2024Environmental, Socialand GovernanceReport
Stock Code：603883
It is a great honor for me to share with you the efforts and practices of LBXPharmacy in environmental, social, and governance (ESG). The year 2025 marksthe 24
thanniversary of the establishment of LBX Pharmacy, as well as the 10thanniversary of our public listing. Along the way, we have built on public health asour cornerstone, adhered to solid industry practices, and continuously createdhistory while achieving growth. I have kept asking myself: as witnesses andparticipants in China’s pharmaceutical retail industry, how should we continue tobe part of this dynamic era? The answer is already embedded in our company’sname — with the warmth of serving "ordinary people," we bring business back tothe essence of humanity.The "Thousand Counties, Ten Thousand Stores" initiative represents our steadfastfootsteps toward promoting accessibility to healthcare in counties and towns.With over 15,000 stores covering 18 provincial markets across the country, the lightof health reaches every corner of cities and rural areas. Empowering healthcareservices with AI and digital intelligence is yet another attempt by us to embracetechnology and innovate services. The full application of online and offline all-chain information systems and digital tools allows the warmth of technologyto benefit more people. Furthermore, the establishment and operation of thepublic welfare organization "LBX Love Association" stand as solid evidence ofour commitment to social responsibility. To date, we have joined forces withpartners to donate funds and supplies worth of more than RMB 100 million fordisaster relief, pandemic prevention, poverty alleviation, education support,rural revitalization, community health, and other social welfare initiatives,demonstrating our dedication and compassion with practical actions.However, becoming a better enterprise means we need to address more ofsociety’s common challenges. This is an era of technological acceleration andvalue restructuring. As artificial intelligence redefines healthcare, as climatechange threatens human well-being, and as the urban-rural healthcare gappersists, we resolutely choose to move forward with responsibility. In momentsof urgent medication needs, we strive to be "faster," as the value of life cannottolerate any delay. Behind the pricing of every medicine, we insist on being"lower," as the right to health should not be constrained by numbers. Acrossevery inch of urban and rural land, we choose to go "deeper," as the value ofinclusiveness requires patient and meticulous cultivation. These decisions may notbring immediate returns, but we ?rmly believe that the advancement of businesscivilization is precisely born from transcending utilitarianism.
LBX Pharmacy is committed to becoming a company that spans centuries,yet this is far more than a mere accumulation of numbers. Genuine "century-long" success is rooted in a century-old adherence to our original mission, acentury-long pursuit of values, and a century-long balance of contradictions.Between "speed" and "slowness," we embrace the digital intelligence wavewhile maintaining the wisdom of "slowness" — slowness in the rigorousquality inspection of every medicine, slowness in the careful care of eachpatient. Between "large" and "small," we strive for scale e?ciency but deeplyrespect the power of "small" — small as the dosage instructions on everymedicine package, small as the trembling gratitude of the elderly duringcommunity health services. Between "change" and "unchanging," we bravelyembrace transformation while guarding the "unchanging" foundation — theunchanging vow of "everything is done for the people," and the unchangingawe for the sanctity of life.Looking to the future, we deeply understand that foresight is not about theaccumulation of technologies, but about insight into human needs. True smarthealth should let technology remain behind the scenes while care becomeseasily accessible. In the future, LBX Pharmacy will actively deploy AI technologyacross various business scenarios, expanding its applications in intelligentconsultations, chronic disease management, and health monitoring. We willfurther deepen the use of DeepSeek and other technologies in supply chainmanagement, operations management, and employee training to drive costreduction and e?ciency improvements across the value chain. Through self-developed algorithm optimization, integration with third-party technologies,and strategic collaboration with leading enterprises, we will enhance healthdata governance and AI model interaction capabilities, thus continuouslyimproving the service quality.Health is the simplest aspiration of humanity; Responsibility is the most noblebadge of an enterprise. LBX Pharmacy is willing to be a humble light, alongsideover 50,000 "LBX employees" to illuminate the journey toward a healthyChina with altruism and protect the tranquility of countless households withprofessionalism.
Words from the Chairman
Founder and Chairman of LBX PharmacyXie Zilong
ContentsWords from the ChairmanAbout This ReportAbout LBX PharmacyDigital 2024
This is an annual report, released to the outside every year.The main body and reporting period of this Report are the same as those of the Company's annual report 2024.The reporting period extended from January 1, 2024 to December 31, 2024. To enhance the integrity of thereport contents, some contents or explanations are appropriately extended forward or backward in time.Unless otherwise stated, the scope of disclosure in this Report is consistent with that of the Company's ?nancialreport and consolidated statements 2024. The environmental performance covers the self-owned pharmacies,medical centers and traditional Chinese medicine factories, as well as logistics centers, employee canteens ando?ces that LBX Pharmacy has the right to control their operations and operated throughout 2024.
This Report has been compiled mainly with reference to the standards below:
The Environmental, Social and Governance (ESG) Report 2024 of LBX Pharmacy Chain Joint StockCompany (hereinafter referred to as "this Report") is the tenth ESG report that has been issued by LBXPharmacy Chain Joint Stock Company (hereinafter referred to as "LBX Pharmacy", "the Company", "theGroup", "we") since its listing (the reports issued from 2015 to 2022 are social responsibility reports, andthose issued from 2023 to 2024 are ESG reports). This Report objectively, transparently and completelydiscloses the Company's ESG concept, practice and performance in 2024 in a standardized manner.
Instructions No. 14 of Shanghai Stock Exchange for Self-Regulation of. Listed Companies - SustainabilityReport (Trial) (hereinafter referred to as "SSE Sustainability Reporting Instructions")Guidelines No. 4 of Shanghai Stock Exchange for Self-Regulation of Listed Companies – Sustainability ReportPreparation (hereinafter referred to as "SSE Sustainability Reporting Instructions")Enterprise Sustainable Disclosure Guidelines - Basic Guidelines (Trial Implementation) issued by the Ministryof Finance of the People's Republic of ChinaGRI Standards 2021 of The Global Sustainability Standards Board (GSSB)Guidelines No. 2 International Financial Reporting Sustainability Disclosure Standard – Climate-RelatedDisclosures (IFRS S2) published by International Sustainability Standards Board (ISSB)
This Report was approved upon deliberation at the nineth meeting of the 5th Board of Directors of the Company,and released.
You can obtain more ESG information from LBX Pharmacy or download the electronic copy of This Reportthrough the following methods:
(The electronic texts include Chinese and English versions. In case of any discrepancy between the two languagetexts, the Chinese version shall prevail)O?cial website of LBX Pharmacy: https://www.lbxdrugs.comO?cial website of Shanghai Stock Exchange: http://www.sse.com.cnIf you want to obtain a paper version of this Report, or have any comments or suggestions about this Report, youcan contact us as follows:
Address: Securities A?airs Department, 808 Luohu Road, Kaifu District, Changsha, Hunan ProvinceTel: 0731-84035189Your comments and suggestions are important basis for us to continuously promote sustainability managementand practice.We have also compared this Report with the SSE Sustainability Reporting Instructions and GRI Standards2021, as detailed in the Appendices.
About This Report
Reporting Scope
All operating data disclosed in this announcement is from the Company's annual report 2024. Unless otherwisestated, all monetary amounts in the report are denominated in RMB.
The data and information disclosed in this Report are mainly obtained as follows:
Internal statistical reports of the CompanyPractical ESG cases daily sorted out and summarizedQualitative and quantitative information collection based on reporting frameworks
Data Sources and Information Descriptions
Deliberative Process
Acquisition of and Response to This ReportBasis for Compilation
ContentsWords from the ChairmanAbout This ReportAbout LBX PharmacyDigital 2024
At the same time of its rapid development, LBXPharmacy has actively participated in public welfareundertakings, conveying social love and warmth withactions. So far, the Company has donated more thanRMB 100 million to social welfare such as disaster relief,epidemic prevention, poverty alleviation and educationassistance and rural revitalization in collaborationwith its partners. The Company has been successivelygranted several honors, including national honor as"Advanced Group Making Contributions to CompleteConstruction of a Moderately Prosperous Society",Super Brands in China, TOP100 Champion in OverallCompetitive Strengths among Chinese Drug RetailEnterprises (for 12 times), and United Nations GlobalCompact.Committed to the health undertakings, it aims tocreate century-old stores. Orienting towards the future,LBX Pharmacy will be deeply ingrained in the healthindustry, ?rmly build a technology-driven health serviceplatform, provide more professional, smarter and morealtruistic services for ordinary people in the silver-haired economy with a more correct healthy lifestyle,and help build a "healthy China".
About the CompanyAbout LBX Pharmacy
Brands
Corporate Culture
LBX Pharmacy (a company listed on the main board ofShanghai Stock Exchange; stock symbol: 603883) is aleading enterprise in China's pharmaceutical retail industry,a top 100 champion in comprehensive competitivenessamong China's pharmaceutical retail enterprises, a top500 enterprise in China's service industry, and a top 100enterprise in Hunan Province.Since its establishment in 2001, the Company hassuccessfully developed 18 provincial markets in Hunan,Jiangsu, Anhui and Gansu, etc. It has more than 15,000stores and approximately 60,000 employees (includingfranchisees). In 2004, its operating revenues RMB 22.358billion; its total assets approximately amounted to RMB
21.045 billion and its taxes RMB 976 million .
Having been deeply ingrained in the health industry formore than 20 years, LBX Pharmacy always maintainsits strategic intent. Consistently adhering to its originalintention of "doing everything for ordinary people", it iscommitted to providing professional and warm healthmanagement services for the ordinary people. In thepast few years, the Company has continuously madebreakthroughs and innovations, constantly deepened itsdigital and intelligent transformation, and driven rapidbusiness development. It has accurately empowered smalland medium-sized chain and single pharmacies, vigorouslybuilt a "large-scale ecosystem" for pharmaceuticalretail, vigorously developed the industry's high-standardpharmacy franchise model, alliance model, professionalDTP pharmacies, tradition Chinese medicine clinic chainsand other business patterns, promoted the full-time, globaland full-product integration of new retail, and made everye?ort to build a technology-driven health service platform.At present, the Company owns subsidiaries such as LBXHealth Pharmacy (franchise), Easydrug (alliance), MYLH(wholesale), BXT TMC Clinics, and Fengwoda Logistics,forming a complete pharmaceutical industry ecosystem.
ContentsWords from the ChairmanAbout This ReportAbout LBX PharmacyDigital 2024
Stock Code：603883
ContentsWords from the ChairmanAbout This ReportAbout LBX PharmacyDigital 2024
Regulating Corporate Governance
proposals deliberated at
general meetingsOrganize and participate in
investor exchangesThe coverage ratio of anti-corruption and anti-briberytraining among the employees is100 %The coverage ratio of information security training amongthe employees is100 %
Jointly Building a Green Ecosystem
The total annual photovoltaic electricity consumption is equivalent to savingstandard coal by about
624.39
tGreenhouse gas emissions are reduced by1,821tons of carbon dioxideequivalentsThe use of cyclic logistics vehicles cumulatively reduces the purchase ofcartons by11,700tThe ratio new energy logistics vehicles used for delivery increases to29%, andthe ratio of electric forklifts on site is100%Creating a Community with a Shared FutureCumulatively donate more than RMB
million in collaboration with partnersAnnually carry out100+ public welfare activitiesAnnually and cumulatively support farmers' sales of more than RMB
millionCumulatively donated materials of more than RMB378,000to floods ofYueyang and Chenzhou, Hunan ProvinceFranchising-supported entrepreneurship has cumulatively provided17,000+jobs
Digital 2024
Bene?ting Ordinary People's HealthThe Company has a total of15,277stores, which cover 18 provincial marketsand150+prefectural cities. The stores at the prefectural level and belowaccount for77%More than18,120,000members with chronic diseases have cumulativelybeen archived, and self-examination services have cumulatively been providedfor more than99,230,000peopleThe satisfaction ratio of the customer service hotline is99%For quality management,1,333suppliers were evaluated in aggregate, and
high-risk suppliers were evaluatedThe coverage ratio of quality training among the employees is100%Driving Industry DevelopmentDigital intelligence empowers the supply chain, and thedays sales of inventory are 94, with a year-on-year decreaseof
days
ESG Key Performancein 2024
Net pro?t attributable to parent company
Tax
Revenue
RMB 22.358 billion
RMB 519 million
RMB 976 million
"Health Pharmacy" focuses on expanding 3-5-tier cities, witha total of 5,296 franchise stores"Easydrug", particularly aimed at
provinces and cities,owns a total of19,900franchise stores (excluded from thetotal number of the Company's stores)Empowering Employee Development
The Company has a total of40,132employees, among whomthe female employees account for
89.27%
, while the femalemid-to-senior management accounts for47%The annual class hours per employee are up to
, and16,313employees receive on-the-job talent training online
2,649employees are promoted throughout the yearAnnually support
employees with difficulties, with acumulative amount of RMB1,555,852
signi?cant and above safety incident
ContentsWords from the ChairmanAbout This ReportAbout LBX PharmacyDigital 2024
Wind ESG
ESG Recognition 2024
ESG rating agency
Rating in 2024(As of 12/31/2024)
CHINA SECURITIES INDEX ESG
SynTao Green Finance
CCXGF
Included in CHINASECURITIES INDEX 500ESGLeading Index
Best ESG Award
7th Excellent IR
New ESG Benchmark
Enterprise AwardStockstar
Social Responsibility ReportRelease Certi?cateHunan Federation of Enterprisesand Industrial Economy
AAA B+
ContentsWords from the ChairmanAbout This ReportAbout LBX PharmacyDigital 2024
LBX Pharmacy consistently upholds "doing everything for ordinarypeople" as its business purpose. We constantly improve our ESGmechanism, actively respond to stakeholder demands, sharedevelopment results, make every effort to improve the sustainabledevelopment capabilities and performance of enterprises, and makeunremitting efforts to create a resilient, sustainable business societyand ecology of the earth.
Contents of This SectionESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)
Sustainability Management
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
In 2024, LBX Pharmacy adjusted the "Strategic Development Committee", a former special committee under the Board of Directors, to the "Strategyand ESG Committee", and added corresponding ESG management responsibilities based on the original responsibilities. In accordance with theAdministrative Measures for Independent Directors of Listed Companies and other relevant regulations, the Rules of Procedure for the Strategy and ESGCommittee of the Board of Directors of LBX Pharmacy Chain Joint Stock Company (hereinafter referred to as the "Rules of Procedure") were formulatedto lay a solid foundation for the Company's sustainable development actions.As of the date of this report, LBX Pharmacy has initially established a governance structure at three levels, namely "decision-making - management -execution", with clear responsibilities at each level, in order to ensure that the potential impacts, risks and opportunities of environmental, social andcorporate governance factors are fully considered in the business decision-making process and promote the integration of ESG into every link of thevalue chain.
ESG StructureESG Management StrategyLBX Pharmacy attaches great importance to sustainable development,actively integrates environmental, social and governance (ESG) into its corestrategies and daily operations, and continuously constructs its ESG system.The Company promptly understands, analyzes and grasps internationaland domestic sustainability-related policies, keeps informative about thelatest developments in ESG, judges the potential impacts of ESG matters onthe Company's business model, and performs preliminary sustainable riskcontrol, with a view to moving forward along a ?xed path and with tenacityamid changes and challenges in the industry environment.In 2024, the ESG management strategy of LBX Pharmacy focused on sixmajor areas, namely standardizing corporate governance, benefitingordinary people's health, driving industrial development, jointly buildinggreen ecology, empowering employee development, and creating acommunity with a shared future.
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
During the Reporting Period, LBX Pharmacy continuously improved itssustainability governance capabilities. In 2024, the Company's seniormanagers and members of the ESG execution team actively participatedin thematic ESG learning or exchange with Shanghai Stock Exchange andexternal parties. The Company also engaged a third-party professionalorganization to conduct special training internally to continuously improveits internal ESG awareness and management. The third-party professionalorganization conducted field research on all departments and affiliatesof the Company, issued ESG management optimization plans, and madesuggestions on the Company's ESG work. The ESG execution team visitedthe departments and a?liates of the Company to publicize and implementthe ESG concept, and continuously improved internal recognition of theESG concept and ability to execute the concept.LBX Pharmacy attaches great importance to the demands of stakeholders,actively participates in ESG research or exchange activities of industryassociations and partners, and works with the stakeholders to promoteESG development in the industry. The Company attaches great importanceto external ESG ratings and pays attention to more than 20 domesticand foreign ESG rating systems. Our ESG execution team identifies ourweaknesses in corporate ESG work through the underlying data of ratingagencies, and regularly reports to the superior to check for omissions and?ll gaps to improve ESG management and information disclosure.
The Company has established a top-down ESG supervision mechanism. The Board of Directors is responsible for supervising di?erent ESG governancework, including risk review, strategy and goal formulation, especially the Strategy and ESG Committee and the ESG Management Committee. The ESGManagement Committee is responsible for daily overseeing the ESG Working Group.The Company has scientifically established performance indicators in six major ESG areas, including but not limited to commodity and qualitymanagement, customer satisfaction, human capital development and information security. We link these ESG performance indicators with theperformance pay and evaluation of relevant senior executives and business leaders.According to the Company's internal ESG information reporting mechanism, reports shall be made from bottom to top and level by level. The ESGWorking Group reports work progress and specific ESG practices of the Company to the ESG Management Committee from time to time. The ESGManagement Committee annually reports to the Strategy and ESG Committee and the Board of Directors on the achievement of ESG objectives andperformance.LBX Pharmacy is committed to openly and transparently reporting the Company's ESG concepts, practices and performance to the stakeholders throughthe publication of annual ESG reports. According to the latest sustainability reporting directives and guidelines issued by Shanghai Stock Exchange, theCompany adjusted and added relevant issues and segmented indicators based on its own situation, continuously standardized the criteria for reportdisclosure and improved the information disclosure.
Information Reporting Mechanism and Supervision Mechanism
For the past few years, the pharmaceutical industry has paidmore and more attention to ESG. On July 16, 2024, ChinaAssociation of Pharmaceutical Commerce hosted ChinaRetail Pharmacy Innovation and Development Forum. LBXPharmacy was invited to participate in the forum and delivera thematic ESG speech titled Altruistic Cure and Explorationof a Sustainable Health Industry Development Path to shareexperience and practice on corporate ESG creation.
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Stakeholder CommunicationComplete, effective stakeholder communication is essential to the Company's business decisions and growth. LBX Pharmacy attaches great importance to its stakeholders, continuously improves its efficient and diversifiedcommunication mechanism, actively listens to and responds to the expectations and demands of its key stakeholders, including government and regulatory agencies, customers, shareholders and investors, customers, employees,suppliers and business partners, communities, the public, and the natural environment, which is taken as an important consideration for optimizing our ESG management strategies and practices. ‘
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Preparation of a list of issues
Issue Analysis ProceduresAssessment of Materiality IssuesESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Based on the 21 issues in the "Table of Index to the Issues of the Instructions" attached to the Guidelines ofShanghai Stock Exchange, 20 issues are identi?ed based on the actual situation of the Company, among which theCompany is not involved in the "science and technology ethics" for the time being. Based on the actual situationand business activities of the Company, another 4 material issues are identified. Hence, there were 24 issues intotal.
The Company preliminarily analyzes the risks and opportunities of 24 issues, and compiles a List of Issuesbased on the situation of a?ected stakeholders. In the future, the Company will be committed to continuouslydeepening its ability to identify and monitor potential risks and opportunities in di?erent issues, ensuring strictmanagement of relevant risks, and proactively seizing every favorable opportunity to promote the long-termsustainable development of the Company.
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Responses to Sustainable DevelopmentGoals (SDGs)
NO POVERTYCorresponding sectionCorresponding sectionCountermeasureBene?ting Ordinary People's HealthDriving Industry DevelopmentCreating a Community with a Shared Future
Bene?ting Ordinary People's HealthEmpowering Employee DevelopmentJointly Building a Green EcosystemCreating a Community with a Shared Future
GOOD HEALTH AND WELL-BEING
Countermeasure
Control quality to provide high-quality goods and servicesProvide professional pharmaceutical services, chronic diseasemanagement, and disease care to promote health accessibilityImprove remunerations and bene?ts; pay attention to employeehealth and safetyPromote green operations, providing green work andconsumption environments
Make high-quality medicines available in remote areas intowns and villages.Develop franchise and alliance business; support individualentrepreneurship, and empower single, small and medium-sized chain pharmacies to increase their e?ciency andrevenue.Support rural revitalization and carry out charitabledonations.
Corresponding sectionCorresponding section
Empowering Employee DevelopmentCreating a Community with a Shared Future
Empowering Employee DevelopmentQUALITY EDUCATIONGENDER EQUALITYCountermeasureProvide abundant training and learning for the employeesImplement an incentive plan for the college entranceexaminations of the employees' childrenProvide charity support for studentsCarry out various health science popularization and patienteducation activities
Countermeasure
Put an end to sex discrimination in the workplaceValue the power of womenRespect and protect the employees' reproductive rightsand interests
Corresponding section
Jointly Building a Green EcosystemCLEAN WATER AND SANITATION
Corresponding section
Jointly Building a Green Ecosystem
AFFORDABLE AND CLEAN ENERGY
CountermeasureStandardize the use of water resources and advocate waterconservationDischarge sewage and wastewater in compliance withregulations to prevent water pollution
CountermeasureOptimize resource utilization and managementEnable photovoltaic power generation on the roofs of buildingsin the park to improve the use of clean energy
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Corresponding sectionJointly Building a Green EcosystemCLIMATE ACTION
CountermeasureAnalyze climate risks and opportunities; adopt relevant mitigation andadaptation measuresContinue to promote green actions across the entire value chain (e.g. greenlogistics and operations)
Corresponding section
Regulating Corporate GovernancePEACE, JUSTICE AND STRONG INSTITUTIONS
CountermeasureCreate an e?ective and responsible management structure, to continuouslyimprove corporate governanceComprehensively promote the rule of law constructionPractise business ethics and strengthen anti-corruption compliancemanagement
Corresponding sectionCountermeasureBene?ting Ordinary People's HealthDriving Industry Development
Strictly control qualityPerform green, digital and intelligent supply chain managementAttach importance to customer feedback on goods and services
RESPONSIBLE CONSUMPTION AND PRODUCTION
Corresponding sectionCountermeasure
Jointly Building a Green EcosystemActively respond to "plastic reduction" and reduce the use
of plastic bagsProtect biodiversity in park construction
LIFE ON LAND
Corresponding section
Driving Industry DevelopmentINDUSTRY, INNOVATION AND INFRASTRUCTURE
Corresponding sectionCountermeasureJointly Building a Green EcosystemBene?ting Ordinary People's HealthCreating a Community with a Shared Future
Standardize waste discharge and develop green logisticsAdvocate green o?ce and green consumptionOver 15,000 stores have become community health service stationsMake barrier-free facilities and services available in storesProvide rescue and care for groups su?ering from natural disasters
SUSTAINABLE CITIES AND COMMUNITIES
Corresponding sectionCountermeasure
Empowering Employee DevelopmentDriving Industry DevelopmentCreating a Community with a Shared Future
Diverse recruitmentProtect laborer rights and interests, improve employeeremunerations and bene?tsImplement personnel promotion, retention and motivationPromoting regional social and economic development
DECENT WORK AND ECONOMIC GROWTH
Countermeasure
Build or upgrade regional logistics centersContinuously improve supply chain managementCreate a high-quality pharmaceutical supply network covering 18 provincesand 150 prefecture-level citiesBuild an industry ecosystem to promote mutual bene?ts within the industry
ESG Management StrategyStakeholder CommunicationAssessment of Materiality IssuesResponses to Sustainable Development Goals (SDGs)ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Corresponding sectionCountermeasure
Regulating Corporate GovernanceEmpowering Employee DevelopmentDriving Industry Development
Engage in fair competitions and safeguard orderliness of themarket economyEqual treatment of small and medium-sized enterprisesEstablish an investigation and whistleblowing systemCombat all forms of discriminationPromote diversity and equal development
REDUCED INEQUALITIES
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Desirable corporate governance is a cornerstone for long-termsteady development of enterprises and a basic prerequisite forcomprehensive risk prevention. The Company strictly abides bylaws, regulations and regulatory requirements of the places whereits businesses are conducted and relevant organizations. We obeybusiness ethics, continuously improve our corporate governance,create fair, clean business environment with our stakeholders, andshare our development results with our shareholders and investors.
Contents of This SectionGovernanceCompliance OperationData Security and Privacy ProtectionParty Building Work
Regulating Corporate Governance
Responses to SDGs in This Section
Governance Structure
General MeetingBoard of Supervisors
Strategy and ESG CommitteeAudit CommitteeNomination, Remuneration andEvaluation Committee
Board of Directors
ChairmanCEOBusiness Cluster
Chairman's O?ceAudit DepartmentSupervisionDepartment
Supply Chain ClusterService Cluster
general meetingsproposals reviewed
meetings of the Board ofDirectors
meetings of the Board ofSupervisorsproposals reviewedproposals reviewed
Annual Data 2024
5224
Governance
The Company has established a corporate governance structure featured by definite powers andresponsibilities, coordinated operation, e?ective checks and balances, which consists of the general meeting,the Board of Directors, the Board of Supervisors and senior management of the Company. We strictly complywith the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China,the Code of Corporate Governance for Listed Companies, the Articles of Association, other laws, regulationsand requirements, in order to promote the continuous growth of enterprise value.
Board of Supervisors of the Company
Management of the CompanyIn the Company, the Board of Supervisors is accountableto the general meeting. It exercises functions and powerssuch as inspecting the Company's financial affairsand supervising the conducts of directors and seniorexecutives in performing their duties in accordance withthe laws. In addition, it strengthens its supervision overall its subsidiaries' businesses by organizing inspectionsof the subsidiaries, to safeguard the interests of theCompany, its shareholders and employees. The fifthBoard of Supervisors of the Company consisted ofthree supervisors, including one supervisor who was anemployee representative and one female supervisor.In 2024, the Company held 6 meetings of the Board ofSupervisors and reviewed 24 proposals.
Responsible for the operations management of the
Company, the management of the Company organizes
the implementation of the resolutions of the Board
of Directors, annual plans and investment proposals
of the Company. They formulate specific rules of the
Company, and the Articles of Association or perform
other functions and powers granted by the Board
of Directors. In 2024, the Company had 10 statutory
executives, including 4 female executives, to guarantee
its e?cient and stable development.
General Meeting of the CompanyBoard of Directors of the Company
The general meeting of the Company enjoys the decision-making rights stipulated under the laws, the regulationsand the Articles of Association. It exercises the decision-making power on major matters such as the Company'sbusiness policies, financing, investment and profitdistribution in accordance with the laws. In 2024, theCompany held 4 general meetings and reviewed 19proposals. At the meetings, on-site and online voting wasperformed in combination to fully discuss and vote onvarious proposals to ensure that all shareholders weretreated equally and effectively safeguard the interestsof all shareholders, especially small and mediumshareholders.
In the Company, the Board of Directors is accountable
to the general meeting. Except for the Chairman,
other directors don't hold management positions
in the Company, thus realizing the separation of
governance and management. In 2024, the Company
held 7 meetings of the Board of Directors and
reviewed 52 proposals. The fifth Board of Directors
of the Company consisted of 9 directors, including 1
female director. Under the Board of Directors, three
professional committees, namely, the Strategy and ESG
Committee, the Audit Committee, and the Nomination,
Remuneration and Evaluation Committee, have been
established. In 2024, the professional committees held
10 meetings and reviewed 26 proposals.
Annual General Meeting 2024.
GovernanceCompliance OperationData Security and Privacy ProtectionParty Building WorkContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Construction of the Board of DirectorsIndependence of the Board of Directors
The Company attaches great importance to theindependence of the operation of the Board ofDirectors, the positions, relationships and decision-making are independent.
Diversity and Professionalism of the Board of Directors
The Company strives to build a diverse, professional team of directors, and pays attention to the diversityof the Board of Directors in terms of sex, cultural and educational backgrounds, professional skills andother aspects to ensure the scienti?c decision-making of the Board of Directors. At present, the Companyhas 9 directors, including 3 independent directors and 1 female director. All members of the Board ofDirectors have rich professional backgrounds and diverse professional skills, covering pharmaceuticalbusiness, ?nancial investment, law, accounting, digitalization, retail, management and other ?elds.
GovernanceCompliance OperationData Security and Privacy ProtectionParty Building Work
directors
independent directors
female director
Special committees of theBoard of Directors
Strategy and ESGCommittee
Composed of 3 directors,namely Mr. Xie Zilong,Mr. Zheng Jiaqi, and Mr.Wu Lianfeng, with theindependent directors'involvement; convened byMr. Xie Zilong - the Chairman.
Composed of three directors,namely Mr. Wu Lianfeng,Ms. Xie Jiaqi and Mr. RenMingchuan, among whom Mr.Wu Lianfeng is the convener.The independent directorsaccount for a majority andserve as conveners.Composed of three directors,namely Mr. Ren Mingchuan,Mr. Li Zhen and Mr. XieZiqi, among whom Mr. RenMingchuan is the convener.The independent directorsaccount for a majority andaccounting professionalsserve as conveners.
?nancial information andtheir disclosure; supervisingand evaluating the internaland external audit work andinternal control.
In 2024, four meetingswere held to consider 16proposals, including periodicreports, use of raised funds,credit granting, guarantees,and appointment ofchief ?nancial o?cer andaccounting ?rm.
Mainly responsible forformulating the selectionstandards and procedures forthe directors and the seniorexecutives; selecting andreviewing the selection andquali?cation of the directorsand the senior executives;formulating and assessmentstandards for the directorsand the senior executives, andevaluating them; formulatingand reviewing remunerationpolicies and plans for thedirectors and the seniorexecutives.
4 meetings were held in2024 to review 8 proposalsincluding election of the Boardof Directors, remuneration ofthe directors, the supervisorsand the senior executives,repurchase and cancellationof restricted stocks.
Mainly responsible forstudying and makingsuggestions on the Company'slong-term developmentstrategies, major investmentdecisions, ESG strategies,visions, goals and policies, etc.
Two meetings were held in2024 to review 2 proposals,including the Company's ESGreports and changes in theapplication of raised funds.
Nomination,Remunerationand EvaluationCommittee
Audit Committee
Members of the committeesFunctions and powers of the
committees
Duties performed during thereporting period
Note: The above data shows the members of the ?fth Board of Directors, who performed their duties in 2024.
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Securities Times 2024Investor Relations Management TianmaAward for Chinese Listed Companies
%
Annual Data 2024
E?ectiveness of the Board of Directors
The Company attaches great importance to the effectiveness of the Board ofDirectors. Our Board of Directors diligently, actively performs its duties, andimplements the resolutions of the general meetings in strict compliance with theCompany Law, Securities Law, Rules Governing the Listing of Stocks on ShanghaiStock Exchange, other laws and regulations, as well as our Articles of Associationand Rules of Procedure for the Board of Directors, In 2024, the average attendancerate of the members of the Board of Directors at the meetings of the Board ofDirectors reached 100%, and the attendance rate of the members of professionalcommittees under the Board of Directors at the meetings of the professionalcommittees was up to 100%. The independent directors of the Company conductself-assessment, report and disclose the annual Independent Directors' DutyPerformance Report annually, which covers their meeting attendance, time andcontent of on-site work, etc.The Company continuously pays attention to the directors' term of office andattaches great importance to the stability of the Board of Directors. Besides, weconstantly recruit new directors to enrich the decision-making dimensions of theBoard of Directors and promote the Company to achieve more stable, e?cient andsustainable development. As of December 31, 2024, the average term of o?ce hadbeen 3.97 years among the members of the Board of Directors.Capacity Building of the Board of DirectorsThe members of the Board of Directors actively participate in our key businessprojects, field research of stores and different types of compliance training,including digitalization, commodity and financial projects, to promote theimplementation of our strategies. They participate in training on nationalpolicies, securities market laws and regulations, operational mechanisms,corporate systems, environmental and social issues, and e?ectively enhance theircompliance awareness and functional performance.In 2024, the Company particularly organized the directors to participate in anti-fraud training and training related to the independent directors organizedby Shanghai Stock Exchange, Hunan Office of China Securities RegulatoryCommission, and China Association for Public Companies. Meanwhile, the Articlesof Association, the Working System for Independent Directors and other systemswere revised to respond to the requirements of China Securities RegulatoryCommission and promote the reform of the Company's independent directorsystem as a listed company.
Capital Market ResponsesCompliance of Information Disclosure
The Company actively ful?lls its information disclosure obligations in strict accordance with the Rules Governing the Listing of Stocks on ShanghaiStock Exchange, the Instructions of Shanghai Stock Exchange for Self-Regulation of. Listed Companies and other relevant regulations. We carry outinformation disclosure work, standardize our information disclosure standards and reporting procedures, adhere to the principle of "truthfulness,accuracy, completeness, timeliness and fairness", and show our business philosophy and achievements to our investors, to e?ectively protecttheir legitimate rights and interests.In 2024, the Company issued a total of 154 announcements and related documents, and added operation descriptions to its periodic reports sothat the investors could truly understand its development through more standardized and transparent information disclosure. To enhance thereadability of its periodic reports, we posted "one picture to understand" or a video for each periodic report, and proactively issued documents tocomprehensively interpret major announcements. We published approximately 850 positive reports in mainstream media sources throughout theyear (excluding reprints).
announcements andrelated documentsissued
investor exchangesperformance brie?ngstelephone conferences
for interpreting periodicreports
response rate ofE-interactive
15426033100
Excellent IR 2024Best Capital MarketCommunication Award
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Diverse Investor Communications
Communication channels
Year201520162017201820192020202120222023Interimperiod of20242024(proposal)Total
267,000,000267,000,000284,945,266286,556,365291,951,495408,673,661447,957,309584,806,902584,793,211760,231,174760,095,613
Cash dividend of RMB
0.3 per share
Cash dividend of RMB
0.30 per share
Cash dividend ofRMB 1 per shareCash dividend of RMB 0.5per shareConversion into 0.4 sharesfor each share held, andcash dividend of RMB 0.42per shareCash dividend of RMB 0.35per shareConversion into 0.3 sharesfor each share held, and cashdividend of RMB 0.5 per shareCash dividend of RMB 0.5per shareConversion into 0.3 sharesfor each share held, and cashdividend of RMB 0.66 pershareCash dividend of RMB
0.3307 per share
Cash dividend of RMB 0.08per share
80,100,00080,100,000284,945,266143,278,182.50122,619,627.90143,035,781.35223,978,654.50292,403,451.00385,963,519.26251,408,449.2460,807,649.042,068,640,580.79
116,780,598
134,387,193
175,437,963
426,605,754
Stable and Steady Returns for Investors
Upholding being "investor-oriented" in the course of development, the Company is committed to establishingscienti?c, sustainable and stable dividend distribution and return mechanisms. We have been implementing thenine new guidelines of China and the action plan of Shanghai Stock Exchange for "improving quality, increasinge?ciency and emphasizing returns". We actively reward our shareholders, and share our operating results withour investors. Since its listing in 2015, the Company has cumulatively distributed cash dividends of RMB 2.069billion (including proposal 2024), which accounts for 205% of the net funds raised from the IPO.
Performancebrie?ngs
Corporatesurveys
Strategymeetingswithsecurities?rms
Collectivereceptionday forinvestors
Mediainterviews
Roadshowandreverseroadshow
ShanghaiStockExchangeE-interactive
EmailTelephone
communications
The Company attaches great importance to communications and exchanges with investors, proactively carriesout investor relations management, and protects the legitimate rights and interests of institutional investors,individual investors, small and medium shareholders and potential investors, including their right to know.We strengthen our communications and exchanges with our investors through multiple channels to help themunderstand our situation more clearly and conveniently, and listen carefully to their feedback and suggestions,thus improving our daily operations.In 2024, the Company conducted a total of 260exchanges with institutional investors, covering1,831 institutional investors in total; 3 performancebrie?ngs and 3 telephone conferences for interpretingour periodic reports. We replied to 20 questionsfrom SSE E-interactive, with a response rate of 100%,answered 524 calls from our investors, answeredquestions and cleared doubts of the investors on thepremise of complying with information disclosurerules. During the reporting period, the Companyactively participated in an activity known as "I am a shareholder" and organized by Shanghai Stock Exchange,Securities Association of Hunan and China Fortune Securities for the small and medium shareholders to get closerto ordinary people. We also participated in the online collective reception day for investors of listed companies inHunan jurisdiction in 2024. We conducted in-depth exchanges with our investors and continuously built friendly,transparent and active investor relations.
In September 2024, the activity of Shanghai Stock Exchangenamed "I am a shareholder" was carried out in LBX Pharmacy.
In 2024, the Company distributed its interim dividends for the ?rst time, distributing total cash dividends of RMB251 million, which accounted for 50.01% of the net pro?t attributable to the parent company in the ?rst half of2024. Besides, the Company released the Shareholder Return Plan for the Next Three Years (2024-2026) during thereporting period. On the premise of satisfying the conditions and guaranteeing normal business operations, theannual pro?t distributed in cash from 2024 to 2026 shall at least account for 50% of the net pro?t attributable tothe parent company in the current year.
Total share capital(shares)
Pro?t distributionplan (tax-inclusive)
Cash distributionCapital conversioninto shares(RMB)(shares)
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Risk Prevention and Control and Internal Control Architecture
Three Lines of Defense for Risk ManagementFirst line ofdefense(businessdepartments)
Second line of
defense(Risk ManagementDepartment)
Third line of defense
(SupervisionDepartment)
As the ?rst line of defense, the business departments identify and investigate risksinto the Company's daily business work, report risks in time, and appropriatelyrespond to risks.
As the second line of defense, it is responsible for risk management before andduring the event. The relevant functional departments include Process and RiskManagement Department, Quality Management Department, Information SecurityTeam and Securities A?airs Department, etc., which comprehensively guide, manageand coordinate the Company's daily work of comprehensive risk management.The Supervision Department and the Audit Department, as the third line of defense,are responsible for post-event risk management, evaluating the rationality, integrity,effectiveness and reliability of the Company's risk control, discovering existingproblems in time, and making suggestions for improving risk control.
Identify and address
Guide and coordinate
Supervisory evaluation
Risk and Internal Control ManagementCompliance Operation
Risk Prevention and Control and Internal Control
Under the complex and ever-changing market environment, a solid line of defense for risks is a cornerstone of the Company's stable and long-term development. We continuously establish and improve our risk and internal controlsystems, comprehensively strengthen our risk warning, prevention and control capabilities, and build a safety barrier for the sustainable development of the Company. We constantly improve our internal process control to ensure thatall our business activities are carried out in order within the frameworks of laws, regulations and internal policies and our systems.The Company has established and continuously optimized its risk prevention and control and internal controlstructures, compiled and published the Yellow Book of Comprehensive Risk Management, the Charter ofComprehensive Risk Management and the Bottom Line Management Standard for the Group's Risk Compliance.We have continuously improved our risk management system, and built a strong line of defense for riskmanagement and control. Based on our internal control risks and management objectives, the Company hasestablished an internal control system covering all business links in business activities, including but not limitedto social responsibility, development strategy, human resources, organizational structure, capital activities,procurement, R&D.
In 2024, the Company continuously optimized the three major lines of defense for risk management, increased itsorganizational collaboration e?ciency and enhanced its risk disposal capabilities. The Company has establisheda high risk control coordination mechanism covering the second line of defense (legal compliance, internalcontrol, quality and information security, etc.) and the third line of defense (supervision and audit, etc.) for riskmanagement, appropriately introduced the business departments of the first line of defense to join, regularlyshared risk information and risk management work plans, discussed risk management strategies and responseplans, regularly followed up on the implementation progress of response plans, and improved the "closeness" ofcooperation. We have also continuously explored how to improve the collaborative governance of the three linesof defense for risk management, set improvement goals, improved our risk management and control processes,systems and mechanisms based on the global perspectives, and continuously promoted our closed-loopmanagement.
As the final decision-making level for the Company's major risks, it is ultimately responsible for theestablishment, improvement and e?ective implementation of the internal control system.Supervise and evaluate internal and external audit work; review internal control.Decide on and guide daily risk management.Full-time Risk Prevention and Control and Internal Control Organization
Led by the Process and Risk Management Department, it has built three major lines of defense for riskmanagement, responsible for the construction and daily operation of the comprehensive risk managementsystem. The internal control group organizes and implements daily internal control inspection and internalcontrol self-evaluation to ensure the e?ectiveness of internal control. The Internal Control Team organizesinspection and self-evaluation of daily internal control, to guarantee the e?ectiveness of the internal control.
Board of DirectorsAudit CommitteeManagement
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direct-sale storescovered by supervisionand audit
supervisionreportscompleted%10013815
punishmentnotices issued bythe Group
Annual Data 2024
Annual Data 2024
Annual Data 2024
The Company implements a hierarchical management mechanism for risks, and judges the risks by levels. Thus,we are able to respond to and address various risks more accurately and e?ciently. The Company creates anduses various risk management tools. As of the date this report, the Company has prepared a list of risk compliancebottom lines for six major business segments, clari?ed the risk redlines based on speci?c conditions of the majorbusiness segments, and increased its employees' awareness of bottom lines. We have established risk matrix andrisk level assessment standards based on our internal control cycle, and applied them in key areas such as fundmanagement on a pilot basis to improve our risk identification capabilities. We have built a risk managementdatabase, to regularly collect and report risk information, review historical data, analyze common problems, andhelp business departments improve their risk management capabilities.
Audit and SupervisionProcess Management
new and amended systems
new and optimizedprocedures
%
coverage ratio of training onnew systems and procedures
process audit items
Hierarchical Risk Management
new core segmentscovered by thehierarchical riskmechanism
new internal controlcycles covered by therisk matrix
risk screening andevaluation items
new business segmentscovered by the riskcompliance bottomlines
In combination with the industry value chain and its own business reality, the Company has issued LBX ProcessFramework, Group's Process Management Standards, Group's System Management Standards and Group'sProcess Operations Management Measures. In 2024, we continuously iterated our process management system,optimized our process management work, sorted L1-L3 processes of 15 core value chains, carried out multiplebusiness domain process optimization projects, constantly improved our process maturity, and increasedour business collaboration efficiency. In addition, the Company actively promoted its process audit projects,established and implemented its process audit management mechanisms on a trial basis, and strengthened ourprocess compliance and transparency.
According to the Charter of Corporate Supervision and Audit, the Group's Supervision Department and Audit
Department of LBX Pharmacy independently carry out internal audit and supervision work, exercise internal
supervision power, and give full play to their roles in promoting and guaranteeing internal supervision and audit
in strengthening internal control, improving the operations management, and increasing economic bene?ts, and
laying a solid foundation for the Company's steady, sustainable development. When performing their duties, the
Supervision Department and the Audit Department of the Group work under the direct leadership of the Chairman
of the Board of Directors and his authorized persons to guarantee business independence.
In 2024, the Group's Supervision Department and Audit Department carried out work in respect of the business
segments according to the annual supervision and audit plan, including but not limited to procurement, ?nance,
engineering, operation and administration. In addition, the Company conducted all-round supervision over its
stores through irregular random inspections, monthly special regional random inspections, store monitoring and
supervision, etc. The supervision and audit covered 100% of the direct-sale stores.
The Company encourages its employees and related parties to report any misconducts that
violate business ethics, laws or regulations. After receiving a complaint and deciding to accept
it, the Supervision Department will strictly investigate and report it in conjunction with relevant
departments, and a supervision report shall be prepared for the case filing. The Company has
established an Employee Reward and Punishment System and Implementation Rules of Nine Red
Disciplines for All Employees to punish the internal employees involved according to its internal
rules.
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Training on legal popularization for allemployees
Promotion of grassroots legislativeconstructionIn 2024, the Company carried out compliancepublicity for its employees, organized legalknowledge training 5 times regarding fourfields, namely advertising law, intellectualproperty, amendments to the Criminal Law,and the Company Law. We continuouslyincreased our employees' complianceawareness, and provided strong support forour compliance management.
In 2024, as the "grassroots legislative contact point"designated by the Justice Department of HunanProvince, the Company extensively collected opinionsand suggestions from grassroots people, and proposeda total of more than 20 amendments in the fieldsof anti-monopoly, supervision over administrativelaw enforcement, and optimization of the businessenvironment. While popularizing the laws, wepooled the wisdom of the masses to promote theimprovement of laws and regulations and contributeto the construction of a law-bases society.
Legal popularization Construction
Tax payment according to law
The Company ?rmly implements tax laws and policies, truthfully declares taxes, pays taxes on time, continuouslystrengthens tax compliance control, and actively makes its due contributions to social development.In 2024, the Company continuously improved its digital financial and tax management, actively promotedthe construction of a tax management system, and initially built a digital electronic invoice managementplatform. Meanwhile, the Company constantly improved its expense control system, achieved refinedexpense management, continuously optimized its organizational construction of the ?nancial sharing center,strengthened its foundation, increased its efficiency and empowered itself. Through digital intelligenceempowerment and team building, the Company has further stimulated the potential and value of the ?nancialand taxation data, strengthened full-process and all-round compliance self-examination and risk preventionmanagement, and better provided support for its sustainable business development. In 2024, the Company paidtaxes of RMB 976 million.
Compliance ManagementLegal Governance
Intellectual Property Protection Prevention and Control of Legal Risks
Contract Management
The Company attaches great importance to "legal governance", and abides by laws and regulations, which is regarded by us as a cornerstone and code of conduct for our development to ensure the legality of our operations. Itgives full play to the role of legal protection, safeguard legitimate rights and interests of its own and its related parties through legal means. We also further improve our legal risk prevention and control mechanism to increase ouremployees' legal awareness.In 2024, the Company continuously optimized its system for preventing and controlling legal risks. Before events, weestablished a pre-litigation legal a?airs handling and risk warning memorandum mechanism to ?le legal a?airs withgreater risks and monitor them in real time to ensure that relevant legal risks were controllable and under control.After events, we actively responded to various legal disputes and litigation cases, and safeguarded our legitimaterights and interests through legal means.The Company sticks to the "contract-abiding and credit-honoring" principle. In 2024, we continuously standardizedour contract signing and performance procedures, prepared 64 contract templates on procurement, sales, lease,franchising, human resources and store engineering, etc., organized our relevant personnel to learn, increased ouremployees' legal awareness during the contract negotiations, further enhanced the e?ectiveness of contract signingand performance, ensured the legality and compliance of contracts, and reduced the risk of contract disputes. In2024, 100% of the Company's contracts passed the legal review.
The Company attaches great importance to the cultivation, declaration and application of independentintellectual property, and actively takes advantage of the intellectual property to empower its business. We alsosafeguard our intellectual property through legal means, cooperate with relevant departments to severely crackdown on illegal activities on trademarks, patents and other ?elds, and clean up the business environment ofthe market. As of the end of 2024, the Company owned 726 valid trademarks (with trademarks deployed in 10overseas regions), 143 copyrights (including 102 computer software copyrights), and 46 patents.
Data as of the End of 2024valid trademarkscopyrightspatents
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of the employees covered by theactivities on "Nine Redlines"thematic program on "Keeping Redlinesin Mind and Acting in Compliance"
%
In 2024, the Company gave integrity education lectures for the management trainees.
During the reporting period, the Company continuously publicized integrity, andcarried out the sixth "Nine-Redline Day" activities in September 2024, covering all of itsemployees. The activities included online taking of a course known as "An Introductionto Integrity by Cases" by all employees, signing the "Commitment Letter of NeverViolating the Nine Redlines", setting the 99 Redline Day computer desktop and the posterfor opening APP "Bai Xing Tong". In addition, in 2024, the Company organized 4 o?ineintegrity education lectures for management trainees; 1 online integrity educationprogram on "Keeping Redlines in Mind and Acting in Compliance"; and published 5WeChat tweets advocating integrity.
Integrity and Fight against Commercial Corruption
Annual Data 2024
Practising of Business Ethics
Adherence to business ethics is the foundation for the Company's long-term development and the code of conduct for all acts of the Company. Consistently adhering to the principle of good faith, fairness and integrity, and LBXPharmacy builds trust with the market and the public in reliance upon good business ethics. Fair CompetitionThe Company strictly abides by the Anti-Unfair Competition Law of the People's Republic of China, the Anti-Monopoly Law of the People'sRepublic of China, the Administrative Measures for Combating Unfair Competitions, other relevant laws and regulations. We stick to theprinciple of fair competition, opposing all acts of unfair competition, monopoly or commercial bribery.The Company reflects the "anti-unfair competition clause" in the contract terms concluded with its suppliers, sets forth its 24-hourwhistleblowing hotline, and includes the "prohibited item" in "Nine Redlines of LBX Pharmacy". We proactively maintain the orderlinessof market competitions, encourage healthy competitions among enterprises, and help create a clean and upright industry developmentenvironment. In 2024, the Company never committed any act that harmed the legitimate rights and interests of other operators ordisrupted social and economic order.
The Company strictly abides by all applicable anti-commercial bribery laws and regulations in its place of business, and prohibits briberyand corruption, in order to acquire or retain business or obtain any other illegitimate bene?ts. Our Chairman has always attached greatimportance to corporate compliance construction. In the Supervision Department, the Chairman directly supervises the integrity andcompliance of the entire group. The Chairman publicizes business compliance operations at quarterly management meetings of the Grouptogether with the Supervision Department, continuously creates a clean, upright company environment, and vigorously supervises andguarantees the Company's sustainable development.The Company makes unremitting e?orts to deeply promote its integrity and anti-commercial corruption work from the perspective ofsystem construction, special spot checks and cultural construction, etc. We have formulated an Integrity Management System to strictlyurge all our employees to be honest and self-disciplined and eliminate corruption. In 2024, the Management System for the Group'sBlacklisted Suppliers was newly issued to standardize the management of blacklisted suppliers and related personnel, emphasizingcompliance and transparency in the process of cooperating with the suppliers.In 2024, the Supervision Department and the Operations Department jointly conducted monthly special spot checks on "Nine Redlines"in each combat zone to punish and criticize those who violated the rules. The Company actively participated in the "Trust and IntegrityEnterprise Alliance" (the ?rst autonomous industry anti-corruption organization for Chinese Internet companies), and promptly uploadsthe blacklist of illegal employees to the database of the "Trust and Integrity Enterprise Alliance" as required by the alliance. In 2024, theCompany additionally blacklisted 6 persons.
o?ine integrityeducation lectures
WeChat tweetsadvocating integrity
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Whistleblowing Investigation System
We encourage our employees and related parties to report any misconducts that violate business ethics, laws or regulations. While keeping the whistleblowers' personal information con?dential, we strictly crack down on anyretaliation and actively maintain open reporting channels.
The Supervision Department of LBX Pharmacy promises to reply to a whistleblower/complainant regarding whether his report/complaint is accepted within 3 business days (for information collection, preliminaryveri?cation and supplementation of relevant evidences) after receiving a real-name report/complaint. To reject the report/complaint, an explanation will be given to the whistleblower/complainant on the reason. For anyreport/complainant not within the jurisdiction, inform the competent department or unit, and reply to the whistleblower/complainant. If the content whistleblown is true, the whistleblower will be given a cash reward.Our Commitments
Whistleblowing MethodNo restriction is imposed on whistleblowing and complaining to LBX Pharmacy. Complainants may whistleblow/complain by telephone, business WeChat, email, letter and face to face, entrust others to whistleblow/complain.Whistleblowing Email
jtdcb@lbxdrugs.com
Whistleblowing Hotline
13975122000
Online Whistleblowing
LBX Pharmacy Business WeChat Bench - Joint Integrity Construction - Whistleblowing and Complaint
Visit and Correspondence AddressSupervision Department, 15/F, LBX Pharmacy Group Building, 808 Qingzhuhu Road, Kaifu District, Changsha, Hunan Province, 410005
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Medicare ComplianceThe Company attaches great importance to medicare compliance management, actively responds to a series of policies such as the Notice on Carrying out Unannounced Inspections of Medical Insurance Funds in 2024, theImplementation Opinions of the General O?ce of the State Council on Strengthening Normalized Supervision of the Use of Medical Insurance Funds to consolidate its self-management of medical insurance funds, strengthen itsmedicare compliance management, and improve its internal medicare management system. We actively carry out internal self-examination, to protect the patients' medication safety and medical insurance funds.
Improve systemconstruction
We have formulated the Compilation of the Medical Insurance Management System, clearly de?ning the responsibilitiesof medical insurance sta?, drug management processes, settlement standards and ?nancial management requirements,and providing a solid institutional guarantee for medical insurance work.The Company has built a special medical insurance team to particularly manage medical insurance compliance mattersand strictly supervise the implementation of compliance requirements in the combat areas.Relying on digital technologies, we have independently developed a medical insurance compliance risk control system,to efficiently monitor medical insurance compliance risks and ensure compliance operations through accurate earlywarning, close monitoring during the events and in-depth post-event analysis.The Company attaches great importance to medical insurance compliance and actively carries out internal self-examination. In 2024, we performed spot checks of all medical insurance outlets to ensure that the system isimplemented in place.The Company actively conducts monthly special medical insurance training, case warning education and training for allits employees, conducts in-depth analysis of medical insurance violations, ensures that medical insurance compliancepublicity is in place, and strengthens the employees' professional skills and compliance awareness through training andpublicity. In 2024, we conducted training on medical insurance compliance 11 times in total.
Establish specialorganizations
Construct a digitalintelligence system
Carry out internal
self-inspection
Strengthencompliance publicity
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Information Security Management Architecture
Data Security and Privacy ProtectionInformation Security Organization and ResponsibilityIn the process of promoting digital and intelligent transformation, information security has become an issue that arouses the Company's great concern at the strategic level. We are well aware that the normal operation of theinformation security system is our responsibility to our customers, employees, partners and other stakeholders. It is also the cornerstone for the sustainable development of the Company.The Company strictly complies with relevant laws, regulations and industry standards, including the Cybersecurity Law of the People's Republic of China, the Measures for Hierarchical Protection of Information Security, the DataSecurity Law of the People's Republic of China, the Personal Information Protection Law of the People's Republic of China, the Administrative Measures on Internet Information Services. We have established an information securitymanagement organization at three levels, "Information Security Committee - Information Security Department - Collaborative Departments" under the guiding framework of ISO 27001 Information Security Management System andthe Measures for Hierarchical Protection of Information Security.
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In 2024, the Company continuously optimized its information security management system and provided multi-level all-round information protection in ?ve dimensions, namely legal compliance, organizational guarantee, riskmanagement, technical construction and audit training, to protect its information assets from various threats and risks.We gradually integrated "information security" into a part of our corporate culture, and made continuous publicity among our employees to increase their information security awareness. In 2024, theCompany organized special training for the employees and publicity activities on hot issues of information security. The information security training covered 100% of the Group's employees.
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Information Security Management System
Annual Data 2024
Information Security Risk ManagementE?ective information security management begins with deep understanding and evaluationof potential risks. The Company carries out information security risk prevention andcontrol work based on its daily business activities. We have formulated the VulnerabilityManagement System, the Emergency Response System for Information Security and otherstandardized systems. We have also formulated safe operating procedures for vulnerabilitymanagement, threat intelligence management, code leakage management, data exportmanagement, APT monitoring, and Internet exposure management.The Company strictly implements internal rules and security operation mechanisms inits daily operations. Driven by the Information Security Management Committee and theInformation Security Department, in 2024, we completed several information securityrisk management projects, including identifying and fixing more than 600 high-riskvulnerabilities, responding to and handling over 50 emergency incidents, assessing andresponding to more than 1,800 pieces of threat intelligence, and converging more than 400Internet exposure risk items.Besides, the Company has established an information security emergency organization ledby the emergency headquarters and organized by the Information Security Department,where relevant departments is responsible for response and execution. If an emergencysecurity incident may be quickly addressed and the business operation may be e?ectivelyrestored, it may guarantee the Company's continuous provisioning of safe and reliableservices for the customers.
CybersecurityAs a core component of information security, the Company has continuously enhanced its cybersecurity defense capabilities. We haveformulated a number of internal systems related to cybersecurity, including the Group's Computer Network System ManagementSystem, to e?ectively guide cybersecurity management and standardize employee behaviors.In 2024, the Company passed the three-level hierarchical protection certification of five systems, including mini program mall "LBXPharmacy", customer relationship management (CRM) system, medical insurance platform, enterprise resource planning (ERP) platform,and point-of-sale (POS) system. We introduced more than 8 security tools such as web application ?rewall (WAF), vulnerability scanner,host-based intrusion detection system (HIDS), external attack surface management (EASM) platform, honeypot trap platform, andsoftware composition analysis (SCA) platform, realizing an in-depth security technology stack from application to infrastructure, andfrom R&D to release. During the reporting period, no major cybersecurity incident occurred in the Company.Data SecurityLBX Pharmacy attaches great importance to data security and privacy protection of itself, its customers, employees, partners and otherstakeholders. In 2024, the Company completed the annual revision of the Group's Data Security Management System, optimized andsummarized the de?nitions of ?ve data security levels. We added more than 100 sensitive data ?elds for encrypted storage, personalsensitive information fields of over 15 core application systems for desensitization, and more than 30 data exchange channels forasymmetric encryption and transmission transformation, etc., with a view to comprehensively protecting privacy.Taking the DSMM framework as a benchmark, the Company has continuously prevented leakage of sensitive businessdata and protected personal privacy. In terms of data acquisition, we classify and grade data by type and sensitivity,and de?ne security speci?cations for the data lifecycle. For data storage, sensitive data ?elds, including core businessinformation on the businesses, personal information of customers and employees are encrypted for storage. Regardingdata exchange, sensitive data is subject to irreversible asymmetric encrypted transmission. From the perspective ofdata usage and sharing, we strictly define the scope and sharing specifications for different levels of data. We alsomake privacy compliance declarations and perform irreversible desensitization for the use of the customers' and theemployees' personal information to fully protect the individuals' rights and interests in privacy. In 2024, the Companyhad no major data security incidents.
1,800+400+
Pieces of threat intelligenceevaluated and responded
Internet exposure risk itemsconverged
600+
Vulnerabilities identi?ed and ?xed
50+
Emergency incidents respondedand addressed
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3333
WeChat mini program "LBX Pharmacy" has formulated a clearprivacy policy to inform the customers of how their personalinformation is collected, used, stored and shared. The Companystrictly controls the personal information authorized by customers,strictly limits their use only within the agreed scope and strictlycontrols the access to ensure that no personnel except for thoseauthorized access the customers' personal information. Thecustomers have the right to access, modify and delete theirpersonal information.
customer privacy leakage
All our core systems passed the NationalCerti?cation
major data security incident
The customers' sensitive information is encrypted, and encryptiontechnologies are used to protect data security, no matter whetherduring storage or transmission. The Company utilizes dataanonymization and differential privacy technologies, etc. toreduce personal privacy risks. We display the customers' sensitiveinformation at different levels, strictly control the permission toview roles, and desensitize the key data to reduce the leakage riskof the customer privacy. In addition, we clarify the responsibilitiesand obligations of third-party partners for protecting the customerprivacy, and require them to strictly abide by the relevantrequirements in terms of technical measures.
The Company regularly conducts privacy protection awarenesstraining for the employees through internal digital learning tools tocontinuously increase their awareness and sense of responsibilityfor customer privacy protection. We strengthen the system auditfunction for customer privacy, and transform the data accesslogs to make their coverage more comprehensive and timely. Weconduct regular privacy audits, e?ectively check the e?ectivenessof privacy protection measures, and make improvements andadjustments according to the audit results.
Privacy policy and access controlData encryption and technical protection
Employee training and audit supervision
major cybersecurity incident
coverage ratio of informationsecurity training
%
%external third-partyinformation security audit
compliance rate of data use
Protection of Customer PrivacyAs pharmaceutical retailer, we are well aware that privacy security is deeply related to customer trust and one of the sustainability issues that customersattach great importance to. We have continuously optimized our privacy protection mechanism and taken a series of measures to ensure that ourcustomers' personal privacy is protected. During the reporting period, no leakage of customer privacy occurred in the Company.
The Information Security Department takes the lead in organizingthe Technical Support Department to conduct relevant data backupand restoration drills, simulate the rapid response to exceptions,and improve the emergency response capability.
Data backup and emergency response
Level 3 Hierarchical Protection
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On June 13, the Party Committee of LBX Pharmacy, the PartyCommittee for Enterprises of Jinxia Park and Diying Party Branchjointly held the Party Day activity of "Learning New Standards andPromoting Development", aiming at helping medical and healthenterprises understand and implement the new version of theGood Supplying Practice (GSP) and improve quality managementof the industry. The activity attracted nearly 70 people fromParty branches and quality management leaders of more than 20enterprises in the park.On June 28, the Party Committee of LBX Pharmacy organizedall Party members for a study tour to Hunan First NormalUniversity (Chengnan Academy) - a red education base, with thetheme of "Celebrating July 1, Recalling the Original Aspiration,Strengthening Party Spirit and Promoting Development".On November 12, to further deepen the creation of the"Demonstration Posts for CPC Members", give full play to thevanguard and exemplary roles of the CPC members, and leada majority of the CPC members and employees to strive forexcellence based on their posts, the Party Committee of LBXPharmacy organized November thematic party day activity for"Setting Benchmarks and Leading Forward" and the unveilingceremony of demonstration posts, demonstration teams anddemonstration workshops for the CPC members.
Cases
Party Building WorkLBX Pharmacy has deeply studied, publicized and implemented Xi Jinping thought on socialism with Chinese characteristics for a new era and the spirit of the 20th National Congress of the Communist Party of China, comprehensivelyimplemented the general requirements for Party building in the new era and the Party's organizational path in the new era, given full play to its leading role in Party building, and continuously promoted the integrated development ofParty building and its operations.As the ?rst privacy pharmacy that established a Party organization in the drug retail industry of China, LBX Pharmacy attaches great importance to Party building, and incorporates the Party building work into its Articles of Association.We guarantee the Party building work institutionally, ideologically, and organizationally. We actively explore non-public Party building, resolutely perform the main responsibility for comprehensively and strictly governing the Party,and transform the Party's political advantages into our own competitiveness.Enhance Organization Construction
Adhering to the principle of "following the leadership ofthe Party and benefiting the ordinary people's health",LBX Pharmacy sticks to simultaneous planning of its Partybuilding and operation, and simultaneous establishmentof Party building and administrative organizations. In 2024,the Company continuously consolidated its organizationalfoundation for Party building. As of the end of thereporting period, we had 1 second-level Party committeeand 26 party branches under our jurisdiction. All thesecretaries of the party branches under our jurisdictionare our middle and senior managers, giving full play to theParty organizations' roles in ideological leadership and theParty members' roles as battle bunkers.Strengthen Ideological ConstructionDuring the reporting period, we continuously promoted the standardization of our Party building work,conscientiously implemented the "Several Guidelines on Political Life within the Party under the New Situation",further improved and improved the systems of democratic life meeting, organizational life meeting, heart talk, anddemocratic appraisal of party members, formulated and issued party building work plans, standardized politicallife, and made party building work rule-based.In 2024, the Company built a learning-oriented Party organization based on a thematic Party day activity knownas "One Class, One Video and One Practice per Month", to educate and guide the Party members to play their rolesas vanguards and role models and unite a majority of its employees. We distributed more than 1,900 volumes oftheoretical readings such as "Compilation of Documents of the 20th National Congress of the Communist Partyof China" and Selected Readings of Xi Jinping's Works to the Party members, organizing 26 thematic learningsessions, 18 online classes, and 36 cloud tutoring sessions, with 3,200 participants in aggregate. More than 2,600articles on their experience and knowledge from these sessions and classes were received.
In June 2024, the Party Committee of LBX Pharmacy wasawarded the title of "Advanced Grassroots Party Organizationin the Provincial Market Regulation System" issued by theComprehensive Committee of Hunan Provincial Non-Public Economic Organization.
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In the summer of 2024, the Party Committee of LBX Pharmacy joined handswith the Committee and government of Kaifu District to jointly carry outthe public welfare activity on "Sending Free Drinks in Hot Summer". Thisactivity aimed to extend sincere condolences to the tra?c police in KaifuDistrict in the front line of road tra?c safety management in hot summer,and sent them cool materials to convey the care and warmth of the society.
On May 19, the Party Committee of LBX Pharmacyand Hunan Party Branch organized and participatedin the second rural happy jogging activity inChangsha, providing caring medical run-upmaterials for runners, and all-round health servicesfor the players on the spot.
In 2024, Baixingtang Party Branch of LBX Pharmacy launched a Party building andco-construction activity known as "TCM Brainstorming", successively visiting 43enterprises, 10 banks, 5 schools, and 4 communities in succession, where it organizeda total of 91 public welfare activities on "Benevolent Free Medical Consultation,Famous Doctors' Door-to-door Health Services". On average, free medicalconsultation was provided for 9 times a month, and for 4,422 people, bene?ting morethan 30,000 employees of schools and enterprises. The activity intensively drove theorganic integration of Party building business, and making ordinary people healthy.
CasesPublic Welfare Activity on "Benevolent Free Medical Consultation, Famous Doctors' Door-to-door Health Services"
Party Building + Public Welfare, Conveying Healing PowerThe Party Committee of LBX Pharmacy insists on forging the Party spirit in "supporting public welfare" and guides all CPC members to practice the business philosophy of "doing everything for ordinary people". In 2024, the PartyCommittee and party branches of LBX Pharmacy actively participated in public welfare undertakings and carried out more than 100 public welfare activities such as poverty alleviation, student aid, rural revitalization, and healthservices, constantly practising altruistic culture and conveying warmth and healing power.
Brand Building for Party ConstructionIn 2024, the Company optimized the brand building for Party construction, and the online Party a?airs disclosure platform - "Party Building e-Home" integrated Party member education, news reports, interactive communications andother functions. In 2024, "Party Building e-Home" published a total of 34 articles, cumulatively with more than 48,000 pageviews, e?ectively reaching Party members and employees, and widely spreading red positive energy.
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LBX Pharmacy is committed to making everyone healthy. We activelyextend to counties, towns and villages to promote balance of regionalmedical resources. We have built a complete quality assurance systemin accordance with high standards and strict requirements to ensurethe consumers' medication safety. We continuously optimize ourproduct categories, improve our professional pharmaceutical servicecapabilities, and take advantage of digital intelligence tools and AItechnologies to help the consumers "buy the right medicines with lessmoney". Rooted in the concept of "altruism", we do every little thingwell so that every customer who walks into LBX Pharmacy can feel thewarmth and care as if they were at home.
Contents of This SectionQuality ControlProfessional PharmacyHealth AccessibilityCordial Services
Bene?ting Ordinary People's Health
Responses to SDGs in This Section
Quality Control
Construction of a Quality System
The Company follows the quality principle of "quality first, customer foremost". In strict compliance with laws and regulations such as the Drug Administration Law, Drug Quality Management Standards, and Measures for theSupervision and Administration of Drug Supply, we have established and improved our drug business quality management system (including wholesale, chain headquarters and stores). We carry out activities on quality planning,quality control, quality assurance, quality improvement and quality risk management, to ensure orderly and stable operation of the quality system, quality of drugs in all links of purchase, sale and storage, and people's medicationsafety.The Company has built a leading quality management team, with the main person in charge of the Company as team leader. Fully responsible for the daily management of the Company, this team ensures that the Quality ManagementDepartment and quality management personnel e?ectively perform their duties. The quality director of the Company, who is fully responsible for drug quality management, performs duties independently, assures drug quality,and has the right to adjudicate drug quality management within the Company. All our employees participate in quality management. Our personnel in di?erent departments and positions perform their duties correctly and assumecorresponding quality responsibilities.
Four Levels of the Quality Management Architecture
Quality ObjectiveNo illegal, counterfeit or shoddy drugsAcceptance rateOutbound review rate Error rate in outbound review100100%%≤ 1/100000
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Control over Six Major Links
The Company has a professional quality management center, which conducts quality supervision from six major links, namely initial audit,acceptance inspection, maintenance in warehouse, outbound review, store acceptance and display, and store sales and after-sales, in orderto ensure the safety of public medication.
Modern logistics operation systemIncluding temperature and humidity monitoring and regulation system, andtransportation management system (TMS). The Company has four large-scalelogistics centers, equipped with modern logistics facilities and equipment fordrug warehousing, conveying, sorting, shelving, and delivery, to efficientlyaccommodate the storage and distribution needs for drugs and othercommodities. Our cold chain facilities are well-equipped. Our verification,calibration, cold chain management system and emergency plan are perfect.Our temperature control system monitors in real time, 24 hours a day. Ourtemperature control, monitoring and regulation system ensures the safety ofstorage and transportation of drugs and other commodities.Computer management system
Our computer system consists of SAP, MDM system, WMS, ERP system,POS system, CRM system and EPS system, etc., which realizes the fullcoverage of procurement, inspection, warehousing, sales, distribution,after-sales and retail links, ensuring the quality control and auxiliarybusiness services of the computer system in the whole process ofprocurement, sale and storage.
Drug traceability systemThe Company attaches great importance to the construction of a drugtraceability system. We connect the traceability platform and codescanning equipment to our computer system to meet the traceabilityrequirements, in order to ensure the traceability of drug quality andpurchase, sale and storage information.
Three Major Quality Assurance Systems
Note: Initial audit: Audit initial enterprises (i.e. the production or merchandising enterprises that ?rst develop supply-demand relationships with theCompany) and initial varieties (i.e. the commodities purchased by the Company for the ?rst time).
Audit suppliers and product quali?cations, andcontrol access; perform monthly and annualreview of suppliers and varieties, and dynamicmanagement; conduct on-site inspection of keysuppliers, and risk control in advance.
Strictly implement a receipt andacceptance inspection system, to trackand control the goods to be processed.The goods may be accepted andwarehoused only when they meet therequirements.Perform real-time monitoring oftemperature and humidity, and regularmaintenance, to assure the quality ofgoods in warehouse.Strictly implement an outbound reviewsystem, and abnormal goods areprohibited from outbound delivery toassure the quality of outbound goods.Strictly implement an acceptance and rejectionsystem, and perform monthly quality inspection;dispose of goods that have expired and with qualityproblems according to regulations to assure thequality of drugs and other goods at the stores.
Provide cordial and professional pharmaceuticalservices; collect, monitor and report adversereactions; strictly implement a recall system,handle customer complaints in a timely manner,and provide appropriate after-sales service toensure drug safety.
Initial audit
Maintenance in warehouse
Outbound reviewStore acceptance/display
Store sales/after-sales
Acceptance inspection
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Quality ControlProfessional PharmacyCordial ServicesHealth Accessibility
Quality Risk ControlDuring the reporting period, we continuously improved our quality risk prevention and control system to ensure drug quality and drug safety. We formulated the Quality Risk Management System, Drug Recall Management System,Supplier Review Management System, Supplier Site Inspection and Evaluation Standards and other institutional documents to identify and manage risks in all aspects that might a?ect the quality.
Strict Control over Quality Sources
Risk Model and Standard Disposal MechanismThe Company analyzes, evaluates and identi?es quality risks in a forward-looking and retrospective manner. We have built a risk model, where risks are divided into high-frequency high-risk risks, high-frequency low-risk risks and low-frequency high-risk risks. We have also established speci?c management standards, prevention and disposal measures to e?ectively avoid quality risks and ensure the medication safety of the masses.Real-time Monitoring of Commodity Quality Information
The Company has a drug quality information sharing platform, and special personnel are responsible for inquiring about the quality information of 118 regulatory websites at all levels across the country, for the purpose of dailyinquiry, daily transmission and daily processing. The computer systems of more than 10,000 stores across the country can be locked to suspend their sales of the varieties with quality risks and remove them from the shelves within 30minutes.
Perform quality risk control in advance. The Company has built an independent and professional quality team to conduct on-site investigations of the suppliers, among which 100% manufacturers of traditional Chinese medicinedecoction pieces receive on-site investigations to control drug quality from the sources. In 2024, we investigated 105 suppliers on site and annually reviewed 1,333 suppliers. The elimination mechanism was started for the high-risksuppliers according to the process, and 54 suppliers were eliminated annually.We have established the Management System for the Group's Blacklisted Suppliers to dynamically control the suppliers who perform abnormal operations or commit acts that harm the Company's interests during the cooperation,and dynamically control the suppliers who fail to cooperate or whose cooperation has to be terminated. We implement precise control over all links, including inclusion management, process control, removal management, publicitymanagement, inspection, supervision, and assessment management. As of the end of the reporting period, a total of 62 suppliers were included in the blacklist of LBX Pharmacy.
Manufacturers of traditional Chinese medicine decoctionpieces subject to ?eld investigation
Suppliers subject to annual ?eld investigationSuppliers annually reviewed
High-risk suppliers annually eliminatedSuppliers cumulative blacklisted
1001051,333
5462
%
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Drug Recall ManagementAccording to the Management Measures for Drug Recall issued by the National Medical Products Administration, the Company has formulated the Drug Recall Management System, divided the drug recall into three levels accordingto the severity of drug quality and safety hazards, and set di?erent recall time limits. Our subsidiaries and stores in di?erent provinces are required to stop selling immediately after receiving a recall notice, recall and recover theproblematic drugs within the time limits, and report to the drug supervision and administration department and the marketing authorization holder according to the regulations.The Company tracks, guides and monitors the drug recall throughout the process to ensure timely and thorough recall. We subsequently dispose of the recalled drugs according to di?erent results con?rmed by the drug supervisionand administration department.
Expiry ManagementThe Company strictly performs expiry management and manages nonconforming drugs. We systematicallycontrol the expiry date of goods in the warehouse in the whole process, gives warnings on "short-dated drugs"and "warned out-of-sale drugs". Our system automatically intercepts, targets and controls the "expired drugs".The Company strictly implements closed-loop expiry management. Expired drugs and other drugs with qualityproblems are managed as nonconforming products. For the management of nonconforming products, thelinks for identifying, reporting and destroying nonconforming products are managed. Entrust a company thatspecializes in destruction of hazardous wastes to destroy the nonconforming products without causing anyharm. The Company actively cooperates with regulatory authorities and suppliers to organize public welfareactivities for the recycling of expired drugs from households, in order to ensure the medication safety of thepublic and prevent the expired drugs from causing environmental pollution, or resulting in social harm for?owing into illegal channels.
De?nitions of Drug Expiry
Drugs which will expirewithin 2 to 6 monthsShort-dated drugs
Drugs which will expirewithin 1 month
Warned out-of-sale
drugs
Drugs which haveexpiredExpired drugs
If the drug use might cause or has caused serious health hazards, the stores shall be noti?ed of stopping selling within 1 day, and the returnshall be started within 3 days;If the drug use might cause or has caused temporary or reversible health hazards, the stores shall be noti?ed of stopping selling within 3days, and the return shall be started within 7 days;The drug use generally doesn't cause health hazards, but if the drugs need to be recalled for other reasons, the stores shall be noti?ed ofstopping selling within 7 days, and the return shall be started within 14 days.
Level 1 RecallLevel 2 RecallLevel 3 Recall
Drug Recall System
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Safe Medication ManagementPharmacovigilance ManagementThe headquarters and stores of the Company appoint specialists tobe responsible for pharmacovigilance, timely evaluate and analyzeadverse drug reactions and drug damages, collect and monitor them,report them to the national adverse reaction monitoring system, andmaintain information communications with the drug supervision andadministration department to ensure drug safety.Reasonable Medication ManagementWe actively employ digital intelligence technologies to strictly controlhigh-risk varieties through prescription control, quantity restrictionon purchase and real-name registration. We have also launched areasonable medication system to automatically identify compatibilitycontraindications, have manual reviews performed by licensedpharmacists, and facilitate automatic interception by cashiers to ensurethat no compatibility contraindications exist.Pharmaceutical Service GuidanceAs an important window for the public to obtain drugs and healthservices, we attach great importance to pharmaceutical serviceguidance and establish a unified pharmaceutical service guidancesystem. All pharmacy-related promotional materials are audited by theQuality Management Department and Legal Department. Our storesare sta?ed with licensed pharmacists to review prescriptions, guide thecustomers on medication, manage chronic diseases, popularize scienceeducation and healthcare knowledge, advocate rational drug purchaseand medication, and help the customers "buy the right medicines withless money".
Construction of a Quality Culture
During the reporting period, the Company continuously deepenedthe construction of quality culture, carefully organized various formsof quality culture activities, and comprehensively enhanced theemployees' quality awareness. By integrating online and o?ine high-quality resources, we carried out comprehensive and systematicquality training. The training covered laws, regulations, professionalknowledge and skills, quality management system, job responsibilities,and operating procedures, etc. In 2024, the monthly quality training forall employees achieved a coverage rate of 100%.Besides, the Company attaches great importance to building anddeveloping a professional talent team of licensed pharmacists(pharmacists), actively participates in and organizes certain internal and external activities, builds a broad learning and communication platform for licensedpharmacists (pharmacists), and creates a good atmosphere under which "everyone attaches importance to quality, creates quality, and enjoys quality".
Quality training for all employees achieves acoverage rate
%
Quality Talent SystemThe Company has constructed an education system for licensed pharmacists (pharmacists), built a training base for the licensed pharmacists (pharmacists)within the city, formulated quality demonstration standards to teach and train new licensed pharmacists (pharmacists), to improve the professional qualitiesof the licensed pharmacists (pharmacists). We are committed to providing our customers with responsible professional pharmacy services.Honored as "People's Star · Pharmacist Star", the Company encourages the pharmacist team to highlight quality management and professional services.We have created a promotion channel for the licensed pharmacists (pharmacists), to promote outstanding pharmacist talents to quality managementpersonnel at our headquarters.
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In July 2024, at the 20th Annual China Retail Pharmacy Conference and the 5th China Professional Pharmacy Development Forum, LBX Pharmacy was granted 2 honors for the "BestPharmaceutical Service Case" and "Specialty Pharmacy Demonstration Store" respectively.
In May 2024, three licensed pharmacists of LBX Pharmacy,including Deng Gengliang, were honorably evaluated as"Industry Role Model" by Hunan Drug Circulation IndustryAssociation, and 8 employees of LBX Pharmacy, includingLiu Qiong, were honorably evaluated as "IndustryRole Model" by Changsha Drug Circulation IndustryAssociation.
In December 2024, Ma Pan, a pharmacist ofLBX Pharmacy Shaanxi Branch, was honorablyevaluated as "Excellent Pharmacist 2024" byShaanxi Licensed Pharmacist Association.In October 2024, at the "Jiangsu Provincial LicensedPharmacist Pharmacy Service Scenario SimulationCompetition" hosted by Jiangsu Medical ProductsAdministration and undertaken by Jiangsu LicensedPharmacist Association, our Wanren Pharmacy andBaixinyuan Pharmacy won the ?rst prize.
[Quality Honors]
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Professional PharmacyLBX Pharmacy attaches great importance to the improvement of its professional pharmaceutical service capabilities, makes multi-dimensional innovations and constantly delves into the industry. We actively undertake prescriptionout?ow, promote stores to obtain medical insurance and outpatient coordination quali?cations, and increase the convenience and accessibility of medication for patients. We use cutting-edge AI technologies to customize ourpersonalized health management solutions for the patients, and o?er health lectures and online consultations, to popularize drug knowledge, and enhance public health and safety awareness.Promote Outpatient Medical Insurance Access and ActivelyUndertake Prescription Out?owAs of the end of the reporting period, 93.84% of our direct-sale stores were qualified for being covered by the medicalinsurance, and our designated pharmacies with medical insurance were widely distributed, providing the consumers with moreeconomical, convenient and safe drug purchase experiences. Besides, the Company actively responds to national policies,regards the outpatient coordination project as the most important strategic project, and makes every e?ort to promote theimplementation of outpatient coordination quali?cations in the stores. As of the end of the reporting period, we had 5,487coordinated outpatient stores, thus signi?cantly increasing medication convenience and accessibility for the public.While actively undertaking the prescription outflow, LBXPharmacy continuously strengthens its ability to coordinateits store operations and management, constantly improvesits professional services, and is committed to providing thecustomers with better drug purchase experiences. The Companykeeps informative about and promotes the optimization ofpolicies in areas where prescriptions are restricted, to facilitatethe circulation of prescriptions, constantly improve theprescription circulation system of Internet hospitals, and furtherexpand the medication channels for the patients.In addition, LBX Pharmacy also gives full play to its ownstrengths and takes advantage of digital and intelligent meansto accurately control the customers' medication and medicalinsurance funds to ensure drug safety and compliance. TheCompany conducts regular self-examination and self-correction,strictly abides by various rules on the use of medical insurancefunds, ensures that every penny of the medical insurancefund is used wisely, and continuously increases its employees'awareness of medical insurance policies through internaltraining and business skills, to effectively prevent medicalinsurance violations.
In December 2024, after a strict comprehensive review by the WeinanMedical Security Bureau of Shaanxi Province, many of our stores inShaanxi Province were awarded the title as "Weinan StandardizedManagement Demonstration Sites for Medical Insurance Funds".
Data as of the End of 2024
direct-sale stores with medical insurancequali?cation
93.84
%
outpatient coordination stores5,487
Improve Professionalism of Pharmacy Servicesand Promote National HealthRegarding improving professionalism of pharmacy services as its own mission, LBX Pharmacyunswervingly promotes the national health undertaking. We closely follow up on the health needsof the public, take licensed pharmacists as the cornerstones, integrate digital intelligence tools withAI technologies, and perform professional health services such as chronic disease management,professional DTP services and multi-disease care, in an attempt to become the "capillary" of healthyChina.Professional Medication GuidanceLicensed pharmacists are important guardians of safe medication and healthy life for the public. LBXPharmacy continuously introduces and cultivates a team of high-quality pharmacists. We also realizethe intelligent upgrade of our pharmacy services through the deep integration of digital intelligencetools and AI technologies. Our self-developed digital intelligence tool, known as "Intelligent DrugRecommendation", not only has a built-in comprehensive drug knowledge base, covering fivefunctions, namely single product search, disease type/symptom solution, pathological inquiry,expert consultation and newcomer area, but can also use AI algorithms to make personalizeddrug recommendations, including updating according to seasonal changes and the latest medicalresearch results, to ensure the timeliness and accuracy of information, and greatly enhance theemployees' pharmacy service capabilities.
Disease types/Symptom solutions
Pathologicalknowledge querySymptomaticmedication
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Combination medicationand reasons
Decision support fordisease diagnosis andmedication
Disease knowledge base
Chronic Disease ServicesWith the accelerated development of China into an aging society, chronic diseases have become major threats to public health. "Prevention?rst, combination of prevention and treatment" and "hierarchical diagnosis and treatment, and grassroots services" have become partial trendsof national chronic disease management. Among them, retail pharmacies, as important supplements to grassroots medical treatment, playimportant roles in national chronic disease management.Since 2018, LBX Pharmacy has proactively established the "Chronic Disease and Health Management Center" and created an industry-leadingchronic disease management system. After years of iteration, we have been able to perform full-link, full-course health management service,providing tailor-made professional care for chronically ill members. We deeply integrate digital intelligence with AI technologies. On the premiseof obey the rules of user privacy protection, we use AI algorithms to analyze the patients' health data, including historical medication records,physical examination results and living habits, to provide personalized health management solutions for the patients and help achieve their long-term health goals.As of the end of the reporting period, the Company had installed smart Bluetooth equipment for self-examination of chronic diseases such asblood sugar, blood pressure, heart rate, blood uric acid, blood lipids, Helicobacter pylori, and blood oxygen saturation in thousands of storesacross the country. Besides, chronic disease management experts are trained in each store to provide the patients with medication guidance,health self-examination and other services. As of the end of 2024, the Company registered a total of more than 18.12 million members withchronic diseases, cumulatively served more than 99.23 million people for self-examinations, and received over 38.53 million return visitors. Wedelivered patient education online and o?ine for more than 29,000 sessions. The chronic disease management services that cover all our storesacross the country not only e?ectively reduce the pressure of grassroots medical institutions, but also makes it easier for the patients to enjoyconvenient and continuous chronic disease management services in the communities and at their doorsteps.
Chronic Disease Knowledge Grand Prix
Data as of the End of 2024
CaseSince 2020, LBX Pharmacy has annually organized the Chronic DiseaseKnowledge Grand Prix to improve its employees' professional serviceskills through "contests instead of training" and attract the customers toparticipate in cultivating good health management habits. In the ChronicDisease Knowledge Grand Prix 2024, more than 167,000 customers clockedin for self-examination. During the event, LBX pharmacists successfullyassisted more than 144,000 customers in implementing their healthmanagement plans.
18,120,000+
99,230,000+
38,530,000+29,000+
people cumulatively ?led
people cumulatively served
people cumulatively receiving follow-up visitsessions delivered online and o?ine for patient education
Professional DTP ServicesIn early 2016, LBX Pharmacy took the lead in establishing a "New Specialty DrugDivision" in the industry to strengthen its professional service capabilities andprescribed drug supply system. As of the end of the reporting period, the Companyhad 176 professional DTP pharmacies, which had ?led more than 300,000 criticallyill patients and served more than one million people.
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"Dual-channel" Professional PharmaciesLBX Pharmacy actively responds to the call of the National Healthcare Security Administration's "dual-channel" policy to bene?t people andactively promote the construction of professional "dual-channel" pharmacies. The Company selects nationally negotiated drugs and drugs forspecial diseases to ensure that the drugs are complete and su?cient. We dynamically allocate drugs in short supply at any time, and strengthenprofessional training of pharmacists, covering pharmaceutical knowledge, policy understanding and patient education, to ensure that thepatients are provided with personalized medication guidance. We organize health lectures, establish patient communities, convey humanisticcare, and provide the patients with health management throughout their lifecycle.As of the end of 2024, 329 stores of the Company obtained the "dual-channel designated quali?cation for medical insurance", covering 64prefecture-level cities in 13 provinces and 2 municipalities directly under the Central Government, including Hunan, Guangxi, Zhejiang,Henan, Shaanxi, Anhui, Shandong, Shanxi, Jiangxi, Jiangsu, Gansu, Ningxia, Inner Mongolia, Shanghai and Tianjin. 1,728 stores obtained thedesignated quali?cation for "outpatient diagnosis of chronic and special diseases", fully protecting the rights and interests of the insured in themedical insurance and improving the medication accessibility for a majority of patients.
Data as of the End of 20241763291,728professional DTP pharmaciesdual-channel storesoutpatient chronic disease stores
Service system and professional guarantee
Professional DTP pharmacystandardization managementsystem
Drug safety and security
Professional pharmacyservices
Value-added services
Care for Disease Types
Deeply engaged in professional services for multiple diseases, LBX Pharmacyactively participates in the care actions for breast cancer, skin diseases, hemophilia,leukemia, lung cancer and other diseases. The Company has created brand newdoctor-patient communication service scenarios by caring for different types ofdiseases, to promote communications between pharmacists and patients, andbetween patients, thus having constructed an abundant "patient ecosystem".We perform periodic free medical consultation and live science popularizationactivities, introduce life health topics or salon activities based on follow-up visitsand medicine use. We help the patients and their families build confidence inovercoming diseases through continuous professional services.
To help patients with psoriasis fully understand the disease, scienti?callymanage the disease condition, and improve the quality of life, on April 24,2024, the New Specialty Medicine Service Center of our Xiangya Store andDr. Li Fangfang from the Department of Dermatology of Xiangya Hospital ofCentral South University jointly organized a public welfare activity to carefor patients with psoriasis.
"Silver" Light Protecting Health - Care for Patients with PsoriasisCase
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Health AccessibilityProfessional services warm people's hearts, and health protection is readily available. Focusing on the growing number of diversi?ed health services for the masses, we have been optimizing our industrial layout and opened more than15,000 stores in more than 150 cities in 18 provinces across the country to continuously promote health accessibility. We carefully screen out high-quality products that satisfy the public health needs, and strive to build an expedient,e?cient one-stop shopping service platform. We continuously expand our functional boundaries and ecological map of pharmacies, tailoring comprehensive and professional health solutions for customers so that health can alwaysaccompany people's lives.Full-category High-quality GoodsAs one of the chain pharmacies with the most complete varieties of drugs in China, the Company continuously improves its digital and intelligent management of product management. Relying on nationwide and globalizedprocurement links, we supply abundant products with high quality, favorable prices and complete varieties, in order to fully meet the personalized and diversi?ed consumer needs for health services.
As of the end of the reporting period, the Company merchandised approximately 25,800 SKUs, covering more than 600 common and frequent diseases. The drugs included in the medicalinsurance catalog accounted for a signi?cant proportion. The stores provide the customers with "special old drug areas" and "rare drug purchase" services. Besides, the "one-click search andpurchase" function of our mini program provides e?ective support for the stores' out-of-stock scenario, and meets the customers' personalized and diversi?ed needs for drug purchase anytimeand anywhere.The Company has reached strategic cooperation with China's and the world's top 100 enterprises of the pharmaceutical industry, and joined forces to ensure genuine and good medicines fromthe sources. We have also been continuously improving our closed-loop management system of quality risk control throughout the whole process to ensure the safe medication by the masses.The sales of the products from the Company's uni?ed procurement has steadily increased. As of the end of 2024, the sales accounted for approximately 72.4%, consolidating bargaining powerwith "a scale up to tens of billions". We have been reducing our outlet prices by continuously optimizing our procurement costs and re?ning supply chain management so that the customers can"spend less money".
Data as of the End of 2024
CompleteSpeci?cations
High quality
Favorableprices
25,800+72.4%SKUsUni?ed purchase and sales
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Higher Cost-performance Ratio of Self-owned BrandsBased on the development principle of "buying the right medicines with less money", our own brands have been built around scenarios such as "health management, health preservation, and healthy exercises" to gain in-depthinsight into user needs and reshape user-centered products. The system covers Chinese and Western patent medicines, tonic traditional Chinese medicines, healthy foods, ordinary foods, personal care products, daily necessities andother supplies, in order to provide the consumers with safe, healthy and cost-e?ective health goods for living. As of the end of the reporting period, the Company merchandised more than 700 SKUs of its self-owned brands.We directly and deeply cooperate with the manufacturers without any intermediate links, to surrender pro?ts to the consumers. The drugs that have passed the consistency evaluation, with quality equivalent to that of original drugsand cheaper than the original drugs and drugs of domestic top brands are preferred. For dietary supplements, we pay much attention to sources of their raw materials, formula and content, to ensure that the formula compositionsof the products are more advanced and cost-e?ective than other competitive products in the market. For personal care and life products, we create "preferred choices for ordinary people", and our product standards are at leastequivalent to the national standards, to carefully choose top-quality products for the consumers' healthy living with safer and more friendly compositions of raw materials.
Whole-process quality assurance system for self-owned brands
Earlyintroduction
Earlydevelopment
Interimproduction
Postinspection
Supplier qualitymanagement
Technicalcontrol overproduct quality
Control overoutboundproduct quality
Managementof customercomplaints aboutproduct quality
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Deep Cultivation of Lower-tier Markets to Promote Regional Equality in Pharmaceutical ResourcesTo e?ectively promote the regional equality in pharmaceutical resources and improve the health accessibility, the Company has been intensively opening stores through self-construction, M&A, franchise and other methods. We haveactively expanded into China's third-?fth-tier prefecture-level cities to provide high-quality pharmaceutical resources and health management services for more residents of counties, towns and rural areas.As of the end of the reporting period, our stores (excluding alliances) covered 18 provincial markets, more than 150 prefecture-level cities and above, and 437 county-level administrative districts (excluding municipal districts) acrossthe country. We had 15,277 stores accessible to a population of 226 million. Among all our stores, the stores in prefecture-level cities and below accounted for 77%, and the stores in counties and towns occupied 45%.
Deeply Cultivating Lower-tier Markets, Safeguarding the Health of Local People
Data as of the End of 2024 (Excluding Alliances)
CaseHuichuan Town, Weiyuan County, Dingxi City, Gansu Province is located in the southwestern mountainous areaof Weiyuan County, with 1 community and 22 administrative villages under its jurisdiction. The local permanentpopulation exceeds 44,600, and there is also mobile population of more than 3,000. There was no professionalpharmacy in the local areas. As a result, it was extremely inconvenient for local residents to buy medicines. Sinceour Huichuan Pharmacy was settled in Huichuan Town in April 2024, it has brought great convenience to the localresidents with its complete varieties of medicines and professional, thoughtful services.
stores in prefecture-level cities and belowof the stores in counties and towns7745stores across the country15,277
provincial markets covered
prefecture-level cities and above covered
150+
county-level administrative regions(including municipal districts) covered
%
%
and
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Serving Industrial Parks in Prefecture-level Cities and Facilitating Drug PurchaseCaseIndustrial parks are often located on the edge of cities, where the living facilities are not abundant,making it di?cult to meet the health medication needs of numerous employees in the parks. By openingpharmacies in the industrial parks, expedient drug purchase services will become available for thisgroup. The opening of pharmacies can improve the supporting facilities of the parks, overall services andliving environment of the parks. This is just the case for Automobile Industrial Park in Hanjiang District,Yangzhou City, Jiangsu Province. In June 2024, Our New Era Pharmacy was successfully opened in thispark, serving more than 16,300 permanent residents in the park and providing convenient, professionalservices for the people within this park.
New Retail Empowers New Ecology and Improves Convenient Drug Purchase Experience
Data as of the End of 2024
LBX Pharmacy actively creates "Internet plus" smart medical and health services. By creating a full-link consumer service system through digital intelligence empowerment, we integrate private domains with members, and accuratelymatch patient needs. We ful?ll our social responsibilities, providing services such as door-to-door drug delivery and nighttime drug sales, improving the consumers' convenient drug purchase experience and further increasing theaccessibility of medical resources.
O2O stores24-hour stores
B2C stores Nationwide e-commerce warehouses
Stores in the private mini program mall
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Online and O?ine Intensive O2O Collaboration Satis?es the Health Needs under 24-hour Emergency Scenarios
In 2024, LBX Pharmacy comprehensively upgraded contract performance, services and other indicators of its O2O business. We improve our rules and established a service quality evaluation system, to increase our employees' sense ofresponsibility, and constantly improve our customer satisfaction. We focus on the customer needs, strengthen online and o?ine collaborative deployment, and meet the user needs under emergency scenarios at all times. In 2024, LBXPharmacy enabled online medical insurance in Shanghai, Hefei and other cities to facilitate medical insurance users' payment for medicines online.As of the end of the reporting period, the Company had 12,659 O2O take-out stores and 694 24-hour stores, covering more than 150 prefecture-level cities in 18 provinces, which greatly met people's online and o?ine urgent drug needsin di?erent regions.B2C Multi-brand and Multi-channel Coverage Satis?es the Regional Drug Demand across the CountryIn 2024, LBX Pharmacy completed its construction of digitally intelligent Kanban through system iteration, comprehensively upgraded its logistics performance services, and increased the 24-hour on-time delivery and collection ratefrom 92% to 95%. Our system automatically selected the best express delivery for customers in di?erent provinces and cities across the country, covering ?ve major platforms to satisfy the national regional drug demand. We upgradedthe varieties of health products and expanded the general health categories of non-pharmaceutical products. Our online platform provided professional pharmacists with pre-sales guidance on medication, as well as pre-sales andafter-sales customer services to satisfy consumer needs for purchasing medicines anytime and anywhere.As of the end of the reporting period, the Company had 17 B2C warehouses across the country, meeting the timeliness needs of users in di?erent regions across the country. We had more than 100 online B2C stores, with the expressdelivery services for the goods covering the whole country. In 2024, a total of 8 million orders were closed, serving millions of families in terms of healthy medication.Continuously Upgraded Private Domains via Digital Intelligence and Satis?ed Diverse User Needsfor Convenient Services
In 2024, the private mini program mall of LBX Pharmacy integrated several mini programs, including "Members +, New Specialty Medicine andDrug Consultant", to complete the system upgrading of combining several codes into one. To be speci?c, a user can obtain diversi?ed expedientservices from the private mini program mall by only scanning the code once. After system optimization, the ful?llment of private domain ordershas been greatly improved. In 2024, the 48-hour delivery rate of the private domain orders was up to 97%. The nationwise orders could basicallybe delivered within 3 days, and after-sales service satisfaction rate reached 99%.In 2024, the Company further expanded its varieties, including food, fresh food, medicine food homology, 3C electric appliances, and lifesupplies. We also introduced regional characteristic agricultural products around healthy living scenarios, and the number SKUs subject to "dropshipping" increased to 1,500+. All our salespersons supported farmers through "Dai Xiao Man", achieving the sales of more than RMB 4million.
As of the end of the reporting period, our private domain cumulatively served more than 23 million users. In order to meetdi?erent shopping needs of the users in di?erent regions across the country, our private domain mini program mall launched9,910 stores, covering 20 provinces and 84 prefecture-level cities.
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Pharmacies Create Commercial Insurance Scenarios and Supplement the Medical Insurance System toImprove Residents' Health Protection
Focus on Comprehensive Health and Create a Diverse Ecosystem for Pharmacies
In 2024, LBX Pharmacy actively promoted diversi?ed strategic transformation, deeply focused on and subdivided the users' diverse healthy living needs, in an attempt to become a healthy living expert around the communities andfully meet the customers' personalized needs in all aspects of healthy living.
LBX Pharmacy joins hands with insurance companies to visit enterprises,providing their sta? with health service and health managementsolutions.
LBX Pharmacy and Dajia Insurance Group launched a commercialinsurance product for "expired drugs replacement" to recycle families’expired drugs, and provided a 50% replacement subsidy to promote thegreen, low-carbon development of the society through the commercialinsurance.
Being supplementary to social insurance, commercial insurance reduces the financial burdenof victims' families when unforeseen events such as accidents, diseases, and disasters occur.LBX Pharmacy connects its system to the technical systems of commercial insurance serviceorganizations, and cooperates with insurance companies, TPA (Third Party Administrator)companies, Internet hospitals, pharmaceutical companies, other suppliers and buyers to providepersonalized health management solutions and comprehensive drug protection services forcommercial health insurance customers. In 2024, our 11,298 stores enabled the commercialinsurance contract performance services, serving 858,600 commercial insurance membersthroughout the year.In addition, the Company also used the store outlets and member management platforms topromote and publicize commercial health insurance products such as Medicare, outpatientinsurance, nursing insurance, and expired drug replacement, in order to guide more customersto participate in commercial insurance plans and obtain more health protection, and improvepeople's living standard and happiness.
Personal Care: Protecting Health Internally and ExternallyHealthy Food: Leading the New Trend of Health Preservation and Nourishing a
Healthy New LifeKeeping up with the cutting-edge concept of medicine foodhomology, we have further enriched our product categories.Nowadays, our stores not only have nutritional supplements suchas various vitamins and minerals, but also promptly "energize"people with insu?cient nutrient intake in their daily diet. We alsohave functional foods that facilitate intestinal health and stablycontrol blood sugar, providing intimate care for the patients withchronic diseases. In addition, we customize energy snacks for ?tnessenthusiasts, injecting vitality into sports anytime.
In addition to displaying traditional medicines, we alsolaunch a variety of high-quality personal care products suchas skin care products, body care products and cleaningproducts. The customers can get professional advice andproduct recommendations for daily or special care stagesfrom professional pharmacists based on their past medicalhistories. Strict product selection and all-round services help theconsumers feel more at ease and rest more assured in pursuit ofhealth.
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Cordial ServicesAdhering to the customer-centered service concept, LBX Pharmacy is committed to providing high-quality, e?cient, professional andwarm services. We have constructed a comprehensive customer service system to actively respond to and properly handle customerfeedback and complaints, and proactively favor citizens in need, to build a harmonious, friendly society together. Sticking to theprinciple of responsible marketing, we fully respect and protect the consumer rights and interests, and build our brand image as acompany with integrity and strong sense of responsibility.Customer Service SystemIn strict compliance with the Law of the People's Republic of China on Protecting Consumers' Rights and Interests, we have establishedan all-round, full-time and whole-process pre-sales, sales and after-sales service system to keep informative about customer needs,optimize our service mechanisms, quickly and properly solve customer problems, and provide the customers with accurate, e?ectivehealth management solutions dependent upon our professional pharmaceutical service capabilities and "altruistic" heart.
Store Operation Principles
LBX Pharmacy continuously improves its store operations management capabilities, service processes, and professional pharmaceuticalservice capabilities, providing the customers with professional and warm cordial services.
Listening to CustomersLBX Pharmacy not only pays attention to customers' front-end medicine needs, but alsoattaches importance to their after-sales feedback on services and products. Our 400 NationalCustomer Service Center is guided by customer needs. Relying on our powerful informationsystem and R&D capabilities, it provides the customers with free voice, online and omni-channel services through BI big data, cloud computing, MA system, customer service system,CC system, WeChat o?cial account, APP, mini programs and other digital intelligence tools.As of the end of the reporting period, LBX Pharmacy HAD 1 licensed physician, 14 licensedpharmacists and 41 health consultants in its 400 customer service team. In 2024, our 400national customer service hotline served a total of 210,000 customers, with satisfactionrate of 99.1%. We served 2,520,700 customers online, providing the customers withcomprehensive, multi-angle and in-depth professional pharmacist services for physical andonline orders.
Clean and brightA?ordable and
complete
First In First OutCordial services
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Responsibility MarketingLBX Pharmacy always adhere to the bottom line of drug compliance publicity. Our productpublicity must be true and realistic, and our drug information is introduced in strict accordancewith the instructions. False publicity that exaggerates the curative effect or reduces adversereactions is strictly prohibited. On the premise of strictly abiding by the Advertising Law of thePeople's Republic of China, the Drug Administration Law of the People's Republic of China andthe relevant laws of the place where it conducts business, the Company has formulated a numberof systems and approval processes, including Advertising Review System, Key Points for QualityControl over the New Retail Business, Management Measures for Precision Marketing Channelsand Management Measures for Precision Reach Channels. In the process of producing promotionalcontent for the products, the information is strictly controlled, and an SOP has been formulatedfor data review. Our Quality Management Department, Legal Department and other departmentsconduct drug information review and legal compliance review in turn to ensure that the content islegal and standardized.
To satisfy the customers' needs for safe medication, give the customers warm care, andcontinuously consolidate its altruistic services, LBX Pharmacy has promoted posting"Dosage and Administration Label" for the customers in its stores. When the customersenter the stores to buy medicines (Rx/OTC) and dietary supplements, our employees willtake the initiative to post "usage and dosage label stickers" on the packages containingwarm reminders such as medication instructions, usage and dosage (the stickers will notbe posted if expressly required so by the customers). The "Dosage and AdministrationLabel" provides standardized medication guidance, ensuring both the accuracy ofpatient medication and improved adherence. This thoughtful design has received praisefrom many patients.
Meticulous, "Usage and Dosage Label Stickers"Case
Continuous Improvement of Customer SatisfactionThe customers' drug purchase experiences and voices are the focuses of our attention. LBX Pharmacy has been advancingcustomer satisfaction surveys to fully understand what the customers truly think and need. In 2024, we collected feedbackfrom more than 10 million people cumulatively, covering all our direct-sale stores. Our professional team regularly analyzesand reviews the survey results, and continuously improves our services according to the survey results to improve customersatisfaction.We pay attention to customer complaints, constantly improve our services and enhance consumer experiences by controllingthe service quality of ?rst-line stores and strengthening the handling of customer complaints. In our national customer servicecenter, our sta? actively coordinates with the business departments to ?nd out the causes, quickly rectify them, and pay returnvisits to the customers who complained regarding their satisfaction, thus handling the complaints in a closed loop. In 2024, ournational customer service center handled 1,941 customer complaints, and all customer complaints were handled in a closedloop.
National customer service hotline
400-6252-888210,00099.1%Served
customers via the hotline, with satisfaction rate ofAccepted online consultation from
2,520,700
customersHandled
1,941
online complaintsHandled
100%
online customer complaints in a closedloop
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The elderly-oriented warm-hearted service of LBX Pharmacy provide warm andconvenient medication experiences for the elderly, competitively reported by CCTV-1/13"News", "Nightly News", "Live News", CCTV-2 "Global Fortune", CCTV-4 "Global News"and other authoritative media.
Bene?ting CustomersAs a pharmaceutical retail company directly serving consumers, LBX Pharmacy is committed to continuously deepening the"altruistic" philosophy. All employees embody the spirit of "altruism" to provide customers with more professional and caringservices.
To incorporate the concept of "altruism" into daily life, in 2024, the Company concentrated on doing "Ten Things of Altruism".Through a range of health services and caring measures benefiting the customers, including " launching six self-examinationservices", "providing the customers with clean washrooms", we spread "altruistic" cultures throughout the omnichannel, to
constantly improve our customer satisfaction, and "developcentury-old stores" with professionalism and warmth.In 2024, LBX Pharmacy made convenient printing servicesavailable in thousands of its stores across the country, e?ectivelysatisfying the printing needs of 47,060 customers. We alsolaunched free collection and express delivery services to solvethe collection di?culty of over 50,000 customers. In addition, wehave also made the washrooms of our 3,097 stores open to thepublic, providing great convenience for the passers-by. In 2024,our store assistants used their expertise to provide the ?rst aidfor 37 customers, saving their lives at critical moments.This year, 4,110 excellent cases of "altruistic" services sprangup in our ?rst-line stores. From solving practical di?culties forthe customers considerately, offering professional medicationguidance, helping the customers get rid diseases that haddisturbed them for years, to stepping forward to professionallyrescue injured/syncoped customers at critical moments, ouremployees explained their deep understanding about the spiritof "altruism" with practical actions, which demonstrated oursocial responsibilities.
Elderly-oriented Services Were Commended by CCTVCase
CaseLBX Pharmacy provides convenientservices for the silver-haired in all storesacross the country, including helping theelderly take taxis through smart phones,paying phone bills, assisting with theirregistration for medical treatment, andcarefully protecting the silver-haired.
Heartwarming Care for theSilver-hairedCase
Shared Washrooms Bring
Convenience to People’s LifeTo make it convenient for the customersand pedestrians to go to toilets, LBXPharmacy made the washrooms ofits 3,097 stores in 68 cities across thecountry open to the public, providinggreat convenience for the pedestrians.It was also the first chain pharmacy inChina that made open and shared itswashrooms.
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Cordial ServicesIntegrating love into its health services, LBX Pharmacy provides 5 health self-examination services, 3 professional medical services,4 convenient heart-warming, 3 silver-haired services and public welfare support for Heimlich emergencies to meet the customers'emergency needs.
Outstanding deeds of front-line "altruism" have been postedon the "wall of likes" for the employees.
The woman sent a pennant to thank Lu Xiaohong for "her benevolenceand wonderful rejuvenation as a doctor".
At noon of May 22, 2024, a thrilling 20-second first aid for lifeoccurred at Guangxi Binyang Lakeview Garden Store of LBXPharmacy. A young woman hurried into the store with her childand shouted loudly, "My child gets stuck in the throat with sugar!"At that critical moment, store clerks Wu Xiaoyu and Chen Liliyumade a decisive decision and immediately did the "HeimlichManeuver". After 20 seconds of emergency rescue, the child spitout a foreign body from his throat, and the danger was lifted.Xinhuanet, health client of People's Daily, Hunan Daily and otherauthoritative media reported this incident. The professionalismand caring actions of our employees were praised by the public.
The health client of People's Daily reported the outstanding ?rst aid deeds ofour Guangxi employees.
The Professional Warmth at Front Line of "Altruism" Was CommendedCase
"LBX employees are meticulous and professional, just like 120 is available around us!" "You're calm and take the initiative to rescue the injured customers, which re?ects the professionalism of the pharmacy sta?. Let me giveyou a thumbs up!" "Thumbs up to you!" …The employees of LBX Pharmacy always practise the spirit of "altruism", and do every little thing well on a daily basis. Their professional and warm health services has won the praises among the customers. According toincomplete statistics, a total of 4,110 excellent cases of "altruistic" services sprang up in 2024. Here below are excerpts of several excellent cases that indirectly re?ect the professionalism and love of our employees.
Heimlich Maneuver Saved the Day and Won Praise fromthe Society
A 10-day-old Baby Choked on Milk, and HeimlichManeuver Saved His Life
Keenly Identifying Risks and Working together as aTeam to Build a Line of Defense for Life
n the evening of September 11, 2024, Wang Liang, an employeeof Beichen Delta Store of LBX Pharmacy in Changsha, HunanProvince was on duty at the night shift. A ?ustered man rushedinto the store with a 10-day-old baby in his arms. The babysuffocated due to choking on milk. At that critical moment,Wang Liang, together with his colleagues Chai Lixia and LiuSuzhen, took turns do Heimlich Maneuver with the doctors'guidance on phone by dialing 120. After more than six minutes'great efforts, the baby finally spit out milk foam and made afaint cry before the ambulance arrived.
On February 12, 2024, Lu Xiaohong, an employee of FenghuangNorth Road Store of LBX Pharmacy in Yuncheng, ShanxiProvince, discovered that a woman who came to the store toshop was not in condition relied on her excellent professionalknowledge and keen intuition. After examination, she found thatthe woman showed a weak pulse and blue lips, accompaniedby dyspnea and confusion. Lu Xiaohong immediately directedthe store sta? to act quickly and gave the woman ?rst aid likeoxygen inhalation. Gradually, the woman's vital signs graduallyreturned to normal.
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In August 2024, Mr. Sun, a door and window installation worker,experienced a glass explosion while working. The aorta in hisright hand was cut o?. He was covered in blood all over and wasrefused by several taxis. At that critical moment, Zhang Hui, anemployee of Zeqiang 589 Pharmacy in Tongliao, Inner Mongolia,immediately drove Mr. Sun to the hospital. As soon as he arrivedat the hospital, Mr. Sun went into shock. Fortunately, afteremergency treatment by the hospital and arterial anastomosis,Mr. Sun recovered and was discharged. The ?rst thing he did afterhis discharge was to express gratitude to Zhang Hui.
In the early morning of August 6, 2024, Gu Jieyun, the storemanager of our Huoju Road Store in Wuhan, Hubei Province, metan old man who had a heart attack on his way to work. Gu Jieyunresponded quickly, helped the elderly sit down, dialed 120 andbought nitroglycerin for the elderly. Subsequently, Gu Jieyunaccompanied the elderly to seek medical treatment and paid themedical expenses in advance. Afterwards, the family membersof the elderly specially sent a pennant to thank Gu Jieyun forher righteous act, and to pay tribute to our cultivation of anoutstanding employee.
? Rescuing a Patient Decisively on the Road to Protect the Life of the Elderly
Stepping Forward and Taking the Initiative to Send the Injured Rejected toHail for Medical Treatment in Case of Danger?
? Warm and Caring, a Thank-you Letter from a 90-year-old Old WomanLiving Alone"I am a 93-year-old woman living alone. I am very grateful to them (LBX Pharmacy)for their care for the elderly. There are many elderly people living alone nearby.They treat and care for them, too." - Excerpted from Mrs. Yang's thank-you letter.In 2024, Mrs. Yang, a 93-year-old woman living alone in Xi'an, Shaanxi Province,sought help from our Fengdeng Pharmacy in Xi'an, Shaanxi Province near her homebecause of diarrhea and fever. Our pharmacist Lin Fangfang and store manager GaoXiaohong not only provided the old woman medicines, but also took good care ofher to take the medicines and bought breakfast for her. Afterwards, they also askedabout the old woman's condition by phone several times. Mrs. Yang was deeplytouched by the warmth and care of the pharmacy, thus writing a thank-you letter inperson to express her gratitude.
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Responses to SDGs in This Section
The business environment is rapidly evolving amidst technologicalinnovation and global changes. LBX Pharmacy steadfastly adheres toits overarching strategy of "building a technology-driven health serviceplatform," which will leverage intelligent digital technologies and AItools to enhance the efficiency of the entire business chain. Besides,LBX Pharmacy strengthens supply chain risk management and activelypursues creating an e?cient and responsible supply chain. Moreover, itvigorously promotes franchising and alliance businesses, empoweringsmall and medium-sized pharmacies as well as independent drugstores.It remains committed to the principle of "treating small and medium-sized enterprises equally," thereby fostering shared growth acrossChina's pharmaceutical retail industry chain.
Contents of This SectionDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Driving Industry Development
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Appendixes
Digital Intelligence Empowerment
In 2024, the state-of-the-art technologies like AI and green technology drive industrial upgrades, making digital transformation a core competitive strength for enterprises. As an intelligent digital pioneer in the industry, LBXPharmacy continues to strengthen its intelligent digital system construction. Through technology-driven comprehensive business upgrades, the company actively builds "new quality productivity" It consistently introduces and trainsprofessionals specializing in intelligent digital areas to provide intellectual support for the implementation of its digital strategy. By solidifying its digital foundations, it enhances data security and governance to ensure data accuracy,completeness, and timeliness. LBX Pharmacy also upgrades the digitalization of its supply chain to empower innovative reforms across the entire procurement and logistics chain and improve collaboration and decision-makinge?ciency. Additionally, leveraging intelligent digital tools helps it empower front-line operations, thus enhancing user experience and satisfaction.
Digital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry SymbiosisContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Deepening Supply Chain Empowerment
Strengthening Internal and External Collaboration to Enhance Decision-Making E?ciencyFrom a full supply chain perspective, the company optimizes management, strengthens internal and external collaboration, and signi?cantly improves decision-making e?ciency. In addition to standardize procurement processesthrough a supplier collaboration platform, the company also achieves a one-stop full-process work?ow from procurement demand to reconciliation. In 2024, the company achieved an increase of over 20% in procurement executione?ciency. In terms of supply chain planning, the company has completed the implementation of digital operational strategies for procurement and allocation, which e?ectively boosted the operational decision-making e?ciency. Forcontract management, it leverages big data computing capabilities to enable the accurate calculation of revenue across various dimensions in numerous scenarios, supporting re?ned operational strategy management. For logistics,by combining full-chain data digitalization with big data computing capabilities, the company achieves a closed-loop management system for the logistics ful?llment chain.
Better Inventory Identi?cation Optimizes Inventory ManagementThe company enhances abnormal inventory identi?cation to optimize inventory turnover rates and improve operational and capital utilization e?ciency. By introducing alert robots to monitor inventory status and market supply-demand dynamics in real-time, and leveraging iterative sales forecasting and automated adjustment strategies, the company achieves re?ned inventory management.In 2024, the company's inventory turnover days will be reduced to 94 days, with a year-on-year decrease of 4 days .
Digital Intelligence Empowerment of Supply ChainExploring Digital Intelligence Scenarios
Deepening Data GovernanceCultivating Digital Intelligence Talent
Continuously improve the procurement system, optimize inventorymanagement, provide solid data support for efficient and refinedoperational decisions, and achieve e?cient and reliable product supply.
Conduct intelligent digital exploration combined with businessscenarios, iteratively develop intelligent digital tools for differentscenarios, and continuously enhance the consumer shoppingexperience.Extensively participate in projects closely aligned with the business,covering infrastructure governance and application delivery, leveragingthe business value of master data governance and label construction toreduce cost and enhance e?ciency.Deeply engaged in cultivating tech talent and driving R&D innovation,continuously fostering new ideas and solutions to propel technologicaliteration and innovative upgrades.
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Expanding Digital Intelligence ApplicationsWith the support of digital intelligence technologies, LBX Pharmacy deeply delves into customers' health needs, providing professional and personalized health services. Meanwhile, the company continuously iterates its digitalintelligence platforms and tools to empower various business segments, thus enhancing decision-making accuracy and operational e?ciency.
In compliance with the "Personal Information Protection Law" and related regulations, and with theauthorization of member users, we establish exclusive health records for members through the informationsystem to enhance capabilities in CDP (Customer Data Platform) and marketing automation. Leveragingfrontier digital technologies such as big data analysis and artificial intelligence, the company gains deepinsights into the characteristics, medication habits, and health needs of members with chronic diseases, whileleveraging data analytics models, the company provides precise forecasts on members' medication needsand health risks. Additionally, by upgrading the social customer relationship management system (SCRM),the company o?ers one-stop services encompassing disease prevention, diagnosis, treatment, rehabilitation,and health management throughout the entire member lifecycle, catering to customers' personalized healthneeds.
During the reporting period, the company upgraded and iterated the self-developed APP "BaixingTong" functionalmodules to improve frontline employees' work experience and e?ciency. Tools such as the "Salary Calculator" and"Store Inspection" with more complete functions have empowered frontline employees in both directly-operatedand franchised stores, ensuring "every penny of income, every minute visible, what you see is what you earn,"achieving timely motivation for the staff. The "To-Do Tasks Platform" module ensures tasks reach the frontlinedirectly, reducing communication layers and minimizing information loss, significantly improving operationale?ciency. Tools such as the "Points Platform" and "Recognition Cards" strengthen employees' sense of achievementand enthusiasm for work through likes and points rewards.
Reduce Labor Costs and Improve E?ciency with Automated ProcessRPA (Robotic Process Automation) technology has helped e?ciently handle large volumes of repetitive tasks,boosting the e?ciency and accuracy across multiple business lines while freeing up manpower and reducinglabor costs. In inventory management, the system automatically monitors drug inventory levels and providestimely replenishment alerts to avoid stockouts or overstock. In order processing, it enables swift capturing,input, and tracking of order details, greatly enhancing processing e?ciency. From the ?nancial perspective, itautomates reconciliation process, accurately matching income and expense data, and reducing manual errors.
Digitally Empowered New Retail, Continuously Improving User ExperienceWe actively harness digital intelligence technologies to empower new retail operations, including effective datagovernance across core links and continuous upgrades to fulfillment capabilities. This was achieved throughthe consolidation management of multiple warehouses, driving cost reductions and efficiency improvements.Additionally, by late 2024, we took the lead to fully implement exceptional price control on Meituan's O2O platform,ensuring visibility in online price monitoring. On the LBX Pharmacy private domain mini-program platform, weadopted a user-centric approach to further optimize functions, unifying multiple codes within the LBX Pharmacymini-program to signi?cantly enhance user experience.
Iterate the Digital Intelligence Platform and Enhance FunctionalModules of the APPBuilding a Membership System to Create a DigitalIntelligence Health Steward
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Cost Reduction and E?ciency ImprovementDeepen Lean Management and Optimize Resource AllocationDuring the reporting period, the company continued to address resource allocation issues from a strategic perspective while emphasizing lean management in daily operations. This approach aims to minimize unnecessary resourcewastage, consistently lower operational costs, and enhance operational e?ciency, thus enabling the enterprise to maintain steady progress in the competitive market.Based on the company's overall strategic planning, the company identi?ed low-e?ciency and limited-growth potential tail-end prefecture-level cities and accordingly reduced investments in these markets during the reporting period.This helped lower overall operational costs while optimizing resource allocation by concentrating premium resources in markets with sustainable development opportunities in the future, ultimately fostering the company's long-termsustainability. Concurrently, the company e?ectively identi?ed, revitalized, and rationally utilized idle property resources to optimize resource allocation. Through contract negotiations, the company secured more reasonable andmutually bene?cial leasing terms to lower overall operational costs.Prioritize Sustainable Development and StrengthenFinancial ControlsDuring the reporting period, the company adopted a sustainable development approach to formulate a seriesof key strategies and measures for cost reduction and e?ciency improvement based on identifying important?nancial issues and associated risk-opportunity factors.Control Financial ExpenseThe company prioritized green financial products and innovative financial products to obtain financing,aligning with global sustainable development trends. This approach diversifies financing risks, and ensuresthe company's long-term market competitiveness and stability as well. Additionally, the company regularlyconducted in-depth analyses of ?nancial expense structures, leveraging digital tools to accurately identify areasfor improvement and eliminate any unreasonable expenditure.
Optimize Cash FlowThe company formulated a comprehensive cash flow budget scheme that is aligned with sustainabledevelopment goals. By employing weekly cash ?ow forecasts, rolling forecasts, and re?ned budget management,the company integrated relevant factors affecting cash flow and planned fund allocation in advance. It alsostrictly monitored operating cash inflows and outflows along with budget execution to ensure a stable ande?cient operation of the cash ?ow system.
2024 China LBX Photography Competition Works: "The Moment" Photographer: Ma Bin
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Supply Chain Management
LBX Pharmacy regards "supply chain security" as a topic of significant importance, which is committed to building an efficient and responsible supply chain, managing suppliers throughout their full lifecycle from selection,cooperation, development, retention, to phasing out. This approach ensures the quality and safety of products and services. Furthermore, the company actively collaborates with suppliers to ful?ll ESG responsibilities collectively,promoting a green, harmonious, and e?cient supply chain ecosystem.Supply Chain Management FrameworkThe company emphasizes the independence and compliance of its supply chain, so it adopts independentoperation in product management and procurement departments while closely collaborating to build a compliantand e?cient supply chain system. Based on the nature of its business, the company's commodity procurementand non-commodity procurement sectors operate independently to ensure precise resource alignment in theprocurement process.For commodity procurement, the company organizes its business into lines based on the categories of goods.These lines include divisions for pharmaceuticals, non-pharmaceuticals, specialty drugs, and traditional Chinesemedicine, which handle category planning and business cooperation. Additionally, specific procurementdepartments are established in some regions and subsidiaries to handle regional procurement execution andmeet speci?c procurement needs. The group headquarters, regions, and subsidiaries align procurement e?orts tocollectively achieve e?cient, high-quality, low-cost procurement and digital transformation in the procurementprocess.For non-commodity procurement, the company adopts a centralized management model, with the groupheadquarters’ non-commodity procurement department being responsible for oversight. Departments forbusiness demands, non-commodity procurement, finance, and inspections work together throughout theprocurement process to create an e?ective mechanism for checks and balances and a layered decision-makingsystem, ensuring transparency, fairness, and compliance in procurement procedures.
Eight Key Principles for SuppliersPrinciples of Supplier Collaboration
Supplier Admission and EvaluationSupplier AdmissionUpholding the principles of fairness, objectivity, and transparency, the company has implemented rigoroussupplier admission management. In 2024, the company launched a procurement platform during the reportingperiod, realizing the standardization, informatization, and digitalization of procurement operations, continuouslyimproving supplier management e?ciency. Meanwhile, during the reporting period, the company simultaneouslyformulated and issued the "Eight Key Principles for Suppliers", clarifying explicit requirements such as "faircompetition," "eliminating bribery," and "information con?dentiality" to ensure the health and sustainability ofthe supply chain. The company strictly adheres to the "Blacklisted Suppliers Management System of the Group,"blacklisting suppliers with serious violations and prohibiting their participation in all procurement projects withinthe company's system.During the supplier admission stage, the company conducts due diligence on potential suppliers; whenestablishing partnerships, the company signs documents such as "Procurement Contract" and "Supplier QualityAssurance Agreement" with suppliers, providing clear guidance and basis for the cooperation.
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Supplier Assessment and ManagementTo ensure a stable and reliable supply chain, the company has established an independent quality management team to assess and dynamically manage suppliers and product categories. It has formulated documents such as the"Quality Risk Management System," "Supplier Review Management System," "Blacklisted Suppliers Management System of the Group," and "On-site Suppliers Inspection and Evaluation Standards." Insisting on proactively controllingquality risks, the company assigns a professional team to conduct quality reviews and on-site inspections of suppliers to ensure the quality of medicines from the source. In 2024, the company assessed a total of 1,215 suppliers andconducted on-site inspections of 105 suppliers, achieving on-site inspections for 100% of prepared TCM decoction manufacturers.We adhere to principles of fairness, objectivity, and impartiality by establishing a supplier performance evaluation system. Various departments collaborate to conduct both regular and irregular inspections of suppliers, coveringdimensions such as quality, pricing, supply conditions, quali?cations, environmental health and safety, and service behaviors. Based on the results of annual performance evaluations, we classify suppliers for tiered management.Additionally, we develop refined supplier management plans tailored to business characteristics, including communication frequency with suppliers and the depth of brand co-building. Through upgrades, downgrades, andeliminations, we ensure supplier quality on an ongoing basis.
Supplier Communication and CollaborationWe value communication and collaboration with suppliers, actively engage in dialogue to share new technologies and experiences with them. Partnering with suppliers, we build a shared industrial ecosystem, and enhance publicperception and trust in the professional services and social value of retail pharmacies. We continue to deepen collaboration to foster resilient growth and we aim to build a robust and environmentally friendly supply chain ecosystemwhile promoting the sustainable development of the industry.
In August 2024, LBX Pharmacy held a strategic supplier conference at the CPEO. In January 2024, LBX Pharmacy and Yangtze River Pharmaceutical convened
a strategic negotiation meeting for the year 2024.
In December 2024, LBX Pharmacy and Dong'e Ejiao Co., Ltd. jointlyorganized a large-scale live media traceability event.
In 2024, the company conducted two supplier satisfaction surveys to gain in-depth insights into supplier satisfaction across various stages of the supply, procurement, and sales process. The results of the survey served as a criticalbasis for improving supplier management and optimizing collaboration work?ows. During the reporting period, the company launched a special initiative to enhance supplier satisfaction, forming Supplier Collaboration Teams andSupplier Settlement Teams to improve e?ciency, which signi?cantly boosted overall supplier satisfaction with a total score of 9 points in 2024, representing a 5.8% year-on-year increase.
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Launch Torch Project to Optimize Supply ChainProcessesIn 2024, the company carried out and continued advancing the Torch Project, centering on three key segments:
"What to Sell," "How to Buy," and "How to Sell." This initiative aims to implement intelligent and lean productmanagement. By optimizing the entire supply chain process, the company seeks to enhance profitability andcontribute to sustainable development. In 2024, its gross profit margin was 33.17%, showing a year-on-yearincrease of 0.62pp.Supply chain risksResponse Measures
Regularly review and evaluate suppliersEstablish a diversi?ed supplier matrixCarry out demand forecasting and early warnings with suppliercollaboration platform and optimize procurement plans anddelivery schedulingAdopt state-of-the-art logistics technologies to improve deliverye?ciencyLeverage technology to identify abnormal inventory and optimizeinventory turnoverEncourage technological innovations by suppliers to jointlyenhance overall supply chain resilienceStrictly implement supplier due diligence to ensure legality andcomplianceReassess the partnership and terminate cooperation in cases ofsigni?cant supplier violations or misconductIntegrate ESG factors into the supplier evaluation system, assessingperformance in governance, social, and environmental aspects
Risk of disruptionsin commoditysupplyRisk of risingprocurement costs
Logistics risksRisks of highinventory levels
Legal risksReputation risks
Front-line stores will extensively adopt intelligent replenishmentsystem to boost the efficiency and accuracy of inventorymanagement. This ensures "Having Products to Sell, Having QualityProducts to Sell, and Selling Products Customers Need."
The company will instill the philosophy of "altruism" amongfront-line employees and continuously refine marketing incentivestrategies. It will adjust the sales structure, strengthen bargainingcapabilities for goods, and provide robust logistical support forfront-line sales. This strategy aims to handle larger businessvolumes, reduce marginal costs, and help customers achieve thegoal of "Spending Less."
Starting from the perspective of consumer demand, the companywill prioritize SKUs with superior performance as its operationalfocus provided ensuring comprehensive coverage of productfunctionalities, hence assisting customers in achieving the goal of"Buying the Right Medicine."Rede?ningProductSelectionLogic
IteratingMarketingStrategies
EnhancingDistributionE?ciency
Supply Chain Safety and Risk ManagementTo strengthen supply chain security, we regularly conduct risk identi?cation and reinforce response measures,enhancing the resilience and protective capacity of the supply chain to ensure its continuity and stability.Meanwhile, we leverage digital intelligence technology to optimize procurement, logistics, inventory, and othersegments, minimizing detailed risks in the supply chain. In 2024, the company initiated elimination mechanismsfor high-risk suppliers as per established procedures, resulting in the removal of 54 suppliers.
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What to Sell
How to Buy
How to Sell
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
The Changsha Regional Distribution Center of LBXPharmacy has been awarded the title of 'Five-StarWarehouse' for consecutive yearsChina General Warehouse Grading Committee, ChinaAssociation for Warehousing and Distribution
Upgrade Smart Logistics to Ensure Timely and E?cient DeliveryThe company is committed to establishing a leading pharmaceutical logistics service system in the industry. It has built a highly e?cient distribution networkcomprising one national distribution center, three regional distribution centers, and 18 delivery centers directly supplying to the stores, covering a warehouse areaexceeding 320,000 square meters.The company's logistics distribution encompasses three major processes: order management, warehouse management, and transportation management.Advanced technologies—including WMS (Warehouse Management System), TMS (Transportation Management System), WCS (Warehouse Control System), AS/RS (Automated Storage and Retrieval System), and ERP (Enterprise Resource Planning System)—are employed. Modern logistics technologies and intelligentequipment, such as automated storage and retrieval systems, AGV (Automated Guided Vehicle) systems for goods-to-person picking, shuttle systems for outboundstorage, sorting and veri?cation conveyor systems, DPS (Digital Picking Systems), and RF (Radio Frequency) technologies, are widely applied. These innovationsenable intelligent product storage and retrieval management, signi?cantly improving operational e?ciency and delivery timeliness.During the logistics development and construction process, the company has introduced automated facilities, equipment, and technologies to enhance labore?ciency and reduce labor intensity. For instance, the split-order picking at the Yangzhou Regional Distribution Center employs a goods-to-person picking systemwith AGV robots and electronic label-applied total sorting technology. The AGV goods-to-person system, through the combined application of Kiva (logistics robots)shelves and seed sorting tables, improves labor e?ciency by over 80%. The Changsha and Yangzhou Regional Distribution Centers utilize automated stacker cranesfor storage and retrieval, enabling unmanned operations and saving labor by 50%.
The company applies a Transportation Management System(TMS) for route planning and delivery optimization in terms oflogistics distribution. Based on order information, historical data,geographic information data, and various algorithmic models,the system calculates the shortest path from the starting point toall other points as well as the actual driving distances betweenpoints. It determines the optimal route, avoids detours, andimproves delivery e?ciency.
In January 2024, the Yangzhou Regional Distribution Center of LBX Pharmacy inJiangsu (abbreviated as "Jiangsu RDC") was inaugurated. This center integratessupply chain resources in Jiangsu, Zhejiang, Shanghai, and other regions to enhancethe company's logistics distribution capability and competitiveness. Jiangsu RDCboasts smart logistics advantages, including a series of intelligent equipment suchas latent robots, automatic stacker cranes, and shuttle storage systems. It enhanceslogistics efficiency while expanding capacity, with a warehouse capacity of over300,000 boxes, a daily order processing capacity of 150,000 lines, and an annualthroughput of over 9 million boxes, meeting the distribution needs of over 4,500stores and supporting an annual sales scale exceeding RMB 6 billion.
In 2024, the shuttle storage systems at theYangzhou and Hefei Regional Distribution Centerswill achieve automatic collection of goods,reducing one operational step, doubling theefficiency of goods collection, expanding thebuffer space for outbound goods, processingmore store orders per wave, and enhancingsingle-warehouse ?exible capacity.
CaseCaseCase
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Industry SymbiosisIn current business environment, consumer's demands on health are increasingly diverse. Individual enterprises and single drug sales models can no longer meet market needs. LBX Pharmacy remains committed to the aspiration ofindustry co-prosperity. It actively integrates upstream and downstream resources and collaborates widely with partners to establish an end-to-end service chain covering medication sales, health management, disease prevention, andchronic disease rehabilitation. This approach creates lasting value for users and promote the sustainable development of the pharmaceutical healthcare industry.Facilitation of the Industry Development
LBX Pharmacy plays an active role as a leading enterprise, leveraging its extensive store network and more than two decades ofsolid reputation. Guided by the principle of "win-win outcome and altruism," and driven by the operational modes of "franchising"and "alliances," the company integrates various industry ecosystems. By fostering closer, mutually beneficial collaborations,LBX Pharmacy provides comprehensive support—including branding, management, and supply chain—to its peers in thepharmaceutical retail sector. Currently, the company has established an ecosystem centered on its direct retail business,complemented by its "LBX Health Pharmacy" franchise segment and "Easydrug" alliance segment.Franchising: Seven Empowerment Systems Fuel GrowthLBX Pharmacy is among the pioneers in the industry to heavily invest in developing a franchise model. Its "Health Pharmacy"franchise business identi?es as both a "management expert from headquarters" and an "operational steward for pharmacies."Focusing on "9+7" regional development, it strategically expands into tier-3 to tier-5 markets. By harnessing its strong brandinfluence, professional operational management capabilities, and new retail expertise, LBX Pharmacy empowers franchisestores comprehensively, helping small chains and independent drugstores enhance their e?ciency and operational quality whileproactively driving industry advancement.By the end of 2024, the "Health Pharmacy" franchise business of the company is set to reach 5,296 franchise stores. During thereporting period, the company shared intelligent tools with franchisees, such as Smart Ordering and Salary Calculator, empoweringthem with advanced digital capabilities. LBX Pharmacy remains committed to promoting a more "digitally intelligent" industryecosystem.
He Jie, from Alxa League, Inner Mongolia, has been operating drugstores locally for nearly 20 years, with a total of 39 stores. However, the challenges of limited operationaland management capabilities of small and medium sized chains became increasingly evident amid market competition. In 2022, after thorough market investigation, HeJie decided to franchise all 39 stores under "LBX Pharmacy." Leveraging the company's extensive product resources, digital supply chain, and professional operationalmarketing systems, He Jie achieved improved overall management e?ciency and increased gross margins. By the end of 2024, He Jie's franchise expanded to 45 LBXPharmacy stores, with continuous expansion and sales scale growth.
CaseStory of Successful Franchisee: small and medium sized Chain with "39 Stores" Achieving E?cient Management
Seven Empowerment Systems Drive High-Quality Industry Development
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Alliance: Sharing Five Key Resource Advantages
The "Easydrug" alliance of LBX Pharmacy is positioned as a "third-party comprehensiveempowerment service platform," which adheres to the principles of "co-integration, co-creation, and sharing." Focusing on pharmaceutical retail market operation services andproduct distribution as its core business, it provides management consulting and supplychain integration services to small and medium sized chain drugstores. By leveraging platformadvantages, it helps alliance members lacking procurement resources and operationalexpertise improve their overall management capabilities.By the end of 2024, the company's "Easydrug" alliance business covered 26 provinces and cities,with a particular focus on 12 provinces, totaling over 19,900 alliance stores (not included in thetotal number of company-owned stores). In 2024, the company initiated the comprehensivepromotion of equity participation model, enabling deeper supply chain empowerment for smalland medium sized chain enterprises. As of the end of the reporting period, the company hadpartnered with 100 equity-participating enterprises, corresponding to a retail scale of RMB 6.648billion.
Alliance Cooperation Case: “Prescribing the Right Medicine” to Optimize Product Strategiesand Boost Pro?t MarginsA pharmacy chain located in Daqing, Heilongjiang Province, with an annual sales scale of approximately RMB 900 million,faced challenges such as low profit margins and difficulty in increasing gross profit. In October 2023, the companypartnered with " Easydrug " and utilized the diagnostic tools for products and operations provided by LBX Pharmacy tooptimize product selection, adjust marketing strategies, and enhance management e?ciency, resulting in sustained growthin gross pro?t margins. By 2024, the gross pro?t margin had increased by 3.7PP year-on-year.
Equal Treatment to SMEs
LBX Pharmacy takes "altruism, equality, pragmatism, and innovation" as its corporate spirit, embedding "integrity andsel?essness"and "treating partners kindly" into its core corporate values and social responsibility outlook. The company activelyimplements the concept of "treating SMEs equally" in its daily operations.We understand that SMEs play an essential role in the pharmaceutical industry chain. They are pivotal in driving industry innovation,ensuring drug supply, and serving grassroots communities. In daily operations, the company advocates for a fair competitiveenvironment, avoids market monopoly practices, supports the development of SMEs, and works together to achieve a thrivingpharmaceutical ecosystem.It has established a fair and transparent cooperation mechanism to protect the rights of SMEs. The LBX product procurementplatform which implements strict regulatory mechanisms to ensure fair competition and transparent operations during thecooperation process is open to all suppliers for login, registration, review, and bidding. The company discloses its reporting hotline,email address, and mailing address, sincerely inviting social supervision over potential improper practices in the cooperation.Meanwhile, during the cooperation, the company provides reasonable and fair payment terms for all partners to enhance theircompetitiveness.Through franchise and alliance business models, the company explores cooperative models with SMEs, consistently deepenscooperation content, empowers SMEs with its mature operational experience, robust supply chain system, and professionalpharmaceutical service capabilities. It provides training and technical support covering compliance, digital transformation, andmarketing promotions to assist them in more e?ectively connecting with the broader health ecosystem and advancing sustainableindustrial development.
案例
Sharing Five Major Advantages with Small and Medium-Sized Chain Enterprises
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
Participating in Industry Standard FormulationLBX Pharmacy actively takes part in the discussion and drafting of group standards, o?ering professional expertise and innovative insights to contribute to the industry's standardized development.Since 2020, LBX Pharmacy has participated in drafting multiple signi?cant standards for the China Association of Pharmaceutical Commerce, including the "Service Speci?cations for Retail Pharmacies Operating Special DiseaseMedicines," "Pharmaceutical Service Speci?cations for Retail Pharmacies Operating Colorectal Cancer Medicines," "Pharmaceutical Service Speci?cations for Retail Pharmacies Operating Lung Cancer Medicines," "PharmaceuticalService Speci?cations for Retail Pharmacies Operating Breast Cancer Medicines," and "Pharmaceutical Service Speci?cations for Retail Pharmacies Operating Psoriasis Medicines," and other key projects. In 2024, the companyparticipated in drafting the group standard "Pharmaceutical Service Specifications for Retail Pharmacies Operating Thyroid Disease Medicines" (TCAPC015-2024). At the same time, the company is committed to cultivating ahighly professional team of pharmacists. As of now, ?ve pharmacists have passed the examination conducted by the China Association of Pharmaceutical Commerce and have been appointed as inspectors for "Retail PharmacyPharmaceutical Service Group Standards," providing professional support for the implementation of industry standards.The company continues to deepen the development of its healthcare service system, being committed to establishing professionalized, digitalized, and diversi?ed model stores, thereby setting a benchmark in the ?eld. Duringthe reporting period, the company's Changsha Xiangya Store received the "Best Pharmaceutical Service Case" award from the China Association of Pharmaceutical Commerce. Additionally, the company's Xi'an Beidajie Store andShaoyang Hongqi Flagship Store were recognized as “DTP Model Stores” by the association. Guided by these model stores, the company has continuously improved the service quality across all its outlets. Moreover, through industryexchanges, the company has shared its service philosophies and experiences with peer professionals, jointly promoting the advancement of service standards in the pharmaceutical retail industry.
Co-construction with the AssociationsLBX Pharmacy actively participates in co-construction with industry associations, promoting the standardized development of the sector. The Chairman of the Board, Xie Zilong, serves as the Honorary Chairman of the China MedicineMaterials Association, Vice Chairman of the China Association of Pharmaceutical Commerce, and Chairman of the Hunan Pharmaceutical Circulation Industry Association. Over the years, he has conducted extensive grassrootsresearch, on-site investigations, and organized industry association seminars and forums, actively contributing ideas and suggestions to the formulation of the industry 's "Self-Discipline Convention," and has taken the lead incommitting to its compliance. This has played a signi?cant role in fostering the healthy and orderly development of the industry and safeguarding consumers'rights. The company's subsidiaries have actively participated in meetingsand activities organized by local industry associations, providing recommendations for the formulation and improvement of industry standards, reinforcing self-supervision mechanisms, and advancing collective industry progress.
In June 2024, the Shanghai Pharmaceutical Trade Association, in cooperation with LBX Pharmacy Shanghai Company and multiple pharmaceutical retail enterprises, jointly launched the "Self-Discipline Initiative forthe Management of Designated Retail Pharmacies under Shanghai Medical Insurance," ensuring the medication needs of the public and fostering a healthy market environment.In June 2024, the Nantong Pharmaceutical Industry Chamber of Commerce held a special meeting for retail pharmacy managers. Nantong Puze Pharmacy Chain Co., Ltd., a subsidiary of LBX Pharmacy, participatedand signed the "Public Commitment for Self-Discipline in Standardized Medical Insurance Management at Designated Pharmacies," pledging to e?ectively perform duties related to medical insurance managementand to resolutely protect the rights and interests of consumers.
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
AppendixesDigital Intelligence EmpowermentCost Reduction and E?ciency ImprovementSupply Chain ManagementIndustry Symbiosis
ContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Green ecology is an essential cornerstone of global sustainabledevelopment. LBX Pharmacy integrates green and low-carbon practicesinto its business strategy, embedding the concept of sustainabledevelopment through the entire process of production, supply chain,park, and store operations. In its daily operations, the companycontinuously optimizes resource management, reduces waste, controlspollution emissions, and adheres to green operations, contributing tosociety's green and coordinated development.
Responses to SDGs in This Section
Contents of This SectionEnvironmental Compliance ManagementUse of Energies and ResourcesClimate Change TacklingGreen Operation
Jointly Building a Green Ecosystem
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Environmental ManagementEnvironmental Management System
LBX Pharmacy has established and continuously improved its environmental management system throughout its production and operation processes. It has integrated environmental responsibilities into relevant functionaldepartments, set environmental management goals, and continuously enhanced its environmental management capabilities.
Environmental Compliance ManagementLBX Pharmacy strictly complies with the "Environmental Protection Law of the People's Republic of China" and the "Environmental Impact Assessment Law", etc. The company has established the Environmental andSanitation Management System at the production level. For park construction projects, it strictly enforces the "Three Simultaneous Policies" (design, construction, and operation of environmental protection facilitiessynchronized with the main project) to establish an environmental management system. During the reporting period, the company did not encounter any major administrative penalties or criminal accountability related toecological environment incidents by relevant authorities.
The second phase construction site of the Changsha NDC expansion projectwas honored as an "Air Pollution Prevention Grade A Site."
During the production process, YST Pharma, a prepared herbal medicine productionenterprise of LBX Pharmacy, formed an environmental management committee led bythe general manager to effectively handle environmental management throughout theproduction process.During project construction, the company established an environmental protectioncommittee to ensure strict implementation of environmental protection standards before,during, and after project construction. The company appointed professional supervisoryunits with appropriate quali?cations to coordinate and monitor the environmental behaviorsof the project throughout the entire process, ensuring safe, green, and civilized construction.Environmental Risk ResponseThe company has attached great importance on preventing and responding to sudden environmental incidents. For speci?c situations such as chemical spills and hazardous waste leaks, YST Pharma has formulated the "HazardousWaste Emergency Plan" and "Production Safety Accident Emergency Plan" to classify and grade potential incidents, specify emergency rescue teams and responsibilities, and equip emergency facilities, thus e?ectively ensuring aprompt response to emergencies.
Environmental Compliance ManagementUse of Energies and ResourcesClimate Change TacklingGreen OperationContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
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Environmental Compliance ManagementUse of Energies and ResourcesClimate Change TacklingGreen Operation
The wastewater discharge situation of YST Pharma in 2024 is as follows：
Wastewater TypeTotal wastewater dischargeTon12,687
0.15
0.18
0.08
TonTonTon
COD discharge in wastewaterSuspended solids (SS) inwastewaterAmmonia nitrogen discharge inwastewater
Unit2024
Emissions and Waste ManagementLBX Pharmacy strictly complies with the "Water Pollution Prevention and Control Law of the People's Republic of China," "Prevention and Control of Air Pollution Law of the People's Republic of China," "Prevention and Control ofEnvironmental Noise Pollution Law of the People's Republic of China," "Prevention and Control of Environmental Pollution by Solid Waste Law of the People's Republic of China," and other relevant laws and regulations. Adhering tothe principles of "source control, e?cient collection, and scienti?c treatment," the company adopts waste reduction measures, periodically monitors pollutant emissions in strict accordance with the requirements of emission permits,and continuously reduces production-related pollutant emissions through waste reduction initiatives and the application of environmental protection facilities. During the reporting period, the company was not subject to any majoradministrative penalties or criminal liabilities due to pollutant emissions.
The company's wastewater includes domestic sewage, construction wastewater, BXT TCM Clinic medical wastewater, and YST Pharma production wastewater, primarily consisting of domestic sewage. All domestic sewage isdischarged into the urban domestic sewage treatment network, while other types of wastewater are managed with corresponding measures.
Discharged into the urban domestic sewage treatment pipeline network.
A temporary three-tier discharge system primarily consisting of drainage pipes, ground collectiontanks, and open ditches is adopted, with assigned personnel carrying out regular maintenance andclearing of the temporary drainage facilities.YST Pharma has formulated the "Sewage Treatment System," entrusting a third-party testingcompany for periodic sewage testing. The facility is equipped with sewage treatment equipmentdesigned to meet the national Grade I discharge standards. Various types of sewage and wastewaterwithin the plant are treated to comply with the standards through septic tanks, oil separators,collection wells, and regulation tanks, which are then sent to the Changsha Changshanyuan SewageTreatment Plant via the park's sewage pipeline network.BXT TCM Clinic has established the "Sewage Disinfection Management System," and equipped withautomatic medical sewage disinfection devices to ensure compliance before discharging into themunicipal network.
Wastewater
Wastewater TypeSolutionDomesticSewage
ConstructionWastewater
ProductionWastewater
MedicalSewage
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Category of Boiler WasteGases
Types of Solid WasteTotal non-hazardous wastesNon-hazardous waste densityTotal hazardous wastesHazardous waste density
UnitTon
609.78
0.03
199.19
0.01
Ton/million RMBTonTon/million RMB
2024
Nitrogen Oxides/NOxTon0.29
Unit2024
The primary sources of the company's waste gas are the boiler emissions andproduction dust from YST Pharma. For boiler emissions, YST Pharma has beenequipped with waste gas treatment devices. After treatment by these devices, thecleaned gas is discharged directly through a 15-meter chimney. For productiondust, YST Pharma employs suction fans and bag-type dust collectors to process thedust, which is then discharged through a 15-meter exhaust pipe in compliance withstandards. YST Pharma's production lines utilize fully automated dust removal,dust recycling equipment, and environmentally friendly inkjet coding technology toreduce exhaust emissions and improve the working environment.
The company's solid waste primarily consists of household garbage, with asmall portion comprising construction waste, general industrial waste (YSTPharma), and hazardous waste (YST Pharma and BXT TCM Clinic). In terms of solidwaste management, the company adheres to the principles of "harmlessness,minimization, and resource utilization" by implementing technologicaltransformations, environmental protection campaigns, and various measures toreduce the generation of solid waste.
The waste gas emissions from YST Pharma's boilers in 2024 are as follows：
Solid waste emissions (including only the Changsha headquarters park, BXT TCM Clinic, and YST Pharma) of the company in 2024 are asfollows：
Waste Gas
Solid Waste
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Notes:
1. The standard coal coe?cient is derived from the "General Rules for Calculation of Comprehensive Energy Consumption of the
National Standard of the People's Republic of China" (GB/T2589-2020);
2. The natural gas data is not entirely comprehensive but covers the majority of the company's operational areas (including the use of
natural gas for the boilers of the YST Pharma).
E?cient use of energy and resources not only reduces operational costs, but also lessens environmental impact, aids in combating climate change, and fosters economic transformation. LBX Pharmacy upholds the concept ofsustainability by e?ciently utilizing energy and resources, reducing energy consumption, actively adopting clean energy, and practicing circular economy principles, taking incremental steps to protect the green ecosystem.Use of Energies and Resources
The company continuously strengthens energy management, improves energy management systems, conducts energy conservation and emission reduction awareness campaigns, enhances employee awareness of energy e?ciencyand emission reduction, consistently deepens energy saving e?orts, and optimizes resource utilization. The company has developed institutional guidelines such as the "Energy Conservation and Consumption Reduction OperationManual" and the "Standard Operating Procedures for Water and Electricity Usage in Stores," which regulate the daily use of resources such as water, electricity, and gas in stores and o?ce parks in accordance with these guidelines.
Energy management
Stores
Changsha Headquarters Park
Conduct regular inspections focusing on water and electricity, identify high-energy-consumptionequipment, and ensure the safe and stable operation of all facilities.More than 4,000 smart electricity meters have been installed in directly operated stores (new andrenovated), enabling real-time monitoring of power consumption and immediate handling ofabnormal electricity usage.Established monthly power consumption logs for store signage in 76 cities. Set switch-on and switch-o? times based on local sunset times in a scienti?c approach to reduce electricity consumption.
Formed a dedicated energy-saving team and assigned speci?c responsibilities to strictly control theuse of energy and resources within the headquarters park.Actively utilize clean energy by installing photovoltaic devices and providing shuttle services withnew energy vehicles for employee transportation.Installed motion-activated lighting in restrooms and pantries, while outdoor pathway lighting iscontrolled by arti?cial intelligence to avoid power wastage.Regular inspections of concealed water pipes and maintenance of water supply facilities by theproperty management team to prevent issues such as water leaks, drips, and wastage.Posted various energy-saving reminders near o?ce lighting and air-conditioning switches in the parkto cultivate an energy-saving and consumption-reduction o?ce atmosphere.During park construction projects, a dedicated "Energy-Saving Design Manual" is prepared, energyconsumption records are maintained, and a specialized supervisory team is set up to monitor dailyenergy consumption operations.
In December 2024, the company conducted an energy consumption assessment of the LED panel lightsused in its stores and became a pioneer in the industry by piloting high-e?ciency LED panel lights. Testingand comparisons revealed that the new energy-saving LED panel lights reduced energy consumption byapproximately 50% compared to the original panel lights, signi?cantly lowering carbon emissions.
Initiating LED Panel Light Upgrade to Create "Green Stores"Case
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Clean Energy Utilization
Usage of Water ResourcesLBX Pharmacy strictly adheres to laws and regulations such as the "Water Law of the People's Republic of China,"upholding the principles of water conservation and environmental protection in its operations. The companyemploys water-saving equipment, enhances equipment maintenance, appropriately allocates water usage,recycles circulating water resources, and raises awareness among all employees about water conservation tobuild a resource-e?cient enterprise. In its operations and production, the company's water supply comes entirelyfrom the local municipal supply system, and there are no reported challenges in accessing suitable water sources.
LBX Pharmacy proactively explores the use of clean energy. As of the end of the reporting period, the rooftopphotovoltaic (PV) power generation systems have been installed and are operational at the company'sheadquarters residential building and logistics warehouse, the Jiangsu Yangzhou Logistics Center, and the YSTPharma plant area. These systems operate under the "self-consumption with surplus electricity fed into the grid"model. By the end of the reporting period, the company's total installed PV capacity reached 4,528.64 kWp, with atotal annual generation of 2,483.20 MWh, while the company's total electricity consumption was 2,076.46 MWh.The company's total annual PV electricity usage equates to saving approximately 624.39 tons of standard coalper year, reducing carbon dioxide (CO2) emissions by approximately 1,711 tons, sulfur dioxide (SO2) emissionsby about 0.17 tons, nitrogen oxides (NOX) by about 0.28 tons, and dust emissions by approximately 0.04 tons(calculation based on the "2023 Annual Development Report of the China Electric Power Industry" published bythe China Electricity Council), e?ectively mitigating environmental pollution.
The company's water resource consumption in 2024 is as follows:
Consumption of water resourcesUnit2024Freshwater consumptionConsumption intensity of water resources
TonTon/million RMB
27.28
621,006.18
The use of renewable and clean energy for 2024 is as follows:
Note: The baseline emission factor for the Hunan power grid is based on the "2023 Emission Reduction Projects China Regional Power Grid Baseline Emission Factors" report, released by the National Center for Climate Change Strategy and International Cooperation. Theemission factor for the Central China Regional Power Grid is 0.8771 tCO2/MWh.
Consumption of Renewable Energy Unit2024
Renewable energy consumptionTons of standard coal255.20Total Energy Savings624.39Tons of standard coalReduction of GHG greenhouse gas emissions1,821.26Tons of carbon dioxide equivalent
Renewable energy electricity consumptionMWh2,076.46
Photovoltaic Rooftop at the Headquarters ParkPhotovoltaic Rooftop of Yangzhou Logistics Center
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The company promotes the recycling of product outer packaging boxes and the reuse of waste cardboardboxes. By reclaiming outer packaging boxes used after material, packaging, and ?nished product shipments forproduction and storage logistics or recycling by third-party companies, it helps reduce environmental pollution.In 2024, the company has recycled 3,000 tons of waste cardboard boxes.
Circular Economy
A circular economy can e?ectively reduce environmental footprints, lower carbon emissions, and minimize resource wastage. The company actively explores circular economy pathways and embraces green development concepts byimplementing measures such as circular packaging, shared logistics vehicles, and rainwater harvesting.
The company recycles logistics carriers such as pallets and turnover boxes to reduce the resource consumptionrequired for producing new carriers, extend the lifespan of carriers, and avoid waste caused by idle self-purchased carriers.
In some of the company's parks, a rainwater and wastewater separation system is adopted, where rainwater is collected via the rainwater pipeline network or rainwater recycling equipment and then discharged into the regionalrainwater pipeline network. During project construction, we incorporate various Low Impact Development (LID) facilities in sponge city designs, such as ecological retention facilities (including rain gardens) and retention-type grassswales. Rain gardens collect rainwater by adjusting the relationship between pavement, greenways, and rainwater elevation, using sandy soil with geosynthetic materials to ensure water retention capacity, and installing permeableblind pipes in impermeable facility layers. Retention-type grass swales collect, convey, and treat rainwater by planting vegetation in surface ditches. During the reporting period, approximately 3,500 tons of rainwater were reused at thecompany's headquarters park.
Circular Packaging
Circular Logistics Vehicles
Rainwater Reuse
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AppendixesEnvironmental Compliance ManagementUse of Energies and ResourcesClimate Change TacklingGreen Operation
Climate Change TacklingCurrently, addressing climate change has become a common task for all mankind. LBX Pharmacy continues to closely monitor changes in climate-related policies, laws, and regulations, initially identifying "addressing climate change"as a key topic, while focusing on the risks and opportunities associated with this issue. The company formulates reasonable response plans by combining external environmental changes with its internal development status.Climate Risk ManagementIn 2024, the company proactively responded to climate change by selecting scenarios from the "AR6 Synthesis Report: Climate Change 2023" (AR6) of the Intergovernmental Panel on Climate Change (IPCC)of the United Nations. These scenarios include a low emission scenario (SSP 1-2.6, where temperature increase does not exceed 2.0℃) and a high emission scenario (SSP 5-8.5, where temperature risesclose to or exceeds 4.4℃) to assess physical risks. Additionally, the company evaluates transition risks and climate-related opportunities based on "Net Zero Emissions by 2050" (NZE, temperature increasenot exceeding 1.5℃) and "Established Policies Scenario" (STEPS, temperature increase exceeding 3℃).Risk andOpportunityClassi?cation
ImpactPathway
FinancialImpact
Response MeasurePhysical risk
Acute risk
Chronic risk
The occurrence ofextreme weather such asearthquakes, typhoons,thunderstorms, andheavy fog may disrupt orobstruct transportation,making product deliverychallenging.
Chronic risks such asextreme high temperatures,droughts, rising sealevels, and intensi?ed ElNi?o phenomena impactthe health and safety ofemployees, potentiallyincreasing costs associatedwith utilities, equipmentwear, and overalloperational expenses.
Increase inoperating costs,decline inrevenue, assetimpairmentlosses.
Increasedoperationalcosts
Strengthen meteorological monitoring and early warning systems topromptly notify all regions of extreme weather disasters. Adjust logisticsand transportation routes, and arrange alternative suppliers in advance toensure a stable supply of medicines.Develop contingency plans for extreme weather, and organize periodictraining or emergency drills for employees to better prepare for suchconditions.Stockpile emergency supplies and deploy necessary equipment in advance,such as adding centralized heating water tanks (20m?) for cold weather, andprocuring industrial salt and anti-slip bags for rain and snow conditions.Formulate seasonal construction assurance measures based on the climaticcharacteristics of each season.Install lightning rods and grounding devices in the park and factory facilitiesto prevent damage caused by lightning strikes.Adjust the energy usage structure, control the consumption of fossil fuels,and increase the proportion of clean and renewable energy sources such assolar power.Enhance the insulation capability of buildings, such as adding insulatingmaterials to cope with extreme cold or scorching hot weather.
Impact Analysis under Di?erent Climate ScenariosSSP1-2.6SSP5-8.5Short Term Short Term Mid Term Mid Term Long Term Long Term
High
Low
HighHigh
MediumMediumMedium
HighHigh
HighHigh
High
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Transition Risks and Climate-related OpportunitiesNZE STEPS
Policy risk
Market risk
Reputation risk
Technology risk
Reputationopportunities
Technologicalopportunities
The government's introduction ofpolicies supporting low-carbontransition and stricter emissionreduction measures may increaseR&D costs for green operationsor carbon trading costs of thecompany.Suppliers may face increasedoperational costs due to carbonreduction policies, leading to arise in raw material prices anda subsequent decline in thecompany's product pro?t margins.Stakeholders are increasinglyconcerned about the company'sperformance in addressing climatechange. Without proactive climateaction, the company might fail tomeet stakeholders' expectations,potentially leading to damage to thecompany's image and reputation.The company needs to enhancethe energy e?ciency standardsof its operational equipmentdue to the implementation ofstricter environmental policiesby the government, which mayrequire additional investments forenergy-saving and environmentalprotection upgrades.Actively engage in climate action toenhance the company's reputationamong society and stakeholders.Through technology R&D, the use ofclean energy, process optimization,and management upgrades,the company comprehensivelyidenti?es and explore energy-saving opportunities to improveenergy e?ciency.
Notes:1. Time dimension: Identi?ed potential impacts of climate change on its business segments across short-term, medium-term, and long-term time scales;
2. Degree of impact: Using a qualitative assessment to rank those identi?ed risks as 'low,' 'medium,' or 'high' based on the probability of occurrence, impact, adaptability, and resilience.
Pay close attention to policy changes, comply with laws andregulations, and ensure legal and compliant operations;Continue to explore and innovate sustainable operational models.
Establish strategic partnerships with premium partners to strengthenthe ability to respond to supply chain risks.
Proactively respond to stakeholders' concerns regarding the company'sclimate-related actions, improve performance, and enhanceinformation transparency.
Continuously monitor environmental policies and implementtimely environmental upgrades in line with the company's actualcircumstances.
Continuously focus on and actively participate in climate action.
Conduct timely technology R&D and iterations in alignment with thecompany's overall strategy and operational conditions.
Increasedoperational costs
Pro?t marginsdeclined
Revenuedecline
Increasedoperationalcosts
Increasedrevenue
Loweroperating costs
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
LowMedium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
MediumMedium
MediumMedium
Medium
Medium
Medium
MediumMedium
High
High
HighHigh
High
High
High
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Greenhouse Gas Emissions
The company's greenhouse gas emissions mainly stem from the consumption of energy sources such as electricity, natural gas, gasoline, and diesel, among which, the use of natural gas and fuel oil is categorized as Scope 1 greenhousegas emissions, which refers to direct greenhouse gas emissions. Purchased electricity falls under Scope 2 greenhouse gas emissions, which refers to indirect greenhouse gas emissions. The greenhouse gas emission data is presented interms of carbon dioxide equivalent.
Notes:
1. The greenhouse gas emissions list includes carbon dioxide, methane, nitrogen oxides, hydro?uorocarbons, per?uorocarbons, sulfur hexa?uoride, and nitrogen tri?uoride.
2. The electricity emission factor is derived from the average emission factor of the Hunan power grid, 0.4900 t CO2/MWH, as speci?ed in the "Announcement on the 2022 Electricity Carbon Dioxide Emission Factors" published by the Ministry of Ecology and Environment in
2024.
3. Other calculations are based on the national standard of the People's Republic of China, "General Rules for Calculation of Comprehensive Energy Consumption (GB/T 2589-2020)," the Global Warming Potential (GWP) values from the AR6 Synthesis Report: Climate Change
of Intergovernmental Panel on Climate Change (IPCC AR6), and the "IPCC 2006 Guidelines for National Greenhouse Gas Inventories (2019 Revision)."
CategoryUnit2024Total Greenhouse Gas Emissions (Scope 1)Total Greenhouse Gas Emissions (Scope 2)Total greenhouse gas emissions
Tons of carbon dioxide equivalentTons of carbon dioxide equivalentTons of carbon dioxide equivalent
985.32
73,690.1974,675.51
Environmental Compliance ManagementUse of Energies and ResourcesClimate Change TacklingGreen Operation
2024 China LBX Photography Competition Works: "The Moment" Photographer: Ma Bin
The company has actively established logistics centers in compliance with GSP standards and environmental protectionrequirements. It has now built one national logistics center, three regional logistics centers, and eighteen distributioncenters with a highly e?cient delivery network directly supplying to stores. The total national warehouse area exceeds320,000㎡.Self-built logistics centers adhere to the principles of farmland protection, energy conservation, and environmentalprotection. They combine multi-story warehouses and automated high-rise warehouses, fully utilizing automated storageand retrieval systems to improve storage efficiency and reduce the consumption of land and human resources. Theautomated high-rise warehouses at the Changsha and Yangzhou logistics centers feature 13-layer shelf units, with 20 aislesand 32,000 pallet positions, capable of storing 540,000 boxes of goods. It has made optimal use of space.The design and construction of the self-built logistics centers employ insulated brick partition walls and external walls withthermal insulation and decorative materials. Photovoltaic power generation facilities are installed on warehouse rooftops,saving over 40% of energy during warehouse operations and effectively reducing energy consumption. The companyhas formulated the "Logistics Center Energy Saving Operational Guidelines" to standardize the use of air conditioning,lighting, and office equipment. All warehouse lighting in the logistics centers adopts energy-saving lamps, along withcentrally controlled air conditioning and temperature-humidity monitoring systems. Temperature and humidity insidethe warehouses are reasonably regulated based on GSP temperature requirements. Furthermore, the warehouses at theYangzhou and Changsha logistics centers have achieved paperless operations, e?ectively reducing the consumption ofpaper materials.
LBX Pharmacy has developed the "Self-owned Vehicle Management Specifications for DeliveryCenters" and "Equipment Inspection and Maintenance Speci?cations" to standardize the managementof vehicles owned by the delivery centers, reducing operational risks and transportation costs. Forinternal transportation, the company has ensured that all forklifts operate on electric energy, e?ectivelyreducing diesel consumption during internal transport stages. For external transportation, the companypromotes the use of new energy vehicles and leverages smart tools to optimize transportation routes,further minimizing pollutant emissions during transportation. As of the end of this reporting period, thecompany's nationwide logistics centers were equipped with a total of 38 electric forklifts.Nationwide, over 99% of the company's delivery vehicles operate under a shared model,utilizing differences in transportation schedules and routes across various industriesto reduce empty vehicle runs. Additionally, the company actively leverages intelligentdigital systems to optimize transportation routes, lowering costs while reducing energyconsumption. As of the end of the reporting period, the company used a total of 293 deliveryvehicles, of which 85 were new energy vehicles, accounting for 29%. In 2024, 35 new energyvehicles were added, further advancing green logistics.
Green WarehousingGreen Distribution
Green Supply Chain
Green OperationLBX Pharmacy has consistently adhered to the concept of green development, deeply implementing green operations. Throughout its daily operations, the company undertakes various environmental protection initiatives, startingfrom small details and collaborating with employees, customers, and stakeholders to promote a green, low-carbon, and sustainable society. In 2024, the company has invested RMB 1.2314 million in environmental protection.
Transportation and warehousing are critical components of the green value chain. LBX Pharmacy activelyengages in green supply chain practices and is committed to building a green and sustainable pharmaceuticalretail model. We have optimized and constructed a green supply chain management system in every aspect,including raw material acquisition, production operations, material storage, packaging transportation, andrecycling, driving green development within the industry.
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Advocating Plastic Reduction and Actively Using Eco-Friendly Packaging Bags
Green ProductionThe company adheres to the principle of prioritizing environmentalprotection and green development, actively implementing greenproduction practices. This includes evaluating the environmentalsoundness of suppliers' processes, strictly controlling the compliance,traceability, and safety of raw material sources, and adopting eco-friendlypractices throughout the production process. From sourcing to productionand transportation, every step is managed to minimize pollution emissions.
Green StoresLBX Pharmacy actively invests in the construction of green stores in every process. From design and decoration to operation, various eco-friendlyinitiatives are implemented to promote a philosophy of health, environmental protection, and sustainable development. These e?orts showcase thecompany's commitment to environmental responsibility, providing consumers with a better and greener service experience.StageMeasure
Integrate green concepts by adopting energy-e?cient lighting systems and designs, such as controlling a row of lightsat the entrance separately and segmenting other areas. When natural light is su?cient, certain lights can be turned o?independently to conserve energy, providing a more comfortable lighting e?ect while reducing energy consumption.Optimize the natural lighting design of stores by reasonably arranging windows and translucent materials to maximizethe use of natural light. This reduces the duration of arti?cial lighting and lowers electricity consumption.Establish regulations such as the "Store Decoration Engineering Management System" and the "Fifth-GenerationStore Decoration Standards," which stipulate that we shall adhere to principles of minimal disruption to residentsand zero pollution during renovations with standardized and scienti?c construction processes and emphasis onhealth and environmental protection.Apply advanced eco-friendly materials, technologies, and techniques to continuously optimize and iterate storedecoration plans. For instance, shelves adjacent to walls are left undecorated to reduce material usage, exposedwalls use eco-friendly bamboo and wood ?berboards, while low-VOC paints are prioritized.Adopt biodegradable and recyclable eco-friendly packaging materials to reduce the use of plastic packaging.
Pesticide pollution can cause long-term harm to the ecological environmentand may impact human health through the food chain. YST Pharmaprioritizes suppliers practicing large-scale cultivation and transitionsfrom traditional market acquisition to deep integration with base-leveloperations and growth cycle monitoring. Full supervision of pesticide bansfor raw materials is implemented. The company has achieved nationallyadvanced levels in applying gas chromatograph-mass spectrometry (GC-MS/MS) and liquid chromatograph-mass spectrometry (LC-MS/MS) forresidue testing in traditional Chinese medicine.
We prioritize the use of eco-friendly processes in production. Externally,the company collaborates with suppliers utilizing green energy dryingmethods, such as electric low-temperature drying instead of traditionalcoal drying, applied to products like monk fruit and roses. Internally, YSTPharma implemented a jujube sorting production line, enabling integratedjujube sorting and packaging production, reducing manual handling,turnover, and intermediate product storage. In 2024, the company reducedthe use of 5,258 bags for pre-measured ingredients.
Facing the increasingly severe issue of plastic pollution, the company actively promotes green shopping at its clinics and retail outlets.Additionally, we have gradually upgraded the materials to more eco-friendly biodegradable options, introduced photodegradable shoppingbags and biodegradable kraft paper bags, and, through researching consumers' shopping needs, we created smaller-sized bags to reduce rawmaterial usage. In 2024, all stores (including franchises) replaced traditional plastic bags with eco-friendly photodegradable shopping bags,totaling 32.85 million bags.
Green Raw Materials
Eco-Friendly Processes
StoreDecoration
StoreDesign
StoreOperations
Case
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StageBiodiversity conservation measures in the construction of LBX Pharmacy's park projects
Measure
Green Commuting
Biodiversity protection
Green O?ce PracticesLBX Pharmacy has implemented a series of measures to lower the carbonfootprint of its o?ce operations. Starting from small actions like promotingenvironmental awareness, conserving o?ce supplies, and reducing travelconsumption, the company aims to minimize the generation and emissionof pollutants during work?ow, rationally reduce the consumption of o?ceenergy and resources, and integrate green concepts into office details,thereby contributing to environmental protection.
The company provides employees with new energy buses and optimizesbus routes based on actual circumstances to lower carbon emissions duringtheir commutes. In 2024, the Group's headquarters has 13 new energybuses (7 owned and 6 leased), transporting more than 800 employeesper day in single trips. Additionally, the company actively encouragesemployees to purchase new energy vehicles and has installed 18 newenergy vehicle charging stations at its headquarters park.
Biodiversity is a critical pillar for maintaining the ecological balance of the Earth and promoting the propagation of life, as well as a solid foundationfor achieving sustainable development in human society. The company strictly adheres to the "Wild Animal Protection Law of the People's Republic ofChina" and the "Regulations on the Protection of Wild Plants of the People's Republic of China."During the construction process of park projects, the company fully considers soil and water conservation, and conducts environmental restoration uponcompletion of construction, thus minimizing adverse impacts on the ecological environment. With the goal of "activating inner courtyard spaces," theheadquarters is committed to creating a more ecological and biodiverse o?ce park, allowing employees to enjoy the beauty of nature during leisure.When selecting plants, we choose local plant species as much as possible, adapting to local conditions while saving costs.
The company utilizes information systems and tools to actively promotepaperless office practices. Furthermore, special office documents mustbe printed double-sided, non-official documents are encouraged to beprinted on reused paper, and paper-saving reminders are posted in printingareas along with providing collection boxes for reused paper. In 2024, thecompany's o?ce paper usage for printing was 375.73 tons.
The company cafeteria features posters advocating grain-saving practices, anti-plasticcampaigns, and the "Clean Plate" initiative to remind employees to avoid food waste.Considering employees' varied food needs, the cafeteria o?ers both small and large portionoptions, encouraging employees to only take the food they can ?nish. Dedicated personnelstationed at cafeteria recycling points supervise e?orts to prevent food waste.
Fully consider soil and water conservation and environmental protection requirements when selecting theproject site.Strictly control and manage the operation range of vehicles and machinery to prevent widening soildisturbance.Set up warning signs to protect the surface and vegetation, emphasizing the conservation of ground coverand vegetation.Pay attention to the safety of construction and living ?res to prevent wild?res from destroying vegetation.After the site is leveled, adopt landscaping and greening measures to meet protection and greening needs.Strengthen the nurturing and management work after planting trees, shrubs, and grass, ensure propermaintenance, and guarantee their survival and preservation rates.
Before construction
Under construction
Post construction
Grain Saving
Reduced Paper Use
The company has established the "Physical Asset Management System", conducted annual asset inventories with submission of inventory reports, andinspected asset management quarterly. It rationally arranges the company's inventory of materials to avoid overstocking or repeating purchases, checksstock before ordering o?ce supplies, and utilizes intelligent systems to digitize the full lifecycle management of assets from procurement to disposal.This enhances asset management e?ciency and maximizes the recycling rate of company assets.
Asset Conservation
New Energy Buses of the Company
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AppendixesEnvironmental Compliance ManagementUse of Energies and ResourcesClimate Change TacklingGreen Operation
LBX Pharmacy is committed to building a sustainable workplace. Weactively create a diverse, fair, and equitable working environment forour employees, fully leveraging talent value and fostering innovation.We respect and value each employee, establishing clear careerdevelopment pathways and co-creating a learning organization toempower employees to grow continuously and achieve a better self in arapidly changing environment. As guided by the principle of "altruism,"we have long focused on employees' physical and mental health andsafety, so as to drive them to better serve customers, bring warmthto the community, and move towards a sustainable future with thecompany.
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Empowering Employee Development
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Employment ManagementLBX Pharmacy strictly adheres to national labor laws, regulations, and international labor standards in employment management to ensure compliance. We uphold principles of diversity and non-discrimination to eliminate all formsof bias and create an inclusive, diverse, and vibrant workplace environment that drives sustainable co-development between the company and employees.Employee StructureRespect Human RightsLBX Pharmacy strictly complies with "Labor Laws", "Labor Contract Law", and other national labor regulations, labor protection rules,as well as human rights provisions set out by the International Labour Organization (ILO) and the United Nations Global Compact.During the reporting period, no incidents of forced labor or child labor occurred within the company. At the same time, employee'sprivacy has been strictly protected. According to the group's "Notification Regarding Legal Matters on Providing or ObtainingPersonal Information" and the department's "Data Extraction Application", all individual requests to export mobile numbers, identityinformation (e.g., ID card), and detailed addresses of the employees are prohibited to prevent intentional or unintentional disclosure ofemployee's private information to unauthorized personnel.The company has established the "Management Regulations to Prevent Workplace Sexual Harassment." Malicious incidents suchas sexual harassment and related complaints are handled with seriousness to ensure that employees work in a safe, respectfulenvironment free from harassment and harm.Labor RightsLBX Pharmacy legally concludes, performs, modifies, terminates, or ends labor contracts with employees. All companies withinthe group have fully implemented the signing of electronic labor contracts, achieving a 100% labor contract signing rate. For laborrelationships involving retired re-hires, interns, and other personnel, corresponding labor agreements are signed.The company strictly complies with national labor laws and regulations, ensuring proper and standardized procedures for employee'sonboarding, con?rmation, transfer, resignation, and handovers. It continuously improves the fundamental standards and processesof human resources at the group headquarters and its subsidiaries. Salaries are paid on time, social insurance and housing fundcontributions are made promptly, and updates on labor developments such as retirement, maternity, and work-related injuries aretimely tracked, fully safeguarding employees' legal and reasonable rights.In 2024, the company updated the "Attendance System of the Group"and "Personnel Transfer and Handover Management System ofthe Grou", achieving centralized online attendance management and establishing a standardized system for overtime and leave. It alsoenhanced the"Resignation Green Card Management System of the Group" encouraging outstanding employees to rejoin the companyafter resignation and providing preferential policies in terms of onboarding and seniority calculation.
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Diversity, Inclusiveness, and Equity"Simplicity and Efficiency," "Integrity and Selflessness," "Equality,"and "Pragmatism" are the DNA of LBX Pharmacy's corporate culture.We are committed to building a diverse talent team and striving tocreate a diverse, equal, and inclusive workspace with a warm workingatmosphere for employees across the country, enabling everyoneto better utilize their expertise and strengths. In our work, we avoiddiscrimination or bias based on age, gender, nationality, race,complexion, religion, and marital status, etc. For subsidiaries locatedin di?erent regions nationwide, we focus on retaining localized talent,actively developing talent retention plans, and pushing forward theirimplementation in accordance with the law. We believe that every"LBX employee" can successfully contribute to our vision of "Devotingto Healthcare and Establishing a Time-honored Enterprise" throughdiligence and collaboration.
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Protection from Labor Union
The company's trade union is independently operated in accordance with the "Trade Union Law of the People's Republic of China" and the "Constitutionof the Chinese Trade Unions". It continues to improve systems such as the staff representative congress and public enterprise affairs for democraticmanagement. By extensively listening to member voices, it plays a critical role in safeguarding employee rights and serves as a "bridge and link" whileactively participating in the company's decision-making. In 2024, the company held two staff representative congresses, in which it collected over 500suggestions from grassroots employees, achieving a 92% implementation rate of employee feedback by the end of the reporting period. Regular employeeskill training sessions are conducted along with member activities to enhance employee care and promote harmonious labor relations. In 2024, ChifengLBX Pharmacy, a subsidiary of LBX Pharmacy, was awarded the "National May Day Labor Medal" and recognized as a "National Advanced Unit for PublicEnterprise Democratic Management".
Talent AcquisitionSustained development of the workforce is always a crucial foundation for enterprises to cope with external challenges. LBX Pharmacy, guided by actual demands, keeps enriching its diverse recruitment channels by conducting open,fair, and just recruitment activities in a scienti?c and regulated manner. It introduces specialized talents from various ?elds at appropriate times to strength its talent pool, improving the quality and e?ectiveness of talent acquisition,and contributing to sustainable corporate development.Management Trainee Program: "Career Makes Your Life Better"In 2024, the company further upgraded its "Management Trainee Recruitment Program" by reaching out to topdomestic and international universities to recruit outstanding talents, hiring a total of 140 individuals, whichshowed a year-on-year increase of 66.67%.
Targeted Recruitment for Tier-3 and Lower Markets
In 2024, the company organized specialized recruitment fairs tailored for tier-3 and lower markets, e?cientlyand broadly reaching talent in these areas. This initiative provided "local" job opportunities to county andtownship-level job seekers. It has hosted a total of 20 o?ine dedicated recruitment events, interviewing 2,000individuals, and hiring over 1,000.
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Veterans' "Young Poplar Plan"The "Young Poplar Plan" is a long-term talent development initiative set by LBX Pharmacy. Through this plan, thecompany recruits outstanding veterans and provides them with vast career development opportunities. In 2024,the "Young Poplar Plan" conducted one recruitment fair and interviewed 90 individuals, 7 of whom were hired.
Collaboration with Medical and Health SchoolsFocused on the pharmaceutical and healthcare industry, the company collaborated with 65 vocational collegesspecializing in medicine and health, such as Hunan Traditional Chinese Medical College and Hunan Food and DrugVocational College. Through models like modern apprenticeship programs, joint employment internship bases,and targeted talent cultivation, the company e?ciently introduced and nurtured professional talent. In 2024, thecompany recruited over 1,600 fresh graduates specialized in pharmaceuticals.
Talent DevelopmentTalent development is not only critical to individual career growth but also the source of innovation and competitiveness forenterprises. LBX Pharmacy adheres to the philosophy of "Building a Learning Organization, Achieving a Better Version of Self" byestablishing diverse training programs for all employees. The company is committed to o?ering diverse learning opportunities whilesmoothing career progression mechanisms, optimizing performance management, and ensuring employees to continuously growamidst industry changes and company needs, thus helping them achieve career development and personal value enhancement.Training and Learning
In the VUCA (Volatility, Uncertainty, Complexity, Ambiguity) era, we aim to help employees establish a full-lifecycle careermanagement system from the perspective of training. By providing clear career paths, diverse learning opportunities, and ?exiblesupport, we assist employees in adapting to rapidly changing environments while enabling the joint growth of individuals and theorganization.After years of development and practice, LBX Pharmacy has established a relatively comprehensive talent development systemdriven by strategy and business. By focusing on enhancing organizational leadership and management capabilities through keyfunction-line talent cultivation, implementing tiered training for front-line talents to improve execution and service capabilities, andadopting a mentoring model to increase the density of professional pharmacists, the company continuously stimulates employees toexert potential and innovation.
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Key Position Talent DevelopmentManagement Trainee Development
Management Talent Development
Talent Development for Functional Lines
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The company emphasizes the sustainable development of talent in key positions. With the support of the "Operations, Merchandising, andProcurement Talent Development Program" and the "Backup Talent Program," the company selects candidates for key positions nationwideannually. By identifying each candidate's strengths and weaknesses in relation to the desired role, personal growth plans are created on thebasis of a combination of role general requirements and individual characteristics. The practice further enhances their capabilities to adapt tothe ever-changing market environment. In 2024, the company developed 162 talents for key positions.
The company builds a layered and categorized leadership development system through various forms such as online learning, o?ine trainingcamps, think-tank forums, action-based learning, and corporate visits, aiming to create a management team with operational ideas. Forjunior managers, the focus is on enabling role transitions and reshaping their professional and managerial competencies. For mid-levelmanagers, training emphasizes broadening perspectives, enhancing holistic and systematic thinking abilities, and strengthening operationalcapabilities to elevate leadership skills. In 2024, the company cultivated 99 management talents in total.
Management trainees are a robust reserve force driving the company'ssustained development and innovation. By providing systematiclearning and training opportunities through activities such ascentralized training, business chain learning, frontline practice,targeted line-specific hands-on training, and discussions with seniorexecutives, the program helps trainees shape cross-functional thinkingand collaboration abilities. This enables them to quickly grow into keymanagement forces for the future. In 2024, the company cultivated 141management trainees in total.
Frontline Talent DevelopmentWe o?er targeted training programs for frontline employees at di?erent stages of their career development, helping them grow progressively. For newly hired sta? and reserve store managers, training is conducted primarily through a"mentor-apprentice mode" at top-performing stores certi?ed by the group. This helps them quickly adapt to the environment, acquire new knowledge and skills, and enhance their systematic understanding of the targetted roles.Frontline Talent Development
To support the continuous growth of on-the-job employees and help them realize their potential, we categorize employees based on their roles and adopt an "online +o?ine with practical training" approach for development. In 2024, the company conducted a total of 321 centralized training camps, which has trained 16,313 individuals.Among them, 234 sessions that focused on reserve talent development trained 9,747 employees, and 87 sessions that targeted at on-the-job talent developmentcultivated 6,566 employees.
On-the-Job Talent Development
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Altruistic Emergency TrainingEmployment ManagementTalent DevelopmentAltruistic EmployeesHealth and SafetyContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
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Professional Talent DevelopmentLicensed Pharmacist DevelopmentAs a pharmaceutical retail enterprise, professional expertise is key to earning thecontinuous trust of customers. We consistently strengthen the development oflicensed pharmacists by improving the assistance mechanisms for the pharmacistcertification exams, and we established awards such as "Employee Learning andGrowth Award," "Talent Training Award," and "Special Execution Award," as well aso?ered paid leave and full reimbursement for exam fees. These initiatives encourageemployees to actively participate in the national licensed pharmacist quali?cationexams, thereby strengthening our team of licensed pharmacists. In 2024, a total of958 employees passed the licensed pharmacist exam, with an overall pass rate of
35.4%, which is 14.3pp higher than the national average.
Skills CompetitionThe Chronic Disease Knowledge Grand Competition is a talent development projectaimed at enhancing professional skills through "training via competition." In 2024,we continued to host the competition in the form of pharmacology/pathology tests,case studies, and on-site service evaluations, through which we selected 200 chronicdisease experts.
LBX Pharmacy continues to deepen the "altruism" philosophy by actively conducting employee
emergency skills training. In 2024, online training covered over 50,000 participants, and more than 2,000
on-site hands-on practice sessions were organized. Additionally, the company conducts a "Finding the
Most Beautiful Emergency Pioneer" evaluation every six months to recognize employees who step forward
in critical situations and apply their professional emergency knowledge to help others, thus inspiring
everyone to embody the spirit of "altruism."
Altruistic Training for All Sta?
In 2024, the company continued to deeply promote and deliver training on the culture of "altruism." By utilizing "The First Lesson on
Altruism,"monthly mandatory lessons on the "BaixingTong" platform, and offline intensive training programs, the company aims to
continuously nurture employees' altruistic thinking and help them systematically understand and practice altruism.
Promotions and PerformanceThe company is committed to building a fair and transparent talent development system. We have established diversified promotion channels covering management,professional, and technical tracks to o?er employees clear career development pathways. By setting robust performance assessment standards, we ensure that the assessmentprocess is open and fair, motivating employees to continually enhance their professional capabilities and work e?ciency, fostering mutual growth for both individuals and theorganization.
Performance ManagementThe company updates the "Performance Appraisal Management System of the Group" from time to time to align with strategic developmentobjectives, evaluate departmental and employee performance in an objective, fair, and scienti?c manner, and motivate employees to focus oncompany operational and management targets to drive constant improvement in work e?ciency and quality. This system not only emphasizesclear rewards and penalties but also ensures level-based protection for frontline employees, thereby enhancing the organization's overallperformance. Meanwhile, the company prioritizes performance coaching by providing detailed guidelines on performance interview frequency,format, and content to ensure that employees' work stays aligned with organizational strategic goals, to enhance their performance during theassessment, and to foster long-term competency.
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Talent Development ChannelsSince the company places great emphasis on talent development pipelines, we haveformulated the "MTP Career Development Pathways and Promotion ManagementSystem," which includes three tracks—Management, Professional, and Technology.In 2024, a total of 2,649 promotion instances were recorded within the company,including 61 instances of middle-to-senior level promotions and 539 instances ofgrassroots management promotions.The company continues to enhance its talent assessment system by developingqualification standards and job certification projects, creating standardizedand high-quality talent development criteria, identifying key talent, as well asclarifying employee development directions to motivate a vibrant talent ecosystem.Quali?cation and certi?cation e?orts have already covered all frontline stores andbusiness circles across the country. In 2024, there were 1,349 employees promotedto store managers and 42 promoted to business circle managers.
2,649Annual promotion
person-times
Altruistic EmployeesLBX Pharmacy consistently upholds the corporate culture of "caring for employees," which has integrated the philosophy of "altruism toward employees" into daily management. We continuously improve compensation and bene?tsystems, create a fair and transparent working environment, and prioritize employees' physical and mental well-being by organizing regular care activities. Employees are encouraged to convey goodwill and professionalism whenserving customers, jointly ful?lling the mission of "Do everything for the people" and fostering mutual growth between the company and its employees.Fair and Competitive CompensationLBX Pharmacy continuously improves a fair and competitive compensation system to attract, retain, and motivatetalents, supporting sustainable business development. We advocate the philosophy of "sharing success with achieversand sharing value with value creators," adhering to the principles of fairness, flexibility, and rewarding hard work.We implement a broad-banded pay system based on qualifications, job grade systems, personal capabilities, andperformance contributions. Through mechanisms like profit-sharing, restricted stock programs, and an innovativepartnership program, as well as benefit-sharing initiatives such as employee compensation reform and the Red KoiProgram, the company provides employees with career development opportunities and fair remuneration. It hasestablished a compensation system that aligns responsibilities, authority, capabilities, and bene?ts closely.
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Employee Bene?tsThe company strictly complies with national and local laws and regulations, ensures timely payment of socialinsurances and housing funds, and guarantees paid leave entitlements such as statutory holidays, annual leave,maternity leave, paternity leave, marriage and bereavement leave, breastfeeding leave, and home visit leave.Additionally, to enhance employees' sense of belonging and happiness, the company provides commuting shuttles,employee dormitories, sta? cafeterias, meal bene?ts, libraries, gyms, and other living services. Various cultural andrecreational activities such as family events, birthday parties, holiday celebrations, and team-building activities areorganized. Furthermore, to meet personalized needs, the company o?ers speci?c care for eligible employees or theirfamilies. This includes rewards for certi?cations, consolation gifts, gratitude cash for parents, incentives for children'scollege entrance achievements, and a multi-million hardship assistance fund for di?culties. Additional supplementalinsurance coverage like accidental injury and critical illness insurance is provided for employees in specializedpositions.
Comfortable Work EnvironmentWe care about employees'health and vitality, striving to provide a healthy, safe, warm, and comfortable work environment with smart and convenient facilities.Signi?cant resources are invested in renovating and upgrading o?ce spaces to ensure spacious, bright, and well-ventilated environments, enhancing employees'enjoyment of their work and life at the park.Meanwhile, the company has equipped the park with a variety of lifestyle facilities, such as lounges, gyms, reading rooms, basketball courts, yoga rooms, andKTVs, so that employees can relax and unwind during their spare time.
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Improving Employee SatisfactionThe company places great emphasis on enhancing employee satisfaction, which always listens to employees' opinions, and ensures ?uent communicationchannels. Each year, the company conducts regular employee satisfaction surveys at both its headquarters and stores nationwide, aiming to strengthenemployees' team spirit and sense of belonging. In 2024, the company carried out employee satisfaction surveys at the headquarters semi-annually, totally twosurveys per year, and quarterly at stores nationwide, totaling four surveys per year.
In 2024, LBX Pharmacy thoroughly implemented the spirit of "altruism" by focusing on the "Ten Altruistic Actions" to foster an altruistic mindset for all employees. This involves upgrading and renovating dining areas and employeedormitories in frontline stores."Ten Altruistic Actions": Upgrading Dining Areas and Employee Dormitories
Based on the actual space of the stores, tailor-made dining areas are created by providing dining essentials such as tables,chairs, microwaves, and small refrigerators to enhance the dining environment. By 2024, renovations for dining areas inmore than 4,000 stores were completed incrementally.
Renovating Employee Dining Areas：Upgrading Employee Dormitories：
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Strict standards for both soft and hard furnishings are established for employeedormitories. Furniture such as tables, chairs, wardrobes, and beds are allocatedbased on the number of occupants, while electrical appliances like air conditioners,washing machines, water heaters, and refrigerators are provided per dormitory,allowing them to feel the warmth of home. In 2024, the company successfullyupgraded and renovated a total of 406 dormitories.
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Enriching Humanistic CareRecognition of LBX Stars
To comprehensively showcase LBX employees' style and promote the corporate spirit, the company organizedthe "LBX Stars Selection" in 2024, recognizing a total of 128 individuals. An award ceremony was held on October27, 2024. Alongside recognizing the employees, the company also extended care to employees' families. Parentsof those awarded "LBX Star" received a monthly pension of RMB 300 for 12 months. This re?ects a warm imagewhere employees work hard, and their parents feel pride and comfort.
Hardship Assistance FundIn 2024, the company continued its "Multi-Million Hardship Assistance Fund" to provide timely support foremployees in need. Throughout the year, the fund aided 68 families of employees in distress, with total aidamounting to RMB 1,555,852. The highest individual assistance was RMB 100,000. Beyond social medicalinsurance, the company reimbursed personal expenses at rates as high as 60%.
Incentive Program for Employees' Children Taking College Entrance Exams
We firmly believe that family is always the driving force behind the hardworking LBX employees. The "ChildDevelopment Plan" is one such benefit recognized unanimously by the company's management as a way tocare for employees' families. The company focuses on children of employees sitting for college entrance exams,rewarding employees who have served for over three years and whose children achieve excellent results. In 2024,a total of RMB 703,968 was distributed as bonuses, bene?ting 435 individuals.
Special Training on Psychological ResilienceThe sustainable development of the company relies on the healthy physical and emotional growth of itsemployees. In 2024, we launched "Psychological Resilience Training" to help employees maintain a positivemindset, adjust work methods, improve stress management capabilities, and enhance emotional managementskills, enabling them to better tackle challenges and pressures in their work.
The Power of WomenAs a company where nearly 90% of employees are women, LBX Pharmacy places great emphasis on the power of women. We ensure the protection of female employees' rights, strictly complying with relevant laws and regulations,such as the "Law of the People's Republic of China on the Protection of Rights and Interests of Women." Moreover, we strengthen protections for female employees during pregnancy, maternity leave, and breastfeeding. We respecttheir equal rights to development and aspirations for career progress, encouraging women to utilize their intelligence and potential to excel in various positions.Additionally, the company strives to improve welfare bene?ts for female employees. Beyond statutory holidays, special half-day leave is provided on International Women's Day along with gifts. Maternal and child facilities areestablished at the headquarters, relevant health check-up programs are added for female employees, and various fun activities are regularly organized to help women relax and unwind.
International Women's Day Activities
Xie Fengjiao earned her Practicing PhysicianQualification Certificate in 2013, followedby the Traditional Chinese MedicinePharmacist Qualification Certificate in2014, and the Western Medicine PharmacistQualification Certificate in 2019. With herunwavering passion for the industry and herrecognition of the pharmacist profession,she has consistently studied pharmaceuticalknowledge and communication skills for overten years, continuously improving her professional skills. She has gained the trust and recognition oflocal residents, who a?ectionately call her "Dr. Xie" In 2023, she was awarded the title of "Hunan's MostBeautiful Pharmacist."
He Min joined LBX Pharmacy in 2009.Through diligent efforts to enhance herpharmaceutical expertise, she activelyparticipated in various internal and externaltraining sessions and competitions organizedby the company, eventually becoming a dual-certi?ed practicing pharmacist. In her work,she served patients with professionalism,who often visited rural areas to care forelderly people living alone, providing freeblood pressure and blood sugar checks, and giving away medication for free. She developed manycross-generational friendships with chronic disease patients. In 2016, He Min was awarded the titleof "China's Top 10 Outstanding Pharmacists," and in 2024, she was honored as a "Touching Figure inChinese Pharmacies."
Case
Female Employee Growth Story：Female Employee Growth Story:
He Min - Chronic Disease Specialist at LBX Pharmacy Liuyang Store,HunanCompany
Xie Fengjiao, Manager of Fenghuang Tuojiang Branch of HunanLBX Huairen Pharmacy Chain Co., Ltd.
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On March 8, 2024, International Women's Day, the company headquarters and its regional subsidiaries organized diverse activities. These included inviting medical experts to deliver lectures on women'shealth, presenting blessings and gifts to female employees, and organizing workshops like ?ower arrangement. These e?orts aimed to make female employees feel warmth and love, inspiring them toengage more enthusiastically at work and life.
Health and SafetyLBX Pharmacy strictly adheres to the relevant legal and regulatory requirements, including the "Work Safety Law of the People's Republic of China" and the "Law on Prevention and Control of Occupational Diseases of the People’sRepublic of China." The company continually improves its health and safety management e?orts for employees, regularly conducts safety risk assessments and emergency drills, strives to create a safe and healthy working environmentfor employees, and achieves joint development for both the company and its employees. In 2024, no safety production accidents occurred at the company.
Safety System
Most of our employees work in stores and parks, with a small portion working in logistics and traditional Chinese medicine manufacturing facilities. Adhering to the principle of "people-oriented, safety ?rst," the company hasestablished systems such as the "Safety Target Management System," "Hazardous Source Management System," "Emergency Management System," "Special Equipment Safety Management System," "Fire Safety ManagementSystem," "Logistics Safety Hazard Inspection and Management System," "Warehouse Fire Emergency Handling Plan," "Safety Incident Reporting System," and the "Security Management System of the Group." The company has alsoestablished and improved emergency management mechanisms to ensure timely and e?ective responses in case of emergencies.
Premises Safety
In LBX parks, branch offices, and store premises, we have equipped fire safetyequipment and conduct regular fire safety inspections. Special inspections areorganized before major holidays such as May Day, National Day, and the SpringFestival. The headquarters inspects fire equipment configuration of subsidiariesthroughout China via video sessions quarterly (four times annually). In February2024, we conducted fire safety inspections across thousands of stores nationwideand identi?ed 493 safety hazards, all of which were recti?ed by May 2024.To ensure employee safety and healthy working conditions, we regularly engageprofessional third-party services to perform routine safety inspections on parkfacilities, such as water systems, power supply systems, and elevators, and issuecorresponding inspection reports to ensure safe usage.
Water Quality Testing: In June 2024, a third-party organization conducted comprehensive cleaning, disinfection, and end-pointwater sampling inspections of the secondary water supply system in the headquarters park, with an inspection report produced.Power Supply Equipment Maintenance: In November 2024, a partner of the power supply bureau conducted the annual inspectionand maintenance of primary power distribution facilities and equipment in the headquarters park to ensure system safety andstability, thereby preventing electrical ?re incidents. A inspection report was issued.Annual Elevator Inspection: Annual inspections of various elevators in the park are conducted to ensure excellent elevatorconditions, with annual inspection reports produced.
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On September 30, a ?re safety drill was conducted at the Changsha headquarters park.On December 3, the LBX Pharmacy Xiangbei Region conducted ?re
safety training.
At our logistics center, we have established a safety protection team that conductsdaily safety inspections, rigorously implementing safety management responsibilities.In 2024, the company optimized and upgraded the "Logistics Center Personnel AccessManagement Rules" to ensure separation of pedestrian and logistical traffic andstrengthen access control management. It has reviewed the video surveillance system,upgraded security across the nationwide warehouse network, installed access alarmsystems, and achieved centralized monitoring at the group level to ensure zero safetyincidents throughout the year at logistics centers.Health ManagementThe company attaches great importance on occupational health for employees, which strictly adheres to relevant laws and regulations such as the "Occupational Disease Prevention and Control Law," "Occupational HealthExamination Management Measures," and "Good Supply Practice for Pharmaceutical Products." Regular health checkups are organized for employees, along with occupational health training, to promote health awareness and ensurecompliance with occupational health standards for both employees’ health conditions and their work environment. Additionally, employees in roles involving direct contact with pharmaceuticals—such as quality control, acceptance,maintenance, and storage—are required to undergo pre-employment and annual health examinations, with health records established for them.Work Injury ManagementThe company strictly executes the reporting and handling process for work-related injuries. In the event of a work-related injury, emergency plans are immediately activated to ensure that the injuredemployee receives timely medical attention, and work injury recognition applications are submitted in accordance with legal requirements to protect the legitimate rights and interests of employees.Furthermore, the company conducts thorough investigations into all work injury incidents to analyze the root causes, and takes targeted corrective measures to prevent recurrence.
We actively collaborate with external professional resources to organize ?re evacuationdrills, ?re equipment operation training, emergency rescue drills for elevator accidents,?rst aid training, and other activities for employees, continuously enhancing their safetyawareness and skills. Simultaneously, we equip the headquarters park with first aidkits, AED devices, and other tools, to improve professional rescue capabilities duringemergencies.
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Responses to SDGs in This Section
LBX Pharmacy actively promotes and advocates the culture of"altruism," which takes proactive measures to ful?ll its corporate socialresponsibility. The company is committed to contributing to the pursuitof common prosperity and the construction of a Healthy China. We aredeeply involved in lower-tier markets to promote employment andeconomic development, thus injecting strong momentum into ruralrevitalization. We engage with communities and towns to advocate forhealthy lifestyles, serving as guardians of safe medication use. We haveactively participated in public welfare initiatives in collaboration withour partners, with cumulative donations exceeding RMB 100 millionin value. Through heartfelt efforts to disseminate a "healing" culture,we strive to o?er warmth and strength to more individuals within theframework of this healing ethos, collectively building a community witha shared future for humanity.
Contents of This SectionRural RevitalizationPublic Welfare and CharityHealthy Community
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Creating a Community with aShared Future
Franchises Supporting Rural Entrepreneurship
Rural RevitalizationAs a pharmaceutical retail enterprise dedicated to serving public health, it is our inescapable duty to actively take responsibility and make contributions to rural revitalization. LBX Pharmacy has identi?ed "Advancing into New RuralAreas" as one of the company's seven core strategies. By promoting store franchise programs to support entrepreneurial ventures in rural areas, leveraging e-commerce to enhance agricultural procurement, and implementing targetedassistance to improve rural healthcare facilities, we have developed a multi-channel, multi-dimensional support strategy to drive comprehensive rural revitalization.
LBX Pharmacy actively expands into "New Rural Areas" by utilizing franchise business opportunities. With the support of corporate supply chain management, digital and intelligent capabilities, and innovative business models,the company helps migrant workers return to their hometowns and engage in the healthcare sector. This initiative not only improves local medical and healthcare standards but also fosters comprehensive economic and socialdevelopment in rural areas. In 2024, to support franchisees in navigating industry cycle adjustments, the company plans to allocate product resources worth of over RMB 6 million as rewards for franchisees, aiming to enhanceoperational quality while promoting sustainable development for franchise partners.
Data as of the End of 2024
In 2013, Xiong Bo resigned from a state-owned enterprise in Shenzhen and resolutely returned to his hometown in Hunan tostart a business. After experiencing the trial and error of opening an independent pharmacy and failing, Xiong Bo and his wifejoined LBX Pharmacy in 2019 after much research. Now their operations are on track, and they've opened a second store.Xiong Bo commented, "Choosing wisely is more important than working hard. I am grateful for the support of LBX Pharmacyand hope that in the future we can steadily grow by adding one store every two years, continuing to be guardians of publichealth."
Returning Home with Love, Transitioning from State-owned Enterprise Employee to "Health Guardian"Case
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Targeted Support to Help FarmersLBX Pharmacy has been steadfastly advancing rural support e?orts, participating in national and provincial government-led poverty-relief initiatives numerous times. In 2024, the company held over 100 public welfare activities,including poverty alleviation and rural revitalization projects.These actions aim to improve rural medical conditions and address local livelihood issues, further enhancing its role in agriculture and rural assistance.
In September 2024, LBX Pharmacy donated medical supplies worthRMB 200,000 to Fengning County, Hebei Province, supporting thedevelopment and construction of 12 rural health clinics in the areato contribute to Fengning's "Healthy Village" initiatives. FengningCounty is a priority contact county under the targeted assistance ofthe China Democratic National Construction Association. As a memberenterprise of the Hunan Provincial Committee of the association,LBX Pharmacy has continuously supported the construction of ruralhealth clinics in Fengning since 2022, donating urgently needed anti-pandemic materials, medicines, and medical equipment with a totalvalue nearing RMB 1 million.
In June 2024, Jinta Village in the Chenjiatan Township YuanlingCounty of Huaihua City, Hunan Province, su?ered severe damage to itsroads caused by heavy rainfall, greatly hindering daily travel for localvillagers. Upon learning the news, LBX Huairen Pharmacy partneredwith several charitable enterprises to raise over RMB 100,000 to repairthe roads in Jinta Village, turning hazardous pathways into safe andreliable roads.
Supporting Improvement of Rural Medical Conditions
Donation to Repair Roads, Helping Transform Hazardous Routes into Accessible Pathways
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E-commerce Empowerment, FosteringAgricultural Industry DevelopmentLBX Pharmacy has actively worked to integrate upstream and downstream industrieswhile developing unique agricultural products. Leveraging its self-developednew retail online sales platform, the company introduced regionally distinctiveagricultural products such as Yongxing Oranges, Yanling Yellow Peaches, and BaiseMangoes from Guangxi, fostering agricultural industry growth. By 2024, the numberof "direct delivery" goods available on LBX Pharmacy's private app-based mallreached 1,500+SKUs, with its "Full Small Bag" initiative boosting agricultural sales tosurpass RMB 4 million.
Tracing Livestreaming: Fresh Agricultural Products Journey Out ofRemote MountainsCaseTo support high-quality fresh agricultural products in breaking geographicallimitations and stepping out of remote mountains, in November 2024, theassistance procurement team of LBX Pharmacy ventured into the coreplanting areas of oranges in Jingui Town of Yongxing County, Chenzhou City,Hunan Province. Together with the local supply and marketing cooperative,they organized an innovative tracing livestreaming event. Through LBXPharmacy's private domain platform on the mini program, they facilitatedthe seamless connection of premium agricultural products from rural ?eldsto urban dining tables, opening up new pathways for increasing farmers'income.
Public welfare and charityFrom disaster relief and charitable help, to honoring teachers, respecting education, and caring for vulnerable groups, LBX Pharmacy has always been at the forefront of public welfare, spreading warmth and love, touching the heartsof countless individuals.Disaster Relief and Assistance
In July and August 2024, during the summer season, heavy rainfall caused ?ood risks in many areas of Hunan Province. LBX Pharmacytook swift action, donating anti-in?ammatory, heat-clearing, detoxifying, and summer-heat prevention medicines and other urgentlyneeded post-disaster hygiene supplies worth over RMB 378,000 to areas including Pingjiang Yueyang, Huarong, Zixing Chenzhou, andWuqianxi Town in Yuanling County. These resources supported ?ood relief e?orts and contributed to post-disaster reconstruction.
Caring for "Guardians"A touch of refreshment, a dose of care, and a gesture of a?ection. During July and August 2024, under the sweltering summer heat, LBX Pharmacy's branches in Hunan, Guangxi, Shaanxi, Anhui, Tianjin, Huairen Pharmacy, ChifengRenchuan Pharmacy, BXY Pharmacy, Baihui Pharmacy, HRT Pharmacy, and Puzhe Pharmacy, delivered cooling supplies to front-line workers enduring the scorching sun. These workers included military training and combat o?cers,?re?ghters, police, tra?c o?cers, grassroots village o?cials, bus drivers, sanitation workers, and food delivery riders. These e?orts were a heartfelt tribute and expression of deep gratitude to these unsung "guardians." Furthermore,the stores of LBX Pharmacy nationwide routinely o?er resting spots, water stations, free health self-checks, health consultations, and other thoughtful services to support these "guardians."On February 6, 2024, LBX Pharmacy's Shaanxi branch, together with Xiyi Subdistrict of Xincheng District in Xi'an City, Shaanxi Province, extended New Year greetings and warm care to the front-line o?cers of the Shaanxi ProvincialGovernment Guards Battalion.
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Respect for Teachers and EducationSince ancient times, the Chinese nation has maintained an excellent tradition of respecting teachers, valuing education, and upholding learning and knowledge. Every year during "Teacher's Day" and "College Entrance Exam season,"LBX Pharmacy o?ers its modest support to inspire students' learning enthusiasm, promote the virtue of expressing gratitude towards teachers, and support the cause of education through practical actions.
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Commitment to Education: Caring for Teachers' Health with LoveLove and Support for Exams: Helping Students Realize Their DreamCaseCase
LBX Pharmacy, together with the Party Branch of KPC Pharmaceutical Group's KunTraditional Chinese Medicine 1381 Division, provided charity gift packages worth overRMB 610,000 to 26 schools in Hunan, Henan, and Anhui provinces. These e?orts were agesture of respect and gratitude towards teachers working tirelessly at the forefront ofeducation.
LBX Pharmacy joined hands with Guilong Pharmaceutical to conduct public welfareactivities in Shaanxi, Henan, and other regions regarding the care to teachers. Theyvisited campuses to present throat health care gift packages to teachers, safeguarding the"voices of illumination."
September 10, 2024 was the 40th Teachers' Day in China. LBX Pharmacyteamed up with various pharmaceutical industrial enterprises to launch thepublic welfare campaign "Gratitude for Teachers, Caring for Their Healthwith Love." On this day of reverence and gratitude, they paid the highestrespect to teachers working diligently on the frontline of education and tookpractical actions to protect their physical and mental well-being.
Each year, during the middle school and college entrance exam seasons, it marks avital moment for numerous students aiming to achieve their dreams, as well as a majorpublic concern for society. On this special occasion in 2024, LBX Pharmacy's provincialsubsidiaries, including LBX Anhui, LBX Shaanxi, as well as companies such as ChifengRenchuan Pharmacy, Tongliao Zeqiang Pharmacy, HRT Pharmacy, and Baihui Pharmacylaunched various exam support actions. These included the "Loving Care Exam SupportFleet," setting up "Health Service Guarantee Points," and distributing free "BlessingPouches" to help students pursue their aspirations.
On May 15, 2024, LBX Pharmacy's Anhui branch delivered warmth and blessings to 11 elderly individuals aged over80 living alone or with no family in Anong Community, Shushan District, Hefei City. The initiative created a happyatmosphere and gave them an unforgettable birthday experience.On August 2, 2024, LBX Tongliao ZeqiangPharmacy hosted a Silver Age Birthday Partyat the central nursing home in Kulun Banner,Tongliao, Inner Mongolia Autonomous Region.They celebrated with elderly residents, singingbirthday songs, presenting sincere wishes, andbringing vibrant smiles to their faces.On October 11, 2024, during the ChongyangFestival, LBX HRT Pharmacy organized the event"Warmth for Chongyang, Caring for Health—LBXHRT Pharmacy Brings Warmth to Nursing Homes,"visiting elderly residents without family at the Baiyin Social Welfare Institute in Baiyin District, Baiyin City, GansuProvince, and conveying festive greetings to them.
On February 4, 2024, members of the Communist Party branch of LBX Pharmacy in Hunan visitedthe Baishantai Community in Changsha City. They delivered New Year materials worth RMB 10,000to disadvantaged individuals in the area, o?ering sincere festive care and greetings.On May 17, 2024, LBX Pharmacy Chifeng Renchuan Pharmacy actively responded to the call ofthe Chifeng Disabled Persons' Federation in Inner Mongolia Autonomous Region to attend thecelebration of the 34th National Day for Helping Persons with Disabilities, for which they donatedlove kits worth a total of RMB 20,000 to 70 people with disabilities.
CaseProviding Assistance and Comfort to People in Need
Elderly Care: Extending Love and WarmthCase
Caring for Special Groups
Child Care: Extending Care to ChildrenCase
On May 22, 2024, LBX Linyi Rende Pharmacy donated portable oxygen respirators worth RMB 280,000 to the LinyiRed Cross Society. These respirators were provided to assist community residents, hospitalized patients, andelderly individuals in need of medical aid and oxygen therapy services.
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On May 25, 2024, LBX Pharmacy Shaanxi Branch joined hands with Dyne Med and Sun?owerPharmaceutical to visit the Shaanxi Huigui Children's Rescue Center (Note: The Shaanxi HuiguiChildren's Rescue Center is a private welfare organization relying on society's donations forfunding and supplies, o?ering free care for children in challenging circumstances living at thecenter). They prepared essential medicines, summer heat relief supplies, and daily necessitiesfor the children. Since 2005, LBX Pharmacy Shaanxi Branch has shown consistent support forthe center's development and operations, continuously donating essential medicines, summerheat relief supplies, and day-to-day supplies for more than a decade.
Healthy community
Establishing convenient pharmaceutical service stationsto ensure the "last mile" of health services is seamless
In January 2024, BXY Pharmacy under LBX Pharmacycollaborated with the Jiangsu Province Yangzhou PharmaceuticalAssociation to establish a "Grade A Tertiary Hospital PharmacistStudio" with Jiangsu Province Subei People's Hospital. Theyregularly invite pharmacists from Grade A Tertiary hospitals tojoin in-store pharmacists to hold lectures on safe medicationpractices for the community.
Warm tea, comfortable seating, emergency medicines... InSeptember 2024, LBX Pharmacy's Tianjin branch launchedthe "Warm 'New' Health Assistance Station" project. Facilitieswere set up in stores to o?er "Ten Heartwarming Services" forworkers in new industries, such as couriers and delivery riders.
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"Convenient Medical Insurance Service Station"Streamlines the "Last Mile"
"Pharmaceutical Workstation" Ensures Healthy Living forthe Community
"Health Assistance Station" Provides Warmth to Couriers
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Leveraging digital intelligence to broaden service boundaries, LBX Pharmacy is dedicated to providing more professional, smarter, and altruistic pharmaceutical services. Collaborating with regulatory authorities, pharmaceuticalsocieties, and other institutions, the company has set up "Convenient Service Stations" and "Health Assistance Stations" to o?er free services such as professional guidance on medication and medical devices, home delivery ofmedicines, expired drug disposal, and public education on safe medication practices. Additionally, it organizes community events that provide free health screenings, like blood pressure, heart rate, blood oxygen levels testing, ando?ers guidance on topics like daily healthcare, prevention of common and infectious diseases, common medication usage, and dietary precautions, thereby enhancing public health awareness.
On April 29, 2024, the Medical Insurance Bureau of HedongDistrict in Tianjin set up a "Convenient Medical InsuranceService Station" at the Hedong store of LBX Pharmacy. Actingas an extension of the medical insurance service systemat the grassroots level, which allows insured residents toaccess one-stop services such as medical insurance accountinquiries, transfer progress checks, insurance bene?ts inquiries,hospital changes for specialized medical insurance, urban-rural registration modifications, and cross-region medicaldocumentation—all at their doorstep.
LBX Pharmacy collaborates with market regulatory authorities to conduct"Expired Medicine Recycling" and "Renew Home Medicine Boxes" campaigns,raising public awareness about properly disposing of expired medicines througheducational outreach.
LBX Pharmacy stores promote the concept of "Expired Medicine Replacement,"enhancing public awareness for drug recycling and reducing casual disposal ofexpired medications.LBX Pharmacy stores promote the concept of "Expired Medicine Replacement,"enhancing public awareness for drug recycling and reducing casual disposal ofexpired medications.
The company implements specialized management and registrationfor collected expired medicines. It collaborates with upstreammanufacturers to unify the handling process, sending them toprofessional hazardous waste disposal companies for harmlesstreatment, thereby preventing resale or reentry into society whileensuring environmental safety and public health.
LBX Pharmacy always adheres to its mission of "Professional services with a touch of warmth to bring health to the people." From strictly ensuring drug quality to sincerely providing professional pharmaceutical services, the companystrives to be a solid "guardian" of medication safety for the public."Drug Safety, Protected by Good Laws"—Becoming Guardians of Medication Safety
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Participation in the "National Drug Safety Publicity Week"to Build a Drug Safety Barrier Together
Renewal of Home Medicine Boxes and Proper Disposal of Expired Medicines
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During the National Drug Safety Publicity Week in September2024, LBX Pharmacy's nationwide stores actively respondedby partnering with local regulatory authorities to entercommunities and conduct campaigns on "Drug, Device, andCosmetic Safety". Pharmacists patiently answered residents'questions on-site, distributed drug safety brochures, andbrought knowledge about drug safety directly to communityresidents. Through various activities, drug safety knowledgewas popularized to the public, fostering a social consensus tocollectively ensure drug safety.
To ensure public drug safety and promote green ecologicaldevelopment in society, LBX Pharmacy consistently invests inthe recycling and disposal of expired medicines. By working withprovincial and municipal market regulatory authorities to host"Expired Medicine Recycling" and "Renew Home Medicine Boxes"campaigns, they promote science-based public education andinteractive experiences such as "Expired Medicine Exchange Rights"awareness at stores nationwide. This raises public awareness of therisks of expired medicines and encourages proper disposal practices.
Public Health Services: Promoting Accessibility to Pharmaceutical Resources
In mid-February 2024, the pharmacistteam of LBX Pharmacy ChifengRenchuan Pharmacy visited FuduJiayuan Community in Aohan Districtof Chifeng City and Linxi County SocialWelfare Center in Chifeng City to carryout the public welfare activity titled"Serving Public Health, Caring forHealthy Living," which is an initiativeaimed to provide health services tolocal residents.
In September 2024, the Baiyin MunicipalCommittee of the China DemocraticNational Construction Associationpartnered with LBX HRT Pharmacy to host alarge-scale health consultation campaign inZhongshan Village Committee of WuchuanTownship, Baiyin City, Gansu Province.This initiative brought high-quality medicalresources to grassroots areas, signi?cantlyenhancing healthcare services in ruralregions. LBX HRT Pharmacy donatedmedicines and supplies worth RMB 23,000,delivering medical and healthcare servicesdirectly to the villagers' doorsteps.
On December 19, 2024, the Lanzhou Municipal Committee of the Communist Party ofChina (CPC) Political and Legal A?airs Commission, together with the Lanzhou MedicalInsurance Bureau and LBX HRT Pharmacy, donated 650 love-?lled medical kits worthRMB 122,300 to residents of Qishan Township, Yongdeng County, Lanzhou City, GansuProvince. The initiative addressed the daily medical needs of local residents while alsoenhancing their health awareness and self-care capabilities through health lecturesand dissemination of educational materials.
On December 19, 2024, LBX Pharmacy ShaanxiBranch, in collaboration with the BaqiaoDistrict Medical Insurance Bureau in Xi'anCity, held a "Universal Participation for GoodHealth" event to promote medical insurancepolicies and support disadvantaged groups. Atthe event, LBX Pharmacy pharmacists providedhealth consultations, shared knowledge on theprevention of common diseases, and deliveredprofessional and considerate services tosafeguard residents' health.
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LBX Pharmacy has long been committed to improving access to pharmaceutical resources in underserved and lessdeveloped regions. Over the years, the company has actively engaged in grassroots communities and remote areasthrough initiatives such as providing medical services, delivering medicines, organizing diverse health activitiesin local communities, spreading health awareness, and advancing the accessibility of quality pharmaceuticalresources to contribute towards elevating public health standards.
Spreading Love and Warmth: Crafting a New Blueprint for a "Healing Culture"LBX Pharmacy remains steadfast in its mission to promote the development of a "healing culture," integrating humanistic care into health management and contributing to the "Healthy China" initiative through tangible actions. In2024, we meticulously planned and successfully hosted over 17 cultural dissemination events, achieving a total annual brand exposure of 5.62 billion views. Through these e?orts, we created warm and healthy spaces for healing,encouraging more people to focus on physical and mental wellbeing and share in the bene?ts of a healthy life.
"Singing Citizen Idol" KaraokeMarketplace Event
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Mother's Day Event: "Citizen Star Show"
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In addition, we innovatively built a media matrixcomprising our official WeChat account "LBXPharmacy Group," an influencer "PharmacistXiaoying," and staff Key Opinion Consumers(KOCs). Through live streaming, shortvideos, and articles, we disseminated healthknowledge on medication, medical insurancereimbursements, and more to a wider audience.In 2024, this new media matrix generated over120 million exposures of high-quality originalhealth education content, helping millionssolve their health concerns and making healthinformation easily accessible.
Springtime Wellness Campaign: Herbal Medicine KnowledgeCommunication"Healthy Illustration: Say No to Colds" Cold Awareness Campaign
Health Education: Enhancing Public Health Literacy
Total exposure of 2024 LBX Pharmacy new media matrix science knowledgeexceeds 120 million times.
Double Ninth Festival Healthy HikingEvent: "Reaching New Heights, Embarkingon New Horizons"
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LBX Pharmacy organized a variety of engaging cultural activities targetedat senior citizens. For Mother's Day, we hosted the "Silver-haired Mom StarsShow," inviting the public to witness the confidence and charm of mothers.During the Double Ninth Festival, we curated the "Healthy Hiking Trail" onMount Yuelu and launched the "Climbing Initiative," encouraging the elderly tostay ?t and enjoy a ful?lling later life. Additionally, we organized the "SingingCitizen Idol" karaoke contest at our stores. These activities not only spreadhealth awareness, but also enriched the leisure pursuits of the community.
As a socially responsible company, LBX Pharmacy recognizes the importance of improving public health literacy. Weconducted a series of targeted brand campaigns focusing on key issues such as children being prone to colds when startingschool and misconceptions about traditional Chinese medicine, spreading accurate and correct health knowledge to thepublic.
CaseCo-hosted by the Hunan Photographers Association and Visual China, and organized by LBXPharmacy and the Xie Zilong Photography Art Museum, the "2024 China LBX PhotographyCompetition" kicked off in February this year and lasted for 189 days. The competitionreceived over 220,000 photographic works from the public, showcasing the vibrant andbeautiful life embraced by the Chinese people. This event not only provided a free creativeand expressive space for photography enthusiasts but also conveyed a sense of healing andpositivity for the mind and body.
Photography Competition Heals Mind and Body
Grand Prize Winner: Excerpt from "What Can Be Done at 100 Years Old" (Photo Series),Photographer: Xiao Yi
Photography Awards - Gold Collection Award: "Wheat Season", Photographer: Yu Chuanli
2024 China LBX Photography Competition Works
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Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
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Creating a Communitywith a Shared Future
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Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
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Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
Table of Responsibility Performance Table of Index to StandardsList of Laws and RegulationsContentsSustainability ManagementRegulating GovernanceBene?ting Ordinary People's HealthDriving Industry DevelopmentJointly Building a Green EcosystemEmpowering Employee
Development
Creating a Communitywith a Shared Future
Appendixes
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