024 and the FirstExtraordinary General Meeting in 2024 held on February 23, 2024, the Proposal on Change of Use and Cancellationof the Repurchased Shares was considered and approved, agreeing the Company to change the use of the 12,599,946shares that had been repurchased as mentioned above in the special securities account for repurchases. The use ofthe repurchased shares was changed from “for the implementation of the employee stock ownership plan or theshare incentive plan” to “for the cancellation to reduce the registered capital,” with decrease in capital reserve(capital stock premium) by RMB 694,828,946.15.
45. Treasury stock
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Share repurchase for equity incentives | 707,428,892.15 | 707,428,892.15 | 0.00 | |
| Total | 707,428,892.15 | 707,428,892.15 |
Other explanations, including changes and reasons thereof as at the end of the reporting period:
At the first session of the Tenth Board of Directors in 2024 held on February 7, 2024 and the First ExtraordinaryGeneral Meeting in 2024 held on February 23, 2024, the Proposal on Change of Use and Cancellation of theRepurchased Shares was considered and approved, agreeing the Company to change the use of the 12,599,946shares that had been repurchased as mentioned above in the special securities account for repurchases. The use ofthe repurchased shares was changed from “for the implementation of the employee stock ownership plan or theshare incentive plan” to “for the cancellation to reduce the registered capital.” The Company completed thecancellation of 12,599,946 shares in April 2024.
46. Other comprehensive income
Unit: RMB
| Item | Opening balance | Amount for the current period | |||||
| Amount before income tax in the current period | Less: Amount previously included in other comprehensive income but transferred to profits and losses in thecurrent period | Less: Amount previously included in other comprehensive income but transferred to retained earnings in thecurrent period | Less: income tax expenses | That attributable to the Company after tax | That attributable to minority interests after tax | ||
Closing balance
| Closing balance | ||||||||
| I. Other comprehensive incomes that will not be reclassified into profits or losses | 450,547.51 | -2,067,513.33 | -2,067,513.33 | -1,616,965.82 | ||||
| Other comprehensive income that cannot be transferred to profits or losses under equity method | 450,547.51 | -2,067,513.33 | -2,067,513.33 | -1,616,965.82 | ||||
| II. Other comprehensive incomes to be reclassified into profits and losses | -89,988,719.64 | -9,657,670.85 | 0.00 | 0.00 | 0.00 | -9,657,670.85 | -1,716,145.16 | -99,646,390.49 |
| Including: Other comprehensive income that can be transferred to profits or losses under equity method | -56,428,881.64 | -4,787,910.02 | -4,787,910.02 | -61,216,791.66 | ||||
| Other fair value changes in debt investments | 0.00 | |||||||
| Amount of financial assets reclassified to other comprehensive income | 0.00 |
| Other credit impairment provisions for debt investments | 0.00 | |||||
| Cash flow hedge reserve | 0.00 | |||||
| Exchange differences from translation of financial statements denominated in foreign currencies | -33,559,838.00 | -4,869,760.83 | -4,869,760.83 | -1,716,145.16 | -38,429,598.83 | |
| Total other comprehensive income | -89,538,172.13 | -11,725,184.18 | -11,725,184.18 | -1,716,145.16 | -101,263,356.31 |
Other explanations, including adjustments to the effective portion of the cash flow hedge profits or losses transferred to the amount initially recognized for the hedged item: None.
47. Surplus Reserves
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Statutory surplus reserves | 2,530,458,968.58 | 2,530,458,968.58 | ||
| Total | 2,530,458,968.58 | 2,530,458,968.58 |
Explanations on surplus reserves, including changes and reasons thereof for the period: None.
48. Undistributed profit
Unit: RMB
| Item | Current period | Previous period |
| Undistributed profit at the end of the previous period before adjustment | 18,102,147,836.12 | 16,720,444,918.66 |
| Undistributed profit at the beginning of the period after adjustment | 18,102,147,836.12 | 16,720,444,918.66 |
| Plus: Net profits attributable to equity owners the Company’s owners in the current period | 4,749,415,499.55 | 4,093,782,074.02 |
| Ordinary share dividends payable | 5,870,223,949.91 | 2,712,079,156.56 |
| Undistributed profit at the end of the period | 16,981,339,385.76 | 18,102,147,836.12 |
Details on adjustment of undistributed profits at the beginning of the period:
1)Due to retrospective adjustments in accordance with Accounting Standards for Business Enterprises and relevant new provisions, theundistributed profits at the beginning of the period were affected by RMB 0.00.
2)Due to changes in accounting policies, the undistributed profits at the beginning of the period were affected by RMB 0.00.
3)Due to correction of material accounting errors, the undistributed profits at the beginning of the period were affected by RMB 0.00.
4)Due to changes in the consolidation scope under common control, the undistributed profits at the beginning of the period were affectedby RMB 0.00.
5)Due to other adjustments, the undistributed profits at the beginning of the period were affected by RMB 0.00.
49. Operating revenue and operating cost
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Principal businesses | 39,983,936,095.25 | 28,851,334,965.90 | 39,062,420,069.47 | 28,704,978,123.36 |
| Other businesses | 49,364,719.47 | 13,431,239.20 | 48,872,086.53 | 39,539,516.93 |
| Total | 40,033,300,814.72 | 28,864,766,205.10 | 39,111,292,156.00 | 28,744,517,640.29 |
Whether the lower of the audited net profit before and after deducting non-recurring gains or losses is negative
□ Yes?No
Breakdown information of operating revenue and operating cost:
Unit: RMB
| Type of contract | Drug sales | Health and daily chemical | TCM resources | Pharmaceutical distribution | Others | Total | ||||||
| Operating revenue | Operating cost | Operating revenue | Operating cost | Operating revenue | Operating cost | Operating revenue | Operating cost | Operating revenue | Operating cost | Operating revenue | Operating cost | |
| Business type | 7,263,081,091.04 | 2,386,844,301.31 | 6,678,868,719.01 | 2,211,048,121.05 | 1,782,164,316.89 | 1,517,777,209.62 | 23,630,359,445.80 | 22,208,783,649.22 | 678,827,241.98 | 540,312,923.90 | 40,033,300,814.72 | 28,864,766,205.10 |
| Including: | ||||||||||||
| Industry sales income | 7,263,081,091.04 | 2,386,844,301.31 | 6,678,868,719.01 | 2,211,048,121.05 | 463,805,656.30 | 302,335,655.88 | 62,494,748.03 | 29,110,492.60 | 14,468,250,214.38 | 4,929,338,570.84 | ||
| Commercial sales income | 1,315,965,323.19 | 1,214,290,744.27 | 23,630,359,445.80 | 22,208,783,649.22 | 526,561,244.95 | 468,200,967.96 | 25,472,886,013.94 | 23,891,275,361.45 | ||||
| Technical services | 26,297,797.46 | 20,496,861.16 | 26,297,797.46 | 20,496,861.16 | ||||||||
| Hotel catering industry | 14,108,732.07 | 9,073,362.98 | 14,108,732.07 | 9,073,362.98 | ||||||||
| Planting sales income | 2,393,337.40 | 1,150,809.47 | 2,393,337.40 | 1,150,809.47 | ||||||||
| Others | 49,364,719.47 | 13,431,239.20 | 49,364,719.47 | 13,431,239.20 | ||||||||
| By operating areas | 7,263,081,091.04 | 2,386,844,301.31 | 6,678,868,719.01 | 2,211,048,121.05 | 1,782,164,316.89 | 1,517,777,209.62 | 23,630,359,445.80 | 22,208,783,649.22 | 678,827,241.98 | 540,312,923.90 | 40,033,300,814.72 | 28,864,766,205.10 |
| Including: | ||||||||||||
| In Yunnan province | 913,541,710.08 | 250,767,064.54 | 284,933,183.66 | 122,830,382.15 | 1,045,453,619.48 | 833,224,359.39 | 23,572,709,915.12 | 22,145,515,381.18 | 200,056,836.92 | 112,202,737.53 | 26,016,695,265.26 | 23,464,539,924.79 |
| Outside Yunnan province (excluding overseas) | 6,320,451,601.22 | 2,128,268,974.36 | 6,380,681,563.65 | 2,075,664,717.19 | 704,944,116.78 | 653,067,532.78 | 57,649,530.68 | 63,268,268.04 | 194,205,453.35 | 148,169,541.25 | 13,657,932,265.68 | 5,068,439,033.62 |
| Overseas | 29,087,779.74 | 7,808,262.41 | 13,253,971.70 | 12,553,021.71 | 31,766,580.63 | 31,485,317.45 | 284,564,951.71 | 279,940,645.12 | 358,673,283.78 | 331,787,246.69 | ||
Information related to performance obligations: None.Other explanations: The Company and its subsidiaries are mainly engaged in sale of drugs, medicinal materials, health anddaily chemical products, etc. and recognize the realization of revenue upon delivery of products to customers and confirmation bycustomers that they have obtained control over the products. No contracts are for the purpose of significant financing. But somecontracts may include some discount and concession clauses. Usually, no contracts contain expected refunds to customers or othersimilar obligations assumed by the Company.Information related to the transaction price allocated to remaining performance obligations:
As of the end of this reporting period, the income corresponding to the performance obligations that have been contractedbut not yet fulfilled or completed is RMB 0.00.Information about variable consideration in the contract: None. Significant contract changes or significant adjustments to the transaction price: None.
Other explanations: None.
50. Taxes and surcharges
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Consumption tax | 2,559,522.81 | 1,334,001.60 |
| Urban maintenance and construction tax | 102,075,935.22 | 87,286,116.05 |
| Education surcharge | 43,871,752.93 | 38,006,819.35 |
| Resource tax | 3,000.00 | |
| Property tax | 25,986,330.94 | 20,854,291.61 |
| Land use tax | 11,067,873.16 | 11,015,525.09 |
| Vehicle and vessel use tax | 68,462.25 | 82,456.83 |
| Stamp duty | 28,025,938.39 | 26,724,523.32 |
| Local education surcharge | 29,246,835.29 | 25,358,176.63 |
| Others | 211,718.45 | 139,568.24 |
| Total | 243,117,369.44 | 210,801,478.72 |
Other explanations: None.
51. Administrative expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee compensation | 677,420,256.86 | 699,216,701.82 |
| Depreciation and amortization | 100,161,064.67 | 119,934,021.71 |
| Agency service fee | 34,600,043.93 | 52,485,577.72 |
| Office expenses | 34,922,096.07 | 22,359,108.91 |
| Technical service fee | 45,839,677.23 | 31,860,830.97 |
| Business entertainment fee | 9,996,603.25 | 15,994,289.45 |
| Travel expenses | 19,239,105.28 | 20,122,003.15 |
| Utilities and property management fee | 9,266,666.24 | 5,926,154.60 |
| Security and cleaning fee | 7,385,287.50 | 6,322,427.76 |
| Advertising and promotion expenses | 2,656,177.04 | 3,570,476.33 |
| Afforestation and pollution discharge fee | 3,624,510.35 | 4,477,164.69 |
| Lease cost | 3,314,864.30 | 6,457,746.85 |
| Others | 89,127,131.15 | 69,777,019.94 |
| Total | 1,037,553,483.87 | 1,058,503,523.90 |
Other explanations: None.
52. Selling expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee compensation | 1,600,098,657.89 | 1,831,501,877.46 |
| Business promotion expenses | 756,413,873.55 | 783,885,455.50 |
| Display expenses | 555,834,987.51 | 372,839,604.06 |
| Advertising expenses | 460,234,304.23 | 661,244,437.69 |
| Marketing service fees | 294,098,539.30 | 340,293,664.08 |
| Travel expenses | 148,652,306.95 | 109,139,900.74 |
| Promotion fees | 113,293,440.09 | 21,239,165.85 |
| Promotional staff expenses | 96,654,358.32 | 98,296,774.25 |
| Information technology service fees | 82,203,681.73 | 53,262,914.17 |
| Others | 772,017,887.34 | 720,453,797.31 |
| Total | 4,879,502,036.91 | 4,992,157,591.11 |
Other explanations: None.
53. R&D expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee compensation | 176,064,710.71 | 155,787,826.65 |
| Materials consumption and inspection fee | 58,512,136.24 | 32,779,955.16 |
| New product design fee | 18,717,947.75 | 4,086,610.07 |
| Commissioned R&D cost | 44,437,281.25 | 59,308,976.45 |
| Depreciation and amortisation | 12,431,179.87 | 18,203,654.61 |
| Test out-sourcing expenses | 2,971,133.28 | 38,162,026.18 |
| Others | 24,278,911.93 | 27,684,385.71 |
| Total | 337,413,301.03 | 336,013,434.83 |
Other explanations: None
54. Financial expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Interest expenses | 63,177,001.07 | 49,601,252.93 |
| Less: interest income | -221,210,259.84 | -315,758,812.17 |
| Net loss on foreign exchange | -7,646,886.55 | -2,073,485.41 |
| Bank charges | 10,749,449.67 | 6,759,007.86 |
| Others | -624,414.20 | 2,228,291.91 |
| Total | -155,555,109.85 | -259,243,744.88 |
Other explanations: None.
55. Other income
Unit: RMB
| Other sources of income | Amount for the current period | Amount for the previous period |
| Government subsidies directly included in current profit and loss during the period | 42,056,174.39 | 51,549,775.52 |
| Amortization of government subsidies related to assets | 12,768,533.54 | 16,798,505.37 |
| Amortization of government subsidies related to income | 29,379,041.17 | 7,026,939.27 |
| Return of individual income tax service charge | 9,533,408.94 | 4,121,718.75 |
| Others | 8,272,615.61 | 3,818,208.41 |
| Total | 102,009,773.65 | 83,315,147.32 |
56. Gains on changes in fair value
Unit: RMB
| Sources of gains on changes in fair value | Amount for the current period | Amount for the previous period |
| Financial assets held for trading | 73,822,492.46 | 179,678,085.07 |
| Other non-current financial assets | 63,014,517.48 | -56,111,754.61 |
| Total | 136,837,009.94 | 123,566,330.46 |
Other explanations: None.
57. Investment income
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Gain on long-term equity investments subject to accounting with equity method | 774,279,535.69 | 628,531,524.35 |
| Investment income from disposal of long-term equity investment | 110,398,541.09 | |
| Investment income on financial assets held for trading during holding period | 6,671,289.70 | 7,606,635.89 |
| Investment income from disposal of financial assets held for trading | -12,988,016.22 | -7,010,382.50 |
| Investment income earned during the holding period of other non-current financial assets | 20,474,449.39 | 75,617,211.23 |
| Others | -11,499,763.50 | -36,132,801.24 |
| Total | 776,937,495.06 | 779,010,728.82 |
Other explanations: None.
58. Credit impairment losses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Bad debt losses on accounts receivable | -46,675,411.57 | -179,435,027.97 |
| Bad debt losses on other receivables | 6,749,484.95 | 42,979,823.61 |
| Total | -39,925,926.62 | -136,455,204.36 |
Other explanations: None.
58. Asset impairment losses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| I. Inventory impairment losses and contract performance cost impairment losses | -49,327,607.34 | -11,490,525.22 |
| IV. Impairment loss of fixed assets | -26,077,160.26 | -4,169,779.04 |
| IX.Impairment loss of intangible assets | -332,131.80 | -16,706,934.75 |
| X.Goodwill impairment loss | -7,158,530.50 | -25,760,323.22 |
| XII. Others | -8,335,279.72 | |
| Total | -91,230,709.62 | -58,127,562.23 |
Other explanations: None.
60. Gains on disposal of assets
Unit: RMB
| Source of gains on disposal of assets | Amount for the current period | Amount for the previous period |
| Profit from disposal of non-current assets | -435,663.65 | -105,279.84 |
| Profit from disposal of right-of-use assets | 926,315.30 | 10,759,718.22 |
| Total | 490,651.65 | 10,654,438.38 |
61. Non-operating revenue
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | Amount of non-recurringprofits or losses included in the current period |
| Profits from destruction and scrapping of non-current assets | 2,313,930.54 | 171,572.75 | 2,313,930.54 |
| Including: fixed assets | 2,313,930.54 | 171,572.75 | 2,313,930.54 |
| Donations accepted | |||
| Government subsidy | |||
| Others | 13,169,408.19 | 12,062,476.51 | 13,169,408.19 |
| Total | 15,483,338.73 | 12,234,049.26 | 15,483,338.73 |
Other explanations: None.
62. Non-operating expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | Amount of non-recurring profits or losses included in the current period |
| Losses from destruction and scrapping of non-current assets | 276,676.77 | 10,746,640.25 | 276,676.77 |
| Including: fixed assets | 276,676.77 | 10,746,640.25 | 276,676.77 |
| External donations | 4,588,957.23 | 3,439,155.47 | 4,588,957.23 |
| Others | 37,519,863.02 | 10,542,607.30 | 37,519,863.02 |
| Total | 42,385,497.02 | 24,728,403.02 | 42,385,497.02 |
63. Income tax expense
(1)Table of income tax expenses
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Current income tax expenses | 964,657,851.50 | 696,380,255.02 |
| Deferred income tax expenses | -47,010,547.79 | -929,594.85 |
| Total | 917,647,303.71 | 695,450,660.17 |
(2)Adjustment process of accounting profit and income tax expense
Unit: RMB
| Item | Amount for the current period |
| Total profit | 5,684,719,663.99 |
| Income tax expense calculated at statutory/applicable tax rate | 852,707,949.60 |
| Effect of different tax rates applied to subsidiaries | 2,876,397.53 |
| Effect of adjusting income tax for prior periods | 73,086,852.64 |
| Effect of non-taxable income | -132,324,338.65 |
| Effect of non-deductible costs, expenses and losses | 127,140,502.28 |
| Effect of deductible losses on the use of deferred tax assets not recognized in prior periods | -25,827,738.84 |
| Effect of deductible temporary differences or deductible losses on deferred income tax assets not recognized in the current period | 82,950,492.77 |
| Change in the balance of deferred income tax assets/liabilities at the beginning of the year due to tax rate adjustments | -12,193,015.34 |
| Extra tax deductions for R&D costs | -49,481,612.97 |
| Others | -1,288,185.31 |
| Income tax expenses | 917,647,303.71 |
Other explanations: None.
64. Other comprehensive income
For details, please refer to Note 46 “Other comprehensive income.”
65.Cash flow statement
(1)Cash relating to operating activities
Cash received relating to other operating activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Interest income | 219,472,052.00 | 343,668,676.54 |
| Deposits and guarantees | 146,845,057.57 | 137,533,597.44 |
| Government subsidy | 151,879,874.90 | 134,140,444.78 |
| Current account and petty cash | 39,444,457.98 | 23,924,789.88 |
| Others | 54,463,899.59 | 49,853,998.90 |
| Total | 612,105,342.04 | 689,121,507.54 |
Explanations on cash received relating to other operating activities: None.Cash payments relating to other operating activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Expenses of cost nature | 2,795,371,889.92 | 2,788,122,677.99 |
| Deposits and guarantees | 166,961,729.93 | 121,204,248.66 |
| Current account and petty cash | 14,551,758.72 | 41,963,044.67 |
| Others | 7,683,664.97 | 29,831,773.08 |
| Total | 2,984,569,043.54 | 2,981,121,744.40 |
Explanations on cash payments relating to other operating activities: None.
(2)Cash relating to investment activities
Cash received relating to other investment activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Principal and interest of time deposits and other financial products redeemed | 7,043,006,500.00 | 1,978,176,523.10 |
| Total | 7,043,006,500.00 | 1,978,176,523.10 |
Important cash received relating to investment activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Principal of stocks, financial products, etc. | 553,145,988.51 | 2,858,040,561.69 |
| Principal and interest of time deposits and other financial products | 7,043,006,500.00 | 1,978,176,523.10 |
| Interest and income from stocks, time deposits, financial products, etc. | 420,227,984.66 | 136,597,866.72 |
| Total | 8,016,380,473.17 | 4,972,814,951.51 |
Explanations on cash received relating to other investing activities: None.Cash payments relating to other investment activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Net cash outflow from disposal of subsidiary | 37,021.72 | |
| Time deposits and other banking products | 5,143,140,000.00 | 3,805,272,300.00 |
| Total | 5,143,140,000.00 | 3,805,309,321.72 |
Important cash paid relating to investment activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Time deposits and other banking products | 5,143,140,000.00 | 3,805,272,300.00 |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 675,074,486.64 | 575,507,137.90 |
| Banking products and other wealth management products | 2,900,000,000.00 | 68,700,000.00 |
| Equity investment funds | 500,000,000.00 | |
| Total | 9,218,214,486.64 | 4,449,479,437.90 |
Explanations on cash payments relating to other investing activities: None.
(3) Cash received relating to financing activities
Cash received relating to other financing activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Withholding and remittance of individual income tax on dividend distribution | 73,292,510.43 | |
| Refund of dividend distribution guarantee deposit | 2,000,000.00 | |
| Total | 75,292,510.43 |
Explanations on cash received relating to other financing activities: None.Cash paid relating to other financing activities
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Payment of lease costs | 90,383,082.47 | 91,230,648.56 |
| Handling fee for financing activities | 2,381,635.77 | 953,227.70 |
| Withholding and remittance of individual income tax on dividend distribution | 60,073,045.88 | |
| Dividend distribution guarantee deposit | 2,000,000.00 | |
| Payment for minority equity upon cancellation and liquidation of subsidiary | 4,900,000.00 | |
| Payments for acquisition of minority equity in Hefei Company | 8,100,000.00 | |
| Total | 154,837,764.12 | 105,183,876.26 |
Explanations on cash paid relating to other financing activities: None.Change of liabilities resulting from financing activities
?Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | ||
| Cash change | Non-cash change | Cash change | Non-cash change | ||
Closing balance
| Closing balance | ||||||
| Short-term borrowings | 1,747,303,700.34 | 822,419,213.86 | 7,421,589.78 | 1,702,653,581.37 | 451,110,649.97 | 423,380,272.64 |
| Lease liabilities (Lease liabilities due within one year) | 247,083,412.30 | 153,292,150.09 | 90,383,082.47 | 30,899,413.95 | 279,093,065.97 | |
| Dividend payable | 86,490,742.04 | 5,878,264,865.44 | 5,878,264,865.44 | 86,490,742.04 | ||
| Other current liabilities | 1,000,000,000.00 | 1,000,000,000.00 | 0.00 | |||
| Long-term borrowings | 2,100,000.00 | 2,100,000.00 | ||||
| Total | 2,082,977,854.68 | 1,822,419,213.86 | 6,038,978,605.31 | 8,671,301,529.28 | 482,010,063.92 | 791,064,080.65 |
(4) Explanation on presentation of cash flow in net amount: None.
(5) Significant activities and financial effects that do not involve current cash receipts and disbursementsbut affect the enterprise’s financial position or may affect the enterprise’s cash flows in the future: None.
66. Supplementary information of cash flow statement
(1)Supplementary information of cash flow statement
Unit: RMB
| Supplementary information | Amount for the current period | Amount for the previous period |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 4,767,072,360.28 | 4,122,561,096.49 |
| Plus: Impairment provision for assets | 131,156,636.24 | 194,582,766.59 |
| Depreciation of fixed assets, depreciation of oiland gas assets, depreciation of productive biological assets | 203,119,678.85 | 208,456,263.24 |
| Depreciation of right-of-use assets | 83,364,568.49 | 100,305,178.75 |
| Amortization of intangible assets | 25,012,034.21 | 30,940,993.27 |
| Amortization of long-term deferred expenses | 38,404,127.20 | 33,493,659.88 |
| Loss on disposal of fixed assets, intangible assets and other long-term assets (gain is indicated with “-”) | 435,663.65 | 79,370.88 |
| Losses on scrapping of fixed assets (gain is indicated with “-”) | -2,037,253.77 | 10,575,067.50 |
| Losses on changes in fair value (gain is indicated with “-”) | -136,837,009.94 | -123,566,330.46 |
| Financial expenses (income is indicated with “-”) | 62,336,462.09 | 49,601,252.93 |
| Investment losses (gain is indicated with “-”) | -842,061,414.65 | -779,010,728.82 |
| Decrease of deferred income tax assets (increase is indicated with “-”) | -66,105,807.62 | 22,377,570.54 |
| Increase of deferred income tax liabilities (decrease is indicated with “-”) | 19,095,259.83 | -23,307,165.39 |
| Decrease in inventories (increase is indicated with“-”) | 113,232,804.84 | 1,539,521,695.37 |
| Decrease in operating receivable items (increase is indicated with “-”) | -758,018,810.16 | -2,088,116,474.45 |
| Increase in operating payable items (decrease is indicated with “-”) | 585,907,421.72 | 198,990,559.88 |
| Conversion of debts into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets acquired under finance leases | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 10,275,529,575.34 | 14,151,765,468.49 |
| Less: Opening balance of cash | 14,151,765,468.49 | 13,046,160,012.47 |
| Plus: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -3,876,235,893.15 | 1,105,605,456.02 |
(2)Net cash paid for acquisitions of subsidiaries for the period: None.
(3)Net cash received from disposal of subsidiaries for the period: None.
(4)Composition of cash and cash equivalents
Unit: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 10,275,529,575.34 | 14,151,765,468.49 |
| Including: Cash on hand | 124,469.53 | 258,600.92 |
| Bank deposit available for payment at any time | 10,222,574,046.06 | 14,114,677,091.39 |
| Other cash and bank balance available for payment at any time | 52,831,059.75 | 36,829,776.18 |
| III. Cash and cash equivalents at the end of the reporting period | 10,275,529,575.34 | 14,151,765,468.49 |
(5)Presentation of items with restricted use but still belonging to cash and cash equivalents: None.
(6)Cash and bank balance which are not cash and cash equivalents
| Item | Amount in the reporting period | Amount in the previous period | Reasons for not belonging to cash and cash equivalents |
| Guarantee deposit, banker’s acceptance bill deposit, performance deposit, etc | 21,699,196.16 | 48,618,045.43 | Cannot be withdrawn at any time |
Others
| Others | 72,926,421.01 | 5,257,571.82 |
| Net cash flows from operating activities | 4,297,003,142.27 | 3,502,742,348.02 |
| 2. Major investment and financing activities irrelevant to cash income and expense: |
| Cost specially used for housing reform and maintenance | 2,648,389.00 | 2,643,393.65 | Cannot be withdrawn at any time |
| Cost for property preservation | 500,000.00 | Cannot be withdrawn at any time | |
| Cost specially used for identity conversion for employees in state-owned enterprises | 588,106,000.80 | 14,816,169.10 | Cannot be withdrawn at any time |
| Total | 612,453,585.96 | 66,577,608.18 |
(7)Explanations on other significant activities: None.
67.Notes to statement of changes in equity
Explanation on “Others” adjusted for closing balance of the previous year and adjusted amount thereof: None.
68. Monetary items denominated in foreign currencies
(1)Monetary items denominated in foreign currencies
Unit: RMB
| Item | Closing balance of foreign currency | Exchange rate | Closing balance converted into RMB |
| Cash and bank balance | |||
| Including: USD | 5,793,601.15 | 7.1884 | 41,646,722.51 |
| Euro | 2,036,154.03 | 7.5257 | 15,323,484.38 |
| HKD | 150,174,402.72 | 0.92604 | 139,067,503.89 |
| Japanese yen | 5,356,674.00 | 0.04623 | 247,639.04 |
| South Korean won | 21,324,422.00 | 0.00494 | 105,300.00 |
| THB | 3,521,782.79 | 0.21260 | 748,731.02 |
| CAD | 1,462.25 | 5.1198 | 7,486.43 |
| CHF | 21,144.34 | 8.3154 | 175,823.64 |
| SGD | 49,832.37 | 5.3219 | 265,202.89 |
| Accounts receivable | |||
| Including: USD | 5,683,408.50 | 7.1884 | 40,854,613.66 |
| Euro | |||
| HKD | 44,853,013.90 | 0.92604 | 41,535,684.99 |
| Accounts payable | |||
| Including: USD | |||
| Euro | |||
| HKD | 6,701,016.38 | 0.92604 | 6,205,409.21 |
| Other current assets | |||
| Including: HKD | 10,016,152.00 | 0.92604 | 9,275,357.40 |
Other explanations: None.
(2)Description of overseas business entities; for material overseas business entities, disclose their majorbusiness places overseas, functional currency and the selection criterion thereof; should there be anychange in the functional currency, disclose the reason for such change.
□ Applicable ?Not applicable
69. Lease
(1) The Company as the lessee
? Applicable□ Not applicableVariable lease payments not included in the measurement of lease liabilities? Applicable□ Not applicable
| Item | Amount |
| Variable lease payments not included in the measurement of lease liabilities | 1,853,203.38 |
Simplified handling of payments of short-term leasing or leasing of low value assets? Applicable□ Not applicable
| Item | Amount |
| Simplified handling of fees of short-term leasing or leasing of low value assets | 21,297,315.26 |
After-sales leaseback transactions: None.
(2) The Company as the lessor
Operating lease where the Company is the lessor? Applicable□ Not applicable
| Item | Receipts from lease | Including: Receipts related to variable lease payments not included in lease receipts |
| Houses and buildings | 19,604,965.17 | |
| Total | 19,604,965.17 |
Finance lease where the Company is the lessor
□ Applicable? Not applicable
Undiscounted lease receipts for each of the next five years
□ Applicable? Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases
(3) Recognition of profits and losses on sales under finance leases as a manufacturer or distributor? Applicable? Not applicable
70. Data resources: None.
71. Others
None.VIII. R&D Expenditure
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Employee Benefits | 176,428,120.44 | 155,787,826.65 |
| Materials consumption and inspection fees | 58,715,281.92 | 33,036,222.54 |
| Depreciation and amortization | 12,553,292.71 | 18,301,737.20 |
| Test outsourcing fee | 13,008,621.76 | 38,167,290.57 |
| Commissioned R&D cost | 44,437,281.25 | 67,328,221.73 |
| New product design fee | 18,717,995.73 | 4,086,610.07 |
| Others | 24,522,693.78 | 27,733,552.52 |
| Total | 348,383,287.59 | 344,441,461.28 |
| Including: Expensed R&D expenditure | 337,413,301.03 | 336,013,434.83 |
| Capitalized R&D expenditure | 10,969,986.56 | 8,428,026.45 |
1. R&D projects meeting capitalization conditions
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | ||
| Internal development costs | Others | Recognized as intangible assets | Transfer to current profits or losses | ||
Closingbalance
| Closing balance | ||||||
| P137 Project R&D (IND) | 14,452,474.57 | 10,969,986.56 | 25,422,461.13 | |||
| Total | 14,452,474.57 | 10,969,986.56 | 0.00 | 0.00 | 0.00 | 25,422,461.13 |
Important capitalized R&D projects: None.Impairment provision for R&D expenditure: None.
2. Important outsourced project under study: None.
IX. Changes in the Consolidation Scope
1. Business combination not under common control: None.
2. Business combination under common control: None.
3. Reverse purchase: None.
4. Disposal of subsidiaries
Whether there were any transactions or events during the period in which control of subsidiaries was lost
?Yes ?NoWhether there was a loss of control in the current period under a progressive disposal of investments in subsidiariesthrough multiple transactions?Yes ?No
5.Changes in the consolidation scope due to other reasons
Describe the change in scope of consolidation for other reasons (e.g. Establishing new subsidiaries, liquidatingsubsidiaries, etc.) and its details:
(1) Establishment of new subsidiaries
1)Yunnan Baiyao Group TCM Resources Co., Ltd invested in the establishment of Hangzhou ShanqiHealth Industry Co., Ltd, with a registered capital of RMB 1,000,000 and a 100% ownership. Yunnan Baiyaoincluded Hangzhou Shanqi Health Industry Co., Ltd into its consolidation scope from April 2024.
2)Yunnan Pharmaceutical Co., Ltd invested in the establishment of Yunnan Pharmaceutical Zhaotong Co.,Ltd, with a registered capital of RMB 10,000,000 and a 100% ownership. Yunnan Baiyao included YunnanPharmaceutical Zhaotong Co., Ltd into its consolidation scope from March 2024.
3)Yunnan Baiyao Group TCM Resources Co., Ltd invested in the establishment of Yunnan Baiyao GroupSeed Industry Technology Co., Ltd, with a registered capital of RMB 10,000,000 and a 100% ownership. YunnanBaiyao included Yunnan Baiyao Group Seed Industry Technology Co., Ltd into its consolidation scope fromDecember 2024.
4)Yunnan Baiyao Group Zhiyun Health Services Co., Ltd invested in the establishment of Shaanxi ZhiyunWenshu Health Services Co., Ltd, with a registered capital of RMB 1,000,000 and a 100% ownership. YunnanBaiyao included Shaanxi Zhiyun Wenshu Health Services Co., Ltd into its consolidation scope from November2024.
5)Yunnan Baiyao Group Co., Ltd invested in the establishment of Yunnan Yunling ManagementConsulting Co., Ltd, with a registered capital of RMB 10,000,000 and a 100% ownership. Yunnan Baiyaoincluded Yunnan Yunling Management Consulting Co., Ltd into its consolidation scope from November 2024.
(2) Deregistration of Subsidiary:
1) Ban Loong Capital GP was deregistered in April 2024.
6. Others: None.
X. Interest in Other Entities
1.Interest in subsidiaries
(1)Composition of the Group
Unit: RMB
| Name of subsidiary | Registered capital | Main business location | Place of registration | Business nature | Shareholding proportion | |
| Direct | Indirect | |||||
Acquisitionmethod
| Acquisition method | |||||||
| Yunnan Baiyao Group TCM Resources Co., Ltd | 16,400,000.00 | Kunming | Kunming | Pharmaceutical | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Medicine E-commerce Co., Ltd. | 30,000,000.00 | Kunming | Kunming | Wholesale and retail of daily necessities | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd. | 25,000,000.00 | Wuxi | Wuxi | Pharmaceutical | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd. | 15,515,000.00 | Dali | Dali | Pharmaceutical | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Health Products Co., Ltd. | 84,500,000.00 | Kunming | Kunming | Production and sales of health and daily chemicals | 100.00% | 0.00% | Set-up or investment |
| Yunnan Pharmaceutical Co., Ltd. | 1,000,000,000.00 | Kunming | Kunming | Pharmaceutical wholesale and retail | 100.00% | 0.00% | Set-up or investment |
| Yunnan Institute of Materia Medica | 54,080,000.00 | Kunming | Kunming | New Drug R&D | 100.00% | 0.00% | Business combination under common control |
| Yunnan Baiyao Holding Investment Co., Ltd. | 100,000,000.00 | Kunming | Kunming | Investment | 100.00% | 0.00% | Business combination under common control |
| Yunnan Baiyao Teayield Co., Ltd. | 20,000,000.00 | Kunming | Kunming | Tea | 100.00% | 0.00% | Business combination under common control |
| Yunnan Baiyao Group (Hainan) Co., Ltd. | 15,000,000.00 | Hainan | Danya | Import and export agency, technical services, etc. | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Shanghai Co., Ltd. | 15,000,000.00 | Shanghai | Shanghai | Technical services | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Medical Technology Hefei | 25,970,800.00 | Hefei | Hefei | Medical Device Production and Sales | 100% | 0.00% | Business combination not under the |
| Co., Ltd. | same control | ||||||
| Shanghai Yunzhen Medical Technology Co., Ltd. | 900,000.00 | Shanghai | Shanghai | Technical development and service | 100.00% | 0.00% | Set-up or investment |
| YNBY International Limited | 0.00 | Hong Kong | Hong Kong | Trade | 28.06% | 45.62% | Business combination not under the same control |
| Yunnan Baiyao Tiancui Business Management Co., Ltd. | 3,000,000.00 | Kunming | Kunming | Catering | 100.00% | 0.00% | Set-up or investment |
| Yunnan Baiyao Group Beijing Co., Ltd. | 50,000,000.00 | Beijing | Beijing | Technology promotion service | 100.00% | 0.00% | Set-up or investment |
| Yunhe Pharmaceutical (Tianjin) Co., Ltd | 20,000,000.00 | Tianjin City | Tianjin City | Research and experimental development | 100.00% | 0.00% | Set-up or investment |
Explanation of the inconsistency of the percentage of shares in subsidiaries with the proportion of voting rights: None.Basis for holding half or less of the voting rights but still controlling investees, and holding more than half of the voting rightsbut not controlling investees: None.
Basis for controlling major structured entities consolidated into the financial statements:
The structured entities included in the scope of consolidation of the Group include CICC Directional AssetManagement-GF-CICC Qirui 1 and Shanghai Trust Platinum Series Hong Kong Market Investment Single Fund Trust.Because the Group has power over such structured entities, enjoys variable returns by participating in related activities,and has the ability to use its power over the investee to influence its variable returns, the Group has control over suchstructured entities.Basis for determining whether the Company is an agent or an entrustor: None.Other explanations: None.
(2)Key non-wholly owned subsidiaries
Unit: RMB
| Name of subsidiary | Percentage of shares held by minority interests | Profit and loss attributable to non-controlling interests in the current period | Dividends declared to non-controlling interests in the current period | Balance of minority shareholders’ equity at the end of the period |
| YNBY International Limited | 26.32% | 4,391,193.58 | -55,511,300.32 |
Explanation on the inconsistency of the percentage of shares held by minority shareholders in subsidiaries with the proportionof voting rights: None.
Other explanations: None.
(3) Main financial information of key non-wholly owned subsidiaries
Unit: RMB
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| YNBY International Limited | 328,272,842.86 | 12,491,866.59 | 340,764,709.45 | 94,092,251.84 | 5,957,177.35 | 100,049,429.19 | 336,579,182.52 | 17,052,211.25 | 353,631,393.77 | 112,222,845.17 | 21,056,768.96 | 133,279,614.13 |
Unit: RMB
| Name of subsidiary | Amount for the current period | Amount for the previous period | ||||||
| Operating revenue | Net Profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net Profit | Total comprehensive income | Cash flows from operating activities | |
| YNBY International Limited | 689,091,622.71 | 16,683,866.18 | 20,363,500.62 | 33,115,847.31 | 651,184,145.52 | 122,600,946.27 | 123,857,222.10 | 27,823,483.10 |
Other explanations: None.
(4) Major restrictions on the use of assets and settlement of debts of the corporate group: None.
(5) Financial support or other support provided for structured entity included in the scope of consolidation for theconsolidated financial statementsNone.Other explanations: None.
2.Transaction in which the share of owners’ equity in the subsidiary changes while control overthe subsidiary remains unchanged
(1)Explanations on changes in the share of owners’ equity in the subsidiary: None.
(2)Impact of the transaction on the minority shareholders’ equity and the owners’ equity attributable to the parent company:
None.
3.Interest in joint arrangement or associates
(1)Important joint ventures or associates
| Name of joint venture or associate | Main business location | Place of registration | Business nature | Shareholding proportion | |
| Direct | Indirect | ||||
The accountingmethod forinvestments injoint venturesor associates
| The accounting method for investments in joint venturesor associates | ||||||
| Shanghai Pharmaceuticals Holding Co., Ltd. | Shanghai | No. 92Zhangjiang Road, China (Shanghai) Pilot Free Trade Zone | Pharmaceuticals | 17.95% | Equity method for long-term equity investments |
Explanation of the inconsistency of the percentage of shares in joint ventures or associates with the proportion of voting rights:
None.Basis for holding 20% or less voting rights but having important influence, or holding 20% or more voting rights but not havingimportant influence: None.
(2)Main financial information of important joint ventures: None.
(3)Main financial information of important associates
Unit: RMB
| Closing balance/Amount for the current period | Opening balance/Amount for the previous period | |
| Current assets | 171,823,107,421.97 | 162,433,862,348.46 |
| Non-current assets | 49,386,322,726.20 | 49,538,671,418.34 |
| Total assets | 221,209,430,148.17 | 211,972,533,766.80 |
| Current liabilities | 126,038,386,279.10 | 122,371,879,034.89 |
| Non-current liabilities | 11,428,680,148.00 | 9,274,561,766.98 |
| Total liabilities | 137,467,066,427.10 | 131,646,440,801.87 |
| Minority interests | 12,066,743,749.10 | 11,801,949,913.58 |
| Equity attributable to shareholders of the parent company | 71,675,619,971.97 | 68,524,143,051.35 |
| Share of net assets based on percentage of shareholding | 12,866,662,562.66 | 12,316,447,243.08 |
| Adjustment | ||
| - Goodwill | 934,411,132.40 | 935,589,606.31 |
| - Unrealized profit on internal transactions | -7,831,910.38 | -5,399,246.55 |
| - Others | -1,731,865,195.92 | -1,709,991,043.28 |
| Book value of equity investment in associates | 12,061,376,588.76 | 11,536,646,559.56 |
| Fair value of equity investments inassociates for which publicly quoted prices exist | 13,978,162,716.00 | 11,135,936,297.08 |
| Operating revenue | 275,250,934,889.66 | 260,295,088,943.53 |
| Net profits | 5,870,011,314.88 | 5,166,570,284.26 |
| Net profits from discontinued operations | ||
| Other comprehensive income | -62,617,948.59 | -126,719,890.54 |
| Total comprehensive income | 5,807,393,366.29 | 5,039,850,393.72 |
| Dividends received from associates during the year | 326,157,130.04 | 406,032,345.56 |
Other explanations: None.
(4)Combined financial information of insignificant joint ventures and associates
Unit: RMB
| Closing balance/Amount for the current period | Opening balance/Amount for the previous period | |
| Joint ventures: | ||
| Total of the followings based on the percentage of shareholdings | ||
| Associates: | ||
| Total book value of investments | 9,809.54 | 14,433.37 |
| Total of the followings based on the percentage of shareholdings | ||
| - Net profit | -318,336.97 | -746,786.87 |
| - Other comprehensive income | 244.20 | |
| - Total comprehensive income | -318,092.77 | -746,786.87 |
Other explanations: None.
(5)Explanation on significant restrictions on the ability of joint ventures or associates to transfer funds tothe Company: None.
(6)Excess loss generated from joint ventures or associates
Unit: RMB
| Name of joint venture or associate | Cumulative unrecognized losses in the previous period | Unrecognized losses in the current period (or net profit | Cumulative unrecognized losses at the end of the current |
| shared in the current period) | period | ||
| Lijiang Changgengming Trading Co., Ltd. | -199,216.33 | -313,468.94 | -512,685.27 |
Other explanations: None.
(7)Unrecognized commitment related to investments in joint ventures: None.
(8)Contingent liabilities related to investments in joint ventures or associates: None.
4.Significant joint operation
Explanations on the proportion of shareholding or entitlement differing from voting rights in joint operations: None.Basis for classification as a joint operation where the joint operation is a separate entity: None.Other explanations: None.
5.Interest in structured entities not included in the scope of consolidated financial statementsRelevant explanation on structured entities not included in the consolidated financial statements: None.
6.Others
None.XI. Government Grants
1. Government grants recognized at the end of the reporting period based on amounts receivable
□Applicable?Not applicable
Reasons for not receiving the estimated amount of government grants at the expected time point
□Applicable?Not applicable
2. Liabilities involving government grants
?Applicable?Not applicable
Unit: RMB
| Accounting item | Opening balance | Amount of new subsidies in the current period | Amount included in non-operating revenue during the period | Amount transferred to other income in the current period | Other changes in the current period | Closing balance | Related to assets/income |
| Deferred income | 80,923,393.38 | 83,257,000.00 | 29,379,041.17 | 1,015,171.01 | 133,786,181.20 | Related to income | |
| Deferred income | 157,887,717.66 | 17,638,200.00 | 12,768,533.54 | 1,050,000.00 | 161,707,384.12 | Related to assets |
3. Government grants included in profit or loss for the current period
?Applicable?Not applicable
Unit: RMB
| Accounting item | Amount for the current period | Amount for the previous period |
| Other income | 84,203,749.10 | 75,375,220.16 |
Other explanations: None.
XII. Risks Associated with Financial Instruments
(I) Risks incurred by financial instrumentsThe Group’s financial instruments include equity investments, debt investments, loans, receivables andaccounts payable, etc., as detailed in the relevant items under Note VI. The risk management objective of the Groupis to get an appropriate balance between risk and return, minimize the negative impact of risk on business results ofthe Group, and maximize the interest of shareholders and other equity investors. Based on this risk managementobjective, the basic risk management strategy of the Group is to identify and analyze various risks faced by theGroup, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risksin a timely and reliable manner to control risks within a limited range.
1. Market risks
Market risk of financial instruments is the risk of fluctuation in the fair value of financial instruments or futurecash flow arising from changes in market price, including exchange rate risk, interest rate risk and other price risk.The Group uses sensitivity analysis techniques to analyze the possible impact of reasonable and possiblechanges in market risk related variables on current profits and losses or shareholders’ equity. Since any risk variablerarely changes in isolation, and the correlations that exist between variables will have a significant impact on theultimate amount of a change in a risk variable, in the following explanation, it is assumed that each variable changesindependently.
(1)Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuatedue to changes in the exchange rate. Exchange rate risk arises from financial instruments denominated in foreigncurrencies other than the functional currency. The Group's principal operations are located in the PRC, the functionalcurrency is RMB, and its principal operations are settled in RMB. The principal place of business of the Group'ssubsidiary, YNBY International, is located in Hong Kong, the PRC, and its functional currency is Hong Kongdollars. The Group's exposure to foreign exchange risk relates mainly to the US dollar and Hong Kong dollar, etc.The exchange rate risk affects both the Group's transactions and the results of its foreign operations. The balance ofthe Group's foreign currency monetary items as at December 31, 2024 is as shown in Section 66 “Monetary itemsdenominated in foreign currencies” under Note VI. If the RMB had appreciated or depreciated by 3% against theUS dollar and Hong Kong dollar, while other factors remained unchanged, the net profit of the Company wouldhave increased or decreased by approximately RMB 8,491,444.23.
(2)Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate becauseof changes in market interest rates. The Group’s interest rate risk arises from bank loans and bonds payable andother interest-bearing long-term debts. Financial liabilities at floating rates expose the Group to the cash flow interest
rate risk, and financial liabilities at fixed rates expose the Group to the fair value interest rate risk. The Groupdetermines the relative proportion of contracts carrying fixed and floating rates according to prevailing marketconditions. As at December 31, 2024, the Group’s interest-bearing debt consisted mainly of fixed-rate borrowingcontracts denominated in RMB amounting to RMB 404,233,333.39 (end of last year: RMB 1,016,734,728.09), andthe exposure to changes in market interest rates was not material.
(3)Other price risk
The investments classified as financial assets at fair value through profits or losses held by the Group aremeasured at fair value on the balance sheet date. Therefore, the Group is exposed to fluctuations in the securitiesmarket. The Group reduces the price risk of equity portfolio investments by holding multiple equity portfolios.As at December 31, 2024, if the expected price at which the Group holds the above types of investments hadincreased or decreased by 5%, while other factors remained unchanged, the Group would have increased ordecreased its net profit by approximately RMB 18,398,335.90.
2. Credit risk
As at December 31, 2024, the maximum exposure to credit risk that could cause the Group’s financial loss ismainly due to losses on the Group’s financial assets arising from the failure of the other party to perform itsobligations under the contract and financial guarantees undertaken by the Group, including:
The book value of recognized financial assets in the consolidated balance sheet. For financial instrumentsmeasured at fair value, the book value reflects its risk exposure, but not its maximum risk exposure, which willchange as fair value changes in the future;
The financial guarantee contract amount disclosed in Note XI “Commitments and contingencies.”
To reduce credit risk, the Company’s self-produced drugs and health products are generally sold in accordancewith the principle of first payment before delivery. When selecting dealers (customers), the Company willinvestigate the scale and financial strength, market resources, operations, brands, sales networks, and sales channelsof dealers (customers). Only dealers (customers) that meet the requirements of the Company can be selected.Yunnan Pharma, a subsidiary of the Company, mainly faces the customer credit risk caused by credit sales. YunnanPharma strictly implements credit management for the whole process of credit sales. It has established a customercredit evaluation management system, and divided customers into various types according to their nature, expectedsales, operating conditions, and development potential. For each type of customer, it will set assessment credit andred line credit days according to a unified division standard, and then confirm the effective sales and the time limitto stop billing, and make credit sales forecast and evaluation before the transactions. In the process of cooperation,dynamic credit adjustment is carried out according to the actual purchase amount of customers and the change ofbusiness scale, so that the credit sales amount given matches its business strength. Because the Company only dealswith recognized and reputable third parties, and customer bases are mainly medical institutions at all levels, largepharmacy chains, distributors, community and township medical service outlets, no collateral is required. Creditrisk concentration is managed by customer type, geographic region and industry.
Because the Company’s customer base for accounts receivable is widely dispersed in different regions andindustries, there is no significant concentration of credit risk within the Company.
The Group’s working capital is held in banks with high credit ratings and therefore the credit risk of working
capital is low.
3. Liquidity risk
Liquidity risk is the risk that a company will run short of funds to meet its obligations settled by deliveringcash or other financial assets.
It is the Company’s policy to ensure that it has sufficient cash to pay its debts as they fall due. Liquidity risk iscentrally controlled by the Company’s Financial Department. The Financial Department ensures that the Companyhas sufficient funds to service its debt with all reasonable projections by monitoring cash balances, readily realizablemarketable securities and rolling projections of cash flows for the next 12 months.
The maturity analysis of financial liabilities based on undiscounted contractual cash flows of the Company isas follows:
(1)The Company’s current liabilities include short-term loans, notes payable and accounts payable, and otherpayables, which are expected to be repaid within 1 year.
(2)The maturity analysis of non-current liabilities (including the non-current liabilities due within 1 year)based on undiscounted contractual cash flows of the Company is as follows:
| Item | December 31, 2024 | |||
| Within one year | 1 to 2 years | 2 to 3 years | Above 3 years | |
Total
| Total | |||||
| Long-term loans | 2,100,000.00 | 2,100,000.00 | |||
| Lease liabilities | 88,436,075.74 | 63,253,673.61 | 49,397,616.62 | 78,005,700.00 | 279,093,065.97 |
| Total | 88,436,075.74 | 63,253,673.61 | 49,397,616.62 | 80,105,700.00 | 281,193,065.97 |
(II) Hedging (1) The Company carried out hedging business for risk management
?Applicable?Not applicable
(2) The Company conducted eligible hedging business and applied hedging accounting: None.
(3) The Company carried out hedging business for risk management, which is expected to achieve riskmanagement target, but did not apply hedging accounting?Applicable?Not applicable
3. Financial assets
(1) Classification by type of transfer
?Applicable?Not applicable
(2) Derecognition of financial assets due to transfer
?Applicable?Not applicable
(3) Financial assets involved in continued assets transfer
?Applicable?Not applicableOther explanations: None.
XIII. Disclosure of Fair Value
1.Final fair value of assets and liabilities measured at fair value
Unit: RMB
| Item | Closing fair value | |||
| Level I fair value measurement | Level II fair value measurement | Level III fair value measurement | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (I) Financial assets held for trading | 179,246,998.10 | 2,363,266,525.30 | 4,600,000.00 | 2,547,113,523.40 |
| (1) Investment in liability instruments | ||||
| (2) Investment in equity instruments | 179,246,998.10 | 179,246,998.10 | ||
| (3) Derivative financial assets | ||||
| (4) Others | 2,363,266,525.30 | 4,600,000.00 | 2,367,866,525.30 | |
| (II) Accounts receivable financing | 1,887,789,780.16 | 1,887,789,780.16 | ||
| (1) Notes receivable | 1,887,789,780.16 | 1,887,789,780.16 | ||
| (III) Other non-current financial assets | 190,764,240.00 | 196,958,378.32 | 387,722,618.32 | |
| Investment inequity instruments | 190,764,240.00 | 196,958,378.32 | 387,722,618.32 | |
| (III) Investment in other equity instruments | 71,745,000.00 | 71,745,000.00 | ||
| Total assets at continuous fair value measurement | 370,011,238.10 | 2,363,266,525.30 | 2,161,093,158.48 | 4,894,370,921.88 |
| II. Noncontinuous fair value measurement | -- | -- | -- | -- |
2.Determination basis of the market price of the item measured using level I fair value measurementcontinuously and non-continuously
The financial assets at fair value through profits or losses held by the Company are mainly the share investmentsin the secondary market, whose closing fair value is determined by the closing price of the publicly traded marketon the balance sheet date.
3.Valuation techniques and qualitative and quantitative information on important parameters adopted foritems subject to level II continuous and noncontinuous fair value measurementThe Company generally classifies the financial products it holds, such as wealth management products, as levelII fair value measurement items. The Company recognizes the fair value of these financial products based on theirnet asset value, with minimal fluctuations in fair value. As of the end of 2024, the Company’s holdings of suchfinancial products had a fair value of RMB 2,363,266,525.30.
4.Valuation techniques and qualitative and quantitative information on important parameters adopted foritems subject to level III continuous and noncontinuous fair value measurement
(1)Other non-current financial assets subject to level III continuous fair value measurement are the equityinvestment in non-listed companies held by the Company. The Company will obtain the annual auditor’s report ofthe investee, consider the operating environment, operating conditions and financial status of the investee enterprise,and determine the closing fair value on the basis of the closing net assets of the company. Other investments in otherequity instruments are the equity of non-listed companies held by the Company. As the investee is a start-upbiotechnology company, considering that the business environment and operating conditions of the investedenterprise currently in the project R&D phase, its financial position have not changed substantially at the time ofthe new investment, the investment cost is used as the best estimate of fair value in the current period.
(2)The accounts receivable financing subject to level III fair value measurement are the notes receivable heldby the Company, mainly including banker’s acceptance bill. Its credit risk is negligible, its remaining term is short(less than 12 months), and its book value is close to its fair value. The book value is used as the best estimate of fairvalue by the Company.
5.The reconciliation information between opening and closing book values and unobservable parametersensitivity analysis for the items subject to level III continuous fair value measurementThe financial assets and liabilities measured at amortized cost reported in the financial statements mainlyinclude: notes receivable, accounts receivable, other receivables, long-term borrowings, short-term borrowings,notes payable, accounts payable, other payables, long-term payables, etc.
6.For the items subject to continuous fair value measurement, if there is a conversion between all levels inthe current period, the reason for the conversion and the policy for determining the time point of theconversionNone.
7.Changes in the valuation technology and the reason for the changes in the current periodNone.
8.Fair value of financial assets and financial liabilities that are not measured at fair value None.
9.Others
None.XIV. Related Parties and Related Party Transactions
1.Information about the parent company of the Company
Explanations on the parent company of the Company: None.Ultimate controller of the Company: None.Other explanations:
1. Controlling shareholders and ultimate controller
The proposal of merger and overall listing of Yunnan Baiyao Group and Baiyao Holdings by issuing shareshad been considered and approved at the First Extraordinary General Meeting of Yunnan Baiyao for 2019. On April24, 2019, CSRC issued the Approval on the Proposal of Merger and Overall Listing of Yunnan Baiyao Group Co.,Ltd and Yunnan Baiyao Holdings Co., Ltd (Zheng Jian Xu Ke [2019] No. 770). Prior to the completion of the above-mentioned merger and overall listing, the controlling shareholder of the Company was Baiyao Holdings, and therewas no de facto controller. After the completion of the transaction, SASAC of Yunnan Province and New Huaduwith its acting-in-concert parties, were equally the largest shareholder of the Company, and neither of them obtainedthe control over the listed company. SASAC of Yunnan Province, along with New Huadu and its acting-in-concertparties, had made long-term share lock-up commitments. Therefore, the listed company did not have de factocontroller before and after the transaction.On May 22, 2020, SASAC of Yunnan Province transferred 321,160,222 shares of the Company held by it toits wholly-owned subsidiary State-owned Equity Management Company at nil consideration. After the completion ofthe transfer, State-owned Equity Operation and Management Company and New Huadu with its acting-in-concertparties, were equally the largest shareholder of the Company, and there was no change in the Company’s situationof not having a de facto controller or controlling shareholder.On December 8, 2021, SASAC of Yunnan Province transferred 100% of the shares held by State-owned EquityOperation and Management Company to Yunnan Investment Group Co., Ltd. After the equity transfer, YunnanInvestment Group Co., Ltd would hold 321,160,222 shares of the Company through State-owned Equity Operationand Management Company, accounting for 25.04% of the total share capital of the Company. State-owned EquityOperation and Management Company and New Huadu and New Huadu with its acting-in-concert parties, wereequally the largest shareholder of the Company, and the situation that the Company has no de facto controller andno controlling shareholder remain unchanged.
On August 8, 2024, the Company disclosed the Announcement on Increase in Shareholdings of the Companyby Shareholders of 5% or More and the Subsequent Shareholding Increase Plan. The Company’s largestshareholder, the State-owned Equity Management Company, increased its holdings of the Company by 17,485,863shares through the Shenzhen Stock Exchange’s centralized bidding system on August 6, 2024. As of December 31,2024, the State-owned Equity Management Company held 467,110,174 shares of the Company, accounting for
26.18% of the Company’s total shares. The State-owned Equity Management Company remains the largestshareholder, and the Company continues to have no de facto controller and no controlling shareholder.
2.Information about subsidiaries of the Company
For details of subsidiaries of the Company, please refer to Section 1 “Interest in Subsidiaries” under Note X.
3.Information about joint ventures and associates of the Company
For details of important joint ventures or associates of the Company, please refer to Note X3 (1) Important Joint Ventures orAssociates.Details of joint ventures or associates with related party transactions for the period and balances resulting from related partytransactions in the previous period are as follows:
| Name of joint ventures or associates | Relationship with the Company |
| Shanghai Pharmaceuticals Holding Co., Ltd. | Associate |
| Yunnan Baiyao Chinese Herbal Medicine Technology Co., Ltd. | Former associate (Cancelled in September 2024) |
| Lijiang Changgengming Trading Co., Ltd. | Associate |
Other explanations: None.
4.Information about other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Yunnan State-owned Equity Operation Management Co., Ltd. | Substantial shareholder of the Company |
| New Huadu Industrial Group Co., Ltd. | Substantial shareholder of the Company |
| Jiangsu Yuyue Science & Technology Development Co., Ltd. | Former substantial shareholder of the Company |
| Yunnan Renjiu Technology Co., Ltd. | Former minority shareholder that has significant influence on the subsidiary |
| Yunnan Tianma Pharmaceutical Co., Ltd. | Minority shareholder that has significant influence on the subsidiary |
| Yunnan Jianshui County Xingda Medicine Co., Ltd. | Minority shareholder that has significant influence on the subsidiary |
| Yunnan Baoshan Medicine Co., Ltd. | Minority shareholder that has significant influence on the subsidiary |
| Qiubei County Wanhe Pharmaceutical Co., Ltd. | Minority shareholder that has significant influence on the subsidiary |
| Kaiyuan Sanfa Pharmaceutical Trade Co., Ltd. | Minority shareholder that has significant influence on thesubsidiary |
| Chuxiong Jiayuan Medicine Co., Ltd. | Minority shareholder that has significant influence on the subsidiary |
| Yunnan Jingxing Pharmaceutical Group Co., Ltd. | Minority shareholder that has significant influence on the subsidiary |
| Yunnan Drug Technology Development Operation Co., Ltd. | Subsidiary of the substantial shareholder |
| YEIG Power Assembly Park Development Co., Ltd. | Subsidiary of the substantial shareholder |
| Tibet Jiushi Zhihe Marketing Co., Ltd. | Subsidiary of the substantial shareholder |
| Jiuai Zhihe (Beijing) Technology Co., Ltd. | Subsidiary of the substantial shareholder |
| Kunming Jinkuan Trading Co., Ltd. | Company controlled by former related party |
| Kunming Yusi Pharmaceutical Co., Ltd. | Subsidiary of the substantial shareholder |
| Yunnan Hongta Bank Co., Ltd. | Subsidiary of the substantial shareholder |
| Teh-Ho Canned Food Company | Subsidiary of the substantial shareholder |
| Quanzhou New Huadu Supercenter Co., Ltd. | Subsidiary of the substantial shareholder |
| Yunnan Salt Wenshan Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Yunnan Salt Lijiang Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Yunnan Salt Rixin Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| MB Packaging Limited | Sub-subsidiary of the substantial shareholder |
| Yunnan Medical Investment Management Group Kunming Technology Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| YEIG Property Services Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Tibet Juliang E-commerce Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Kunming Guiyan New Material Technology Co., Ltd. | Subsidiary of the substantial shareholder |
| Guiyan Chemical Materials (Yunnan) Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Guiyan Platinum Industry Co., Ltd. | Subsidiary of the substantial shareholder |
| Yunnan Kunhua Hospital Investment Management Co., Ltd. | Subsidiary of the substantial shareholder |
| Yunnan Pharmaceutical Health Products Import and Export Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Yunnan Gongtou TCM Materials and Decoction Pieces Industry Development Co., Ltd. | Sub-subsidiary of the substantial shareholder |
| Shanghai Skynet Brand Management Crop., Ltd. | Equity investment company of the subsidiary of the substantial shareholder |
Other explanations: None.
5.Related party transactions
(1)Related party transactions on purchase and sales of goods and rendering and receiving of services
Information of commodities purchased/labor services accepted
Unit: RMB
| Related Party | Contents of related party transaction | Amount for the current period | Approved transaction limit | Whetherexceeding the transaction limit | Amount for the previous period |
| Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | Purchase of goods and services | 728,349,788.25 | 120,000,000.00 | No | 615,537,706.00 |
| Jiangsu Yuyue Science & Technology Development Co., Ltd and itssubsidiaries | Purchase of medical devices, goods and drugs | 23,819,450.91 | 50,000,000.00 | No | 32,852,184.77 |
| MB Packaging Limited | Purchase of goods | 4,544,493.47 | 3,925,036.06 | ||
| Yunnan Gongtou TCM Materials and Decoction Pieces Industry Development Co., Ltd. | Purchase of goods | 4,004,620.45 | |||
| Yunnan State-owned Equity Operation Management Co., Ltd. | Purchase of services | 1,469,355.33 | |||
| Yunnan Jingxing Pharmaceutical Group Co., Ltd. | Purchase of goods | 1,098,494.12 | |||
| YEIG Property Services Co., Ltd. | Purchase of services | 1,049,364.96 | |||
| Teh-Ho Canned Food Company and its subsidiaries | Purchase of goods and promotion services | 578,624.26 | 2,661,071.80 | ||
| Kunming Yusi Pharmaceutical Co., Ltd. | Purchase of goods | 545,939.23 | 767,124.82 |
| Shanghai Skynet Brand Management Crop., Ltd. | Purchase of goods, Dunhuang IP licensing fee, yolk cat IP licensing and derivative product design and other service fees | 498,819.05 | 164,408.23 | |
| Yunnan Drug Technology Development Operation Co., Ltd. | Purchase of goods | 200,352.21 | ||
| Yunnan SaltWenshan Co., Ltd. | Purchase of industrial salt | 27,079.65 | 56,548.68 | |
| Yunnan Salt Rixin Co., Ltd. | Purchase of raw materials | -29,996.79 | 37,433.63 | |
| Kunming Jinkuan Trading Co., Ltd. | Purchase of goods and services | 2,923,733.27 | ||
| Quanzhou New Huadu Supercenter Co., Ltd. | Purchase of services | 336,792.44 | ||
| Yunnan Medical Investment Management Group Kunming Technology Co., Ltd. | Purchase of goods | 232,920.36 | ||
| Yunnan Salt Lijiang Co., Ltd. | Purchase of salt products | 353.98 |
Information of commodities sold/labor services provided
Unit: RMB
| Related Party | Contents of related party transaction | Amount for the current period | Amount for the previous period |
| Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | Sale of goods | 474,122,601.09 | 405,843,813.13 |
| Tibet Jiushi Zhihe Marketing Co., Ltd. | Sale of goods | 267,190,270.17 | 260,774,824.31 |
| Yunnan Jingxing Pharmaceutical Group Co., Ltd. | Sales of drugs | 16,068,315.55 | |
| Yunnan Provincial Pharmaceutical Technology Development and Operation Co., Ltd. | Sales of drugs | 12,013,360.11 | 2,820,416.84 |
| Yunnan Baoshan Medicine Co., Ltd. | Sales of drugs | 582,396.79 | 437,891.88 |
| Lijiang Changgengming Trading Co., Ltd. | Sales of drugs | 257,609.51 | 259,161.96 |
| Tibet Juliang E-Commerce Co., Ltd. | Sale of goods | 104,934.51 | |
| Jiuai Zhihe (Beijing) Technology Co., Ltd. | Sale of goods | 70,894.16 | |
| Kunming Jinkuan Trading Co., Ltd. | Sale of goods | 28,520,999.82 |
Explanations on related party transactions on purchase and sales of goods and rendering and receiving of services: None.
(2)Trusteeship/contracting and entrusted management/outsourcing: None. (3) Leasing between related parties
The Company as the lessor: None.
| Yunnan Salt Rixin Co., Ltd. | Sales of drugs | 52,762.79 | |
| Jiangsu Yuyue Science & Technology Development Co., Ltd and itssubsidiaries | Sales of drugs | 23,805.00 | |
| Kunming Guiyan New Material Technology Co., Ltd. | Inspection services | 6,000.00 | 2,830.19 |
| Yunnan Hongta Bank Co., Ltd. | Sales of drugs | 5,852.48 | |
| Guiyan Chemical Materials (Yunnan) Co., Ltd. | Inspection services | 4,300.00 | |
| Guiyan Platinum Industry Co., Ltd. | Sales of drugs | 236.02 |
The Company as the lessee:
Unit: RMB
| Name of lessor | Types of leased assets | Rental costs for short-term leases and leases of low-value assets that are streamlined (if applicable) | Variable lease payments that are not included in the measurement of the lease liability (if applicable) | Rent paid | Interest expense on lease liabilities assumed | Increased right-to-use assets | |||||
| Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | Amount for the current period | Amount for the previous period | ||
| Yunnan Jianshui County Xingda Medicine Co., Ltd. | House | 1,629,730.00 | 1,552,123.81 | 176,599.56 | 15,144.50 | 7,545,479.15 | |||||
| Yunnan Baoshan Medicine Co., Ltd. | House, equipment, vehicle | 3,758,075.00 | 2,813,785.08 | 73,844.23 | 17,373.95 | 8,120,850.14 | |||||
| Yunnan Tianma Pharmaceutical Co., Ltd. | House | 1,841,918.53 | 770,642.20 | 36,476.85 | 38,043.92 | 2,857,171.88 | |||||
| Kaiyuan Sanfa Pharmaceutical Trade Co., Ltd. | Vehicle and equipment | 602,477.88 | 602,477.88 | ||||||||
| Chuxiong Jiayuan Medicine Co., Ltd. | Equipment | 141,592.93 | 4,104.37 | ||||||||
| Yunnan Jingxing Pharmaceutical Group Co., Ltd. | House | 633,686.24 | 21,069.80 | 60,511.53 | 3,447,933.32 | 1,565,165.47 | |||||
| YEIG Power Assembly Park Development Co., Ltd. | House | 1,364,087.62 | 1,364,087.62 | 178,898.07 | 231,019.21 | ||||||
Explanations on leasing between related parties: None.
(4) Related party guarantees: None.
(5) Borrowings with related parties
Unit: RMB
| Related Party | Borrowing amount | Commencement date | Due date | Description | |
| Borrowing | |||||
| Entity A | 500,000.00 | February 29, 2024 | March 14, 2024 | Repaid | |
| Entity A | 1,500,000.00 | February 29, 2024 | June 28, 2024 | Repaid | |
| Loans | |||||
(6) Asset transfer and debt restructuring of related parties: None.
(7) Remuneration to key management personnel
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Remuneration to key management personnel | 33,776,976.72 | 39,094,528.46 |
(8) Other related party transactions: None.
6. Amounts receivable from and payable to related parties
(1) Receivables
Unit: RMB
| Item name | Related Party | Closing balance | Opening balance | ||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | ||
| Accounts receivable | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 18,347,243.79 | 915,508.67 | 14,929,453.95 | 588,430.73 |
| Accounts receivable | Yunnan Jingxing Pharmaceutical Group Co., Ltd. | 4,827,582.65 | 241,379.13 | 256,854.37 | 12,842.72 |
| Accounts receivable | Yunnan Drug Technology Development Operation Co., Ltd. | 3,456,930.86 | 172,846.54 | 16,253.88 | 812.69 |
| Accounts receivable | Lijiang Changgengming Trading Co., Ltd. | 2,849,942.43 | 1,291,749.42 | 2,717,793.63 | 610,834.92 |
| Accounts receivable | Yunnan Baoshan Medicine Co., Ltd. | 8,331.65 | 416.58 | ||
| Accounts receivable | MB Packaging Limited | 4,050.00 | 1,215.00 | ||
| Other receivables | Yunnan Kunhua Hospital Investment Management Co., Ltd. | 200,000.00 | 10,000.00 | ||
| Other receivables | Yunnan Baiyao Chinese Herbal Medicine Technology Co., Ltd | 179,791.57 | 158,771.36 | ||
| Prepayment | Yunnan Pharmaceutical Health Products Import and Export Co., Ltd. | 185,900.08 | |||
| Prepayment | Jiangsu Yuyue Science & Technology Development Co., Ltd and its subsidiaries | 117,455.24 | 1,185,072.72 | ||
| Prepayment | Qiubei County Wanhe Pharmaceutical Co., Ltd | 72,206.41 | |||
| Prepayment | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 9,757.13 | 205,957.44 | ||
| Prepayment | Yunnan Medical Investment Management Group Kunming Technology Co., Ltd. | 4,145.40 | ||
| Notes receivable | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 689,199.51 | ||
| Accounts receivable financing | Tibet Jiushi Zhihe Marketing Co., Ltd. | 8,102,835.34 | 1,544,428.80 | |
| Accounts receivable financing | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 8,225,916.72 |
(2) Payables
Unit: RMB
| Item name | Related Party | Book balance at the end of the period | Book balance at the beginning of the period |
| Accounts payable | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 86,515,415.13 | 60,976,451.66 |
| Accounts payable | MB Packaging Limited | 1,731,652.43 | 28,682.85 |
| Accounts payable | Jiangsu Yuyue Science & Technology Development Co., Ltd and its subsidiaries | 530,062.48 | |
| Accounts payable | Kunming Yusi Pharmaceutical Co., Ltd. | 195,914.10 | 196,663.49 |
| Accounts payable | Yunnan Drug Technology Development Operation Co., Ltd. | 216,491.97 | |
| Accounts payable | Teh-Ho Canned Food Company and its subsidiaries | 46,990.36 | 44,515.35 |
| Accounts payable | Yunnan Jingxing Pharmaceutical Group Co., Ltd. | 43,245.62 | |
| Accounts payable | Shanghai Skynet Brand Management Crop., Ltd. | 39,911.51 | |
| Accounts payable | Yunnan Salt Rixin Co., Ltd. | 8,403.60 | 42,300.00 |
| Accounts payable | Yunnan Medical Investment Management Group Kunming Technology Co., Ltd. | 907,736.56 | |
| Accounts payable | Qiubei County Wanhe Pharmaceutical Co., Ltd. | 10,779.90 | |
| Accounts payable | Chuxiong Jiayuan Medicine Co., Ltd. | 3,126.32 | |
| Accounts payable | Yunnan Renjiu Technology Co., Ltd. | 0.30 | |
| Notes payable | Jiangsu Yuyue Science & Technology Development Co., Ltd and its subsidiaries | 8,977,012.28 | 11,503,853.81 |
| Notes payable | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 1,050,654.60 | 1,745,473.86 |
| Other payables | Yunnan Medical Investment Management Group Kunming Technology Co., Ltd. | 4,229.99 | |
| Other payables | Kunming Yusi Pharmaceutical Co., Ltd. | 2,353.18 | |
| Other payables | Chuxiong Jiayuan Medicine Co., Ltd. | 604.80 | |
| Other payables | Kaiyuan Sanfa Pharmaceutical Trade Co., Ltd. | 12,831.86 | |
| Dividend payable | State-owned Assets Supervision and Administration Commission of Yunnan Provincial People’s Government, New Huadu Industrial Group Co., Ltd. | 86,490,742.04 | 86,490,742.04 |
| Contractual liabilities | Shanghai Pharmaceuticals Holding Co., Ltd and its subsidiaries | 27,079,192.76 | 50,412,199.36 |
| Contractual liabilities | Tibet Jiushi Zhihe Marketing Co., Ltd. | 2,172,816.79 | 2,427,757.00 |
| Contractual liabilities | Yunnan Baoshan Medicine Co., Ltd. | 548,382.19 | 567,217.96 |
| Non-current liabilities due within one year | Yunnan Baoshan Medicine Co., Ltd. | 1,869,495.16 | 2,610,019.14 |
| Non-current liabilities due within one year | Yunnan Jingxing Pharmaceutical Group Co., Ltd. | 1,652,355.08 | 526,744.88 |
| Non-current liabilities due within one year | Yunnan Jianshui County Xingda Medicine Co., Ltd. | 1,434,687.47 | |
| Non-current liabilities due within one year | Yunnan Tianma Pharmaceutical Co., Ltd. | 1,428,311.30 | 761,902.21 |
| Non-current liabilities due within one year | YEIG Power Assembly Park Development Co., Ltd. | 1,321,553.56 | 1,185,189.56 |
| Non-current liabilities due within one year | Chuxiong Jiayuan Medicine Co., Ltd. | 338,184.26 | |
| Lease liabilities | Yunnan Jianshui County Xingda Medicine Co., Ltd. | 4,657,661.24 | |
| Lease liabilities | YEIG Power Assembly Park Development Co., Ltd. | 1,382,344.99 | 3,889,088.11 |
| Lease liabilities | Yunnan Jingxing Pharmaceutical Group Co., Ltd. | 1,148,722.02 | |
| Lease liabilities | Yunnan Baoshan Medicine Co., Ltd. | 2,714,419.89 |
7. Related party commitments: None.
8. Others: None.
XV. Share-based Payment
1.General information about share-based payment
□Applicable
?Not applicable
2.Equity-settled share-based payment
□Applicable ?Not applicable
3.Cash-settled share-based payment
□Applicable
?Not applicable
4.Share payments during the period
□Applicable
?Not applicable
5.Amendment and termination of share-based payment
Not applicable.
6.Others
Not applicable.
XVI. Commitment and Contingencies
1.Significant commitments
Significant contingencies on the balance sheet date
1. Provision of guarantees for Yunnan Yuncheng Hospital Management Co., Ltd.
In November 2017, the Company issued the Announcement on the Investment and Establishment of PPPProject Companies by Wholly-owned Subsidiaries and the Provision of Guarantees for Them. According to theannouncement, Yunnan Provincial Health and Family Planning Commission was authorized by Yunnan ProvincialPeople’s Government to serve as the project implementation agency of the Chenggong Hospital PPP project (PhaseI project) of the First Affiliated Hospital of Kunming Medical University, and The First Affiliated Hospital ofKunming Medical University was authorized to be the representative of the government, to invest and hold shareson behalf of the government, and jointly establish Yunnan Yuncheng Hospital Management Co., Ltd (the “ProjectCompany”) with social capital. Yunnan Pharma, a wholly-owned subsidiary of the Company, and Yunnan HaopyPharmaceutical Sales Co., Ltd, a private capital, formed a consortium to bid for the project, and finally won the bid.According to the requirements of the procurement documents, Yunnan Pharma shall invest RMB 100,000 in theProject Company in cash, with an equity ratio of 10%. The consortium shall undertake joint and several guaranteeliability for the PPP project debt of the Project Company for a period of 12 years, and the maximum total guaranteeamount of the consortium should be RMB 1.5 billion.In June 2024, according to the special resolution of Yunnan Pharma, both parties reached an agreement toterminate the PPP project (Phase I) of the Chenggong Hospital, the First Affiliated Hospital of Kunming MedicalUniversity, and the related contracts and agreements from April 2024. Therefore, the consortium’s joint and severalguarantee liability for the PPP project debts of the project company has also been terminated accordingly.
2.Contingencies
(1) Significant contingencies on the balance sheet date
None.
(2) Where the Company had no significant contingencies to disclose, explanation is also requiredThe Company had no significant contingencies to disclose.
3.Others
None.XVII. Events Subsequent to the Balance Sheet Date
1.Important non-adjusting events: None.
2.Profit distribution: None.
3.Sales return: None.
4.Explanation on other events subsequent to the balance sheet date: None.XVIII. Other Significant Events
1.Correction of previous accounting errors: None.
2.Debt restructuring: None.
3.Assets exchange
(1)Exchange of non-cash and bank balance: None.
(2)Exchange of other assets: None.
4.Annuity plan
(1)In accordance with the Trial Measures for Enterprise Annuity and Trial Measures for Enterprise AnnuityFund Management of the Ministry of Labor and Social Security, as well as the Letter Yun Lao She Han [2006] No.267 of Department of Labor and Social Security of Yunnan Province, the Company was approved to establish anenterprise annuity. The investment manager of the enterprise annuity fund is Fullgoal Fund Management Co., Ltd,and the trustee of the enterprise annuity fund is China Merchants Bank Co., Ltd. The enterprise contribution shallbe paid annually at 5% of the total salary of the employees of the Company in the previous year, and the individualcontribution of the employees shall be paid at 10% of the unit contribution. The individual contribution shall becollected and paid by the Company from the employee’s salary.
(2)According to the replies of Yunnan Provincial Department of Human Resources and Social Security (YunRen She Letter [2009] No.79) and Kunming Municipal Labor and Social Security Bureau (Kun Lao She Han [2008]No.204) on the Enterprise Annuity Implementation Plan of Yunnan Pharma, Yunnan Pharma, a subsidiary of theCompany, was approved to establish an enterprise annuity. The investment manager of the enterprise annuity fundis Ping An Annuity Insurance Company of China, Ltd, and the trustee of the enterprise annuity fund is ChinaMerchants Bank Co., Ltd. According to the plan, the enterprise contribution shall be paid annually at no more than
8.33% of the total salary of the employees of Yunnan Pharma in the previous year, and the individual contributionof the employees shall be paid at 10% of the unit contribution.
(3)According to the replies of Yunnan Provincial Department of Human Resources and Social Security (YunRen She Letter [2009] No.79) and Kunming Municipal Labor and Social Security Bureau (Kun Ren She Han [2016]No.21) on the Enterprise Annuity Implementation Plan of Yunnan Institute of Materia Medica, Yunnan Institute ofMateria Medica, a subsidiary of the Company, was approved to establish an enterprise annuity. According to thereply from the Kunming Municipal Bureau of Human Resources and Social Security (Kun Ren She Han [2024] No.105) to the Letter from Yunnan Institute of Materia Medica Regarding Adjustment of the Corporate Pension Plan,the adjustment of the corporate pension plan for Yunnan Institute of Materia Medica has been approved. Theinvestment manager of the enterprise annuity fund is Ping An Annuity Insurance Company of China, Ltd, and the
trustee of the enterprise annuity fund is China Construction Bank Corporation. According to the plan, the enterprisecontribution shall be paid annually at no more than 5% of the total salary of the employees of Yunnan Institute ofMateria Medica in the previous year, and the individual contribution of the employees shall be paid at 10% of theunit contribution.
(4)In accordance with the Measures on Enterprise Annuity (Decree No. 36 of Ministry of Human Resourcesand Social Security), Measures on the Management of Enterprise Annuity Fund (Decree No. 11 of Ministry ofHuman Resources and Social Security) and other relevant provisions as well as the Reply on Filing of EnterpriseAnnuity Plan of Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd issued by Wuxi Human Resources and SocialSecurity Bureau (Xi Ren She Fu [2018] No.27), Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd, a subsidiaryof the Company, was approved to establish an enterprise annuity. The investment manager of the enterprise annuityfund is Ping An Annuity Insurance Company of China, Ltd, and the trustee of the enterprise annuity fund is ChinaConstruction Bank Corporation. According to the plan, the enterprise contribution shall be paid annually at no morethan 5% of the total salary of the employees of Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd in the previousyear, and the individual contribution of the employees shall be paid at 10% of the unit contribution.
5.Discontinuation of operation: None.
6.Segment information
(1)Determination basis and accounting policy of reporting segments: None.
(2)Financial information of reporting segments: None.
(3)If the Company has no reporting segment or the total assets and total liabilities of the reporting segmentscannot be disclosed, please explain the reason: None.
(4)Other explanations: None.
7.Other significant transactions and matters that have an impact on investors’ decision-making
On April 28, 2023, YNBY International Limited (“YNBY International,” stock code: 00030, formerly knownas Ban Loong Holdings), a subsidiary of the Company, disclosed an announcement stating that HLB HodgsonImpey Cheng Limited (“HLB”) has resigned as the auditor of Ban Loong Holdings with effect from April 25, 2023.The Board, with the recommendation of the Audit Committee, resolved to appoint Zhonghui Anda CPA Limited(“Zhonghui Anda”) as the auditor of the Company with effect from April 28, 2023 to fill the casual vacancyfollowing the resignation of HLB as auditor of the Company, and to hold office until the conclusion of the nextannual general meeting of Ban Loong Holdings.
On January 15, 2024, YNBY International published the 2021 Annual Report, the 2022 Interim Report, the2022 Annual Report and the 2023 Interim Report. The 2021 Annual Report (from April 1, 2020 to March 31, 2021)and the 2022 Annual Report (from April 1, 2021 to March 31, 2022) were audited by Zhonghui Anda, and the typeof audit comment in the audit report issued was “Disclaimer of Opinion.” Matters that resulted in the audit commentof “Disclaimer of Opinion” were businesses that occurred prior to the tender offer of the Company in January 2022,for which the Company had made appropriate treatment at the point of acquisition. In addition, after the acquisition,the Company actively took over YNBY International in an orderly manner in accordance with the requirements of
listed companies. Thanks to the efforts of all parties of the Company, the requirements under the ResumptionGuidelines were fulfilled on January 30, 2024, and the Resumption Guidelines were fully complied with to thesatisfaction of the Hong Kong Stock Exchange. The trading in YNBY International was resumed on January 31,2024 with effect from 9:00 a.m. onwards.On March 22, 2024, the Board of Directors of YNBY International held a meeting to consider the auditedresults for the financial year ended December 31, 2023 (The period of business results was from April 1, 2023 toDecember 31, 2023) and the publication of the relevant results announcement on the websites of The StockExchange of Hong Kong Limited and YNBY International. The type of audit comment in the audit report for thefiscal year ended December 31, 2023 was qualified, which was mainly due to the fact that the matters leading todisclaimer of opinion still had an impact on the financial data at the beginning of the year (the fiscal year endedMarch 31, 2023). The matters leading to qualified opinion did not have a significant impact on the Group’s financialdata and results of operations for 2023.On March 14, 2025, YNBY International held a Board meeting to consider and approve the auditedperformance for the fiscal year ending December 31, 2024 (performance period from January 1, 2024 to December31, 2024), and the related performance announcement will be published on the Hong Kong Stock Exchange and theYNBY International website. The audit report for the fiscal year ending December 31, 2024, still contains a qualifiedopinion, which relates to the issues raised in the qualified opinion for the previous fiscal year (ending December 31,2023). However, these issues do not impact the financial data and operation results of the Group for 2024.
8.Others: None.
XIX. Notes to Major Items of Financial Statements of the Parent Company
1.Accounts receivable
(1) Disclosure by aging
Unit: RMB
| Aging | Closing balance | Opening balance |
| Within 1 year (inclusive of 1 year) | 1,227,895,866.19 | 614,449,599.26 |
| 1 to 2 years | 3,872,165.80 | 85,846,594.74 |
| 2 to 3 years | 79,324,328.73 | 5,516,424.89 |
| Above 3 years | 650,617,364.49 | 645,998,164.53 |
| Total | 1,961,709,725.21 | 1,351,810,783.42 |
(2) Disclosure by provision for bad debts
Unit: RMB
| Closing balance | Opening balance | ||||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | Book value | |
Category
Category
Amount
| Amount | Proportion | Amount | Provision proportion |
Book value
Book valueAmount
| Amount | Proportion | Amount | Provision proportion | |||||||
| Including: | ||||||||||
| Account receivables with provision for bad debt on portfolio basis | 1,961,709,725.21 | 100.00% | 20,993,861.37 | 1.07% | 1,940,715,863.84 | 1,351,810,783.42 | 100.00% | 20,902,222.46 | 1.55% | 1,330,908,560.96 |
| Including: | ||||||||||
| Age-based portfolio | 67,854,948.56 | 3.46% | 20,993,861.37 | 30.94% | 46,861,087.19 | 79,297,162.59 | 5.87% | 20,902,222.46 | 26.36% | 58,394,940.13 |
| Related party portfolio | 1,893,854,776.65 | 96.54% | 0.00% | 1,893,854,776.65 | 1,272,513,620.83 | 94.13% | 0.00% | 1,272,513,620.83 | ||
| Total | 1,961,709,725.21 | 100.00% | 20,993,861.37 | 1.07% | 1,940,715,863.84 | 1,351,810,783.42 | 100.00% | 20,902,222.46 | 1.55% | 1,330,908,560.96 |
Provision for bad debts made on a portfolio basis:
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Age-based portfolio | 67,854,948.56 | 20,993,861.37 | 30.94% |
| Related party portfolio | 1,893,854,776.65 | 0.00% | |
| Total | 1,961,709,725.21 | ||
Explanation on the basis for determining the portfolio: None.If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
?Applicable?Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the period: None.
(4) Actual write-off of accounts receivable for the period: None.
(5) Top five customers in closing balance of accounts receivable and contractual assets summarized bydebtor
Unit: RMB
| Customer name | Closing balance of accounts receivable | Closing balance of contractual assets | Closing balance of accounts receivable and contractual assets | Percentage of total of closing balance of accounts receivable and contractual assets | Closing balance of provision for bad debts of accounts receivable and provision for impairment of contractual assets |
| Customer A | 875,784,318.69 | 875,784,318.69 | 44.64% | ||
| Customer B | 133,003,690.45 | 133,003,690.45 | 6.78% | ||
| Customer C | 32,447,019.88 | 32,447,019.88 | 1.65 % | ||
| Customer D | 8,531,233.95 | 8,531,233.95 | 0.43% | 426,561.70 | |
| Customer E | 6,144,074.28 | 6,144,074.28 | 0.31% | ||
| Total | 1,055,910,337.25 | 0.00 | 1,055,910,337.25 | 53.81% | 426,561.70 |
2.Other receivables
Unit: RMB
| Item | Closing balance | Opening balance |
| Dividends receivable | 10,348,033.98 | 4,531,100.00 |
| Other receivables | 6,491,515,478.29 | 4,122,557,802.76 |
| Total | 6,501,863,512.27 | 4,127,088,902.76 |
(1) Interest receivable
1) Category of interest receivable: None.
2) Significant overdue interest: None.
3) Disclosure by provision for bad debts
?Applicable?Not applicable
4) Provision for bad debts accrued, recovered or reversed during the period: None.
5) Actual write-off of dividends receivable during this reporting period: None.
(2) Dividends receivable
1) Category of dividends receivable
Unit: RMB
| Item (or investee) | Closing balance | Opening balance |
| Jacobson Pharma Co., Ltd. | 6,482,280.00 | 4,531,100.00 |
| JBM (Healthcare) Co., Ltd. | 3,865,753.98 | |
| Total | 10,348,033.98 | 4,531,100.00 |
2) Significant dividends receivable aged above 1 year: None.
3) Disclosure by provision for bad debts
?Applicable?Not applicable
4) Provision for bad debts accrued, recovered or reversed during the period: None.
5) Actual write-off of dividends receivable during this reporting period: None.
(3) Other receivables
1) Other receivables by nature
Unit: RMB
| Nature | Book balance at the end of the reporting period | Book balance at the beginning of the reporting period |
| Amounts from related parties within the scope of consolidation | 6,622,159,259.62 | 4,254,011,881.88 |
| Deposits and guarantees | 7,874,816.28 | 14,347,777.84 |
| Petty cash and others | 12,856,300.67 | 7,104,113.05 |
| Total | 6,642,890,376.57 | 4,275,463,772.77 |
2) Disclosure by aging
Unit: RMB
| Aging | Book balance at the end of the period | Opening balance at the end of the period |
| Within 1 year (inclusive of 1 year) | 2,829,671,131.53 | 1,864,972,976.56 |
| 1 to 2 years | 1,704,148,058.85 | 943,970,831.13 |
| 2 to 3 years | 841,712,325.56 | 677,614,286.73 |
| Above 3 years | 1,267,358,860.63 | 788,905,678.35 |
| Total | 6,642,890,376.57 | 4,275,463,772.77 |
3) Disclosure by provision for bad debts
Unit: RMB
| Closing balance | Opening balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
Category
CategoryAmount
| Amount | Proportion | Amount | Provision proportion |
Book value
Book valueAmount
| Amount | Proportion | Amount | Provision proportion |
Book value
| Book value | ||||||||||
| Single account receivable with provision for bad debts | ||||||||||
| Including: | ||||||||||
| Provision for bad debts by portfolio | 6,642,890,376.57 | 100.00% | 151,374,898.28 | 2.28% | 6,491,515,478.29 | 4,275,463,772.77 | 100.00% | 152,905,970.01 | 3.58% | 4,122,557,802.76 |
| Including: | ||||||||||
| Age-based portfolio | 20,731,116.95 | 0.31% | 5,400,228.74 | 26.05% | 15,330,888.21 | 21,451,890.89 | 0.50% | 6,931,300.47 | 32.31% | 14,520,590.42 |
| Related party portfolio | 6,622,159,259.62 | 99.69% | 145,974,669.54 | 2.20% | 6,476,184,590.08 | 4,254,011,881.88 | 99.50% | 145,974,669.54 | 3.43% | 4,108,037,212.34 |
| Total | 6,642,890,376.57 | 100.00% | 151,374,898.28 | 2.28% | 6,491,515,478.29 | 4,275,463,772.77 | 100.00% | 152,905,970.01 | 3.58% | 4,122,557,802.76 |
Provision for bad debts made on a portfolio basis:
Unit: RMB
| Name | Closing balance | ||
| Book balance | Provision for bad debts | Provision proportion | |
| Age-based portfolio | 6,622,159,259.62 | 145,974,669.54 | 2.20% |
| Related party portfolio | 20,731,116.95 | 5,400,228.74 | 26.05% |
| Total | 6,642,890,376.57 | 151,374,898.28 | |
Explanation on the basis for determining the portfolio: None.Provision for bad debts in accordance with the general expected credit loss model:
Unit: RMB
| Provision for bad debts | Phase I | Phase II | Phase III |
| Expected credit losses | Lifetime ECL (not credit- | Lifetime ECL (credit- |
Total
| for the next 12 months | impaired) | impaired) | ||
| Balance as of January 1, 2024 | 152,905,970.01 | 152,905,970.01 | ||
| Balance as of January 1, 2024 in the current period | ||||
| ——Transferred to Phase 2 | 0.00 | |||
| ——Transferred to Phase 3 | 0.00 | |||
| ——Transferred back to Phase 2 | 0.00 | |||
| ——Transferred back to Phase 1 | 0.00 | |||
| Current provision | 0.00 | |||
| Current reversal | 1,531,071.73 | 1,531,071.73 | ||
| Current transfer | 0.00 | |||
| Current write-off | 0.00 | |||
| Other changes | 0.00 | |||
| Balance as of December 31, 2024 | 151,374,898.28 | 151,374,898.28 |
Division base for each phase and proportion of provision for bad debts: None.Changes in book balance with significant changes in loss reserves in the current period?Applicable?Not applicable
4) Provision for bad debts accrued, recovered or reversed during the period
Provision for bad debts for the period:
Unit: RMB
| Category | Opening balance | Change in the current period | |||
| Provision | Recovery or reversal | Transfer or write-off | Other changes | ||
Closing balance
| Closing balance | |||||
| Age-based portfolio | 6,931,300.47 | 1,531,071.73 | 5,400,228.74 | ||
| Related party portfolio | 145,974,669.54 | 145,974,669.54 | |||
| Total | 152,905,970.01 | 1,531,071.73 | 151,374,898.28 |
Provision for bad debt with important amount of recovery or reversal during the period: None.
5) Actual write-off of other receivables during this reporting period: None.
6) Top five customers in closing balance of other receivables summarized by debtor
Unit: RMB
| Entity name | Nature | Closing balance | Aging | Percentage of total of closing balance of other receivables | Closing balance of provision for bad debts |
| Entity A | Related parties within the | 1,451,940,522.54 | Within 1 year | 21.86% |
| scope of consolidation | |||||
| Entity B | Related parties within the scope of consolidation | 1,401,501,648.75 | Within 1 year, above 1 year | 21. 10% | |
| Entity C | Related parties within the scope of consolidation | 859,470,144.83 | Within 1 year, above 1 year | 12.94% | |
| Entity D | Related parties within the scope of consolidation | 824,545,699.09 | Within 1 year, 1 to 2 years, above 3 years | 12.41% | |
| Entity E | Related parties within the scope of consolidation | 385,859,311.47 | Within 1 year, 1 to 2 years, 2 to 3 years | 5.81% | 145,974,669.54 |
| Total | 4,923,317,326.68 | 74.12% | 145,974,669.54 |
7) Reported as other receivables due to centralized fund management: None.
3. Long-term equity investment
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investments in subsidiaries | 2,593,195,450.92 | 244,474,941.95 | 2,348,720,508.97 | 2,573,195,450.92 | 244,474,941.95 | 2,328,720,508.97 |
| Investments in associates and joint ventures | 12,578,620,530.71 | 12,578,620,530.71 | 11,553,542,823.25 | 11,553,542,823.25 | ||
| Total | 15,171,815,981.63 | 244,474,941.95 | 14,927,341,039.68 | 14,126,738,274.17 | 244,474,941.95 | 13,882,263,332.22 |
(1) Investments in subsidiaries
Unit: RMB
| Investee | Opening balance (book value) | Closing balance of impairment provision | Increase and decrease in the current period | |||
| Additional investment | Decreased investment | Provision for impairment | Others | |||
Closing balance(book value)
| Closing balance (book value) | Closing balance of impairment provision | |||||||
| Yunnan Baiyao Group TCM Resources Co., Ltd. | 130,894,518.14 | 130,894,518.14 | 0.00 | |||||
| Yunnan Baiyao Group Medicine E-commerce Co., Ltd. | 56,059,850.00 | 56,059,850.00 | 0.00 | |||||
| Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd. | 39,627,253.25 | 39,627,253.25 | 0.00 | |||||
| Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd. | 16,489,200.00 | 16,489,200.00 | 0.00 | |||||
| Yunnan Baiyao Group Health Products Co., Ltd. | 168,297,661.03 | 168,297,661.03 | 0.00 | |||||
| Yunnan Pharmaceutical Co., Ltd. | 765,533,647.30 | 765,533,647.30 | 0.00 | |||||
| Yunnan Institute of Materia Medica | 101,075,329.94 | 101,075,329.94 | 0.00 | |||||
| Yunnan Baiyao Holding Investment Co., Ltd. | 193,992,837.67 | 193,992,837.67 | 0.00 | |||||
| Yunnan Baiyao Teayield Co., Ltd. | 3,701,960.00 | 20,000,000.00 | 3,701,960.00 | 20,000,000.00 | ||||
| Yunnan Baiyao Group (Hainan) Co., Ltd. | 457,198,438.74 | 457,198,438.74 | 0.00 | |||||
| Yunnan Baiyao Group Shanghai Co., Ltd. | 11,350,000.00 | 11,350,000.00 | 0.00 | |||||
| Yunnan Baiyao Group Medical Technology Hefei Co., Ltd. | 85,700,000.00 | 85,700,000.00 | 0.00 | |||||
| Shanghai Yunzhen Medical Technology Co., Ltd. | 200,572,858.37 | 200,572,858.37 | 0.00 | |||||
| YNBY International Limited | 98,226,954.53 | 224,474,941.95 | 98,226,954.53 | 224,474,941.95 | ||||
| Yunhe Pharmaceutical (Tianjin) Co., Ltd. | 20,000,000.00 | 20,000,000.00 | 0.00 | |||||
| Total | 2,328,720,508.97 | 244,474,941.95 | 20,000,000.00 | 0.00 | 0.00 | 0.00 | 2,348,720,508.97 | 244,474,941.95 |
(2) Investments in associates and joint ventures
Unit: RMB
| Investee | Opening balance (book value) | Closing balance of impairment provision | Increase and decrease in the current period | |||||||
| Additional investment | Decreased investment | Profit and loss on investments recognized under the equity method | Adjustment of other comprehensive income | Change in other equities | Cash dividends or profit declared to be issued | Provision for impairment | Others | |||
Closing balance(book value)
| Closing balance (book value) | Closing balance of impairment provision | |||||||||||
| I. Joint ventures | ||||||||||||
| II. Associates | ||||||||||||
| Shanghai Pharmaceuticals Holding Co., Ltd. | 11,537,291,236.28 | 772,614,014.59 | -6,855,667.55 | 85,358,027.54 | 326,157,130.04 | 12,062,250,480.82 | ||||||
| Yunnan TCM Big Health Innovation Equity Investment Fund Partnership (Limited Partnership) | 500,000,000.00 | -110,316.95 | 499,889,683.05 | |||||||||
| Yunnan Tianzheng Testing Co., Ltd. | 16,251,586.97 | 228,779.87 | 16,480,366.84 | |||||||||
| Subtotal | 11,553,542,823.25 | 0.00 | 500,000,000.00 | 0.00 | 772,732,477.51 | -6,855,667.55 | 85,358,027.54 | 326,157,130.04 | 0.00 | 0.00 | 12,578,620,530.71 | |
| Total | 11,553,542,823.25 | 500,000,000.00 | 0.00 | 772,732,477.51 | -6,855,667.55 | 85,358,027.54 | 326,157,130.04 | 0.00 | 0.00 | 12,578,620,530.71 | ||
The recoverable amount is determined based on fair value less the disposal expense.
□Applicable ?Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.
□Applicable?Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previousyears or external information: None.Reasons for significant differences between the information used in the Company’s impairment tests in previous years andthe actual situation in the corresponding year: None.
(3) Other explanations: None.
4. Operating revenue and operating cost
Unit: RMB
| Item | Amount for the current period | Amount for the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 7,594,049,549.16 | 3,288,033,537.43 | 6,762,661,949.46 | 3,050,317,137.32 |
| Other business | 1,273,785,043.21 | 102,035,979.67 | 118,794,971.14 | 114,817,635.55 |
| Total | 8,867,834,592.37 | 3,390,069,517.10 | 6,881,456,920.60 | 3,165,134,772.87 |
Breakdown information of operating revenue and operating cost:
Unit: RMB
| Contract classification | Drug sales | TCM resources | Others | Total | ||||
| Operating revenue | Operating cost | Operating revenue | Operating cost | Operating revenue | Operating cost | Operating revenue | Operating cost | |
| Business type | 7,460,504,599.17 | 3,187,118,657.54 | 131,924,546.43 | 99,610,314.76 | 1,275,405,446.77 | 103,340,544.80 | 8,867,834,592.37 | 3,390,069,517.10 |
| Including: | ||||||||
| Industry sales income | 7,460,504,599.17 | 3,187,118,657.54 | 7,460,504,599.17 | 3,187,118,657.54 | ||||
| Commercial sales income | 131,924,546.43 | 99,610,314.76 | 131,924,546.43 | 99,610,314.76 | ||||
| Technical services | 1,620,403.56 | 1,304,565.13 | 1,620,403.56 | 1,304,565.13 | ||||
| Others | 1,273,785,043.21 | 102,035,979.67 | 1,273,785,043.21 | 102,035,979.67 | ||||
| By operating areas | 7,460,504,599.17 | 3,187,118,657.54 | 131,924,546.43 | 99,610,314.76 | 1,275,405,446.77 | 103,340,544.80 | 8,867,834,592.37 | 3,390,069,517.10 |
| Including: | ||||||||
| In Yunnan province | 945,402,384.18 | 429,854,683.76 | 131,751,803.07 | 99,544,373.79 | 1,253,182,041.51 | 87,816,296.73 | 2,330,336,228.76 | 617,215,354.28 |
| Outside Yunnan province (excluding overseas) | 6,515,102,214.99 | 2,757,263,973.78 | 172,743.36 | 65,940.97 | 22,223,405.26 | 15,524,248.07 | 6,537,498,363.61 | 2,772,854,162.82 |
Information about performance obligations: None.Other explanations: None.Information related to the transaction price allocated to the remaining performance obligations:
At the end of this reporting period, the Company recorded an amount of revenue of RMB 0.00 from its performance of obligationsset out in the signed contracts to be fulfilled or fully fulfilled. Among them, RMB 0.00 is expected to be recognized as revenue in year0, RMB 0.00 is expected to be recognized as revenue in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.
Significant contractual changes or significant transaction price adjustments: None.
Other explanations: None.
5. Investment income
Unit: RMB
| Item | Amount for the current period | Amount for the previous period |
| Long-term equity investment incomes accounted by the cost method | 1,900,000,000.00 | |
| Long-term equity investment incomes accounted by the equity method | 772,732,477.51 | 628,517,050.64 |
| Investment income on financial assets held for trading during holding period | 6,671,289.70 | 7,606,635.89 |
| Investment income from disposal of financial assets held for trading | 7,855,018.09 | |
| Investment income from other non-current financial assets during the holding period | 20,474,449.39 | 70,844,082.00 |
| Others | -3,991,808.68 | 27,070,201.34 |
| Total | 2,695,886,407.92 | 741,892,987.96 |
6. Others: None.
XX. Supplementary Information
1.Breakdown of non-recurring profits and losses for the current period?Applicable?Not applicable
Unit: RMB
| Item | Amount | Description |
| Profits and losses from disposal of non-current assets | 2,527,905.42 | |
| Government subsidies included in the current profits and losses (excluding the government subsidies closely related to regular businesses of the Company in line with national policies and received by a determined standard, with a continuous impact on the Company’s profits and losses) | 84,203,749.10 | |
| Profits and losses from changes in fair value of financial assets and liabilities held for trading by non-financial enterprises, and from disposal of such financial assets and liabilities, except for effective hedging operations related to regular businesses of the Company | 150,994,732.81 | |
| Profits and losses from entrusted investment or asset management | 6,589,832.78 |
| Reversal of impairment provision of accounts receivable subject to individual impairment test | 1,738,612.00 | |
| Non-operating revenue and expenses other than the above | -28,939,412.06 | |
| Other profits and losses satisfying the definition of non-recurring profits and losses | 47,186,324.01 | |
| Less: Amount affected by the income tax | 37,938,914.49 | |
| Amount affected by minority interests (after tax) | 4,868.25 | |
| Total | 226,357,961.32 | -- |
Other profits and losses satisfying the definition of non-recurring profits and losses:
?Applicable?Not applicableOther profit and loss items that meet the definition of non-recurring profit and loss mainly include other non-recurring profit andloss such as interest on time deposits and return of individual income tax fees.
Note for the definition of non-recurring profits and losses set out in the No.1 Explanatory Announcement on InformationDisclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses, as recurring profits and losses
□Applicable?Not applicable
2.Return on equity and earnings per share
| Profits during the reporting period | Weighted average return on equity | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profits attributable to ordinary shareholders of the Company | 11.99% | 2.66 | 2.66 |
| Net profits attributable to ordinary shareholders of the Company after deducting non-recurring profits andlosses | 11.42% | 2.53 | 2.53 |
3.Differences in Accounting Data under Chinese Accounting Standards (CAS) and Overseas AccountingStandards
(1)Differences in the net profits and net assets in financial statements disclosed respectively underInternational Financial Reporting Standards (IFRS) and CAS
□Applicable?Not applicable
(2)Differences in the net profits and net assets in financial statements disclosed respectively under overseasaccounting standards and CAS
□Applicable?Not applicable
(3)Explanations of the causes to differences in accounting data under CAS and overseas accounting
standards; if adjustment is made for data audited by an overseas audit institution, the name of theinstitution shall be provided
4.Others: None.
Yunnan Baiyao Group Co., Ltd.
Board of DirectorsMarch 31, 2025