TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
Form
0102
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
Form
ABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
ABOUT THIS REPORTThis report marks the rst sustainability report issued by Yunnan Baiyao Group Co., Ltd. We have previously publishedcorporate social responsibility (CSR)/ESG reports for 18 consecutive years. It gives stakeholders information on YunnanBaiyao’s social responsibility practices and performance in the areas of management, environment, society, and publicwelfare in accordance with the principles of standardization, transparency, objectivity, and comprehensiveness.
This report is prepared in accordance with Self-Regulatory Guidelines No. 17 for Companies Listed on Shenzhen StockExchange—Sustainability Report (For Trial Implementation) and with reference to the reporting standards such as the GlobalReporting Initiative (GRI) Core Option standard of the Global Sustainability Standards Board (GSSB) and the ChineseAcademy of Social Sciences’ China Enterprise CSR Reporting Guidelines (CASS-CSR4.0).
The report covers Yunnan Baiyao Group Co., Ltd., as well as its subsidiaries and branches.
The report covers the period from January 1, 2024 to December 31, 2024, and serves as the annual report.
Unless otherwise specied, the nancial data in this report comes from the annual nancial data of Yunnan Baiyao GroupCo., Ltd. and its subsidiaries. Other data is sourced from internal statistics and manual compilation. Unless otherwisespecied, the currency type and amount mentioned in this report are denominated in RMB.
For the sake of simplicity and readability, “Yunnan Baiyao Group Co., Ltd.” is referred to as “Yunnan Baiyao,” “Baiyao,” “theCompany” or “we” in this report.
This report was put together by Yunnan Baiyao Group Co., Ltd.’s Social Responsibility Management Team and was reviewedand approved by the Company’s Board of Directors (the “Board”) and the Supervisory Committee. The Board of Directorsand all the directors guarantee that this report contains no false records, misleading statements, or signicant omissions,and they accept individual and joint responsibility for its truthfulness, accuracy, and completeness.
This report is available in both printed and online versions. The online version is available for viewing and can bedownloaded at www.yunnanbaiyao.com.cn and the Juchao Information website (www.cninfo.com.cn).Report Format
Statement Explanation
Report Reliability Assurance
Data Sources
Report Period
Report Scope
Reference Standards
BOARD SUSTAINABILITY STATEMENTYunnan Baiyao highly recognizes the importance of sustainability for its long-term and stable operation and activelyundertakes corporate social responsibility. The Company and the Board of Directors follow the requirements of the ChinaSecurities Regulatory Commission’s Guidelines for Corporate Governance of Listed Companies and the Self-RegulatoryGuidelines No. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For Trial Implementation) andestablish a three-layer ESG (Environmental, Social and Governance) governance structure “decision-making, supervisory,and execution layers” with clear powers and responsibilities. The Board of Directors of Yunnan Baiyao has incorporatedthe concept of sustainability into the consideration and decision-making process of the Company’s major matters, and hasgradually established and improved sustainability management and governance mechanisms to promote the Company’shigh-quality and sustainable development.Yunnan Baiyao values the opinions and suggestions of all stakeholders, continues to identify and evaluate materialityissues, and engages in exchanges and communications with stakeholders in various forms, including information disclosureand media communications. We strictly comply with the relevant requirements of regulatory authorities, closely followthe development trends of industry policies and professional elds, and rank the material sustainability-related issues incombination with the focus of rating agencies. In 2024, we have included the significant financial impacts arising fromthe sustainability issues related to the enterprise or those expected to a?ect the enterprise into our considerations of themateriality of these issues, as a key reference for sustainability information disclosure to continually improve our sustainabledevelopment.This report provides a detailed disclosure of the progress and e?ectiveness of the Company’s sustainability e?orts in 2024,and was considered and approved at the 2025 rst session of the Tenth Board of Directors and the 2025 rst session of theTenth Supervisory Committee of Yunnan Baiyao on March 31, 2025.
0304
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
FormABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
MESSAGE FROM THE CHAIRMAN
Over the past year, amid an ever-changing externalenvironment, Yunnan Baiyao has steadfastly pursued progresswhile ensuring stability, leveraging opportunities to advancein a coordinated manner across business development,technological innovation, ecological conservation, andrural revitalization. We deeply understand the concept ofsustainable development, adhere to strategic guidance, andpromote the coordinated development of the century-oldBaiyao in terms of scale, quality, and structure. The Companywill shoulder the responsibilities of a “chain leader” bypromoting coordinated development across the industry chain,rening its focus on core areas, expanding the leadership ofadvantageous 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 comprehensiveindustrial chain for Yunnan-branded TCM materials. We willfocus on expanding the long-term potential of pharmaceuticals,health products, TCM resources, and commercial logistics,thus achieving self-driven leapfrog development. By 2025, theCompany will further establish an R&D innovation system andoperational management capabilities that align with Baiyao’sstrategic development phase. We will balance TCM andinnovative drugs, focus on inheritance and innovation whileactively developing TCM and ethnic medicines, and adopta differentiated approach to develop more competitive andpromising innovative drugs. We will continuously explore theintegration of modern technology with traditional medicine,driving development through innovation and earning trustthrough quality.Pursuing Excellence in GovernanceYunnan Baiyao strives for strategic and high-qualitydevelopment through robust Party building, continues toexplore more reasonable and efficient operational models,management systems and business mechanisms, insistson promoting the comprehensive leadership of the Partyand the in-depth integration of the sustainability concept
As a Chinese poem goes, “The river is wide at full tide; a strong wind sends the sail surging forward.” The year2024 is a crucial year for fully implementing the spirit of the 20
thNational Congress of the Communist Party of Chinaand advancing the construction of Chinese-style modernization. It is also an important year for Yunnan Baiyaoas it strives for high-quality development and takes significant steps forward. Guided by Xi Jinping’s Thoughton Socialism with Chinese Characteristics for a New Era, we have diligently studied and implemented GeneralSecretary Xi Jinping’s important statements on the development of TCM and his signicant speeches during hisvisit to Yunnan. Following the directive from the Yunnan Provincial Committee of the Communist Party of China andthe Yunnan provincial government to “cultivate Yunnan’s TCM industry into a world-class modern industry,” we willunwaveringly pursue the path of protecting and inheriting TCM, uniting our e?orts to create a Yunnan “model” forhigh-quality development in the TCM industry.
and corporate governance, and deepens the construction ofthe modern enterprise system with Chinese characteristicsto support the sustainable development of the Company.Guided by Xi Jinping’s Thought on Socialism with ChineseCharacteristics for a New Era, we always adhere to the Party’sleadership and strengthen the Party building, improve ourinternal control systems and risk management mechanismsunder the leadership of the Party to ensure the complianceand soundness of the Company’s operations and safeguardthe high-quality development of Yunnan Baiyao through ourleadership in high-quality Party building. At the same time,we focus on improving sustainability management, graduallyconstruct a sound sustainability governance system, integratesustainability concepts into the Company’s strategic planning,establish a win-win sustainable development model with allstakeholders and transform governance e?ciency into a lastingdriving force for sustainable development, thus supporting thecentury-old Baiyao to elevate from “excellence” to “outstanding”with excellent governance.Strengthening the Foundation of the IndustryYunnan Baiyao, as the “chain leader” in the high-qualitydevelopment of the Yunnan TCM industry, leverages theresource and geographical advantages of Yunnan Province,pragmatically promotes the coordinated development ofpolicies, resources, and capital, builds a large cluster in theTCM industry, and supports “excellent TCM products” by“excellent Yunnan TCM resources.” The Company aligns itselfwith contemporary trends, centering its e?orts on developinga “Seed Chip,” while wholeheartedly working to strengthen thefoundation of the TCM industry. The Company has taken onsignicant responsibilities, responds to the national action forthe revitalization of the seed industry, and vigorously promotesthe cultivation of superior TCM materials and the developmentof germplasm resources to provide solid guarantee for theindustrial development. Yunnan Baiyao always puts thequality of its products first, and ensures the authenticityand medication safety of medicinal materials through a
quality traceability system covering planting, processing andcirculation. We have established three major systems, namely“Baiyao Preferred,” “Baiyao Certified” and “Baiyao Owned,”to promote the development of standardization, scaling,branding and digitalization of the TCM industry. We have builtan industrial internet platform for the TCM industry, a new TCMorigin trading market, and a sound industrial service ecosystemto gradually form an industrial cluster involving various entitiesparticipating in planting, processing, circulation, and otheractivities, and enhance the synergy of all links in the industrialchain. Looking ahead, Yunnan Baiyao will continue to cultivatethe industrial chain of TCM, underpinning the sustainabledevelopment of the ecological and industrial chain throughtechnological empowerment and full-chain coordination.Practicing Low-Carbon Development
Guided by the national “dual-carbon” strategic goal, YunnanBaiyao actively responds to the challenges of climate change,accelerates its low-carbon transformation, builds a greendevelopment model, and makes e?orts to achieve harmoniouscoexistence between humanity and nature. LeveragingYunnan’s unique ecological advantages and taking biodiversityconservation as the principle, we shape a vision for sustainabledevelopment of TCM from the cultivation of medicinalseedlings to the green upgrading of the entire industrial chainthrough digital empowerment and technological innovation.We launched a pilot project for carbon management targetplanning and system and platform construction within theHealth Products Business Group, established commitmentsto address climate change, developed a robust carbonmanagement system, built a carbon emission monitoringplatform covering the entire production process, and promotedlow-carbon transformation in four aspects: product design,raw material procurement, manufacturing, and logistics, thusforming a comprehensive low-carbon sustainable developmentstrategy. Moving forward, Yunnan Baiyao will incorporategreen concepts into its corporate development, advocatelow-carbon green o?ce and production, build a green supply
chain system, and contribute to achieving the “dual-carbon”goal. At the same time, we will join hands with shareholders,customers, employees and all sectors of society to marchtowards a green and low-carbon future.A journey of a thousand miles starts with shared commitments.The year 2024 is a year of practical action and perseverancefor Yunnan Baiyao, marked by overcoming challenges andsteady progress. Guided by the sustainability concept,Yunnan Baiyao has partnered with all stakeholders to activelyfulfill its environmental, social and corporate governanceresponsibilities. We focus on “improving quality and e?ciency”across the industrial chain, value chain and production factorsto promote the construction of an excellent operation system.We are concerned about environmental issues and globalclimate change, persist in biodiversity conservation andpractice the concept of green development. We consolidateproduct quality, build a sustainable supply chain, and arecommitted to providing customers with high-quality, safe,reliable and environmentally friendly products and services. Wecare about the well-being of our employees, attach importanceto the cultivation and development of our employees, andbuild an outstanding talent team. We will continue to improveour corporate governance and enhance our risk responsecapabilities to safeguard the long-term sound development ofthe enterprise.Stars guide the dreamers and time honors the strivers. Theyear 2025 is a crucial year for Yunnan Baiyao’s “2+3” strategy,and marks the launch of a three-year action plan for the high-quality development of the Yunnan TCM industry. In the comingyear, Yunnan Baiyao will uphold the mission of “to guardlife and health”, respond to the call of the national strategy,fulfill its corporate social responsibilities, pursue excellencein governance, strengthen the industrial foundation, lead agreen future, and contribute to social harmony and sustainabledevelopment with the strength of Baiyao.
Zhang Wenxue
Party Committee Secretary andChairman of Yunnan Baiyao Group
0506
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
FormABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
About Yunnan Baiyao
CompanyProle
StrategicPlanning
BusinessPresence
Yunnan Baiyao Group Co., Ltd. was formerly known as Yunnan Baiyao Factory. As a122-year-old national brand in China, Yunnan Baiyao is dedicated to its corporate mission of“to guard life and health,” integrates TCM into modern life, and continually innovates to meetthe growing health needs of consumers.
Yunnan Baiyao adopts a dual approach of “intensive and extensive growth” to deliver its strategic objectives in an orderlymanner.
In addition, the Company will continue to develop the strategic management capability system in ve dimensions: strategicmanagement, group management and control, e?ective operation, innovation management and professional business.
To promote the Company’s strategicmanagement capability system,continuously improve the strategicclosed-loop management system,and lead the Company to achieveits long-term strategic objectives.
To focus on the construction of the R&D and capabilitysystem to support sustainable development, andprovide competitive advantages by e?ective businessdevelopment empowered through digital intelligence.
To construct a strategic managementand control capability system for amulti-industry, cross-region large-scale modern pharmaceuticalindustrial group to e?ectively supportthe Company’s strategic objectives.
To strengthen professional business capabilitiesin solidifying segments such as medicine and “BigHealth,” as well as functional capabilities such asnance, risk, brand and market value management toensure high-quality implementation of strategies.
To construct a lean operationsystem and operation capabilitiesmatching the Company’s scale,achieve a rened managementacross the industry chain, valuechain and production factors, andimprove the Company’s operationale?ciency and competitiveness.
Yunnan Baiyao formulated four strategic positions based on the Company’s strategicobjectives, which were divided into four segments.
The “chain leader” withhigh-quality development
of Yunnan TCMresources
The “leading” tier of high-
quality health lifestyle
products
The “leading” brand of painmanagement in the eld of
traumatology
The “leading” enterprise
in pharmaceutical
distribution andinnovative services
BusinessSegment and
StrategicPositioning
Mission and Visionof Yunnan Baiyao
TCM Resources
Health Products
Pharmaceuticals
Pharmaceutical Business
Strategic Path of Yunnan Baiyao
Capability Guarantee of Yunnan Baiyao
To build collaborativecapabilities for a“unied strategy” with
a customer-centricapproach.
To ensure a stable,scientic, and orderlyachievement of strategicgoals with the “two-phase approach.”
To focus on steadydevelopment and stabilizethe principal businessesby increasing potentialand e?ciency.
To emphasize foresight andpromote the continuousoptimization of the Company’sindustrial portfolio.Intensive growth
Extensive growth
Strategic Management
Innovation ManagementProfessional Business
Group Management and ControlExcellent Operation
Management model
Two-phase“2+3” strategy
To guard life andhealthMission
To be a leadingprovider ofcomprehensivepharmaceuticaland healthcaresolutions
Vision
Yunnan Baiyao leverages three curves to deliverthree-layered connotationsEnhancing health through the rejuvenation of TCM andthe innovation of new technologies, thus reducing theburden of disease and extending healthy lifespans.Improving quality of life with “Big Health” solutionsfor oral care, bone injuries, and more, elevating livingstandards and creating joyful moments.Radiating beauty with “Big Health” solutions for skincare and women’s health, satisfying the desire forbeauty and helping individuals shine inside and out.
0708
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
Form
ABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
The case of “Yunnan Baiyao Toothpaste IntelligentFactory - A Century-old Brand Practicing Industry 4.0”was selected as one of the outstanding cases in theScenario Innovation Dimension of the Best PracticeCases of Digital Transformation of China Association
for Public Companies in 2024
“Application Practice Project of Data Elements
Promoting the Development of New QualityProductivity” won the Best Practice Award of
Data Governance
Honors and Awards
Sina Finance
Interbrand, a global strategic brandmanagement consulting and design company
China Media Group Finance Program Center
China National Pharmaceutical Industry Information
Center (CPIIC)
Brand Finance, the leading international
brand value consultancy
Fortune
2024 Healthy China Communication Forum, jointlyorganized by the China Health Culture Association andthe China Health TeleVision (CHTV) of the NationalHealth Commission of the People’s Republic of China
China Association for Public Companies (CAPCO)
2024 DAMA China Data Management Summit
2024 Future Healthcare 100 Innovation
Awards · Annual Leading Enterprise
No. 45 in China’s Best Brands
Selected into the “China ESG ListedCompany Pioneer 100” list
No.5 in “Top 100 TCM Enterprises in China”
Top 25 Most Valuable GlobalPharmaceutical Brands
Fortune’s top 500 Chinese companies for 15 consecutive years
Securities TimesWon the “Tianma Award for Investor Relations Chinese Public Company”
for the fourth consecutive time
No. 2 in the Brand Inuence List ofTCM Enterprises in 2024
Materiality Assessments
DualMaterialityAnalysis
In current complex and ever-changing socio-economic development environment, sustainabilityfactors have become the core indicators for assessing corporate sustainability and marketcompetitiveness, and the principle of dual materiality plays a pivotal role in this system. YunnanBaiyao adheres to the concept of sustainable development, deeply analyzes and balances thefactors affecting both impact materiality and financial materiality as key bases for formulatingcorporate strategic plans and decision-making.Yunnan Baiyao incorporates the demands and expectations of stakeholders regardingcorporate management and development into its comprehensive considerations to meet thecompliance requirements on dual materiality as outlined in the Self-Regulatory GuidelinesNo. 17 for Companies Listed on Shenzhen Stock Exchange—Sustainability Report (For TrialImplementation), and will conduct the identication and assessment of dual materiality issues forthe rst time in 2025.Based on the industry characteristics of our pharmaceutical sector and the professional featuresof our business field, we conduct researches in accordance with the three-step process of“identification, research, and analysis” to fully understand the impact materiality and financialmateriality of ESG-related issues on the Company. We have actively responded to the newrequirements of regulators for disclosure of issues and identified 27 material issues from theperspectives of both companies and stakeholders. We were actively conducting stakeholderresearches to determine the priority of issues by impact materiality in 2024. After communicationand discussion with competent departments closely related to sustainable development issues,as well as investigation into the data performance of each issue in the past financial yearsand the plans in the future nancial years, the Company arrives at a determination of nancialmateriality and finalizes the 2024 dual materiality matrix of Yunnan Baiyao. This matrix canintuitively help the Company achieve overall improvements in various aspects, including strategicgoal planning, e?cient corporate governance, accurate information disclosure, stronger marketcompetition, and stakeholder communication, which provides a reference for the managementand operation of the Company’s sustainable development related affairs, thereby advancingtowards a higher level and more sustainable development prospects.
Kantar Company
Morgan Stanley CapitalInternational (MSCI), the world’s
leading index compilerChina Association for PublicCompanies (CAPCO)
Ranked 71
stin the KantarBrandZ Top 100 MostValuable Chinese Brands and
st
in the healthcare industry
Awarded an A-level ESG rating
by MSCI ESG Ratings for the
fourth consecutive time“2024 Excellent Practice Case of the Boardof Directors among Listed Companies”“Best Practice Cases for SustainableDevelopment among Listed Companies”
0910
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
FormABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
As the capital market pays increasing attention to sustainable development elements, the correlationbetween the Company’s issues and financial performance has become increasingly obvious, andthe assessment of nancial materiality has become a core consideration in the Company’s strategicplanning and resource allocation. To this end, Yunnan Baiyao’s social responsibility management teamsystematically reviews and organizes data clues in the Company’s nancial records that are closelyrelated to sustainable development issues. We conducted an in-depth analysis of the actual role ofsustainable development issues in the Company’s nancial structure during this year, aiming to providereliable guidelines for the development of corporate nancial strategies and business planning relatedto sustainability.
To analyze negative impacts (scale, scope, irremediability, likelihood)and positive impacts (scale, scope, likelihood), and quantify orqualitatively measure the degree of impact.
To analyze the continuity of resourceuse, dependencies (e.g., supplier,customer relationships) based on thelikelihood of risks and opportunitiesand the degree of the nancial impactto assess the potential impact on thenancial statements.
To compare the results of theassessment with the thresholds todetermine whether the issue is ofnancial materiality.To set thresholds through qualitative(high/medium/low) or quantitative(monetary value or percentage)methods to determine the impactmateriality.
To collect opinions from key stakeholders through questionnairesand symposiums to assess the scale, scope, and likelihood ofimpacts.To set appropriate thresholds for assessing whether actual andpotential impacts are signicant and prioritize them based on theimpact materiality.Based on the research results and the threshold, the conclusionon impact materiality is drawn. The material issues of industryconsensus can be directly identied.FinancialMateriality
CommunicationwithStakeholders
Yunnan Baiyao attaches importance to the demands of stakeholders and maintainscommunication with them through various channels. Based on the nature of Company,industry trends and the Company’s own development, we identify key stakeholders, includingshareholders and investor organizations, customers and consumers, employees, businesspartners, government departments and regulators, the media and the public, communitiesand NGOs, and proactively meet their demands and expectations.
Shareholder andinvestor institutions
●
Standardized operation
●Information disclosure
●Risk control
●Reasonable return on investment
●Information disclosure
●
On-site communication and report atshareholders’ meetings
●On-site, phone, email, interactive platform andother other forms of research
●Steadily increasing performance, and stabledividends
Clients andconsumers
●Consumer rights protection
●Guarantee of product quality and safety
●Customer privacy protection
●Intellectual property protection
●Customer satisfaction survey
●Product recall system
●Integrated customer service system
●Product service and quality assurance
Business partners
●Integrity in business
●Supply chain sustainability
●Timely communication
●Standardized management andimplementation of contracts and
●agreements
●Regular conferences and networking events
●Strict implementation of the bidding system
●
Collaboration in social responsibility
Employees
●
Good working environment
●
Welfare and benets
●
Career development
●
Workers’ congress
●
Training, lectures, salons and othercommunication activities
●
Thematic networking activities
●
Employee feedback from work summary
Governmentaldepartments/
regulators
●
Compliance with laws and regulations
●
Compliance operation
●
Paying taxes in accordance with the law
●
Joint development
●
Information disclosure
●
Fullling all obligations in accordance withlaws and regulations
●
Undertaking government projects
●Reporting the Company’s businessperformance on a regular basis
●Association activities and communications
Media and
community public
●
Financial performance
●
Enterprise management
●Information disclosure
●
Press releases and publications
●
Media interviews
Communities and
NGOs
●Community relations
●
Promoting health knowledge
●
Volunteer service
●
Community activities
●
Exchanges and interviews
Stakeholders
Analysis of factorsfor assessing impact
materiality
Involvement of key
stakeholders
Setting a threshold todetermine the impact
materialityConclusion on impactmateriality assessment
Analysis of factors for assessingnancial materiality
Setting a threshold to determinenancial materiality
Conclusion on nancial materiality
assessment
Key Communication TopicsCommunication Channels
We have built a multi-dimensional and multi-faceted analysis system to identify the impact materiality.Based on the connection between business and macro policies, we conducted an in-depth analysis overthe all-round impact of macro policies in China and at the business locations on the overall operation,and conduct researches on employees, customers, suppliers and other stakeholders online or o?inein accordance with the specific laws and regulations related to the industry and its own businesscharacteristics, so as to gather feedback and expectations from all parties on the operations of theCompany, and to comprehensively measure the impact of issues on di?erent stakeholders, including itsdepth, breadth and duration, and then summarize the impact materiality for each issue in this year toprovide a solid basis for the Company’s strategic adjustment and the formulation of action plans.
ImpactMateriality
1112
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
FormABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Conclusion onMateriality Analysis
2024 Sustainability Dual Materiality Matrix of Yunnan Baiyao
2024 Material Issues of Yunnan Baiyao
●
Compliant operation
●
Business ethics
●Risk management
●
Corporate governance
●
Economic contribution
●Intellectual property protection
Environmental
Social
Governance
Energy utilizationEcosystem and biodiversity protectionAddressing climate changeEmission managementEnvironmental compliance managementCircular economyWater resource utilization
Issues of both nancialand impact materiality
Issues of nancialmateriality but withoutimpact materiality
Issues withoutnancial materialityand impact materiality
Issues of impactmateriality but withoutnancial materiality
Impact materiality to ESG
Financial materiality to the Company Low materialityHigh materiality
High materiality
EnvironmentalSocialGovernance
Energy utilization
Inclusive healthcare
Economic contributionRisk management
Business ethicsIntellectual property protectionCorporate governance
Compliant operation
InnovationdrivenRural revitalization
Employee equality and diversityEmployee training and development
Employee training and development
Promoting industry progress
Equal treatment for small and medium-sized enterprises
Responsible marketingSocial contributionData security andcustomer privacyprotection
Safety and quality ofproducts and servicesSustainable value chainEmployee rights and benets
Emission management
Addressing climate change
Environmental compliance managementCircular economy
Ecosystem and biodiversity protectionWater resource utilization
Energy utilizationSafety and quality of products and services
Inclusive healthcare
Innovation drivenSustainable value chainEcosystem and biodiversity protectionEnvironmental compliance managementAddressing climate changeEmployee equality and diversity
Employee rights and benetsEmployee training and developmentOccupational health and safety
Social contributionResponsible marketing
Rural revitalizationCompliant operationCorporate governance
Circular economyData security and customer privacy protection
Intellectual property protection
Promoting industry progress
Business ethics
Emissions management
Risk managementEconomic contribution
Water resource utilization Equal treatment for small and medium-sized enterprises
●
Safety and quality of products and services
●Innovation driven
●
Occupational health and safety
●
Employee equality and diversity
●Data security and customer privacyprotection
●
Employee rights and benets
●
Sustainable value chain
●
Employee training and development
●Equal treatment for small and medium-sizedenterprises
●
Responsible marketing
●
Inclusive healthcare
●Promoting industry progress
●Social contribution
●Rural revitalization
1314
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
Form
ABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
SustainabilityGovernance
Yunnan Baiyao has always been committed to long-term healthy development, continuesto optimize and upgrade sustainability strategies and management systems, and promotesthe improvement of the Company’s sustainability governance e?ciency, thereby e?ectivelyimplementing sustainability-related tasks and promoting the Company’s sustainabledevelopment.To improve the Company’s sustainability management capabilities, Yunnan Baiyao has builta scientic and e?cient ESG management system with well-dened levels, clear power, andresponsibilities in accordance with the latest requirements from regulatory authorities andindustry standards and the Company’s actual business operations.Yunnan Baiyao has established a three-tier ESG governance structure with the ESG LeadingTeam as the leading body, the ESG Promotion O?ce as the core management institution,and ESG working teams as the main force for execution, which provides e?ective support forthe Company’s sustainability e?orts.
To follow the external sustainability development trend as well as to enhance the Company’soverall sustainability knowledge and practice, Yunnan Baiyao has actively carried outsustainability-specic training. In 2024, we organized a special training and sharing sessionfocused on key topics such as the interpretation of the latest sustainable developmentpolicies, trends in sustainable development within the TCM industry, and the assessment andimprovement of current sustainability management practices, so as to enhance the capabilitiesof employees at all levels in implementing and practicing sustainability, thereby ensuring theorderly development of the Company’s sustainability initiatives.
Sustainability Management
ESGManagementSystem
SustainabilityTraining
ESG Governance Structure of Yunnan Baiyao
Leadership
ESG Leading
Team
Personnel Composition:
The vice chairman and the president lead the team, with the Chief Financial O?cerand Secretary of the Board of Directors serving as vice directors and the top managersof functional departments and business groups as team members, to jointly lead andbe responsible for the Company’s ESG e?orts.Main Responsibilities:
Responsible for establishing the ESG management structure, reviewing ESGstrategies, policies and objectives, and ensuring the e?ective ESG risk managementand internal control system of the Company. On this basis, the leading teamimplements strategic planning and system building, identies management risks andopportunities, and conducts performance evaluation and goal planning.
Management
ESGPromotionO?ce
Personnel Composition:
Composed of professionals from the ESG-related departments, serving as the centralmanagement team for the Company’s ESG e?orts.Main Responsibilities:
Covering the overall coordination, strategic guidance, organizational arrangements,coordination and promotion of ESG-related tasks, as well as the promotion ofdevelopment and ensuring that safeguards are in place.
Execution
ESG WorkTeams
Personnel Composition:
The working teams include external coordination, information disclosure, overallpromotion, nancial support, legal and patent a?airs, risk control management, brandpromotion, quality control, employee care, supply chain ecosystem construction, greenenvironmental protection coordination and strategic planning.Main Responsibilities:
Responsible for the implementation and promotion of ESG specific projects andwork, including but not limited to meeting organization, information in time, reportpreparation, information disclosure, external communication, image maintenance, andconsulting services selection and control, to ensure e?cient and orderly ESG practicesand enhance the Company’s transparency and image.
ESG Annual Training Pragmatic Sustainability Management for Sustainable Development ofa Century-Old Brand of Yunnan BaiyaoTo continuously improve the sustainability managementcapability at all levels and departments of the Company, in2024, Yunnan Baiyao carried out the training of PragmaticSustainability Management for Sustainable Developmentof a Century-Old Brand for the Board of Directors,management, heads of departments and business groupsand key personnel. The training promoted sustainability-related concepts, sustainability status and developmenttrends in the global and pharmaceutical industries, as wellas Yunnan Baiyao’s sustainability highlights and futureefforts to continuously optimize sustainability governanceand system construction, reinforcing the blueprint forYunnan Baiyao’s green, healthy, and long-term developmentunder the auspices of sustainability concepts.
On-site Sustainability Training of Yunnan Baiyao
1516
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Sustainability Strategy
Sustainability Risks
Yunnan Baiyao closely follows the national “14
th
Five-Year Plan,” attaches great importanceto its corporate responsibility in the environmental, social and governance aspects, and iscommitted to achieving coordinated development, and deeply integrates the sustainabilityconcept into the development strategy. With the highest mission of “to guard life and health,”we embrace inheritance and innovation, surpass ourselves to embark on a new journey, andelevate the century-old Baiyao from “excellence” to “outstanding.” Yunnan Baiyao regardsintensive and extensive growth as equally important and promotes them in a synergisticmanner. While strengthening its internal strength, Yunnan Baiyao remains committed toexploring new avenues for growth externally. This dual-driven model not only ensures thestability and sustainability of our operations but also enables us to respond exibly to marketchanges. The Company exibly adjusts the proportion between these two aspects accordingto its own development stage and market environment to ensure continuous exploration ofnew growth opportunities while maintaining core competitiveness, thereby promoting the long-term development of the Company.
With its in-depth exploration and practical experience in risk management, Yunnan Baiyaohas established a set of risk identication, assessment, and response mechanisms tailored tothe Company’s operational characteristics and has systematically incorporated sustainability-related risks. In terms of governance structure, the Company has established a multi-levelmanagement system covering the Company and its subsidiaries to ensure the comprehensiveand in-depth implementation of sustainability-related risk management.
RiskAssessment
Risk Response
DigitalTransformationRisks
Impropertechnologytransformation isdi?cult to meetthe actual needsof the Company;Enterprisedata leakageis caused bydata securityvulnerabilities.
●Increasedoperating costs
●Data breach
●Compliance risk
To strengthenplanning andmanagement ofdigital transformation,improve data securitymanagement system,and continuouslycarry out datasecurity training foremployees to copewith the risk of ITinnovation.
Climate ChangeRisks
Climate changemay lead toinstability in thesupply of TCMmaterials.
●Increasedproduction costs
●Decline in productquality
●Impact on marketshare and brandimage
To establishdiversied supplychannels and improvethe sustainablesupply chain system.
IntellectualProperty Risks
The Companymay face the riskof intellectualpropertyinfringement.
●Financial losses
●Brand imagedamage
●Market orderdamage
To carry outintellectual propertyrisk checks, identifyand reveal potentialrisks in all aspects ofintellectual propertymanagement.
RiskIdentication
To focus on sustainability-related risks in the Company'sdaily operations and include these related risks in theCompany's risk database, and maintain and update thedatabase annually.
Based on the actual situations and prospective risks facedby various departments in the Company's productionand operations, to select certain sustainability-relatedrisks, assess these risks according to their likelihood ofoccurrence, impact level, and the e?ectiveness of internalcontrols, and combine methods such as interviews andprocess analysis to formulate the assessment results.
Primarily based on the results of the risk assessment, toidentify the key risks that the Company needs to focuson and implement corresponding risk managementstrategies.
The Company continuously promotes sustainability-related risk assessment of eachbusiness line location and thoroughly identies potential risk points. In addition, the Companyhas gradually integrated sustainability risks into its investment analysis and decision-makingprocess to avoid potentially high-risk investments and to ensure the safety and sustainabilityof the Company’s investments, thereby enhancing the Company’s overall e?ectiveness ofrisk management and the quality of its investment decisions. In 2024, the Company updatedits assessment results for emerging risks and developed corresponding countermeasures.
RisksRisk DescriptionPotential ImpactCountermeasures
Emerging Risk Assessment
1718
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Sustainability Objectives
Climate change
Business ethics
Rural revitalization
Promoting radiopharmaceutical business
Innovation and breakthrough of R&D platform
Innovative R&D of transdermal preparations
Safe production
Talent team
Pollutant emissions
Compliance management
Pollution incident
Equal treatment for small and medium-sized enterprises
Objective
Objective
Objective
Objective
Objective
Objective
Objective
Objective
Objective
Objective
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
Progress in 2024
ESG Strategic Objectives of Yunnan Baiyao
To launch a pilot project within the Health ProductsBG. The BG has set the dual-carbon strategic goals of“achieving carbon peak by 2028; operational carbonneutrality and a100%renewable energy usage ratioby 2030; and value chain carbon neutrality by 2050.”
Signing of the Commitment to Integrity Practice bymanagers and employees in key positions
To continually carry out rural revitalization-related activities
To tap into the radiopharmaceutical eld andestablish the innovative drug R&D system led byradiopharmaceuticals
To dene the positioning of the four existing R&Dcenters, and drive the Company’s innovation andbreakthrough in R&D with platform innovation
To continuously explore and study thetransdermal preparations and the trauma eld
To identify safety risk points, achieve safety andreduce safety accidents
To build a team of high-quality talents
100% compliance with pollutant discharge standards
Compliance training covers all employees
0 occurrence of environmental pollution incident
To strictly control the project payment cycle and do notdelay paymentsCompleted
Completed
Completed
Completed
Completed
In progress
Multiple measures to promote rural revitalization
The Phase I/IIa clinical trial of INR101 therapeuticradiopharmaceutical Injection for diagnosis hassuccessfully been completed, about
month aheadof schedule. The IIT study of the INR102 therapeuticradiopharmaceutical project has been completedand
subjects were enrolled with their rst cycle ofdosing completed.
The high-throughput computing center was put into useon January 10, 2024, the Tianjin RadiopharmaceuticalR&D Center was put into use on November 18, 2024,and the Kunming Center was put into operation onNovember 19, 2024.
In terms of transdermal preparations, there arecurrently
varieties under research with
varietyunder clinical trials and
variety under applicationfor clinical trials, which will bring patients a moreconvenient and comfortable treatment experience.
Investigated and rectied2,755potential safetyhazards
Orderly promoted such activities as building the talentteam and attracting and training employees
Environmental
Corporate Governance
Social
Products
ObjectiveProgress in 2024
ObjectiveProgress in 2024
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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MaterialityAssessments
SustainabilityManagement
Highlights of Sustainable Development Performance
Steady Progresswith Legacy ofBaiyao
GreenDevelopmentfor DeepeningEcologicalCivilization
People First forStrengtheningthe Foundationof Talent
Innovation-drivenExploration of NewHorizons in TCM
CultivatingVirtue andEmbracingResponsibilities
Held
shareholders’ meetings,
Board meetingsand
Supervisory Committee meetings.
Explored the path to cope with climate change, and launched a pilot project for carbonmanagement target planning and system construction within the Health Products Business Group.Shouldered the responsibilities as a chain leader, guided and drove the construction of larger-scale GAP bases with more varieties across the Yunnan province, and incorporating key varietiessuch as Panax notoginseng, Paris polyphylla, Poria, and Dolomiaea costus into a high-standardplanting ecosystem, facilitated the coordinated development across the industry chain and therefined management from cultivation to processing and sales, providing a more efficient andhealthy ecosystem for the entire industry chain.Established planting standards and specifications, vigorously built the top ten standardizedYunnan medicinal planting demonstration bases, created a rational layout for authentic productionareas, and led for
new TCM varieties and
superior asexual strains, promoting the plantingof over
150,000
mu of authentic Yunnan TCM materials.The germplasm resource nursery for Paris polyphylla had collected
species, including
variants or populations of Paris polyphylla plants, and the Northwest Yunnan TCM ResourceNursery for Yunnan Provincial Medicinal Plants had collected over
medicinal plant speciesand showcased the cultivation of more than
specialty medicinal materials.100%
of exhaust gas, wastewater, and waste are discharged in compliance with thestandards.Comprehensive annual energy consumption is
24,351.00
tons of standard coal equivalent (tce).The amount of reclaimed water is
25,950
tons.The proportion of female employees in Yunnan Baiyao is
45.15%
, and that of ethnicminorities is
14.57%
.The total cost of training at the Company’s headquarters is about RMB
8.8312
million.Total investment in safety amounted to approximately RMB
8.4857
million. A total of
safety inspections were carried out, identifying
2,755
potential hazards, achieving a
100%
rectication rate.In the model of “company + base + farmer”, technical guidance is provided in the process, andassistance activities for TCM planting industry are carried out in poverty alleviation areas such asWeixi and Fugong, so as to promote rural employment, achieve industrial prosperity and become anew income growth driver for farmers in remote mountainous areas.Implemented a model of collaboration with farmers, and helped increase farmers’ incomes withdiverse measures such as industrial empowerment, technology transfer, and order cooperation,ensuring the quality and supply of TCM materials and supporting the sustainable development of theindustry.Total input of RMB
800,000
for the Party building and grassroots government services.Total external donations amounted to RMB
4.589
million.Conducted free clinic activities, provided
item/time health tests, and served more than
patients.
The Pharmaceutical Business Group underwent a total of
audits by the drugregulatory authorities, with
100%
completion and approval of rectications.R&D investment amounted to about RMB
million.
Held
performance briengs, received
investor surveys and more than
person-times, and responded to
inquiries at irm.cninfo.com.cn,with a response ratio of
100%
.
Conducted research on the process about formula granules of
varieties and successfully completed experiments on
varieties.
Conducted nearly
training sessions on diversified topics and compliancetraining, with a total of
thousands
of participants and
100%
coverageof key personnel.
The Phase II clinical trial of Pan-Panax notoginseng Tablets is progressingsmoothly.As of the end of the Reporting Period, a total of
participants had beenenrolled, achieving
82%
of the enrollment target.
1920
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Amid the vigorous development of the TCM industry, the significance of theTCM seed industry as the foundation of the industry is becoming increasinglyprominent. Yunnan Baiyao resolutely implements the new objectives andrequirements for the high-quality development of the TCM industry put forwardby the Sixth Plenary Session of the Eleventh Yunnan Provincial Committee ofthe Communist Party of China, focusing on the five objectives of “developingthe seed industry from a high starting point, advancing cultivation with highstandards, enhancing processing with high energy levels, expanding the marketat a high level, and building the brand with a high stance.” With profoundindustry expertise and forward-looking strategic vision, Yunnan Baiyao placesgreat emphasis on the TCM seed industry and makes every e?ort to create a “SeedChip,” invigorates the construction of the full-chain ecosystem of TCM industryand drives high-quality development of the industry to new heights.
Yunnan, known as the “Kingdom of Plants,” is rich in TCM material resources and hostsa diverse array of TCM ingredients, holding a signicant position in the country. However,for a long time, the TCM seed industry in Yunnan has faced many challenges: unevenprovenance quality, self-cultivation and self-collection of farmers, scattered transactionsand a lack of quality testing, which make it di?cult to guarantee the quality of planting andseriously restrict industrial upgrading. In this context, Yunnan Baiyao bravely participatesin the construction of the TCM seed industry, striving to break through developmentbottlenecks.
To enhance the technological level of the seed industry, Yunnan Baiyao continues toincrease investment in scientic research. It established Yunnan Baiyao Group Seed IndustryTechnology Co., Ltd., and built an integrated modern seed innovation system of “breeding,propagation, and promotion.” We cooperated with Higentec to carry out Panax notoginsengmolecular selection, and achieved rapid directional breeding with modern biotechnology.We introduced advanced breeding technologies and equipment from home and abroad,established an experimental R&D center at the headquarters, and equipped it with seedproduction workshops to promote the transformation of TCM breeding from reliance ontraditional experience to a model based on scientific precision. We also established atesting platform for TCM seeds and seedlings to comprehensively verify and assess theirauthenticity and quality, providing assurance for high-standard planting in the seed industry.
In terms of variety breeding, Yunnan Baiyaohas achieved fruitful results. Six superiorvarieties of Paris polyphylla were bred, andthe cultivated Paris polyphylla seedlings areexcellent in quality and strong adaptability,which effectively improved the planting yieldand quality. We have also made importantprogress in selection and breeding ofFritillaria cirrhosa, Yunnan Angelica sinensis,Dolomiaea costus and other varieties, andestablished harvesting bases and nurserybases for a number of superior varieties, toprovide a high-quality provenance guaranteefor industrial development.
Yunnan Baiyao attaches great importance to the protection and development of germplasmresources of TCM materials. After years of efforts, we have successfully overcome theproblem of Yunnan Paris polyphylla from wild to articial large-scale planting, collected 23Paris polyphylla varieties across China, and established the world’s largest Paris polyphyllaliving germplasm resource nursery, laying a solid foundation for the protection of raregermplasm resources and the sustainable development of the Paris polyphylla industry.At the same time, we have completed the cultivation of several high-quality varieties suchas Dolomiaea costus, Aconitum vilmorinianum and Fritillaria cirrhosa, built a germplasmresource nursery that preserves 105 kinds of authentic medicinal materials in northwestYunnan, conducted the breeding research of multiple varieties, continuously enriched thegermplasm resource reserve, and provided abundant “chip” materials for the development ofthe seed industry.
Dilemmaof the SeedIndustry andResponsibilitiesof Baiyao
ResearchEmpowerment:
EnhancingTechnologicalLevel of theSeed Industry
VarietyBreeding:
FruitfulResults
GermplasmResources:
BalancingProtection andDevelopment
Seed and Seedling Testing Laboratory
Medicinal Material Planting andDomestication Base of Yunnan Baiyao
Topic
Creating a
“Seed Chip”
for the Full-Chain Ecosystem ofthe TCM Industry
For details, see the section “Biodiversity.”
2221
Process
Results
ProcessProcess
Process
Results
Results
Results
●Self-built, co-built and sharedover
4,000 mu GAP base
●Drove more farmers to participate in standardized planting, andimproved the management level and economic benets of theplanting end
●Ensured the supply and quality of medicinal materials andincrease farmers’ income
As the foundation, the seed industry provides strong support for Yunnan Baiyao Group tobuild a full-chain ecosystem.Full-ChainConstruction:
Consolidatingthe Foundationof IndustrialDevelopment
Yunnan Baiyao explores innovative operating models, takes varieties as the core, builds amodel of “one variety + one expert team + one variety manager + 3 to 5 partners,” integratesscientific research resources, to form a base cluster for seed collection, seedling, anddemonstration planting. We cooperated with Yunnan Academy of Agricultural Sciences,Southwest Forestry University, and other scientic research institutions to jointly carry outbreed selection and technical research, accelerate the transformation and application ofscientic research results, and enhance the collaborative innovation capacity of the industry.
The development of seed industry is not only related to the enterprise itself, but also closelyrelated to the interests of planting enterprises and farmers. Yunnan Baiyao focuses onserving the GAP system across the Yunnan province and self-built planting bases, promotesthe selection and breeding of seedlings, and integrates the entire process of “seedling-planting-harvesting” into the digital planting system to achieve full traceability and closed-loop production management. We should strictly measure the yield and inspect the quality,verify the planting benets, promote the formation of high-quality seedling base clusters, andguarantee the protability of planting enterprises and farmers.
OperationInnovation:
Exploring NewDevelopmentModel
Benetingthe People:
Sharing theResults ofSeed IndustryDevelopment
Looking ahead, Yunnan Baiyao will continue to deepen its e?orts in the TCM seed industry, and consistentlyimprove the technological content of the “Seed Chip,” and enrich the variety reserves. We will continuouslyimprove the construction of the full-chain ecosystem, strengthen the collaborative innovation across allstages, and promote the standardization, scaling, branding and digitalization of the TCM industry. We willmade more e?orts to support farmers and agriculture, promote rural revitalization, and contribute to the high-quality development of the TCM industry in Yunnan and even across China, while promoting the TCM culture.
R&D andBranding
Planting
Processing
Marketing
Washing Process of TCM MaterialsTCM R&D Laboratory of Yunnan Baiyao
GAP: Good Agricultural Practice.
2423
●To promote standardized cultivation with high-quality provenanceand advanced cultivation techniques
●To translate GAP
specications into easy-to-understand andeasy-to-use standards;
●To promote the order planting model and maintain stablecooperative relationships with farmers.
●To establish Wenshan Sanqi Digital Industry Platform andLijiang Digital TCM Industry Platform;
●To adopt the fresh processing model to clean, select andslice the medicinal materials as needed when they arefresh.
●Shortened the supply chain and production chain, andimproved the utilization of raw materials
●Avoided cost increases and quality losses caused bytraditional multi-step processing, and improved productquality and market competitiveness
●To build a specialized service-oriented market oforigin and build a new specialized TCM marketpattern of “1 + 1 + N”;
●To create a digital platform for the Yunnan TCMindustry, and provide public services for the upstreamand downstream of the industrial chain;
●To focus on the main production areas of Yunnanmedicine, build a new specialized market of origin,and integrate the resources and processing capacityof origin;
●To take advantage of Wenshan, Tianbao and otherports to expand international import and export trade.
●Enhanced market inuence
●
Formed a complete industrial closed-loop
●To invest resources to build a public platform forscientic research of TCM, and conduct innovativeR&D of diversied TCM products;
●To build a multi-level brand system for Yunnanmedicines and establish a full-chain standard systemin collaboration with relevant parties;
●To adopt digital means for precision marketing.
●Carried out Phase II clinical studies on Pan-Panaxnotoginseng Tablets, an innovative drug in the Class
1.1 TCM, and advanced Phase III clinical design and
preparation of Fuqi Guben Ointment, a new TCM, aswell as the secondary development of 20 varieties,such as several core products and GongxueningCapsule.
●
Improved the quality of TCM and the online presenceof the Yunyao brand.
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TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Steady Progresswith Legacy ofBaiyao
Yunnan Baiyao insists on integrating the Party’s leadershipwith sustainability principles into its corporate governance,treating corporate governance as a key task for achievinghigh-quality development. Guided by risk management,the Company has built an organizational structure withclear responsibilities, strengthened anti-corruption efforts,implemented robust internal controls, and continuouslyenhanced operational e?ciency.
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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During the Reporting Period, Yunnan Baiyao exerted all efforts to enhance theoverall capability of grassroots organizations. Through self-registration, unitrecommendations, comprehensive assessments, and organizational reviews,60 outstanding cadres were selected and added to the talent pool. Following theprinciple of “nurturing business backbones into Party members and Party membersinto business backbones,” 95 Party members were developed. As of the end ofthe Reporting Period, there were 1,610 registered Party members, over 150 activeapplicants for membership, and more than 300 applicants for Party membership.To strengthen the cohesion and leadership of the Company’s Party organization,Yunnan Baiyao actively conducted Party building training. The training focused onParty theory, covering key Party thoughts, policies, and regulations. Through in-depth and systematic instruction, employees were able to better understand the coreprinciples of the Party, providing a solid ideological foundation and strong spiritualsupport for the Company’s development.
Yunnan Baiyao held a meeting to discuss Party building andthe construction of Party discipline, signing the 2024 Statementof Party Building Work Objectives and the Statement of PartyDiscipline Construction. The Company also formulated andissued “two handbooks and four lists” to guide the year’s work,establishing a system for implementing responsibilities.The Company conducted a comprehensive review, identication,and updating of its existing regulations. Forty-two systems weredeveloped and issued in such areas as Party building, disciplineinspection, supervisions, and publicity, including the Opinionson Strengthening and Improving Party Building Work at YunnanBaiyao Group Co., Ltd. (Trial).A Party building work system was established, including a“task list, responsibility list, and evaluation list,” which ensuressystematic management and e?ective implementation of goalsthrough “overall planning, arrangement, and assessment.”
In 2024, Yunnan Baiyao rigorously implementedthe Learning System of Party CommitteeTheoretical Learning Center Group and the“First Topic” Learning System, guiding all Partymembers and cadres to deeply comprehend theParty’s principles, guidelines, and policies. Thisaimed to enhance the political and theoreticalknowledge of Party members and cadres.As of the end of the Reporting Period, Partycommittees at all levels had conducted over 40centralized study sessions for the center group,while Party organizations at all levels held morethan 520 “First Topic” and theoretical learningsessions.
In April 2024, Yunnan Baiyao organized specialized rotational training to enhance the overall capabilities of grassrootsParty organizations. The training aimed to guide Party organization secretaries and Party a?airs personnel at thegrassroots level in deeply studying and consciously implementing Xi Jinping’s Thought on Socialism with ChineseCharacteristics for a New Era in a bid to strengthen their ideological foundation, guide their practical work, and driveorganizational progress. The goal was to signicantly improve their political awareness, theoretical knowledge, andprofessional competencies. As of the end of the Reporting Period, over 530 Party a?airs personnel had participated inthe rotational training, resulting in a notable improvement in the quality and e?ciency of Party building e?orts.
Strengthening Ideological Education and Theoretical Empowerment
Rotational Training for Party A?airs Personnel to Improve the Quality of Party Building
Study Meeting of Party Committee Theoretical Learning
Center Group of Yunnan Baiyao Group
On-site Training for Party Organization Secretaries and Party A?airs Cadres
Guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for aNew Era, Yunnan Baiyao Group’s Party Committee has thoroughly studied andimplemented the spirit of the 20
th
National Congress of the Communist Party ofChina and the Third Plenary Session of the 20
thCentral Committee. The Companyconsistently upholds the Party’s leadership, strengthens Party building, emphasizesits leadership in Party building, and focuses on deepening “integration andinclusion.” The overall approach to Party building is dened in the “1346” strategy,which includes: “One Goal,” “Three Major Projects,” “Four-Dimensional Integration,”and “Promoting Six Key Developments.” Through these initiatives, the Companyseeks to transform the political advantages of Party building into a competitive edgefor guiding key operations, uniting the workforce, and driving corporate growth. High-quality Party building serves as the foundation for Yunnan Baiyao’s high-qualitydevelopment.
StrategicPlanning
SystemConstruction
WorkImplementation
2827
Leadership in Party Building
2930
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Yunnan Baiyao actively promotes the standardized and e?cient operation of the Board ofDirectors in strict accordance with the relevant provisions of the Articles of Association, theRules of Procedure for Board of Directors and the Work System for Independent Directors.Directors of the Company are elected or replaced by the shareholders’ meeting and maybe removed from o?ce by the shareholders’ meeting before the end of their term. The termof o?ce for directors is three years, and they may be re-elected and re-appointed upon theexpiration of their term. At the same time, we implement a top-down governance approach,with the Board of Directors overseeing the Strategy Committee, Remuneration and AppraisalCommittee, Nomination Committee, and Audit Committee. We have established detailedimplementation rules for each committee’s role in corporate governance, ensuring thatthey perform their duties strictly within their dened authority. The Company regularly holdsthe Board meetings to facilitate collective decision-making on governance and strategicdevelopment. During the Reporting Period, the Company held 12 Board meetings, with a100% attendance rate among directors.Yunnan Baiyao upholds the independence of the Board of Directors as a key principle ofcorporate governance. The Board oversees the management team and ensures the e?ectiveimplementation of Board resolutions, protecting shareholders’ interests and promoting theCompany’s long-term sustainable development. As of the end of the Reporting Period,the Company had 11 directors, including 7 non-independent directors and 4 independentdirectors, with independent directors making up 36% of the total.In the selection of Board candidates and the appointment of directors, we consider variousfactors such as age, industry experience, and professional capabilities to fully evaluatethe candidates’ diverse skills. The members of the Company’s Board of Directors possessexpertise and experience in multiple areas, including business management, law, nance,auditing, risk control, investment and mergers, R&D, and healthcare reform, ensuring theBoard makes scientic decisions.Yunnan Baiyao elects supervisors and conducts activities of Supervisory Committeein accordance with the Company Law of the People’s Republic of China, the Articlesof Association, the Rules of Procedure for Supervisory Committee, and other relevantlaws, regulations, and internal systems of the Company. The Company stipulates thatthe Supervisory Committee must include shareholder representatives and an appropriateproportion of employee representatives, with employee representatives accounting forno less than one-third, elected democratically by the Company’s employees through theemployee representative congress. The Supervisory Committee has established rules ofprocedure, outlining the decision-making and voting processes, and holds at least onemeeting every six months to e?ectively carry out its supervisory functions. As of the end ofthe Reporting Period, the Company had 3 supervisors, including 2 employee representativesand 1 shareholder representative, and held 6 meetings of Supervisory Committee.
As of the end of theReporting Period, theCompany had
directorswith independent directorsmaking up
36%
of the total
Board ofDirectors
SupervisoryCommittee
InvestorCommunication
Yunnan Baiyao continuously improves its corporate governance system, establishing a well-dened governance structure with distinct roles and responsibilities. In accordance with legalregulations and internal procedures, the Company convenes the general meetings, meetingsof Board of Directors, and meetings of Supervisory Committee, ensuring e?cient operations,scientific decision-making, and effective supervision to guarantee the Company’s high-quality development.
Operation of the Board of Directors
CorporateGovernance
Yunnan Baiyao strictly adheres to the Company Law of the People’s Republic of China, theSecurities Law of the People’s Republic of China, the Guidelines for Corporate Governanceof Listed Companies, and other relevant laws and regulations, complies with regulatoryrequirements, and thus establishes a comprehensive corporate governance structure basedon the Company’s current development status. The shareholders’ general meetings, theBoard of Directors, the Supervisory Committee and the management each exercise theirrespective rights of decision-making, business management, and supervision, ensuring aclear governance hierarchy that facilitates the full realization of both the Company’s andinvestors’ interests.
Yunnan Baiyao adheres to the provisions of the Articles of Association and the Rules ofProcedure for Shareholders’ Meetings, effectively exercising the decision-making powerof the shareholders’ meeting on major matters of the Company. The Company followsprinciples of fairness, transparency, and rationality in convening, conducting, and voting atshareholders’ meetings, protecting shareholders’ rights to information, participation, andsupervision, and ensuring equal treatment for all shareholders. In 2024, the Company heldve shareholders’ meetings.
Shareholders’Meetings
Supervisory Committee
Shareholders’ Meeting
Strategy CommitteeAudit CommitteeNomination Committee
Management
Remuneration andAppraisal Committee
Board of Directors
Corporate Governance Structure of Yunnan Baiyao
Yunnan Baiyao strictly adheres to the relevant regulations of regulatory authorities andhas established a regular communication mechanism to create a comprehensive investorcommunication platform. The Company continuously organizes investor research activitiesto engage with investors and communicate the Company’s operational status. During theReporting Period, the Company held 4 performance briengs, conducted 52 investor researchsessions both online and o?ine, received over 200 investor visits, responded to 156 inquiriesat irm.cninfo.com.cn, with a response ratio of 100%, ensuring that communication channelsbetween the Company, shareholders, and investors remain open and e?ective.
3132
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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SustainabilityManagement
The Board of Directors serves as the principal decision-making bodyfor comprehensive risk management, bearing ultimate responsibilityin this regard. The Audit Committee of the Board oversees theimplementation of the Company’s risk management activities. Itdelegates specic internal control evaluation and risk managementtasks to the Audit Department and provides specialized reports to theBoard of Directors.Yunnan Baiyao adheres to a prudent operational philosophyand, in accordance with norms such as the Comprehensive RiskManagement System, continuously optimizes its risk managementmeasures. The Company regularly identifies internal risks andcompiles an annual risk list. It evaluates and identifies key risksbased on multiple factors, develops response plans, and monitorsthem dynamically, forming a closed-loop risk management system.Additionally, we incorporate the effectiveness of the risk controlsystem’s construction and implementation into performanceevaluations, aiming to motivate employees to actively engage in riskcontrol and enhance overall risk awareness across the Company.Yunnan Baiyao conducts risk control training for all employeesusing both online and o?ine methods. The Company o?ers relevantcourse videos on the Baiyao Academy platform, making risk controllearning more accessible. Furthermore, offline training activities,such as seminars and workshops, are organized to enhance learningoutcomes through interactive sessions. We encourage trainedemployees to actively identify and report potential risks. Employeescan report risk information through various channels, including“Baiyao Ding,” email, and phone, cultivating a corporate cultureof risk management that encourages voluntary participation andproactive
Internal Auditand InternalControl
Yunnan Baiyao, in accordance with the Internal Control Manual and the Internal Audit System,entrusts the Audit Department with independently performing internal audits, fully exercisingits internal supervisory authority. The aim is to ensure the Company’s operations are healthyand compliant through supervision, evaluation, and service functions. During the ReportingPeriod, the Company updated and optimized internal audit systems, such as the EconomicResponsibility Audit Management Measures and the Management Measures for Rectifying AuditIssues, to improve the e?ciency and accuracy of auditing and e?ectively prevent potential newrisks that may arise during the audit process. The Company has established a professional riskcontrol team that regularly conducts internal control evaluations and ensures comprehensiveaudit coverage of all business entities by combining general and specialized audits. Specialemphasis is placed on targeted supervision of key areas, critical funding, major projects, andthe implementation of the Company’s major strategies and decisions.In response to risk factors identified during the audit, Yunnan Baiyao requires the relevantdepartments to immediately implement corrective actions, with the Audit Departmentcontinuously monitoring the progress. The Company adopts a result-oriented registration andwrite-o? management mechanism to ensure that all identied risk factors are swiftly eliminated.
In 2024, the Company created and launched the employee compliance training course titled “Compliance First andAlways” on the Baiyao Academy platform. The course covers five key modules: Compliance, Contracts, IntellectualProperty, Anti-Bribery in the Pharmaceutical Industry, and Company Law and Governance. With a total duration of479 minutes, the training is aimed at all employees below middle management and relevant members of the Legaland Compliance teams. Since its launch, the course has effectively equipped employees with legal and complianceknowledge, enhancing their ability to operate in compliance with business practices.
Employee Compliance Training Course “Risk Management and Professional Practice”
Employee Compliance Training Course “Compliance First and Always”
Yunnan Baiyao regards strengthening risk management andinternal control systems as a key focus and actively carries out riskmanagement audits and training. The Company is also advancingsustainability-related risk identification efforts to ensure sustainablebusiness operations.
Risk Management
Risk Management System
Yunnan Baiyao conducts risk controltraining for all employees using bothonline and o?ine methods
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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Yunnan Baiyao continuously improves its business ethics management system, placing greatemphasis on cultivating integrity awareness. The Company drives the ongoing update of itswhistleblowing management system, rmly opposes unfair competition, upholds business integrity,and practices ethical business conduct.
Business Ethics
GovernanceSystem ofBusinessEthics
Yunnan Baiyao follows the laws and regulations such as the Company Law of the People’s Republic ofChina, the Law of the People’s Republic of China Against Unfair Competition, and the Anti-MonopolyLaw of the People’s Republic of China as guiding principles. The Company adheres to internal anti-corruption policies such as the Work System of Discipline Inspection Commission, the Work System ofLetters and Visits, the Measures for Integrity Risk Control, and the Responsibility System for the Workof Clean and Honest Party Building, and strengthens the implementation of 15 operational systems,including the Opinions on Strengthening and Improving Discipline Inspection of Yunnan Baiyao GroupCo., Ltd. (for Trial Implementation). In 2024, the Company also established 12 inspection systems,including the Implementation Measures for Inspection Work (Trial), to ensure e?ective supervision andaccountability mechanisms, regulate business ethics management requirements, and strengthen theCompany’s integrity defense line in all aspects.Yunnan Baiyao continues to improve its supervisory mechanisms, promoting the formation of an“overall supervision” framework with coordinated e?orts from supervisory bodies. The Company hasestablished a work mechanism where the Party Committee provides unied leadership, grassrootsParty organizations are responsible at di?erent levels, inspection agencies organize implementation,the Discipline Inspection Department and Organizational Department assist, relevant functionaldepartments cooperate, inspected Party organizations comply, and employees and the publicparticipate. This system ensures the e?ective supervision of Party discipline and clean governmentat all levels. In 2024, Yunnan Baiyao continued to enforce the Code of Conduct for Business Ethics
,strictly prohibiting all employees (including non-regular employees) from engaging in unethicalbusiness practices such as corruption, bribery, unfair competition, and conicts of interest, with a “zerotolerance” approach to violations, ensuring the Company’s compliant operations.We integrate the requirements of integrity practice into the management and assessment of keypositions. Each year, according to their management authority, we require managers and employeesin key positions to sign the Commitment to Integrity Practice, ensuring that employees strictly complywith integrity regulations, consciously accept supervision from relevant departments, and clearlydene the primary responsibilities of leaders at all levels in managing business ethics.
IntegrityAwarenessCultivation
Yunnan Baiyao has implemented integrity education regularly and organizes various trainingactivities for all employees, such as expert-led seminars on “Key Issues and Prevention inMedical Anti-Corruption,” training sessions on integrity in the workplace and anti-commercialbribery, and integrity-related knowledge competitions, further enhancing the integrity andcompliance awareness of both management and sta?. In 2024, the Company conducted 10anti-corruption training sessions for managers and key personnel, with over 600 participantsand 100% coverage for key positions.
ReportingManagement
Yunnan Baiyao places great importance on the critical role of supervision and whistleblowingin promoting business ethics. In accordance with national laws and regulations, the Companycontinuously improves its mechanisms for whistleblowing and handling issue leads, handling eachwhistleblowing report and issue leads according to procedures, and continuously enhancing thestandardization and rule of law of the whistleblowing process. We make reporting channels publicand encourage employees, users, and other stakeholders to supervise and report any violations ofregulations, discipline, or laws.The Company focuses on protecting the legitimate rights of whistleblowers and enforces thewhistleblower protection clauses in the Work System of Discipline Inspection Commission, strictlyadhering to condentiality requirements. Without the whistleblower’s consent, we do not disclose anypersonal information or the contents of the report in any form. We strictly implement mechanisms forcondentiality, avoidance of conicts of interest, and accountability in whistleblowing, fully protectingwhistleblowers and preventing any form of retaliation.Address: Yunnan Baiyao Discipline Inspection
Commission, 3686 Yunnan Baiyao Street, ChenggongDistrict, Kunming City
Email: byxfjb@ynby.cn
Business Ethics Reporting Channels of Yunnan Baiyao
Tel: 0871-66203262Website: http://www.yunnanbaiyao.com.cn/
Party Building and Party Discipline Work Meeting
Party Building and Party Discipline Work Meeting
Code of Conduct for Business Ethics: https://www.yunnanbaiyao.com.cn/view/ynbyPc/1/46/view/5897.html
Anti-UnfairCompetition
Yunnan Baiyao strictly complies with the requirements of the Law of the People’s Republicof China Against Unfair Competition and rmly opposes unfair competition practices such asfalse advertising, monopolistic behavior, and infringement of trade secrets. The Company iscommitted to maintaining a fair, transparent, and healthy market competition environment,ensuring the authenticity and accuracy of market information, protecting intellectual property,and promoting fair competition to contribute to the sustainable development of the industry.As of the end of the Reporting Period, the Company itself had not engaged in any unfaircompetition and had not suffered any financial losses due to unfair competition or otherviolations.
In January 2024, Yunnan Baiyao held a Party building andParty discipline work meeting. The meeting conveyed thekey speeches of General Secretary Xi Jinping and thespirit of important meetings at the central and provinciallevels, with five grassroots Party organizations sharingtheir work experiences. The Group’s Discipline InspectionCommission Secretary summarized the work of 2023and outlined tasks for 2024. The Party Committee signedresponsibility statements with secondary units. The meetingemphasized that Party building leads the high-qualitydevelopment of Yunnan Baiyao, calling for adherence toParty leadership, focusing on “integration and inclusion,”and deeply understanding the connection between strictParty governance and corporate development. Underthe guidance of Xi Jinping’s Thought on Socialism withChinese Characteristics for a New Era, Yunnan Baiyao willimplement the requirement to promote development throughParty building, and drive the Company to new heights.
3536
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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Innovation-drivenExploration ofNew Horizons inTCMYunnan Baiyao has always inherited the culture of TCM,closely following the development trends of the industry,and focusing on product quality and innovation. We centerour e?orts on customer needs, promote inclusive healthcaredevelopment, collaborate with suppliers, and build asustainable supply chain to support the long-term healthygrowth of the Company.
3738
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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SustainabilityManagement
Yunnan Baiyao attaches great importance to the quality and safety of its products, alwaysconsidering them as the core foundation of the Company’s development. We are alwayscommitted to providing consumers with high-quality, safe, and reliable products.
Product Quality
QualityControl
Yunnan Baiyao strictly adheres to relevant laws and regulations, such as the DrugAdministration Law of the People’s Republic of China, the Regulations on the Supervisionand Administration of Medical Devices, the Supervision and Administration of DrugManufacturing, and the Good Clinical Practice (GCP). In 2024, the Company revised 52existing regulatory documents for drugs, medical devices, and other business categories.New internal systems were also added, such as the Annual Report Management Proceduresfor Drug Marketing Authorization Holders, the Management Procedures for Drug ProductionSites, and the Risk Assessment Operation Procedures for Drug Marketing AuthorizationHolders, ensuring that product quality remains compliant with market demands and industrystandards.The Company has established a quality management system that spans the entire industrychain, covering product R&D, production, sales, and other stages. This ensures that thequality and safety of our products are controlled throughout their lifecycles. Moreover,we have formed a dedicated technical quality management committee to enhance thequality and safety responsibilities across all business groups, and promote the systematicadvancement of technical quality efforts in every business group, thereby ensuring thee?cient implementation of our industry-wide quality management system. In 2024, YunnanBaiyao invested approximately RMB 579,100 in quality improvement projects
.In 2024, the Pharmaceutical Business Group of Yunnan Baiyao formed a “5P (GAP, GLP,GMP, GSP, and GVP)” integrated quality management model based on the entire industrychain to improve the industry’s quality ecosystem. In June 2024, the GLP center of theYunnan Baiyao Institute of Materia Medica successfully passed the regular review by theNational Medical Products Administration (NMPA), meeting the requirements of the qualitymanagement system.
In 2024, Yunnan Baiyao’s business groups conducted quality audits to ensure the continuede?ectiveness of quality risk management.
In 2024, Yunnan Baiyaoinvested approximatelyRMB
579,100
in quality improvementprojects
In 2024, Yunnan Baiyao continued to strengthen its quality risk management e?orts, closelymonitoring potential quality risks in processes and adopting proactive or retrospectiveapproaches for e?ective control. At the same time, the Company regularly conducts internaltesting and preventive testing for potential risks, formulating risk mitigation measures forbusiness development as needed to fully ensure the safety and e?ectiveness of products.During the Reporting Period, the Company performed comprehensive assessments of thepossibility and impact of quality risks, determining their risk levels. Based on these risklevels, we took appropriate control measures, and evaluated the effectiveness of thesemeasures continuously until the risks were reduced to an acceptable range.
Quality RiskManagement
Quality AuditsVision
Quality Mission
Quality Guideline
Policy, Mission,and Vision of Product Quality
Making Quality a Part of Yunnan Baiyao Employees’ DNA
Honoring Quality and Integrity, Inheritingand Innovating, and Striving for Excellence
Quality and Customer First
Risk LevelControl Measures
“Very Low” or “Normal”To maintain the current risk management level
and continue to monitor the risk“High,” “Very High,” or“Extreme”
To communicate with relevant parties in a timely
manner and propose targeted risk control measures,
such as reducing, avoiding, or transferring the riskInherent risks that cannotbe resolved
To develop emergency or preventive measures and
implement them with approval from department
heads and quality managers
The Pharmaceutical Business Group underwent regular quality management systeminspections by the drug regulatory authority every year. In 2024, the BG underwent 5audits by the regulatory authority, successfully completing all rectications and passingthe audits.The Health Products Business Group conducted inspections based on the InspectionPoints and Judgment Principles for Cosmetics Production Quality ManagementSpecifications and the Code of Practice for Quality Management in the Production ofCosmetics. It conducted a thorough review over the quality management systems atits manufacturing sites for compliance, integrity, adequacy, and e?ectiveness. Also, theHealth Products Business Group organized department managers to review the qualityobjectives from the previous audit cycle and set new quality objectives for the next cycle.During the audit, 11 non-compliance items were found, all of which have been rectied.In 2024, Yunnan Pharma conducted 5 internal quality audits, including bothcomprehensive and specialized internal audits, focusing on various elements of theCompany’s quality management system. The audits identied 5 deciencies, all of whichhave been rectied on time. Furthermore, the Company underwent 9 external audits, 4of which were regulatory audits and 5 were conducted by business partners. During theregulatory audits, 16 deciencies were identied, all of which have been rectied.
PharmaceuticalBusiness Group
YunnanPharma
HealthProductsBusiness
Group
This data covered the Yunnan Baiyao Pharmaceutical Business Group and the Yunnan Pharma.
3940
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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SustainabilityManagement
During the 47
thNational “QualityMonth” in September 2024, inresponse to the “Theme Activity of2024 Household Expired MedicineCollection and Rational Medication,Environmental Protection in YunnanProvince” jointly organized by theMedical Products Administration ofYunnan Province, the Departmentof Ecology and Environment ofYunnan Province, and the HealthCommission of Yunnan Province,Yunnan Baiyao’s 13 stores totallycollected more than 300 boxes ofexpired household medicines ato?ine event sites, contributing to thespread of drug knowledge.
Activity of Household Expired Medicine Collection and Rational Medication
Expired Medicine Collection Activity
Yunnan Baiyao considers quality awareness and culture construction as one of its core tasks.In the new employee orientation training, the Company has added a mandatory course onquality culture to cultivate quality awareness from the onboarding and help new employeesdeeply understand the critical role of quality in the Company’s development. Throughout theyear, the Pharmaceutical Business Group, Health Products Business Group, and YunnanPharma organized a total of 395 quality training sessions, effectively improving employees’understanding of the importance of quality and their practical capabilities. Yunnan Pharmaalso actively organized employees to participate in the “Speak Out Your Voice on Quality”theme activity during Quality Month, encouraging employees to share their views on qualityin the Baiyao Forum, thereby stimulating employees’ enthusiasm for participating in qualitymanagement.
QualityCultureConstruction
ProductRecall
Pharmacovigilance
Yunnan Baiyao conducts pharmacovigilance through two main channels to promoterational drug use among the public. In addition, the Company organizes activities likethe “Drug Safety, Ensured by Laws” campaign to educate consumers on how to readdrug instructions and use medications safely, and introduces the “Jingjie Xiao’an”app to spread medication safety concepts. The Company also participates in thepublic awareness campaign themed “Join ‘Seven Entries’ to Build Defense Together,”informing community residents about adverse drug reactions, medical device adverseevents, and preventing drug abuse, while also standardizing the disposal of expiredhousehold medicines to prevent drug abuse and environmental contamination.
Yunnan Baiyao strictly follows the Drug Administration Law of the People’s Republic ofChina, the Measures for the Administration of Drug Recall, and other relevant laws andregulations. The Company developed the product recall management systems such asthe Drug Recall Management Procedure and the Disposal Management of Drug SafetyIncidents. We categorized and graded the reasons for product recalls and developeddetailed recall plans accordingly. Then, appropriate measures were taken for the recalledproducts. Yunnan Baiyao also regularly conducts product recall drills to ensure thatemployees are familiar with the recall process and evaluate its e?ectiveness, ensuring thatin the event of an actual recall, the process is completed in a timely and orderly manner.During the Reporting Period, Yunnan Baiyao did not initiate any product recalls.In 2024, the Company’s Pharmaceutical Business Group regularly organized mock recalldrills, which helped employees become familiar with the recall process and assessed itse?ectiveness. This ensured that in the event of an actual recall, the relevant work could becompleted accurately, efficiently, and in an orderly manner. During the Reporting Period,we conducted a mock recall drill of Pudilan Anti-inammatory Tablets, and the assessmentresults were satisfactory. We also conducted a mock recall drill, selecting two types ofproducts: a batch of toothpaste (Yunnan Baiyao Toothpaste - Spearmint Type) and a batchof cosmetics (Yangyuanqing Anti-hair Loss Shampoo). The recall team developed a recallplan based on investigation and evaluation, and by checking sales records, conrmed theexpected quantity for recall, and notied distributors to stop selling and shipping. After therecall report from distributors was submitted, the recall team compared it to the expectedquantity and successfully completed the mock recall.
Yunnan Pharma
Times
Yunnan Pharma
1,252
Person-times
190.5
Hours
Pharmaceutical BG
Times
Pharmaceutical BG
5,324
Person-times
Health Products BG
Times
Health Products BG
7,121
Person-times
Quality and Safety Training
Annual Employee Quality Training Sessions
Annual Employee Quality Training Attendees
Annual Employee Quality Training Hours
Yunnan PharmaPharmaceutical BG
6,517.03
Hours
Health Products BG
253.7
Hours
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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In 2024, Yunnan Baiyao regards R&D innovation as the core driving force for sustainabledevelopment, continuously expands into cutting-edge technological fields, closely followsglobal pharmaceutical R&D trends, and deepens its innovative layout. We continueto improve our product R&D pipeline and strengthen intellectual property protection,empowering health with science and technology, and relentlessly working to protect life andhealth.
R&D Innovation
R&DInnovationManagement
Yunnan Baiyao always focuses on closely integrating R&D management with practicalR&D activities, and continuously improving its unique R&D management system. TheCompany has implemented six core management systems, including the Specication onManagement of Entrusted Scientic Research Project Funds, the Management Measuresfor Internal Entrusted Research in Yunnan Baiyao Group’s R&D Projects, and the Measuresfor Management of R&D-type Governmental Projects in Yunnan Baiyao Group’s CentralResearch Institute, to promote the e?cient management and collaborative operation of R&Dprojects. In 2024, the Company invested approximately RMB 348 million in R&D.In 2024, Yunnan Baiyao built a di?erentiated R&D platform, steadily advancing the work ofmajor centers. The Company further claried the roles of its existing four R&D centers andactively promoted the construction of the Wuxi and U.S. R&D centers. These platforms drivecontinuous innovation and breakthroughs of the Company in R&D.R&D PlatformDevelopment
Yunnan Baiyao has taken a number of measures in terms of R&D talents and actively builtan innovative R&D system that is compatible with the Company’s strategic development.During the Reporting Period, Yunnan Baiyao further increased its e?orts in building a teamof high-level R&D personnel specializing in TCM and innovative drugs, with the aim ofcontinuously attracting and cultivating top-notch R&D talents in the pharmaceutical field,injecting a continuous stream of impetus into the company's innovative development. In2024, Yunnan Baiyao had a total of 619 R&D personnel, accounting for 6.67%.
R&D TalentIntroduction
Yunnan Baiyao strengthens R&D investment and talent development, continuously enhancescore competitiveness and drives both technological innovation and product development byadopting a diversied model including independent R&D and cooperative development.R&D InnovationPractice
Yunnan Baiyao’s technological innovation projects span drug design, clinical trials, drugsafety assessments, and more, aiming to accelerate the R&D process and improve successrates.TechnologicalInnovation
Tianjin R&D Center
Shanghai R&DCenter
Positioning of the Four Existing R&D Centers
Kunming R&D Center focuses on the R&D of TCM materialsand natural drugs, striving to build an integrated R&Dplatform that combines internal research and externalsharing. The GLP center passed national re-inspectionand successfully carried out various validations and trialoperations, providing strong support for steady projectadvancement and normal operations.
Tianjin R&D Center focuses on the R&D and transformationof radiopharmaceuticals, working to improve radiopharma-ceutical R&D e?ciency and build its own R&D capabilities.The center completed its relocation and officially startedoperation in 2024, providing new technical support and R&Dplatforms for innovation in the radiopharmaceutical eld.
Shanghai R&D Center specializes in innovative drugs(chemical and biological drugs), establishing a specializedR&D experimental center with early-stage R&D and small-scale process development as its core capabilities. Thiscenter is expected to start operations in the rst half of 2025,providing strong support for the R&D of innovative drugs.
Launched in 2024, Beijing Center for High-ThroughputComputing uses big data and AI computational power tobuild a target discovery and drug optimization platform. Thecenter continuously improves the target discovery process,and supports drug design and optimization. It has integrateda comprehensive set of public and internal databases, andcreated the world’s largest single-cell transcriptomic dataset.
4241
Kunming R&DCenter
Beijing Center forHigh-Throughput
Computing
Education Background Structure of R&D Talents
Belowundergraduatelevel
Undergraduate
Master’s degree
Above master’sdegree
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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4443
Key Technological Innovation Initiatives of Yunnan Baiyao
Quickly screen keytechnology projectsto prepare for theannouncement
Complete theexperiment for theprocess research onformula granules
Add the extract ofYunnan Baiyao tothe list of toothpasteingredients
Continuously promotecollaborative projectson skin-beautifying andanti-aging technologies
In the eld of TCM modernization, Yunnan Baiyao actively promotes the deep integration ofTCM and modern technology. By employing advanced scientic and technological methods,the Company undertakes in-depth research and development of TCM products.ProductInnovation
In 2024, we further advanced a series of innovative drug projects such as Pan-Panax notoginseng Tablets, Fuqi GuibenOintment, and classic large-scale varieties like Gongxuening and Qixuekang. These drugs have signicantly improved interms of e?cacy and safety, providing patients with more high-quality treatment options.
R&D of Innovative TCM
Pan-Panax Notoginseng Tablets
Qixuekang Oral Liquid
Fuqi Guben Ointment
Gongxuening Capsule
Pan-Panax notoginseng Tablets are a new TCM syndrome-based drug withthe Company’s own intellectual property rights. The Phase II clinical trial ofPan-Panax notoginseng Tablets is progressing smoothly. As of the end of theReporting Period, a total of 578 participants had been enrolled, achieving 82%of the enrollment target.Fuqi Guben Ointment is the first syndrome-based new drug. The Companyo?cially launched the Phase III clinical trial of Fuqi Guben Ointment in 2024.It also completed the preliminary preparation and review of materials for thePhase III clinical trial, submitted communication materials to the Center forDrug Evaluation (CDE), and advanced the project steadily.
The Company has achieved signicant clinical research results in the eld ofcardiac and vascular health. Data from 109 participants showed that QixuekangOral Liquid can effectively improve endothelial function and hypertension.The research ndings have been presented at professional conferences andpublished in SCI journals.
Currently, Yunnan Baiyao has completed the closing meeting for its multicenterclinical study on reducing post-abortion bleeding. The Company has initiateda clinical study on reducing vaginal bleeding after medical abortion and hasenrolled 65 subjects. Furthermore, the Company has completed 12 studieson the safety and toxicology of animal pharmacokinetics, pharmacology, andtoxicology.
Innovative TCMand SecondaryDevelopment Projects
●The Companyconducted theprocess researchon formula granulesof 100 varieties,successfullycompleted theexperimental workon all 100 varietiesand preparedrelated researchreports.
●The Companyconducted researchon the project titled“Add the extract ofYunnan Baiyao tothe list of toothpasteingredients,”providing technicalsupport for theGroup’s productinnovation in thehealth productseld.
●The Companycompleted tworesearch projects,including thestudy of anti-aginge?ects of naturalplant extracts andthe molecularmechanismresearch ofParis fargesiiextracts, whichfurther advancedthe Company’stechnologicalinnovation in therealms of skinbeauty and anti-aging.
●The Companyis committed toconstructing a keytechnology projectfor high-throughputanalysis of naturalsmall moleculesfrom Yunnan’sunique plants andAI-assisted rapiddrug screening. Theproject is currentlyprepared for theannouncement,helping enhance theCompany’s industryvisibility.
4546
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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In the eld of radiopharmaceutical R&D, Yunnan Baiyao keeps up with international technological advancements and activelydevelops new targets in nanobody and cyclic peptide radiopharmaceutical pipelines, quickly advancing radiopharmaceuticalresearch projects.
Transdermal preparations are a type of topical medication that delivers drug components through the skin. Yunnan Baiyaocurrently has ve transdermal formulations under R&D, with one entering clinical trials and another to be led for clinicaltrials. These would o?er patients a more convenient and comfortable therapeutic experience.
INR101 Injection Diagnostic Radiopharmaceutical Project
Flurbiprofen Cataplasms
INR102 Therapeutic Radiopharmaceutical Project
Loxoprofen Sodium Cataplasms
The chemical Class 1.1 innovative radiopharmaceutical diagnostic drugfor PET imaging of PSMA-positive lesions in prostate cancer patients hassuccessfully completed its Phase I/IIa clinical trial, finishing about 1 monthahead of schedule. Clinical results have demonstrated its excellent stabilityand safety.
The Company has successfully obtained the clinical trial approval andinitiated the clinical study, which has also completed the preclinical trial phase.Significant progress has been made in the development of transdermalformulations, with the formal clinical trial expected to commence in 2025.
The Company started non-clinical research for INR102 two months aheadof schedule, successfully completing pre-IND communications and o?ciallystarting IND preparation. Also, the IIT study was completed, with 10 subjectsenrolled and the rst dosing cycle completed.
The preclinical research has been completed, and the Company plans tostart clinical trials in 2025. It is expected to provide a new treatment option forpatients with pain.
Radiopharmaceutical
R&D
TransdermalPreparations
R&D
Yunnan Baiyao has launched a series of medicaldevices related to medical treatments, including thesmart non-invasive electroacupuncture instrument andstroke rehabilitation treatment device. The Companyhas completed the rst registration/ling of four medicaldevices and continued registration for eight medicaldevices, supporting the processes of diagnosis,treatment, and rehabilitation.
Medical Device R&D
In 2024, Yunnan Baiyao launched 10 newproducts, including five micro-innovationproducts (such as the Acupoint Stimulator3C/3E, Pain Relief Instrument 2C/2E, andTherapeutic Electrodes with EnhancedFunctions) and ve new products (such asthe Fuyang Juanbi Pack, Mid-frequencyPulse Therapy Device 2 types, and twonew versions of the simulated massagedevice for neck and waist). The launch ofthese products highlights the Company’songoing efforts to continuously innovateand optimize its product line, driving thedeep integration of technology and marketdemand.
Development of New Medical Devices
Development Matrix for New Medical Devices
PromotingIndustryProgress
In 2024, Yunnan Baiyao actively promoted the integration of industry, academia, andresearch, aiming to foster close cooperation within the industry and enhance technologicalinnovation capabilities. Through high-level expert exchange activities and strengtheningcross-disciplinary strategic cooperation, the Company has achieved significant results indriving pharmaceutical R&D innovation while expanding its presence in the industry.
“HuanzhangForum”
IndustryAssociations
In 2024, Yunnan Baiyao successfully hostedsix sessions of the “Huanzhang Forum,”inviting top Chinese and international experts,including Kong Fanpu, former Director of theCDE, to discuss cutting-edge areas such aspharmaceutical evaluation, medical devices,TCM, and radiopharmaceutical R&D. The“Huanzhang Forum” serves as an importantplatform for Yunnan Baiyao’s medical researchexchanges, o?ering opportunities to learn aboutfrontier scientific innovations and introducebreakthrough technologies and projects.
Yunnan Baiyao’s subsidiary, YunhePharmaceutical (Tianjin) Co., Ltd., joinedthe Radiopharmaceutical Branch of ChinaIsotope & Radiation Association and servesas a vice-chairman unit. Yunnan Baiyao alsojoined the Pharmaceutical Affairs ManagementProfessional Committee of the ChinesePharmaceutical Association and establishedclose cooperation with the China Association ofGerontology and Geriatrics.
Initiatives Related to Industry Development
“Huanzhang Forum” Exchange Session
First Board Meeting ofRadiopharmaceutical Branch of China
Isotope & Radiation Association
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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University-EnterpriseCooperation
Yunnan Baiyao collaborates with theAcademy of Military Medical Sciencesand Qinghai University to conduct clinicalstudies on the high-altitude adaptabilityof Qixuekang. The trials, conducted inlocations such as Golmud, Nagqu, andBaingoin, demonstrated that Qixuekangsignificantly improved the high-altituderesponse of participants.
On September 5, 2024, Yunnan Baiyao’s national drug standard revision for Panaxnotoginseng achieved signicant progress, marking the announcement of the draft revisionto the Pharmacopoeia Standard for Panax notoginseng. Through collaborations withinstitutions such as the Yunnan Provincial Institute for Food and Drug Administration,Kunming University of Science and Technology, and Yunnan Hongxiang Chinese MedicineTechnology Co., Ltd., Yunnan Baiyao strengthened its leadership in standards and quality,promoting in-depth research and standardization of Panax notoginseng cultivation,harvesting, and processing.
Completion of Clinical Trial on“Qixuekang Oral Liquid’s Acute
High-Altitude Adaptability”
Ethics inMedicalTechnology
IntellectualPropertyProtection
Yunnan Baiyao strictly adheres to a series of scientic ethics standards to ensure that allresearch activities comply with ethical standards. These include, but are not limited to, theDrug Administration Law of the People’s Republic of China, the International Council forHarmonisation’s E8 (R1): General Considerations for Clinical Studies, ICH-GCP, the DrugClinical Trial Management Regulations, the World Medical Association’s Declaration ofHelsinki, the Technology Ethics Review Measures (Trial), the Opinions on Strengthening theGovernance of Scientic and Technological Ethics and the Ethical Review Measures for LifeSciences and Medical Research Involving Human Subjects.
Yunnan Baiyao recognizes that intellectualproperty protection is the core support for theCompany’s long-term competitiveness. TheCompany adheres to international standardsand complies with relevant laws such asthe Patent Law of the People’s Republic ofChina and the Trademark Law of the People’sRepublic of China, continuously improving itsintellectual property management system. In2024, the Company formulated the IntellectualProperty Management System, which clearlydenes the application process, maintenancemeasures, utilization strategies, and protectionmechanisms for the Company’s intellectualproperty. Aside from that, the Company’sMedical Devices BU completed the CQMintellectual property management systemcertication in 2024.At the same time, in response to 25 trademark applications that are similar to the Company'strademarks "Yunnan Baiyao" and "Yangyuanqing," Yunnan Baiyao actively took legal action.A total of 40 trademark cases were successfully concluded within the year, with a successrate of 77.5%. As of the end of the Reporting Period, Yunnan Baiyao had obtained a total of73 software copyrights.
On November 13, 2024, the Shanghai Center ofthe Central Research Institute of Yunnan Baiyaoorganized a training session on GCP basicknowledge and key ethical regulations to enhanceemployees’ understanding and application ofscientic ethics standards.
Training on GCP Basic Knowledge and Ethical Regulations
During the Reporting Period,
no
violations of scienticethics occurred.
Certicate of the CQM IntellectualProperty Management System forMedical Devices BU of Yunnan Baiyao
Invention patents
Design patents
Utility model patents
During the Reporting Period,
IndicatorsUnit2024 Data
Patent Application Quantity
Invention PatentsPatents55Utility Model PatentsPatents39Design PatentsPatents4Patent Authorization Quantity
Invention PatentsPatents33Utility Model PatentsPatents18
Design PatentsPatents4Expenses from Intellectual Property DeclarationRMB1,789,669Expenses from Intellectual Property Disputes and ArbitrationRMB1,300,000
Intellectual Property Related Data
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Yunnan Baiyao always places the customer rst, safeguards their legal rights and strivesto provide an excellent service experience. Through strengthening customer servicemanagement, practicing responsible marketing, ensuring customer privacy and security,and other measures, the Company continually optimizes its service quality. Also, we work toimprove healthcare accessibility, striving to ensure all customers have access to high-qualityand a?ordable medical services.
Customer Service
CustomerRelationshipManagement
Yunnan Baiyao follows the Customer Response Management System to standardizethe process for handling customer complaints, ensuring that customer complaints arefollowed up and resolved effectively. In accordance with the Internal Communication andHandling Mechanism for New Product Complaints of Yunnan Baiyao, the Company speedsup the resolution of customer complaints, actively responding to customer feedback,and continuously improving service quality. In 2024, Yunnan Baiyao provided a varietyof communication channels for customers. During the Reporting Period, all customercomplaints have been e?ectively resolved.
Pharmaceutical CustomersHealth Product Customers
Customer Complaint Channels
Customer Complaint Handling Process
Manufacturers
Retail StoreCustomersMedicalInstitutions
Customer TypeProcessesTarget and Outcome
Receive complaints, classifyand evaluate, investigate,formulate solutions, respondto the customer, summarizeand le, follow up.
Receive complaints, record, analyze,process and reply, summarize and le.To establish dedicated teams,maintain complete records,conduct rapid categorization andassessment, conduct objectiveinvestigations and developfeasible solutions, and implementtracking and revisit to ensure thesatisfaction of medical institutions.
To timely reassure the manufacturers, and if necessary,transfer the matter to the relevant departments. Tocontact the manufacturers within 24 hours and, inspecial circumstances, complete the handling withina maximum of 3 days. To ensure that the complaintdocuments are fully archived.Medicines are non-returnable and non-exchangeableonce sold (except in cases of quality issues). Pricecomplaints require verication of market basis, andreturns and refunds will be considered for those thatmeet the criteria.
Yunnan Baiyao’s customer satisfaction efforts focus on both medical institutions andmanufacturers. For medical institutions, we conduct satisfaction surveys through questionnaires,face-to-face meetings, and phone interviews. The survey covers areas such as order response,product variety fulllment, delivery timeliness and accuracy, and customer service quality. Duringthe investigation process, we select the subjects and communicate with the relevant functionaldepartments, develop and implement an investigation plan. After collecting the issues, wecoordinate solutions with all parties involved. Finally, we provide feedback to the customersand follow up through revisit. For manufacturers, we periodically select strategic or potentialmanufacturers and assess their satisfaction through the form of questionnaire surveys. Feedbackmainly focuses on supplier needs, authorization cooperation, and retail store service, with overallpositive feedback.
CustomerSatisfaction
ResponsibleMarketing
In 2024, Yunnan Baiyao implemented the Marketing Service Procurement ManagementMeasures of Yunnan Baiyao Group (Provisional) and the Brand Trademark Authorization and UseManagement Details of Yunnan Baiyao Group (Trial) to internally regulate responsible marketing,ensuring that marketing procurement projects follow established systems, reducing operationalrisks of the Company, and ensuring compliant procurement activities. The Company also adjustedand revised the endorsement and authorization process for five brand trademarks to reduceoperational risks and ensure compliance and responsibility in marketing activities.Yunnan Baiyao’s advertising compliance approval process includes brand material consultation,internal advertising release applications, WeChat brand zone release applications, etc., ensuringall advertising activities comply with industry regulations. To ensure marketing activities align withindustry norms and policy requirements, the Company organized multiple industry-related policytraining sessions during the Reporting Period. These sessions covered topics such as regulatoryrequirements in the pharmaceutical sales sector, medical insurance fraud cases, and more,helping employees stay informed about industry trends. In 2024, the Pharmaceutical BusinessGroup organized 17 training sessions on marketing compliance for management personnel, newemployees, and key positions, with nearly 1,800 participants, reinforcing compliance awarenessamong marketing sta?. In accordance with the Company’s tiered talent training strategy and talentdevelopment plan, the Pharmaceutical Business Group has carried out a series of responsiblemarketing trainings in the development of a talent capability model to provide high-quality servicesto customers and to ensure that employees are well-versed in marketing standards, terminology,and product knowledge related to quality, business ethics, and responsible marketing.In addition, the Company pays close attention to trademark registration issues to prevent unfaircompetition due to trademark infringement. Yunnan Baiyao actively defends its interests andensures fair competition, taking a “zero-tolerance” approach to infringement of its trademarks. In2024, the Company led lawsuits against several online stores for infringing on its trademarks,with 88 cases concluded, totaling RMB 10 million in litigation costs.
5049
●Including Customer Service Department, SalesDepartment Sta?, Contracted Manufacturers,Medical Institutions, etc., or via consumerhotline, letters, faxes, and the internet. Duringthe Reporting Period, all customer complaintshave been e?ectively resolved.
●Customer Response Center, Portal Website,WeChat O?cial Account, National 12315Internet Platform, and ODR BusinessProcessing Channels.
Customer TypeProcessesTarget and Outcome
●Service-related complaints: receive,reassure, record, investigate,apologize, discipline, and le.
●Price and refund-related complaints:
receive, reassure, record, process,and le.
5152
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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InformationSecurityand PrivacyProtection
Yunnan Baiyao continues to enhance its information security management capabilities, e?ectivelyprevents information leaks and privacy risks, and safeguards customer trust and security.
InformationSecurity
PrivacyProtection
The Company strictly adheres to all relevant laws and regulations regarding information and datasecurity in the regions where we operate. These include the Cybersecurity Law of the People’sRepublic of China, the Personal Information Protection Law, the Data Security Law, and the Lawof the People’s Republic of China on the Protection of Consumers’ Rights and Interests. In 2024,we developed the Data Security Management Measures of Yunnan Baiyao Group Co., Ltd. (Trial)and the Management Measures for Personal Information Security of Yunnan Baiyao Group Co.,Ltd. (Trial), which clearly outline the security management requirements for critical processes suchas data classication, storage, transmission, and access, ensuring that data processing activitiescomply with laws and regulations as well as internal corporate policies to prevent the occurrence ofdata security incidents.
Yunnan Baiyao understands that protecting user privacy is the foundation of establishingtrust with customers. The Company strictly adheres to the Personal Information ProtectionLaw of the People's Republic of China and other relevant laws and industry standards, anddeveloped the Explanation on the Protection of Privacy of User Data. We are committed torespecting and protecting user rights, including access, correction, deletion, sharing, transferof personal information, and modification of consent, ensuring that user privacy is fullyprotected.
Yunnan Baiyao developed an emergency response plan and measures for information securityincidents, and outlined communication and reporting processes to respond effectively tounexpected events. In 2024, the Company did not receive any complaints regarding userinformation security.During the Reporting Period, Yunnan Baiyao regularly conducted information security tests andinspections, identified issues in advance, and took management and technical measures toreduce information security risks. In 2024, the Company conducted 30 information security riskassessments, including 26 penetration tests, 3 network attack-defense drills, and 1 level protectionevaluation, identifying and rectifying 97 security risks.
Information Security Governance Structure
Emergency Response Steps for Customer Privacy Breach Events
Name of the InstitutionFunctional PositionResponsibilities
Leading body
Control Body
Execution Body
Permanent VirtualOrganization
Overall planning, coordination, demandmanagement, inspection and evaluation, etc.Responsible for reporting on digital securitymanagement to the Company’s o?ce meeting,and conducting the Company’s digital securitymanagement work in accordance with thedecisions made.Responsible for implementing the relevantdecisions and work arrangements of theGroup.The team is composed of members from theDigital Security Execution Group according toactual needs. Its main responsibilities are torespond to, analyze, and handle informationsecurity incidents.
Data Governance andSecurity ManagementTaskforceDigital SecurityProfessional Group
Digital SecurityExecution GroupDigital SecurityResponse Team
To record the detailedinformation of theevent, including but notlimited to: the personwho discovered theevent, time, location,type and quantity ofpersonal informationinvolved, system nameof the event, impacton other connectedsystems, and whetherlaw enforcement andrelevant departmentshave been contacted.
To report the eventinformation in a timelymanner according to theEmergency ResponsePlan for CybersecurityIncidents, including thetype, quantity, content,and nature of thepersonal informationinvolved, the impact ofthe event, measuresalready taken orplanned, and contactinformation of relevantpersonnel.
To inform the a?ectedindividuals via email,letter, phone call,push notication,etc. If individualnotication is notfeasible, reasonableand e?ective publicalerts should beissued.
To assess the potentialimpact of the event,take necessary controlmeasures to containits development, andeliminate potential risks.
Yunnan Baiyao has built a strong informationsecurity defense through systematic training,adopting the “Specialized Training + FlexibleModel” approach. The Company organized fourspecialized training sessions during the year,training 768 employees in total. Each session lastedfor 8 hours, ensuring depth and thoroughness. Thetraining aimed to improve awareness of informationsecurity and customer privacy, while workingclosely with the cybersecurity team to integratesecurity culture through practical case studies,creating a solid “human defense” barrier for theCompany’s information security.
Information Security and Customer Privacy Training
The Company organized
specialized trainingsessions during the year
training
person-times in total
5354
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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HealthcareAccessibility
Yunnan Baiyao always regards safeguarding the health of patients as the core mission ofthe Company. We are dedicated to improving healthcare accessibility and view promotinginclusive healthcare as an important social responsibility. We focus on the health needsof various patients, and through innovative marketing channels and the establishmentof a modern warehouse logistics system, we ensure the supply of medical resources incities, rural areas, and remote regions across China. Meanwhile, we actively explore smarthealthcare solutions, providing more convenient and efficient medical services to a widerange of patients.
ScienticPlanning
Based on the healthcare needs of regional endpoints, the Company ensuresthat medical resources are reasonably distributed among regions, avoidingover-concentration in some areas and shortages in others.
PharmaceuticalSupply Guarantee
PharmaceuticalDistribution
Yunnan Baiyao is always committed toensuring the supply of medicines, witha particular focus on the stability ofkey varieties, such as drug shortages,drugs subject to special administration,and emergency medications.
The Company actively responds to customer urgent needs, providing e?cient emergencydistribution services to medical institutions at all levels across the Yunnan province. In2024, Yunnan Baiyao successfully completed 2,531 emergency deliveries. To improve thee?ciency of emergency deliveries, the Company optimized several aspects:
Supply Assurance Initiatives and Performance of Various Medicines
DrugShortages
Drugs Subject
to SpecialAdministration
EmergencyMedications
We have implemented a dynamic monitoring and timelyupdating mechanism to ensure that the management ofnational and provincial shortage drug lists reaches anefficiency rate of 99% and 90%, respectively. In case thatimmunoglobulin supply is tight, we have established solidpartnerships with 15 manufacturers, successfully increasingthe 2024 purchase volume by 26.6%.This category includes 35 varieties and 51 specifications,including narcotic drugs, Class 1 psychotropic drugs, andcontrolled chemicals. We have achieved a near 100% supplyrate within 24 hours through an efficient supply guaranteesystem.Yunnan Baiyao has established a comprehensive inventorymanagement and emergency response mechanism toensure rapid resource allocation in emergencies. In 2024,the Company successfully completed 16 special demandorders. In the case of peritoneal dialysis liquid supply, wecollaborated with manufacturers to offer home deliveryservices, providing services to nearly 1,800 patients, with aquarterly cumulative delivery of 35,000 items.
To ensure su?cientsta? are on hand toexecute emergencyorders on a 7×24-hour basis.
To implement multi-warehouse collaboration,so that when the centralwarehouse has insu?cientinventory or is unable tooperate due to anomalies,the sub-warehouses canpromptly take over theemergency tasks.
To develop atransfer process tosupport multimodaltransportation,ensuring that ordersare fully traceablethroughout thedelivery process.
To integrate our own eet, third-partydelivery services, and public transportation(such as subways, high-speed trains,and airplanes), and provide su?cienttransportation resources for emergencyorders. As of the end of the ReportingPeriod, the Company had completed 102high-speed train deliveries, a year-on-year increase of 152.1%. Compared withfull-truckload emergency direct deliveryservices, the cost was reduced by 60%,and the timeliness was improved by 40%.
Strategic Planning for Healthcare Accessibility
Cooperationand Win-Win
SupplyOptimization
The Company strengthens the close cooperation and e?cient linkage betweenvarious terminal medical institutions, establishes and improves the cooperationmechanism, and promotes the sharing of resources and the complementarity ofstrengths.
To ensure the safety and efficiency of the drug supply chain, the Companycontinually improves the drug traceability management system, drug operationmanagement platform, and SPD logistics system, ensuring the timely supply,accuracy, and safety of drugs, which effectively reduces medical risks andpromotes the continuous improvement of overall healthcare services.
E?cientManagement
The Company is dedicated to establishing chronic disease managementcenters, cancer prevention and treatment centers, and kidney disease patientmanagement initiatives. By leveraging advanced information systems, we aim tosignicantly enhance patient health management and support the developmentof related centers across numerous counties and cities, thereby expandingthe reach of medical services and elevating their quality. Also, we are activelypromoting the e?ective implementation of the “Intelligence Platform for Dian YiBao County Medical Community Grassroots Management” at the grassrootslevel, assisting nearly 317 grassroots medical institutions in advancing theirinformation management capabilities.
5556
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Yunnan Baiyao is committed to building a responsible and sustainable supply chain system. Througha comprehensive supplier lifecycle management system, the Company clearly defines suppliers’responsibilities in environmental protection, labor management, data security, and business ethics,steadily advancing high-quality development in the value chain to achieve a win-win situation for allparties involved.
Supply Chain Management
SupplierManagementSystem
Yunnan Baiyao strictly adheres to relevant laws and regulations, such as the Product Quality Law ofthe People’s Republic of China, the Tendering and Bidding Law of the People’s Republic of China, theDrug Administration Law, the Measures for the Supervision and Administration of Drug Manufacturing,the Code of Practice for Quality Management in the Production of Cosmetics, and the Measures forCosmetics Registration and Filing Management. The Company continues to update various suppliermanagement and procurement-related rules and regulations, such as the Procurement ManagementManual of Yunnan Baiyao Group (Trial), the Procurement and Bidding Implementation Details ofHealth Products Business Group of Yunnan Baiyao Group (Trial), and the Legal and ComplianceDaily Procurement Management Rules (Version 2024). The Company has also successfully launcheda group procurement platform and supplier management portal systems to fully digitize processes,including supplier access, bidding evaluation, and performance management.In 2024, Yunnan Baiyao, driven by project management, delved deeply into several key areas such assupplier management, process optimization, carbon emission control, introduction of new technologiesand materials, and risk management. The Company introduced the PILOT Leading Model
, combinedwith the actual operational conditions at present, and accurately focused on five core directions:
procurement, inventory, operations, logistics, and technology. It formulated and rened managementstrategies and performance evaluation indicators that match these areas, thereby laying a solidfoundation for the e?cient operation and sustainable development of supply chain management.
Supplier Access and
Classication
SupplierAssessment and
Evaluation
Supplier Audits
The Company develops corresponding supplier access requirements according tobusiness needs across six major procurement committees, including production, dailyoperations, branding, digital, pharmaceutical materials, and engineering. Suppliers areselected based on quality, cost, delivery, and service criteria.The Company conducts semi-annual and annual supplier evaluations and acomprehensive performance evaluation from dimensions such as quality, cost, service,after-sales, technology, and innovation. Suppliers with poor performance are urged tomake rectications and track the e?ectiveness until the rectications are completed.Meanwhile, an efficient appeal mechanism has been established. If suppliers haveany objections to the assessment results, they may submit their concerns through thedesignated appeal channels. Upon receipt, we will process the appeal promptly andprovide feedback.The Company conducts work in accordance with the supplier audit plan. Based onthe audit results, it jointly compiles the Supplier On-site Audit Assessment Report withthe suppliers to analyze the main issues and propose corrective actions. It also urgessuppliers to complete the rectications on time to meet compliance requirements.As of the end of the Reporting Period, Yunnan Baiyao has completed on-site audits of30 suppliers in the pharmaceutical category, 17 in the health product category, and 4 inthe TCM resources category.
Supplier Management System
To strengthen management and awareness regarding integrity within supplier partnerships,the Company has added integrity clauses to procurement contracts, requiring all newsuppliers to sign contracts with procurement regulations. At the same time, the Companyensures the protection of small and medium-sized enterprise investors’ rights, strictlycontrolling the project payment cycles, and ensuring that there are no overdue payments inbusiness transactions. As of the end of the Reporting Period, 100% of supplier procurementcontracts had been signed.
In 2024, Yunnan Baiyao focused on upstream supply chain innovation, upgrading its supplierportal, and developing a new SRM
system. Through visualized interaction, it facilitatesinformation sharing and integrates big data and AI technologies to build price forecastingmodels. The Company introduced item-specic traceability and connected the productionsystem to advance quality control, significantly enhancing production efficiency, resourceutilization, and sustainable development capabilities.
IndicatorsUnit2024
Total SuppliersQuantity
Suppliers in Yunnan ProvinceQuantity
Suppliers (in other provinces and regions in ChineseMainland except Yunnan Province)
Quantity
Overseas Suppliers (including Hong Kong, Macau, Taiwan)Quantity
Key SuppliersQuantity
Number of Suppliers for Yunnan Baiyao
SustainableSupply Chain
Yunnan Baiyao places great importance on the environmental and social risks associatedwith its suppliers. During the Reporting Period, the Company drafted the Supplier ESGManagement Manual, which systematically outlines the background, expected outcomes,objectives, and evaluation methods of the supplier ESG assessment project. Through theseevaluations, the Company encourages suppliers to improve their ESG performance, thusenhancing the overall sustainability and competitiveness of Yunnan Baiyao’s supply chain.As of the end of the Reporting Period, 80% of the products procured by the Company werecertied according to third-party environmental or social standards.
Refers to Performance, Innovation, Lean, Operational Excellence, Technology Enablement.
Supplier Relationship Management.
5758
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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ESG Management System of Suppliers
Environmental
Social
Governance
In 2024, Yunnan Baiyao conducted ESG evaluations for major suppliers with significant procurement amounts in bothpharmaceuticals and health products. With the evaluation, we identied and mitigated environmental, social, and governancerisks within the supply chain, ensuring supply chain stability. We regularly collect ESG data and reports from suppliers,track and analyze performance, and provide feedback and improvement suggestions to suppliers based on the evaluationresults. Outstanding suppliers are recognized and rewarded, while those who continuously fail to meet standards may havetheir orders reduced or face termination of cooperation. This encourages continuous optimization of the supply chain. Inaddition, Yunnan Baiyao continuously optimizes the content and methods of training to ensure that the outcomes of thetraining can e?ectively be translated into ESG improvement measures in suppliers’ actual operations, thus helping create agreener, more equitable, and more sustainable supply chain ecosystem. During the Reporting Period, Yunnan Baiyao did notexperience any time or nancial losses due to the impact of suppliers.
In January 2024, Yunnan Baiyao held its Annual Supplier Conference, with over170 supplier partners in attendance. During the conference, Yunnan Baiyao andits suppliers jointly issued a “Commitment on Sunshine and Green Procurement,”promising to jointly practice transparent procurement, ensure fair transactions,prioritize environmentally friendly and sustainable products and services, reduceenvironmental impact, and embrace the concept of sustainable development.
From May to October 2024, Yunnan Baiyao successfully organized on-site ESGtraining and exchange activities for six core suppliers in Kunming, covering 33% ofthe mainstream suppliers. This activity aimed to deepen suppliers’ understandingand practice of ESG concepts, share best practice cases through face-to-faceinteractions, and discuss how to effectively integrate ESG principles into dailyoperations, contributing to the overall sustainable development of the supply chain.
Annual Supplier Conference of Yunnan Baiyao Group
ESG Training and Exchange to Build a Path to Sustainable Development
ESG Exchange Session with Suppliers
Annual Supplier Conference of Yunnan Baiyao
GE
ES
●To develop and implement energy-saving plans to improve energy e?ciency.
●To prioritize the use of renewable energy or clean energy.
●To promote resource recycling and reuse to reduce waste.
●To manage water resources rationally to reduce water consumption and pollution.
●To measure and report greenhouse gas emissions.
●To set emission reduction goals and action plans.
●To ensure that production and operations comply with environmentalregulations and rectify violations in a timely manner.
●To comply with labor laws and regulations to protect workers’ rights, includingwork hours, wages, benets, and safety.
●To prohibit the use of child labor and forced labor.
●To adhere to the code of business ethics, and prohibit any form of corruption,fraud, and unfair competition.
●To provide a safe working environment and establish a sound occupationalhealth and safety management system.
●To regularly train employees on health and safety.
●To establish a sound corporate governance structure, including clearresponsibilities of the board of directors and decision-making mechanisms.
●
To conduct regular internal audits and risk assessments.
●To e?ectively manage the supply chain, ensuring that suppliers also meetESG requirements.
●To establish a supplier evaluation and supervision mechanism.
●To respect and protect the human rights of employees, and prohibit any formof discrimination and harassment.
●To support employees’ freedom of association and collective bargaining.
●To actively participate in the development and public welfare activities of thelocal community to promote its sustainable development.
EnergyManagementResourceManagementGreenhouseGas EmissionsEnvironmentalCompliance
Labor Rights
BusinessEthics
Health andSafety
CorporateGovernanceStructureSupply ChainManagement
Human RightsCommunityEngagement
5960
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
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Green Developmentfor DeepeningEcologicalCivilizationYunnan Baiyao always adheres to the concept of greendevelopment, integrating ecological civilization construction into theCompany’s development strategy. By actively addressing climatechange, implementing biodiversity conservation projects, optimizingenvironmental management systems, and rationally utilizingnatural resources, the Company continues to deepen its greendevelopment path and contribute to building a sustainable futurewhere humans and nature coexist in harmony.
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Addressing Climate Change
Yunnan Baiyao recognizes the profound impact of climate change on the global ecologicalenvironment and human health. As such, the Company has made “addressing climatechange” a cornerstone of its sustainable development strategy. In alignment with the national“dual-carbon” goals and its unique characteristics, Yunnan Baiyao adheres to relevantinternational agreements, including the United Nations Framework Convention on ClimateChange and the Paris Agreement. Furthermore, the Company references the frameworkand suggestions in the IFRS Sustainable Disclosure Standard No. 2 (IFRS S2) on Climate-related Disclosure, issued by the International Sustainability Standards Board (ISSB).Starting from four aspects, i.e. governance, strategy, risk management, metrics, and goals,we continuously improve the climate change governance system. We actively engage inthe identication of risks and opportunities related to climate change, and strive to meet thechallenges posed by climate change. While enhancing the Company’s adaptability to climatechange, we also contribute to the fullment of global climate goals.
ClimateGovernance
Yunnan Baiyao attaches great importance to climate change governance, continuouslystrengthening the management and monitoring of climate change issues, and graduallyundertaking tasks such as climate change strategy development, risk management, indicatormonitoring, and information disclosure. We also continue to enhance the supervision andsupport of climate change response e?orts, allocate resources reasonably and improve theCompany’s climate change governance.ClimateStrategy
Yunnan Baiyao fully understands the impact of climate change on the Company’s business,strategy, and finances. The Company is actively promoting the transition to a green andlow-carbon business model, intensifying e?orts to reduce carbon emissions, and enhancingresilience to climate change.Considering the Company’s operational situation, the characteristics of the TCM industry,and the concerns of stakeholders, from economic, compliance, reputational, and operationalperspectives, the Company actively identifies, evaluates, and manages the risks andopportunities that climate change may bring, laying the foundation for achieving climatechange-related goals.
Climate-related Risks and Countermeasures of Yunnan BaiyaoRisk TypeRisk DescriptionCountermeasures
Physical risk
Acute risks
Frequent occurrence of extreme weather such asoods, high temperatures and typhoons, which willlead to:
1. Power supply and water supply risks, increasing
the uncertainty of stable production and operationof Yunnan Baiyao.
2. The supply risk of TCM materials, which may
lead to the di?cult harvest of raw materials onschedule and the rise of drug prices.
3. Transportation risks, causing delays or
disruptions in transportation, which in turn a?ectthe upstream and downstream operations of theCompany.
4. Employee health and safety risks, which may
pose a threat to the health and safety of operatingemployees.
●To pay close attention to weatherforecasts and get extreme weatherinformation in time.
●To make a comprehensiveconsideration of retail and largesuppliers in the selection ofsuppliers, so as to ensure supplystability.
●To enhance the Company’semergency response capabilities forextreme weather conditions, conductemergency drills, and improveemployee safety awareness.
Chronicrisks
The gradual global warming and rising sea levels,which will cause:
1. The change of the growing environment of TCM
materials, which may a?ect the quality and e?cacyof TCM materials.
2. Global water quality changes and the emergence
of new pollutants, a?ecting normal production andoperations.
3. High temperatures are more frequent in the
summer, requiring more energy to regulate thetemperature for production and operations, whichleads to increased operating costs.
4. The risks of heatwaves, droughts, and res are
on the rise, which may lead to major accidents anddisruptions in company operations.
●To stay tuned for reports on warmingtrends, take actions to addressclimate change, and enhance theCompany’s resilience to climatechange.
●To conduct conservation researchon the important medicinal materialsinvolved in the Company’s business,understand their suitable growthconditions, carry out articialcultivation base experiments, andensure the quality of TCM materials.
●To implement energy-savingtechnological transformation projectsto improve the e?ciency of energysystems.
Transition
risks
Policy andlegal risks
Chinese and international regulatory authoritiesare imposing increasingly stringent requirementson the management of the Company’s greenhousegas emissions, with continuously rising standardsfor carbon emission control. This poses climatechange-related legal risks for the Company.
●
To continuously monitor changes inexternal policies and plan for climatechange response actions.
●To promote the Company’s low-carbon transformation and strive toachieve green operations and leanmanagement.The increasingly tight regulatory requirements forwild animals and plants at home and abroad willlead to restrictions on the use of TCM materialsand the normal supply of products.
●To carry out the substitution researchof medicinal materials to reduce theprobability of drugs being a?ected.
●
To plan for reservation andprocessing of key TCM materials inadvance.
6364
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Risk TypeRisk DescriptionCountermeasures
Transitionrisks
Policy andlegal risks
Carbon trading, carbon tax,environmental protection taxand other policies are graduallyimplemented. The Company willface increasingly higher costs in thecarbon market, which requires theCompany to continuously increaseits e?orts in energy conservationand emission reduction.
●To develop and utilize clean energy sources,such as photovoltaic power generation andother green electricity applications.
●To prioritize low-energy consumption andnew energy equipment when purchasingnew equipment.
●To conduct energy saving renovation of theexisting equipment.Regulators have higherrequirements for the accuracy ofenvironmental data declared byenterprises, increasing the pressureof environmental informationstatistics and compliance risks ofYunnan Baiyao.
●To enhance the Company’s digitalmanagement and strengthen its capabilitiesin data collection and analysis.
●To monitor important environmentalindicators in the process of production andoperation.
●To make information disclosure in strictaccordance with compliance requirements.
Technicalrisks
As the government pays moreattention to low-carbon matters,and requires enterprises to adoptenergy-e?cient equipment, cleanenergy, and low-carbon productiontechnologies, Yunnan Baiyao needsto invest more costs in low-carbonproduction and operation.
●To continuously promote the transformationto low-carbon and energy-savingtechnologies.
●To reduce low-carbon input costs throughoptimizing business processes and recyclingresources.
●To select more energy e?cient raw materialsand suppliers.
Marketrisks
The market has presented morepreference for low-carbon andenergy-saving companies andproducts, increasing the pressureon Yunnan Baiyao’s low-carbonproduction and operation.
●To study and judge the market trend, timelyadjust the business deployment.
●To carry out lightweight transformation ofpackaging materials to show the Company’sgreen awareness to consumers.
Reputational
risks
Stakeholders are paying closerattention to how companies respondto climate change. If Yunnan Baiyaofails to address such concerns in atimely and e?ective manner, it maylead to a decline in the Company’sreputation and impact its value.
●
To enhance communication withstakeholders to fully understand theiropinions and suggestions on the Company’sclimate change-related work.
●To disclose the Company’s progressactively and transparently in addressingclimate change, such as green packaging,sustainable procurement, and circulareconomy.
Opportunity TypeOpportunity Description
Energy Supply
Opportunities to improveenergy e?ciency
With the continuous introduction of low-carbon technologies, YunnanBaiyao can use emerging energy-saving processes to improve thee?ciency of resource and energy use in its production and operations,e?ectively reducing operational costs.Opportunities in CleanEnergy Utilization
China is advancing the construction of a new energy system and hasformulated incentive policies and measures to support enterprises instrengthening the use of clean energy. Yunnan Baiyao can respond to thenational energy strategy by actively deploying the use of clean energy,thereby reducing the costs associated with the Company’s low-carbontransformation.Products andServices
Opportunities in industrydevelopment
The growing concern and preference for green products and eco-friendlyfactories by both the government and consumers present an opportunityfor Yunnan Baiyao to enhance its market competitiveness by promoting itscommitment to sustainability.
While actively identifying and addressing climate change-related risks, Yunnan Baiyao also pays attention to thedevelopment opportunities that climate change may bring. The Company strives to seize these opportunities to blaze newtrails for its sustainable development.
Climate-related Opportunities for Yunnan Baiyao
“Biomass Gasication Gas and Natural Gas” Dual-Energy Centralized Intelligent Heating Projectat Qidian Raw Material Center
In 2024, the Qidian Raw Material Center constructed two 25-ton biomass gasification heating systems. The newlyestablished centralized intelligent heating platform allows the coupling of biomass gasication gas and natural gas tosupply heat. After the completion of the project, it is expected to save energy costs by RMB 8 to 10 million per year. Itwill e?ciently utilize about 53,400 tons of agricultural and forestry residues annually, reduce the use of standard coal by26,700 tons, cut carbon dioxide emissions by 69,000 tons, sulfur dioxide emissions by 226 tons, and nitrogen oxidesemissions by 197 tons, signicantly reducing the total greenhouse gas emissions from the Raw Material Center.
Biomass Gasication Gas Heating System at Qidian Raw Material Center
Climate RiskManagement
Yunnan Baiyao places great importance on the risks posed by climate change, particularlythe potential impact on the TCM supply chain. The Company identifies, assesses, andmanages climate risks. The Company implements climate risk management requirementsin its daily operations, continuously monitors climate risks that may be faced in the planting,harvesting, and storage of TCM materials, formulates preventive strategies and responsemeasures, and urges all functional departments and subsidiaries to implement the relevantwork. Moving forward, we will continue to improve our climate risk management system,build a management framework, and enhance the collection and analysis of greenhousegas emissions data. Based on these analyses, we will adjust our climate risk managementstrategies and work mechanisms to ensure the sustainability of key operational areas,including the supply of TCM materials and pharmaceutical production.
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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ClimateIndicators andGoals
Dual-Carbon Strategic Goals of Health Products BG of Yunnan BaiyaoAt the same time, the Company has been carrying out multiple carbon reduction measures,including energy conservation, emissions management, and the use of low-carbon rawmaterials. The Company continues to increase its investments in these areas, identifiesfurther carbon reduction potential, and contributes to achieving the national “dual-carbon”goals. Yunnan Baiyao will further strengthen its climate indicators and goal management,collaborate with upstream and downstream partners in the value chain to explore low-carbonemission reduction pathways, and jointly achieve a green, low-carbon transformation.
Low-CarbonEmpowermentfor a GreenJourney
In 2024, Yunnan Baiyao actively explored climate change response pathways, with theHealth Products Business Group serving as a pilot to develop carbon management targets,systems, and platforms. The Company’s climate change response commitments, carbonmanagement systems, and carbon reduction actions are being enhanced to improve theCompany’s overall climate change governance and create a comprehensive low-carbon andsustainable development strategy.ClimateCommitment
The Health Products Business Group developed the following climate change commitments,providing a clear framework for implementing the Company’s dual-carbon strategy:
Commitment Related to Climate Change:
ManagementSystem
To achieve climate commitments and improve carbon management, the Health ProductsBusiness Group implements the PDCA (Plan-Do-Check-Act) management concept. TheBG has developed the Carbon Management Manual of Yunnan Baiyao Health ProductsBusiness Group, which clearly defines the carbon management organizational structureand responsibility distribution, standardizes carbon emission data management processes,continuously improves carbon management performance and climate performance, andsupport the Health Products Business Group in continuously achieving the goal of carbonemission reduction.
To regularly identify climatechange risks and opportunities,scientically assess theirimpact on suppliers, and createa list of climate risks andopportunities.
Based on risk and opportunity assessments, todevelop special response plans, integrate climaterisk management into the Company’s overall riskmanagement system and ensure systematic andscientic management.
To regularly calculate greenhouse gasemissions, establish carbon reduction targets,and continually improve climate changemanagement and carbon reduction disclosures.
To consider the impact of climatechange on human health and identifyways the Company can mitigate orproactively address related issues.
Carbon Management Organizational Structure
Carbon Management Steering GroupCarbon Management Execution Group
Supply ChainOperation Center
Manufacturing Safety
and EnvironmentalOperation Center
Finance andEconomicManagementDepartment
HealthManufacturing
CenterHealth ProductInnovation Center
Health MarketOperation Center
Health Financial
ManagementDepartment
Health Human
ResourcesDepartment
2024 Greenhouse Gas Emissions of Yunnan Baiyao
Direct Greenhouse Gas Emissions (Scope 1)
Total Greenhouse Gas Emissions
Indirect Greenhouse Gas Emissions (Scope 2)
Greenhouse Gas Emissions DensityTons of CO
equivalent
Tons of CO
equivalent
Tons of CO
equivalent
Tons of CO
equivalent/Operating revenue ofRMB 10,000
15,079.39
78,503.70
63,424.31
0.020
To e?ectively supervise and continuously strengthen the governance of climate change andenhance emission reduction e?orts, the Company has launched a pilot project for carbonmanagement target planning and system construction within the Health Products BusinessGroup, as part of the overall Yunnan Baiyao Carbon Management Target Planning andSystem Construction. Based on its current carbon emission status and future developmentplans, the Health Products Business Group has set the dual-carbon strategic goals
of“achieving carbon peak by 2028; operational carbon neutrality and a 100% renewableenergy usage ratio by 2030; and value chain carbon neutrality by 2050.” The BG hasestablished clear indicators for responding to climate change and tracks key indicatorsannually to review and assess the Company’s progress in achieving its “dual-carbon” goals.
Basis for Selecting the Base Year and Target Year for Carbon Emission Reduction Goals: The year 2022 is dened as the base year for carbon targetsetting, as it is the rst year in which the Health Products Business Group has complete and accurate carbon emission accounting data. In conjunctionwith the national dual-carbon goals timeline and decarbonization pathway planning, the short-term target year is set for 2030, and the long-term targetyear is set for 2050.
2022202820302050
ValueChainCarbonNeutrality
Base Year
Peak Year
OperationalCarbonNeutrality
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Carbon Management Responsibility Distribution
The Health Products Business Group is continuously upgrading its personalized carbon management system to achieveend-to-end carbon management across the entire value chain. The system is comprehensive and standardized, includingseven core modules: organizational carbon management, product carbon management, supply chain carbon management,carbon reduction management, factor library management, dual-carbon knowledge repository, and dashboard monitoring.Thus, the Company conducts rened management and scientic analysis of relevant data and information. Among them,the organizational carbon and product carbon management modules comply with international standards such as the GHGProtocol, ISO 16064, and ISO 14067, and have passed the conformity assessment by Intertek.Apart from that, we have formulated control procedures for the four key aspects of carbon management: organizationalcarbon accounting, product carbon footprint accounting, carbon target setting and emission reduction management, andsupply chain carbon management. These procedures clarify the relevant workows and enhance the standardization ande?ciency of the Company’s carbon management.
Key Processes for Carbon ManagementCarbonManagementSteering
Group
CarbonManagement
Execution
Group
FunctionalDepartmentsand Business
Centers
Organizational Carbon Accounting
Product Carbon Footprint Accounting
Carbon Target Setting and Reduction Management
Process
Process
Process
Establish a baseyear for inventory
Select accounting
standards
Assessment ofcurrent carbonemissions
Decomposition ofcarbon reduction
indicators
Select accountingstandards
Dene productfunctional units
Dene organizationalboundaries
Dene accountingscope
Dene accountingscope
Data collection and
allocation
Identify carbonemission sources
Calculate carbon
emissions
Collect activity
data
Data quality
analysis
Calculate carbonemissions
Identify carbonreduction potential
Generate inventory andreports
Generate carbonfootprint report
Signicance
Signicance
Signicance
●To understand the carbon emissions of di?erent product lines.
●To provide data references for low-carbon design and low-carbon procurement of products.
●To refine the Company’s carbon emission reduction strategy, clarify the pathways for emissionreduction, and e?ectively promote the low-carbon transition.
Benchmarking industry
carbon targets
Evaluation of carbon
reduction projects
Selection of carbon
target indicatorsAssessment of carbonreduction indicators
Choice of baseline andtarget yearsCarbon performance
evaluation andreward/punishmentmechanisms
Setting of carbonreduction targetsChange of carbon
targets
●Responsible for discussing the overall strategy and development goals of carbon management, andconveying the Company’s carbon management goals and strategic requirements for development.
●Responsible for guiding and making decisions on carbon management, and establishingcollaborative communication mechanisms and rules of procedure for working groups.
●Responsible for establishing and improving the carbon management system, and formulating andissuing relevant procedures and implementation details for carbon management.
●
Responsible for developing the overall plan, goals, and indicators for carbon management,setting emission reduction goals and assessment mechanisms, and supervising and auditing theimplementation of carbon reduction goals by various business departments.
●Responsible for coordinating the collection, statistics, and accounting of carbon management-related data, and supporting the aggregation and organization of carbon emission information inthe Company’s ESG report.
●
Responsible for implementing carbon management requirements in all business processes,including assessing carbon emission policies, collecting and analyzing carbon emission data,advancing energy-saving and technological renovation projects, strengthening the management ofwaste (solid waste, wastewater, and waste gas), and developing low-carbon products.
●
To understand the impact of our own operations on climate change.
●To provide data support for identifying signicant emission sources and setting carbon reduction targets.
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Actions
The Health Products Business Group actively implements carbon reduction measures infour key areas: product low-carbon design, raw material low-carbon procurement, greenmanufacturing, and low-carbon logistics.
Comparison of Two Production Processes
Supply Chain Carbon ManagementProcess
Signicance
●To enhance the carbon management capabilities of suppliers to support the low-carbon transitionand sustainable development of the value chain.
Digital carbon managementby suppliers
Carbon managementsystem by suppliers
Carbon emission baselinesurvey by suppliers
Carbon targetsetting by suppliers
Carbon performanceevaluation by suppliersImprovementempowerment by suppliersAccounting model
of material end
Accounting modelof production end
Accounting model
of logistics end
Suppliersregularly submitdata andinformation inthe system
To output supplierproduct carbonfootprint calculationresults and completecomponent carbonemission comparisonanalysis
72%65%
80%
Material endProduction endLogistics end
Level DLevel CLevel BLevel A
Low-Carbon Product Design
●
To continuously promote productlightweighting
●
To select low-carbon andenvironmentally friendly raw materials
●To reduce the residual rate of productsduring their lifecycle
●To introduce product carbon footprintassessment in new product development
Low-Carbon Toothpaste Ingredient
Yunnan Baiyao conducted a low-cost technology R&D project to transform the production process of anhydrouscalcium hydrogen phosphate, a key ingredient in toothpaste. By switching from a thermal phosphoric acid method to awet phosphoric acid method, the Company reduced energy consumption and carbon emissions during the productionprocess. It is estimated that this transformation will save 1.064 tons of CO
equivalent per ton of calcium hydrogenphosphate produced.
ThermalphosphoricacidWet phosphoricacid
1,400°CCrushingPurication
Main actions
7069
Phosphate rock
Phosphate rock
Sulfuric acid
High-temperatureelectric furnacePhosphate powder
High-purity yellowphosphorusCrude phosphoricacid
Thermal phosphoricacidWet phosphoric acid
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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●
Utilization of renewable energy
●
Continuous advancement of energy-savingand technological renovation projects
●
Waste minimization
●
Establishment of environmental andenergy management systems
●
Low-carbon commuting and businesstravel for employees
Toothpaste Pipeline Recovery
Recycling of Transit Cardboard Boxes
By employing toothpaste recovery technology within pipelines, theCompany uses a Pigging System to recover toothpaste from the nishedproduct pipelines, which saves 122.4 tons of toothpaste annually andavoids the wastewater treatment issues associated with cleaning thetoothpaste pipelines, thereby significantly reducing the difficulty ofwastewater treatment.
For the cardboard boxes used in our operations, we have implemented a system where semi-nished cardboard boxesare produced in coordination with downstream contract manufacturing facilities, enabling the recycling of transit boxeswithin the production process. In collaboration with upstream suppliers based on the cardboard boxes we purchase, wehave achieved a recycling loop for packaging material boxes with suppliers. In 2024, our cardboard box procurementvolume decreased by 75%, reducing the consumption of 1.2 million cardboard boxes.Green Production and Manufacturing
Low-Carbon Logistics and Transportation
Toothpaste Pipeline Recovery System
Recycling of Transit Cardboard Boxes
Conducting Supplier Carbon Performance EvaluationBased on indicators such as the carbon targets set by suppliers, the results of carbon accounting, carbon reductionmeasures, and the proportion of clean energy applications, the Company evaluates the current state of suppliers’ carbonmanagement capabilities and completes the scoring of carbon performance evaluations. The focus is on comparingthe carbon performance evaluation results of different suppliers within the same procurement category, identifyingsupplier partners with outstanding performance in low-carbon and sustainable management, and supporting low-carbonprocurement decisions for key projects.
Low-Carbon Sourcing of Raw Materials
Main actions
Main actions
Main actions
7172
●
To conduct a survey on carbonemissions in the supply chain
●To encourage suppliers to increase theproportion of renewable energy use
●
To promote the use of low-carbon andenvironmentally friendly raw materials amongsuppliers
●To introduce carbon performance assessmentfor suppliers
●To shift from road to rail transport andoptimize logistics transportation links
●To increase the proportion of new energytransport vehicles
●To use recyclable packaging andtransportation equipment
7374
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Biodiversity ProtectionYunnan Baiyao, as a successor of TCM, regards TCM materials as valuableresources, placing high importance on the protection of TCM materials and otherbiological resources. By leveraging the Company’s platform advantage in plantresearch and conservation, Yunnan Baiyao has initiated multiple biodiversityprotection efforts, striving to achieve harmonious development between theCompany’s production operations and the natural environment.The Company strictly adheres to laws and regulations such as the WildlifeProtection Law of the People’s Republic of China, the Regulations of thePeople’s Republic of China on Wild Plants Protection, the Regulations for theImplementation of the Drug Administration Law of the People’s Republic of China,the Measures for the Administration of Drug Registration of the People’s Republicof China, and the Law of the People’s Republic of China on TCM. During itsbusiness activities, including the layout of medicinal materials, drug processing,and production, the Company always follows the principles of authenticityand regional distribution characteristics of medicinal materials, continuouslystrengthening the protection and management of authentic medicinal resources.We implement ecological and economic cyclic cultivation and harvesting methodsfor medicinal materials, minimizing the negative impact caused by the Company’soperations on the local ecosystem. At the same time, we actively take measuresto protect endangered and rare medicinal materials, contributing to the protectionof biodiversity at the sites where we operate while improving the quality andsupply capacity of medicinal materials.Building a Treasury of TCM MaterialsWe place great importance on the protection and development of TCM materialresources. Yunnan is known for its high-quality medicinal varieties, such asDolomiaea costus, Angelica sinensis, Panax notoginseng, and Yunnan Parispolyphylla, which have been prioritized as key varieties for the development ofYunnan medicine. We are actively engaged in protecting TCM resources andreducing the risk of species endangerment. Leveraging the Company’s extensiveexperience and resources in the TCM industry, we are committed to conductingresearch, collection, and protection of TCM materials. In 2024, the Companycarried out eld research on wild resources such as Fritillaria cirrhosa, Rodgersiasambucifolia Hemsley, and Onosma paniculatum. Moreover, we continuedresearch on the cultivation, processing, output, and testing of major specieslike Licorice, Astragalus, Pinellia ternata, Scutellaria baicalensis, Saposhnikoviadivaricata, and Yam in cultivated varieties. The Company has long beendedicated to the introduction, domestication, and cultivation technology research,as well as the breeding of superior strains and planting promotion of authenticTCM materials in Yunnan. We conduct in-depth research on resource-specificvarieties in the field, overcoming technical bottlenecks and solving technicalchallenges to improve per-mu yield, thus ensuring the smooth developmentof the industry. Over the years, the Company has carried out research on thedomestication and cultivation of rare resources and the construction of cultivationbases. We have successfully achieved articial cultivation and domestication aswell as large-scale production of varieties such as Yunnan Paris polyphylla andOnosma paniculatum. Additionally, we have established several local medicinalplant species resource nurseries to reduce the risk of species endangerment andensure the sustainable development and utilization of wild resources.
Germplasm Resource Nursery for Paris Polyphylla
Northwest Yunnan TCM Resource Nursery for Yunnan ProvincialMedicinal Plants
Initiated by Tai’an Company at the planting end of TCM materials, the resource nursery covers most ofthe Paris polyphylla species distributed in China, and has planned a comprehensive seed preservationmechanism integrating live species, gene preservation and propagation, which provides a good platformfor resource preservation, scientic research, popularization of science and industrial development ofParis polyphylla.In 2024, based on years of accumulated seed preservation, the Company precisely selected andbred three specialized superior Paris polyphylla strains. Seed orchards, seedling breeding bases, anddemonstration planting bases were established for each, achieving a correspondence between fieldplanting and the production of specialized products, making a signicant contribution to maintaining thegenetic advantages of Paris polyphylla. The successful breeding of superior Paris polyphylla strainsrepresents a major advancement in the research of Paris polyphylla breeding and has e?ectively driventhe development of the Paris polyphylla industry. As of the end of the Reporting Period, the resourcenursery had collected 23 species, including 54 variants or populations of Paris polyphylla plants, makingit the largest and most diverse live germplasm resource nursery for Paris polyphylla in the world.
The Company, referencing the national medicine monograph Yulong Materia Medica, established aprovincial-level medicinal plant germplasm resource nursery in Tai’an Township, Lijiang, covering anarea of 180 mu. The nursery includes a eld display area for medicinal plants, a cold-resistant varietyplanting area, and a greenhouse area. It had collected over 150 medicinal plant species and showcasedthe cultivation of more than 20 specialty medicinal materials, laying a solid material foundation for theinheritance of ethnic medicinal culture and the protection of species resources.
Germplasm Resource Nursery for Paris polyphylla
Northwest Yunnan Resource Nursery for Yunnan Provincial Medicinal Plants
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Upholding theBreeding ofSuperior TCMVarieties toCreate SharedEcologicalCircle
Yunnan Baiyao has been dedicated to the researchof Yunnan’s authentic medicinal materials for over20 years, consistently conducting foundationalresearch on the breeding of new medicinal materialvarieties to e?ectively address the challenges in thedevelopment of medicinal materials. The Companycontinues to accelerate the breeding process ofsuperior medicinal materials, focusing on solvingissues such as severe degradation of varieties, pooruniformity, and a lack of superior strains. As of theend of the Reporting Period, the Company had ledfor 12 new TCM varieties and 3 superior asexualstrains, promoting the planting of over 150,000 muof authentic Yunnan TCM materials.
Superior Variety Certicate forDolomiaea costus
Yunnan Baiyao has built a digital platform “Digital Cloud Medicine” for the TCM material industry, based on its 1+1+N strategy(i.e., one industry internet trading platform + one product, one production area layout + multiple replication of production areaprojects). The platform will provide services to planting partners, including tender procurement, contract farming cooperation,shared processing, shared warehousing, land leasing, testing, logistics, nance, and insurance. On one hand, farmers can achievea “worry-free sales, better prices, and sustainable” prot cycle, ensuring the benets and stable development of the entire plantingcycle. On the other hand, the platform will provide consumers with high-quality products and services, forming a traceable industrialchain that drives the collaborative development of the entire upstream and downstream supply chain. This will help create amutually benecial and shared ecological circle centered on medicinal material bases and varieties, with the participation of farmers,businesses, governments, and research institutions. We focus on base construction as the starting point, technical support as theentry point, long-term mutual benet development as the principle, and continuous resource security as the goal. We aim to cultivatesuperior varieties, strengthen the construction of local medicinal material bases, establish technical standards, and improve qualitystandards, while implementing the strategic guidelines of “storing medicines in the warehouse, in the land, and through technology.”We are also working to share and co-build bases outside Yunnan province, promoting the domestication of wild resources, such asAtractylodes lancea and Saposhnikovia, to prevent local residents from overharvesting wild resources and causing environmentaldamage, thus e?ectively protecting the ecological environment of multiple areas.
MaintainingEcologicalSustainability ofthe TCM MaterialIndustry Chainto Create SharedEcologicalCircle
Yunnan Baiyao is leading, guiding and driving the construction of larger-scale GAP bases withmore varieties across the Yunnan province, and incorporating key varieties such as Panaxnotoginseng, Paris polyphylla, Poria, and Dolomiaea costus into a high-standard plantingecosystem. We further promote the high-quality development of Yunnan’s TCM material industry,establish planting standards and specications, vigorously build the top ten standardized Yunnanmedicinal planting demonstration bases, and create a rational layout for authentic productionareas. The promotion of GAP standards has facilitated the coordinated development across theindustry chain and the rened management from cultivation to processing and sales, providing amore e?cient and healthy ecosystem for the entire industry chain.In terms of seedling cultivation, we start from the cultivation of raw medicinal materials’ seedsand strictly control every link of the entire industry chain, with the aim of building a high-qualitymanagement system that is traceable throughout the entire process. With regional planning ofTCM materials and optimization of planting techniques, as well as high-standard GAP cultivation,we ensure the high quality of these materials and enhance the production efficiency of eachbase. In the eld of production and processing, we actively build the Lijiang Digital TCM IndustryPlatform to meet the needs of di?erent stages, including the supply of raw medicinal materials,production and processing, packaging and storage, and digital traceability. This enables diversiedcustomization and provides customers with high-quality TCM products.Ecological Environment Management of the TCM Material Industry Chain
●To study seed sources and soilless cultivation with genetic engineering, enhance diseaseresistance and growth rates of TCM materials, select suitable environmental conditions andbreeding techniques, effectively cultivate high-quality TCM materials, and significantly reducereliance on wild resources to achieve ecological protection.
Shared Ecological Circle of TCM Resources
Medicinal MaterialVarieties in MedicinalMaterial BasesFarmers
ResearchInstitutions
IndustrialEnterprises
GovernmentDepartments
Base SiteSelection
Planting
Production
ProcessingBreeding
7675
●To establish strict ecological environment standards, and conduct regular monitoring over the qualityof air, soil, irrigation water, and processing water to ensure compliance with national environmentalquality standards, providing a healthy ecological environment for the growth of TCM materials.
●To reasonably plan planting areas, promote high-standard planting techniques for TCM materials,increase yield, e?ciently utilize and protect natural resources.
●To ban the use of highly toxic pesticides, nitrate nitrogen fertilizers, and unregistered fertilizers,promote green plant protection techniques, combine agricultural, biological, and physical controlmethods to e?ectively reduce the use of chemical fertilizers and pesticides, minimizing the damage tosoil and ecosystems.
●When chemical control is necessary, use the minimum e?ective dosage and select highly e?cient,low-toxicity, and low-residue pesticides to minimize environmental impact.
●To implement crop rotation and deep plowing to optimize soil structure, reduce the occurrence ofpests and diseases, promote natural balance between crops, restore soil nutrients and biodiversity,and protect the stability of farmland ecosystems.
●To use domesticated varieties instead of wild ones as raw materials for medicinal production andstrictly implement biodiversity protection for wild and protected species.
●To promote fresh processing techniques to reduce resource waste and environmental pollutioncaused by repeated drying and reprocessing of medicinal materials.
7778
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Environmental Management
Yunnan Baiyao adheres to the concept of green development, continuously optimizing itsenvironmental management mechanisms. By establishing a comprehensive environmentalmanagement system and implementing environmental protection measures, the Company e?ectivelystrengthens the prevention and control of pollution from exhaust gas, wastewater, and solid waste,as well as their emission management, and continuously enhances the Company’s ability tomanage and mitigate environmental risks, striving to achieve a harmonious unity of economic andenvironmental benets. In doing so, Yunnan Baiyao sets an example for the sustainable developmentof the TCM industry.EnvironmentalManagementSystem
Yunnan Baiyao pays close attention to the relevant policies and strategic developments of nationalenvironmental protection. It strictly complies with laws and regulations such as the EnvironmentalProtection Law of the People’s Republic of China, the Air Pollution Prevention and Control Law of thePeople’s Republic of China, the Water Pollution Prevention and Control Law of the People’s Republicof China, and the Noise Pollution Prevention Law of the People’s Republic of China to ensure that itsbusiness operations are in line with environmental management requirements. Within the Company,a series of management systems have been established, including the Environmental ProtectionManagement System, the Environmental Risk Grading Method, and the Environmental RiskHidden Trouble Inspection, Investigation, and Management Method. These systems strengthen theimplementation of environmental protection responsibilities, clarify the duties of environmental work,dene the scope and boundaries of environmental responsibilities, enhance emergency managementof environmental risks and management of environmental protection facilities, and strengthen themanagement of pollutant emissions. Environmental protection responsibilities are assigned to eachbusiness unit, with environmental target responsibility agreements signed, requiring all productionunits to implement environmental protection in accordance with the law. The Company has alsodeveloped an Emergency Response Plan for Environmental Incidents, which has been led with thelocal environmental protection department to assess and prevent signicant environmental impacts.In 2024, Yunnan Baiyao’s Pharmaceutical Business Groups and Health Products Business Groupactively responded to the Company’s requirement to further enhance environmental protectionmanagement, established environmental management systems tailored to the characteristics of theirrespective businesses and strengthened the improvement of the Company’s overall environmentalmanagement system.Environmental Management System of Yunnan Baiyao
In 2024, to enhance the systematic and professional nature of environmental management, the Company established anenvironmental management structure with well-dened rights and responsibilities. The Technology and Safety ManagementDepartment was designated as the department in charge of the Company’s environmental protection a?airs. Moreover, allunits were required to set up a dedicated environmental management department as needed, to appoint full-time or part-time environmental personnel, and to coordinate and promote the environmental protection within their respective units.
Pharmaceuticals
●
Considered and approved the Environmental Management Measures for the PharmaceuticalBusiness Group (Trial), which clearly defines the organizational structure and responsibilitiesfor environmental protection, as well as the tasks and requirements. The management contentincludes prevention of new pollution sources, management of pollution sources, environmentalapproval management, emergency management, publicity, education and training, and day-to-daymanagement.
●Developed the other secondary management systems such as the Management Details forEnvironmental Online Monitoring Equipment of the Pharmaceutical Business Group andthe Management Details for Emergency Response Plan for Environmental Incidents of thePharmaceutical Business Group to enhance environmental risk control and urge all responsibleentities to fulll their duties.
●Developed the Clean Production Regulations to strengthen the clean production.
Environment Management StructureTo enforce national environmental protection laws, regulations, and policies, and organize theCompany’s environmental law publicity, education, and training.To take the lead in formulating the Company’s environmental protection strategy and goals, andcoordinate and guide the environmental protection by all units.To develop and improve the Company’s environmental protection management system andregulations, and strengthen the management of environmental protection comprehensively.To carry out the classication of the Company’s environmental protection risks and establish amechanism for graded control of environmental risks.To conduct investigations into environmental protection risks and hidden dangers, urge all unitsto rectify environmental risks and hidden dangers, and continuously improve the Company’senvironmental risk management.To organize major environmental protection technology discussions, promote the resolution ofsignificant environmental protection technical issues within the Company, and empower theenvironmental protection work of all units.To conduct statistical analysis of the Company’s environmental protection data and evaluate thework, reporting the status and suggestions about environmental protection to the Company’sleaders in charge.To develop its own environmental protection management system and operating procedures inaccordance with national and corporate environmental protection requirements.To implement the Company’s environmental protection strategy, goals, and responsibilityrequirements to prevent environmental pollution and ecological damage.To organize learning of environmental protection policies and laws, and training to enhanceoperational skills within the unit.To conduct self-inspection activities for environmental protection risks and hidden dangers withinthe unit, and promote rectication and feedback of results.To strengthen the operation and maintenance management of environmental protection facilitiesand equipment to ensure that pollutants are discharged up to standard.To carry out pollutant emission monitoring within the unit, and ensure the authenticity and accuracyof environmental materials and data.To actively respond to national policies, fully carry out energy conservation and emission reductionwork, and reduce the generation and emission of pollutants.
Technologyand SafetyManagementDepartment
Emergency Response Drill and Training for Environmental Incidents at Yuhua Preparation Center
On November 28, 2024, to enhance employees’ emergency response capabilities when facing sudden incidents duringoperations, the Yuhua Preparation Center organized training and emergency drills focused on the emergency handling ofsewage pipeline blockages at the wastewater treatment station. The activities included learning about emergency rescueknowledge for sewage pipeline blockages, identifying the causes of such incidents, and e?ectively strengthening employees’professional knowledge and skills in dealing with environmental incidents.
Emergency Response Drill and Training for Environmental Incidents at Yuhua Preparation Center
Each Unit
Health Products
7980
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Yunnan Baiyao’s 2024 Environmental Protection Work Conference and EnvironmentalProtection Promotion MeetingOn October 31, 2024, Yunnan Baiyao held its 2024 Environmental Protection Work Conference and EnvironmentalProtection Promotion Meeting. Over 40 participants attended the meeting, including the heads of units involved inpollutant emissions and environmental management personnel. At the meeting, the current environmental protectionsituation had been analyzed, the Company’s environmental status reported, and all units were required to strengthenthe management of environmental baseline data, promote the investigation of risks and hidden dangers, andaddress environmental issues through technological innovation. Furthermore, the meeting promoted the Company’senvironmental management system, clarified the environmental responsibilities of each unit, and deployed theenvironmental work for 2025. It proposed to achieve the goals of lawful and compliant environmental operationsand pollutant emissions up to standard through measures such as consolidating the foundation, implementingresponsibilities, rectifying hidden dangers, and upgrading technology.
Meeting Site
As of the end of the Reporting Period, Yunnan Baiyao has notexperienced any signicant incidents of litigation or correspondingpenalties due to violations of environmental regulations. Therehave been no instances where pollutant emissions haveadversely a?ected the local community residents. The Companyand its nine subsidiaries that are subject to environmentalprotection administrative licensing have all obtained thenecessary discharge permits in accordance with regulations.In compliance with the requirements of their discharge permits,they have engaged third-party testing units with CMA certicationto regularly monitor wastewater, exhaust gas, and noise levels,ensuring that all indicators are within the required limits. Besides,after inviting a qualied third-party assessment unit for evaluation,Yunnan Pharma has passed the certification audit of the ISO14001 Environmental Management System.
Environmental Management System Certication
of Yunnan Pharma
Achievement of Environmental Goals by Yunnan Baiyao in 2024
100% compliance with pollutant discharge standards0 occurrence of environmental pollution incident
AchievedAchieved
Environmental goalsAchievement in 2024
Exhaust GasManagement
The exhaust gas of Yunnan Baiyao mainly consists of sulfur dioxide, nitrogen oxide andparticulate matter produced in the production process. The Company strictly complies withnational laws, regulations, and standards such as the Air Pollution Prevention and Control Lawof the People’s Republic of China, the Comprehensive Emission Standard for Air Pollutants, theEmission Control Standard for Volatile Organic Compounds from Industrial Enterprises, and theEmission Standard for Air Pollutants from the Pharmaceutical Industry. Each business unit isrequired to fully equip the corresponding environmental protection facilities for all exhaust gasemission links, set monitoring indicators, and regularly inspect the tail gas emission outlets.End-of-pipe treatment facilities are installed at locations with larger emission volumes, andprofessional third-party companies are engaged to conduct regular inspections. This ensures thestable and compliant emission of all types of exhaust gases and eliminates fugitive emissions. Toreduce the volume of exhaust gas emissions, the Company continuously optimizes productionprocesses and uses clean fuels, e?ectively reducing the environmental impact of exhaust gasemissions. In 2024, the Company achieved a 100% compliance rate for exhaust gas emissions.
The Company achieved a
100%
compliance rate forexhaust gas emissions
Introduction of Ethanol Condensation and Recovery Device atYuhua Preparation Center
In 2024, Yuhua Preparation Center of YunnanBaiyao made signicant progress in the introductionof environmental protection technologies bycompleting the acceptance of an ethanolcondensation and recovery device. This deviceis used for the distillation of ethanol waste liquid,such as residual liquid and substandard productsgenerated in the production line, in the recoverytower. The recovered ethanol concentrationcan reach 85%-90%, which can be reused fordisinfection of equipment, floors, and pipelines inthe production workshop. After calculation, thisdevice has reduced the emission of volatile organiccompounds by more than 20 tons during the “14
th
Five-Year Plan” period, greatly promoting theCompany’s exhaust gas reduction.
Ethanol Recovery Device for
Acceptance
Exhaust Gas Emission of Yunnan Baiyao in 2024
IndicatorsUnit2024
Total exhaust gas emission10,000m
52,868.87Particulate matterTon(s)0.27NOxTon(s)7.36SOx
Ton(s)0.02Volatile Organic Compounds (VOCs)Ton(s)24.03Exhaust gas emission density10,000m
/Operating revenue of RMB 10,0000.013
Due to the increase in the statistic standards, exhaust gas emission increased in 2024 compared to that in 2023. As specied by the Company’senvironmental protection management system, the exhaust gas emission data statistics in 2024 covered all production areas under the Company’senvironmental protection management.
8182
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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WastewaterManagement
Yunnan Baiyao’s wastewater mainly comes from discharges generated from the productionof pharmaceuticals and health products and domestic sewage. The Company strictlyadheres to national and regional management requirements, such as the Water PollutionPrevention and Control Law of the People’s Republic of China, in carrying out wastewatertreatment. It enhances its internal wastewater management through multiple means,including establishing internal regulations like the Management Details for WastewaterTreatment Stations and the Inspection Management Details for Rainwater and WastewaterFacilities, assigning dedicated teams for wastewater management, standardizingenvironmental protection records, and engaging in environmental technology exchangeswith neighboring enterprises and units in the eld of wastewater treatment. We have set updedicated wastewater treatment tanks at the end of the production process. These pondsreduce pollutant concentrations through sedimentation, filtration, microbial degradation,and adsorption. Online monitoring equipment is used to ensure that the treated wastewatermeets the required standards before it is discharged as stipulated.
Upgrade and Transformation of Qidian Wastewater Treatment Tank
In 2024, the Company carried out an upgrade and transformation of the wastewater treatment tank in the QidianIndustrial Zone. This involved cleaning, anti-corrosion treatment, and replacement of facilities in multiple ponds,including the thickening tank and the regulating tank, which e?ectively prevented wastewater leakage, extended theservice life of the tanks, and reduced maintenance and replacement costs. The upgrade of the wastewater treatmenttank enhanced the operational efficiency of the wastewater treatment station and further ensured the compliantdischarge of wastewater in the Qidian Industrial Zone.
Upgrade and Transformation of Qidian Wastewater Treatment Tank
In 2024, the Company has monitored and uploaded key water quality indicators in accordance with the requirements of thehigher-level environmental protection authorities, ensuring compliant discharge and avoiding impacts on rivers and soil.
Wastewater Discharge of Yunnan Baiyao in 2024
Wastewater Prevention and Control of Yunnan Baiyao
Building a comprehensive water pollution governance system
Reducing wastewater pollutant concentration
Improving water usage processes
IndicatorsUnit2024
Total wastewater dischargeTon(s)1,012,618.24Chemical Oxygen Demand (COD)Ton(s)84.83Ammonia nitrogenTon(s)2.00Reclaimed waterTon(s)25,950Wastewater discharge density
Ton(s) / Operating revenue ofRMB10,000
0.25
Due to the increase in the statistic standards, wastewater discharge increased in 2024 compared to that in 2023. As specied by the Company’senvironmental protection management system, the wastewater discharge data statistics in 2024 covered all production areas under the Company’senvironmental protection management.
●To strengthen source control, optimize production processes and reduce the generation of pollutants at thesource.
●To intensify end-of-pipe treatment, select appropriate treatment technologies based on the characteristics of thewastewater and treatment objectives, and ensure stable and reliable treatment outcomes.
●To implement multi-stage treatment processes and degrade various types of pollutants through continuousmultiple treatment stages.
●To install automated online monitoring systems for water pollution sources and connect them to national,provincial, and municipal regulatory platforms to transmit monitoring data in real-time, and engage third-partyunits for regular maintenance and management to ensure the stable operation of the online systems.
●To conduct regular maintenance, upgrades and transformation of wastewater treatment facilities to ensure theirlong-term, e?cient, and stable operation.
●To promote water recycling technologies and enhance measures for the reuse of treated wastewater (such asreclaimed water) to reduce the volume of wastewater generated.
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Solid WasteManagement
Yunnan Baiyao’s solid waste includes hazardous waste and non-hazardous waste.Hazardous waste includes waste drugs, medicines and experimental waste liquids, etc; non-hazardous waste mainly consists of medicine residue and sludge generated in the productionprocess. The Company strictly complies with laws and regulations such as the Law of thePeople’s Republic of China on the Prevention and Control of Environment Pollution Causedby Solid Wastes, the National Catalogue of Hazardous Wastes (2016), and industry wastedisposal standards. It has established internal regulations like the Management Details forSolid Waste Environmental Protection to classify and manage various types of solid wasteand strictly differentiate between hazardous and non-hazardous waste. Adhering to theprinciples of reduction, resource utilization, and harmlessness, the Company continuouslystrengthens the standardized management and resourceful use of solid waste. In 2024, theCompany achieved a 100% compliance rate in the disposal of hazardous waste.
Measures for Solid Waste Treatment and Resource Utilization
Non-hazardous
waste
IndicatorsUnit2024
Hazardous waste dischargeWaste drugs, drugs HW03Ton(s)139.14Experimental liquid waste HW49Ton(s)28.94Other hazardous wasteTon(s)25.38Total amount of hazardous wasteTon(s)193.47Intensity of hazardous waste
Kilogram(s) / Operating revenue ofRMB10,000
0.048
Non-hazardous waste dischargeDrug residue, sludgeTon(s)26,207.34Household wasteTon(s)856.80Total amount of non-hazardous wasteTon(s)27,064.14Intensity of non-hazardous waste
Ton(s) / Operating revenue ofRMB10,000
0.0068
TotalTotal amount of solid wasteTon(s)27,257.61Discharge intensity of solid waste
Ton(s) / Operating revenue ofRMB10,000
0.0068
Waste Discharge of Yunnan Baiyao in 2024
●General waste, including household waste, is collected and transported to thesanitation station for incineration.
●General solid waste with recyclable value, such as discarded TCM materials,fragments of medicinal materials, dust, and packaging cardboard boxes, iscollected and regularly sold to recycling companies for recycling. For example,sludge after fermentation is used for soil improvement in landscaping, andmedicinal residues after fermentation are used to produce organic fertilizers.
Hazardous
waste
●Hazardous waste generated in production workshops is managed by designatedpersonnel. Accounts are established and clear labels and signs are used. It isstored in designated areas and collected by categories before being handed overto a third party for disposal.
●For laboratory hazardous waste, we have formulated the Laboratory HazardousWaste Prevention and Control Responsibility System and the LaboratoryEnvironmental Control Procedures to clarify and strictly implement the laboratorywaste treatment standards. Following the principle of “Unied Collection, ClassiedDisposal, and Elimination of Hidden Dangers,” hazardous waste is managedexclusively, accounts are established, and disposal is carried out by third-partyprofessional disposal companies.
8483
Due to the increase in the statistic standards, waste discharge increased in 2024 compared to that in 2023. As specified by the Company’senvironmental protection management system, the waste discharge data statistics in 2024 covered all production areas under the Company’senvironmental protection management.
8586
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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SustainabilityManagement
Resource Utilization
Yunnan Baiyao always regards resource conservation as a crucial strategy for sustainabledevelopment. Adhering to the philosophy of “E?cient Utilization and Green Development,”the Company is committed to promoting a resource-conserving production model. Throughtechnological innovation, process optimization, and the scientic allocation of resources, theCompany continuously improves resource e?ciency and reduces the consumption of energy,water, and raw materials. Meanwhile, Yunnan Baiyao actively promotes the circular economymodel, advocates green o?ce practices, and drives the resourceful utilization of waste toachieve closed-loop resource management. Looking ahead, Yunnan Baiyao will continueto deepen its resource-conserving practices, implement green development concepts, andcontribute to the building of a resource-conserving and environmentally friendly society.EnergyManagement
Yunnan Baiyao adheres to the development policy of energy conservation and consumptionreduction, and continuously improves its energy management system to enhance energyutilization e?ciency. The Company strictly complies with laws and regulations such as theEnergy Conservation Law of the People’s Republic of China. Internally, it has establishedthe Energy Management Measures and optimized other secondary management systems,and rened other secondary management systems, such as the Reward and PunishmentDetails for Energy Conservation, the Energy Audit and Performance Assessment Details,and the Energy Use Plan Management Details, which standardize the energy managementmechanism and processes. The Company requires each manufacturing unit to set upan energy management organization to coordinate energy management efforts, clarifyresponsibilities, implement improvement measures, improve the energy managementsystem, optimize the construction and operation of energy systems, and promote energy-saving technologies.
●An energy conservation inspection team was established to conduct monthly checks and provideguidance to energy-consuming units. For energy consumption points with potential for energy savings,the team implements energy-saving project retrots, corrects ine?ciencies, conducts on-site training,promptly eliminates non-standard energy usage, establishes a long-term energy-saving mechanism,enhances energy e?ciency, and thus reduces production costs and energy waste.
●Energy-saving indicators are integrated into the performance evaluation of departments and employees,which motivates all staff to actively participate in environmental management, fostering a resource-conserving enterprise.
Optimization and Retrot of the Power System at Yuhua Industrial Zone
In 2024, in response to the long-standing issues in the air compression and vacuum systems of the Yuhua IndustrialZone, the Company launched a power system retrot project. By optimizing the conguration of air compressors in theworkshops to create an energy-saving air supply mode, transformations in the air transportation system were achieved.The project also involved purchasing new vacuum pumps, replacing cooling towers, and installing constant-pressure airsupply control systems to revamp the vacuum system. After the retrot, the air compression system achieved energysavings of over 15%, while the vacuum system realized energy savings of more than 20%, yielding notable energy-saving benets.
Optimized and Retrotted Power System
Energy Consumption of Yunnan Baiyao in 2024
IndicatorsUnit2024
Diesel consumptionTon(s)1.42Gasoline consumptionTon(s)22.21Natural gas consumption10,000 m
686.52
Purchased electricityMWh64,441.65Purchased steamGJ213,075.17Usage of cleanenergy
HydropowerkWh51,553,317.26Solar photovoltaickWh3,274,076.00Comprehensive energy consumptionTon(s) of standard coal24,351.00Comprehensive energy density
Ton(s) of standard coal/Operatingrevenue of RMB10,000
0.0061
●The Company has optimized and renewedkey systems such as the air compressionand chilled water systems, which helpreduce energy consumption, improvethe precision and efficiency of energymanagement, and thus e?ectively controlenergy costs and achieve energy-savingand emission reduction goals.
Energy Management Measures of Pharmaceutical BG of Yunnan Baiyao
The statistical data follows the reporting standards of the National Bureau of Statistics.
8788
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Water ResourceManagement
Yunnan Baiyao places great emphasis on the conservation and protection of water resources,strictly adhering to laws and regulations such as the Water Law of the People’s Republicof China. Internally, the Company has established management systems and operationalprocedures, including the Non-pharmaceutical Water System Management Procedures and theSafety Standards and Operating Procedures for Secondary Water Supply System Posts, whichadvocate water conservation across all production and operation departments. The Company alsoundertakes energy-saving technological transformation projects to enhance water use e?ciencyand reduce water loss.
Water Balance Test Certicate forQidian Raw Material Center
Waste Heat Recovery Project for Condensate System at Qidian Raw Material CenterIn 2024, the Qidian Raw Material Center initiateda waste heat recovery project for its condensatesystem to address the issues of energy wastecaused by direct discharge of condensate andthe increased volume of wastewater treatment.The Company developed its own treatmentdevice, utilizing a plate heat exchanger for theheat exchange treatment of condensate. Potablewater was selected as the heat exchange medium.After heat exchange, the potable water is used forproduction in the extraction workshop, while thelow-temperature condensate serves as makeupwater for the circulating water system. The projecte?ectively recovers waste heat and reduces waterconsumption. It saves over 2,100 tons of steam andRMB 585,000 in thermal energy costs annually. Italso reduces the need for potable water makeupby 100m
per day, saving about RMB 200,000in water fees and RMB 445,000 in wastewatertreatment costs, which signicantly enhanced bothenvironmental and economic performance.
Condensate Heat Recovery System
Water Consumption of Yunnan Baiyao in 2024
Packaging Material Conservation Measures of Yunnan Baiyao
For the printing of toothpaste boxes, transfer printing technologyhas been adopted to replace the traditional film laminationprinting method. Once fully implemented, it is expected toreduce costs by over 10%, saving more than RMB 2.6 millionannually.
The Company has successfully developed a new type of dual-core pump packaging for shampoo. This packaging is the rstin China to achieve a quantitative ratio of 9:1 for shampoodispensing. The metal spring inside the pump has beenreplaced with a plastic “umbrella-shaped” spring, effectivelycreating a recyclable and environmentally friendly packagingsolution.
The Company promoted the lightweight toothpaste compositesoft tubes. The thickness of the 5-gram Ice Lemon Minttoothpaste soft tube has been reduced from 275 microns to 200microns. Over 400,000 of these lighter tubes have been putinto the market. The reduction in thickness of the toothpastesoft tubes can decrease the use of plastic, thereby reducingenvironmental pollution.
ProductsPackaging Material Optimization Measures
Toothpaste Tube
Shampoo Bottle
Toothpaste
Shampoo
PackagingMaterialManagement
Yunnan Baiyao is committed to optimizing the use and management of packaging materialsand other production resources, encouraging each business segment to explore pathwaysfor lightweight and reduced packaging based on its own characteristics. The Companyhas taken a series of measures, including optimizing packaging design, promoting theuse of environmentally friendly materials, reducing excessive packaging, and recyclingscrap materials and packaging from the production process, to reduce the demand for rawmaterials and lower resource consumption and environmental impact. In 2024, the Companyworked with suppliers to carry out several exploratory practices in reducing and recyclingpackaging materials, striving to minimize packaging waste.
IndicatorsUnit2024
Waterconsumption
Municipal tapwater
Ton(s)1,329,515.54Water consumption density
Ton(s)/Operating revenue of
RMB10,000
0.33
Water Resource Management Measures of Pharmaceutical BG of Yunnan Baiyao
●The Company has established water resource managementsystems such as the Water Conservation Management System,the Measurement Management System, and the RegularInspection and Maintenance Management System for Water UseEquipment, which involve irregular inspections and maintenanceof water use points, as well as monitoring of water qualityindicators, ensuring the timely identification and resolution ofwater-related issues, resolutely preventing occurrences of waterleakage, overow, dripping, and seepage, and thereby reducingwater use risks.
●The Company developed comprehensive records for water usemanagement, conducted monthly statistical calculations of waterusage at each water consumption point, organized and analyzedthe data, and assessed the actual water use. It also madeunied arrangements for water use across business groups andformulated annual water use plans.
●The Company has integrated water use management into itsperformance assessment system, and has implemented a systemof rewards for water conservation and penalties for excessivewater use.
●
In 2024, the Qidian Raw Material Center of the PharmaceuticalBG passed the water balance test, demonstrating its goodcapability in the scientic and e?cient use of water resources.
Coating for ToothpastePackaging Paper Box
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Organizing the “Supply Chain Packaging Innovation Forum”
To promote the upgrade and innovation of product packaging, Yunnan Baiyao organized the “Supply Chain PackagingInnovation Forum,” which was attended by the Company’s marketing department, R&D department, and suppliers.During the forum, experts and representatives from various sectors engaged in in-depth discussions about advancedpackaging technologies and cutting-edge packaging materials currently available on the market. They also sharedthe latest industry trends and practical experiences. Through cross-departmental and cross-disciplinary cooperationand exchange, the Company has made ample technical preparations for future product packaging and laid a solidfoundation for further enhancing the sustainability of packaging materials.
Supply Chain Packaging Innovation Forum
Packaging Material Consumption of Yunnan Baiyao in 2024
Green O?ce
Yunnan Baiyao integrates the concept of green development into every aspect of its operations,actively advocates and implements green o?ce practices, and is committed to creating a low-carbon and environmentally friendly working environment. To enhance employees’ awarenessof energy conservation, the Company continuously strengthens publicity and education. It postssigns in o?ces and other operational areas to remind sta? to turn o? lights and water taps whennot in use, set air conditioning temperatures and usage times reasonably, and encourages thereuse of paper and paperless o?ce practices to cultivate green living and working habits amongemployees. Meanwhile, the Company strengthens daily supervision to ensure that employeesput the green o?ce concept into practice.Implementation of Multiple Green O?ce and Production Measures by TCM Resources BG
In 2024, the TCM Resources BG carried out several notable practices in green o?ce and production. Through renedmanagement, the BG effectively advanced the Company’s energy conservation, consumption reduction, and greenoperation processes.Regarding the use of ribbon in coding machines, the BG optimized the usage of the ribbon through minor technicaladjustments and employee training. Originally, each roll of ribbon (33mm × 450m) was used only once and thendiscarded. Now, by adjusting the coding position, each roll can be reused twice. As a result, the ribbon consumption ofeach device over 24 hours has been reduced from two rolls to one. With a cost of RMB 120 per roll, two devices saveRMB 6,000 in consumables per month, amounting to an annual savings of about RMB 40,000.
Before transformationAfter transformation
In terms of paperless o?ce practices, the Company actively introduced electronic storage cards, which digitally andaccurately record information about goods, achieving a complete replacement of traditional paper storage cards. Duringthe Reporting Period, the Company handled a large volume of business shipments and receipts, with a total of 46,987batches shipped and received throughout the year. In this process, the use of electronic storage cards saved a total of46,987 sheets of paper, signicantly reducing paper consumption.
IndicatorsUnit2024
PaperTon(s)15,000PlasticTon(s)4,267GlassTon(s)807AluminumTon(s)2,900Composite soft packageTon(s)3,632Packaging material consumptionTon(s)26,606Density of packaging materialconsumption
Ton(s)/Operating revenue ofRMB10,000
0.0067
8990
9192
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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People First forStrengtheningthe Foundationof TalentWe always adhere to the philosophy of “People First” andare committed to providing a diversied, fair, inclusive, andaccessible working environment for our employees. Througha comprehensive compensation system, performanceincentives, and career development plans, we ensure thebasic rights and interests of our employees, pay attention toemployee support and care, and actively promote employeegrowth and well-being. At the same time, we strengthenour occupational health and safety management systemto ensure the physical and mental health and occupationalsafety of our employees.
9394
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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SustainabilityManagement
Protecting Employees’ Rights and Interests
Yunnan Baiyao focuses on all employees, making the vision tangible so that employees cansee it, touch it, and aspire to it. Yunnan Baiyao e?ectively safeguards the legitimate rightsand interests of employees, adheres to diversied and equal employment, and is committedto building harmonious labor relations, creating a workplace environment that is equal,diverse, transparent, and gives a sense of belonging.Yunnan Baiyao strictly complies with relevant laws and regulations, including the LaborLaw of the People’s Republic of China, the Labor Contract Law of the People’s Republicof China, the Labor Rights Protection Law, and the Prohibition of Child Labour Provisions.The Company advocates equal employment policies, adheres to compliant recruitment andemployment practices, rmly opposes all forms of child labor and forced labor. At the sametime, the Company revised and improved a series of internal rules and regulations, includingthe Recruitment Management System of Yunnan Baiyao Group Co., Ltd., the Labor ContractManagement System, and the Dual-Channel Management Measures for Employee CareerDevelopment to ensure the compliance and fairness of recruitment. During the ReportingPeriod, there were no incidents of illegal use of child labor or forced labor.The Company is dedicated to building a capable and efficient workforce, adhering to theprinciples of open recruitment, strict selection, fair competition, and matching people withthe right positions. It clearly defines job positions and staffing requirements, setting uppositions based on job needs and hiring personnel for those positions. In the “2024 ChinaBest Employer” selection jointly initiated by Zhaopin.com, employer brands and professionalacademic institutions, Yunnan Baiyao stood out for its excellent employer brand building andemployee experience, winning the “Most Innovative Spirit Employer Award.” In the agshipawards organized and reviewed by the HR management think tank HRag, the Companyreceived the “2024 Flag Award” (OneFLAG? AWARDS), demonstrating its outstandingperformance in HR management.
ComplaintEmployment
The total employee count includes employees under labor contracts, labor dispatch, interns, andoutsourced personnel.
The scope includes individuals holding executive positions within the Company and its businessgroups.
“2024 Flag Award” (OneFLAG? AWARDS)
2024 China Best Employer- Most Innovative SpiritEmployer Award
Employee Employment
Employment Details in 2024
Total number of employees
Persons12,371
InternsLabor contract employeesLabor dispatch employees
Subcontracting sta?9,2771,6831,202
Types by total
employeecount
8,0531,034
Junior employeesSeniormanagement
Middlemanagement
Number ofemployeesby rank
30 and below41 to 50
31 to 4051 (inclusive) and above4,4472,825
1,658
HanEthnic minoritiesOverseas employees
7,924
1,352
5,088
4,189
Maleemployees
Femaleemployees
4,728
4,545
Yunnan ProvinceChinese Mainland (excluding Yunnan)
Hong Kong, Macao,Taiwan and overseas
Sales sta?Technical sta? (including R&D sta?)
Financial sta?Production sta?Administrative sta?
1,2761,760
5,433
Number ofemployees bytype of work
Number ofemployees by
gender
Number ofemployeesby age
Number ofemployees bynationality
Number ofemployees by
region
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
On the basis of market-oriented employment, Yunnan Baiyao has built a communityrelationship between the enterprise and talents. It forms a community of shared interestswith all employees, a community of shared endeavors with key employees, and a communityof shared destiny with core employees. By creating these three types of communities, theCompany attracts and retains talents.In 2024, to e?ectively meet the needs of the Company’s strategic planning and continuousbusiness development, the Company further improved its talent selection and employmentmechanism, achieving refined management in recruitment classification and procedures.Through diversied channels and promotional platforms such as social recruitment, campusrecruitment, and internal recommendations, the Company focused on areas like druginnovation, lean manufacturing, quality management, marketing, and internationalization.It continuously enriched and expanded career development pathways for employees,attracting high-quality, versatile, and high-level talents to join the Company. This enhancedthe match between introduced talents and job requirements, cultivated and motivated talentdevelopment, and retained talents through corporate culture and atmosphere.During the Reporting Period, the Company increased its e?orts to recruit high-level talentsfor senior management positions and innovative drug R&D. A total of more than 40 high-leveltalents were precisely introduced, including 3 senior vice presidents at the group level and10 doctoral students. This provided strong talent support for the high-quality developmentof the TCM industry in Yunnan Province and the Company’s high-quality and sustainabledevelopment.
TalentAttraction
Yunnan Baiyao always adheres to the principles of fairness, transparency, and diversity,and opposes all forms of discrimination based on education, gender, ethnicity, religion,region, appearance, age, marital status, health, and reproductive status. In recruitment, theCompany has established clear anti-discrimination policies to prevent any discriminationrisks.At the same time, the Company rmly prohibits any form of harassment, including verbal,written, visual, or physical contact. To protect employees' rights and interests, the Companyhas established accessible and e?ective channels for complaints and whistleblowing, as wellas investigation and handling mechanisms. Employees who experience harassment mayreport it at any time, and the Company will respond promptly in accordance with relevantregulations while fully safeguarding the privacy of the employee. In 2024, no incidents ofdiscrimination or harassment occurred.The Company advocates multiculturalism, enhances cultural exchanges, and raisesemployees’ awareness and consciousness of anti-discriminatory actions to actively promotethe harmony and progress of the Company’s cultural atmosphere. In 2024, Yunnan Baiyaohad up to 45.15% of female employees, and up to 14.57% of employees of ethnic minorities.In 2024, the employee turnover rate of Yunnan Baiyao was 9.16%.
Equality,Inclusion andDiversity
Two-Level Training System and Three-Level Management Mechanism
Empowering Talent Development
Yunnan Baiyao is committed to building a team of dedicated and capable leaders, as wellas a well-structured talent pool. The Company continuously enhances the professionalism,career orientation, and market competitiveness of its leadership and talent team, fostersa supportive environment for talent development, and strives to cultivate a high-caliberworkforce to fuel the Company's growth.To meet the needs of the Company’s strategic planning, business development, andorganizational capability building, Yunnan Baiyao has continuously deepened its “internalcultivation + external talent introduction” dual-wheel driven talent supply chain mechanism. Itinsists on focusing on internal cultivation for management cadres and giving equal weight tointernal cultivation and external introduction for professional talents. Through e?ective cadremanagement and talent cultivation mechanisms, the Company has cultivated a high-qualitytalent pool that meets the future strategic development needs.In 2024, the Company adhered to the principle of Party management of talent, ensuringthe correct direction and clear goals of talent cultivation. It optimized and improved the two-level training system and the three-level management mechanism, claried organizationalresponsibilities, and made task division clear. It also strengthened the systematicmanagement of talent cultivation and enhanced the effectiveness of empowerment anddevelopment.
TalentDevelopment
Led by the Company and implemented by the BaiyaoAcademy, with the focus on top-level design, and unied plansand standards developed within this system to cover corporateculture, employee quality, and leadership training in line withthe Company’s talent development strategy.Led by the Company’s business or platform units, this systemfocuses on business and job requirements, aiming to enhanceemployees’ professional skills.Responsible for the overall planning of the Group’s trainingstrategy, the construction of the training system andmechanisms, the management of training resources andoperations, and leading the development and implementationof the rst-level training system.Undertaking projects related to the first-level training systemand being responsible for organizing and managing thesecond-level training system within the respective business orplatform units.Responsible for the planning and implementation oftraining related to employees’ job knowledge and skills, andorganization of a series of training activities targeting businessoperations based on business needs.
First-Level Training System
HR and Cadre Management
Department
Second-Level Training System
HR Functional LineDepartments of eachbusiness/platform unit
Two-LevelTrainingSystem
Three-LevelManagementMechanism
Yunnan Baiyao had up to
45.15%
of female employees
9798
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
FormABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
In 2024, Yunnan Baiyao continued to optimize and improve its talent development system, which is centered around the jobqualication system. Focusing on “people” and “professions,” the Company concentrated on building management cadres,professional technical talent pools, and high-skilled talent pools. By creating a favorable learning and growth environmentand mechanism, and adhering to a “learner-centered and practice-based” approach for contextual learning, the Companyimplemented a job rotation policy under the guidance of the principle “training aligned with combat, integrating training andcombat,” the Company strengthened employees’ peripheral work experience in real combats and built real-world scenariosand challenges in the learning process. It also emphasized the development of a diversied knowledge system for talents,achieving a win-win situation between personal value and the Company’s strategic goals.
Talent Cultivation System
Highlights of 2024 Training Programs
Seniormanagement
SeniorManagementTrainingProgram
To enhance senior management todeeply understand the Company’s overallstrategy and business deployment, bemore clear about the Company’s long-term development plan, and be moredeeply understand the Company’svision and mission, so as to much moree?ectively lead the Company towardsachieving its preset goals.
The Company organized andconducted the rst session of the SeniorManagement Training Program - the 2024Peking University Senior Workshop ofYunnan Baiyao Group.
Middlemanagement
MiddleManagement
TrainingProgram
To promote the middle management’sstrategic thinking and leadership skills,deepen their understanding of theCompany’s business, and develop theirdecision-making and team managementskills, such that they can become ane?ective backup force for the Company’ssenior management.
The Company organized and conductedthree sessions of the Middle ManagementTraining Program, namely the YunnanUniversity of Chinese Medicine 2024Yunnan Baiyao Group Senior Workshopon the Inheritance and Innovation ofTCM, the Middle Management New EntryClass Training Program, and the MiddleManagement Xuanjia Army AdvancedTraining Program.
Back-upmanagement
MiddleManagementSuccessorTrainingProgram
Focusing on the Company’s strategy,business development, and organizationalcapability requirements, the programaims to accelerate the structural andqualitative upgrade of the cadre echelon,stimulate the internal driving force of thecadre team, and cultivate versatile middlemanagement successors to meet futuremanagement challenges and leadershiptasks.
The Company organized and conductedone session of the Middle ManagementSuccessor Training Program - 2024Middle Management SuccessorDevelopment and Assessment Program.
New employees
New Employee
TrainingProgram
To help new comers quickly integrateinto the Company culture, enhance theiridentication with the Company culture,and deepen their understanding of theCompany’s core business, so as to ensurethat they can achieve comprehensivequality expansion in the early stageof their career in the Company, layinga solid foundation for their long-termdevelopment.
The Company organized and conductedtwo sessions of the New EmployeeTraining Program - “New Beginnings,Growing Hope” Yunnan Baiyao April2024 New Employee Training and the“Ambitious Aspirations, Shining Future”Yunnan Baiyao August 2024 NewEmployee Training.
EmployeeHierarchy
Training ObjectivesTraining PlanProgress in 2024
In 2024, Yunnan Baiyao hosted the “Yunnan Baiyao Senior Workshopon Exploration and Practice of Intelligent Manufacturing and DigitalTransformation.” A total of 62 professional technical personnel andenterprise managers with intermediate and senior titles participatedin the study. Focusing on the core theme of intelligent manufacturingand digital transformation, the program deepened participants’understanding of these areas, injecting new momentum into the high-quality development of the industry and the transformation of Yunnan’sTCM sector.
Yunnan Baiyao Senior Workshop on Exploration and Practice of Intelligent Manufacturing and Digital Transformation
In 2024, the Company collaborated with the Institute of New StructuralEconomics at Peking University to hold the “Peking University SeniorWorkshop of Yunnan Baiyao Group.” The program covered topics suchas “Macroeconomics and Development Trends of the TCM Industry,”“Corporate Development Strategy and Digital Transformation,” and“Leadership.” About 120 members of the Group’s Party committee,directors, supervisors, senior management, and some middle managersattended the study, further enhancing their strategic innovationcapabilities and leadership skills.
To help newly promoted middle managers quickly adapt to their newroles and enhance their management capabilities, Yunnan Baiyaolaunched the 2024 Middle Management New Entry Training Program.Aimed at 90 newly promoted middle managers, the program focusedon strengthening team leadership, collaboration, and decision-makingand problem-solving abilities. The training included leadership coursessuch as Financial Business Thinking, Human Resource Management forNon-HR Managers, Coaching Leadership: How to Coach Subordinates,and the flipped classroom Outstanding Manager’s Voyage Workshop,improving leadership and management skills in various managementscenarios and promoting organizational e?ciency.
To effectively motivate successor cadres to seize opportunities, facechallenges, and strive for success, and to stimulate the internal drivingforce of the successor cadre team, the Company followed the principlesof openness, fairness, competition, and merit selection in 2024.Centered around cultivating a cadre and talent team that is politicallyconscious, courageous in responsibility, strong in execution, disciplined,and ambitious, the Company organized and launched the MiddleManagement Successor Development and Assessment Project, infusingnew vitality into the Company’s cadre team building.
Peking University Senior Workshop of Yunnan Baiyao Group
Middle Management New Entry Training Program
Middle Management Successor Development and Assessment Program
On-site Training of the Senior Workshopon Exploration and Practice of IntelligentManufacturing and Digital Transformation
On-site Training of the Peking University Senior
Workshop
On-site Training of the Middle Management
New Entry Training Program
Middle Management Successor Development
and Assessment Program
99100
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Total Number of Participants
Total Annual Training Cost
Training Cost Per Person
56,448
RMB
8.8312
million
RMB
951.95
Total Training DurationTraining Duration Per Person325,839.46
Hours
35.12
Hours
PromotionMechanism
PerformanceIncentives
Yunnan Baiyao has established fair, just, transparent, and objective evaluation criteria, andfurther rened its dynamic and e?cient job management system, providing employees withequal opportunities for promotion. The Company prioritizes internal employees for promotionopportunities, strengthens career development paths, and through dynamic adjustments andalignment with strategic needs, o?ers clear channels for advancement, thus achieving theoptimal allocation of human resources and the strategic goal of talent development.Through a dual-wheel driven model of “internal cultivation and external talent introduction,”we have established a scientic and rational job management system, job level system, jobqualication system, employee evaluation system, and a dual-channel career developmentsystem to promote continuous talent development, help employees understand their currentpositioning within the Company, clarify career development directions, and open up futurecareer development pathways, enhancing the Company’s competitiveness in attracting andretaining talent. Employees can choose their career development direction based on theirprofessional knowledge, skills, and personal characteristics, clarify their career developmentpath within the Company, participate in the job level evaluation of their professional group,understand their job level within the group, and under the guidance of their superiors,identify areas for personal capability improvement and develop a personal career plan. Jobqualification levels serve as the professional foundation for job level promotion and arean indispensable criterion for evaluation. Employees can achieve job level promotion byenhancing their personal capabilities and value contributions.Yunnan Baiyao has established the Performance Management System and developed acomprehensive performance management framework, which emphasizes positive incentiveorientation and drives high-quality growth. Tailored to the functions and key business areasof each department, and in conjunction with employees’ job responsibilities, the Companydeveloped specic performance assessment plans for every employee. These plans coverdi?erentiated assessment weights, clear criteria, and rational assessment cycles, ensuringthe e?ectiveness of performance evaluations. The assessment outcomes are closely linkedto critical decisions such as salary adjustments and promotion opportunities for employees,thereby safeguarding the fairness and validity of the evaluation process.
Clarify thepurpose ofevaluationImplementimprovementplans
Establishevaluationstandards
SetevaluationcyclesExpandevaluationdimensions
Enhancefeedbackmechanisms
Data of Employee Training in 2024
Employee Performance Evaluation System
25,402
31,046
14,1125,64536,691
The statistic standard for the employee training data covered only the employees subject to labor contracts.
Male employeesFemale employees
Number of trainingparticipants by rank
Junior employeesSenior management Middle management
Number of trainingparticipants bygender
101102
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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ABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Yunnan Baiyao focuses on value creation and has built a compensation system based on valuecontribution, establishing a virtuous cycle of creation and distribution. The Company adheresto the principle of valuing contributors, continuously optimizes its compensation incentives andperformance management system. The Company also pays special attention to the needsand expectations of female employees and actively organizes a variety of cultural and sportsactivities, striving to enhance employees’ sense of happiness and belonging.
Improving the Well-being of Employees
Remunerationand Benets
EmployeeCare
In strict compliance with laws and regulations such as the Social Insurance Law of the People’sRepublic of China, the Company Law of the People’s Republic of China, the Securities Lawof the People’s Republic of China, the Management Measures for Share Incentives of ListedCompanies, the Rules for the Listing of Stocks on the Shenzhen Stock Exchange, and theGuiding Opinions on the Implementation of the Pilot Employee Stock Ownership Plan for ListedCompanies, Yunnan Baiyao has established internal management systems and norms, includingthe Salary Management System of Yunnan Baiyao Group Co., Ltd.The Company has developed a fair, just, and market-competitive compensation and benefitssystem. It implements a diversified wage system and a compensation incentive mechanismthat grows in tandem with the Company’s performance, continuously improving employees’remuneration and welfare. The Company strictly enforces statutory holidays, paid annualleave, marriage and bereavement leave, maternity leave, nursing leave, and other holidays asstipulated by national and local regulations. It provides comprehensive protection for all regularand dispatched employees, including pensions, medical care, unemployment, work-relatedinjury, and maternity insurance, as well as housing provident funds, to ensure employees’ basicwelfare needs. In addition, the Company distributes festival gift packages to employees duringthe “two festivals” (Spring Festival and Mid-Autumn Festival) each year and o?ers a warm workenvironment.In 2024, Yunnan Baiyao revised the Employee Welfare Management Measures, further increasingmeal allowances and labor protection standards to enhance employee welfare. The Companyalso introduced a wedding welfare program to encourage employees to actively respond tothe national policies on marriage and childbirth. The supporting service environment and freefacilities available to employees were also included in the management measures, improving thework experience and perception of corporate care among employees. In addition, the Companyrevised and issued the Leave Management Measures, adding parental leave and only-child careleave in accordance with national policies to further improve employee leave benets.During the Reporting Period, the Company actively carried out employee hardship assistanceand warmth-giving activities to ensure that warmth was promptly conveyed to every employee.We conducted a survey of the employees in difficulty, formulated the Warmth-Giving ActivityPlan of Yunnan Baiyao Group Trade Union, and organized consolation visits for employees indi?culty and model workers. The Company also continued to conduct activities such as birthdaycelebrations, childbirth condolences, and hospital visits for employees, delivering care to everyemployee. During major festivals, we organized warmth-giving activities and distributed festivalconsolation gifts to employees, conveying sincere care and blessings.The Company advocates a balance between work and life for employees, implementinggenuine care and concern. We have created a warm and comfortable working atmosphere foremployees, continuously improving their job satisfaction, dedication, and happiness. In 2024, weopened sports and cultural facilities such as basketball courts, tennis courts, and gyms to enrichemployees’ spare time, enhance their physical tness and mental outlook, and strengthen teamcohesion. We also partnered with China National Petroleum Corporation to issue fuel cards andsigned the Cooperation Agreement for Vehicle Annual Inspection Service with several motorvehicle inspection agencies to provide convenient door-to-door vehicle pick-up and deliveryservices for employees. The Company provided employees with benefits such as discountedswimming cards and appliance discounts, which were widely praised.
The Company strictly enforces policies and regulations regarding the protection of femaleemployees’ labor rights and special interests. It has signed a special collective contractfor the protection of female employees’ rights and interests to safeguard their legal rightsin accordance with the law. In 2024, to further enhance the care and protection of femaleemployees, the Company formulated the Special Collective Contract for the Protectionof Special Rights and Interests of Female Workers, which explicitly stipulates a range ofsafeguard measures for female employees and states that the Company should legallyprevent and stop sexual harassment against female employees through verbal, written,pictorial, or physical means. If a female employee encounters sexual harassment at workand reports or complains to the employer, the Company should promptly accept, investigate,and handle the case or refer it to the relevant authorities, while legally protecting the femaleemployee’s personal privacy. Also, the Company collaborates with medical examinationinstitutions to conduct lectures on Caring for Women’s Health and offers free physicianconsultations on medical examination reports to disseminate health knowledge, providepsychological counselling, and enhance the Company’s care for female employees.
Care for Female
Yunnan Baiyao has e?ectively advanced the construction of grassroots democratic politicsand has always attached great importance to communication with employees. It fullyleverages the enthusiasm of its cadres and employees, establishes multi-channel and multi-level communication mechanisms to ensure smooth communication, listens to employees’voices, and fosters a united, harmonious, and positive organizational atmosphere, thusmaximizing the protection of employees’ legitimate rights and interests.To enhance the convenience and efficiency of communication, Yunnan Baiyao furtherenriched and optimized employee feedback channels in 2024. The Company uses suchchannels as the OA system, collaborative document-sharing forms, suggestion boxes, andemail to ensure that employees could submit their opinions and suggestions in a timely andconvenient manner. Employees could provide feedback on system optimization, processadjustment, training satisfaction, and registration information, among other aspects, to helpthe Company continuously improve its internal management and service quality. Throughthese feedback channels, employees’ voices can quickly reach the executives, enabling theCompany to better respond to employees’ needs and enhance overall work e?ciency andemployee satisfaction.
EmployeeCommunication
On the occasion of the 2024 International Women’s Day (March 8), Yunnan Baiyao,in response to the call of the Women’s Committee of Yunnan Federation of TradeUnions, jointly carried out the fourth phase of the “Bringing Happiness Together” CaringProgram for Female Employees in Yunnan Province. A total of 15,672 female employeeparticipants from 16 prefectures and cities across Yunnan province participated throughthe “Baiyao Life+” online platform for benefit activities. The cumulative number oftransactions reached 930, with sales amounting to RMB 146,400, and the Companyprovided a preferential subsidy of RMB 119,800. In addition, the Yunnan BaiyaoGroup Trade Union, in collaboration with the Yunnan Trade Union of Education andHealth, held a “Internal Purchase Activity of March 8
th
Worker Benet” at the Workers’Sanatorium of Yunnan Provine. A total of 14 types of benet products were displayedon-site, with 76 transactions made o?ine, generating sales of RMB 5,731, of which theCompany’s subsidy amounted to RMB 4,687.
Care on International Women’s Day (March 8) and Benet Activities forFemale Employees
The Company provided apreferential subsidy ofRMB
119,800A total of15,672
female employee participants from 16prefectures and cities across Yunnan province participatedthrough the “Baiyao Life+” online platform for benet activities
103104
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
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BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Yunnan Baiyao always puts employee health and safety first, fully implements the work policyof “safety first, prevention foremost, and comprehensive management.” The Company hasestablished a sound safety management system, enforces strict safety regulations, and activelycultivates a comprehensive safety culture, all to provide employees with a safe and healthyworking environment.
Protecting Health and Safety
SafetyManagementSystem
Yunnan Baiyao strictly adheres to laws and regulations such as the Work Safety Law of thePeople’s Republic of China, and the Law of the People’s Republic of China on Prevention andControl of Occupational Diseases. In line with the Company’s actual operations, it continuouslyrevises and improves a series of internal safety management systems, including the ProductionSafety Targe Management System, the Production Safety Responsibility System and the SafetyTraining and Education Management System. For specific scenarios in production, we haveformulated targeted systems such as the Safety Management System for Warehouses and TankAreas, the Fire Prevention, Explosion Prevention and Fire Prohibition Management System,the Management System for Hazardous Chemicals and Significant Hazardous Sources, andthe Management System for Precursor Chemicals to meticulously manage high-risk areas andraw materials used in production, so as to more e?ectively identify, prevent and control potentialsafety risks. The Company has also established a Work Safety Management Committee tocomprehensively promote the Company’s management in safety-related a?airs and ensure thee?ective implementation of primary safety responsibilities.By introducing safety facilities such as interlocking devices, alarm systems, and detectionequipment, the Company has significantly enhanced its inherent safety and substantiallyreduced accident risks at production sites. Regular safety inspections are conducted, and 62safety emergency drills have been organized to strengthen employees’ emergency responsecapabilities. During the Reporting Period, Yunnan Baiyao’s total investment in safety amounted toapproximately RMB 8.49 million. A total of 210 safety inspections were carried out, identifying 2,755potential hazards, all of which were rectied, achieving a 100% rectication rate.
Yunnan Baiyao continues to advance its safety culture construction, always adheres to theprinciple of “full participation and comprehensive coverage.” The Company is committed topromoting the in-depth implementation of its safety system through innovative online and o?inetraining models. It has meticulously planned and successfully completed 203 safety educationtraining sessions, with a total of 19,652 participants.The safety training content includes modules such as quality and safety onboarding for newemployees, re-education on quality and safety following job changes, in-depth analysis ofStandard Operating Procedures (SOPs), authoritative interpretations of quality regulations,specialized training on laboratory quality and safety, and training for those responsible for cosmeticquality and safety. These e?orts have enhanced employees’ safety awareness and professionalskills, strengthening the foundation of the Company’s safety culture.
Safety CultureConstruction
Yunnan Baiyao strictly adheres to relevant laws and regulations, including the Law of thePeople’s Republic of China on Prevention and Control of Occupational Diseases and theRegulations on Occupational Health Management in the Workplace, which continuouslystrengthens the prevention and control of occupational health hazards, and ensures thesafety and health of its employees. During the Reporting Period, a total of 2,767 employeescompleted occupational disease examinations.
Safety training sessions for new employees of Yunnan Baiyao last about three hours andcover essential topics such as basic knowledge of safety production, interpretations ofsafety laws and regulations, guidance on occupational health protection, and practicalsafety skills exercises. We place particular emphasis on critical areas such as firesafety, electrical safety, and elevator usage. Through case sharing and practical drills,the training signicantly enhances emergency response capabilities and risk preventionawareness of new employees, reinforcing their recognition and implementation of thesafety culture.
New Employee Safety Training
In 2024, Yunnan Baiyao held the First Session of Employee First Aid Training Course,with 48 employees participating in total. The training featured a special invitationto a team of instructors from the American Heart Association (AHA), providing acomprehensive curriculum on basic first aid knowledge and practical exercises. Thecourse covered essential life support techniques and detailed the six key chains ofsurvival. Through group practice, participants mastered practical skills that enabled themto “dare to save, be able to save, and know how to save,” allowing them to respondswiftly and e?ectively in emergencies, thereby minimizing harm.
First Aid Training for Employees
Occupational Health Promotion
On-site Safety Training for New EmployeesOccupationalHealthProtection
Related Data on2024 Yunnan BaiyaoOccupational HealthNumber of work-relatedinjuries
Persons
Number of work-relateddeathsPersons
Lost working hours due towork-related injuries
Injury rate per million workhours
Hours
42.94%
During the Reporting Period, Yunnan Baiyao’s totalinvestment in safety amounted to approximatelyRMB
8.49
millionidentifying
2,755
potential hazards
A total of
safety inspectionswere carried outachieving a100%
rectication rate
The statistic standard for the number of injuries per million hours worked only covered the employees subject to labor contracts and labor dispatch
Cultivating Virtueand EmbracingResponsibilities
Yunnan Baiyao actively practices corporate socialresponsibility by deeply integrating into the nationalrural revitalization strategy and actively engaging in thedevelopment and construction of local communities.Through concrete actions, the Company empowerscommunities and promotes their prosperous development.We actively carry out charitable activities, demonstratingour commitment to social responsibility in multiple ways.
107108
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
AppendixFeedback
FormABOUT THISREPORT
BOARD SUSTAINABILITYSTATEMENT
MESSAGE FROMTHE CHAIRMAN
About YunnanBaiyao
MaterialityAssessments
SustainabilityManagement
Yunnan Baiyao thoroughly implements the decisions and deployments regarding rural revitalization from the CentralCommittee of the Communist Party of China, the State Council, as well as the provincial Party committee and government.Leveraging the Company’s industrial advantages, we have outlined our work strategies, developed specific plans, andrened our measures. We adhere to a rural revitalization model that integrates “organizational leadership, integration ofParty building, technical guidance, leading wealth generation, talent cultivation, and consumer support,” which promotesa dual-driven development of industrial and talent revitalization, fostering sustainable progress in rural economies andimproving residents’ living standards.
Rural Revitalization
In 2024, Yunnan Baiyao continued to promote the reforms to “delegate power, streamline administration and optimizegovernment services,” and further enhanced grassroots government service capabilities. The Company optimizedand upgraded relevant facilities in poverty alleviation areas, established a liaison o?ce for NPC deputies, convenienthealth service stations, occupational health centers, laborer rest stations, dispute mediation rooms, and communityactivity centers to foster rural harmony and stability. The community activity center strengthens the cohesion ofgrassroots Party organizations. As of the end of the Reporting Period, Yunnan Baiyao had invested a total ofRMB 800,000 for assistance sites, rural grassroots Party and mass activity facilities, and Chazhiluo Village PartyMember Activity Room/prefecture-level exhibition hall for inheritance of peacock dance, an intangible cultural heritage.
Yunnan Baiyao leverages its industrial characteristics andtechnical capabilities to actively promote investment, breeding,cultivation, procurement, and promotion of TCM materials.In 2024, we utilized the natural resource advantages andindustrial status of Xinle Village and Chazhiluo Village inPantiange Township to develop the Dolomiaea costus CultivationTechnical Solutions, which provides professional guidance onDolomiaea costus cultivation techniques. Farmers can applythese innovative methods to other economic crops, ensuringthe sustainable development of their agricultural economies. Asof the end of the Reporting Period, Yunnan Baiyao had totallytrained 10 leading wealth creators, achieving an innovative yieldof 500 jin (=1/2 kilogram) of corn and 800 jin of Dolomiaea costusper mu, resulting in an additional income of RMB 3,500 per mu,thereby helping farmers to continuously increase their earnings.
Engagement with Grassroots Communities to Support Rural Harmony and Stability
Technical Guidance to Energize Rural Revitalization
Liaison O?ce for NPC Deputies in Chazhiluo Village, Pantiange Township
Innovative Planting Experimental Field
Yunnan Baiyao fully leverages its industrial advantages by procuring TCM materials, including Fritillaria cirrhosa,Fritillaria unibracteata, fresh Fritillaria, and Dolomiaea costus, through Shangri-La Tianquan Chuanbei TechnologyCo., Ltd., Hezheng Tibetan Medicine Industry Co., Ltd., and Jingxiang Breeding and Planting Co., Ltd. In total, weprocured 36,286.4 kilograms of these materials and 1.5863 million seedlings of Dolomiaea costus, generating totalsales of RMB 2.316 million. This e?ectively addressed the sales di?culties faced by local farmers of TCM materials,broadening their paths to wealth and income growth.
Expanding Channels to Co-Create the Blueprint for Rural Revitalization
Supporting Farmers to Enhance Rural Revitalization
Yunnan Baiyao rmly believes in the principle that “To revitalize talent, education comes rst.” The Company activelyengages in educational assistance for rural areas, encourages students to use the knowledge gained during theirhigher education to give back to their hometowns, thereby bringing fresh blood to the rural revitalization e?orts.In 2024, Yunnan Baiyao conducted a college admission survey across Pantiange Township, visiting 86 students whosuccessfully gained admission to undergraduate and vocational programs. Through the “Golden Autumn Scholarship”program, the Company awarded a total of RMB 153,000 in scholarships to these students, helping them full theirdreams of attending university.
Golden Autumn Scholarship to Boost Rural Talent Revitalization
Education Support Activity of Yunnan Baiyao
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TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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List of Social Welfare Awards Won by Yunnan Baiyao in 2024Best Practice Case for Rural Revitalization:
Yunnan Baiyao’s initiative titled Balancing Inheritance and Innovation for Diverse Growth of SpecialtyIndustries was selected as a Best Practice Case for Rural Revitalization by the China Association for PublicCompanies. The Company has received this hornor for the second consecutive year since the associationrst launched its collection of best practice cases in rural revitalization in 2022.
In practice, Yunnan Baiyao consistently adopts a pragmatic approach, truly centering its efforts on the needs of ruralcommunities and the populace. The “Baiyao Model” for rural revitalization has been developed and rened over the years,gaining widespread recognition across various sectors of society and receiving multiple awards related to social welfare andpublic service.
Yunnan Baiyao actively fullls its social responsibility by engaging deeply with local communities and collaborating closely toconduct a diverse range of community care activities, and thus foster community development and enhance the quality of lifefor residents.
Community Care
In 2024, Yunnan Baiyao’s subsidiary,Hefei Medical Technology Co., Ltd.,actively participated in the large med-ical support activity of “HarmoniousSociety, Healthy China - Caring forPain Patients,” which provided freeon-site examinations, assessments,diagnoses, and treatments for attend-ing pain patients. The event attractedover 400 patients, with the medicalteam offering health consultationsto 212 elderly individuals. They con-ducted 109 health screenings andprovided vertebral treatments andhome rehabilitation training guidancefor 89 mobility-impaired seniors.
Free Medical Consultation Event at Wenshan Rehabilitation Hospital
Free Medical Consultation Event at Wenshan Rehabilitation Hospital
Yunnan Baiyao actively responds to social needs, and contributes to social valueby organizing volunteer activities, donating materials, and participating in socialwelfare projects.In 2024, Yunnan Baiyao implemented systematic regulations for public welfareactivities and donations in accordance with the Public Welfare DonationManagement Measures of Yunnan Baiyao Group Co., Ltd., which enhances thetransparency and e?ciency of the Company’s charitable actions, expanding theinfluence of its corporate culture. During the Reporting Period, the Companyactively participated in multiple social welfare projects and encouraged employeesto engage in volunteer activities, resulting in a total donation of RMB 1 million inmaterials, and a total of RMB 4.589 million in external donation.
Social Care
During the Reporting Period, theCompany actively participated inmultiple social welfare projectsand encouraged employees toengage in volunteer activities,resulting in a total ofRMB
4.589
million inexternal donation.
On World Oral Health Day 2024, Yunnan Baiyao launched the “Healthy Oral 123 Plan,” aimed at enhancing publicattention to gum health through simple oral care rules: “1 good toothpaste, brush twice a day, rinse for 30 seconds.”The Company also collaborated with the RedNote IP Truth Research Institute to hold the “Healthy Oral, Count on 1, 2, 3”pop-up event in Shanghai. The event featured interactive elements such as a truth check-in map and gum care tasks,educating users about gum health while strengthening emotional connections. The online campaign achieved over 490million topic exposures and 3.35 million interactions, signicantly raising public awareness of oral health care.
“Healthy Oral 123 Plan”
“Healthy Oral, Count on 1, 2, 3” Pop-up Event
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TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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In 2024, Yunnan Baiyao hosted the “Let’s Play Basketball” tournament for college students, aiming to connect youngpeople and promote a healthy lifestyle. We partnered with several pharmacies and health & public welfare team ofKeep to start a campus-based initiative that promotes the integration of tness and health. The tournament took placein key cities such as Kunming, Shanghai, Changsha, and Guangzhou, leveraging both online platforms and o?ineinteractions to achieve over 300 million online exposures and 4.2 million interactions, reaching an audience of 110million. Yunnan Baiyao also launched a charitable donation plan, encouraging participants to contribute through sportsby synchronizing with Keep’s public welfare running courses, and showcasing the Company’s social responsibility.
“Let’s Play Basketball” Tournament
Group Photo of Youth Players from the Basketball Tournament
On January 5, 2024, the Hong Kong-Zhuhai-Macao Bridge (Hong Kong Section) Half Marathon of Bank of China (HongKong) successfully took place. The bridge is the longest bridge-cum-tunnel sea crossing in the world. Yunnan Baiyaosponsored the event with HKD 250,000 and provided some of its aerosol products for participants. The event attractednearly 7,000 runners.
Sponsorship of Hong Kong-Zhuhai-Macao Bridge (Hong Kong Section) Half Marathon
Hong Kong-Zhuhai-Macao Bridge (Hong Kong Section) Half Marathon
DimensionIndicatorsUnit2024
Governance
Business EthicsCompliancetraining
Compliance training sessionsTimes9Compliance training coverage%100
Environmental
Addressing Climate Change
GHG emissions
Direct greenhouse gas emissions(Scope 1)
Ton(s) of CO
equivalent15,079.39Indirect greenhouse gas emissions(Scope 2)
Ton(s) of CO
equivalent63,424.31Total greenhouse gas emissionsTon(s) of CO
equivalent78,503.70Intensity of greenhouse gasemissions
Ton(s) of CO
equivalent/Operating revenue of RMB10,000
0.020
Environmental Management
Exhaust gas
Total exhaust gas emissions10,000m
52,868.87NOx Ton(s)7.36Particulate matterTon(s)0.27SOx Ton(s)0.019VOCsTon(s)24.03Exhaust gas emission density
10,000m
/Operating revenue ofRMB10,000
0.013
Wastewatermanagement
Total wastewater dischargeTon(s) 1,012,618.24COD Ton(s)84.83Ammonia nitrogenTon(s)2.00Reclaimed waterTon(s)25,950Wastewater discharge density
Ton(s)/Operating revenue ofRMB10,000
0.25
Wastemanagement
Waste drugs, drugs HW03Ton(s) 139.14Experimental liquid waste HW49 Ton(s) 28.94Other hazardous wasteTon(s)25.38Total amount of hazardous wasteTon(s)193.47Intensity of hazardous waste
Kilogram(s)/Operating revenue ofRMB10,000
0.048
Drug residue, sludgeTon(s) 26,207.34Household wasteTon(s) 856.80Total amount of non-hazardouswaste
Ton(s)27,064.14Intensity of non-hazardous waste
Ton(s)/Operating revenue of
RMB10,000
0.0068
Appendix
Performance Table
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TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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DimensionIndicatorsUnit2024
Environmental
Resources UtilizationWastemanagement
Total amount of solid wasteTon(s) 27,257.61Discharge intensity of solid waste
Ton(s)/Operating revenue ofRMB10,000
0.0068
Energymanagement
Coal consumptionTon(s) 0Gasoline consumptionTon(s) 22.21Diesel consumptionTon(s) 1.42Natural gas consumption10,000 m
686.52
Purchased electricityMWh64,441.65Purchased steamTon(s)213,075.17HydropowerkWh 51,553,317.26Solar photovoltaickWh 3,274,076.00Comprehensive energyconsumption
Ton(s) of standard coal equivalent24,351.00Comprehensive energy density
Ton(s) of standard coal equivalent/
Operating revenue of RMB10,000
0.0061
Waterresourcesmanagement
Water consumptionTon(s) 1,329,515.54Water consumption density
Ton(s)/Operating revenue of
RMB10,000
0.33
Packagingmaterialconsumption
Paper Ton(s) 15,000PlasticTon(s) 4,267AluminumTon(s) 2,900Composite soft packageTon(s) 3,632Glass materialTon(s) 807Packaging material consumptionTon(s) 26,606Density of packaging materialconsumption
Ton(s)/Operating revenue of
RMB10,000
0.0067
Social
Employee EmploymentTotal employee count
Person12,371Types by totalemployeecount
Labor contract employeesPerson9,277Labor dispatch employeesPerson1,202InternPerson209Subcontracting sta?Person1,683Number ofemployees byrank
Senior management
Person190Middle managementPerson1,034Junior employeesPerson8,053
DimensionIndicatorsUnit2024
Social
Number of employees bytype of work
Sales sta?Person5,433Technical sta? (including R&D sta?)Person1,276Production sta?Person1,760Financial sta?Person277Administrative sta?Person531Number of employees bygender
Male employeesPerson5,088Female employeesPerson4,189Number of employees byage
30 and below Person2,82531 to 40Person4,44741 to 50Person1,65851 (inclusive) and abovePerson347Number of employees bynationality
HanPerson7,924Ethnic minoritiesPerson1,352Overseas employeesPerson1Number of employees byregion
Yunnan ProvincePerson4,545Chinese Mainland (exclusive Yunnan)Person4,728Hong Kong, Macao, Taiwan and overseasPerson4Employee training
Total training durationHours325,839.46Total number of participantsPerson-times56,448Training duration per personHours35.12Total annual training costRMB million8.8312Training cost per personRMB951.95Number of trainingparticipants by gender
Male employeesPerson-times31,046Female employeesPerson-times25,402Number of trainingparticipants by rank
Senior managementPerson-times5,645Middle managementPerson-times14,112Junior employeesPerson-times36,691Health and safetyOccupational safetyperformance
Number of work-related injuries and deathsPerson9Lost working hours due to work-related injuriesHours856Number of injuries per million hours worked
%42.94Occupational disease examination participantsPerson2,767
The total employee count includes employees under labor contracts, labor dispatch, interns, and outsourced personnel.
The employee count by all types includes only employees under labor contracts.
The scope includes individuals holding executive positions within the Company and its business groups.
The statistic standard for the employee training data covered only the employees subject to labor contracts.
The statistic standard for the number of injuries per million hours worked only covered the employees subject to labor contracts and labor dispatch.
115116
TopicSteady Progress with
Legacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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DimensionIndicatorsUnit2024
Social
Safety managementSafety investmentRMB million8.49Safety inspection
Safety inspection sessionsSessions210Number of safety hazard inspectedEntries2,755Safety training
Safety emergency drill sessionsSessions2Safety education training sessionsSessions10Safety training attendancesPerson-times19,652Product Quality and SafetyQuality and safety training
Quality and safety training coverage %100Quality and safety training sessionsTimes395R&D and InnovationR&D and InvestmentRMB million348Number of patentapplications
Invention patentsQuantity55Utility model patentsQuantity39Design patentsQuantity4Patent authorizationquantity
Invention patentsQuantity33Utility model patentsQuantity18Design patentsQuantity4Customer ServicesCustomer complaint resolution rate%100Supply Chain ManagementTotal number of suppliersQuantity287Key suppliersQuantity138Chinese suppliers
Suppliers in the local provinceQuantity41Chinese suppliers (other provinces andregions in Chinese Mainland except thelocal province)
Quantity244Overseas suppliers (including Hong Kong, Macao and Taiwan)Quantity2Public welfareExternal donationRMB million4.589
Dimension
Series
No.
TopicCorresponding ArticleCorresponding Section
Environmental
Addressing climatechange
Articles 21-28
Green Development for Deepening EcologicalCivilization – Addressing Climate Change2Pollutant dischargeArticle 30
Green Development for Deepening EcologicalCivilization – Environmental Management3Waste disposalArticle 31
Green Development for Deepening EcologicalCivilization – Environmental Management
Ecosystem andbiodiversityprotection
Article 32
Green Development for Deepening EcologicalCivilization – Biodiversity Protection
Environmentalcompliancemanagement
Article 33
Green Development for Deepening EcologicalCivilization – Environmental Management6Energy utilizationArticle 35
Green Development for Deepening EcologicalCivilization – Resource Utilization
Water resourceutilization
Article 36
Green Development for Deepening EcologicalCivilization – Resource Utilization8Circular economy Article 37
Green Development for Deepening EcologicalCivilization – Resource Utilization
Social
9Rural revitalizationArticle 39
Cultivating Virtue and Embracing Responsibilities –Rural Revitalization10Social contributionArticle 40
Cultivating Virtue and Embracing Responsibilities –Community Care, Social Care11Innovation drivenArticle 42
Innovation-driven Exploration of New Horizons inTCM - R&D Innovation12Technology ethicsArticle 43
Innovation-driven Exploration of New Horizons inTCM - R&D Innovation13Supply chain safetyArticle 45
Innovation-driven Exploration of New Horizons inTCM – Supply Chain Management
Equal treatment toSMEs
Article 46
Innovation-driven Exploration of New Horizons inTCM – Supply Chain Management
Product and servicesafety and quality
Article 47
Innovation-driven Exploration of New Horizons inTCM – Product Quality
Data safety andcustomer privacyprotection
Article 48
Innovation-driven Exploration of New Horizons inTCM – Customer Service17EmployeeArticle 50
People First for Strengthening the Foundation ofTalent
Shenzhen Stock Exchange Index
117118
TopicSteady Progress withLegacy of Baiyao
Innovation-driven Explorationof New Horizons in TCM
Green Development forDeepening Ecological Civilization
People First for Strengtheningthe Foundation of Talent
Cultivating Virtue andEmbracing Responsibilities
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Dimension
Series
No.
TopicCorresponding ArticleCorresponding Section
Sustainability
relatedgovernance
18Due diligenceArticle 52
Steady Progress with Legacy of Baiyao –Risk Management
Communication withstakeholders
Article 53
Issue’s Materiality Assessment –Communication with Issue-relatedStakeholders
Anti-commercial briberyand anti-corrupt
Article 55
Steady Progress with Legacy of Baiyao –Business Ethics21Anti-unfair competitionArticle 56
Steady Progress with Legacy of Baiyao –Business Ethics