Making People Physically and
Mentally Healthier
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Table of
Contents
Executing Duties with Full
Commitment to Pharmaceutical Care for All, Enhancing Benefits and
Strengthen Governance Safeguarding National Efficiency for Improved
About the Report 2 Foundations 15 Health 27 Medication Accessibility 40
About Us 3 Health Sustainability Framework 28 Smooth Medical Network 41
Improving the Governance System 16
Strengthen the Compliance 19 Strict Quality Control for Medicines 30 Deepening Digital Intelligence 45
Message from the Chairman 6
Defense Line Empowerment
Regulating Channels for Medicines 33
Ensuring information security 23 Enhancing People's Well-Being 50
Sustainable Development 7 Improving Service Quality 38
Management
Achieving Win-Win Results,
Appendix 72
Realizing the Value of Co-Creating Green and
Talents 53 Sustainable Horizons 63
Standardized Employment 54 Deepening Energy Management 64
Management and Addressing Climate Change
Protecting Employees' Rights and 55 Strengthening Resource Recycling 69
Interests and Pollution Prevention
Improving the Training System 56 Optimize Water Resource 71
Utilization Efficiency
Deepen Caring Communication 60
Protecting Occupational Health 62
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About the Report
Yifeng Pharmacy's 2025 Environmental, Social and Governance (ESG) Report (hereinafter referred to as the "Report") is the third ESG report independently published by Yifeng Pharmacy Chain Co., Ltd. and all the branches and
subsidiaries (hereinafter referred "Yifeng Pharmacy", "the Company" or "we"). The Report aims to comprehensively present our ESG goals, management strategies, practices and achievements in 2025 to our stakeholders.
Report Scope Report Standards Report Access
The time scope covered by the Report is consistent with the 2025 The Report is prepared in accordance with the Rules Governing the The Report is prepared in Simplified Chinese and English and
annual report, that is, from January 1, 2025 to December 31, 2025 Listing of Stocks on Shanghai Stock Exchange and Guidelines No. 14 released in electronic format. In case of any conflict between the two
(hereinafter referred to as "2025" or "the Reporting Period"). of Shanghai Stock Exchange for Self-Regulation of Listed language versions, the Simplified Chinese version shall prevail. The
Companies—Sustainability Report (Trial) (hereinafter referred to as electronic version can be viewed and downloaded on the Company's
Unless otherwise specified, the disclosure scope of the Report is the the "Guidelines for Sustainability Report"), and with reference to official website (https://www.yfdyf.cn) and the Shanghai Stock
same as that of the Annual Report, covering all subsidiaries and Guidelines No. 4 of Shanghai Stock Exchange for Self-Regulation of Exchange website (http://www.sse.com.cn/).
affiliated companies within the listed entity of Yifeng Pharmacy. The Listed Companies—Compilation of Sustainability Report (Revised
environmental performance data covers the self-owned drugstores January 2026) and the Global Reporting Initiative Sustainability
operated by Yifeng Pharmacy throughout 2025, its subsidiary Heng Reporting Standards (hereinafter referred to as the "GRI Standards")
Xiu Tang Pharmaceutical Co., Ltd. (hereinafter referred to as "Heng issued by the Global Sustainability Standards Board.
Xiu Tang"), logistics centers under its operational control, staff
canteens, and offices. To enhance the integrity of the Report content,
some content or descriptions may extend beyond the above-
mentioned disclosure or time scope. Report Information Feedback
All the information used in the Report comes from the Company's If you have any comments or suggestions on the Report, you can send
official documents and reports, internal statistical data, and public them by email to ir@yfdyf.com. Your comments and suggestions
information. The Company's Board of Directors promises that there serve as an important basis for us to continuously promote our
are no false records, misleading statements, or major omissions, and sustainable development management and practices.
is responsible for the authenticity, accuracy, and completeness of the
report. The Report was approved by the Company's Board of Directors
on April 22, 2026.
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About Us
Company Profile Corporate Culture
Yifeng Pharmacy (Stock Code: 603939) was founded in June 2001. It has been deeply involved in the pharmaceutical retail industry for more than
two decades and is the first large-scale pharmaceutical retail enterprise listed on the Shanghai Stock Exchange in China. As a leading enterprise in
the Chinese healthcare and wellness industry, Yifeng Pharmacy has successively expanded into multiple health-related sectors such as
pharmaceutical retail, pharmaceutical wholesale, the production and sale of prepared Chinese herbal slices, chronic disease management, Internet
hospitals, medical project investment and medical technology development. It continuously optimizes the supply chain system and category
Corporate Mission
structure, builds a new pharmaceutical retail ecosystem, actively promotes digital transformation and builds an efficient logistics network to
Making people physically and
provide high-quality services for customers and safeguard their health and safety.
mentally healthier
Our business scope
Hunan Jiangxi Hebei
Hubei Zhejinag Beijing Corporate Vision
Becoming the trusted and
preferred pharmacy
Shanghai Guangdong Tianjin
Jiangsu
We operate a total of Serve a membership of Employees Offer a range of over Values
results-oriented, innovating
(including 4,313 and improving with lean
principles, acting with
franchise stores) diligence and pragmatism,
taking responsibility and
collaborating, fostering growth
and care
Since our establishment, we have always adhered to the core concept of "putting customer value first" and insisted on customer-centric innovation
and transformation of the business model, committed to providing customers with high-quality products and professional health services. In the
future, we are committed to continuously improving our core competitiveness, practicing the concept of corporate sustainable development,
building a benchmark brand of chain pharmacies trusted by customers and respected by society, thereby contributing to social development.
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Development Milestones
• Opened the Changde Binhu Road Store, • Acquired Xinxing Pharmacy, the • Annual sales exceeded RMB 10 billion. • Achieved an AAA rating in the MSCI ESG
pioneering the "discount medicine leading chain in Hebei Province, for • Established its subsidiary, Hengxiutang assessment
supermarket" model to the five provinces RMB 1.384 billion – a record for M&A in Pharmaceutical Co., Ltd.. • Ranked among the Hurun China Top 500
of Central and Southern China. China's retail pharmacy sector at the Most Valuable Brands in 2025 (9th in the
time. Healthcare sub-list).
• The subsidiary, Hengxiutang
Pharmaceutical Co., Ltd., was
recognized as a "2025 Top Brand
Hunan Yifeng Pharmacy Chain Co., Ltd. was the China Association of Traditional
• Celebrated Yifeng's 20th anniversary
Officially listed on the Shanghai Stock Chinese Medicine.
•
established, laying the groundwork for •
Exchange, becoming the first retail Ranked among the Top 100 Chinese Listed
cross-regional and inter-provincial Topped the "2025 China Top 100
•
Companies for three consecutive years.
•
operations. chain pharmacy on China's main Comprehensive Competitiveness
board. • Obtained the Internet Hospital license in Ranking for Drug Retailers" and was
Hainan and established a remote diagnosis and named the "2025 Champion in
treatment center. Profitability for China Drug Retail
Competitiveness".
• Honored as a "Top 20 Digital Leadership
• Reformed the supply chain and pioneered Enterprise in Medicine Retail (West Lake
the "Triple-Win" business model • Awarded "Champion in Operational Award)" and received the "West Lake
Award for Excellence in Specialized
(benefiting customers, pharmaceutical Capability among China's
factories, and Yifeng), setting an industry Pharmaceutical Retailers". Pharmacy Construction (2024)".
precedent. • Yifeng surpassed 10,000 stores nationwide. • Awarded as an "Outstanding
• Listed among the "Top 100 Most Valuable Pharmaceutical Retail Fulfillment Chain
Companies on China‘s Main Board." Enterprise in China (2024-2025)".
• The restructuring into Yifeng Pharmacy commerce platform.
Chain Co., Ltd. was completed.
• Initiated a project to reconstruct its
• Invested in a large-scale information store management system.
system and logistics management system, • Launched the "Strategic Innovation and • Achieved an MSCI ESG Rating of A.
embarking on a new chapter of Organizational Transformation" initiative.
technology-driven growth. • Included in the GYBrand "2024 Top 500
• Debuted on the Hurun China 300 Most Most Valuable Chinese Brands" list.
Acquired 100% equity of Shanghai Kaixin
• Valuable Brands list. Successfully issued convertible bonds
Pharmacy, initiating its expansion through •
mergers and acquisitions. • Became the drug retail enterprise with the worth RMB 1.787 billion.
• Yifeng Pharmaceutical Logistics Park highest brand value nationwide.
commenced operations.
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Honors and Recognitions
Association Qualification Honors of the Year
Listed among the 2025 China Top 500 Most Ranked 248th on the list with a brand
China Medical Equipment Association Valuable Brands value of 3 billion yuan
GYBrand Global Brand Research Institute Hurun China 2024
Executive President Member
West Lake Award ·Top 20 Digital Leadership Topped the 2025 China Top 100 Comprehensive
Retail Branch of the China Association of Enterprises in Medicine Retail Competitiveness Ranking for Pharmaceutical Retail
Pharmaceutical Commerce2 West Lake Award ·Excellence Award for Specialized 2025 Pharmaceutical Retail Profitability Champion
Pharmacy Construction in China 2024 The 18th China Health Ecology
Vice President Member
Hunan Pharmaceutical Industry
Association
Executive Vice President Member
Hunan Pharmaceutical Distribution Annual List of Most Influential Enterprises-
Industry Association Award for Most Investment Value
Executive Vice President Member The 8th CLS Investment Conference 2025
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Message from
Currently, the pharmaceutical retail industry is in a critical period of accelerated integration and in-depth transformation, shouldering the dual missions of
safeguarding people's health and responding to national strategies. With the continuous deepening of population aging and the continuous upgrading of health
the Chairman
consumption demand, the public has put forward higher expectations for drug safety, service professionalism, and corporate responsibility. Looking back on this
year, all Yifeng people have always adhered to the core concept of "Pharmaceutical Care for All". We have strengthened the foundation of governance in steady
operation and responded to industry changes through innovation while adhering to principles. We are committed to promoting the coordinated growth of business
value and social value through systematic ESG practices, clearly identifying the value path of pharmaceutical retail enterprises in the context of the new era, and
strengthening our sense of responsibility in safeguarding public health and serving the people's livelihood.
"Based on regulations, achieve stable and long-term "Innovation as the wings, lead the future with intelligence" "Aim for green development, integrate into the future"
development"
Innovation is the core engine driving pharmaceutical retail enterprises We always pay attention to the balance of the natural ecosystem and
Compliance governance is not only the cornerstone of a company's to cross cycles and reshape value. We keenly observe industry trends resource utilization efficiency, actively face the challenges of resource
stable operation but also our core asset for winning long-term trust in and changes in consumer behavior, actively embrace the digital wave, constraints and climate change, and firmly promote the Company's
a complex market environment. With a clear governance structure and reshape business processes and service experiences through in-depth transformation to a green and low-carbon development
and a standardized decision-making mechanism, we regulate the technological innovation and model upgrading. We continuously model. Focusing on the core scenarios of store operation and
decision-making of major matters and daily business operations, promote the integrated development of all channels, break the warehousing and logistics, we integrate energy conservation and
build a governance closed-loop integrating compliance with laws, boundaries between online and offline services, and build convenient efficiency management into the entire business operation cycle.
business integrity, and risk prevention, and strengthen the bottom and efficient health consumption scenarios. At the same time, we Relying on systematic lean management, we achieve prudent control
line of standardized operation. In the important area of medical deepen the in-depth application of digital and intelligent technologies of environmental impact while improving operational efficiency. We
insurance management, we strengthen internal supervision and in fields such as supply chain management, precision marketing, and adhere to long-termism to promote the construction of green
implementation requirements, promote the accurate implementation chronic disease management, improve operational efficiency and infrastructure, continuously optimize the energy structure, cooperate
of medical insurance policies at the service front-line, and maintain decision-making accuracy, inject strong impetus into the Company's with industrial chain partners to deepen green packaging and circular
active communication with relevant departments to help ensure the high-quality development, and strive to become a pioneer and economy practices, gradually internalize the concept of sustainable
safe and reasonable use of medical insurance funds. At the same explorer in the industry's digital transformation. development into the Company's core competitiveness, and
time, in the process of digital transformation, we establish a data unswervingly take the green development path towards the future.
security and privacy protection system for the entire life cycle with a "Unite with heart, pursue growth together"
prudent and responsible attitude, effectively safeguard consumers' We adhere to the original aspiration of serving the people's livelihood
Employees are the most valuable human capital of an enterprise and through pharmaceutical retail. We are firmly committed to deeply
rights and interests, and strengthen the defense line of digital trust.
the core driving force for promoting the upgrading of service quality integrating the concept of sustainable development into corporate
"Based on medicine, safeguard health" and the release of organizational vitality. We abide by the governance and business practices. We are determined to build a
employment principles of "compliance, fairness, and people- benchmark enterprise that is responsible for public health,
Safeguarding national health is our unwavering strategic mission. We oriented", regarding employees as co-creators of our business contributes to social well-being, has long-term value for the industry
adhere to the foundation of drug quality and medication safety, development. Through improving the career development system and national development, and coexists harmoniously with the
taking "family-trusted medicines" as an insurmountable quality and diversified promotion channels, we empower employees natural environment. Looking ahead, we will uphold the belief of long-
bottom line to ensure clear and safe drug sources. We are committed throughout their careers to help them improve their professional termism, join hands with employees, partners, and all sectors of
to building a stable and reliable supply system, continuously abilities and comprehensive qualities, laying a solid talent foundation society. We will safeguard the national health with professional
promoting the "Controllable Premium Strategy", extending quality for the Company's high-quality development. Meanwhile, we are services, a sense of responsibility, and humanistic care, and
requirements to the upstream of the industrial chain, and working committed to building a workplace ecosystem that combines continuously create trustworthy and reliable health value for society.
with partners to build a resilient and responsible supply chain. At the professional value and humanistic care, continuously optimizing the
same time, we continuously deepen our professional service salary, welfare, and rights protection system, paying close attention to
capabilities, respond to customers' trust with professional employees' occupational health and well-being, enhancing
pharmaceutical services and full-life-cycle health care, and actively organizational cohesion, building a value community of co-creation Chairman of Yifeng Pharmacy Co., Ltd.
promote the sinking of medical services to the grass-roots level, so and sharing, and achieving the win-win situation of employees'
that high-quality medical resources can benefit a wider population personal growth and the Company's long-term development. Gao Yi
and contribute to the construction of a healthy China.
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Sustainable Development Management
Yifeng Pharmacy adheres to sustainable development as the core orientation and continuously strengthens the strategic leading role of the Board of Directors in ESG governance. We continuously improve the corporate
governance system, actively respond to the demands and expectations of stakeholders through a regularized and multi-channel communication mechanism, and integrate them into the whole process of strategic planning
and business decision-making. We promote the full implementation of the concept of sustainable development in the business chain and enhance the Company's operational resilience and long-term value creation ability.
Sustainability Governance Structure
Yifeng Pharmacy has established a clear organizational structure and a standardized institutional system, and clearly defined the core leadership position of the Board of Directors in sustainable development governance. The
composition, scope of responsibilities, and working methods of the committee are clearly stipulated in the "Rules of Procedure for the Strategy and Sustainability Committee of the Board of Directors", providing institutional
guarantee for the standardized implementation of relevant work and ensuring the steady progress and effective implementation of sustainable development goals in business operations.
ESG Governance Structure Diagram
Reporting and
Level Structure Composition Responsibilities Supervision
Board diversity is an important foundation for us to maintain our
• As the highest responsible body for sustainable development At least one competitive edge and enhance our talent attraction. The members of
matters, it assumes overall responsibility for the sustainable formal meeting the Strategy and Sustainability Committee have rich and
development strategy and reports. per year.
complementary industry backgrounds and have in-depth
It is responsible for comprehensively reviewing the Company's accumulations in fields such as the pharmaceutical and health
Board of
•
Board Members impacts, risks, and opportunities in the field of sustainable
Directors development. industry, investment management, organizational governance,
• It is responsible for comprehensively reviewing the Company's human capital strategy, and multinational enterprise operations.
impacts, risks, and opportunities in the field of sustainable They bring diverse professional experiences and knowledge reserves
development. in areas such as industry insights, financial compliance, risk
management, organizational development, and sustainable
Decision development to the Board of Directors, which helps to identify and
It is composed of Under the authorization of the Board of Directors: At least one
making three directors, formal meeting assess major ESG risks faced by the Company from multiple
Review the sustainable development strategy and work plan.
Strategy and including at least one
•
per year. perspectives. To further improve the professional capabilities of
Sustainability independent Review matters such as the sustainable development
committee members and all employees in the field of sustainable
•
Committee director. management method, management objectives, and sustainable
development-related impacts, risks, and opportunities. development, we regularly organize systematic special training, invite
external experts to provide consulting support, and carry out various
forms of learning and exchange activities. This helps relevant
It is composed of the • It is responsible for implementing the sustainable development At least one personnel continuously deepen their understanding of the concept of
Company's Securities strategy and work plan. formal meeting sustainable development, the latest regulatory requirements, and
ESG Investment per quarter.
Department and the
Formulate and evaluate the progress, impacts, risks, and industry trends, and continuously enhance their ability to identify and
Management
•
opportunities of sustainable development goals.
Group heads of business respond to ESG risks and opportunities, providing comprehensive and
and functional Report to the Strategy and Sustainability Committee in a timely
Management
•
solid professional support for the effective implementation of the
departments. manner.
Company's sustainable development strategy.
To drive the delivery of our sustainable development strategic
Business and Designated Carry out specific ESG work around ESG issues. Report to the ESG
representatives of Management objectives, we have introduced a compensation clawback policy and
Functional
each business and Group regularly. embedded sustainability-focused key performance indicators into the
Departments, functional compensation assessment framework for the Board members and
and department, branches
Subsidiaries senior executives, ensuring that remuneration incentives are fully
Execution and subsidiaries
aligned with the Company’s sustainable development strategy.
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Stakeholder Communication
Yifeng Pharmacy attaches great importance to establishing long-term trust relationships with stakeholders. Through regular communication channels, we deeply understand the demands and expectations of all parties and
use them as important basis for formulating sustainable development strategies and optimizing operational activities to continuously improve the level of corporate governance and service quality.
Key Stakeholder
Groups
Shareholders and Government and
Customers Employees Suppliers Communities
Investors Regulators
• Medicines safety and • Protection of • Return on investment • Compliance • Responsible • Public welfare and
quality employees' rights Operation procurement charity
and interests • Information
• Medical accessibility disclosure • Tax compliance • Integrity and honesty • Community
• Employees development and
Expectations • Protection of development and • Corporate • Win-win cooperation well-being
and consumers' rights training Governance
and interests
Demands ESG management
• Occupational health •
• Customers privacy and safety
protection
• Employees care and
• Responsible benefits
marketing
• Communication with • Employee • General meeting of • Regulatory • Supplier conference • Providing job
communication and shareholders assessment opportunities
• stores feedback platform • Supplier visit
Announcement and Voluntary tax Volunteer service
Communic Consumers service
• •
Industry
•
Employee circular letter payment
ation
• • •
hotline satisfaction survey communication • Public welfare activity
Channels • Research roadshow • Semina
• Customer • Employee meeting
satisfaction survey • Investor relations • Written responses to
• Employee activity website public inquiries
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Double Materiality Assessment
As a key link in sustainable development management and information disclosure, Yifeng Pharmacy carried out the double materiality assessment of ESG issues in 2025. Based on the guidance of the "Guidelines for
Sustainability Report" and combined with the methodological interpretation and guidance of experts, we formulated an assessment process, scoring method and ranking model to evaluate our impact on the environment and
society, as well as the sustainability-related financial risks and opportunities we face.
Based on the assessment results of previous years and considering the complexity of quantifying sustainable development impacts, risks and opportunities, this year's double materiality assessment follows the principle of
"mainly qualitative and supplemented by quantitative". In the future, we will continue to pay attention to the updates of the Shanghai Stock Exchange guidelines, improve our double materiality assessment process and
methods, and continue to prudently apply quantitative assessment methods to reasonably obtain the concerns and opinions of stakeholders, so as to provide a scientific basis for our sustainable development planning and
even business decisions.
Scope Stakeholder Participation Score Threshold
In relation to our own operations, we Due to the far-reaching impact of the When evaluating the "severity" of impacts, we assess and score We set the materiality threshold at
assess the impact on the environment application of the double materiality based on the scale and scope of impacts, i.e., we "material", meaning that impacts,
and society, as well as sustainability principle on our management and comprehensively assess the extent of impacts on human beings risks and opportunities and their
risks and opportunities for our disclosure matters, the numerous ESG or the environment, the breadth of impact coverage, and the associated ESG issues that are
business. In our assessment of impact issues involved, and the fact that time and economic costs of remediating the damages, etc. ultimately assessed as material.
materiality, we take into account some parts of the assessment require When evaluating the "likelihood of occurrence" of impacts, we
positive and negative impacts, actual accessors to have a certain level of score according to the probability of potential impacts
and potential impacts related to ESG industry understanding, we invited a occurring within five years. The weight of impact "severity" and
issues. In our assessment of financial wide range of internal and external "likelihood of occurrence" is 1:1.
materiality, we assess positive and stakeholders to participate in the
negative impacts, actual and impact materiality assessment, while In assessing the scale of financial impact, we use a percentage
potential risks and opportunities for restricting the stakeholders for the of FY2025 pre-tax profit as a threshold. In assessing the
our business. financial materiality assessment to a "likelihood of occurrence" of a financial risk or opportunity, we
limited number of internal senior score it based on its probability of occurrence within five years.
management and external The weight of financial impact "scale" and "likelihood of
sustainability experts. occurrence" is 1:1.
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We conduct the ESG issue materiality assessment through stakeholder surveys, industry benchmarking, and expert consultations. After in-depth discussions between the senior management and external experts, we
accurately identify the key impacts, risks, and opportunities.
Materiality Assessment Process of ESG Issues
Based on the 21 issues set in the Guidelines, combined with the GRI Standards, ESG rating concerns, national
policies, and the geographical location, industry background, business activities, business relationships, and
Issue strategic development direction of Yifeng Pharmacy, we identify issues in the three categories of environment,
Identification society, and governance, and preliminarily analyze their related impacts, risks, and opportunities.
Impact investors, customers, employees, and suppliers to understand the impacts of different issues, and set
Materiality thresholds around the severity and likelihood of impact to identify ESG issues of impact materiality.
Assessment
Financial from senior management on the scale and likelihood of the financial impact of the issue on the business, and
Materiality invite external experts to assess the financial materiality of the issue in the context of current policy analysis
Assessment and industry insights.
The materiality assessment results of the issues are reviewed by the Strategy and Sustainability Committee and
approved by the Board of Directors, and the applicability and rationality of the assessment conclusions are
regularly reviewed every year. We have sorted out the Company's sustainable development strategy and goal
Confirmation
and setting based on the assessment results, and re-examined the management mechanism for significant
Application sustainable development-related impacts, risks, and opportunities to ensure the effectiveness of the internal
mechanism. We also disclose information in a targeted manner according to the priority order of the
assessment results to ensure a targeted response to the concerns of all parties.
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The results of the double materiality assessment show that customer
health and safety, medical accessibility and inclusion, data security Important
and customer privacy protection, supply chain security, protection of
consumers'rights and interests & health education, employment
practices, and training and development are our most important
sustainable development matters. Among them, customer health and
safety have both impact and financial materiality. Currently, risks
such as drug quality and medication accuracy may trigger a customer
trust crisis and regulatory penalties, directly impacting the Company's
finance, operations, and cash flow, and are the core focus of business
operations.
• Customer Health and Safety
As a chain retail pharmacy, we take customer health and safety as the
strategic core, meet customer needs through reasonable pricing and
diverse choices, take data protection measures to protect customer
• Anti-commercial Bribery and • Corporate Governance • Medical Accessibility and Inclusion
privacy, optimize the supply chain to ensure the quality and stability
Anti-corruption • Stakeholder Communication • Data Security and Customer
of drug supply, rely on process specifications and quality control to
• Innovation-driven development • Procurement Practices Privacy Protection
ensure the consistency of store services, fulfill compliance
Financial Material
• Anti-unfair competition • Franchisee Management • Supply Chain Security
obligations, strengthen internal supervision and risk control
Relevant
capabilities, enhance public health awareness through pharmacist • Compliance Management
consultations and health lectures, build a fair workplace, and
enhance employees' professionalism and service capabilities through
training and career planning. These practices are anchored to our
value of serving the public with medicine, support our long-term and
stable development, and help us continuously consolidate the
foundation for sustainable operations in the process of serving
customers, empowering employees, and contributing to society.
• Energy Utilization • Occupational Health and Safety • Protection of Consumers' Rights
• Addressing Climate Change • Community Contribution and Interests & Health Education
• Due Diligence • Diversity, Equity and Inclusion • Employment Practices
• Pollutant Discharge • Rural Revitalization • Training and Development
• Equal treatment to small and • Waste Treatment
medium-sized enterprises • Circular Economy
• Ecosystem and biodiversity • Environmental Compliance
protection Management
• Ethics of science and technology • Water Resources Utilization
Weakly relevant Relevant Important
Impact Materiality
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The following table lists the sustainable development-related impacts, risks, and opportunities evaluated as important issues. The measures and actions taken for their monitoring, prevention, management, and control will be
further elaborated in the subsequent chapters:
Value chain mapping
Time Own
Issue Type Description horizon 1 Upstream operations Downstream Actions
Through professional services and standardized operations, it can have a positive impact on customer health and social Short
safety, including providing customers with qualified drugs, precise medication guidance, and health management plans, term
reducing medication risks, and ensuring health effects.
Through strict product quality control and professional pharmacist services, it can reduce the circulation of inferior drugs
and safeguard public health and safety.
Impact
By providing convenient health monitoring and basic medical support, it can relieve the pressure on social health services
and improve the public health protection level.
Conversely, if there are drug problems, improper medication guidance, insufficient store safety management, or service
process defects, it may cause physical harm to customers, adverse drug reactions, or personal safety accidents, which will
have an adverse impact on customer health and may lead to complaints, legal liabilities, and loss of brand reputation.
Pharmaceutical
Customer
If the Company cannot provide customers with professional and precise health solutions, for example, it cannot meet the Medium Care for All,
health and
customized needs of customers or the market development in terms of the level of the pharmacist team and the term Safeguarding
safety
Risk application of technical tools, the Company will not be able to truly address customers' health concerns and establish in- National Health
depth trust with them. As a result, it will lose its core competitiveness, leading to customer loss, a sharp decline in sales,
and even a cash flow crisis.
Relying on the advantage of being the "closest health access point", the Company can provide chronic disease Long
management, daily health monitoring, and customized health services (such as medication reminders and side effect term
warnings) for the elderly population, seizing the development opportunities presented by the aging trend.
Opportunity It can effectively enhance the stickiness of specific customer groups.
With in-depth professionalism and in-depth relationships as the core support, the Company can build a team of doctors,
pharmacists, and nutritionists centered on efficacy, improving the accuracy and effectiveness of health solutions and
achieving both an increase in market share and revenue.
In the policy environment of stricter medical insurance supervision, as a large-scale chain pharmacy, the Company has a Long
Impact good development space, which is conducive to meeting the national demand for convenience in purchasing, coexistence term
of functions, and economic value, thus promoting medical accessibility and inclusion.
While the medical insurance policy's control over drug prices promotes medical inclusion, it also poses revenue Medium
challenges to the pharmaceutical retail industry. term
Medical Risk Pharmaceutical
With the intensifying industry competition, on the one hand, it improves medical accessibility; on the other hand, the
accessibility number of retail pharmacies may be approaching the critical point, and the sales and profitability of single stores are Care for All,
and showing a downward trend. Safeguarding
inclusion National Health
As the pharmaceutical market develops towards the two international best practices of "prescription outflow" and Long
"separation of medicine and pharmacy", the pharmaceutical retail industry will face the next market boom. If the term
Company can, based on its years of in-depth industry experience, with the support of policies, reduce the difficulty of
Opportunity
purchasing drugs by expanding retail channels and penetrating into the market, and improve the timeliness and accuracy
of services by reconstructing the supply chain efficiency and introducing AI consultations, it can gain a higher market share
and meet the market's expectations for inclusion.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Value chain mapping
Time Own
Issue Type Description horizon 1 Upstream operations Downstream Actions
In the pharmaceutical retail industry, digital technology plays a crucial role. The potential data security and privacy protection Short-
issues are directly related to the Company's prevention and control of operational risks and the establishment of customer term
Impact
trust. If network attacks and data security vulnerabilities are not prevented, resulting in omissions in customer data security
management, it may damage customers' right to privacy.
Data
With the evolution of big data, industries that possess personal information inevitably face increased vulnerabilities and risks Medium- Executing
security
of privacy leakage. If business and personal information is misused or accidentally leaked, it may damage the Company's term Duties with Full
and
Risks reputation and may also lead the Company to face fines or reduced revenue. Commitment,
customer
Failure to comply with relevant regulations for protecting patient information may result in civil and criminal penalties, which Strengthen
and
will have a negative impact on the Company. Governance
privacy
Privacy protection in the pharmaceutical retail industry has evolved from a "compliance burden" to a "trust asset". Through Medium- Foundations
protection
systematic management measures from the inside out, such as building a full-life-cycle data security system, obtaining data term
Opportunities security protection system certification, managing internal staff operations, and participating in the formulation of industry
standards, the Company can transform data security and privacy protection into a competitive advantage, thus establishing a
trust economy in the digital health market and consolidating its core competitive barriers.
Through standardized operations and proactive education, it can have a positive guiding effect on consumers' rights and Short-
interests and social health literacy, including safeguarding consumers' right to know and right to choose, eliminating false term
advertising, and maintaining a fair consumption environment.
Conduct health education through professional explanations and popular science materials to improve consumers' health
Impact literacy and reduce blind drug purchases or misunderstandings in health management.
Build trust through after-sales follow-up, enhance consumers' satisfaction and dependence on retail channels, and promote
the healthy development of the industry.
Protection Conversely, any behavior that damages consumers' rights and interests will lead to violations and affect consumers' trust in
of the Company.
Pharmaceutical
consumers If the Company's health popularization content is inaccurate or insufficient, or if the store clerks mislead customers to buy Medium- Care for All,
' rights and health products instead of medicines, it may lead to the Company misleading consumers. term Safeguarding
interests & Risks Measures such as establishing a 24-hour pharmacist consultation hotline and developing an AI medication assistant system
National Health
health require continuous technological investment from the Company, which will increase the Company's operational difficulty for
education a certain period.
Protect consumers' rights and interests more comprehensively by strengthening drug traceability management and providing Medium-
professional guidance on drug use by licensed pharmacists. term
Connecting to e-prescription services through the Internet hospitals platform to solve the pain points of chronic disease
Opportunities patients in follow-up consultations and drug purchases is conducive to safeguarding consumers' core rights and interests and
enhancing consumers' trust and recognition of the brand.
Rely on innovative technological means to establish in-depth professional capabilities and health solutions centered on
efficacy, and provide customers with accurate health education and services.
Enhance the stability of the entire supply chain network through Risk Management of each link in the supply chain. Short-
Promote synergy among supply chain enterprises and achieve common development by establishing cooperative term Pharmaceutical
Supply
relationships based on trust and win-win results. Care for All,
chain Impact
However, the supply chain in the pharmaceutical retail industry is long and complex, covering the distribution network Safeguarding
security
between manufacturers and retailers, and there is a risk of counterfeit drugs, which may have a negative impact on public National Health
health.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Value chain mapping
Time Own
Issue Type Description horizon 1 Upstream operations Downstream Actions
Product quality problems may lead to production stagnation and sales decline. Short-
Natural disasters such as earthquakes and floods may cause traffic disruptions, affect logistics and transportation, and term
result in supply chain delays and untimely drug supply in stores.
Risks If the Company fails to prevent counterfeit, inferior, or mislabeled drugs from entering the pharmaceutical retail
system, it may trigger stricter supervision of the pharmaceutical supply chain. Pharmaceutical
Supply chain Care for All,
security With the globalization and networking development of the supply chain, the complexity of supply chain security Safeguarding
management is constantly increasing. If the Company fails to effectively manage the complex supply chain, it may lead National Health
to drug safety incidents and bring significant risks.
If the Company can achieve effective management in a complex supply chain and seek and promote cooperation with Medium-
Opportunities supply chain enterprises in business models, technological innovation, etc., it can reduce costs, improve efficiency, term
and enhance its own and the supply chain's competitiveness.
For employees, the Company can effectively improve their work experience, enhance their professionalism, and help Short-
them receive positive feedback from customers and in terms of performance by improving rights and interests term
protection, providing growth paths, and empowering them with AI technology. This will enhance their sense of mission
Impact and achievement, and contribute to the realization of their personal value.
For society, employee-centered practices can reduce the loss of industry talents, promote the overall quality
improvement of practitioners. Meanwhile, by stabilizing employment and conveying the concept of "valuing and
developing people", it can inject positive energy into the harmonious development of the industry and even society. Achieving Win-
Employment If the Company has problems such as labor disputes and unfair treatment, it may lead to employee turnover and legal Short- Win Results and
practices disputes, directly affecting normal operations. term Realizing the
Risks Value of Talents
As the competition in the talent market intensifies, companies need to invest more resources to attract and retain
outstanding talents.
By establishing long-term and stable employment relationships, companies can enhance employees' loyalty and Short-
engagement, promote talent development, improve management efficiency, and reduce labor costs. term
Opportunities
Good employment practices can enhance a Company's social image and brand value, attract more outstanding
talents to join, win market trust, and lay a solid foundation for the Company's sustainable development.
Employees' professional skills and knowledge can be updated through training, enabling them to more efficiently Short-
meet job requirements and realize personal value. term
Impact By promoting employee training towards high-quality, professional, and standardized development, the Company is
expected to further iterate the industry's pharmaceutical service standards, thereby enhancing the overall social value
of the pharmaceutical retail industry.
The pharmaceutical retail industry has an increasing demand for practitioners and may face a talent shortage, posing Medium- Achieving Win-
Training and challenges in recruiting, training, and retaining pharmaceutical retail practitioners. Once there is a shortage of term Win Results and
Risks
development practitioners, it will directly lead to insufficient service capabilities of the Company, resulting in revenue loss or Realizing the
damage to the reputation. Value of Talents
Investment in training and development can strengthen organizational effectiveness. By training employees with high Medium-
professional qualities and flexible adaptability, the Company can better adapt to market changes and seize new term
Opportunities business opportunities.
Training helps the Company implement its strategies and achieve long-term goals, and reserves talents for the
Company's sustainable development.
Executing Duties with
Full Commitment to
Strengthen Governance
Foundations
Yifeng Pharmacy continuously refines its governance structure, upholds
the highest standards of compliance, clarifies the boundaries of
authority and responsibility, and strengthens internal control.
Concurrently, we rigorously implement data security and personal
information protection requirements, enhance our institutional
framework, and comprehensively establish robust safeguards for stable
operations and sustainable development.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Improving the Governance System
Yifeng Pharmacy strictly complies with national laws and regulations such as the Company Law of the People's Republic of China and the Securities
Law of the People's Republic of China, as well as internal rules and regulations such as the "Articles of Association," the Rules of Procedure for the
General Meeting of Shareholders, and the Rules of Procedure for the Board of Directors. We continuously promote the standardization of
governance processes and the refinement of mechanisms. We have established a standing investor engagement system, strictly fulfill the obligation In 2025,
of information disclosure, and effectively safeguard the legitimate rights and interests of all investors through transparent disclosure and high-
the Company held a total of 3 Shareholders'
quality relationship management.
Meetings and 13 Board of Directors meetings.
Governance Structure
We build a governance structure of "General Meeting of Shareholders, Board of Directors, and Senior Management" with clear rights and
responsibilities and mutual checks and balances, clarify the responsibility boundaries of each governance subject, strengthen the coordinated
operation of decision-making, supervision, and execution, form a standardized and efficient governance mechanism, and comprehensively improve
the Company's corporate governance level and decision-making and execution efficiency. In 2025,
As the highest authority of the Company, the Shareholders' Meeting is mainly responsible for determining the Company's business policies and
the Board of Directors reviewed and approved a
investment plans. The Board of Directors is accountable to the General Meeting of Shareholders and assumes the ultimate responsibility for the
Company's operation and management. The Management conducts business operations and management in accordance with the business total of 51 proposals and listened to or reviewed
decisions of the Board of Directors and earnestly fulfills various obligations.
The Board of Directors has established the Strategy and Sustainability Committee, the Remuneration and Appraisal Committee, the Audit
Committee, and the Nomination Committee. The Board of Directors actively fulfills its duties, operates in a standardized manner, and makes
The 4 specialized committees established by the
scientific decisions. The members of the specialized committees of the Board of Directors strictly follow the rules of procedure of each specialized
committee and carry out their work under the leadership of the Board of Directors to jointly safeguard the interests of the Company and all Board of Directors held a total of 8 meetings,
reviewed and approved 23 proposals, and
shareholders.
To improve the transparency of corporate governance, we publicly disclose the "Working System for Independent Directors". It clearly states that listened to or reviewed 18 reports.
natural person shareholders who directly or indirectly hold more than 1% of the Company's issued shares or are among the top ten shareholders of
the Company, as well as their spouses, parents, and children, cannot serve as independent directors of the Company. The requirements regarding
shareholding changes are the same as those for non-independent directors.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Organizational Structure Diagram
Information Disclosure
We actively fulfill the information disclosure obligations of listed
companies to ensure that the disclosed content is true, accurate, and
complete. In accordance with relevant laws and regulations such as
the Company Law of the People's Republic of China, the Securities
Law of the People's Republic of China, the Regulations on Information
Disclosure of Listed Companies, and the Rules Governing the Listing of
The General Meeting of Stocks on Shanghai Stock Exchange, we have issued institutional
Shareholders
Strategy and Sustainability documents such as the Information Disclosure Affairs Management
Committee Policy and the Registration Management Policy for Insiders of Inside
Information, clarifying the responsibilities of information disclosure
obligors and promoting the standardized and orderly implementation
Remuneration and Appraisal of information disclosure work.
Committee
Board Secretary
The Board of
Directors
Audit Committee
In 2025,
the Company issued a total of 109 interim reports
and 4 regular reports. The information disclosure
Nomination Committee
work has received an A-level evaluation from
the Shanghai Stock Exchange for nine consecutive
years.
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Investor Communication
We have formulated the Investor Relations Management Policy, adhering to the principles of compliance, equality, initiative, and honesty and
trustworthiness, and established a multi-channel, multi-platform, and multi-dimensional communication mechanism to effectively safeguard the
During the Reporting Period:
legitimate rights and interests of investors and continuously enhance market trust.
We conduct activities such as Shareholders' Meetings, investor briefings, roadshows, analyst meetings, reception of visitors, and symposiums
through channels such as the Company's website, new media platforms, telephone, email, and investor education bases, and actively Further revised the Investor Relations Management
communicate with investors on relevant information such as the Company's production, operation, and finance. Policy to strengthen the protection of the
legitimate rights and interests of stakeholders;
Case "I am a Shareholder" Activity: Investors Visiting Shanghai-listed Companies
Participated in 34 brokerage strategy meetings.
To maintain good communication with investors, on May 28, 2025, we invited small and medium-sized investors with
different backgrounds to participate in Yifeng Pharmacy's investor education activity "I am a Shareholder," which featured
a visit to the company as a Shanghai-listed enterprise. We presented to the investors the development history, business
Held 3 large-scale investor telephone conferences.
layout, and overall development trend of the industry of Yifeng Pharmacy, and responded to the investors' concerns about
multiple key areas of the Company during the investor Q&A session. Through this activity, we further improved information
transparency and enhanced trust and understanding with investors.
Conducted 3 online investor performance
briefings on the exchange.
Received a total of 288 research visits from
various investors through online and offline
methods, engaging with 1,737 investors
throughout the year, and carried out long-term,
stable, and high-frequency communication with
various investors.
• "I am a Shareholder" Activity Scene
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Strengthen the Compliance Defense Line This year, we have continuously strengthened the Company's
compliance risk management:
Yifeng Pharmacy integrates compliance obligations throughout its business operations, establishes a systematic compliance management system,
and formulates regulations such as the Measures for the Identification of Administrative Penalty Responsibility of Yifeng Pharmacy to clearly define
the responsibility boundaries and enhance the accuracy of internal supervision and the foresight of risk prevention and control. We also ensure that
the Company's actions adhere to business integrity through a sound business ethics management framework.
Compliance Management Conducted proactive risk identification and
developed business compliance risk guidelines in
We have established a Compliance Responsibility Structure to comprehensively monitor and guide the Company's operational activities and ensure
checklist form. These provide clear guidance on
that all business processes comply with laws and regulations.
compliant practices for business departments,
enhancing the efficiency of risk response.
Compliance Responsibility Structure
Board of Directors It mainly assumes a supervisory role and is responsible for continuously monitoring the
Company's compliance risks.
It is responsible for organizing and conducting audits before, during, or
after operational management business activities to identify and fill in Continuously iterated and upgraded the contract
Audit and Supervision
the gaps in the institutional processes and ensure that the Company project management system, streamlining work
Department
strictly complies with laws, regulations, and internal policies. processes through digital tools, and improving
business compliance.
Securities Investment Public Affairs Quality Management Operations Center
Department Department Headquarters
Provides necessary legal Provided employees with more than 20 business
It focuses on the compliance It is responsible for quality It is responsible for
advice and is responsible for compliance training sessions and a regular monthly
work of listed company control throughout the formulating and
contract review and compliance awareness program, "Xiaoyi's Legal
management, covering product lifecycle to ensure implementing store
execution supervision to Insights", using diverse formats to further reinforce
aspects such as information that products fully meet operation standards and
prevent potential legal risks. employee compliance awareness.
disclosure, equity quality standards and procedures to ensure the
management, and regulatory requirements. compliance of store
interaction with investors. operations.
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Integrity in Employment
We abide by the business code of conduct, continuously optimize the Integrity Management System, and formulate relevant systems for anti-
corruption, anti-unfair competition, and whistleblower protection. We actively promote the construction of an integrity culture and work together
with employees and partners to build an honest and clean business environment. In 2025, no major commercial bribery or embezzlement incidents
occurred in the Company; there were no lawsuits or administrative penalties due to unfair competition.
We have built a rigorous and complete Integrity Management System, formulated and implemented relevant rules against bribery and corruption
such as the Yifeng Pharmacy Employees' Integrity and Self-Discipline Management Regulations, the Code of Conduct for the Ten "Red Line"
Behaviors, and the Whistleblower Reward Management Measures of Yifeng Pharmacy, clearly defining the requirements for integrity and self-
discipline and the punishment measures for violations, providing a solid disciplinary guarantee for the Company's operation and management.
We have established an Integrity and Self-Discipline Supervision Committee, composed of the board of directors, the Audit and Inspection
Department of the headquarter, and the Audit and Inspection Departments of branches and subsidiaries. The chairperson of the board serves as
the team leader, with explicit responsibility for overseeing the company's business ethics and compliance matters. This structure establishes a
comprehensive integrity supervision framework covering the governance, supervision, and execution levels. The committee regularly reports to the
board of directors on anti-corruption efforts to ensure the effective operation of the integrity management system.
Structure of the Integrity and Self-discipline Supervision Committee
Team Leader Chairman
Deputy Team Head of the Audit and Inspection Department of the
Leader headquarter
Deputy Director of Audit and Inspection, Heads of
Members the Audit and Inspection Departments of branches
and subsidiaries
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We attach great importance to the Company's integrity management In 2025, the Company conducted an annual special audit of the We require suppliers to formulate anti-bribery and anti-corruption
and have formed a complete pre-event, concurrent, and post-event business ethics system, code of conduct, anti-corruption policy, and policies and establish corresponding mechanisms to continuously
business ethics assessment and review system. other standards to identify areas for improvement and continuously verify their compliance with their own integrity policies. At the same
improve relevant policies. time, we require suppliers to abide by Yifeng Pharmacy's integrity
Pre-event management system and sign the Integrity and Self-Discipline Letter.
We have also incorporated integrity clauses and liability for violations
• Conduct business ethics risk assessment in the fourth quarter of into supplier contracts and clearly stipulated measures to deal with
each year to identify potential risks and their impacts, and We attach great importance to anti-corruption management and relevant violations. In 2025, we carried out business ethics due
formulate differentiated response plans according to the severity actively promote anti-corruption activities. As a member of the diligence on key suppliers to evaluate their performance in areas such
of risks. Sunshine Integrity Alliance, we participate in various anti-corruption as compliance management, anti-corruption, and social
• For the identified risks, require relevant personnel to review and actions initiated by the alliance. Moreover, we strictly implement the responsibility. We also organized specialized anti-corruption training
document preventive measures and establish a dynamic alliance's blacklist system in the recruitment process and firmly sessions for suppliers to ensure that they fully understand and meet
monitoring mechanism to ensure the full implementation of pre- refuse to hire any individuals on the violation list to jointly maintain relevant requirements. By the end of the Reporting Period, the
event prevention and control of business ethics-related risks. an honest and clean business environment with the alliance. Company had achieved a 100% signing rate for supplier integrity
agreements.
To further strengthen employees' awareness of integrity and
Concurrent compliance, we have established a tiered training system, offering In addition, we adhere to the principles of legal operation and fair
special training for new employees and business ethics education for competition, resist all forms of unfair competition, and clearly
• Special Audit: Regularly conduct special audits on business ethics all employees. The training content covers core areas such as Anti- prohibit and strictly control false advertising, monopoly behavior, and
standards and anti-corruption policies, evaluate the effectiveness corruption, anti-monopoly, and anti-unfair competition. We have also infringement of trade secrets. We have also continuously regulated
of the monitoring system, and clarify the process for handling set up an "Integrity Model Award" to recognize employees who the Company's competitive behavior through improving internal
corruption incidents; for donations and sponsorships, clarify the perform their duties with integrity. Meanwhile, we require all review, supervision, and behavior restraint mechanisms to ensure the
declaration, approval, and compliance assessment processes, employees to sign integrity agreements to prevent corruption. In fair, honest, and orderly conduct of business activities.
and include relevant materials such as donation agreements and 2025, the signing rate for these agreements reached 100% among all
donation vouchers as necessary items in the approval process for employees.
key verification of compliance.
Comprehensive Business Audits: Conduct systematic audits of all To standardize internal procedures, we have established a formal
During the Reporting Period
•
business segments, operating locations, and subsidiaries every whistleblowing policy, the Rewarded Whistleblowing Management
year, covering key areas such as risk control, violations of Measures. This policy encourages employees and stakeholders to
Number of directors participating in business ethics report misconduct by providing clear channels and incentives.
discipline, corruption, and embezzlement; conduct additional
audits of high-risk positions and key business segments, training: 9 Crucially, it provides robust protection for whistleblowers against any
establishing a multi-layered audit and oversight system form of retaliation, ensuring their privacy and safety. As stipulated in
our Employees' Integrity and Self-Discipline Management
characterized by "annual full coverage, monthly routine checks, Coverage rate of directors participating in business
and quarterly targeted reviews." Regulations, individuals have the right to report any violation
ethics training: anonymously. We are formally committed to safeguarding
Monthly Routine Audit: Every month, routine store operations,
whistleblowers from reprisal, fostering a culture where concerns can
•
corruption risk assessments, and anti-fraud activities are included Number of employees (including full-time be raised without fear.
in the audit cycle to ensure 100% coverage of store operations. employees, part-time employees, and third-party
contractors involved in operations) participating in
Post-event business ethics training: 38,953
Whistleblower hotline: 0731-89953992
Yifeng ?
Implement dynamic supervision over the rectification of audit Pharmacy's Whistleblower email: sjb@yfdyf.com
Coverage rate of employees participating in
• ?
whistleblower
business ethics training: 100%
findings, verify the timely closure of identified issues, and Internal whistleblower channel: Direct
channels
?
evaluate the effectiveness of corrective actions through review reporting channel for employees
sessions.
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Medical Insurance Compliance Highlight 2: Iteration of the digital management
system for medical insurance risk control
Highlight 4: Medical insurance benefits and
price governance
We strictly comply with national and local medical insurance policies
A medical insurance risk control system with intelligent pre- We supervised the consistency of online and offline medicine
and continuously improve the medical insurance compliance
warning, precise in-process control, and in-depth post-analysis prices and gradually improved the accessibility of chronic
management system. This year, we closely aligned with the self-
was built to achieve closed-loop control of the entire process of disease medications.
inspection and self-correction requirements of national, provincial,
prescription source traceability, standard use of prescriptions,
and municipal medical insurance fund supervision, fully learned from A special price governance team was established.
professional prescription review by pharmacists, medicine
•
industry compliance management experience, and optimized the all- Combining system monitoring and manual inspections,
traceability, and precise medical insurance settlement.
round medical insurance compliance prevention and control system we ensured that the online and offline selling prices of
through technological empowerment, process optimization, and full- • Functions such as accurate verification of prescription medicines remained the same.
chain supervision. Concurrently, we have conducted regular policy information, safe identification of pharmacists' identities, The coverage of outpatient integrated management
training for all staff to improve compliance efficiency. Focusing on
•
scientific control of medication dosage, matching of pharmacies was increased, the medicine-purchasing
"refined and intelligent advancement," we have successfully achieved indication specifications, and review of medication process for chronic disease patients was shortened, and
the dual objectives of ensuring compliance and elevating service matching were embedded. the medical insurance reimbursement ratio was raised.
quality.
• Real-time dynamic verification of medical insurance
settlement data was carried out to achieve precise early
warning and dynamic control of violations.
Highlight 1: Full-link management of medicine
traceability codes • Dynamic risk profiles of stores, employees, and medicines
were completed, and hierarchical and classified
Through internal system controls and traceability code
management was implemented. Monthly compliance Highlight 5: Medical insurance risk prevention
verification, we compel pharmaceutical manufacturers to
reviews were conducted for high-risk stores. and security of medical insurance funds
assign codes to drugs. We have achieved 100% coverage of the
mapping relationships among the three codes, enabling full- We ensured the standardized use of medical insurance funds
chain tracking from procurement and warehousing to sales through systems and platform technologies.
and settlement. Highlight 3: Prescription compliance
management • We partnered with the medical insurance department to
• Established a mapping system for traceability codes, build a regulatory information platform for sharing data
medical insurance codes, and product codes, ensuring A closed-loop control system for the entire prescription on drug procurement, inventory, and prescription
efficient integration between different coding systems. process was established to ensure both the legal source and circulation.
• Developed a mapping system for traceability codes on standard use of prescriptions.
large and small packages to address linkage issues in the • Established a prescription evaluation mechanism based
drug circulation process. on compliance, rationality, and patient suitability, directly
• Built a unified traceability platform for codes, achieving linking results to doctor credentialing and practice ratings.
end-to-end drug traceability and data storage. • Formed a tripartite prescription review model combining
• Implemented a risk control system for traceability codes, "internal rules, external professional systems, and manual
with functions such as "traceability code verification," pharmacist verification."
"code-free inventory management," and "no payment for • Implemented a mechanism for real-time interception and
un-coded medical insurance claims," thereby preventing root-cause tracing of abnormal prescriptions.
loopholes in drug traceability.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Ensuring information security
Information security and customer privacy are the core pillars for
Yifeng Pharmacy to maintain customer trust and ensure the stable Information Security Management Architecture
operation of the business. By constructing an information security
management system and implementing multiple measures such as
technical protection, we strengthened the data security defense line. • The company's privacy and data security work is ultimately responsible, reviews the company's
Centering on customer rights and interests, we effectively protected Board of Directors overall data security and privacy-related strategies, and the Information Security Committee under it
customers' personal privacy through transparent notification and is responsible for coordinating and implementing the specific tasks
standardized management.
Information security • Be responsible for formulating the company's overall data security and privacy strategy and policies.
• Draft the company-level data management system, security classification standards and
We strictly comply with laws and regulations such as the requirements, etc.
Cybersecurity Law of the People's Republic of China, the Data Information Security
Supervise the company's overall data security status and management effectiveness, and coordinate
Committee
•
Security Law of the People's Republic of China, the Personal
cross-departmental data security management work.
Information Protection Law of the People's Republic of China, and the
General Data Protection Regulation. We formulated and • Promote the construction of the company's data security management team and the cultivation of
implemented systems such as the Measures for Yifeng Pharmacy Data data security awareness culture.
Security Management and the Measures for Yifeng Pharmacy Project
Information Security Management, and required the Company, all
affiliated subsidiaries, all business departments, all business lines,
and all operation points to strictly regulate the purposes, methods, • Assist the Information Security Committee in the implementation and execution of data security and
and access controls for data collection and use. We are committed to privacy policies, including proposing annual plans and implementation schemes.
continuously improving the information security management
Information Security Regularly inspect, evaluate and assess the company-wide data security management situation, and
system. In the future, we will appropriately promote the relevant work
•
Executive Office put forward improvement requirements and suggestions for rewards and punishments.
of information security management system certification, clarify and
standardize the scope of certification, and continuously improve the • Coordinate the emergency response and handling of major data security risks and incidents across
standardization and normalization level of information security the company.
management. During the Reporting Period, no major data security
incidents occurred in the Company.
We constructed an information security management structure of
• Based on the business front they are in, determine the strategy and priorities for data security
"Board of Directors-Information Security Committee-Information
management.
Security Execution Office-Information Security Management
Information Security Review and confirm the compliance of data security systems and process norms.
Responsible Person", with the Board of Directors taking the ultimate Management Officer
•
responsibility for privacy and data security work. • Take the lead in implementing important measures for data security management, and inspect and
supervise the data security status and management effectiveness of the front.
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Under the information security management architecture of the
three-level protection system, we ensure the implementation of Proactive Measures to Prevent Data Leakage
management through the following regular review mechanisms:
With the trinity of "technology, management, and compliance" as the core, establish a dual guarantee of the technical protection system and
the management protection system.
Conduct an information security risk assessment every six Technical Protection
months, establish a risk ledger, and formulate data security System
prevention and control measures.
Establish a data encryption Apply static and dynamic de- Set data access permissions based on the principle
Conduct an internal audit of the information security system mechanism to achieve encryption of identification technologies to of least privilege. Data analysts can only access the
every two years. Complete self-inspection and self-correction of sensitive data storage, transmission, make data available but de-identified data sets and cannot associate with
the implementation of information security measures, put and end-to-end encryption. unidentifiable. the original personal identifiers. Conduct a
forward rectification suggestions, and follow up on the permission audit every quarter to identify and
implementation of rectification. revoke redundant and expired permissions.
Build a zero-trust security Implement data breach
architecture and synchronously prevention deployment,
Entrust third-party institutions to conduct external independent deploy a multi-factor authentication achieve real-time interception Deploy terminal protection tools, conduct a full-
data security audits every year to verify the effectiveness of mechanism. of high-risk operations, and system vulnerability scan every month, and conduct
protective measures and issue audit reports. conduct log audits. at least one penetration test every year.
At the same time, we formulate proactive prevention measures and Management
an emergency mechanism after a data leakage incident, aiming to Protection System
comprehensively control the information security risks in the entire
data lifecycle.
Establish data classification and grading standards, and review the data classification results every six months.
Conduct privacy and data
Overall Strategy Basic Principles
security training for all employees
(including full-time employees, Build a shared vision of information security and Full implementation, continuous improvement
part-time employees, and third- achieve extraordinary results Full participation of all employees; classified
party contractors participating in management, appropriate investment
operations) every quarter. The
Construction Objectives
training content covers Basic Concepts
identifying phishing emails, In accordance with the company's development
plan and strategic goals, gradually establish a (1) Information security risks are ever-present,
handling sensitive data in a scientific information security management and information security management is a
standardized manner, etc. system, improve the overall information security never-ending task.
awareness of all employees, standardize data
Training assessments are (2) Enhancing employees' safety awareness and
operations through appropriate management
organized, and those who fail the and technical measures, achieve refined sense of responsibility is a crucial part of
information security management.
assessment will have their data management, effectively control information
security risks, continuously reduce information (3) Emphasize process supervision and
access permissions suspended. security incident losses, and ensure the inspection, and strictly implement the
In 2025, the Company organized sustainable and stable development of the information security reward and punishment
company's business. system.
a total of 5 training sessions.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
In addition, we have publicly released the "Project Information
Passive Emergency Response Process Security Management Method", requiring all cooperating Suppliers to
comply with Yifeng Pharmacy's information security-related systems
Adopt passive emergency response measures based on the principles of "rapid response, risk control, compliance notification, and closed- and not to disclose the Company's and customers' confidential
loop rectification". information, data, and documents.
• Revise the "Data Leakage Emergency Plan" every six months to ensure its practicality and operability.
• Establish an emergency response organizational structure, form an emergency response team, clarify the responsibilities of each In terms of supplier access, factors such as
information security management
member, and ensure the efficient progress of the emergency response process.
capabilities and information security
• Develop a four-step closed-loop emergency response process: qualifications are included in the evaluation
scope. Collaborate with the information
security manager to conduct an information
security review of the supplier's system, and
require it to meet security certifications such
as ISO 27001.
Require a comprehensive evaluation of the
The evaluation content includes: the
Discovery and Initial Disposal Compliance Notification
standardization compliance rate of the
Identify and confirm the data Complete notifications to regulatory software environment, the standardization
leakage incident, assess its risk authorities and data subjects in deployment compliance rate of IT
level, and take emergency accordance with domestic and equipment, whether personnel information
measures to stop losses at the security awareness training is carried out,
international laws and regulations.
whether a confidentiality agreement is
technical and organizational
signed, whether a system penetration test is
aspects to prevent the negative
passed, etc., to verify the compliance of
impact of the incident from further externally purchased data and strengthen
expanding. the data security management of externally
Rectification and Review
In-depth Investigation and
Disposal Formulate targeted rectification plans, Require all cooperating suppliers to sign the
continuously optimize organizational "Data Protection Agreement (DPA)" to clarify
Conduct an internal investigation, coordination and technical disposal their security requirements for data
repair system vulnerabilities, trace capabilities, and conduct monthly processing and liability for breach of
the leaked data, and gradually reviews to continuously monitor the contract.
resume business processes after implementation of rectification
the risk is completely controlled. measures.
Suppliers are required to complete data
security compliance training and assessment
through the SRM system. In 2025, the
participation rate of supplier data security
compliance training was 100%.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Privacy Protection We adhere to the concept of "privacy by design" and embed privacy protection into the lifecycle management process of products. We have issued
the Software Information Security Function Standard Document to clarify the privacy standards for the entire lifecycle of products and services,
forming a systematic and traceable management mechanism to provide a solid guarantee for customers' privacy information throughout the entire
We fully understand the necessity and importance of protecting product and service chain.
customers' personal information and regard the protection of
customer privacy as the top priority in our business management. We
have established corresponding security management processes and
control measures for information technology systems, employees, Workflow for security and privacy control in the entire product lifecycle
and suppliers. We have also implemented privacy protection
measures in product development, technology development, and
customer service to ensure that access control and encryption • Research on security and privacy requirements: Identify user privacy risks in the customer service
technologies are in place, safeguard the confidentiality and integrity scenarios of the APP and mini-program, and clarify the boundaries of privacy protection.
of our information systems, and better protect customer privacy. requirement phase • Requirement documentation: Integrate privacy protection functions into product design.
• Compliance alignment: Ensure that privacy requirements comply with relevant laws, regulations,
We have formulated relevant systems for customer privacy and standards.
protection, such as the Yifeng Pharmacy Service Agreement and the
Guidelines for the Safe Usage of Data of Yifeng Pharmacy Members,
strictly regulated the information collection process, and
implemented permission control, encrypted transmission, and
Architecture design: Design privacy protection mechanisms such as network isolation, permission
operation record-keeping. During the Reporting Period, there were no
•
layering, and data classification.
incidents of customer privacy leakage in the Company. design phase
• Design review: Verify the integrity of privacy functions and the effectiveness of risk mitigation
measures.
We require all business departments, subsidiaries, and operating
points to comply with the Yifeng Pharmacy Personal Information
Protection Policy and make the following commitments:
development
Clearly inform customers of the reasons, purposes, and Development process control: Deploy privacy protection tools and promptly fix data vulnerabilities.
phase
• •
processing methods of information collection to ensure explicit
consent and authorization from customers.
• Without customer authorization, we will not collect relevant
information through any channels (including the official website). • Privacy-specific testing: Conduct tests on privacy scenarios for apps and mini-programs.
• Guarantee customers' rights to access, correct, delete (including test phase • Penetration testing: Carry out at least one penetration test for each version to prevent
deleting backup data), view, and copy personal data, and process unauthorized access and leakage of privacy data.
deletion requests within 3 days.
• Unless providing specific services, we will not rent, sell, or provide
customers' personal data to any third parties.
Only store customers' information for the shortest necessary time Vulnerability Management: Timely fix privacy vulnerabilities in apps and mini-programs
release and
• •
and delete it in a timely manner after expiration. operation & • Privacy Protection upon Decommissioning: When apps and mini-programs cease service,
maintenance phase thoroughly clear users' privacy data.
• Do not publicly disclose customers' information.
• Do not collect customers' personal data from third parties
(except as required by law).
Require all employees and data Suppliers to sign the Data
At the same time, we have also built a complete information security technology toolkit, covering key technologies such as firewalls, VPNs, bastion
•
Security and Confidentiality Agreement to clarify the personal
hosts, log auditing systems, virus protection systems, network auditing systems, terminal management systems, and data encryption systems to
legal liability for privacy leakage.
ensure that customers' personal privacy can be maximally protected while we provide services.
Pharmaceutical
Care for All,
Safeguarding
National Health
Yifeng Pharmacy adheres to the core concept of
"Pharmaceutical Care for All" and establishes the
provision of safe, effective, and accessible medicines
as the strategic cornerstone for high-quality
development. We continuously improve the lifecycle
management system for medicines and provide high-
quality professional pharmaceutical services to
ensure that the entire business process is precisely
aligned with the health needs of the Chinese people.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Health Sustainability Framework
Yifeng Pharmacy always adheres to the quality criterion of "family- On this basis, to ensure the effective implementation of quality management requirements, we have built a "training + assessment" dual-drive
trusted medicines" and places customers' health and medication mechanism. We conduct systematic quality control and product safety training covering all employees every year, covering special topics such as
safety at the core of its sustainable development strategy. By building the Good Supply Practice for Pharmaceutical Products (GSP), pharmaceutical professional knowledge, and quality management system
a scientific governance structure, formulating clear strategic plans, documents. At the same time, key indicators such as quality accident handling, product quality evaluation, and expiration date management are
implementing reliable risk control, and setting clear performance included in the performance assessment of quality management personnel, forming a management mechanism that combines incentives and
goals, we promote the implementation of responsibilities and the constraints to comprehensively strengthen supervision responsibilities and execution capabilities.
improvement of performance, effectively safeguard the public's
Strategy
medication safety and consumer rights, and steadily consolidate our
image as a trustworthy health partner.
We integrate the "Controllable Premium Strategy" into the overall development path, continuously building a matrix of self-owned brands,
Governance exclusive varieties, and jointly-built varieties with manufacturers. We also expand categories such as herbal wellness products, nutraceuticals,
health monitoring devices, personal care items and health-oriented consumer goods to enrich the supply of health products. By constructing a
premium product system with standardized channels and excellent efficacy, we provide customers with health solutions that cover diverse needs,
We have established a sound quality governance structure to ensure supported by quality safety, professional teams, and warm services.
standardized decision-making, orderly implementation, and effective
supervision. The Board of Directors assumes the ultimate
Our quality management system covers all Our team includes over 10,000 licensed We serve over 116 million members. We can
responsibility for the compliance and effectiveness of the quality of aspects, including the qualification review of pharmacists and more than 25,000 medical provide systematic health solutions from disease
goods and services. As a full-time institution, the Quality Management suppliers, acceptance of purchased medicines, in- professionals. There are over 800 professional treatment to health promotion. We offer one-
Department coordinates the operation of the quality management stock maintenance, outbound review, store training courses for common diseases and more stop pharmaceutical services to patients,
system and establishes a hierarchical and collaborative mechanism acceptance, display inspection, and after-sales than 1,600 professional courses on drug including 7*24-hour doctor/pharmacist
of "headquarters overall planning-branch companies supervision and service. Through the triple quality evaluation ingredients. Through the intelligent and precise consultations, medicine purchase, and home
system, we achieve strict screening and full- service system for members, we provide full- delivery. We also establish a service
implementation-stores standardized execution". At the same time, a
process control to ensure the safety and course health management for customers with improvement mechanism centered on order
Quality Management Leadership Group composed of the heads of effectiveness of medicines. We use advanced chronic diseases, including drug treatment, diet evaluation to continuously enhance service
various functional departments at the headquarters is established to technology to track the quality of products in real- regulation, behavior management, and exercise quality.
implement quality management requirements throughout the entire time and implement an automatic system to guidance.
process of product procurement, storage, and sales, laying a solid prohibit the purchase and sale of products with
foundation for customer trust. quality risks.
A professional team is the cornerstone of the stable operation of the Quality and Safety Professional Team Warm Service
quality management system. We have set strict access standards for
key quality positions: the quality responsible persons at the
headquarters and branch companies must have the qualification of a
licensed pharmacist and more than 3 years of experience in
pharmaceutical business quality management, and the quality
management personnel must have a college degree or above in
pharmacy, traditional Chinese medicine, or related majors. This
ensures that the team has a solid professional foundation and
practical experience to effectively address quality and safety risks in
the business process. For detailed information on the Company's implementation of the Controllable Premium Strategy, please refer to the sections "Strict Quality
Control for Medicines", "Regulating Channels for Medicines", and "Improving Service Quality" in this chapter.
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Management of Impacts, Risks, and Opportunities Metrics and Targets
To systematically manage the impacts, risks, and opportunities related to customer health and safety, we focus on the prevention and control of In accordance with the Quality Policy and Objective Management
product quality risks. We have formulated the Quality Risk Management Operating Procedures and established a high-standard quality risk System, we formulate the annual quality policy and management
management process to assess, communicate, control, and review quality and safety risks throughout the product lifecycle. The Quality goals in an overall manner and decompose the goals step by step to
Management Department has the power of veto during the review of products that fail quality inspections or have non-compliant packaging, each department and position, forming a supporting implementation
strengthening pre-risk control. plan to promote the implementation of the responsibility for
customer health and safety. For key goals, the Quality Management
Product Quality Risk Prevention and Control Mechanism Department conducts continuous supervision through an internal
review mechanism. Meanwhile, we strictly supervise and assess
employees' compliance with quality management systems. Through
annual departmental assessments and quarterly store assessments,
Annual Risk
The Quality Management Department formulates a quality risk management plan and we promote the integration of quality management into daily work
Management processes to ensure the standardized operation and continuous
distributes it to the heads of each department for confirmation.
Plan improvement of the quality management system. In 2025, the
Company successfully achieved its annual quality management goals.
The personnel in the drug operation quality control position adopt a forward-looking or
Identification
retrospective approach throughout the entire product life cycle to identify, analyze, and
classify risks in each link that affects product quality. The Quality Management Department
analyzes and conducts a second-round confirmation of the risk ratings.
The Quality Management Department formulates control and prevention measures based on
Assessment
the assessed quality risks. At the same time, it requires relevant departments to effectively
implement risk control measures and regularly evaluate the effectiveness of these measures
All online and offline businesses were operated in
compliance with laws and regulations
to ensure that relevant risks reach an acceptable level.
The Measures for Quality Supervision and Management of
Medicine Operation and Use was strictly implemented to
Risk Review improvement of our quality management system
management and the acceptability of risks every year.
We apply digital means to product quality risk management. Through an intelligent monitoring system, we conduct risk control over the entire
process of "purchase, storage, sales, and return". This system integrates functions such as license validity control, interception of out-of-scope
business, near-expiry date warning, prohibition of purchasing and selling expired products, prohibition of purchasing and selling products with
quality problems, and restricted distribution and sales. It provides technical support for the automatic identification, monitoring, and control of
quality risks in the operation process, improving the accuracy and standardization of risk management.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Strict Quality Control for
Medicines
In-store Acceptance In-store Display
All medicines in the stores are uniformly distributed from the All directly-operated stores and franchise stores must, in
headquarters warehouses. After delivery, each store strictly follows the accordance with the relevant provisions of the Store
Store Medicine Acceptance Management Policy and related operating Medicine Display Management Policy, conduct display
Ensuring the quality, efficacy, and safety of drugs is the cornerstone for procedures to fully implement the quality acceptance process, ensuring by zones and categories according to the
Yifeng Pharmacy to achieve long-term and stable development and gain that the medicine packaging is intact and the quality meets the standards, physicochemical properties and storage conditions of
medicines. They must also strictly implement regular
social trust. We adhere to the principle of "Quality is the foundation of and firmly controlling the quality of medicines in the retail link of the
stores. maintenance inspections of medicine quality in
Yifeng", strictly abide by laws and regulations such as the Drug
accordance with the provisions of the Store Medicine
Administration Law of the People's Republic of China, the Good Supply Maintenance and Inspection Management Policy and the
Practice for Pharmaceutical Products (GSP), and the Measures for Quality Medicine Expiration Date Management Policy. This
Supervision and Management of Medicine Operation and Use. We ensures that any potential quality problems can be
Medicine Delivery promptly detected, properly handled, and quickly
systematically construct and continuously improve the quality
We formulate and implement the Medicine Delivery Review and resolved.
management system and implementation specifications covering all
Management System and related process operations. We implement the
business links, and earnestly fulfill the social responsibilities and mission of
principle of " first-produced products to be sold first and products with
a leading enterprise in the pharmaceutical retail industry.
closer expiration date to be sold first", and conduct deliveries according to
batch numbers. We also require that medicine outbound must be After-sales Service
Medicine Quality Management
accompanied by supporting documents such as the medicine inspection We publicly display the hotline of the medicine
report and the registration certificate for imported medicines. Through a
System
regulatory authority and relevant signs such as the
comprehensive recheck of outbound medicines and their packaging, we service convention of Yifeng Pharmacy at prominent
ensure that the quantity of all outbound medicines is accurate, the quality positions in each store. We also set up a 24-hour service
meets the standards, and the labels are clear, so as to guarantee the hotline (4008879908) and a customer opinion book to
We build and operate a quality management system covering the entire quality and compliance of outbound products. provide customers with multiple channels to feedback
medicine life cycle around the requirements of medicine quality and safety their opinions on products and services. We have
management. Through institutionalized, process-based, and standardized established customer complaint files in accordance with
management, we implement unified control over the entire process of the Quality Complaint Management Policy and assigned
medicines from procurement to terminal sales and risk disposal, Medicine Storage a dedicated department and personnel to handle them,
systematically ensuring product quality safety and compliant operation. ensuring that customers' opinions and complaints can
We formulate and implement the Medicine Storage and Maintenance
be promptly responded to and properly handled.
Management Policy and relevant operating procedures to ensure that all
medicines are stored in designated warehouses according to their
Medicine Full-life-cycle Quality Management System packaging and storage requirements. At the same time, we conduct
monthly maintenance inspections, establish maintenance records, and Medicine Recall
Medicine Procurement use an information system to automatically track and control the
expiration dates of inventory medicines. We take measures such as near- For medicines that have been sold and have serious
In accordance with systems such as the Supplier Quality Assurance System quality problems, in accordance with the provisions of
expiry date warning and automatic locking and suspension of sales for
Evaluation Criteria and the Supply Units and Sales Personnel, First Purchased the y Unqualified Products Management Policy and the
expired medicines to ensure the in-stock quality of medicines.
Variety Review Management Policy, we adhere to the qualification-first principle and Medicine Recall Management Policy, we establish and
conduct a comprehensive qualification review of suppliers, purchased products, implement a quality management mechanism for recall,
and sales personnel of suppliers. Through on-site inspections and document retrieval, and return. We also set up controls on
verification, we systematically evaluate the suppliers' quality management Acceptance and Inspection prohibited distribution and sales through the
capabilities and sustainable supply capability to control product quality at the information system, and urge the stores to return
source. The procurement process adopts a model that combines centralized We formulate and implement relevant regulations such as the Medicine
relevant medicines as required to prevent the continued
procurement by headquarters and local procurement by subsidiaries. We flexibly Acceptance Management Policy and the Acceptance Procedure. We
circulation of medicines with quality doubts, strengthen
formulate procurement plans based on medicine attributes, with the reliability of carefully inspect the appearance, packaging, labeling, and package inserts
quality risk control, and ensure the safety of consumers'
channels, price competitiveness, and the satisfaction rate of store products as core of medicines according to sampling standards and conduct barcode
medication.
indicators to ensure that medicine quality is controllable, channels are traceable, scanning and verification of medicine traceability codes. For any
and prices are affordable. medicines that do not meet the sampling standards or have quality
problems, we take the measure of directly returning them to the suppliers
to prevent unqualified medicines from being warehoused.
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We establish a regular review mechanism for the quality management
system. In accordance with the Internal Audit Policy on Quality Medicine Expiration Date Management
Management System and the Inspection and Evaluation Policy on
Implementation of Quality Management System, we conduct We formulate the Medicine Expiration Date Management Policy and establish
systematic inspections and evaluations of the system's operation Definitions of Medicine Expiration Date
a full-process expiration date management mechanism, clearly defining the
annually. In case of changes in key elements or major quality service red line that "stores are strictly prohibited from selling medicines with less
issues, we promptly initiate special reviews to promote rectification than 30 days of validity and expired medicines". Stores conduct key
and process optimization, continuously improve the system Products with an expiration date of 12
maintenance on near-expiry medicines every month. Specialists evaluate the
•
operation, and ensure that products and services always meet the feasibility of return to the manufacturer and conduct overall allocation. months are considered expiring products
established requirements. Medicines with less than three months of validity are stopped from allocation, if they will expire within less than 4
and those to be delisted and written off as damaged goods are completed Expiring months
In terms of product testing, we conduct full inspections at the batch
level for all self-manufactured medicines of Heng Xiu Tang. We select
one month before expiration. Relying on the digital management system, we Medicines • Products with an expiration date of 18
achieve automatic monitoring of medicine expiration dates, set functions months or above are considered expiring
key varieties from external suppliers for sampling inspections and
such as prohibition of sales of near-expiry medicines and early warning alerts,
entrust qualified third-party institutions for testing. For varieties with products if they will expire within less
and promote the pre-identification and disposal of expiration date risks to
quality doubts, we promptly take measures such as sampling for than 6 months
ensure the compliance of store operations.
testing, quality inquiry, and necessary recall to strengthen risk
disposal. The testing work covers scenarios such as new product
According to the Unqualified Products Management Policy and the Store
evaluation, complaint verification, and doubt detection, ensuring the
Return Procedures for Unqualified Products, near-expiry medicines with less • Products with an expiration date of 12
quality and safety of medicines from multiple dimensions.
than one month of validity and expired medicines returned by stores will be months are considered to be in warning
In addition, we formulate the Medicine Traceability Management uniformly placed in the storage area for substandard medicines. The period if they will expire within less than 6
Medicines
System and continuously improve the traceability system covering warehouse will deliver them to the contracted environmental protection months
the entire business process to achieve "traceable source, trackable company for safe disposal in accordance with the waste disposal standards. in Warning
Products with an expiration date of 18
destination, and accountable responsibility" for medicines. In 2025, Period •
We implement a regular shelf-life inspection mechanism to conduct regular months are considered to be in warning
we have achieved 100% integration of the "traceability code, medical
checks on the products in our stores. If expired products (including gift items) period if they will expire within 9 months
insurance code, and product code" for medical insurance medicines,
and implemented "scanning upon seeing the code" in the processes are found during the inspection, we will hold the involved personnel directly
of inbound, outbound, and return, collecting traceability codes responsible and the management personnel jointly responsible, and assign
throughout the whole process. At the inbound end of incoming goods, responsibility to individuals.
the system automatically verifies the consistency between the
physical goods and the information on the "Code Assurance" platform
and controls batch differences. In the outbound and sales processes,
it automatically intercepts duplicate codes and abnormal code
scanning to strengthen risk prevention and control throughout the
whole process. Meanwhile, we promote traceability management in
the field of Chinese herbal medicines. We cooperate with Yunnan
Baiyao to establish 50 Chinese herbal medicine planting bases for
Panax notoginseng, Astragalus membranaceus, etc., achieving full-
link traceability from planting, harvesting to processing, and laying a
solid foundation for the quality and safety of medicines. During the
Reporting Period, the Company did not experience any major liability
accidents related to the quality and safety of products and services.
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Pharmacovigilance Management Medicine Emergency and Recall
We have formulated the Pharmacovigilance Management System and the Adverse Medicine Reaction Monitoring and Reporting Management We have formulated the Medicine Emergency Response Plan and
System, established and improved the pharmacovigilance management system, and carried out systematic monitoring of medicine safety, forming established an emergency response mechanism covering pre-event
a closed-loop management mechanism of "information collection-identification and recording-analysis and evaluation-information reporting-risk prevention, in-event response, and post-event summary. We have
disposal-monitoring and optimization". established a Medicine Safety Emergency Leadership Team led by the
President to coordinate monitoring and response. When a medicine
safety emergency occurs, the Medicine Safety Emergency Leadership
We clarify management responsibilities, equip drugstores with pharmacovigilance specialists, and collect and record information on adverse
Team immediately activates the emergency response plan, takes
reactions, medication errors, and damage events in a timely manner through channels such as customer feedback and consultations to ensure
measures such as medicine recall, risk warning, notifying consumers,
traceability. The Quality Management Department conducts unified analysis and evaluation, assesses the severity and relevance of adverse
and assisting in treatment, and dynamically tracks the progress. After
reactions, and reports events that meet the requirements through the national adverse drug reaction monitoring information network in strict the event, the Quality Management Department submits a summary
accordance with laws and regulations. Based on the evaluation results, we take measures such as issuing risk warnings, suspending sales, and report, analyzes the reasons, and puts forward improvement
assisting in recalls to prevent the further expansion of risks and effectively ensure public medication safety. recommendations to continuously optimize the emergency
management mechanism and reduce relevant risks.
Meanwhile, we continuously promote the monitoring optimization of pharmacovigilance work. Through the review and analysis of relevant events,
we continuously improve the management process and risk control measures, and organically combine pharmacovigilance with medication safety In terms of medicine recall management, we strictly implement the
management, and regularly carry out medication safety publicity and patient education. By providing professional medication guidance and Medicine Recall Management Policy and the Medicine Recovery
organizing health education lectures, we guide patients to use medicines rationally and safely, reduce medication-related risks, and provide Management Policy, implement a three-level recall management
continuous and professional support for patients in the process of medicine use, treatment, and auxiliary medical services, further safeguarding according to the severity of drug quality and safety hazards, and
clarify the corresponding recall time limits and disposal
patients' medication safety and health rights.
requirements. After receiving the recall notice, each store must
immediately stop selling, notify the purchasers, and recover the
Closed-loop Management Mechanism for Pharmacovigilance
problematic drugs, and report to the medicine regulatory department
or notify the drug production enterprise within the specified time
limit. According to the different results confirmed by the medicine
Monitoring and regulatory department, follow-up processing of the recalled drugs
Information Collection
Optimization will be carried out. The Quality Management Department conducts
unified management and records of the entire recall process,
establishes a recall file, and assigns responsibility to individuals to
ensure a rigorous and perfect accountability mechanism and prevent
similar problems from occurring again.
Identification and Medicine Recall System
Risk Disposition
Recording
First- An urgent recall must be completed within 24 hours if
level the use of the medicine may cause a serious health
Recall hazard.
Second A recall must be completed within 48 hours if the use of
Information Reporting Analysis and Evaluation -level the medicine may cause a temporary or reversible
Recall health hazard.
Third- A recall must be completed within 72 hours of the
receipt of the recall notification if the use of the
level
medicine does not generally cause health hazards but
Recall the medicine needs to be recalled for other reasons.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Regulating Channels for Medicines
Yifeng Pharmacy aims to ensure that the source of drugs is clear, safe, and controllable, and regards the stable operation of the supply chain as the By establishing a quality management system covering the entire life
core task. We implement the full-lifecycle management of suppliers in terms of delivery, quality, etc., and clearly define the risk-constraint cycle of suppliers, we systematically standardize the supplier
requirements in the purchase and sales agreements. In accordance with laws and regulations such as the Drug Administration Law of the People's management process around key links such as supplier screening and
Republic of China, the Good Supply Practice for Pharmaceutical Products (GSP), and the Good Manufacturing Practice for Pharmaceutical Products access, assessment and evaluation, and hierarchical and classified
(GMP), we have formulated systems such as the Supplier Quality Assurance System Evaluation Criteria, the Operating Procedures for On-Site Quality management. This effectively prevents quality risks in the supply
Supervision of Suppliers, and the Quality Management System External Audit Management Policy, and are committed to building an efficient chain and consolidates the management foundation for the safety,
supplier management system to strengthen the defense line for public health. compliance, and controllability of drug channels.
Supplier Quality Management
We regard source control as the key and formulate systems such as
To ensure the systematicness and effectiveness of management, we have established a supply chain security governance framework centered
the Supply Units and Sales Personnel, First Purchased Variety Review
around "strategic guidance, technological empowerment, and hierarchical control". We have set up a dedicated Supply Chain Management
Management Policy. We have established a supplier access
Department to coordinate procurement, logistics, and warehousing, and implemented a mechanism of "separation of procurement and
mechanism covering qualification review, risk identification, and
management, parallel cooperation". At the same time, we clearly require relevant positions in supply chain management to have comprehensive
comprehensive evaluation. When introducing new suppliers, we
professional capabilities in pharmaceutical expertise, logistics management, and information technology. We also include inventory turnover rate,
systematically evaluate their scale, quality assurance ability, product
drug sampling qualification rate, supplier compliance rate, and the proportion of green procurement in performance evaluation, and implement
delivery ability, and after-sales support ability, and carefully identify
incentive measures based on performance results to promote the effective implementation of management requirements.
their business stability and performance ability to ensure that the
supply source is clear, compliant, and controllable.
Supply Chain Security Governance Framework
In the specific access review process, we focus on potential issues
Decision- The Board of Directors and the Chief Security Officer (CSO) of the supply chain such as whether the supplier has business risks, litigation or
making Layer • Responsible for coordinating the direction of supply chain security governance, formulating administrative penalty records, and historical quality complaints. We
security strategies, and making decisions and providing supervision on the admission of major also legally require them to provide relevant certification materials to
suppliers and key risk matters. ensure that the supplied products meet the requirements of national
laws, regulations, and quality standards, and improve the
transparency and traceability of the supply chain from the source.
The dedicated Supply Chain Management Department comprises the Quality Control Team (led by
a licensed pharmacist), the Data Security Team (led by a data engineer), and the Logistics
We also systematically integrate environmental protection and social
Executive Operations Team (led by a cold chain expert)
responsibility requirements into the supplier screening and access
Layer • Responsible for implementing requirements such as supplier audits, traceability
mechanism, setting clear standards in key dimensions such as
management, and temperature control monitoring, and for coordinating the standardization
and digitalization of category planning, supplier management, and related management environmental compliance, resource utilization, business ethics, and
processes. employment norms. We conduct pre-verification through the supplier
management platform and do not allow non-compliant suppliers to
enter. We give priority to cooperating with suppliers that are qualified
External expert committees (university scholars, former drug regulatory inspectors) and third- and compliant and practice sustainable development. We identify
party auditing institutions. and control potential environmental and social risks from the source,
Support Layer
• Provide professional consultation, independent assessment, and compliance review continuously reduce the negative impacts related to the supply chain,
support for supply chain security and supplier quality management. and promote the steady evolution of the supply chain towards a
green, standardized, and sustainable direction.
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Supplier Environmental and Social Access Criteria (Partial)
To ensure the continuous and stable quality of drugs, we have formulated documents such as the Supplier Quality Assurance System Evaluation
Environmental Access Criteria Criteria and the Chinese Medicine Bidding and Quality Assessment Guidelines, and established a comprehensive supplier assessment and
evaluation system. We continuously monitor and dynamically evaluate the supplier's performance ability, quality performance, and potential risks
to ensure that they always comply with the Company's quality management requirements and legal and regulatory standards.
We have established a triple-quality evaluation mechanism centered on on-site inspections, quality comparison tests, and evaluations of efficacy
• Passed ISO 14001 environmental management system
and quality perception. Before conducting on-site inspections, we conduct a preliminary review of suppliers based on indicators such as the
certification
company's scale, development history, operation of the quality assurance system, product quality reputation, and price rationality. If significant
• Submit full life cycle carbon footprint data, and require key risks are found after evaluation, we will immediately terminate the cooperation, require rectification, and simultaneously conduct risk analysis and
category (such as Chinese medicinal materials, packaging follow-up verification of the supplied products to ensure effective closed-loop management.
materials) suppliers to have a carbon intensity 20% lower
than the industry average
Quality Evaluation Mechanism
• Prohibit cooperation with suppliers that use highly polluting
processes (such as traditional coal-fired boilers)
• Chinese medicinal material suppliers must pass GAP (Good
Agricultural Practice) certification Reviews on
Quality
Give priority to choosing suppliers of drug outer packaging Efficacy and
• On-site Visits Comparison
boxes that use degradable materials (such as PLA bioplastic) Quality
and Inspection
Perception
The Quality Management Department Quality comparison inspection involves The Quality Management Department
Social Access Criteria dispatches dedicated personnel to monitoring and analyzing key indicators invites health advisors from stores to
conduct unannounced on-site of products, including content, related conduct paper or online questionnaires
inspections of the potential cooperative substances, heavy metals, dissolution on the perception of product efficacy,
manufacturing enterprises. Based on rate, content uniformity, friability, etc., appearance quality, packaging material
• Possessing the relevant qualifications for drug production or the GMP inspection criteria, an and conducting comparisons among and brand.
operation in accordance with the law and having passed assessment and rating of the similar products based on the
quality management system certifications such as ISO 9001 enterprise's quality management inspection results.
• Having signed the Integrity and Self-discipline Commitment system is carried out to gain an
Letter, clearly prohibiting commercial bribery, unfair understanding of the true situation of
competition and other such behaviors the enterprise.
• Meeting the requirements for labor employment and
employee rights protection, and providing the required proof
Regarding the regular operation of the quality evaluation mechanism, we arrange multiple-frequency supplier assessments through annual audits,
materials such as labor contracts and social insurance
surprise inspections, and dynamic monitoring. The annual audit focuses on a systematic evaluation of the supplier's overall annual performance,
payment records
operation of the quality system, and compliance; surprise inspections are carried out irregularly for key or high-risk suppliers, focusing on checking
• Having no major illegal or disciplinary records or serious the production site, process execution, and key quality control links; dynamic monitoring relies on a digital system to track quality indicators,
negative public opinions, and suppliers with potential performance, and key risk signals in real-time, identify potential problems in a timely manner, and trigger corresponding disposal processes. The
compliance risks will not be admitted coordinated operation of the multi-level assessment mechanism effectively enhances the ability to proactively identify and quickly respond to
supplier quality risks.
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Meanwhile, based on the differences in the importance and potential Based on the assessment and evaluation results, we implement
risks of suppliers, we implement a hierarchical audit management for dynamic management of suppliers and take management measures
suppliers and configure corresponding audit depth and trigger such as continuous cooperation, rectification within a time limit, or
conditions. Through differentiated audit arrangements, while termination of cooperation accordingly. In 2025, we terminated our
reasonably allocating management resources, we strengthen the partnerships with a total of 98 suppliers, both current and
process supervision of key and high-risk suppliers and improve the prospective, and implemented on-site supervision and monitoring of
pertinence and effectiveness of the audit work. our core suppliers. By continuously improving the supplier
assessment and evaluation mechanism, we have effectively reduced
supply chain risks and ensured the stable and reliable supply of
Material Supplier Audit Process
medicines.
Supplier Categories Supplier Audit Process In addition, we provide quality assurance training to all suppliers
every year, covering topics such as the solution of product violation
problems and product quality standards, to ensure that suppliers can
strictly comply with our quality standard system and are committed
Conduct supplier qualification
to improving the supplier's quality management level.
•
Class A Suppliers review and on-site quality audit
before suppliers' first delivery
• Conduct supplier qualification
reviews To achieve refined management of suppliers, we have established a Grades of Suppliers in 2025
• Organize on-site audits when supplier quality risk rating mechanism, conducted annual evaluations
quality issues arise with of suppliers, and implemented dynamic management. This rating
Class B Suppliers materials or when significant system combines the quality characteristics of different medicines, Grade E Grade A
changes occur in the supplier's sets corresponding scoring standards for various quality problems,
production conditions, and divides suppliers into five levels: A, B, C, D, and E, corresponding
processes, quality standards and to different risk levels, thus intuitively reflecting the supplier's quality
other key factors performance and risk status.
Grade D
• Conduct certification audit of
For suppliers of different levels, we have developed differentiated
supplier management strategy. For Grade A Suppliers, we offer more
Class C Suppliers
suppliers cooperation opportunities and preferential policies to encourage
them to maintain a high-quality level continuously. For Grade B and C
Suppliers, we promote their continuous improvement through
enhanced communication and guidance. For Grade D and E Suppliers
To enhance the independence and professionalism of supplier
with higher risks, we increase supervision and take measures such as Grade C Grade B
assessment and evaluation, we introduce third-party professional
restricting cooperation or elimination when necessary. Through
institutions to participate in the evaluation of quality testing, ESG
hierarchical and classified management, we have achieved precise
compliance, and sustainable development performance. Through
allocation of supplier resources, improved management efficiency
third-party testing and review, we conduct professional evaluations
and flexibility, and provided strong support for the stable and efficient
of the quality of medicines and key raw materials, environmental
operation of the supply chain.
performance, employment compliance, and business ethics risks,
and incorporate the results into the supplier comprehensive
assessment system as an important basis for subsequent
management and cooperation decisions.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Supply Chain Risk Management
We focus on key links such as procurement, warehousing, logistics and distribution, and supplier collaboration, and systematically carry out supply
We deeply identify potential risks in the supply chain and chain risk identification and assessment. We examine the potential impacts of relevant risks on business operations from dimensions such as
comprehensively evaluate their potential impacts to pre-develop pharmaceutical quality and safety, supply stability, operational efficiency, and compliance and sustainable development. We combine internal and
response strategy, enhance risk resilience, and forge a strong external information such as the entire procurement process data, supplier qualifications and performance, industry regulatory requirements, and
protective net for the three-dimensional supply chain layout of external environmental changes, and use a combination of quantitative and qualitative methods to comprehensively identify and assess supply
smooth channels and source construction. chain-related risks and opportunities. We prioritize them according to factors such as the probability of risk occurrence, impact degree, and control
cost, and clarify the management focus of different risks to provide a basis for implementing hierarchical and classified management and targeted
In risk management practice, we take safeguarding compliance,
responses.
ensuring product quality and patient safety, improving operational
efficiency and enhancing business continuity as the core objectives,
balance cost control and long-term sustainable development, Impacts, Risks, and Opportunities in Supply Chain Management
promote the construction of a supply chain system that is safe,
efficient, economical and resilient, and further conduct continuous
tracking and evaluation of risk management effectiveness by defining Impact Risk Opportunity
quantitative indicators.
• Improve supply chain safety and • Supply chain optimization • Improve efficiency, reduce costs, and enhance
Supply Chain Risk Management Objectives transparency, strengthen and upgrading (such as business continuity by improving the automation
pharmaceutical quality control system construction, level of the supply chain, optimizing operational
and traceability capabilities, equipment update, green management, and applying digital tools.
Quality and Safety
ensure customer medication packaging/new energy • Build a regional warehousing and distribution
Traceability code Cold chain medicine Data security safety, and promote transportation, etc.) require system, promote multi-warehouse operation and
coverage rate: disconnection rate: compliance rate: pharmaceutical accessibility. upfront investment, which regional integrated logistics collaboration,
• Improve supply chain efficiency may increase costs in the improve the ability to respond to emergencies
through process standardization short term and put pressure and changes in market demand, and enhance
and digital operation, reduce on cash flow. core competitiveness.
inventory backlog, improve • The increased reliance on • Improve supply stability and capital turnover
Zero incidents of customer privacy leakage, and zero turnover and fulfillment automation and digital efficiency, reduce inventory backlog, and
anomalies in drug quality and safety. capabilities, and drive the systems may lead to an improve cash flow quality through supplier
improvement of operational increase in operation and grading and early warning mechanisms,
efficiency. governance complexity, and centralized procurement and local procurement
• Strengthen compliance and risk at the same time, bring collaboration, etc.
control, reduce violation losses about supporting pressures The green supply chain aligns with the ESG
Efficiency and Cost
•
and potential penalty risks, such as personnel skill compliance capability to support the sustainable
Inventory turnover Logistics cost: Out-of-stock rate: improve business continuity and transformation and training strategy, reduce long-term compliance and
the ability to resist emergencies, costs. carbon risks, enhance brand and financing
rate: and support business expansion competitiveness, and create space for value
times/year decrease and business model robustness addition in new businesses/ecosystems (such as
in the medium and long term. the extension of data capabilities).
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Based on the systematic identification and assessment of supply chain risks, we further establish a supply chain risk management and response Meanwhile, we also actively participate in various industry exhibitions,
mechanism centered around prevention, graded response, and digital support. This forms a closed-loop management system covering pre-event professional lectures, and seminars. We discuss the supply chain risk
prevention, in-process control, and post-event improvement, continuously enhancing the stability, flexibility, and response efficiency of the supply situation in the industry with peers and partners, exchange and share
chain operation to ensure the safe, reliable, and continuous supply of medicines. practical response strategies, and contribute to the continuous
improvement of the risk management system and the enhancement
Focusing on key risk types such as supply disruptions, abnormal deliveries, quality compliance, and inventory fluctuations, we integrate risk of risk response capabilities in the entire industry, thus laying a solid
management requirements into the daily operation of the supply chain. By coordinating the supply structure, resource allocation, and operational foundation for the stable and healthy development of the industry's
collaboration, we promote the regular implementation of risk mitigation measures. These risk management measures cover both risk prevention supply chain.
and mitigation in normal operations and emergency response arrangements in case of emergencies, ensuring rapid linkage and effective handling
in different risk scenarios. In addition, we continuously enhance the regional resilience of the
supply chain through mergers, acquisitions, integration, and
technological innovation. By integrating regional resources,
optimizing the logistics and warehousing network, and promoting the
Supply Chain Risk Management Measures
application of intelligent and digital technologies in all aspects of the
supply chain, we continuously improve the overall operation
By implementing a dual procurement and diversified supply strategy, maintaining multi-source supply in key categories effectively efficiency and collaboration ability of the supply chain, providing
reduces the risk of supply disruption caused by over-reliance on a single source. long-term and stable capacity support for supply chain risk
management and emergency protection. While consolidating the
safety foundation of the supply chain, we further enhance the overall
Promote the layout of localized procurement, shorten the supply radius, and reduce the impact of transportation uncertainties and competitive advantage.
regional factors on the stability of supply.
Based on the product's importance and demand characteristics, set safety stock and priority guarantee standards, and ensure the
continuous supply of core medicines through cross-regional allocation of backup manufacturing sites and resource coordination.
Establish a warning and review mechanism for contract renewal, and carry out connection arrangements in stages before the contract
expires to avoid supply risks caused by contract expiration.
Establish a tiered response and emergency handling mechanism for delivery anomalies, quality or compliance risks, promptly activate
backup suppliers, switch procurement channels or implement emergency allocation to ensure continuous business operation.
Relying on digital systems such as SRM, the entire process of procurement execution, order fulfillment, inventory turnover and key
product delivery is monitored to achieve real-time risk early warning, rapid response and closed-loop improvement.
In light of business development and changes in market demand, we will coordinate production capacity and resource allocation,
enhance the overall stability of the supply chain by expanding production bases, coordinating raw material and product supplies in
advance, and reserving alternative supply resources.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Improving Service Quality
Yifeng Pharmacy always focuses on customer needs and adheres to the original intention of "making people physically and mentally healthy", committed to setting a health benchmark. We have formulated systems such as
the Pharmaceutical Service Management System and the Pharmaceutical Service Management System for Stores. Through a scenario-based model, we integrate pharmaceutical services, preventive healthcare, medication
tracking, chronic disease management, and health lifestyle consulting to build a comprehensive health service system. With a professional service system, strict marketing regulations, and omni-channel interactive
experiences, we provide customers with safe, professional, and considerate services to promote the improvement of the national health level.
Professional and Accurate Services
Our Service Philosophy Our Service Team Our Membership System
We adhere to the professional and humanistic service We attach great importance to the construction of a professional service team. More We have established a multi-level membership system and built
concept, build a comprehensive service system, than 95% of frontline employees have a medical or pharmaceutical background, and we a health management service system covering all channels, all
promote the "peak-end experience" service model, are equipped with licensed pharmacists to provide services such as medication scenarios, and the entire life cycle centered around members. In
implement the service principles of "Three Dos" and consultation, medication guidance, and adverse reaction monitoring, promoting the response to the diverse health needs of members, we have
"Three Nos", and adhere to the value orientation of transformation of stores into "health solution providers". We focus on "precise launched the "88" membership benefits, including 8
"selflessness and altruism". We require employees to medication", requiring store health advisors to make precise recommendations professional membership services (such as complimentary tea
prescribe the right medicine according to the according to diseases and using big data to optimize medication suggestions. We have and decoction of herbs and gelatin) and 8 exclusive benefits
symptoms, make recommendations according to established a systematic training system to train many grassroots personnel to become (such as member discounts, point redemption, and health
needs, clearly explain the basis for recommendations, health advisors with pharmacist qualifications, and regularly train and assess store advisors). While providing convenient services and practical
and provide considerate and professional medication employees on relevant standard requirements and medical knowledge. For core benefits, we strengthen professional health support. Relying on
guidance and health management. Relying on a treatment drugs for common diseases (such as antihypertensive drugs and the enterprise WeChat platform, we establish a regular digital
widely covered service network, we steadily expand hypoglycemic drugs), we have established a professional knowledge base to push interaction mechanism with members, providing one-on-one
and optimize our stores, coordinate online and offline scientific and reasonable combination medication examples to employees, and medication consultation and professional follow-up services,
platforms to form an integrated health service model, introduced electronic medical records and intelligent consultation systems for auxiliary continuously tracking members' health needs, and helping
and improve service accessibility and experience guidance. In addition, we have formulated the Store Member Management Incentive them gradually establish scientific health concepts and good
consistency. Program to stimulate the enthusiasm of employees and improve service capabilities. medication and lifestyle habits.
We continue to make efforts in professional pharmaceutical services, focusing on the management of chronic non-communicable diseases (chronic diseases). Through customized chronic disease management plans, we
provide services such as professional medication guidance, medication reminders, disease course management, health monitoring, and popular science education for customers with chronic diseases, aiming to enhance
customers' awareness of diseases and self-management ability, improve medication compliance, and effectively promote national health.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Consumer Rights Protection mechanism with special training, we focus on the 9 key dissatisfied
scenarios identified throughout the year to carry out targeted capacity
remained at a relatively high level in the industry: the average ringing
time of customer service was 152.91 seconds (from answering to
improvement. This measure has effectively promoted the shift in the hanging up), the average manual response speed reached 4 seconds,
We integrate consumer rights protection into the entire process of awareness of front-line employees from "passive response" to "active and the complaint resolution rate reached 84.65%.
business management and are committed to building an excellent service", and continuously optimized the overall service level.
customer experience. We actively identify customer demands through
a regular customer satisfaction survey system; rely on a standardized
and efficient closed-loop complaint handling process to promptly
We strictly abide by laws and regulations such as the Advertising Law
respond to and resolve feedback. At the same time, we adhere to the
of the People's Republic of China and the Measures for the
principle of responsibility in the marketing and service process,
Administration of Medicine Operation and Use Quality Supervision,
strengthen compliance review, ensure information transparency, We have built a multi-channel, full-process, and traceable complaint
upholding the compliance baseline for medicine promotion. We have
prudent recommendations, and fair transactions, and effectively management system to ensure that customer demands are
established a systematic compliance review and approval mechanism
safeguard consumers' right to know, right to choose, and health responded to in a timely and standardized manner. Centering around
to ensure that promotional materials in our stores are truthful and
rights. the "400 Call Center" and "Online Customer Service", we integrate
objective, effectively safeguarding the authenticity and compliance of
multiple contact points such as receipt scanning, WeChat payment
all promotional content.
entry, manager hotline, official account, audit channels, and public
opinion platforms to achieve full coverage of complaint feedback A dedicated team is responsible for the unified production of
channels. promotional and advertising materials, which undergo rigorous
We conduct monthly comprehensive customer satisfaction surveys
review by professionals before being distributed. This ensures
and have built an evaluation system centered on the Net Promoter After all complaints are accepted, the customer service team
consistent messaging and standardized presentation across both
Score (NPS), covering multiple dimensions such as service attitude, uniformly creates digital work orders to completely record key
directly operated and franchised channels. Additionally, we have
professionalism, in-store environment, cashier efficiency, convenience information for traceability. The work orders are transferred to the
implemented an internal responsible marketing inspection
services, product variety, and drug quality and price. We particularly responsible stores or departments according to the nature of the
mechanism, with relevant departments reviewing all external
focus on the implementation of key actions in the "peak-end complaints to ensure that the complaint matters reach the processing
promotional materials to guarantee the legality and compliance of
experience" and introduce a competitive comparison perspective to terminal immediately.
publicly disseminated content.
comprehensively evaluate the Company's competitiveness and
We have set a hard-time target of completing complaint handling
customer reputation in the local market. Furthermore, we carry out regular marketing audits focusing on key
within 48 hours. Customer service staff actively follow up on the whole
issues such as checkout price discrepancies, infringement of member
Based on the survey data, we compile monthly and quarterly NPS process of complaint matters to ensure closed-loop resolution. For
rights, and unprofessional recommendations that may harm
Survey Report, conduct in-depth analysis of the month-on-month overdue work orders, the system will trigger a step-by-step feedback
consumer interests. In response to violations, we take actions ranging
changes and horizontal differences in indicators, accurately identify from "work order handler-store manager-store director-branch
from warnings to internal notifications based on the severity of the
customer pain points, and formulate improvement plans. In 2025, the customer service", and link with the reward and punishment
case, strengthening internal accountability, promoting closed-loop
Company collected approximately 30,000 customer satisfaction mechanism in the 100% Customer Satisfaction Improvement Program
corrective measures, and preventing the recurrence of similar
survey questionnaires each quarter, and the overall customer to strengthen the implementation of responsibilities.
incidents.
satisfaction score was 80.01, maintaining a relatively high level in the
Meanwhile, we implement hierarchical management of complaints
industry. To enhance the compliance awareness of all employees, we conduct
and strictly conduct investigations in accordance with the Customer
annual special training on responsible marketing for all employees,
To deepen customer experience management, we set the customer Complaints and Adverse Reaction Handling Management Procedures.
covering knowledge of consumer rights and legal protections. We
service hotline net satisfaction target at 85% and incorporate it into The handling process covers aspects such as customer
guide Employees to adhere to the principle of "putting consumer
the performance assessment of the customer service team, communication, on-site verification, sample verification, and
interests first" in marketing activities, promote the effective
promoting the focus of satisfaction management to shift from result medicine quality re-examination. If there are problems related to
implementation of responsible marketing requirements at the front-
monitoring to process control. We have established an "active product quality, we will immediately initiate a recall procedure and
line of stores, and consolidate brand credibility. As of the end of the
invitation for evaluation + closed-loop follow-up" mechanism, promptly feedback the handling results to customers to effectively
Reporting Period, the Company has not had any major violations
covering key nodes such as inbound service, restart of interrupted safeguard the legitimate rights and interests of consumers.
related to product/service information and labeling or marketing
business, and follow-up after complaint handling, forming a
We also regularly conduct multi-dimensional analysis of complaint activities.
management closed-loop mechanism of "feedback-improvement-re-
data, focusing on the distribution of complaint types, processing
evaluation".
efficiency, and customer feedback. We transform typical cases into
Meanwhile, we continuously iterate on the 100% Customer internal learning materials to drive continuous service optimization. In
Satisfaction Improvement Program. Combining the incentive 2025, the customer service operation efficiency of the Company
Enhancing Benefits
and Efficiency for
Improved Medication
Accessibility
Yifeng Pharmacy aims to improve both the efficiency of medical
services and social benefits. It is committed to improving the layout of
the medical network, strengthening service coverage and reachability;
using digital and intelligent technologies to empower the operation
and logistics systems, improving service efficiency and operational
stability; and while ensuring drug quality and supply safety,
continuously empowering the industrial source and grass-roots areas
to promote the development of medical and health services in a more
efficient and inclusive direction, and jointly building a sustainable new
ecosystem of medical services.
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Smooth Medical Network
Yifeng Pharmacy adheres to the business philosophy of "fair pricing
with professional service" and is customer-demand-oriented. It is
committed to providing customers with high-efficacy, cost-effective
Reasonable
and easily accessible drugs, as well as reliable pharmaceutical Accessibility
Pricing
services. In a basis of traditional pharmacy operations, we
continuously identify and respond to the diverse, full-cycle health In addition to continuously expanding the offline store layout With a procurement scale of over 10 billion RMB, we convert the
management needs of our customers. By establishing traditional and building a modern logistics network, we have established scale advantage of the supply chain into terminal price benefits
Chinese medicine clinics, offering on-site TCM consultation services, 24-hour service stores to meet customers' medication needs at through non-centralized national price comparison, channel
setting up outpatient departments and in-store clinics, developing all hours of the day, thereby continuously improving the integration, and repeated bargaining. At the same time, we
internet-based healthcare services, as well as building the convenience of purchasing medications. vigorously develop private-label products to provide customers
Hengxiutang Chinese Herbal Medicine Factory, we are steadily with cost-effective drug options.
expanding into medical services and the upstream industrial chain.
We enrich our service offerings and delivery methods to provide Variety
comprehensive, one-stop health solutions for the people. Supply Stability
We have established strategic cooperative relationships with
Facing the development trend of increasing chain-store rate and
globally leading pharmaceutical companies and top 100 We have established long-term and in-depth strategic
market concentration in the pharmaceutical retail industry, we
pharmaceutical companies in China. The variety of retail drugs cooperation with important pharmaceutical companies in
adhere to the development strategy of "holding regional focuses and
exceeds 70,000 SKUs, covering Chinese and Western patent China and continuously upgraded the logistics network. We
performing steady expansion" and adopt a diversified expansion
medicines, Chinese herbal medicines, health products, medical improve the cross-regional allocation efficiency through a digital
model of "new store + merger and acquisition + franchise" to
devices, and daily convenience products related to health. system to ensure fast delivery services within 48 hours
continuously improve the breadth and depth of the store network
nationwide and 24 hours within the province.
coverage, meeting customers' immediate drug-using and health
service needs. At the same time, we continuously expand the online
Timeliness
and offline business layout, aiming to improve the consumer
experience through large-scale operation, and ensure that customers
can enjoy more accessible high-quality products and services in terms By leveraging our network of brick-and-mortar stores located
of purchase convenience, product variety, timeliness of drug within communities, we have effectively reduced the distance
purchase, pricing rationality, and supply stability. customers must travel to purchase medications, enabling
patients to obtain the medications they need promptly within
their daily living areas and improving both the timeliness and
accessibility of medication.
We continuously promote the construction of the retail network, build an omni-channel layout with coordinated online and offline development,
and precisely cover diverse customer groups. Offline, we promote the "fleet-type" store layout, focusing on covering 10 provinces and cities in
Central South, East, and North China. The network extends to 72 prefecture-level cities and over 250 county-level cities, consolidating the regional
service foundation. Online, we continuously improve the business system integrating traditional and new retail models, build intelligent retail
channels covering B2C, O2O, APP + Mini Program, and private traffic, and expand new service scenarios such as Internet hospitals and electronic
prescriptions, providing customers with more convenient and affordable drug-purchasing and health service options. At the same time, we open
direct-operation franchising. On the basis of providing stable business support to franchise stores, we further promote the extension of medical
services to grass-roots areas and continuously improve the coverage of pharmaceutical products and health services.
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As of December 31, 2025
Offline Retail Layout
Specialty Medicine
Flagship Stores Stores (DTP Specialized
Pharmacies)
Offline Stores
(including 4,313 franchise stores) "Dual-channel"BMI
Designated Outlets
Regional Central
Stores
Stores Special
Flagship stores Regional Medium-sized Retailing Stores Special and Chronic
Offline
Retailing
Coordinated Stores
Medium-sized
Community Stores
Hospital-
adjacent Stores
Small-sized DTP specialized
pharmacies Small-sized
community stores
Community Stores 24-hour Service
Traditional
Medicine Stores
Clinics
"Dual-channel" BMI Hospital adjacent stores
designated outlets
We combine the population structure, medical resource distribution, and customers' drug-using needs in different regions to continuously improve
the offline retail network system covering multiple cities and business districts, forming a "fleet-type" store layout centered on flagship stores,
provide "one-stop" services with a wide range of products and integrated functions, while small and medium-sized community stores precisely
Chinese medicine clinic)
cover the daily medicine-using needs of communities by being close to residents' living circles and rationally allocating product categories, ensuring
the accessibility and stability of medicine supply.
Meanwhile, we take "thoughtful service + new retail" as the strategic core and continue to promote the construction of the specialty pharmacy
The Company operates 10,000+ online stores (including system. Gradually, we have formed a professional service network covering various types of business forms, such as specialty medicine stores (DTP
specialized pharmacies), "dual-channel" BMI designated outlets, special and chronic diseases medical insurance coordinated stores, hospital-
franchise stores, adjacent stores, and 24-hour service stores. Focusing on the needs of patients' full-course management, we improve service links such as pre-
municipal medical insurance and health prescription circulation medication consultation, continuous treatment, rehabilitation management, and follow-up support. We also equip DTP pharmacies with chronic
platforms, nearly200 stores have direct or indirect disease management specialists to provide professional goal management, health monitoring, medication guidance, and health education, helping
chronic disease customers enhance their disease awareness and self-management ability. In addition, adhering to the principle of "customers first",
connections with hospitals (including 95 internet hospitals, we continuously optimize the service radius and response efficiency. 24-hour service stores offer self-pickup and home delivery services within a 3-
kilometer range, and hospital-adjacent stores are opened within 100 meters of hospitals, aiming to provide customers with a better, faster, and
and 10 self-built internet hospitals (including those under more convenient medicine purchasing experience.
construction).
To further promote pharmaceutical accessibility, we have opened township franchise stores in provinces such as Hunan, Hubei, Jiangsu, Jiangxi,
and Guangdong. Through the coordinated operation of multi-level offline networks, we expand health service channels in the grass-roots market,
meet the medication needs of different regions and populations, and promote the full coverage of regional markets.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Online Retail Channels
We continue to strengthen our retail service system centered on offline stores. Building on this foundation, we are moderately expanding our online service capabilities to complement and extend the services offered by our
brick-and-mortar stores. We develop an ecological new pharmaceutical retail platform based on the membership system, Internet healthcare, and health management. We promote the effective connection between online
diagnosis and treatment, chronic disease management, services such as health butlers and family doctors, and the physical store network, to meet the diverse and continuous health needs of different populations. In terms of
fulfillment, online orders are completed through the cooperation between the company's logistics system and physical stores, realizing online ordering, nearby distribution, and efficient delivery, expanding the service
coverage of our stores to better meet the daily medication needs of community residents.
B2C/O2O Internet Hospital
• We have established service touchpoints on major online platforms to serve as a • We have deployed Internet hospital services in many provincial capital cities such as Changsha, Nanchang, Nanjing, Shijiazhuang, Tianjin, Guangzhou, and
complementary channel to our offline store services. These touchpoints cover Haikou, covering multiple departments such as internal medicine, traditional Chinese medicine, integrated traditional Chinese and Western medicine, surgery,
more than 90% of the county-level administrative regions within our Company's and obstetrics and gynecology, continuously improving the accessibility and coverage of online diagnosis and treatment services.
operational area, further expanding the ways we reach customers and enabling
them to conveniently access store services across a variety of scenarios. • There are more than 3,000 registered doctors on our platform, and we have recruited and trained a professional team of licensed pharmacists. We have formed
a prescription review and quality management team consisting of more than 30 licensed pharmacists, strengthening the guarantee of prescription compliance
The online takeaway platform launch rate of our stores exceeds 95%. Relying on
and medication safety, and consolidating the professional foundation of online medical services.
•
the nearby stores' fulfillment and instant delivery system, we have achieved 30-
minute medicine delivery service covering more than 10,000 stores, and support
multiple scenarios such as night-time medication, emergency medication, and Internal Medicine
cold chain drug delivery, timely responding to customers' actual needs of
"urgent and special medication". Traditional Chinese Medicine
Integrated Traditional Chinese and Western Medicine
General Practice
APP + Mini Surgery
Program
Obstetrics and Gynecology
• Our APP + Mini Program realizes the integrated management of online and
offline products, supports the synchronization of product, membership, price, Pediatrics
and activity information, and ensures the consistency of services and rights in
Other Departments
different consumption scenarios.
• We continue to improve the online product supply, optimize the product
structure and service experience, and better respond to consumers' health Department Distribution of Practicing Doctors in Internet Hospitals
needs.
• To ensure the standardized and orderly development of relevant services in Internet hospitals, we have established and implemented supporting mechanisms
covering compliance, service quality, and operation management:：
We have formulated strict medical compliance systems, built a multi-license network hospital management system and an Internet hospital risk control
Private Domain
?
system, realized the connection between self-built network hospitals and third-party network hospitals and the upload of regulatory data, ensuring that the
Community
prescription compliance rate;
• We provide professional medication consultation services through the private ? We have launched a consultation and prescription system that supports text/graphic/video consultations, doctor management, and online mall
domain community and build a health communication platform to facilitate connection, serving more than 22,000 stores;
customers to obtain drug information, health knowledge, and health
We have improved the electronic medical record system and big data analysis, and used remote medical and encryption technologies to ensure the
preservation suggestions.
?
interconnection and information security of medical data;
• We systematically record customers' detection data and carry out chronic
We have optimized the diagnosis and treatment process, established a rapid response mechanism, reduced the proportion of abnormal orders to 3.05%,
disease management. We provide online health consultations through
?
and reduced the prescription rejection rate to 4.68%.
platforms such as enterprise WeChat, and store staff push medication guidance
and health care according to customers' needs, realizing personalized services ? Implement the assessment plan for full-time doctors and the subsidy plan for multi-practice physicians, covering assessment dimensions such as medical
and precise communication. quality and patient satisfaction, to motivate doctors to improve service quality.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Franchise Management
Regulations
As a leading enterprise in the pharmaceutical retail industry, we
actively convey the trustworthy brand value and the service concept To ensure brand consistency, we will All franchise stores must strictly We require all franchise stores to We have set unified standards and
of comprehensive health. We continuously improve the standardized uniformly arrange and designate units implement a unified management establish and use a unified processes to standardize the
and sustainable management system for franchise stores, taking the for the decoration design and basic system, including quality computer management system to management of business invoices
decoration (renovation) construction management requirements, price facilitate the headquarters' throughout their lifecycle,
guarantee of medication safety and service quality as an important
of all franchise stores. All materials systems, and promotion policies, unified digital control of the including entry, query, review,
prerequisite for the construction of the franchise system. In the
with the "Yifeng Pharmacy" logo used to ensure that franchise stores stores. and archiving, to ensure the
process of selecting franchise stores, we give priority to those with
during the construction process must have rules to follow. While financial compliance of
experience in the pharmaceutical retail industry, a practicing
be purchased at designated locations. continuously expanding sales franchisees.
pharmacist qualification certificate, and relevant professional At the same time, we require franchise channels, they can provide
knowledge. We also pay attention to their long-term cooperation stores to install network wiring and a customers with medicines with
willingness, awareness of compliant operation, and the degree of designated video surveillance system transparent prices and reliable
recognition of the Company's unified management requirements. We during the decoration process to quality, as well as professional
conduct a prudent assessment of their financial strength and stability strengthen subsequent management and convenient health services.
to ensure that they have the business foundation to support the and monitoring.
upfront investment in store leasing, decoration, and inventory
procurement. Franchise stores need to recognize and practice the
Company's brand culture and business philosophy, and provide safe
and high-quality services to customers. The location of franchise
Unified Corporate Unified Management Unified Computer Unified Bill
stores should be in accordance with the Company's market layout
Identification System System Management
strategy to ensure the maximization of brand image and market
influence. Before the official opening, franchise stores need to pass
the preparatory review and employee training to ensure that the store
"Seven Unifications" Management
operation conditions and staff capabilities meet the Company's
unified management standards, laying the foundation for the stable
progress and long-term development of the cooperation.
Unified Standards for Unified Procurement and Unified Personnel
In terms of franchisee management, we always adhere to high- Pharmaceutical Services Delivery Training
standard operations and fully implement the "seven unifications"
management model to ensure that franchise stores are consistent
with the Company in terms of brand image, product quality, All franchise stores must hold relevant licenses such as the As the sole supplier of goods, we To improve the management level of
professional services, and operational efficiency. Relying on the big- Drug Business License, the Business License, the Food implement unified procurement and franchise stores, we conduct regular
data store-location selection model and the intelligent franchise Distribution License, and the Class II Medical Devices distribution management. Franchise stores standardized training, including training for
management system, we implement full-process management of key Recordation Certificate, and strictly implement quality are strictly prohibited from purchasing new franchisees, annual training for
links such as franchise applications, location assessment, store control in accordance with the Drug Administration Law of goods privately. We have also formulated franchisees, training for reserve store
establishment and opening, and subsequent operations, effectively the People's Republic of China, the Good Supply Practice penalty mechanisms for violations such as managers and regional directors, as well as
improving the quality of new store expansion and operational for Pharmaceutical Products (GSP), and the Company's private purchases, cross-selling, and price online learning courses for employees of
stability. In addition, we provide comprehensive support to internal regulations, and accept irregular inspections and chaos. For franchisees who fail to make franchise stores and training to improve
GSP inspections. We strictly implement the "three-checks effective rectifications after multiple store managers' capabilities, to assist
franchisees, including opening planning, product planning,
and one-heavy-penalty" system. Through regular attempts, seriously violate the contract, or franchisees in optimizing store operations.
operational guidance, professional training, manufacturer support,
inspections and strict control, we ensure that franchise cause major quality and safety incidents,
and financing consultation. Through regular questionnaires, phone
stores meet the standards in terms of quality, service, and we will terminate the cooperation and
follow-ups, and on-site investigations, we continuously optimize the
compliance, thus ensuring the safety of customers' revoke the brand authorization in
franchise management and support system to promote the medication and maintaining the standardized order of the accordance with laws and regulations.
standardized operation and coordinated development of the industry.
franchise network.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Deepening Digital Intelligence Empowerment
Yifeng Pharmacy adheres to digital and intelligent capabilities as an We ensure the execution and R&D efficiency of innovative business through a flexible management model and an efficient organizational structure.
important engine for promoting high-quality development. We At the innovation execution aspects, we established a digital innovation group for people, goods, and places, focusing on the R&D of core products
continuously deepen the integrated application of digital for innovative business. Through precise and continuous resource investment, we systematically response to industry pain points and lay the
technologies in business management and operation, and foundation for the implementation of innovation. We have built the "Product and Business Analysis Business Partnership Model". Business analysts
systematically build a digital and intelligent system covering front- deeply analyze business requirements to help product managers optimize processes and reconstruct business models. At the same time, we
end operations, mid-platform operations, and back-end fulfillment, implement the "Technical Resource Team" model, dividing the technical team into multiple small teams and allocating resources according to
to continuously improve operational efficiency and service quality, business needs to ensure that technical support is closely integrated with business goals, thereby shaping the support capabilities for product R&D.
and enhance the stability and responsiveness of business operations.
At the same time, in the process of promoting technological In addition, we established the IT Strategy Committee and the COE (Centre of Excellence) organization. By connecting the front-and back-end
innovation and application implementation, we continuously pay collaboration and online and offline business processes, we closely integrate technology R&D with cross-departmental cooperation, effectively
attention to potential risks in technology ethics and compliance to evaluate business value to reduce decision-making waste and improve R&D efficiency, ensure that innovation results are quickly transformed into
ensure that digital and intelligent development proceeds steadily on practical applications, promote digital transformation, and optimize production capacity.
a standardized, prudent, and sustainable path.
Original The requirements proposed by various business lines are aggregated into a requirement pool, covering
Requirements different business scenarios such as products, functions, and services.
Innovation-Driven Approach L1 At the COE's weekly meeting, the requirements are initially clarified to ensure that they are clearly
described and the objectives are well-defined. The necessity, feasibility, and priority of the requirements is
Clarification also preliminarily assessed.
We take "customer-centric operational services, efficient and agile
supply chain capabilities, and efficient and innovative organizational Monthly requirement alignment meetings are held to conduct an in-depth analysis of the requirements
talent development mechanism" as the strategy and goal of that have been screened through L1 phase. The value impact on business and the technical
L2 Alignment
technological innovation, and are committed to achieving a leading COE Operation implementation difficulty are assessed, and the consistency of requirements across departments is
ensured.
digital business level in the industry. To achieve this goal, we Mechanism
reasonably allocate capital resources based on our own business
At the project initiation review meeting of the Digital Strategy Committee, the requirements that have
situation and adopt a diversified financing strategy. Through a sound
been screened through L2 phase are reviewed for approval. This ensures that the requirements align with
capital management system, we ensure the sustainability of L3 Review the Company's overall strategic goals and determines the resource investment and development plan for
investment in technological innovation and maximize the efficiency of the project.
capital use. In the process of innovation, we strictly abide by
intellectual property laws and regulations, respect and protect our Requirements that have passed the final review officially enter the R&D process. The system team
proceeds with development, testing, and implementation according to the established plan, driving the
own intellectual property rights and the achievements of others. System R&D Company's digital transformation and providing efficient and stable technical support for business
operations.
In 2025, we deepened R&D innovation and technology application, and the innovation results were implemented more quickly in multiple business
scenarios. In terms of customer service, we launched a precise reception assistant. Based on membership labeling and big-data model calculation
empowerment, we created a system for store clerks covering goals, incentives, tasks, diagnosis, and training, and introduced AI technology to build
The Company's innovation and R&D expenditure reached a closed-loop for professional ability improvement of "learning-reception-practice-consolidation", continuously strengthening front-line
RMB 42.532million, with 382 R&D personnel. employees' professional judgment ability and service execution ability, and comprehensively improving the professional level of store clerks and
Customers' satisfaction. In terms of compliance operation, we established a medical insurance risk control and supervision system based on big-
data models, strictly setting risk control and supervision rules according to national medical insurance supervision requirements to effectively avoid
the risk of medical insurance fund fraud. In terms of supply chain management, we built a supply chain center to break through the efficiency
bottlenecks in each link, effectively improving store turnover, product availability, and traceability transparency.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Operational Efficiency Digital System Framework
Improvement
Employees Users
We regard digital management means as the core to improve the
operating efficiency of the retail network and the refined
management level. Focusing on the characteristics of the Business Middle End
Business Intelligent
Middle End
pharmaceutical retail business, we built a full-chain digital system Medical
Retailing Stores
covering "store operation-supply chain management-membership Insurance
Event Data
service-employees' management". Through a standardized and Membership Product Salesman Marketing
tracking governance
progressive construction path, we steadily promoted the system R&D
of the middle platform and the large front-end, and empowered Payment Transaction Quality Task User profile
Data
application
traditional operation management with digital and intelligent
Opened Platform
technologies. Our digital system supports store operation, POS Public Domain Point of Sales
Platform (POS)
payment, medical insurance services, public platforms, drug
Technical Service Middle End
supervision, etc. externally, and undertakes various functional
modules such as personnel, finance, and materials of the
headquarters internally. While ensuring the steady expansion of Cache
Message
Database Tracing
High High
queue availability concurrency
business scale, we continuously improve internal operating efficiency Medical
and process operation quality. Products Headquarter
Supervision
Human Resources Finance OA
We continuously improve our digital operation capabilities through key means such as the construction of new technology frameworks, the
governance of system sub-health, the improvement of main-link performance, and the optimization of approval processes.
Digital Operation Enhancement Initiatives
Upgrade the system framework By optimizing various By optimizing system performance and the main Analyze process authorization
based on the Springboot aspects such as the system links, we upgraded the existing technical from the prospective of time
technology architecture, database, log analysis and architecture, resulting in significant improvements consumption, value, and pass
optimize the R&D process, and network traffic, we have in system performance and stability. This ensured rate based on the RAPID model,
improve system performance reduced system alerts and the system successfully withstood the peak and reduce and optimize
and development efficiency. improved stability. demands of major sales promotions and our nonessential process nodes to
company anniversary, while reliably supporting increase the approval efficiency
the operations of over 30,000 stores. across the entire system by 26%.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
We conduct refined membership operation and precise marketing, We continuously promote the digital construction of human
and actively promote the development of online diagnosis and resources, systematically improving the operating efficiency of core
treatment and chronic disease services to improve users' repurchase modules such as recruitment, signing, performance, salary,
rate and brand loyalty. Through the in-depth integration of promotion, scheduling and attendance, talent inventory, and
membership behavior data and user portrait analysis, we enhance development. We designed a three-year panoramic view of human
users' brand recognition and professional dependence on Yifeng resources digitalization and promoted the implementation of key
Pharmacy, effectively improving their consumption experience. As of projects with the DHR system as the core, covering key scenarios such
the end of the Reporting Period, our online membership has exceeded as intelligent staffing and scheduling, digital talent supply chain,
remuneration incentives, and licensed pharmacist management.
Among them, the Core HR project has been launched and the rules
and processes have been optimized, laying a solid foundation for the
human resource management system. At the same time, we
We focus on building an industry-leading, efficient, and agile product strengthen the governance of human resources data and system
management system, and continuously promote the digital and operation and maintenance, standardize the management of human
intelligent upgrade of the product management system, building a resources master data, reducing the number of incremental errors in
product operation mechanism centered on demand identification, human resource master data to single digits per month. Through the
prediction decision-making, and efficient fulfillment. We achieve a hierarchical operation and maintenance mechanism, we improve the
rapid response to out-of-stock and emergency medication scenarios system stability and response efficiency, promoting the continuous
through intelligent coordination, out-of-stock registration, rapid evolution of human resource management towards an efficient and
procurement in medical cold areas, and daily distribution from the standardized digital model.
front-warehouse. Relying on data analysis for automatic inventory
replenishment and the medication cycle model, we conduct pre-
judgment and precise replenishment of medication demand. We also
link systems such as intelligent replenishment, intelligent returns, and
online supplier rebates to improve product availability and inventory We continuously improve the integration of business and finance,
turnover efficiency, and promote the transformation of product achieving intelligent and automated management in multiple links
management to demand-oriented refined operation. such as budgeting, cost control, and reimbursement. This effectively
improves the efficiency of financial control and supports the Company
to achieve high-quality financial services and control during rapid
expansion.
We adhere to integrated construction and continuously improve the
digital product system around new retail business scenarios.
Supported by CRM and big data, we have completed the construction
of platforms such as public domains, private domains, and Internet
We independently developed and iterated the Yifeng Transportation
hospitals, promoted the strategic upgrade of "new retail + thoughtful
Management System (TMS), which covers multiple functions such as
retail", and laid a solid foundation for the digital transformation of
dispatching management, freight calculation, temperature and
retail business. In terms of O2O fulfillment services, we drive efficiency
humidity monitoring, and turnover box management, achieving
improvement through digital upgrades. We independently developed
online and closed-loop management of the entire process of
and launched a mobile intelligent picking system, which increased the
warehousing, distribution, and transportation. At the same time, we
store picking accuracy to 99.9% and the picking efficiency by 40%, and
introduced an intelligent dispatching engine and the ability to
kept the average delivery time stable within 35 minutes. As of the end
optimize loading routes, promoting the transformation of the
of the Reporting Period, the Company has more than 10,000 directly-
dispatching link to intelligent vehicle dispatch, with the proportion of
operated stores on the O2O platform, and the picking efficiency,
intelligent dispatching vehicle dispatch increasing to over 85%.
delivery timeliness, and labor efficiency are all in line with the
Through the unified dispatching and control of the TMS system, we
industry's leading level.
continuously improve the efficiency and stability of logistics
operations, effectively strengthening the quality control ability during
the commodity transportation process while ensuring delivery
timeliness.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Smart Logistics
Based on the efficient fulfillment needs of pharmaceutical retail, we We focus on the characteristics of the retail business and the drug demand of stores, and continuously promote the automation and intelligent
continuously build a "highly efficient, flexible, and agile" digital smart construction of the logistics network. In the logistics system planning, we fully consider the actual operational needs such as store replenishment
logistics supply chain platform around core links such as warehousing rhythm, category structure, and return processing, and systematically improve the operational efficiency of key links such as incoming goods
operations, logistics transportation, and logistics operation acceptance, shelving, piece-picking, rechecking, goods collection and loading, and reverse logistics. We focus on core links such as warehousing
management. Guided by actual operation scenarios and relying on management, picking and sorting, and transportation and distribution, and build a visual and intelligent management system covering the whole
professional digital technology R&D and application capabilities, we process of in-warehouse operations and distribution fulfillment. By introducing automated three-dimensional warehousing, intelligent
systematically sort out and optimize key logistics nodes. Guided by replenishment and picking equipment, automated outbound goods collection solutions, and cold-chain visual monitoring and efficient distribution
the 3C principles (Cost, Close, Convenient), we continuously improve operation modes, we promote the upgrade of logistics operations from single-point automation to system coordination and overall optimization,
the end-to-end service ability of the logistics system, striving to fulfill and continuously improve the stability, response efficiency, and fulfillment ability of logistics operations.
the delivery commitment of "thoughtful, efficient, timely, and
accurate" to customers.
Case Hengyang 3.0 Automated Warehouse Officially Opened
as conveyor lines, AGV picking systems, and flow-through consolidation systems. It features 18 loading docks and 24 verification stations,
and deploys 106 AGV intelligent transport robots, achieving a maximum daily processing capacity of 60,000 orders for unit-pick operations.
Picking efficiency has increased from approximately 240 orders per hour under the traditional model to 320 orders per hour, with both
receiving and picking accuracy rates reaching 100%. This has effectively enhanced warehouse distribution efficiency, operational precision,
and pharmaceutical quality and safety standards, providing robust support for supply chain coordination and logistics system upgrades
across stores in the Hunan region.
Cost Convenient
Close
To be more
To become convenient
more
advantageous
in terms of cost To be closer to
stores/users
As of the end of the Reporting Period, we have established 7 modern
provincial logistics centers in Hunan, Hubei, Jiangsu, Shanghai,
Jiangxi, Guangdong, and Hebei, as well as 10 city distribution centers
in Wuxi, Huai'an, etc., achieving full online management of 17
warehouses including production, retail, and e-commerce, ensuring
that all customers receive their goods on time and accurately.
• Launch Ceremony for the Hengyang 3.0 Automated Warehouse
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
By adopting a multi-level warehouse design and Through the collaboration of "box-type multi-level shuttles and
automated equipment such as high-rise racking Multi-level AGV pallet robots," this system integrates with the Warehouse
Automated systems and stacker cranes, the system enables Control System (WCS), Programmable Logic Controllers (PLCs),
Shuttle
Stereoscopic automated storage and retrieval of goods as well and Warehouse Management System (WMS), among others,
Automated
Warehousing as precise location tracking. This enhances while transmitting data in real time to the Transportation
warehouse space utilization and storage density Consolidation Management System (TMS). This enables the automatic
System
while improving the continuity and operational System consolidation and retrieval of outbound goods, thereby
stability of warehouse operations. enhancing collaborative management capabilities.
Warehousing Utilizing bin-based automation technology, this Cold Chain Provides real-time, end-to-end monitoring of temperature and
Management MINILOAD Bin- system enables automatic replenishment from Logistics humidity for pharmaceuticals stored between -20°C and 8°C,
based full bins to individual picking stations. Combined Visual
along with anomaly alerts, enabling visual status tracking and
Automatic with one-to-one electronic labels and pre-set proactive risk management; the system achieves a 99.8%
Monitoring accuracy rate for cold chain disruption alerts, reducing the loss
Replenishment picking patterns, it enhances replenishment
System
efficiency and accuracy, resulting in a 42.8% rate of cold-chain pharmaceuticals to 0.05%.
System
increase in picking efficiency.
Transportation
and Intelligent scheduling and route planning enable vehicle
This system intelligently moves racks according Distribution End-to-End management, real-time tracking, navigation, and a visualized
AGV to demand, combining a "goods-to-person" Visibility in national transport capacity map. By introducing digital and
Automated operation model with a small-batch picking Logistics and intelligent monitoring of handover processes, we enhance
method to automate order picking and eliminate Delivery transparency and ensure better control over fulfillment
Guided the need for manual movement. It achieves a throughout the delivery process.
Vehicle picking efficiency of 300 lines per hour per person
System for unit-pick operations, significantly improving
operational efficiency.
By optimizing processes through automated order fulfillment,
Yidatong intelligent scheduling, and cross-district transfers, we reduce
Timely manual operations and warehouse inspection steps to achieve
Intelligent Utilizing two robotic arms for automated picking,
the system integrates with the AGV work area to Delivery more efficient, precise, and cost-effective store restocking and
Robotic delivery.
enable unmanned, automated picking of full-unit
Picking shipments and 24/7 continuous operation, with a
Picking and System capacity of 2,200 boxes per hour.
Sorting
We are fully implementing an equipment management system
Automated across the logistics operations, shifting from "reactive repairs"
Utilizing high-precision positioning technology to Equipment to "preventive maintenance" to enhance equipment reliability,
Cross-belt enable automatic sorting of zero-weight items, Management reduce downtime caused by malfunctions, and improve the
with a repeat positioning accuracy of less than 1 stability of warehouse operations.
Automatic
mm, meeting the demands of large-scale sorting
Sorting operations; the system achieves a sorting speed
System of up to 18,000 items per hour and can Equipment
simultaneously process shipments for 380 stores. Operation We continuously introduce automated equipment and innovate
and On-site Tool on-site tools, combining regulatory requirements with
Maintenance Innovation standardized processes to enhance logistics efficiency and
overall operational coordination.
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Enhancing People's Well-Being
Shouldering the mission of the development of the great health
industry, Yifeng Pharmacy adheres to improving people's livelihood Case Targeted Assistance for Rural Revitalization Project in Fenghuang County, Hunan Province
and safeguarding public health as important directions of
responsibility. Through targeted assistance and diversified public
welfare practices, it continuously extends professional health services Yifeng Pharmacy has long carried out targeted assistance work in Fenghuang County, Hunan Province, and supports the development of
to communities and grassroots levels. It responds to the health needs local characteristic agriculture through industrial cooperation. We signed a fixed-point procurement cooperation agreement for Siraitia
of different groups with practical actions, promotes the universal Grosvenorii with Fenghuang Xingcun Agricultural Development Company, a collective enterprise in Zhangpo Village, Fenghuang County,
accessibility of health resources, and contributes to enhancing Hunan Province, and implemented stable procurement of Siraitia Grosvenorii planted by local farmers. In 2025, we purchased traditional
people's well-being and promoting the health of the whole nation. Chinese medicinal material Siraitia Grosvenorii from local farmers with an amount of RMB 470,000. Through continuous fixed-point
procurement cooperation, the Company not only ensures the stable supply of traditional Chinese medicinal material raw materials but also
effectively drives the development of the rural economy.
Assisting in Rural Revitalization
We continuously integrate enterprise development with regional
economy and Rural Revitalization. On the basis of ensuring reliable
drug quality and stable supply, we actively promote the extension of
the traditional Chinese medicine industry chain to rural areas. We give
priority to purchasing traditional Chinese medicinal materials from
rural farmers, with a total procurement of RMB 208 million in 2025. As
the core enterprise under Yifeng Pharmacy focusing on the
manufacturing of traditional Chinese medicine decoction pieces,
Heng Xiu Tang sources more than 80% of its traditional Chinese
medicinal material raw materials from products harvested, planted,
and processed by farmers. While stabilizing the raw material supply, it
effectively broadens the sales channels for farmers and drives up
farmers' income. This year, we have invested over RMB 470,000 to
support rural revitalization, playing a positive role in promoting the
development of rural industries and boosting regional economic
vitality.
• Scene of the Signing Ceremony for Fixed-Point Procurement of Siraitia Grosvenorii
Caring for Livelihoods
Over the years, we have always integrated social responsibility into enterprise development and actively promoted the improvement of people's
well-being, achieving remarkable results. Looking forward, we will continue to deepen public welfare practices with a more firm sense of
responsibility, drive the improvement of people's well-being with professionalism and humanistic care, contribute to the health and harmonious
development of society, and create a higher-quality living environment for the public.
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Focusing on people's livelihood concerns such as public medication To improve the health literacy of community residents, we We proactively expand the service scope of our stores during important
safety and ecological environment protection, we continuously continuously carry out diverse and accessible health public welfare examination periods, integrating professional pharmaceutical services
promote the standardized and safe disposal of expired household activities according to the health needs of community residents and and convenience support into public scenarios. During the college
medicines. By popularizing scientific medication knowledge, seasonal health preservation characteristics. From April to May 2025, entrance examination in June 2025, we simultaneously launched the
improving recycling channels, and strengthening professional we simultaneously carried out the public welfare activity "Vitality "College Entrance Examination Guard Station" public welfare activity in
guidance, we guide the public to correctly identify and handle expired Health Preservation Tour" in many places across the country, covering multiple locations across the country, covering several provinces such
medicines, effectively reducing the health and environmental risks more than 10 provinces. We held more than 5,000 activities in total, as Hunan, Jiangxi, and Jiangsu. Each guard station provided heatstroke
caused by improper medication and random disposal. In March 2025, providing free blood pressure, blood sugar, and blood lipid testing prevention supplies and convenience support for examinees, parents,
we continuously carried out the public welfare activity "Yifeng Protects services to nearly one million residents. Through easy-to-understand and support staff outside the examination venues, and opened the
Health · Clean Up the Family Medicine Cabinet" in many places health education and professional services, we improved the health stores' emergency facilities to ensure the smooth progress of the college
across the country, covering more than 10 provinces and involving literacy of community residents and achieved a good social response. entrance examination with practical actions.
more than 5,000 stores.
A Glimpse of Public Welfare: Scientific A Glimpse of Public Welfare: Heart-warming A Glimpse of Public Welfare: Cool Protection at
Recycling to Eliminate Hidden Dangers Health Gifts the Changde Examination Site
In the "Yifeng Protects Health · Clean Up the Family Medicine During the "Vitality Health Preservation Tour" activity, we not In Changde City, Hunan Province alone, we set up more than 30
Cabinet" activity, we set up special recycling bins for expired only provided health lectures and free testing but also service points, covering all major examination sites. These
medicines and cooperate with qualified hazardous waste specially prepared nearly 100,000 health preservation gifts, service points distributed free mineral water, Huoxiang Zhengqi
treatment agencies to implement a closed-loop management including household commonly used medicines such as Isatis Shui (a traditional Chinese medicine for heatstroke prevention),
of "special person registration, special box storage, special
Root Oral Liquid, Lactulose Oral Solution, and Compound Bear and essential balm, and offered emergency printing services and
vehicle transportation, and professional destruction" to
Bile and Mint Lozenges, to convey the health concept to every resting seats in the stores, bringing coolness and convenience to
ensure 100% harmless disposal of expired medicines and
participant in a tangible form. anxious parents and on-duty traffic police.
prevent them from flowing back into the market. At the same
time, we enhance residents' participation through welfare
such as "health subsidy vouchers", popularize safe medication
knowledge relying on the team of licensed pharmacists, and
launch innovative measures such as age-friendly services and
"medicine ID cards" for the elderly and medicines without
package inserts to facilitate citizens to obtain electronic
package inserts and medication reminders by scanning codes.
• Scene of the "Vitality Health Preservation Tour" Series of Activities • Scene of the "College Entrance Examination Guardianship Station"
Public Welfare Action
• Scene of the Public Welfare Activity "Yifeng Protects Health ·
Clean Up the Family Medicine Cabinet"
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We respond to the actual needs of different social groups with practical actions and continuously carry out various forms of loving public welfare
donation activities. By donating pharmaceutical supplies, daily necessities, and providing financial support, we offer timely assistance to vulnerable We combine public welfare care with health services and continuously
groups and disaster-affected areas, fulfilling our corporate social responsibilities. From July to August 2025, we organized the "Cooling-off Public promote the construction of "Loving Stations". Relying on the
Welfare Community Tour" activity in multiple locations across the country. In cooperation with multiple pharmaceutical companies and street advantages of our store network, we provide convenience services for
communities, we donated heatstroke prevention supplies to groups such as sanitation workers, food delivery riders, and on-duty traffic police, outdoor workers and community residents, creating a warm urban
showing care for outdoor workers in high-temperature conditions. public service space. In 2025, we added 240 standardized stations in
Hunan Province, increasing the total number of "Loving Stations" in
the province to 300. These stations serve about 120,000 people per
A Glimpse of Public Welfare: The Care of a Cooling Package month, effectively expanding the coverage and accessibility of
convenience services.
During the "Cooling-off Public Welfare Community Tour", we distributed "cooling packages" containing heatstroke prevention drugs such as
A Glimpse of Public Welfare: The "Supply
Huoxiang Zhengqi Oral Liquid to outdoor workers in Nanjing, Jiangsu, Yingtan, Jiangxi and other places; in Nanchang, Jiangxi, we jointly Station" Around Us
donated heatstroke prevention supplies worth 200,000 yuan; in Shijiazhuang, Hebei, we donated pharmaceutical supplies worth 89,000
yuan to sanitation workers. At the same time, we joined hands with leading pharmaceutical companies and major online platform partners
to launch a special action called "Providing Coolness to Riders for Heatstroke Prevention", donating heatstroke prevention drugs, electrolyte Our "Loving Stations" provide free standardized convenience
water, and first-aid kits to relevant stations, paying tribute to the hard work of urban builders and logistics support forces with practical services for outdoor workers such as couriers, sanitation
actions. workers, taxi drivers, and surrounding community residents,
including tea and beverage supplies, resting seats, mobile
phone charging, blood pressure measurement, and
emergency drugs, making the pharmacies the "supply
stations" around the people.
• Scene of the "Cooling-off Public Welfare Community Tour" Activity • The "Loving Station"
Achieving Win-
Win Results and
Realizing the
Value of Talents
Yifeng Pharmacy always adheres to the principle of
Compliance Employment and is committed to
building a respectful, fair, and inclusive working
environment, which serves as the cornerstone for
talent attraction and retention. We continuously
optimize the employees' career development system,
enhance their professional abilities and
comprehensive qualities through systematic and
diverse training mechanisms, and help them grow
steadily in their careers and realize their personal
values. At the same time, we scientifically design the
salary and welfare structure, attach great importance
to Occupational Health and Safety (OHS), and
comprehensively improve the employees' work
experience and sense of belonging. In the process of
the Company's development, we work hand in hand
with all employees to jointly create a future of mutual
benefit, win-win results, and continuous growth.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Standardized Employment Management
Yifeng Pharmacy strictly abides by relevant laws and regulations such As of December 31, 2025
as the Labor Law of the People's Republic of China, the Labor
Contract Law of the People's Republic of China, the Provisions on the
Prohibition of Child Labor, and the Provisions of the State Council on 2025 2024
Working Hours of Workers and Staff. We promote the employees'
recruitment work with the core principles of openness, fairness, and Total employees 38,953 40,018
justice, ensuring that the entire recruitment process is compliant and
transparent. We firmly oppose any form of discriminatory based on By gender
ethnicity, gender, religion, age, etc., and oppose any form of
discrimination and harassment. We also strictly enforce our forced Male 5,216 5,497
labor and child labor provision. Recruitment staff need to strictly
verify the personal information of applicants and can only handle the Female 33,737 34,521
employment procedures after confirming the information is correct. If
any illegal employment behavior occurs, we will seriously hold the By age
relevant responsible persons accountable according to the severity of
the situation. In 2025, the Company did not have any illegal incidents Under 31 years old 10,739 11,157
involving the employment of Child Labour, forced labor,
discrimination, or harassment. Aged 31-40 13,820 13,860
To precisely attract high-quality talents and build a high-quality talent
Aged 41-50 12,011 12,185
echelon, we have established a diversified recruitment system that
includes "social recruitment, campus recruitment, internal transfer,
Over 51 years old 2,383 2,816
and internal competition." We recruit fresh graduates through
campus recruitment channels to inject new vitality, and we recruit
By employee level
experienced professionals from the industry through social
recruitment. At the same time, we encourage employees to
Senior manager 141 140
participate in internal position transfers and competitions based on
their interests and abilities to maximize the match between
Middle manager 332 281
employees and positions, providing solid talent support for the high-
quality development of the Company's business. As of December 31,
General manager 12,173 11,422
situation is as follows:
General employees 26,307 28,175
By function
High-quality Administration & Functional Support 3,512 3,501
talent attraction
enterprise-
Employer Awarded by the
Technical roles 382 251
award picture Civil Affairs and
Social Security Warehousing & Distribution 1,498 1,475
Bureau of Hunan
Xiangjiang New Production 179 110
Area
Store Operation & Service: 33,382 34,681
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Protecting Employees' Rights and Interests
Yifeng Pharmacy complies with internationally recognized human rights standards and guidelines, including the Ten Principles of the United
Nations Global Compact, the United Nations Guiding Principles on Business and Human Rights, ILO core conventions and relevant international
human rights conventions. It has established a comprehensive employee rights and interest protection system. Through the formulation of policies As of the end of the Reporting Period
such as the Employee Resignation Management Measures, the Employee Leave Management Measures and the Employee Transfer Management
Measures, it clarifies employees' rights and interests in employee recruitment, transfer, promotion and separation and leave management to
The proportion of newly recruited female employees2
prevent labor disputes. We firmly protect employees' legal rights such as freedom of association, five insurances and housing fund, and legal
holidays, ensuring that the rights and interests of all employees, including flexible workers, are implemented. In 2025,100% workforce covered by exceeded 48.44%
labor contracts or agreements, and the Company paid the employees' five insurances and housing fund in full as required, and paid salaries on time
for all employees.
At the same time, we are committed to building a diverse, equal, and inclusive workplace environment. We have set up recruitment positions for The number of newly recruited ethnic minority
ethnic minorities, veterans, and people with disabilities, providing them with flexible work arrangements and barrier-free work environments to
help employees from different backgrounds better integrate into the team. We will actively identify and develop high-potential female talents employees: more than
through inclusive talent development programs and a fair and transparent selection process, increase the representation of women in
management, so as to make full use of talent reserves and promote diverse perspectives in management decision-making.
The number of promoted female employees:
more than 2,400
The number of recruited veterans and people
with disabilities: 318
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Improving the Training System
Focusing on the core needs of employee development, Yifeng
Talent development and training system Senior manager
Pharmacy focuses on key areas such as training improvement, career development
development, and salary incentives. It provides employees with program
learning support for capacity improvement and a clear career growth Manager
path. Through a reasonable salary mechanism and continuous development
program
employee care measures, it promotes a positive interaction between
employees' personal development and the long-term growth of the Potential store
enterprise. managers cultivation
program
Incumbent Senior
manager
Training System
Reserve cadre
Project
Incumbent
We follow the "7-2-1" talent development concept and build a minister
systematic and sustainable talent echelon development system
covering all employees. We provide personalized development plans
Potential store
for employees at different levels, positions, and career stages to managers
comprehensively improve their comprehensive quality and
professional abilities. At the governance level, we have established a
Talent Development and Review Committee and formulated the Reserve cadre
Operating Rules of the Talent Development and Review Committee to
ensure the standardized and effective operation of the talent
development mechanism in a systematic way. At the management
Employees at the
level, we have added the "reserve rate of key position talents" to the
Headquarter
assessment system and continuously optimized the talent labeling
and succession management system, laying a solid foundation for
talent identification, training, and echelon construction.
Frontline Employee Store Manager District Manager
Relying on the perfect talent development system, we continuously
optimize the full-cycle training system covering all employees to
ensure that employees from new recruits to senior managers can
receive diversified training that matches their job requirements and Training "AI Digital Human" Intelligent Centralized Training, Job Rotation, Project Practice,
ability development. On this basis, we are also actively promoting the Tools Online Training Platform Mentorship
construction of digital training, creating an "AI digital human"
intelligent training platform, gradually building a systematic and
scenario-based online training resource library, and further enriching
and expanding the training content and learning channels by Under the training system framework, we provide comprehensive succession planning & development programs and skills and knowledge
launching courses covering multiple fields such as core business development training for all employees (including full-time employees, part-time employees, and third-party contractors involved in operations).
scenario teaching and practical skill processes to meet the diverse We support the career development plans and ability improvement needs of employees at all levels in various forms, systematically cultivating their
learning needs of employees anytime and anywhere. leadership abilities and refining their professional skills, injecting dual impetus into their personal career growth.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Case Reserve Cadre Special Training Program Case Store Manager Ability Advancement Case "Yiqi Xue" AI Skills Learning
We have launched a three-year systematic career We comprehensively improve the store management and team In 2025, with the theme of "Efficient Work, Happy Life", we
development training program, focusing on cultivating reserve teaching abilities of store managers through standardized held sharing sessions and public courses on the latest AI
management talents with high adaptability and potential. The training processes, personalized coaching, and a hierarchical trends and practical skills for all employees. The activities
program revolves around three main lines of "culture- assessment mechanism to strengthen their leadership. In 2025, were carried out in a combination of online and offline forms,
learning-experience" and sets up three phased empowerment we piloted an on-the-job store manager coaching program, attracting more than 6,700 participants in total, which
modules: "Onboarding Intensive Training", "Growth Training included the performance of newly appointed store managers effectively improved employees' digital skills reserve.
Camp", and "Annual Intensive Training". These modules focus in the performance tracking system, and strengthened the
on role transformation, ability supplementation, and cognitive store inspection and supervision responsibilities of store
leap respectively, with leadership training running through the management ministers, district directors, and training
whole process to strengthen key management abilities such administrators. A total of 1,531 store managers were trained
as teamwork, goal management, and problem-solving. We throughout the year, with a training effectiveness rate of
also help reserve cadres deeply integrate into the corporate 62.49%, a 3.87% increase compared to 2024. Through the dual-
culture and quickly improve their management qualities track training model of "Store Manager Base" and "Outstanding
through various forms such as cultural story-telling sessions, Employees", we formulated differentiated training plans for
business visits, scenario performances, and sand table reserve store managers and promoted experience sharing
simulations. through quarterly meetings. A total of 285 reserve store
managers were trained throughout the year.
Case District Director Training
Focusing on the leadership improvement and professional
growth of reserve regional directors, we have set up a full-
process cultivation path covering selection, pre-training,
intensive training, and on-the-job coaching. We emphasize
enhancing their store management, team teaching, and
regional operation capabilities. We use the "Review Meetings",
and system regular meetings to continuously track the
cultivation progress. We also conduct key performance
assessments for newly appointed regional directors to ensure
that their ability improvement matches the job requirements.
In 2025, we completed the cultivation of 81 reserve regional
directors. The passing rate of regional directors in the
assessment period reached 65.51%, a 15.43% increase
• Reserve Cadre Training Site compared with the same period last year. • The on-site of "Yiqi Xue" training
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Compliance Training on the Good Supply We continuously strengthen the construction of the lecturer team. By improving the lecturer rating incentive and performance assessment
Case Practice for Pharmaceutical Products (GSP) mechanism, we enhance the role of the lecturer team in store empowerment and on-site guidance. Currently, there are 88 full-time training
administrators and lecturers and 215 part-time lecturers in the whole system, forming a professional lecturer force with internal talents as the core
and rich business experience. We also focus on promoting the preparation work for the licensed pharmacist exam. By providing mock exams and
In 2025, we adopted the "system learning + platform
supporting exercise training, we offer systematic and full-process preparation support for employees to help them improve their exam-preparation
examination" model and conducted training on the
efficiency and achieve the goal of increasing the passing rate of the licensed pharmacist exam in 2025. In 2025, 5,568 employees participated in the
knowledge and skills of the Good Supply Practice for
licensed pharmacist qualification exam.
Pharmaceutical Products (GSP) every 1-2 months on average.
The training covered all employees and focused on key
At the same time, we provide all employees (including full-time employees, part-time employees, and third-party contractors involved in
contents such as laws and regulations of pharmaceuticals and
operations) with support for degree programs or certifications. Employees can obtain relevant knowledge and learning resources through the
medical devices, management of refrigerated drugs,
Company's regular training programs and online learning platforms, which support their personal academic improvement and certificate exams,
maintenance of traditional Chinese medicine, management of
thus enhancing the Company's talent reserve and development impetus.
traceability codes, and online sales regulations. We organized
a total of 6 training sessions throughout the year, with the
highest number of participants in a single session reaching
Training data during the Reporting Period
training reached 100%.
Annual training investment (million) 5.2237 4.1938
Employee training coverage rate (%) 100 100
Quality management training and Percentage of trained employees and average
professional skills knowledge training in 2025 Average
training hours by employee category
training hours:
senior management
Number of new-employee quality management
Percentage of trained Average training hours
training sessions:
Percentage of trained employees and average
training hours by gender
Number of new employees participating in the quality Male management middle-level management
training examination: 11,724 Percentage of trained Average training hours Percentage of trained Average training hours
Passing rate of new employees participating in the
Female management grass-roots management
quality training examination: 97.23%
Percentage of trained Average training hours Percentage of trained Average training hours
grass-roots employee
Percentage of trained Average training hours
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Employee Development Main Content of Performance-based Variable Pay
Based on individual or store sales performance,
and on the premise of strictly abiding by
We are committed to long-term investment in human capital to empower employee growth. We continuously iterate the employee rank Performance compliance management and quality safety
development system and build a diversified and equal development path of "management + professional", aiming to provide a clear career Commission bottom lines, follow the distribution principle of
prospect for all employees and consolidate the core talent foundation for the Company's sustainable development. "more pay for more work" to stimulate frontline
employees' vitality in market expansion.
Employee promotion and development map
Focus on key process management and value
orientation, and be distributed based on the
assessment results of KPI indicators such as
Leadership Model Performance customer satisfaction, core task completion, and
Bonus basic management standardization. Guide
employees to pursue business growth while
taking into account service quality and
Leadership operational compliance.
Set up a special fund pool for stores or business
teams, and its distribution is linked to the overall
performance target achievement of the
Team Fund corresponding unit. This mechanism aims to
break the limitations of individual incentives,
strengthen awareness of team collaboration, and
Professional build consensus on collective goals.
Channel
Goal
Performance Employee
Capability
Assessment Promotion
Management Implement a profit sharing plan, deeply linking
Talent Assessment employees' income to the final profit
Channel
System performance of their business unit. Encourage
Profit employees to shift their focus from revenue-only
Sharing to cost-effectiveness and resource optimization,
promoting the sustainable win-win of individual
contributions and the company's overall
profitability.
Value To fully mobilize the enthusiasm of employees, we have established a
long-term incentive system and implemented an employee equity
program to attract and retain key talents. We regularly grant restricted
stocks to key management personnel and core technical staff, and
have completed the preset grant registration work for the incentive
targets. A total of more than 450 core talents have received equity
grants.
In addition, to further strengthen the fairness of salary incentives, we
We refine the job standards and development paths for each sequence and match them with a more scientific performance-based salary system to continuously monitor the position pay gap and earnestly fulfill the
systematically improve organizational capabilities and employee value. We conduct employee performance evaluations every year, commitment of Equal Pay for Equal Work. We conduct regular salary
comprehensively evaluating employees from multiple dimensions such as performance indicator achievement, general management ability, evaluations, continuously monitor indicators, including the average
pay gap, the median pay gap, the average bonus gap, and the median
professional ability, and corporate culture values to comprehensively and objectively reflect employees' annual performance. At the same time, we
bonus gap, to accurately understand the gap and trend of salary.
establish an incentive-based salary structure combining "basic salary + performance-based floating salary", covering all employees including front- Based on the evaluation results, we formulate targeted improvement
line positions such as stores, logistics, and production. By providing strong performance-based incentive pay structure, we effectively stimulate measures to continuously promote a more fair, transparent, and
employees' enthusiasm and sense of responsibility. sustainable salary system.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Deepen Caring Communication
Employee Care
Yifeng Pharmacy has established diversified Communication At the same time, we conduct regular employee satisfaction surveys
Channels to accurately understand and respond to employees' every year to comprehensively understand employees' work status
demands, and continuously optimize the work experience by flexibly and needs. The survey dimensions cover core aspects such as job
adjusting the Strategy. At the same time, we have launched a variety satisfaction, organizational identity, team cooperation atmosphere, We respect employees' family responsibilities and provide support
of employee benefits and deepened the emotional connection with and management recognition, providing data support for optimizing during the arrival and growth of new lives for every parent, ensuring
employees through practical care measures to enhance team employee management strategies. Based on the survey feedback, we that all employees enjoy paid parental leave.
cohesion and provide a solid guarantee for talent retention. continuously optimize management measures and introduce a
number of targeted measures to enhance employees' engagement
and satisfaction:
Employee Communication
Channels Build a real-time team incentive mechanism
We are committed to building an open and efficient communication
platform and actively collect employees' opinions and suggestions. Parental Leave
We promote the transparent and efficient closed-loop of the Establish an instant recognition system. Through the digital Policy
feedback process to ensure that employees are aware of the progress platform "Recognition Card", employees' contributions can
of the handling. We regard employees' feedback as an important receive real-time feedback and records from the
basis for management optimization. Through timely Response and organization. Points accumulated based on Recognition
improvement, we enhance employees' sense of participation and Cards can also be redeemed for benefits in the internal mall.
All female employees: All male employees:
satisfaction and create an inclusive workplace atmosphere.
Enjoy at least 98 days of Enjoy at least 10 days of paid
paid maternity leave. paternity leave.
"Grow Together" Upgrade of the Training and development System
Employee Care
We organize four key-node communication meetings for each
employee: on the first day of employment, 7 days after employment, Publicize the promotion standards, build diversified and
fully cover and pay attention to employees' feelings during the improvement needs of employees in different positions;
adaptation period. construct a parallel career dual-channel of management
sequence and expert sequence to effectively solve the The number of employees on parental leave:
problem of talent loss of technical backbones caused by
"Employee Express" promotion bottlenecks and lay a solid foundation for
Application employees' long-term development.
Employees can directly submit their ideas and opinions through the
application. We collect them regularly and directly feedback them to
the Executive President to ensure that the voices of grass-roots
employees reach the Management.
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We also provide employees with non-statutory benefits, including annual physical examinations, a "bring your child to work" work mechanism, free Restructuring programs
work meals, accommodation, commuter buses, birthday benefits, holiday benefits, and company anniversary activity funds, and carry out a variety
of employee activities. Moreover, we have established the Yifeng Mutual Assistance Foundation ("Yi" Fund) to help employees and their families in
extreme difficulties. During the Reporting Period, the Company provided financial assistance to 26 employees in need through the "Yi" Fund, with a Applicable objects Support measures
total amount of RMB 335,000.
Priority will be given to providing internal
job transfer opportunities; cooperate
Employees with external recruitment platforms and
Case "The Adventure of Pinellia" Employee Activity
affected by
professional institutions to provide re-
business
adjustment employment support such as resume
"The Adventure of Pinellia" empowers parent-child care through "Chinese medicine research and study". Relying on the Company's optimization, interview coaching, and job
characteristic resources in the Chinese medicine industry, a series of parent-child activities for employees have been carried out in 10 recommendations.
branches and subsidiaries across the country. Through immersive experiences such as research and study at the Chinese medicine
specimen base of universities, making Chinese medicine handmade soaps and sachets, and outdoor Chinese medicine exploration, the Assist in handling pension application
activities have attracted hundreds of employees' children to participate, creating a warm scenario for parents and children to learn Chinese procedures; provide part-time
medicine culture together, and effectively enhancing employees' sense of belonging and cultural identity. Retired employees consultant opportunities for experienced
retirees to promote the inheritance of
knowledge and experience.
• The scene of the "The Adventure of Pinellia" activity
In addition, we attach great importance to the rights and interests protection and career transition of departing and retired employees, and provide
necessary psychological and legal consultation services to help employees relieve stress and safeguard their rights during the transition period,
demonstrating our care and support for employees throughout their entire career cycle.
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Protecting Occupational Health
Yifeng Pharmacy always places the occupational safety and health of
employees at the core of its operation and management. We strictly Occupational health and safety risk prevention and control system
comply with national laws and regulations such as the Law of the
People's Republic of China on Prevention and Control of Emergency Compile and implement the "Production Safety Accident Emergency Response Plan", conduct a comprehensive
Occupational Diseases and the Law of the People's Republic of China response plan identification and analysis of the Company's potential risk factors, clarify the types of accidents and hazard levels, and
on Work Safety, and formulate and improve internal regulations such
as the Safety Management Policy and the Safety Fire and Theft
system formulate targeted preventive measures and disposal procedures to ensure that risks are controllable.
Prevention System in combination with industry characteristics,
constructing a systematic and standardized safety management
system to provide employees with a safe and reliable working Focus on the safety hazards in the front-line of production and operation, clarify and strictly implement the basic
environment. The Company has also obtained the ISO 45001 Basic safety protection standards for fire prevention, theft prevention, and accident prevention; standardize the operating
Occupational Safety Management System certification. In 2025, the protection procedures of equipment such as balers and slicers, and strictly abide by the safety principle of "power off first, then
Company purchased work-related injury insurance and workplace operate" to build a solid safety defense line for equipment operation.
safety liability insurance for all employees, with a total investment of
were no major safety accidents throughout the year. Occupational For specific occupational health risks such as food toxin residues, heavy metal and dust exposure, and noise pollution,
a total investment of 10.88 million yuan, effectively
ensuring the safety of employees (million) Equip standardized first-aid kits in all workplaces and carry out occupational health and safety training, focusing on
First-aid ability
popularizing first-aid skills such as cardiopulmonary resuscitation (CPR), artificial respiration, and the Heimlich
Coverage rate (%) 100 100 training maneuver to improve the self-rescue and mutual-rescue ability of all employees.
Regularly hold fire drills and safety accident emergency drills every year. Through practical simulations and after-
Practical
action reviews, continuously improve employees' emergency response ability and team cooperation level, and
emergency drills comprehensively strengthen the Company's overall safety protection resilience.
ISO 45001 Occupational
Safety Management
System certification We also attach importance to the mental health of employees and are committed to creating a healthy workplace ecosystem that emphasizes both
physical and mental well-being. Around the mental health needs of employees, we have launched multi-dimensional care and support measures to
help them actively cope with the stress generated in work and life in a way that takes care of both body and mind, enabling employees to engage in
work in a more positive and balanced state.
Mental health support initiatives
In daily operations, we conduct systematic identification and
assessment of the occupational safety risks faced by employees
through regular in-store inspections by district directors and store
managers. Our inspection content covers key links such as chemical Mental health Multi-mode Digital science Employee Assistance
handling, drug handling, and equipment operation, and also pays monitoring training popularization Program (EAP)
attention to environmental safety hazards such as noise, dust,
slippery floors, messy wires, and blocked fire exits. Through Provide mental health check- We offer both offline and Through the self-developed We implement the Employee
continuous monitoring and dynamic tracking, we can timely identify
ups for all employees to help online mental health lectures "Yi Family" app, we regularly Assistance Program (EAP) to
potential risk points and provide a basis for subsequent risk
prevention and control. Based on the risk identification and them understand their own to suit the learning needs of publish mental health science provide Employees with
assessment, we comprehensively implement multi-level occupational mental state in a timely employees with different popularization articles every confidential professional
safety risk prevention and control measures from four dimensions: manner. work schedules. month. psychological counseling
system construction, hardware protection, skill training, and services.
emergency response.
Co-Creating Green
and Sustainable
Horizons
Yifeng Pharmacy is committed to integrating
environmental protection responsibilities into the entire
cycle of enterprise operations. We continuously improve
energy utilization efficiency, strengthen Climate Resilience
construction, strictly control resource consumption and
pollution emissions, and actively contribute to sustainable
development. We emphasize strict management of waste
gas, wastewater, and waste emissions. Through effective
waste management methods, we ensure compliance with
emissions regulations to minimize the negative
environmental impact of the Company's operations. In
sustainable development of the economy and society.
During the Reporting Period, the Company did not receive
any major administrative penalties from relevant
environmental departments or be held criminally liable
due to environmental incidents.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Deepening Energy Management and Addressing
Climate Change
Energy-saving and carbon-reduction measures
Yifeng Pharmacy is committed to improving energy use efficiency to
make the greatest possible contribution to environmental protection. Stores
We strictly abide by laws and regulations such as the Environmental
Promote the full coverage of energy meters in stores to collect and monitor energy data in real time, and consolidate the data foundation
Protection Law of the People's Republic of China and have
•
for refined energy management.
established a sound management system for energy and carbon
emissions, providing a solid institutional guarantee for green • Implement a time-sharing lighting control strategy. Use an intelligent control LED lighting system during non-peak business hours to
operations. improve lighting energy efficiency and avoid ineffective losses.
Implement air-conditioning energy-saving renovations and deploy an intelligent temperature control system to achieve dynamic operation
Energy Utilization Control
•
adjustment based on room temperature and create a comfortable and low-carbon operating environment.
In line with the Company's development strategy and green operation
vision, we have set the following energy management goals for 2025:
Offices
• Increase the scale of photovoltaic installation in the park. The cumulative self-generated electricity has reached 4.8 million kWh, equivalent
to reducing approximately 2,500 tons of carbon dioxide emissions.
• As of the end of the Reporting Period, the headquarters office area of the Company has achieved 100% photovoltaic power generation,
effectively optimizing the Company's energy consumption structure while saving electricity costs.
• All industrial parks are
required to be equipped • Carry out waste heat recovery renovations. Install heat recovery devices in the canteen facilities to preheat the incoming water using the
with supporting waste heat from wastewater and steam, reducing heating energy consumption.
Energy
photovoltaic(PV) facilities.
management • Strictly implement green procurement standards and give priority to purchasing electrical equipment with high energy efficiency ratings to
goals improve the energy efficiency level from the source.
• All parks shall achieve
Logistics centers and warehouses
Deploy intelligent warehouse electricity meters to dynamically monitor the electricity load and explore the potential for energy
supporting PV facilities,
•
Progress of conservation and consumption reduction.
energy with a self-consumption
management rate of at least 60% by • Implement energy-saving renovations for warehouse lighting and apply photovoltaic power lighting systems to improve environmental
goals 2025. protection benefits.
(achieved)
• Carry out energy-saving publicity activities and post energy-saving signs in the warehouse area to enhance the energy-saving awareness of
all employees.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
During the Reporting Period, the consumption and density of various types of energy of the Company are as shown in the following table:
Addressing Climate Change
Facing the challenges brought by global warming and frequent
Energy consumption Unit 2025 2024
extreme weather, we actively respond to the national "dual carbon"
goal and take the initiative to assume the responsibility of addressing
climate change. We manage and disclose climate-related matters
Total energy consumption Tons of standard coal 26,958.16 26,055.34* from four dimensions: governance, strategy, Risk Management, and
indicators and targets.
Tons of standard coal /
Energy consumption density 1.10 1.08
million yuan
Consumption of non-renewable We have established a sound ESG governance framework and clarified
Tons of standard coal 494.20 470.18* the responsibilities of each level in climate change management. The
fuels (direct)
Board of Directors of the Company is responsible for overseeing
matters related to the Company's sustainable development impacts,
Consumption of pipeline natural
Tons of standard coal 156.08 169.87* risks, and opportunities. A Strategy and Sustainability Committee is
gas
established under the Board of Directors to be responsible for
formulating the climate strategy and monitoring the progress of
Total gasoline consumption Tons of standard coal 218.87 206.08 climate targets, and identifying climate-related risks and
opportunities. The senior Management of the Company formulates
and evaluates the progress, impacts, risks, and opportunities of
climate targets. All business and functional departments, as well as
Total diesel consumption Tons of standard coal 119.25 94.23 branches and subsidiaries, ensure the effective implementation of
work plans and execution plans to enhance the Company's ability to
address climate change.
Consumption of renewable fuels
Tons of standard coal 446.23 87.81
(direct)
Photovoltaic power generation3 Tons of standard coal 446.23 87.81
Going forward, we will gradually integrate climate-related
considerations into the Company's overall development planning,
Consumption of purchased energy
Tons of standard coal 26,017.73 25,497.35 explore and sort out the potential impacts of climate-related factors
(indirect)
on our business model. We also plan to conduct climate risk-related
assessment work in a timely manner based on actual operational
Electricity consumption Tons of standard coal 26,017.73 25,497.35 conditions, and continuously enhance our adaptive capacity to
climate change.
*During the reporting period, the Company comprehensively upgraded its ESG data governance mechanisms, systematically strengthening the verification
processes for underlying data, the definition of accounting boundaries, and standardized conversion rules. In accordance with the principles of accuracy and
objectivity, the Company has retrospectively restated certain historical data for the 2024 fiscal year (indicators marked with * ) to ensure the accuracy and
comparability of the information across reporting periods.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Climate change-related risks and response measures
Risk category Potential impact Response measures Adaptability4
Physical risks Acute Sudden heavy rain or flash floods may cause damage to • Develop an emergency plan for extreme weather and clarify the work responsibilities and response High
infrastructure. measures of relevant departments and personnel.
Chronic Global warming and sea-level rise may affect coastal • Purchase relevant property insurance to avoid significant impacts on the Company's operations caused High
stores and warehouses, and reduce the work efficiency of by potential financial losses.
store employees. • Upgrade and renovate infrastructure such as stores and warehouses to improve their flood prevention
and disaster resistance capabilities.
• By optimizing the supply chain layout, establishing diversified supply channels and a flexible logistics
and distribution system, we can quickly adjust and respond when the supply chain is interrupted due to
extreme weather, ensuring the stable supply of drugs. This helps to improve the resilience and reliability
of the supply chain and enhance customer trust.
• Use digital technology to monitor and provide early warnings for the status of key facilities such as
stores and warehouses in real-time, and take timely countermeasures. At the same time, optimize
inventory management and order processing processes through digital means to reduce inventory
backlogs and order delays caused by extreme weather and improve operational efficiency.
Transition Policies and Regulatory authorities have increased requirements for • Always maintain a high level of attention to newly issued compliance documents, timely identify and Medium
risk laws the disclosure of greenhouse gas-related information. conduct in-depth analysis of the compliance requirements therein, clarify the compliance disclosure
matters that the Company must abide by, and ensure the effective implementation of these
information disclosure tasks.
Technology The transformation to low-carbon technology will • Develop and apply low-carbon and energy-saving technologies to improve operational efficiency and Medium
increase operating costs in the short term. product quality, and bring new economic growth points and competitive advantages.
Market Consumers tend to purchase drugs with low-carbon • Increase the emphasis on and investment in the green production of drugs and environmentally friendly Medium
production and environmentally friendly packaging. The packaging, and convey the latest market consumption trends and preferences to suppliers.
change in consumption preferences may lead to a
decline in the demand for certain types of products.
Reputation If carbon emission reduction management is not in place • Strengthen internal management and data collection capabilities, establish a sound environmental Medium
and has a negative impact on the climate and management system, and improve management levels and operational efficiency.
environment, it may damage the Company's reputation.
Climate change-related opportunities and response measures
Opportunities Impact Response measures Adaptability4
Market With the global emphasis on the low-carbon economy and green • Meet the market and customers' demand for green products, and expand business areas and market Medium
development, the market and customers' demand for green products is share.
increasing. • Increase the proportion of renewable resource use in the future when feasible.
Brand It can establish a good corporate image, demonstrate our emphasis on • Actively respond to regulatory requirements, proactively disclose Greenhouse Gas Emissions Medium
environmental protection and sustainable development, help enhance information, and take effective carbon emission reduction measures.
brand value, and strengthen the trust and support of consumers and
investors.
Finance Low-interest funds can be obtained through loans linked to sustainable • Set Sustainable Development Management goals and carry out relevant work to obtain low-interest Low
development. loans from financial institutions.
intensity of extreme weather events.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
To mitigate and adapt to the impacts of climate change from the source, we have formulated a carbon emission reduction plan covering the entire value chain of drug procurement, production, transportation, sales and Waste
treatment to reduce the carbon footprint in an all-round way. At the same time, we have set up a special fund amounting to exceed RMB 300 million for Addressing climate change, focusing on supporting Heng Xiu Tang's
climate transition investment (the digital decoction piece factory), the procurement of new energy vehicles for the logistics fleet and other measures, injecting core impetus into the Company's green and low-carbon
transformation and continuously strengthening its sustainable development competitiveness.
Production and operation (covering Store operations (covering most stores and
Drug procurement Transportation and logistics
all factories) distribution centers)
• Incorporate indicators such as • Carry out energy-efficiency upgrades • Rely on the advanced logistics management system • Fully promote the energy-saving renovation
recyclable packaging of core and renovations of production driven by AI to implement dynamic route planning, project of stores and distribution centers.
products into the supplier access equipment, introduce energy-saving optimize the transportation network, reduce Through measures such as replacing energy-
evaluation system, and implement processes and optimize the transportation distance and frequency, and lower saving lamps and installing energy-saving air
the survival-of-the-fittest principle. production line layout to reduce carbon emissions in logistics. conditioners, reduce operational energy
production energy consumption. consumption.
• Collaborate with industry partners • Scientifically dispatch to improve vehicle loading rate
to empower raw material • Continuously optimize the energy and effectively reduce the empty load rate. • Promote the use of degradable and
suppliers' low-carbon structure by deploying distributed recyclable green packaging to reduce waste
Increase the investment in new energy logistics
transformation, share green photovoltaic power generation generation and carbon emissions at the
•
vehicles, accelerate the promotion of new energy
procurement experience and systems on the factory roof to source.
transportation fleets, and introduce multiple
technology, and improve the low- increase the proportion of renewable
enterprises with new energy vehicles for urban Strengthen the refined energy management
carbon level of the industry's energy use.
•
distribution to reduce exhaust emissions in the of stores, deploy an intelligent energy
overall supply chain.
• The digital decoction piece factory, logistics and transportation links. management system to monitor and
• Implement a localized which was invested RMB 300 million optimize energy efficiency in real time, and
Encourage carriers to use new energy vehicles to
procurement Strategy to shorten to build, adopts advanced avoid energy waste.
•
ensure business operations.
the transportation radius, reduce technologies such as numerical
Carry out green consumption advocacy
carbon emissions in the logistics control medicine cutting machines
•
Collaborate with logistics partners to promote
activities to raise customers' awareness of
•
link, and build a low-carbon supply and heat pump drying equipment, recyclable packaging boxes and reduce the
environmental protection, encourage them
chain. and introduces the low-temperature consumption of disposable cartons.
to bring their own shopping bags and reduce
spray drying process. Compared with
Give priority to purchasing Fully apply technologies such as energy-saving the use of disposable packaging, and jointly
traditional processes, it reduces
• •
products from Chinese herbal lighting in the warehousing link, and reduce overstock build a low-carbon consumption ecosystem.
energy consumption by more than
medicine planting bases certified losses through optimized inventory management to
by GAP. lower the carbon footprint of warehousing.
• Fully promote degradable packaging
materials, streamline the printing
process, and avoid over-packaging.
To deepen carbon emission management, we sort out the product catalog, formulate and implement a product carbon footprint assessment plan, and clarify the assessed products, their production stages, and emission
reduction paths. We will continuously expand the assessment coverage and improve the depth and breadth of carbon footprint management.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Heng Xiu Tang integrates ecological design into daily Progress of goals for Addressing climate change
operations.
Heng Xiu Tang conducts product ecological design in As of the end of 2025
accordance with GB/T 24256-2009 "General Rules for Product
Ecological Design". Through technological upgrading, supply
a total of305 new energy vehicles were used to perform 17,000 distribution tasks, accounting for about 40% of the total
distribution services.
chain collaboration, and management system optimization, it
achieves resource conservation and environmental
friendliness. In addition, Heng Xiu Tang conducts self-
evaluations of green products such as wine-processed 35%, and the annual diesel consumption was reduced by 12,000 tons.
were reduced by
Polygonatum sibiricum according to GB/T 32161-2015
"General Rules for the Evaluation of Ecological Design
Products", and meets the evaluation standards for green
products (ecological design products) in the four categories of
In 2025, the emissions and densities of various greenhouse gases of our Company are as shown in the following table:
resources, energy, environment, and product attributes.
Greenhouse Gas Emissions5 Unit 2025 2024
Total greenhouse gas emissions Tons of carbon dioxide equivalent
At the same time, we solidly promote energy-saving and emission- 113,406.20 112,334.11*
(Scope 1 and Scope 2)
reduction work, carry out diversified energy-saving publicity activities,
popularize the low-carbon concept among employees, and advocate
Greenhouse gas emission density Tons of carbon dioxide equivalent
green office and lifestyle. 4.64 4.67
per million yuan
Risk Management Greenhouse Gas Emissions (Scope 1)6 Tons of carbon dioxide equivalent 1,079.06 1,008.85*
In terms of climate risk management, we collaborate with professional
Greenhouse Gas Emissions (Scope 2)7 Tons of carbon dioxide equivalent 112,327.15 111,325.27
institutions to conduct risk identification and assessment, and incorporate
it into the Company's overall risk management framework. By regularly
monitoring data, tracking climate impacts, and evaluating the effectiveness
of management strategies, the Company will continuously improve the In the future, we will continue to monitor physical risks such as frequent extreme weather events, as well as transition risks such as policy changes
closed-loop management process to ensure that climate risks are
caused by climate change. Through strategies like establishing a comprehensive climate change management system and a Risk Management
controllable and manageable.
framework and exploring opportunities for green energy use, we aim to comprehensively enhance the Company's resilience in Addressing climate
change.
Indicators and Goals
We actively respond to the country's "3060" dual-carbon goals and take
them as long-term strategic guidelines. The Company will continuously 5. The operational control method is adopted for the consolidation of greenhouse gas emissions. The Company calculates the greenhouse gas emissions generated by
improve the carbon emission data management system, scientifically set its own operations and those of its subsidiaries over which it holds operational control. The denominator of the greenhouse gas emission density is the operating
phased sustainable development goals, and continuously strengthen the revenue during the Reporting Period.
disclosure transparency of key indicators such as Greenhouse Gas 6. The assessment of carbon emissions during the transportation and logistics stages has been included in the calculation f Scope 1.The greenhouse gas emissions in
Emissions. Scope 1 mainly come from the direct greenhouse gas emissions generated by the consumption of fossil fuels in the Company's operation and production processes,
including natural gas, gasoline, and diesel. Among them, the emission factors refer to the Environmental Key Performance Indicator Reporting Guidelines of the HKEX
and China's Accounting Methods and Reporting Guidelines for Greenhouse Gas Emissions of Public Building Operation Enterprises (Trial), and the calorific value
Goals for Addressing climate change: coefficients refer to China's Accounting Methods and Reporting Guidelines for Greenhouse Gas Emissions of Public Building Operation Enterprises (Trial). The Global
Warming Potential values refer to the IPCC Global Warming Potential Values.
and Scope 2. Scope 2 greenhouse gas emissions mainly result from the purchased electricity for the Company's production and operation, as well as that used in the
megawatt-hour in the Announcement on Releasing the Electricity Carbon Dioxide Emission Factors in 2023 of China.
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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons
Strengthening Resource Recycling and Pollution
Prevention
Our key Waste treatment methods and measures taken for waste
reduction goals are as follows:
Yifeng Pharmacy strictly adheres to laws and regulations such as the Law of the People's Republic of China on the Prevention and Control of
Atmospheric Pollution and the Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes,
• Drug recovery requires internal review by
and is committed to minimizing the environmental impact of waste through responsible management. During the Reporting Period, the Company
the Company
did not face any major administrative penalties or criminal liabilities due to Pollutant discharge.
• Set up a dedicated drug return area, and
The waste generated during the Company's operations mainly includes expired drugs, domestic wastewater, and logistics packaging waste. To the stores will return expired drugs to the
strengthen waste management and promote the development of circular economy, we have set the following management goals: corresponding warehouse of the Company
A third-party company with professional
Expired drug
•
Hazardous waste management goals Progress of hazardous waste management goals qualifications will uniformly recycle the
recovery
expired drugs stored in the Company's
dedicated warehouse
• The recovery rate of ex8 pired drugs reaches 100% By 2025, the recovery rate of expired drugs will reach 100%
• All discarded cartons are disposed of by
third-party recycling agencies, with a
Non-hazardous waste management goals Progress of non-hazardous waste management goals proper disposal rate of 100% and a
recovery rate of over 98%
Discarded
carton recovery
Compared with 2024, the generation of office waste in 2025
Compared with 2024, the generation of office waste in 2025 decreased by 34% year-on-year • Kitchen waste is disposed of by an external
• professional third-party unit
will decrease by 20% year-on-year
• Office waste is thrown into the domestic
waste bin and collected and processed by
• Promote the use of recyclable or degradable packaging the environmental sanitation department
materials At least of the packaging boxes for self-owned Food waste
brand pharmaceuticals were made of environmentally
friendly packaging materials.
• The recycling rate of plastic barrels, plastic turnover boxes
and plastic pallets reaches 100%
In 2025, we will cooperate with logistics companies to use
The recycling rate of plastic barrels, plastic turnover boxes
recyclable packaging boxes, reducing the consumption of
and plastic pallets reached
them to the pharmaceutical factory for unified and specialized disposal.
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In 2025, our material usage is as shown in the following table:
Material usage9 Unit 2025 2024
Materials used10 Tons 3,262.33 2,720.50
Density of materials used Tons per million yuan 0.13 0.11
In 2025, our exhaust gas emissions and density are as shown in the following table:
In addition, we have established and improved a full-process risk
Exhaust gas management Unit 2025 2024
management system for environmental incidents, regularly carried
out environmental risk assessment work, systematically identified
Total exhaust gas emissions Kilograms 1,322.48 1,157.68* various potential environmental risks, and formulated and
implemented targeted risk prevention and control measures to
reduce the probability of environmental incidents from the source. We
Exhaust gas emission density Kilograms per million yuan 0.05 0.05
have also strictly followed the requirements of the "Guidelines for
Compiling Production Safety Accident Emergency Plans of Production
Nitrogen oxides (NOx) Kilograms 1,222.01 1,074.27* and Business Operation Entities" (GB/T 29639-2013), established a
special compilation team, comprehensively analyzed the Company's
environmental risk factors, clarified the types and degrees of harm of
Sulfur oxides (SOx) Kilograms 4.51 4.01
possible environmental incidents, and formulated corresponding
preventive measures based on the characteristics of the hazard
Particulate matter Kilograms 95.95 79.40 sources. At the same time, we objectively evaluated the Company's
internal emergency response capabilities, surveyed and sorted out
the available social emergency resources, and compiled the
emergency plan for environmental emergencies on the basis of fully
In 2025, our solid waste emissions and density are as shown in the following table: soliciting the opinions of relevant departments and personnel at all
levels, providing comprehensive institutional support and operational
Solid waste emissions11 Unit 2025 2024 guidance for the rapid and effective handling of sudden
environmental incidents.
Total hazardous waste Tons 261.52 201.60*
Hazardous waste density Tons per million yuan 0.01 0.008* intensity, hazardous waste intensity, non-hazardous waste intensity and
water resource consumption intensity are all the operating income during
the Reporting Period.
Total amount of harmless waste Tons 6,284.70 6,755.42 10. Materials used mainly include packaging cartons, plastic barrels, plastic
turnover boxes and plastic pallets.
Density of harmless waste Tons per million yuan 0.26 0.28 hazardous waste mainly includes general office waste, traditional Chinese
medicine waste dregs (without toxic substances) and waste cartons.
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Optimize Water Resource Utilization Efficiency
Yifeng Pharmacy implements a scientific water resource management strategy, strictly implements the water conservation system, and
comprehensively improves utilization efficiency. The Company's water sources all come from the municipal pipe network, so there is no risk of
water intake difficulties. We continuously optimize the water use structure and process by setting water conservation goals and conducting regular
monitoring and analysis.
In 2025, we have set the following water resource management goals:
Water resource management goals Progress of water resource management goals
Compared with 2024, the water consumption in 2025 will Compared with 2024, the water consumption in 2025 has
decrease by 10% year-on-year. decreased by 8% year-on-year.
In 2025, our key measures for water resource management are as follows:
Optimize the water use process, reasonably arrange cleaning time, and avoid large-
scale cleaning during peak water use periods.
In 2025, the total water consumption and density of our Company are
Install water-saving faucets to reduce Post water conservation signs in all water as shown in the following table:
water flow and effectively reduce water use areas to raise employees' awareness of
waste. water conservation.
Water Unit 2025 2024
Consumption
Total water
Reasonably recycle the vegetable washing Dynamically monitor water consumption through
resource Tons 779,192.50 843,953.30*
water from the canteen for floor cleaning to water meters to detect abnormal water use in a consumption
improve water resource use efficiency. timely manner.
Water resource
Tons/mill
consumption 31.89 35.07*
ion yuan
density
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Appendix: Report Index Table
Guidelines for Sustainability GRI Standards12 Corresponding Chapters Explanation
Report
/ GRI 2: General Disclosures 2021 About the Report /
About Us
/ GRI 3: Material Topics 2021 Sustainable Development Management /
Addressing climate change GRI 201: Economic Performance 2016 Deepening Energy Management and During the Reporting Period, the Company did not involve the use of Carbon Credits,
Addressing Climate Change did not participate in carbon emission trading, and did not participate in the national
GRI 302: Energy 2016 voluntary greenhouse gas emission reduction projects and certified voluntary emission
reductions (CCER) or other emission reduction mechanisms.
GRI 305: Emissions 2016
Pollutant discharge GRI 305: Emissions 2016 Strengthening Resource Recycling and During the Reporting Period, neither the Company nor its important holding subsidiaries
Pollution Prevention were included in the list of enterprises required to disclose environmental information
GRI 306: Effluents and Waste 2016 according to law; no major leakage incidents occurred.
Waste treatment GRI 306: Effluents and Waste 2016 Strengthening Resource Recycling and /
Pollution Prevention
GRI 306: Waste 2020
Ecosystem and biodiversity GRI 304: Biodiversity 2016 / During the Reporting Period, the Company's operating points and their surroundings that it
protection owns, leases, or manages are not located within the ecological protection red line, key
terrestrial or marine ecological function areas, nature reserves, or other areas with important
ecological functions or ecological sensitivity and vulnerability. The Company's products and
services have a low impact on and dependence on ecosystems, biological species and their
habitats, and biological genetic resources. Therefore, it is assessed that the Company's
production and business activities will not have a significant impact on ecosystems or
biodiversity.
Environmental compliance GRI 2: General Disclosures 2021 / During the Reporting Period, the Company did not experience any major environmental
management incidents, nor was it subject to any major administrative penalties from relevant
environmental protection departments or held criminally liable due to environmental
incidents.
Energy utilization GRI 302: Energy 2016 "Deepening Energy Management and /
Addressing Climate Change"
Water resources utilisation GRI 303: Water and Effluents 2018 "Optimizing Water Resources Utilization /
Efficiency"
circular economy GRI 301: Materials 2016 "Strengthening Resource Recycling and /
Pollution Prevention"
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Guidelines for Sustainability GRI Standards Corresponding Chapters Explanation
Report
Rural Revitalization GRI 203: Indirect Economic Impacts 2016 "Enhancing People's Well-Being" /
Social Contribution GRI 413: Local Communities 2016 "Enhancing People's Well-Being" /
Innovation-driven development / "Deepening Digital Intelligence /
Empowerment"
Technology Ethics / / During the Reporting Period, the Company did not engage in scientific research,
technological development, or other activities in sensitive areas of technology ethics such as
life sciences and artificial intelligence.
Supply Chain Security GRI 204: Procurement practices 2016 "Regulating Channels for Medicines" /
GRI 308: Supplier Environmental
Assessment 2016
GRI 414: Supplier Social Assessment
Equal treatment to small and / / At the end of the Reporting Period, the Company and its controlled subsidiaries did not have
medium-sized enterprises accounts payable (including notes payable) balances exceeding RMB 30 billion or accounting
for more than 50% of total assets. The Company and its controlled subsidiaries did not
publicly disclose information on overdue payments to small and medium-sized enterprises
through the National Enterprise Credit Information Publicity System.
Product and Service Safety and GRI 416: Customer Health and Safety "Health Sustainability Framework" /
Quality 2016 "Strictly Controlling Drug Quality"
GRI 417: Marketing and Labeling 2016 "Improving Service Quality"
Data security and customer GRI 418: Customer Privacy 2016 "Ensuring Information Security" /
privacy protection
Employees GRI 202: Market Presence 2016 "Standardizing Employment Management" /
GRI 401: Employment 2016 "Protecting Employees' Rights and
GRI 403: Occupational Health and Safety Interests"
GRI 404: Training and Education 2016 "Protecting Occupational Health"
"Improving the Training System"
GRI 405: Diversity and Equal Opportunity
GRI 406: Non-discrimination 2016
GRI 408: Child Labor 2016
GRI 409: Forced or Compulsory Labor
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Guidelines for Sustainability GRI Standards Corresponding Chapters Explanation
Report
Due diligence GRI 2: General Disclosures 2021 "Double materiality assessment" /
Stakeholder Communication GRI 2: General Disclosures 2021 "Stakeholder Communication" /
"Improving the Governance System"
Anti-Commercial Bribery and GRI 205: Anti-corruption 2016 "Building a Solid Compliance Defense" /
Anti-Corruption
Anti-unfair competition GRI 206: Anti-competitive Behavior 2016 "Building a Solid Compliance Defense" /
/ GRI 207: Tax 2019 / The Company strictly complies with tax laws and regulations in the places where it operates
and fulfills its tax obligations in accordance with the law. Given that detailed country-by-
country tax reports and tax governance strategies involve trade secrets and competition-
sensitive information, the Company only discloses data such as the total annual tax payment
in the "2025 Annual Report".
/ GRI 402: Labor Relations 2016 / The Company strictly complies with the Labor Contract Law of the People's Republic of
China and relevant local regulations. For major operational changes that affect employees'
vital interests, the Company fulfills democratic procedures and notification obligations in
accordance with the law. Since the specific notice period depends on the nature of the
change (such as organizational restructuring and job changes) and legal requirements, a
unified and quantifiable minimum notice period indicator has not been set for the time
being.
/ GRI 407: Freedom of Association and / The Company strictly abides by the Trade Union Law of the People's Republic of China,
Collective Bargaining 2016 establishes trade union organizations in accordance with the law and conducts collective
negotiation work to effectively safeguard the democratic rights of employees. The
association and negotiation mechanisms in the Company's operating environment are all
implemented within the framework of national laws, and there are no operational risks of
violating the right to freedom of association.
/ GRI 410: Security Practices 2016 / As a pharmaceutical retail enterprise, the Company's main operating places are pharmacies
and logistics centers, with extremely low security risks. The security of stores mainly relies on
the shopping mall property or the public security system; the security of the logistics park is
mainly responsible for asset protection and is Not involved in high-risk human rights law
enforcement scenarios. After a materiality assessment, this issue is not a core ESG issue for
the Company.
/ GRI 411: Rights of Indigenous Peoples All the Company's business activities are located in regular commercial areas, Communities
indigenous people's land or the infringement of indigenous people's rights. This indicator has
no relevance to the Company's current business model and operating regions.
Yifeng Pharmacy Chain Co., Ltd.
Address: Yifeng Pharmaceutical Park, No. 68 Jinzhou
Avenue, Lugu Hi-Tech Zone, Changsha, Hunan, China
Investor Email: ir@yfdyf.com
Company Website: https://www.yfdyf.cn
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