This report marks Yunnan Baiyao Group Co., Ltd.'s 17th consecutive release of a Corporate Social Responsibility (CSR)report. It gives stakeholders information on Yunnan Baiyao's social responsibility practices and performance in the areas ofmanagement, environment, society, and public welfare in accordance with the principles of standardization, transparency,objectivity, and comprehensiveness.Reference StandardsThis report adheres to the Shenzhen Stock Exchange's Guidelines for Listed Companies' Social Responsibility and is inaccordance with the Global Reporting Initiative (GRI) Core Option standard of the Global Sustainability Standards Board (GSSB)as well as the Chinese Academy of Social Sciences' China Enterprise CSR Reporting Guidelines (CASS-CSR4.0).
ABOUT THIS REPORT
Report ScopeThe report covers Yunnan Baiyao Group Co., Ltd., as well as its subsidiaries and branches.
Report PeriodThe report covers the period from January 1, 2022, to December 31, 2022, and serves as the annual report.
Data SourcesUnless otherwise specied, the nancial data in this report come from the annual nancial data of Yunnan Baiyao Group Co.,Ltd. and its subsidiaries. Other data is sourced from internal statistics and manual compilation. Unless otherwise specied, thecurrency type and amount mentioned in this report are denominated in RMB.
Report Reliability AssuranceThis report was put together by Yunnan Baiyao Group Co., Ltd.'s Social Responsibility Management Team and was reviewedand approved by the Company's Board of Directors and Board of Supervisors. The Board of Directorss and all the Directorsguarantee that this report contains no false records, misleading statements, or signicant omissions, and they accept individualand joint responsibility for its truthfulness, accuracy, and completeness.
本报告以印刷版和网络版形式发布，网络版浏览下载地址为：www.yunnanbaiyao.com.cn 及巨潮资讯网。
Statement Explanation
Report Format
For the sake of simplicity and readability, "Yunnan Baiyao Group Co., Ltd." is referred to as "Yunnan Baiyao", "Baiyao", "theCompany" or "we" in this report.
This report is available in both printed and online versions. The online version is available for viewing and can be downloaded atwww.yunnanbaiyao.com.cn and the Juchao Information website (www.cninfo.com.cn).
0102YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTMESSAGE FROM THE CEO
MESSAGE FROM THE CEO
2022 was a year of global upheaval and turbulence, but it wasalso a year in which Yunnan Baiyao maintained its artisanalspirit and actively pursued innovation.In October of 2022, thesuccessful convention of the 20th National Congress of theCommunist Party of China（hereinafter referred to as the “CPC"）marked the advent of a new era for the continued advancementand rejuvenation of the Chinese nation, following the illustriousblueprint of Chinese-style modernization. Meanwhile, YunnanBaiyao celebrated its 120th anniversary after surviving morethan a century of trials and tribulations. Throughout thesemany years, we have always upheld the corporate mission, "ToGuard Life and Health,” and have evolved from a traditionalpharmaceutical company into a modern, integrated medical andhealth enterprise. Looking ahead, we will energetically advanceour digital transformation, develop new products, and furtherexpand innovative business cooperations, leading to significantgrowth. We will steadily progress towards becoming a providerof comprehensive pharmaceutical and healthcare solutionsas we fulfill our national mission and social responsibility. Ourcompany generated a total operational revenue of RMB 36.488billion in 2022, an increase of RMB 0.114 billion from the sameperiod of the previous year's RMB 36.374 billion, with a growthrate of 0.31%. The net prot attributable to the parent companywas RMB 3.001 billion, a net increase of RMB 0.196 billion fromthe same period of the previous year's RMB 2.805 billion, witha growth rate of 7.00%. The ethos of Yunnan Baiyao is builtfrom a foundation of craftsmanship and entrepreneurship, thespirit of which we assiduously nurture in our ceaseless quest forexcellence and self-renewal. This ethos echoes the company’smission to guard the life and health of the people, and bearswitness to the turbulent century-long history of our company. Aswe progress towards realizing a healthy China and fulfilling theChinese dream, we will continue to make Yunnan Baiyao evenmore illustrious, dynamic, and enduring.
Just as raw jade must be cut and polished in order to become agem, to reach the heights of success one must rst persevere andbe dedicated. We have been devoted to our undertaking over thepast 120 years. In honor of Yunnan Baiyao's 120th anniversary, weproposed the philosophy of "assisting our nation and its familiesin achieving their goals for health and prosperity." We remaincommitted to our company's mission to guard life and health,drawing on the essence of traditional Chinese medicine (hereinafterreferred to as ''TCM''), and striving to become a leading globalenterprise while continuing to express our Chinese heritage. Wecontinue to innovate and develop new products while broadeningour business scope through our "New Baiyao, ComprehensiveHealth" strategy. To lay a solid foundation for achieving ourinternational development goals, we are upgrading our brandoperation and management and expanding our overseasmarketing channels. Earlier this year, we signed an agreement thatlaid a framework for strategic cooperation with Yunnan Universityof Chinese Medicine. This agreement strengthened our company'scollaboration with the university in pursuing the innovation andgrowth of Yunnan’s ethnic medicine industries, including throughthe creation of a national lab that will be key for the study ofemerging medicines and their use in clinical settings. At ourcorporate headquarters, we held the 2022 Annual Conference andthe Brand Planning Communication Meeting themed "BuildingStrength for a Bright Future," where we discussed the company'slong-term strategic development and vision for the brand. Inpartnership with Peking University, we hosted the "PharmaceuticalInnovation and Technology Frontier Forum 2022" in the middleof the year. Over 500 renowned scholars and professionals inthe medical sector gathered to explore new ideas for medicalinnovation and development. We completed our board electionat the end of the year and set sail with a new board of directors.We commemorated our 120th anniversary, launching the "QiyunScience Award" and unveiled the Yunnan Baiyao New Museumand Yunnan Baiyao Exploration Gallery. Time inevitably passes,and Yunnan Baiyao now nds itself in a unique moment. Havingmaintained its vitality throughout its 120-year journey, it is nowlooking forward to embarking from a historical new starting pointwith a historical new mission. Looking ahead, we are ready toembrace the next stage of development and embark on a newjourney in this era of progress.With an enterprising spirit and an eye for innovation, weenthusiastically embrace emerging technologies and refine theessence of traditional Chinese medicine culture by leveragingthe latest in scientific advances. We’ll extract the essence anddiscard the dross, enabling the culture of traditional Chinesemedicine to span across time and radiate brilliance and vitality. Wehave proposed a development strategy of "1+4+1" based on ourresources, advantages, and future goals, with a focus on boostingthe traditional Chinese medicine industry and targeting highly
valued segmented markets, adding upwards of tens of billions ofRMB worth of value. We are taking an ecological developmentapproach and have built a business matrix for the four major eldsof oral care, skin care, orthopedics, and women's health. Weplan to continue to embrace digital transformation, strategicallycollaborating with Huawei in AI medicine development. In thisway, we envision empowering an innovative medical screeningprocess while leveraging topnotch research resources to promotea high-quality structure of radiopharmaceuticals. In our pursuitof groundbreaking technological innovation, we have allocatedmore capital, strengthened our investment in basic research, andincreased the proportion of highly skilled workers who play animportant role in the innovation process. Our goal is to transformYunnan Baiyao into a technologically advanced pharmaceuticalcompany focusing on innovation.Unswervingly dedicated and innovative, we remain steadfast in ourcommitment to our mission and to corporate responsibility, and westrive to fulll our value to society in every aspect of our business.For Panax notoginseng and other traditional Chinese medicinalmaterials, we have created a digital management platform thatwe are constantly optimizing. This platform has transformed theseherbs' traditional agricultural management model into a quasi-industrial management model. Through the power of big data,farmers working in herb cultivation can use this platform to collectand analyze data, contributing to significant improvements ine?ciency and increased returns on investment. We also launcheda user-oriented traditional Chinese medicinal materials assetsystem in 2022, allowing consumers to directly customize theirrequired medicinal materials through the Yunnan Baiyao website.This system even enables users to specify the part or size ofthe herbs they want to purchase. Through this system, we havefostered a closer connection with our users and expanded thereach of Yunnan Baiyao's health benets to more people.Rome wasn't built in a day, and neither was Yunnan Baiyao. Inthe past 120 years, from 1902 to 2022, we have undergone aprocess of innovation and transformation as well as serving asa historical witness to our continuous growth. The growth andaccumulation over these 120 years has laid a solid foundationfor Yunnan Baiyao's future development. As we journey towardsthe next century, Yunnan Baiyao, as a provider of comprehensivepharmaceutical and healthcare solutions, pledges to "embracethe light and keep growing.” We will use technology to propelourselves to the forefront of the global stage, to guard life andhealth with unwavering vigor, and to assist our nation and itsfamilies in achieving their goals for health and prosperity.
- Dong Ming, Chief Executive O?cer
0304YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTABOUT US
Formulated in 1902, Yunnan Baiyao is widely recognized as themost innovative representative of time-honored Chinese brands,combining brand, product, and company name in one.In 1971, Yunnan Baiyao Factory was established followinginstructions from Premier Zhou Enlai. In 1993, Yunnan Baiyaobecame the first listed company in Yunnan on the ShenzhenStock Exchange. It achieved "Five Unifications" in 1996 andsuccessfully implemented corporate reformulation in 1999. In2005, the Company launched the "Stabilizing the Center andExpanding the Wings" product strategy and began implementingthe "New Baiyao, Comprehensive Health" industry strategy in2010. It has gradually developed from a traditional Chinesemedicine company into one of the leading enterprises in China'scomprehensive health industry. Since its listing in 1993, theCompany has continuously paid dividends to shareholdersfor 30 consecutive years. From 2016 to 2019, the Companycompleted mixed-ownership reform in two steps, furtherstimulating its development momentum through innovations insystem and mechanism.The Company is committed to integrating traditional Chinesemedicine into modern life. It has gradually evolved from atraditional pharmaceutical company producing a single Baiyaopowder to a leader in China's pharmaceutical and healthindustry with a rich portfolio. The Company's products andservices include pharmaceuticals, personal healthcare products,
ABOUT US
traditional Chinese medicinal materials, and pharmaceuticallogistics. It has 36 product categories and 390 varieties, with12 products generating more than RMB 100 million in salesrevenue each. Notably, its toothpastes, aerosols, woundplasts,and plasters are all top-selling products across the country.The Company has established a business group system todrive the expansion of its existing businesses. These groupsinclude the Pharmaceutical Business Group, the HealthProducts Business Group, the Traditional Chinese MedicineResources Business Group, and Yunnan Pharmaceutical Co.,Ltd. (responsible for pharmaceutical logistics operations).Each business group assumes its own responsibilities andcollaborates with one another, and their main businesses havereached a leading level in the industry. With production bases inKunming, Dali, Wenshan, Lijiang, Wuding, and Wuxi in Jiangsuand Hefei in Anhui, the Company has deployed sales channelsthat cover the entire country.Yunnan Baiyao regards guarding life and health as its corporatemission and is committed to becoming a leading provider ofcomprehensive pharmaceutical and healthcare solutions.Based on its mission and vision, the Company has establisheda strategic goal of "1+4+1" (Traditional Chinese Medicine +Oral Care, Skin Care, Orthopedics, And Women's Health +Digitalization) while consolidating its existing business. It hasoptimized its industrial, research and development systems,
Company Prole
Corporate Culture
Mission
Vision
Values
Survival Philosophy
Strategic Driving
Forces
Value Creation
ElementsTo guard life andhealth
Becoming a leadingprovider of comprehensivepharmaceutical andhealthcaresolutions
and expanded its presence in Beijing, Shanghai, Hong Kong, Hainan, and Korea, which have become critical strategic pillars for Baiyaoto leverage global resources and better serve the needs of the Chinese market. Various business activities have already taken place inthese areas, including fundamental research, commercial development, product innovation, and marketing.The Company always adheres to the core concept of long-term development. We focus on the development strategy of "1+4+1" anddrive our growth through three main drivers: products, innovation, and research and development, to promote a non-continuous leaptowards the second growth curve, contributing to the development of China's healthcare industry.
Inheriting and innovating,seeking truth and pragmatism,fullling social responsibility,taking due responsibilities,collaborating with integrity,
and pursuing
excellence
Starting fresh by resettingeverything to zero, facingcrises head-on, andembracing the presentand future
Technological innovationand organizationaltransformation
Human capital, nancialcapital, and public
resources
YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT
Historical Evolution
1955Miao Lanying, Mr. Qu Huanzhang's wife,donated the secret formula of YunnanBaiyao to the country.
1993
Yunnan Baiyao was listed on the ShenzhenStock Exchange.
2006
2011
2016-2017
2019
2021
1971
Premier Zhou Enlai approved the establishmentof the Yunnan Baiyao Factory.
1999
2010
2015
2018
2020
2022
1902
Mr. Qu Huanzhang, a famous Yi doctor, gatheredthe essence of traditional ethnic medicine andformulated Yunnan Baiyao, also known as the"Wanying Baibao Dan."
Organization Structure
Executive Management Committees
Committees under the Board of Directors
Innovation IncubationPlatform
IndustrialPlatform
FunctionalSupport Platform
Strategy Committee
Nominating Committee
Audit Committee(with an Audit O?ce)
Remuneration andEvaluation Committee
Board O?ce
Product Portfolio and InvestmentManagement Committee
Shareholders' Meeting
Board of Directors
Chief Executive O?cer
Board of Supervisors
TransformationManagement Committee
Brand ManagementCommittee
Operation Management
Committee
Safety ManagementCommittee
SharedService Platform
The Company was restructured to allocate re-sources based on market demands and build asystemic foundation to support sustained devel-opment.The operation revenue exceeded RMB 10 billion.
The Company's performance indicatorssurged to the top of the industry, whichenables the Company to evolve from anindustry follower to an industry leader.The rst phase of the Company's reloca-tion was completed, and the headquarterswas relocated to Chenggong New District.
The Company initiated the process of acquiringcontrolling shareholders, aiming to integrateresources and achieve reverse merger.
Yunnan Baiyao promoted the construction ofthe Beijing International Medical ResearchCenter, as well as international centers andindustrial platforms in Shanghai and Hainan.
The mixed-ownership reform of controllingshareholders was completed.
The Company successfully completedthe acquisition process, which marksthe successful conclusion of the secondphase of the mixed-ownership reform.
Under the leadership of the Board ofDirectors and with the newly appointedCEO at the helm, the Company initiatedan iterative upgrade and innovative trans-formation driven by the three pillars ofproducts, innovation, and R&D, followingits corporate mission of "To Guard Lifeand Health."
Yunnan Baiyao established a strategic goal of"1+4+1" (Traditional Chinese Medicine + OralCare, Skin Care, Orthopedics And Women'sHealth + Digitalization). It expanded its pres-ence in Beijing, Shanghai, Hong Kong, Hainan,and Korea. These branches serve as crucialstrategic pillars for the Company to leverageglobal resources and serve the needs of theChinese market.
The operation revenue exceeded RMB 20 billion.
ABOUT US
0708YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTABOUT US
Impression of Yunnan Baiyao in 2022
The 2022 CBCSD Sustainable Devel-opment CEO Forum unveiled its 2022China Corporate Sustainability IndexReport, which recognized Yunnan Bai-yao as one of the "Top 100 ChineseEnterprises for Sustainable Develop-ment," ranking in joint fourth place.
Yunnan Baiyao Group Traditional Chi-nese Medicine Resources Co., Ltd.was selected as one of the rst batch ofkey units to be cultivated and support-ed by the National Traditional ChineseMedicinal Materials Standardizationand Quality Assessment Innovation Al-liance. The selection reference was thenew version of Quality ManagementStandards for the Production of Chi-nese Medicinal Materials.
The China Association for Public Companies (CAPCO) held a conference toestablish the Information and Digitization Committee, and released the TypicalCases of Digital Transformation of Chinese Listed Companies. The report se-lected 101 digital transformation cases of listed companies, among which therewere 26 outstanding cases. Yunnan Baiyao's Digital Panax notoginseng IndustryPlatform - Empowering Century-Old Chinese Medicine to Embark on Industry
4.0 was one of the outstanding cases in digital transformation for products and
services.
With its demonstration model of "Full life-cycle manage-ment," Yunnan Baiyao Group Wenshan Qihua Co., Ltd. wasselected as one of the fourth batch of provincial service-ori-ented manufacturing demonstration enterprises (projectsand platforms) released by the Yunnan Provincial Depart-ment of Industry and Information Technology.
The winners of the 2021-2022Kotler New Marketing Awardswere announced. Yunnan Baiyaowon the "Kotler New MarketingAward - Excellent CustomerValue Award" for its unique mar-keting creativity, clear brand posi-tioning, and high brand trust.
According to the 2022 GlobalHealthcare Brand Value List re-leased by the British brand eval-uation agency Brand Finance,Yunnan Baiyao was listed as one ofthe "Top 25 Pharma Brands" with abrand value of USD 813 million.
At the 7th IDC China Digital Transformation Annual Cer-emony hosted by IDC (International Data Corporation) in2022, Yunnan Baiyao Group's digital transformation devel-opment project won the 2022 IDC China "Annual FutureEnterprise Award," and the ONE-BY digital talent full life cy-cle management platform won the "Best in Future of Work"award.
The China Association for Public Companies released thelist of cash dividends for A-share listed companies in 2021,and Yunnan Baiyao was selected for both the "GenerousReturn List" and the "Sincere Return List" for A-share listedcompanies.
The Shenzhen Stock Exchange re-leased the Notice on the AssessmentResults of Information Disclosure forListed Companies on the ShenzhenStock Exchange Main Board in 2021.Yunnan Baiyao received an A-classevaluation for 16 consecutive yearsfrom the Shenzhen Stock Exchange.
Yunnan Baiyao Group TraditionalChinese Medicine Resources Co.,Ltd. was selected as one of the "Top10 Green Food Enterprises" in Kun-ming.Yunnan Baiyao was honored withthe Best Investor Relations Award forChinese Listed Companies in the 13thInvestor Relations Award for ChineseListed Companies (Tianma Awards)selection by the Securities Times.
Yunnan Baiyao maintained its A rat-ing in 2022 for its ESG performance,as assessed by MSCI.
Yunnan Baiyao's "Baoqi" Panaxnotoginseng ranked rst on the "Top10 Famous Medicinal Herbs" list inKunming.
Honors and Awards
0910YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTABOUT US
Important Visits
Ma Zhongjun, Deputy Secretary of Wenshan Pre-fecture Party Committee and Governor of Wen-shan Prefecture, visited the Company for researchand investigation with his delegation. They werereceived by CEO Dong Ming, Yin Pinyao, COO,Senior Vice President and President of the Tra-ditional Chinese Medicine Resources BusinessGroup, and Zhu Zhaoyun, Academician of ChineseAcademy of Engineering and Director of Tradition-al Chinese Medicine Research and Development.
On March 25
Wang Jianying, Secretary of the Party Committee ofYunnan University of Finance and Economics, and herdelegation of 11 people visited the Company. They werereceived by Chief HR O?cer Yu Juan.
On March 31
Na Yunde, then Secretary of the NujiangPrefecture Party Committee, and his del-egation of 6 people visited the Company.They were received by Yin Pinyao, Group'sCOO, Senior Vice President, and Presi-dent of the Traditional Chinese MedicineResources Business Group, along with LuHongdong, Deputy Secretary of the PartyCommittee of Yunnan Baiyao.
On April 21
Major General Lu Chuangang, Member of theStanding Committee of the Yunnan Provincial PartyCommittee and Commander of the Provincial Mili-tary Region, visited the Company and was receivedby CEO Dong Ming.
Yang Dawei, Director of the Enterprise Leadership Management Division of theState-owned Assets Supervision and Administration Commission of the YunnanProvincial People's Government, Wang Hongxin, Secretary of the Party Com-mittee and Chairman of the Yunnan Provincial State-owned Equity OperationManagement Co., Ltd., Li Yinglin, Deputy Secretary of the Party Committeeand General Manager, and other leaders of the Equity Operation ManagementCo., Ltd visited Yunnan Baiyao for research and investigation. They visited thelogistics center, aerosol production line, and intelligent toothpaste factory, Yun-nan Baiyao Museum, and had a discussion with the Joint Chairman of YunnanBaiyao, Chen Fashu, Chairman Wang Minghui, CEO Dong Ming, ExecutiveDirector Yang Changhong, Director Chen Yanhui, and Secretary of the BoardQian Yinghui.
On May 19
Yu Qineng, head of the Economic Investigation Team of theYunnan Provincial Public Security Department, and ZhangYaogui, Secretary of the Party Committee of the EnvironmentFood and Medicine Investigation Team, led a team to hold asymposium on police-enterprise cooperation at the Company.The symposium aimed to strengthen police-enterprise coop-eration, promote the co-construction of police and enterprises,better guard the legitimate rights and interests of enterprises,and serve the healthy development of enterprises. Both sideshad in-depth discussions on the above topics and signed thePolice-Enterprise Co-Construction Agreement. CEO Dong Mingattended the symposium and signed the agreement.
On May 20
On July 6
Zhang Chunxian, Vice Chairman of the StandingCommittee of the National People's Congress andmember of the Party Group, Liu Hongjian, memberof the Yunnan Provincial Party Committee and Sec-retary of the Kunming Municipal Party Committee,visited Yunnan Baiyao. They were accompanied byWang Minghui, Chairman of Yunnan Baiyao Group,Zhu Zhaoyun, Academician of the Chinese Acad-emy of Engineering and strategic scientist of Chi-nese medicine of Yunnan Baiyao Group, and YangChanghong, Executive Director of Yunnan BaiyaoGroup.
On November 19
1112YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTSOCIAL RESPONSIBILITY MANAGEMENT
SOCIAL RESPONSIBILITY MANAGEMENT
Yunnan Baiyao has always insisted on constantly improving its social responsibility management system while maintaining steadybusiness growth. We coordinate and direct the Company's sustainable development practices, fulfill our national mission, anddemonstrate our accountability and commitment. As to sustainable development, we focus on the aspects that matter most to the capitalmarket and engage in various forms of communication and collaboration with stakeholders. We regularly review substantive issues inlight of external trends and our own business operations, and prioritize timely and relevant disclosure of substantive issues based ontheir importance and boundaries.
Yunnan Baiyao places a high value on stakeholder communication. Based on its own operation and governance, the Company takesinto account each stakeholder's unique needs and characteristics and solicits the suggestions of stakeholders such as government andregulatory agencies, shareholders, customers, employees, communities, and the general public through various channels. It identieseach stakeholder's feedback and expectations of the Company, establishes an e?cient stakeholder communication feedback mechanism,and responds to the needs of all parties in a targeted manner, thereby comprehensively improving the Company's social responsibilityperformance. The specic methods employed are as follows:
Identication and analysis of substantive issues matrix
Social Responsibility Management
Social Responsibility Communication
Interested partiesExpectations and demandsOur response
Shareholders
Standardized operationReasonable return on investment
Compliance Information DisclosureComprehensive reports at shareholders' meetingsOn-site, phone, email, interactive platform, andother forms of researchSteadily increasing company value, and ensuringstable dividends
Customers
Consumer rights protectionEnsuring product quality and safetyCustomer privacy protectionIntellectual property protection
Customer satisfaction surveyProduct recall systemIntegrated customer service systemProduct service and quality assurance
Partners
Integrity in businessSupply chain sustainabilityTimely communication
Standardized management and execution ofcontracts and agreementsRegular exchange conferences and networkingeventsStrict implementation of the bidding system"Coming Home" activitiesCollaboration in social responsibility
Employees
Good working environmentGood welfare and benetsVocational skills training and careerdevelopment paths
Sta? CongressTraining, lectures, salons and other communicationactivitiesThemed networking activitiesEmployee feedback from work summary
Government /Associations
Compliant operationPaying taxes in accordance with thelawJoint development
Policy consultationFullling all obligations in accordance with the lawand regulationsUndertaking government projectsReporting the Company's business performance ona regular basisAssociation activities and exchanges
Community public
Reducing the impact of productionand operation on the surroundingenvironmentPromoting health knowledgeAssisting disadvantaged groups
Carrying out the "Into Baiyao" activities for publicvisitsPublic opinion management and mediacommunicationCarrying out public welfare activities such asbuilding a harmonious community, respectingand assisting the elderly, poverty alleviation andeducation assistance
Impact on the sustainable development of Yunnan Baiyao
Impact on the sustainable development of stakeholders
1716
1314
Internationalization process
Green product service
Participating in public welfare activities
Employee care
Driving progress in the industry
Safe production
Contribution to national and regional economy
Anti-corruption
Recruitment
Occupational health
Environmental management
Green and low-carbon development
Continuous innovation
Corporate culture
Supply chain management
Customer value creation
Emissions management
Training and development
1314YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT2022 RESPONSIBILITY STORY - PRESERVING A CENTURY-OLD HERITAGE AND UPHOLDING THE SPIRIT OF CRAFTSMANSHIP
2022 RESPONSIBILITY STORY - PRESERVING ACENTURY-OLD HERITAGE AND UPHOLDING THESPIRIT OF CRAFTSMANSHIPMr. Qu Huanzhang, a renowned Yi doctor, formulated Yunnan Baiyaoin 1902 by fusing traditional Chinese medicine and ethnic medicine.Yunnan Baiyao, with 120 years of continuous construction anddevelopment, has adhered to the Baiyao spirit for over a centuryand integrates modern advanced technology into production. TheCompany is constantly innovating and breaking new ground, and ithas now grown into a large modern pharmaceutical group with twonational rst-class protected traditional Chinese medicine varieties,19 dosage forms, and over 300 varieties.
The saying "only good medicinal materials make good medicine" is widely accepted. To produce high-quality products, Yunnan Baiyaocarefully chooses and compares medicinal materials from various sources. This is a crucial step for the Group in improving the quality ofits products and the value of its entire industrial chain.Seventeen years ago, Yunnan Baiyao Group initiated its industrial layout with a foresighted perspective and established a completeindustry chain, successfully ensuring the quantity and quality of its pharmaceutical products. For example, at the Group's Wudingmedicinal materials planting base, the quality of medicinal materials is carefully controlled from the beginning of the cultivation process.This approach has contributed to not only the production of high-quality medicinal materials varieties, but also a series of impressiveachievements in the eld of medicinal materials cultivation. The cultivation and domestication of Paris polyphylla, a wild plant species,required countless e?orts, perseverance, and time from the dedicated Baiyao team.
Paris polyphylla is a kind of traditional Chinese medicine that is one of Yunnan Baiyao Group's key strategic herbs. Recent research hasrevealed that both Paris polyphylla and its chemical constituents have a wide range of physiological activities, including antibacterial,anti-inammatory, anti-tumor, sedative, and analgesic properties, cough and asthma relief, and anti-fertility e?ects, implying a signicantpotential for use in medical elds. However, as wild Paris polyphylla grows slowly, the consumption of its medicinal material far outpacesits growth rate.With the rapid growth of the Chinese healthcare industry, there has been a substantial increase in the use of medicine derived fromraw materials sourced from Paris polyphylla by pharmaceutical companies. However, the excessive exploitation of this resource overa prolonged period has reduced the quantity of wild Paris polyphylla. It takes 8 to 10 years to grow Paris polyphylla from planting toharvesting, and in order to obtain more raw materials, pharmaceutical companies have signicantly increased the procurement price ofthis resource. This signicant procurement price hike has further fueled farmers' enthusiasm towards picking and digging, enabling a diggingspeed surpassing the natural growth rate of Paris polyphylla. Consequently, this valuable resource has become increasingly scarce.In the 1970s, the wild Paris polyphylla in China had been over-harvested to extinction. At that time, China relied primarily on importsfrom Southeast Asia to obtain the plant, and a lack of resources became a bottleneck for the sustainable development of the YunnanBaiyao industry. Because relying solely on wild resources was no longer feasible in order to meet market demand, articial cultivationbecame the unavoidable solution to the Paris polyphylla shortage. In this context, Premier Zhou Enlai issued an important directive todomesticate Yunnan Baiyao's raw material plant from the wild to articial cultivation. Yunnan Baiyao Group began looking into waysto ensure a steady supply of raw medicinal materials. Among the 24 subspecies of Paris polyphylla worldwide, the Company visitedSouth America, Europe, and Africa, bringing back 23 seeds for further study in China. After two decades of meticulous research, Parispolyphylla was eventually transformed from a wild plant to a factory-produced medicinal materials.
With
years ofcontinuous construction anddevelopment
dosage forms
Over
varieties
The reason for the century-long success of Yunnan Baiyaolies in two main pillars: the spirit of craftsmanship andthe spirit of entrepreneurship. The former ensures quality,e?cacy, and reputation, while the latter drives the growthand expansion of the business into an industry.
- Premier Li Keqiang
Craftsmanship and Source: The Foundation of Quality
""
Paris polyphylla
1516YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT2022 RESPONSIBILITY STORY - PRESERVING A CENTURY-OLD HERITAGE AND UPHOLDING THE SPIRIT OF CRAFTSMANSHIP
Advanced Deployment of Chonglou Industry in Multiple Locations - Yunnan Baiyao (Lijiang)Ecological Science and Technology Industrial Park
Advanced Deployment of Paris Polyphylla Industry in Multiple Locations – Yunnan Baiyao WudingPlanting BaseIn February 2017, Yunnan Baiyao Group collaborated with the Yulong People's Government of Lijiang City in accordancewith its comprehensive health strategy, leveraging Yunnan Baiyao's advantages in brand, technology, and talent, as wellas the superior traditional Chinese medicinal and biological resources in Yulong County, to establish a "Yunnan Baiyao(Lijiang) Ecological Science and Technology Industrial Park" in Tai'an. The park completed the construction of infrastructure,environment renovations, temperature-controlled greenhouses, and other facilities after three years following the projectplan. Its seed germination chambers were established, and the decoction pieces production line renovations werecompleted, obtaining a permit granted for production. The total investment was nearly RMB 100 million.As for Paris polyphylla, the park has completed germplasm conservation, display planting, and seedling cultivation afterthree years of construction, covering a total of 107 acres, with 82 acres dedicated to germplasm planting and 25 acresto seedling cultivation. Additionally, it has constructed a Paris polyphylla germplasm nursery, amassing 23 species and53 varieties of Paris polyphylla plants. This has transformed it into a comprehensive site boasting with a wide variety ofspecies in Northwest Yunnan. In compliance with GAP
requirements, the park has established various types of plantingmanagement and protection techniques systems, as well as a traceability system for Paris polyphylla. It has obtained 1invention patent, 3 new varieties, 1 high-quality variety, and 4 local standards.
As the Paris polyphylla planting industry grows, there is a severe shortage of seedlings in the market, especially high-quality ones. At the same time, due to the di?culty of growing Paris polyphylla and long cultivation cycle, we face signicantconstraints in cultivating and promoting Paris polyphylla. Through years of e?orts, the Wuding Planting Base has studied theentire growth cycle from seed to commercial medicinal materials, and has successfully achieved articial cultivation of Parispolyphylla var. yunnanensis.The new Paris polyphylla var. yunnanensis varieties "Baiyao Paris polyphylla var. yunnanensis No. 1" and "BaiyaoParis polyphylla var. yunnanensis No. 2," were registered on June 29, 2014. They are the new varieties through articialcultivation obtained by the Wuding Planting Base through single-plant selection and phased propagation. As theindependently developed intellectual property of Yunnan Baiyao Group, these two varieties have laid a solid foundation forthe breeding, standardized cultivation and planting promotion of high-quality Paris polyphylla. These e?orts have boostedthe healthy development of the Paris polyphylla planting industry.
It has obtained
invention patent
new varieties
GAP, short for Good Agricultural Practice, is a set of operating standards aimed at agricultural product production, including crop planting and animalbreeding. The purpose of this standard is to enhance the quality and safety management level of agricultural production bases, making it an e?ectivemeans and tool.
Paris polyphylla planting
Preserving Founding Principlesand Committing to theDevelopment Mission
On the occasion of Yunnan Baiyao 120th anniversary, theCompany proposed the philosophy of "assisting our nationand families in achieving their goals for health and prosperity."The founder and subsequent inheritors of the Company haveconsistently demonstrated an unwavering devotion to thecountry and the public, which has become deeply ingrained inthe brand's heritage."The Yunnan Baiyao powder protected health over a centuryago. However, in this technologically dominated era, businessesmust change their approach to serving and protecting users."CEO Dong Ming emphasized that after 120 years of the nationalbrand's existence, it is critical to determine the Company'smission and responsibility to the nation. In response, YunnanBaiyao will provide product solutions based on the mostadvanced production relations and productivity of this era,which is connected with the future development planning of the
Company. "To guard life and health" has always been YunnanBaiyao's core value. Dong Ming stressed that during wartime, weguarded people by healing injuries; whereas, during peacetime,Yunnan Baiyao would expand into the field of comprehensivehealth.Looking ahead, Yunnan Baiyao will maintain its "New Baiyao,Comprehensive Health" strategy, leveraging its existingcapital, brand, channels, and market positioning advantagesto consolidate and improve its existing business sectors. Witha more open mindset, Yunnan Baiyao will create an integratedindustrial ecosystem in nance, capital, industry, products, andservices. The aim is to foster new innovative capabilities andfacilitate its ecological development. In doing so, we will promotestrategic planning and commercial model innovation to increasethe Company's core competitiveness in the future.
high-quality variety
local standards
1718YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT2022 RESPONSIBILITY STORY - INNOVATING AND EXPLORING TO EMPOWER INDUSTRY GROWHT
2022 RESPONSIBILITYSTORY - INNOVATINGAND EXPLORING TOEMPOWER INDUSTRYGROWHTLooking back on the 120-year development journeyof Yunnan Baiyao, the Company has always pursuedtechnological innovation while maintaining itscentury-old brand and traditional Chinese medicineculture. The Company has adopted various strategiessuch as "Stabilizing the center and expanding thewings" and "New Baiyao, Comprehensive Health,"with a focus on the "medicine" while continuouslyexpanding its business. The 120th anniversary ofYunnan Baiyao not only commemorates its pastachievements but also marks a new beginning and atime of growth.Yunnan Baiyao has always been driven by thespirits of entrepreneurship and craftsmanship, and itgathers strength from all parties and achieves evenmore remarkable accomplishments in the relentlesspursuit of self-improvement. Yunnan Baiyao isunwavering in its commitment to creating, sustaining,and extending the legacy of its renowned Baiyaoproducts as it works to realize the Chinese Dreamand build a healthy China.
The Peking University-Yunnan Baiyao International MedicalResearch Lab’s research accomplishments truly serve soci-ety’s "last mile," representing an exploration of the integrationof industry, university, and research between the two medicalbrands, Peking University Health Science Center and YunnanBaiyao. According to Academician Qiao Jie, the integration ofthe academic and industrial innovation chains has long been aweak point in China’s medical innovation landscape, which ne-cessitates collaborative e?orts from experts and scholars fromvarious elds to address the challenges of insu?cient quantity,low quality, fragmentation, and unevenness in health and medi-cal technology innovation.
The Peking University-Yunnan Baiyao International Medical Re-search Center will recruit and gather top international talents invarious disciplines, and cultivate a globally competitive team ofexperts to support the Center’s development through high-levelinnovative research and talent cultivation. This effort will pro-mote multiple disciplines to reach world-class levels, generatesignicant international academic achievements, and cultivate agroup of scientists with signicant international inuence. Bothparties are currently engaged in technology transfer activities,hoping to truly lead the way in the fields of traumatology andosteology on a national and even global scale.
Innovation Forum PromotesIntegration of Industry,University and Research
Universities must collaborate with enterprises,hospitals, and research institutions. Only byrmly integrating these four technological forcescan we connect the academic and industrialinnovation chains.
——Qiao Jie, Academician of theChinese Academy of Engineering andExecutive Vice President of Peking University
“
“
Pharmaceutical Innovation and Technology Frontier Forum 2022
In light of this, the "Pharmaceutical Innovation and Technology Frontier Forum 2022," was hosted by the Peking UniversityHealth Science Center and Yunnan Baiyao Group, and was organized by the Peking University-Yunnan Baiyao InternationalMedical Research Center. The event included "Academic Reports," the "Baiyao and Pharmaceutical Innovation Forum," andthe "Baiyao and Clinical Transformation Forum." We leveraged the talent advantages of Peking University and the marketadvantages of Yunnan Baiyao Group to promote deep integration of industry, university, and research in the pharmaceuticalindustry, achieving true unity of economic and social benets.This forum focused on the forefront of medical technology development in the new era, bringing together well-knowndomestic and foreign experts in the elds of oncology, reproductive medicine, trauma orthopedics, pharmacy, dentistry, andmedical aesthetics. They discussed and exchanged advanced medical concepts, technological innovations, and serviceexperiences on the forum. It showcased the latest achievements in medical technology development at home and abroad.Participants planned to promote the future development of medicine, striving to create a high-end medical academic brandwith international inuence that was rened and distinctive.
Pharmaceutical Innovation and Technology Frontier Forum 2022
YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT
1920YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT2022 RESPONSIBILITY STORY - INNOVATING AND EXPLORING TO EMPOWER INDUSTRY GROWHT
Yunnan Baiyao has been closely collaborating with various sectors of society, including the government, universities, institutions, andexperts, to promote innovation in medical and health technology, and to drive high-quality development in the biopharmaceutical industry,as evidenced by its rapid development. On the occasion of its 120th anniversary, Yunnan Baiyao once again intensied its e?orts andannounced that it will jointly host the "Qiyun Conference on Life and Health Science" (hereinafter referred to as the "Qiyun Conference")in August 2023 with the Kunming Municipal People's Government and Peking University, ushering in a new era in the development ofYunnan's biopharmaceutical industry.
As a high-level and high-standard industry conference in thelife sciences and medical eld in China, the Qiyun Conferencewill be redesigned and upgraded based on the "PharmaceuticalInnovation and Technology Frontier Forum," which hadbeen held for two consecutive years. The conference aimsto comprehensively improve the innovative capabilities ofindustry, academia, and research in the field of biomedicineand comprehensive health. It also promotes industry-university-research integration, and plays a strategic supporting role inthe high-quality development of the biopharmaceutical industryat a higher level and on a larger scale. It strives to makecontributions to supporting the construction of a healthy Chinaand promoting the innovative development of life sciences.
Constant Exploration to Facilitate Industry Development
"Qiyun Conference on Life and Health Science" opening ceremony
Fujian Fashu Charity Foundation donation ceremony for establishing the "Qiyun Science Award"
Meanwhile, the Fujian Fashu Charity Foundation donated RMB120 million to establish a non-profit science award called the"Qiyun Science Award," which will be presented during theQiyun Conference to recognize top Chinese scientists who havemade outstanding contributions in the eld of life sciences andhealthcare. We hope that, under the direction of the "QiyunConference on Life and Health Science" and the "Qiyun ScienceAward," more outstanding talents can be gathered to jointlypromote the development of China's life sciences and medicalindustry to guard life and health.
We guard life and health through product innovation, promotingbiopharmaceutical science and industry development throughthe Qiyun Conference and Qiyun Science Award. In addition,Yunnan Baiyao continues to contribute to public health andhealth equity through various means. Yunnan Baiyao heldthe opening ceremonies of the Yunnan Baiyao Museum andYunnan Baiyao Exploration Gallery to commemorate its 120thanniversary. The Yunnan Baiyao Museum "connects the past"by promoting traditional Chinese medicine culture, introducingthe history of Chinese and Western medicine, and telling thedevelopment history of Yunnan Baiyao over the past 120 years.The Yunnan Baiyao Exploration Gallery "reects the future" byo?ering various services in elds such as orthopedics, medicalcosmetology, and skin and oral health services.
"Yunnan Baiyao aims to become a leading provider ofcomprehensive pharmaceutical and healthcare solutions inabout 15 years," Dong Ming said. The Company will adopt a"dual-engine drive" strategy, combining endogenous growth withexternal expansion. It strives to be a practitioner and paragon ofChinese medical culture and industry. It also aims to become aninnovator and pioneer of the "Chinese approach" to medical andhealth care, ultimately contributing to the well-being of humanity.
2122YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCORPORATE GOVERANCE
This chapter corresponds to the following Sustainable Development Goals:
CORPORATEGOVERANCE
Yunnan Baiyao continues to improve its corporate governance structureand has developed a more comprehensive plan in accordance with itsdigital transformation strategy. Through systematic capacity buildingin organizational structure, management system, business processes,technological means, and supervisory mechanisms, the Company hasstrengthened its internal control through digitalization. The internalcontrol system framework has become more complete and reasonable,meeting the needs of enterprise development. The Company alsopersists in advancing anti-corruption and integrity of its CPC team,e?ectively protecting the rights and interests of investors, and utilizingexcellent governance to contribute to the Company's long-termsustainable development.
2324YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCORPORATE GOVERANCE
Yunnan Baiyao adheres strictly to the Company Law of the People's Republic of China, the Securities Law of the People's Republicof China and other relevant laws and regulations. It continually improves its corporate governance structure based on its actualdevelopment and the requirements of regulatory authorities. It has established a multi-level management system that is based onthe Company's Articles of Association and covers all aspects of its operations, forming a decision-making and management structureprimarily consisting of the shareholders' meeting, the Board of Directors, the Board of Supervisors, and the management team. Thisstructure aims to protect the interests of the Company and all shareholders.
Corporate Governance
Shareholders' meetingBoard of Supervisors
StrategyCommittee
Remuneration andEvaluation CommitteeNominatingCommitteeAuditCommittee
Board of Directors
Management team
Yunnan Baiyao strictly follows the provisions and requirements of the Articles of Association andthe Rules of Procedure for Shareholders' Meetings. It standardizes the procedures for convening,holding, and voting at shareholders' meetings, treats all shareholders equally and ensures thatshareholders can fully exercise their rights. The Company held two shareholders' meetings in 2022.
Yunnan Baiyao elects the Board of Supervisors in strict accordance with laws and regulationssuch as the Company Law, the Articles of Association, and the Rules of Procedure for the Boardof Supervisors. The Board of Supervisors consists of four supervisors, including two employeerepresentatives and two shareholder representatives. They fulll their duties with integrity, diligence,and responsibility, supervising the company's financial status and the legality and compliance ofThe Board of Directors and senior managers' performance. They e?ectively safeguard the legitimaterights and interests of the Company and the shareholders.
Yunnan Baiyao has been constantly improving its internal control system. It has created the InternalControl Management Manual and implemented risk assessment and control in business processesin conjunction with the special supervision system, internal information system, Party building andintegrity, and asset management.The Audit Committee under The Board of Directors is responsible for supervising the internal control,internal audit, and audit of the annual report. It authorizes the Audit and Risk Control Departmentto carry out specic internal control, and facilitates the real-time inspection and improvement of theCompany's internal control design and operation through routine audits, special audits, and specialinvestigations. This has promoted continuous improvement of internal control quality, and ensured theCompany's stable and proper operation.In 2022, Yunnan Baiyao continued to advance its internal control system construction, establishing andimproving internal control regulations and business processes to comprehensively strengthen its internalcontrol framework. With this foundation in place, we persisted in creating a conducive atmosphere forinternal control within the Company, conducting self-assessments to generate internal control reports.Through the "Risk Management Online" platform, we regularly disseminated risk prevention andcontrol knowledge related to internal control, internal audit, risk management, and asset management,cultivating a corporate culture of risk management with company-wide participation. Throughout theyear, Yunnan Baiyao maintained e?ective internal control over all major risks.
Yunnan Baiyao strictly follows the relevant provisions of the Articles of Association and the Rules ofProcedure for the Board of Directors, actively promoting the standardized and e?cient operation ofthe Board of Directors. All Directors of the Company strictly carry out their work in accordance withregulations, attend board meetings and shareholders' meetings diligently, and fulll their duties asdirectors with due diligence. Independent directors review relevant proposals based on independentjudgment and express independent opinions in a responsible manner towards the Company, allshareholders, and investors.Yunnan Baiyao has been continuously promoting the diversification of the Board. The Boardof Directors consists of seven directors and four independent directors. Board members havediverse professional backgrounds in fields such as law, finance, auditing, management, riskcontrol, investment, mergers and acquisitions, and medical reform, bringing diversied experienceand expertise to the Company. The Board of Directors has four well-functioning specialized sub-committees: the Strategy Committee, the Audit Committee, the Nominating Committee, and theRemuneration and Evaluation Committee.
Shareholders'Meeting
Board ofDirectors
Board ofSupervisors
Internal
Control
SystemThe Corporate Governance Structure of Yunnan Baiyao
2526YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCORPORATE GOVERANCE
Yunnan Baiyao consistently regards enterprise development as its guiding principle, remains committed to following the CPC'sleadership and has appointed an assistant to liaise with multiple grassroots Party organizations. The assistant is responsible for followingup on Party a?airs and group work of the responsible Party organizations, conveying the basic requirements and innovation demands toeach grassroots Party organization, and ensuring the timeliness and e?ectiveness of various work. Through these e?orts, the Companyachieves full process clarity of various activities in the Party-mass system.Yunnan Baiyao adheres to the principle of "listening to and following the Party," actively carries out Party-building work under the correctdirection, demonstrates the exemplary role of advanced models, and inspires Party organizations at all levels and the majority of Partymembers so as to learn from the exemplary individuals and strive for progress.At the Group's Party committee level, the first issue system and the centralized group theoretical study system are adopted, withmultiple organized learning sessions throughout the year. In accordance with the arrangements and deployment of the provincial Partycommittee's "Two New" Work Committee, which focuses on newly emerging industry organizations and new social organizations, regulardemocratic life meetings are held for the study of Party history education. In the Grassroots Party Organization Quarterly Work GuidanceManual, the theoretical learning direction and content for grassroots Party organizations are specied, and the corresponding learningmaterials are compiled and distributed by the Party-mass Work Department. Each grassroots Party organization, based on the actualwork, conducts centralized theoretical learning through various forms, such as individual study, Party group study, internal branch study,external branch study, secretary's Party lectures, expert Party lectures, and on-site teaching. In 2022, a total of over 150 centralizedtheoretical learning sessions were organized, and all 64 grassroots Party organizations held democratic life meetings. The traininginvolved 1,458 Party members, covering 100% of Party members, including 65 new members.
Party Building
Yunnan Baiyao's Learning about the 20th CPC National CongressAfter the successful conclusion of the 20th CPC National Congress, the Party Committee of Yunnan Baiyao promptly invitedZhu Zhaoyun, the Group's representative, to convey the key points of the congress and conduct a series of study sessionsto implement its spirit. This quickly created an atmosphere of enthusiasm for learning and implementing the 20th CPCNational Congress spirit throughout the Company, ensuring that its principles are e?ectively implemented within YunnanBaiyao.The Party Committee emphasized that the study, promotion, and implementation of the 20th Party Congress's spirit shouldbe the primary task and long-term strategic mission for the current and future periods. It explicitly requested that partyorganizations at all levels should demonstrate a strong sense of political responsibility, make rapid arrangements to fullyengage in the learning and implementation of the 20th CPC National Congress spirit. Theoretical learning groups at everylevel should prioritize studying the 20th CPC National Congress spirit, with party members and leaders, particularly thosein leadership positions, taking the lead in learning and applying the principles. At the same time, all departments shouldspearhead the e?ort to learn and apply those directives to present a new look in the future.
Yunnan Baiyao's study session about 20th CPC National Congress
Yunnan Baiyao is committed to guarding the legitimate rights and interests of shareholders and investors, taking e?ective measures toensure they receive reasonable returns on their investments. The Company closely attends to the expectations and requirements ofinvestors and shareholders, and diligently fullls its information disclosure obligations. The Company regularly holds investor interviewsand communication activities, promptly disclosing its operating conditions and business progress to investors, establishing an e?cientand smooth interaction and communication mechanism to ensure the legitimacy and e?ectiveness of company decisions. It highly valuesand carefully listens to the opinions and suggestions of small and medium-sized investors and overseas institutional investors, adoptsand implements reasonable ones, e?ectively guarding their interests. In 2022, the Company planned to distribute cash dividends ofRMB 15.2 (including tax) per 10 shares to all shareholders, based on the total share capital of 1,784,262,603 shares after deducting the12,599,946 shares repurchased and held in a dedicated stock repurchase account. The total amount of cash dividends distributed wasRMB 2,712,079,157. This made the Company one of the listed companies with the highest shareholder returns in A-shares.Building upon truthful, accurate, complete, timely, and fair information disclosure, Yunnan Baiyao utilizes a variety of tools, including theInvestor Relations section of the o?cial website, the Interaction Easy platform of the Shenzhen Stock Exchange, the investor interactionplatform, investor interviews, and roadshows, to establish a comprehensive and 24/7 investor communication platform, ensuringinvestors receive real-time information. In 2022, the Company answered 516 inquiries through investor hotline and we held 72 onlineor on-site investor relations activities, and received 268 institutional investors and analysts. We answered 342 questions with a perfectresponse rate of 100%. The Shenzhen Stock Exchange has consistently ranked the Company's high-quality information disclosure andinvestor relationship management as Class A for 16 consecutive years, which demonstrates its leadership position in this domain.
Owing to its excellent performance in the capital market, Yunnan Baiyao has been included in various indices such as the MSCI Index,the FTSE Emerging Markets Index, the Shanghai and Shenzhen 300 Index, and the CSI 100 Index. The Company has also proactivelyresponded to the capital market's expectations and concerns regarding environmental, social, and governance issues. In 2022, YunnanBaiyao's MSCI ESG rating continued to maintain an A rating, which makes the Company the only listed pharmaceutical company on theShenzhen Stock Exchange to receive an A rating for two consecutive years. Additionally, the Company continued to hold the highestrating in Yunnan Province, and is the only listed company in the province to receive an A rating.
Shareholders and Investors' Rights and Interests
inquiries answered through investor hotline
investor relations activities held online or on-site
institutional investorsand analysts received
questions answeredA perfect response rate of
100%
2728YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCORPORATE GOVERANCE
"Anti-Corruption and Integrity Promotion" Education and "Integrity Warning" Education
In 2022, the Secretary of Yunnan Baiyao's Discipline Inspection Committee lectured twice on integrity. Party membersand sta? in key positions were organized to watch clean governance educational videos such as Integrity in Mind, NanhuaBusiness Story, Building Nests to Invite Phoenixes, Integrity in Action in State-owned Enterprises and Practices of Anti-corruption in Yunnan. Over 30 staff in key positions were organized to visit the National Security Education Center ofYunnan Province. Party members of the Company also carefully studied the spirit of the conference held by the ProvincialDiscipline Inspection Commission and the Provincial Supervision Commission on further strengthening Party building andintegrity for provincial state-owned enterprises following the implementation of the 20th CPC National Congress spirit.Throughout the year, grassroots Party organizations carried out 51 study sessions on integrity management, with nearly athousand participants.
Welcoming the 20th CPC National Congress and Embarking on a New Journey - The PartyBuilding and Integrity LectureOn October 19, 2022, to further strengthen Party conduct and integrity education, and solidify the ideological and moraldefense against corruption, the joint Party Committee and Discipline Inspection Committee of Yunnan Institute of MateriaMedica, Central Research Institute, and Strategy Development Research Institute invited Li Jin, Secretary of the DisciplineInspection Committee of Yunnan Baiyao, to give a special lecture on Party conduct and integrity themed "Welcoming the20th National Congress and Embarking on a New Journey."More than 40 participants attended the lecture in the No. 4 Conference Room of the Yunnan Institute of Materia Medica,including the Company’s Discipline Inspection Committee members, secretaries of Discipline Inspection Committees fromthe business groups, relevant personnel from the Process Management Center, members of the joint Party Committee andDiscipline Inspection Committee, secretaries and members from subordinate Party branches. Other Party members andcadres participated simultaneously through Tencent Meeting.
Li Jin, secretary of the Disciplinary Committee of the Company, lectures on the construction of Party building and integrity management
Mr. Xu Dong gives a brieng onprocess management
Dong Xun, secretary of a primary-level partycommittee, delivers a concluding speech
In 2022, Yunnan Baiyao marked its 120th anniversary. Over the past year, under the guidance of the Group's Party Committee andthe higher-level Discipline Inspection Committee, the Group's Discipline Inspection Committee carried out a comprehensive studyand implementation of the 20th National Congress of the CPC's spirit. This e?ort helped to deepen the understanding of the crucialimportance of the "two establishments," effectively reinforced the "four consciousnesses" and steadfastly maintained "four self-condences" to achieve the "two guards." With a focus on Party building and integrity, the Company adheres to laws and regulations,integrates these principles into daily operations, and strives to create a corruption-free ecosystem that will enable stable and sustainabledevelopment for the century-old enterprise.
Anti-Corruption and Integrity
Yunnan Baiyao is committed to continuously enhancing its discipline inspection and supervision system, deepening its e?orts to addressboth symptoms and root causes, and strengthening the construction of a culture of integrity in the new era. The Company educates andguides Party members to improve their awareness of integrity and establishes a system combining punishment, power regulation andeducation to achieve better institutional results and greater governance e?ciency. In 2018, the Compilation of Discipline Inspection andSupervision System of Yunnan Baiyao was completed, comprising various documents such as the Disciplinary Committee System, theLettering and Reporting System, the Integrity Risk Prevention and Control Management Measures, and the Party Building and IntegrityConstruction Work Responsibility System, was established. In 2022, timely updates and adjustments were made to ensure alignmentwith the Company's operational characteristics.
In accordance with the unified arrangements of the PartyCommittee of the Company, the Discipline InspectionCommittee organized study sessions for all Party membersthrough individual self-study and collective learning. Themembers focused on General Sacretary Xi Jinping's report atthe 20th National Congress of the CPC, the revised Constitutionof the Communist Party of China, and the Work Report of theNineteenth Central Commission for Discipline Inspection on the20th National Congress of the CPC. A total of four concentratedtheoretical study sessions were organized throughout the year.The construction of integrity management is a crucial aspect ofYunnan Baiyao's anti-corruption and integrity promotion e?orts,and it is a long-term, arduous and complicated systematicproject. Starting from the characteristics of modern corporategovernance, the Discipline Inspection Committee of YunnanBaiyao carries out its inspection and supervision in combinationwith the Company's risk prevention and control, internal audit,internal control, business compliance and process management.The committee actively explores the ways of e?ective integrationof disciplinary inspection work and business development. Itsmembers diligently fulfill their supervisory responsibilities andfoster a working atmosphere that abides by regulations andrespects integrity. The committee continuously strengthensanti-corruption supervision and culture construction, promotesthe construction of a clean culture within the Company, andgradually establishes a long-term mechanism for the preventionof corruption and risk management.
Internal Anti-Corruption System
Integrity Management Building
At the beginning of 2022, Yunnan Baiyao officially releasedits Business Ethics and Code of Conduct. CEO Dong Mingtook an oath on behalf of all employees, after which all staffmembers signed the Yunnan Baiyao Business Ethics and Codeof Conduct Commitment. The Group's Discipline InspectionCommittee emphasized the concept of "not daring to be corrupt,cannot be corrupt, and do not wish to be corrupt." While strictlysupervising and enforcing discipline, they held pre-appointmentintegrity reminder talks with 205 department heads, managers,and key personnel in positions such as engineering constructionand supply chain operations, according to adjustments inadministrative and Party organization structures. All signedthe Commitment to Integrity and Clean Practice, clarifyingthe responsibilities, scope, and content for each level ofmanagement in Party building and integrity.Yunnan Baiyao consistently implements the policy of settingup integrity warnings in prominent locations for all ongoingconstruction projects and issuing integrity reminders in theprocurement transfer box. During important holidays such asNew Year's Day, Spring Festival, Mid-Autumn Festival, andNational Day, anti-corruption messages are sent to all Partymembers in advance. Throughout the year, six pre-holidayintegrity reminders were given, and there were no violations ofregulations among Yunnan Baiyao's management personnelduring these holiday periods.
2930YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
PIONEERING THE IDEA OF"COMPREHENSIVE HEALTH"AND PROVIDING QUALITY ANDINNOVATIVE PRODUCTS
Yunnan Baiyao, formulated in 1902, is a time-honored brand and a well-known trademark in China. TheCompany is among the rst batch of national innovative enterprises, and its main economic indicatorsremain at the forefront of China's traditional Chinese medicine industry. Guided by an innovation-driven development philosophy, the Company reshapes its multi-brand system through technology,product, and management innovations and strives to build an all-encompassing pharma industrial chainthat includes Chinese patent medicine, personal care products, health care products, and commerciallogistics. As a result, we have successfully expanded our pharmaceutical brand into the healthcare andservices sectors. We have consistently ranked first on Chinese brand lists published by Interbrand,Hurun, and The Brand Consultancy.
This chapter corresponds to the following Sustainable Development Goals:
3132YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
As a representative brand in traditional Chinese medicine and orthopedicsand traumatology solutions, Yunnan Baiyao builds on its past legacy andcombines TCM with modern science and technology. We follow our users'footsteps by constructively developing and refining our product offeringsbased on consumers' demands, and aim to address problems in modernmedicine and modern life. The Company enhanced product managementacross the board by focusing on the business segments of TCM,orthopedics, skin care, and oral care in 2022. Our e?orts in a wide range ofareas have also enabled ongoing breakthroughs in healthcare products andoral care solutions and ensured steady revenue streams from all lines ofbusiness.
Gaining Insights intoHealthcare Needs andO?ering a DiversePortfolio of Products
In 2022, Yunnan Baiyao launched a series of internal and external integration activities. As a result, we claried our brand architecture,developed and implemented brand and trademark regulations, created a brand marketing matrix, established a brand ecology, and builtinternal publicity channels. Furthermore, we have invigorated Yunnan Baiyao quality and e?ciency operations, integrated the productportfolio of the business unit, established a vertical communications platform, and organized various activities through the platformYouliaoshe to share best practices. In celebration of Yunnan Baiyao's 120th anniversary, we engaged in a variety of activities to builda greater brand reputation, reduce costs while improving e?ciency, leverage our consumer operations strategy, and create smoothchannels for brand collaboration, ushering in a new era for Yunnan Baiyao through innovations.
Building a Stronger Brand
Obtaining Recordation Certicates for its Highland Bio-Energy Healthcare Products
On December 30, 2022, Yunnan Baiyao Group Lijiang Pharmaceutical Co., Ltd. developed seven Highland Bio-Energyhealthcare products, which included Fish Oil Soft Capsules, Coenzyme Q10 Soft Capsules, Broken-Wall GanodermaLucidum Spore Powder Granules, Broken-Wall Ganoderma Lucidum Spore Powder Capsules, Melatonin Tablets, MelatoninSoft Capsules, and Spirulina Capsules, and obtained the corresponding recordation certicates. These products can providewide-ranging healthcare functions, including reducing blood fat, enhancing immunity, resisting oxidation, and improvingsleep quality.
Yunnan Baiyao's Highland Bio-Energy healthcare products
Launching the Smart Oral Health Integration Box with Kanya Platform
In 2022, Yunnan Baiyao's Oral Intelligent CareComprehensive Solution BU partnered with KanyaPlatform and jointly launched a Smart Oral HealthIntegration Box. They improved user experienceby adding user-friendly functions, such as onlineinquiry in the Box and telephone inquiry with oralhealth experts, to provide one-stop solutions. TheIntegration Box also leveraged its "3+1+1" IntelligentHardware, o?ering comprehensive support to users'oral health. Additionally, we launched the AI dentalphoto evaluation service on the Kanya App, allowingusers to get their oral health checked by AI OralExpert with a quick click. The App also providessome knowledge on oral health and could give userspersonal care recommendations. Users' regular useof the feature can help them address common oralissues in a timely manner.
User interface of Smart Oral Health Integration Box
Establishing ToothTalk SKU- the Framework for a Comprehensive Oral Health Solution
From July to December 2022, Yunnan Baiyao brought 23 SKUs from its ToothTalk product line to market, marking theestablishment of a framework for the comprehensive oral health solution. The products include ToothTalk Smart Magic Box,dental mirror, electric toothbrush, water osser, mouth rinse, and mouth spray. Our ToothTalk products have ranked rst inthe mouth spray category on Douyin, an emerging e-commerce platform.
ToothTalk SKU-comprehensive oral health solution
3334YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Developing the Smart Management Platform for Primary-Level Medical InstitutionsIn 2022, Yunnan Baiyao's Smart Management Platform for primary-level medical institutions focused on medicinemanagement in primary-level medical institutions of the tightly knit county-level medical community and the Companyconstantly improved the Platform by adding more user-friendly features. Bearing the special characteristics of medicinemanagement in primary-level medical institutions in mind, Yunnan Baiyao embedded different levels and categories ofauthority and functions into the Platform and flexibly adjusted them to meet the management requirements in differentcounties, meeting the operation and management needs of primary-level medical institutions.In the regulator end of the county-level medical community, we enabled data collection and analysis, and added largescreens for data display and monitoring designed specically for dynamic and multi-dimensional surveillance of primary-level medical institutions and calculating the number of feverish patients. This provided an effective new tool at thecommunity level, and it further enhanced our support to the supervision of primary-level medical institutions in the county-level medical community.In terms of its promotion and application, the Platform continuously explored more possibilities for cooperation withinthe county-level medical community. After successfully developing a pioneering informatized management system forcommunity-level medical institutions that was modeled on our pilot regional tightly knit medical community, we sought tospread the system to a broader regional market. Our Smart Management Platform was included in the Industry ProgressReport on Medicine Distribution in China 2022 as a classical case.
Application of Yunnan Baiyao's Smart Management Platform for community-level medical institutions
Baoqi Panax notoginseng being Included in the 2022 Top 10 Local Specialties List of Yunnan
Having passed 208 safety testing procedures by the globally trusted SGS (Société Générale de Surveillance) in Switzerland,Yunnan Baiyao's Baoqi Panax notoginseng product was of superior quality. Our Panax notoginseng plant was grown in fullytraceable GAP-compliant plant bases that has successively passed the organic certication by the Japanese AgriculturalStandards, the US National Organic Program and China Quality Mark Certication Group, and met the "Euro Leaf" logo userequirements. Wenshan Prefecture Government awarded a Wenshan Panax notoginseng Geographic Label to our product.We employ modern GMP-compliant cleaning and processing techniques to produce Panax notoginseng decoction piecesso as to eliminate mud, bacteria, parasite, and other impurities. For the cooked Panax notoginseng powder, we adoptmodern steaming techniques instead of the traditional frying procedure to protect e?ective ingredients from loss.Yunnan Baiyao is the rst company in the industry to use freeze drying technique (FD) in production. Therefore, our productcontain only 3% of water, retaining more e?ective ingredients. The amount of saponin in our Baoqi Panax notoginsengproduct surpass the national threshold by 20%.
Yunnan Baiyao's Baoqi Panax notoginseng
In 2022, Yunnan Baiyao used insights from its business operations and future outlook to accelerate the construction of its platforms.The Company improved upon its multi-dimensional network at headquarters, subsidiary, and individual levels in order to build a bettermarketing service network and align business operations across various platforms. We enhanced our variety strength by introducingmore high-quality varieties, and increased customer loyalty by launching value-added service projects. The level of integration betweenthe parent company and subsidiaries was further enhanced, and subsidiaries gained a more prominent competitive advantage incommunity-level medical markets.
Building Better Platforms
3536YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Launching a Digital TCM Medication PlatformIn 2022, Yunnan Baiyaointegrated the entire in-dustrial supply chain byconnecting patients to TCMhospitals, pharmacies,pharmaceutical companies,and upstream plantations.Patients could consult doc-tors, get prescriptions andmedicine, and have theirherbal medicine boiled anddelivered to their home viaphysical pharmacies, TCMhospitals or clinics, onlineTCM hospitals, and onlinepharmacies. In this way, acustomer-oriented platformbusiness model took shape.
User interface of Yunnan Baiyao's Digital TCM Platform-Baoxiang TCM
Launching a One-Stop Medicine Search Platform
In 2022, Yunnan Baiyao leveraged informationtechnologies and integrated core internalresources to launch a Cloud Medicine Searchplatform. The platform has provided a value-added service in full life cycle managementof products to upstream manufacturers andensured a complete cycle of services wherewe make a product precisely reach targetcustomers during the introduction phase, provefast-selling during the growth phase, achieveinnovations and make breakthroughs duringthe mature phase, and receive collaborativesolutions during the decline phase. Theplatform aims to help manufacturers betterserve patients, offer a private medicinepurchase channel for corporate clients, andcreate a closed-loop system for pharmacies tocapitalize on private tra?c marketing.
User Interface of the One-Stop Medicine
Search Platform
Pursuing an Innovation-Driven Strategyto Power the Healthcare Sector
Yunnan Baiyao regards R&D and innovation as the keys to boosting product vitality. The Company continues to improve its R&Dcapability by establishing more than ten national and provincial research platforms for its R&D teams and establishing R&D centerstogether with a host of research institutions, colleges, and universities. Focusing on the pharmaceutical sector, the Company strengthenstalent recruitment, encourages scientific research and exchanges, and combines basic and clinical research. These efforts haveensured commercialization of outputs, interdisciplinary growth, and innovative development. The industry chains for natural productsdeveloped by our Corporate Technology Center comply with the Good Agricultural Practices for Chinese Crude Medicine (GAP), theGood Laboratory Practices for Non-Clinical Laboratory Studies (GLP), the Good Manufacturing Practices for Medical Products (GMP),and the Good Supply Practices for Pharmaceutical Products (GSP). We have the rst pharmaceutical technology center that obtainsnational certication in Yunnan, as well as the 7th entity that received such an honor in Yunnan. Our Medicine Safety Assessment Centerof Yunnan Institute of Materia Medica passed the assessment of the National Administration of Traditional Chinese Medicine, receivedthe national Grade-3 lab accreditation on TCM toxicology, and passed the GLP-compliance inspections by China Food and MedicineAdministration and US Food and Medicine Administration, respectively.
Boosting R&D Continuously
Yunnan Baiyao's R&D Platforms
Yunnan Natural Medicine EngineeringResearch CenterYunnan Key Corporate Laboratoryfor Innovation of Development ofTraditional Chinese Medicine and NewEthnic Medicine ProductsJiangsu Engineering and TechnologyResearch Center of New TransdermalMedicine Delivery Systems
Provincial Research Labs/CentersNational Scientic Research PlatformsMedicine Safety Assessment Center (First pharmaceuticalcenter to obtain national GLP certication in Yunnan)Yunnan Baiyao Nationally Certied Corporate TechnologyCenterNational and Local Joint Engineering Research Centerfor Development of New Ethnic Medicine Products inSouthwest ChinaBiomedicine Pilot Scale Production Center of National(Kunming) Biological Industry Hub - Pilot ScaleProduction Platform of Traditional Chinese Medicine andHerbal MedicineNational Grade-3 Laboratory on Quality Assessment ofTraditional Chinese MedicineNational Grade-3 Laboratory on Traditional ChineseMedicine ToxicologyYunnan Baiyao Postdoctoral Research Station
3738YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Yunnan Institute of Materia Medica Obtained Plentiful Research Achievements In 2022
In 2022, Yunnan Institute of Materia Medicaachieved fruitful research achievements, which arelisted as follows: Our first-in-class novel traditionalChinese medicine product, Quan Sanqi Tablet,was approved by the National Medical ProductsAdministration for clinical trials. Two types ofmedicine, Compound Sulfamethoxazole Tabletsand Metronidazole Tablets passed the consistencyevaluation of chemical medicine. Xianghuo Spraypassed the on-site GMP-compliance inspections andobtained the approval document for the preparationregistration of medical institutions in Yunnan.Regarding our Foods for Special Medical PurposesProject, we completed the construction of productionlines and established a quality managementsystem. We also wrapped up the design and R&D ofalimentary formula food for special medical purposesKatetai, finished the filing material, and submittedit to the State Administration for Market Regulation.Moreover, our eye training lamp and scar gelobtained the National Registration Certificate forMedical Devices.
Fruitful results achieved by Yunnan Institute of Materia Medica
Initiating Basic Research in Oral Health in 2022
In 2022, Yunnan Baiyao's Technology R&D Center in Health Products BG focused on product development in oral health,cleaning, and skin care segments. Underpinned by product development and basic research, our Center adhered to theprinciple of short-term and long-term product planning and coordination. While understanding and responding to the newregulations, we carried out R&D of new products, provided technical data support, engaged in basic research, protectedintellectual property, and published new scientic discoveries and theories in order to guarantee scientic verication ofproducts, both old and new. We attempted to address remaining challenges in the techniques for manufacturing paste forprofessional tooth cleaning, polishing, enamel regeneration and anti-dentin sensitivity, and nd ways to convert bagasseinto toothpaste abrasive.
By December 31,2022, Yunnan Institute of Materia Medica had a total of 239 employees, including 121 master's and doctoral degreeholders, 63 with senior professional titles, 1 academician from Chinese Academy of Engineering, 1 expert receiving the State CouncilSpecial Allowance, and 19 provincial-level talents. The Yunnan Baiyao Postdoctoral Research Station collaborated with the PekingUniversity Health Science Center Postdoctoral Mobile Station to jointly recruit one postdoctoral fellow. Furthermore, Yunnan Instituteof Materia Medica brought in 22 new employees, including 14 with master's degrees. The institute actively collaborated with variousuniversities, providing entrusted training to 11 postgraduate students and internships to 103 students.
Parterning with BASF to Conduct Skeletal Formula Research
In 2022, Yunnan Baiyao collaborated with BASF, the world's largest chemical enterprise, to jointly build an innovativeplatform for researching the skeletal formula of cleaning products in Shanghai. Building on BASF's future trend forecastsof emerging raw materials and its high-throughput screening of surfactants, the Company focused on researching thesulfonate and taurine systems to complete the trend analysis of the skeletal formula for shampoo products.
Yunnan Institute of MateriaMedica employed
people
master's anddoctoral degree holders
with seniorprofessional titles
provincial-leveltalents
State Council SpecialAllowance expert
academician from ChineseAcademy of Engineering
Peking University-Yunnan Baiyao International Medical Research Center
3940YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Leveraging its market strength and relying on brand value platforms, Yunnan Baiyao partners with famous universities and researchinstitutions to deepen strategic cooperation and conduct all-round cooperation in relevant areas. The Company pursues an innovation-driven development strategy and strives for breakthroughs in strategic cooperation. In 2022, we achieved remarkable results in many ofour strategic cooperation projects, laying a solid foundation for the creation of new business segments.
Deepening Strategic Cooperation
Peking University-Yunnan Baiyao International Medical Research Center Conducted Many ActivitiesIn 2022, Peking University-Yunnan Baiyao International Medical Research Center, based on its needs, leveraged PKU’sacademic resources, gave full play to the university’s strengths in talent attraction and discipline platforms, as well as Yun-nan Baiyao’s market advantages, encouraging project cooperation across various disciplines. This collaboration promotedtechnological innovation, research commercialization, and deep industry-university-research integration, achieving botheconomic and social benets and accelerating the innovative development of the "Big Health" industry in Yunnan.
Recruitment ceremony for senior research fellows
Pharmaceutical Innovation and Technology Frontier Forum 2022In August 2022, Yunnan Baiyao held the Pharmaceutical Innovation and Technology Frontier Forum 2022 in theHeadquarters' Baiyao Park in Kunming city. The Company invited academicians from the Chinese Academy of Engineeringand the Chinese Academy of Sciences, leading experts and scholars from well-renowned research institutes, hospitals,universities and enterprises in China, and more than 500 medical professionals. The event was also livestreamed. Dozensof experts and scholars discussed the latest trends, exchanged views on the future of traditional Chinese medicine,oral health, skin care, bone injury treatment and female care, and shared insights into technological breakthroughs andprospects. Going forward, Yunnan Baiyao will make greater e?orts to build the Forum into one of the most prestigious andinuential international academic brands held in Yunnan province.
Pharmaceutical Innovation and Technology Frontier Forum 2022
The Center established a physical entity inScience and Technology Building of PKU HealthScience Center. The workforce was made up oftalents from Peking University, Yunnan Baiyao,and experts recruited from society, tasked withundertaking scientific research projects. In2022, we completed the construction of 5,400square meters of work space, assisting in projectincubation, innovation, and R&D and occupyingthree stories of the Science and TechnologyBuilding. In mid-October, we nished construction,conducted inspections, and tested the equipment.In November, R&D personnel at the MedicalResearch Center moved in and began working inthe newly built o?ces.
Peking University-Yunnan Baiyao International Medical Research Center
With the coordination and support of different PKU de-partments, Peking University-Yunnan Baiyao InternationalMedical Research Center has attracted a host of inuen-tial experts in the medical eld. By adhering to the policyof "attracting more talent with our existing talent pool," theCenter aims to select more outstanding and high-poten-tial talents and highlights the pioneering role of leadingexperts in providing strategical and intellectual support. Atthe Pharmaceutical Innovation and Technology FrontierForum in August 2022, we organized a recruitment cer-emony for the rst batch of senior research fellows, whowere all leading medical experts in di?erent elds, includ-ing Academician Zhan Qimin, Academician Qiao Jie, Aca-demician Jiang Baoguo, Professor Zhang Ning, ProfessorZhou Demin, Professor Ye Min, Professor Deng Xuliang,and Professor Li Hang.
YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT
Yunnan Baiyao and Livzon Pharmaceutical Group Reaching Strategic Cooperation in Herbal Medicine
On October 12, 2022, both Chinese Medicinal ResourcesDivisions of Yunnan Baiyao and Livzon Pharmaceutical Groupheld an online meeting themed "Mutual Development ThroughCollaboration & Strategic Cooperation Agreement Signing,"in order to promote innovation and quality improvement in theTCM industry and steer the industry toward an industrialized,modern and standardized path. Both sides exchanged viewson the building of manufacturing centers for TCM raw materialsand application of research outputs, and signed strategiccooperation agreements on Paris polyphylla.
In 2022, Yunnan Baiyao applied for 67 patents including 35 invention patents, 21 utility models, and 11 design patents. The Companylicensed 42 patents, including 12 invention patents, 25 utility models, and 5 design patents.
Signing ceremony of Yunnan Baiyao and Livzon
Pharmaceutical Group
Yunnan University of Chinese Medicine Signing a Strategic Cooperation Agreement with YunnanBaiyao Group
On February 21, 2022, Yunnan University of Chinese Medicine and Yunnan Baiyao Group signed a strategic cooperationframework agreement. Both sides aimed to deepen university-enterprise cooperation and promote the innovativedevelopment of traditional Chinese medicine and ethnic medicine industries in Yunnan by jointly building state keylaboratories and Academician Zhu Zhaoyun Research Station, improving talent training hub, and conducting R&D andclinical application of new medicine. After signing the framework agreement for strategic cooperation, both sides combinedtheir work and actual conditions and established a Key Laboratory for Inheritance, Innovation and Commercialization ofEthnic Medicine to carry out in-depth research in this area. They would jointly apply for certication of a provincial-level keylab from 2022 to 2023, and then apply for certication of a state key lab after achieving some basic research results.
Signing ceremony of Yunnan University of Chinese Medicine and Yunnan Baiyao Group
Invention patentUtility modelDesign patent
2022
2022
20222021
2021
2021
Number of patents applied in 2022
Number of patents licensed in 2022
Total Number of Yunnan Baiyao's Patents
2022
2022
2021
20222021
2021
Invention patentUtility modelDesign patent
PIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
4344YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Yunnan Baiyao's Institutional Documents of
Quality Management System in 2022
PrioritizingQuality andProducingPremium YunnanBaiyao Products
Yunnan Baiyao complies with the Medicine Administration Law of the People's Republicof China, the Regulations on the Supervision and Administration of Medical Devices, theMeasures for the Administration of Medicine Regulation, the Measures for the Supervisionand Administration of Pharmaceutical Production, the Measures for the Supervisionand Administration of Medical Device Production, the Measures for the Administrationof Registration and Recordation of Medical Devices, and other applicable laws andregulations.In 2022, the Company published the Outline on Quality Culture of Yunnan Baiyao Group,emphasizing the Company's policy of "Quality and Customer First" and outlining its qualitymission of "Honoring Quality and Integrity, Inheriting and Innovating, and Striving forExcellence," its vision of "Making Quality a Part of Yunnan Baiyao Employees' DNA," andits values of "Inheritance, Innovation, Integrity, Rigor, Responsibility, Perseverance," aswell as establishing quality behavioral guidelines for all to follow. Our Pharmaceutical BGalso published the Quality Management Manual, integrating various business units andproviding systemic planning for quality management of medicine and medical devices.In 2022, responding to the market demand, Yunnan Baiyao optimized the quality management system for pharmaceutical production,strengthened the holder management system, and continually enhanced control of entrusted production. Specifically, the Companyupdated the Entrusted Production Management Procedure and the Finished Product Release Operating Procedure and added theRelease Operating Procedure for Entrusted Production of Medicinal Preparations. It also prepared entrusted production qualityagreements, which claried the rights and responsibilities of both entrusted parties, e?ectively monitored product quality throughout theproduction process, and ensured the safety and reliability of the entrusted medicine.
Improving the Quality Management System
Pharmaceutical GMP Training
In 2022, Yunnan Baiyao carried out 129 training sessions onGMP quality control, covering the drug, medical device, andpharmacovigilance quality management topics. 2,513 employees fromthe Quality Management Department, the Analysis and Testing Center,and the Production OU participated in the training. The duration of thetraining was 278.24 hours.The Company engaged a third-party trainer to assist in the developmentof a full-cycle training management model featuring "PreliminaryInvestigation+Orderly Organization+Diversified Content+ProcessSupervision" to ensure trainees can achieve positive learning outcomes,combine training with daily work, and meet the goal of learning throughtraining and application of training outcomes in work. 47 advancementtraining sessions were planned and held for 93 of our employees.Each session took into account the requirements of QA, QC, OU, andother functional departments, covered Yuhua, Qidian, Dali, Wuxi, andother production sites, and imparted systematic knowledge in quality,production, validation, laboratory control, R&D registration, plants,facilities and equipment, regulations, and comprehensive management.
On-site gmp training
By the end of 2022, Yunnan Baiyao had developed 69 institutional documents regarding ISO 13485 medical device qualitymanagement system in line with internationally accepted standards. Considering the release of new regulations and internal andexternal audits, the Company substantially revised 10 GMP management systems for medical devices, and developed 4 newsystems, i.e., the Entrusted Production Management Procedure, the Rework Control Management Procedure, the AuthorizedSampling Management Procedure, and the Product Return Management Procedure, to ensure the adequacy, e?ectiveness andsuitability of our quality management system.
By the end of 2022, Yunnan Baiyao conducted special audits of internal documents and systems. In accordance with the principleof "Writing down what we've done," the Company developed 7 new GSP operating procedures, including the Transport, Loadingand Unloading Operating Procedure, the Inventory Check Operating Procedure, the Operating Procedure for the Filing of NewPick-up Vehicles, and the Recall and Recovery Operating Procedure. It comprehensively optimized the GSP system in accordancewith new regulations and the principle of "doing what we've written down." In terms of building a GVP quality management system,the Company strengthened the management of GVP activities and quality control, and updated 31 current GVP managementdocuments, including the Main Document of the GVP System, the Management Procedure on GVP Internal Audit, and theManagement Procedure on GVP Institutions and Personnel, based on such new regulations as the Specications for GVP QualityManagement and the Guiding Principles for GVP Detection. Moreover, the Company also developed the Management Procedurefor Regular Data Analysis and Reporting, the Management Procedure for Information System and the Operating Procedure forCreating the Main Document of Pharmacovigilance System, to ensure consistent GVP compliance at Yunnan Baiyao.
Quality Management System of Medical Device Production
By the end of 2022, there were 202 public documents regarding the GMP quality management system, 180 process controlprocedures and 780 equipment operating procedures. In the technical documents, there were 800 technical documents regardingstandards for internal control of medicinal products, including herbal medicine decoction pieces, intermediate products, packagingmaterials, and nished products. Yunnan Baiyao had a total of 1,962 GMP public and technical documents.
Good Manufacturing Practices (GMP) for Pharmaceutical Products
Quality Management System of Medicine and Medical Device Distribution
By the end of 2022, there were 31 GVP management documents: 23 Standard Management Procedures (SMP) and 8 StandardOperating Procedures (SOP). These documents e?ectively guided the Company's GVP work.
By the end of 2022, there were 36 GSP management systems and 22 operating procedures for pharmaceutical products, aswell as 36 management systems and 21 operating procedures for medical devices. Yunnan Baiyao had a total of 116 GSPmanagement documents.
By the end of 2022, there were 131 documents on medical device systems, including 66 standard management procedures(SMP), 17 standard operation procedures (SOP) for process control, 32 standard operating procedures (SOP) for equipmentoperation, and 14 standard operating procedures (SOP) for equipment maintenance. The Company also developed 39 newcontrol procedures and 30 management procedures regarding the ISO 13485 quality management system for medical deviceproduction. Yunnan Baiyao had 78 internal control quality standards on medical devices and industrial products.
Good Pharmacovigilance Practices (GVP) of Pharmaceutical Products
Manufacturing Systems of Medical Devices and Industrial Products
Good Supply Practices (GSP) for Pharmaceutical Products
4546YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Pharmaceutical GMP Training
Yunnan Baiyao's Technical Capability in Product Testing Reaching the Standards of First-classNational LaboratoryIn 2022, Yunnan Baiyao provided pre-employment training to all new hires in order to fully implement the Company's qualitypolicy, drive continuous improvements to quality management, and ensure the sustainability and e?ectiveness of our GSPsystem. According to new issues and developments arising from real work, the GSP Department conducted targetedtraining and increased training opportunities focused on special skills. Furthermore, the Company implemented an IT skillsimprovement program to address employees' di?culties with computer operations, stayed up to date with newly releasedrules and regulations, and made corresponding interpretations of them to inform employees. In this way, the Companysuccessfully completed its annual training plan for 2022 by organizing 32 medicine GSP training sessions and 22 medicaldevice GSP training sessions, covering all the key personnel working on medical device GSP management.
Building on years of experience in quality control, Yunnan Baiyao has built accurate and reliable testing methods fordi?erent types of products. In the past three years, more than 70 projects in the elds of medicine, cosmetics and medicaldevices, have achieved good performance results when benchmarked against capability standards stipulated by rst-classnational labs. All of them have obtained certicates of satisfactory results, demonstrating that our testing capabilities havereached national-level standards.The technical operational model for our innovative third-party testing platform has been highly praised by YunnanAdministration for Market Regulation, Yunnan Medical Products Administration, Food Safety O?ce of Yunnan ProvincialGovernment, and Yunnan Provincial Center for Disease Control and Prevention. Besides conducting testing and qualitycontrols for Yunnan Baiyao products, the platform also provides third-party inspections and testing services for othercompanies. We are now a high-end public service platform for inspection and testing technology that covers qualitytesting, standard development and revision, and method development for pharmaceutical products, cosmetics and medicaldevices from Southwest China. Our services have been recognized by more than 100 companies, including Kunming JidaPharmaceutical Co., Ltd, Yunnan Leiyunshang Lixiang Pharmaceutical Co., Ltd, Yunnan Xitao Green Pharmaceutical Co.,Ltd, Yunnan Hongxiang Herbal Medicine Technology Co., Ltd, Yunnan Phytopharmaceutical Co., Ltd, Kunming HerbalMedicine Co., Ltd, and Yunnan Dachu Food Co., Ltd. In 2022, we provided 5,089 technical services reports to variouscompanies, empowering the high-quality development of the pharmaceutical industry in Yunnan with our cutting-edgetechnology.
Yunnan Baiyao focuses on the "Four Lines of Defense" in quality management, strengthens the management of medicine productionand supervision, and regulates and directs the on-site work. The Company maintains quality assurance and compliance, updates theImplementation Rules for Quality Assessments and Rewards, and regularly conducts daily and special quality inspections.
A New Granule Packaging Production Line beingPut into Operation at Yunnan Baiyao's GranuleSouthwest UnitIn 2022, Yunnan Baiyao purchased a fully automatic granulepackaging production line and installed it in the Granule SouthwestUnit of the Production and Manufacturing Center, to improve theoverall brand image and quality of the Company's granule products.After purchasing the equipment, the Company renovated the plantsand installed the machines in accordance with the installationrequirements, and then applied for GMP-compliance inspection. Tobetter control product quality, the Company's Quality ManagementDepartment planned and coordinated the implementation ofvarious tasks. Specifically, it developed 6 SOP for equipment useand maintenance and 2 SOP for equipment cleaning; completed2 equipment verification plans and their reporting; developed andimplemented 1 cleaning validation plan and report; developed andimplemented process validation plans and reports for 2 varieties;completed the risk assessment for mixed production on the same line;developed and implemented a continuous stability testing plan; andcreated and reviewed the technical processes and volume productionrecords. Yunnan Medical Products Administration conducted on-site GMP-compliance inspections on our new granule packagingproduction line on May 26 and 27, 2022 and announced the result ofpass on June 20, 2022.Automatic granule packaging production lineTesting processesfor medicine qualitycontrol (LIMS)
Quality control ofdouble-ester alkaloids inYunnan Baiyao products
Quality control formedicineafety indicatorsand exogenous pollutants
Quality control of pesticide residues in products
Quality control ofmycotoxin in products
Quality Control at
Yunnan Baiyao
The Company has built a comprehensive testing capability platformthat can test our medicine, cosmetics, medical devices, herbalmedicine, decoction pieces, and a clean environment, providinga wide range of technical testing services for Yunnan Baiyao'sbusiness units and groups. In 2022, we made breakthroughs on 411testing items, including the detection of pesticide residues in TCMpieces and hazardous substances in health products. Currently,1,200 testing items in 5 elds of medicine, food, cosmetics, medicaldevices, clean environment, and pharmaceutical packagingmaterials have received validation from China Inspection Body andLaboratory Mandatory Approval (CMA), addressing product qualityrisks and further improving the quality of our products.Yunnan Baiyao has created an internal quality control system for key lab parameters and implemented quality controls in daily testing aswell as process control to ensure the accuracy of the test data. We also follow the principle of "manual comparison, standard recovery,blind sample testing, and cross-lab comparison" in implementing quality controls.
1,200
testing items in 5 elds of medicines,food, cosmetics, medical devices, clean environment,and pharmaceutical packaging materials have receivedvalidation from China Inspection Body and LaboratoryMandatory Approval (CMA)
4748YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Improving Overall Manufacturing Technology for Class I Medical Devices to Meet ComplianceRequirements
Updating Quality Standards for Medical Devices toPreempt Risks
Making E?orts to Enhance the Quality and Content of Panax Notoginseng Saponins (For Injection)
In early 2022, the National Medical Products Administration issued new Class I Medical Device Product Catalog (2021No.107), signicantly raising the recordation threshold for Class I medical devices, as well as regulating previously ledproducts. Yunnan Baiyao's Quality Management Department actively responded to changes made to Class I medicaldevices classication in accordance with new regulations by reviewing and improving product technical requirements acrossthe board, and updating product specications. The Company also changed its recordation records for 20 types of Class Imedical devices, re-applied for entrusted production recordation records for 4 types of products including bandages, andobtained new valid production ling certicates for Class I medical devices, all done within the required time limit thanks toits preemptive planning and detailed arrangements. This ensured that all of the Company's products fully comply with thenew Catalog and that the technical requirements for Class I medical devices have been enhanced overall.
In 2022, the National Institutes for Food and Medicine Control initiated a new batch of Panax notoginseng saponins controlextracts (110870-201904). Based on the announcement and actual needs, Yunnan Baiyao organized its project teams andconducted extensive research on the purication and rening processes of the product, in order to improve the quality ofPanax notoginseng saponins (for injection) and ensure that products manufactured after the transition period can meet thenew requirements on control extracts. After research and sample testing, our teams made sure that the content of Panaxnotoginseng saponins (for injection) met the requirements without conversion stipulated in the new standards, achieving abreakthrough in enhancing the consistency of product content and its corresponding preparation, successfully completingthe transfer of product manufacturing technology, and increasing our volume production capability for high-quality products.Three batches of products, each consisting of 700 kg, were manufactured, and they contain an average of 90.3% Panaxnotoginseng saponins and a maximum of 91.4%. The stability testing results for the injection proved satisfactory.
Training on Class I Medical Device Product Catalog and establishment and pilot testing of standard projects in 2022
Conducting Research on Raw Material Packaging to Ensure Better Quality
In 2022, the Quality Management De-partment of Yunnan Baiyao conductedvarious studies including acceleratedtesting to better control the loss ondrying (or moisture) of the extract andensure the quality of the product onmarket. The Company changed itspackaging method for Panax notogin-seng saponins and Erigeron extractpowder from double-layer low-densitypolyethylene pharmaceutical packagingto a combination of low-density polyeth-ylene pharmaceutical packaging in theinner layer and aluminum-plated (PET/VMPET/CPP) triplex sealing packagingin the outer layer. Furthermore, the out-er layer was sealed with a thermoplas-tic method, which makes the packagingmore air-proof and contaminant-resis-tant, to ensure the product quality.
Before and after the change of raw material packaging
Testing report from Yunnan Institute for
Medical Device Testing
In 2022, Yunnan Baiyao explored new elasticity testing methods for itselastic adhesive bandages based on the product monitoring data. TheCompany brought together Wuxi Pharmaceutical Co., Ltd, the Analysisand Testing Center, and an entrusted third party to conduct a comparativestudy of the three parties' testing methods. Ultimately, the item of reboundelasticity in the YY/T 0148-2006 standard was selected to replace theprevious elasticity testing indicator. After requesting a reassessment ofproduct technical requirements from Yunnan Institute for Medical DeviceTesting and passing third-party inspections, the Company obtainedrecordation approval documents for changing technical requirements ofelastic adhesive bandage products, to preempt the risk of unqualied elasticadhesive bandages in spot checks.
4950YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Yunnan Baiyao is constantly working to foster a strong quality culture, striving to integrate this culture into management practices,expanding its scope of work in product quality, and improving its quality management level. Furthermore, the Company strengthensemployees' identication with its quality culture and continuously adds value by leveraging the orientation, cohesion, restriction, andradiation of a quality culture.During its marvelous 120-year journey, Yunnan Baiyao has always prioritized product quality and customer services and regarded qualityas the lifeline for its long-term development, gaining market recognition. Quality is the foundation. Without it, there is no way to build abrand, compete in the market or achieve long-term growth, especially for pharmaceutical companies for which quality is the cornerstone.
Fostering a Strong Quality Culture
National Quality Month Activities Themed "Promoting Breakthroughs and Innovations in Quality,and Building a Quality Powerhouse"The 2022 National Quality Month activities themed "Promoting Breakthroughs and Innovations in Quality, and Building aQuality Powerhouse" provided a great platform for Yunnan Baiyao Group to enhance employees' awareness of quality andincrease corporate cohesion. They also served as a good opportunity for the Company to scale new heights in quality andmarch toward bigger goals.The Company's senior leadership placed a high value on Quality Month Activities. Acting in accordance with the guidingprinciples of the Notice on Conducting 2022 Quality Month Activities (2022-1235) issued by Yunnan Medical ProductsAdministration, the Company put the Technical Quality Committee in charge of organizing and conducting a series ofactivities, developing activity plans for the Quality Month, and striving for innovations and breakthroughs in both activitiesand their presentation forms, to ensure effective implementation of Quality Month activities. On February 26, Li Jin,Technical Quality Committee Director of Yunnan Baiyao Group, announced the launch of the National Quality Monthactivities and defined the company-wide theme as "Seize the Moment in Promoting Breakthroughs and Innovations inQuality, and Embrace a Bright Future through Building a Quality Powerhouse."
The Company organized a variety of activities during the Quality Month to encourage employees to take an active part inthem, in order to ensure that the anticipated e?ect can be achieved. With slogans and banners, the Company attemptedto foster a good atmosphere where everyone cares about quality, everyone highly values quality, and everyoneparticipates in quality activities. We also used posters to promote the Quality Month theme from various perspectives topractically improve employees' quality awareness and reach a company-wide consensus on boosting corporate growthby pursuing quality.
Li Jin, Technical Quality Committee Director of Yunnan Baiyao,announces the launch of the National Quality Month activities
Posters and slogans for National Quality Month Activities
Promoting and Distributing the Quality Management Manual
The Quality Management Department under the Production and Operation Centerof Pharmaceutical BG formed a Quality Control Team and developed a QualityManagement Manual. The Manual provided guidelines for quality managementactivities and applied to product development, manufacturing, sales, and after-sales processes and services in Pharmaceutical BG. We distributed 202 copiesto 20 departments and 3 subsidiaries. Each department organized its owntraining sessions on implementation of the Manual. Our Quality Control Team willrevise and update the Manual based on the suggestions and feedback from ouremployees.The Company arranged for relevant personnel to attend the awarding ceremony ofthe Quality Management Manual at Dali Pharmaceutical Co., Ltd. to highlight theimportance of the Manual to lifecycle management of product quality and documentsystem consistency and improvement. In addition, publicity sessions were heldand they elicited positive feedback from employees of the subsidiary, providingmomentum for future implementation and improvement.
Awarding ceremony of theQuality Management Manual
5152YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
Company-Wide Quality Improvements -Quality Control Team ActivitiesIn 2022, Yunnan Baiyao carried out company-widequality control team activities, and strictly followedthe procedures of reviewing and registering topics,conducting activities, summarizing activity results andwriting a report, publishing and evaluating internally,selecting representative work for national publication,and summarizing and promoting results and highlights.The Company registered 138 topics, evaluated 77topics internally, and selected 30 topics for nationwidepublication. While achieving outstanding results, we in-stilled the company-wide quality improvement conceptinto all employees’ minds, shaping employees’ logicalthinking abilities like problem discovery and Plan-Do-Check-Act (PDCA), and fostering a good quality culturethat prioritizes teamwork in solving problems.
Interviews with Quality Control teams
Engaging in Industry Exchange Events
Tengchong Scientists Forum
From December 1 to 3, 2022, Yunnan Baiyao co-hosted the 2022 Tengchong Scientists Forum - Entrepreneur InnovationForum to build an open, empowered, and shared ecosystem.
The theme for this Forum was "Science and Technology Leading the Future." The Forum aimed to pool global scientic,technological, and innovation resources, promote exchanges and cooperation in science and technology between China'seastern and western areas, and spur Yunnan to build itself into a science and innovation hub radiating througout South Asiaand Southeast Asia. These e?orts enhanced Yunnan's capability in boosting high-quality development through scientic andtechnological advances. The 2022 Forum gathered academicians and leading experts, passed down the founding spirit ofNational Southwest Associated University, and established a structure of "1+10+N," writing a new chapter of "Science andComprehensive Health."
2022 Tengchong Scientists Forum
Entrepreneur Innovation Forum
On December 3, 2022, Yunnan Baiyao Group and TusHoldingsco-hosted the sub-forum of Entrepreneur Innovation Forum.Supported by Tengchong Municipal People's Government,Yunnan Alumni Association of Tsinghua University, and TusStar,the sub-forum brought together businessmen and entrepreneursof high-growth firms, specialized and sophisticated enterprisesthat produce new and unique products, innovative start-upsfrom China's top innovative cities such as Beijing, Shenzhen,Shanghai, and Guangzhou, as well as business representativesof companies included in the TusStar Demo Day. Focusing oncorporate development and the pursuit of "Tower Top Effect,"corporate representatives shared their views on the promotionof technological innovation by entrepreneurs, the innovativedevelopment of industries, and the creation of an open innovationecosystem with global competitiveness.
2022 Entrepreneur Innovation Forum
Holding Thematic Activities on Building a Correct Mentality on Quality as well as ThematicActivities on Bottom-Line Mentality on Quality and Pursuit of Upper LimitsIn 2022, Yunnan Baiyao conducted publicity sessions themed "Quality is the Lifeline for a Company" for a second timebased on the Quality Month activities, to further improve employees' quality awareness and boost corporate growth. TheCompany held thematic activities on building a correct mentality on quality, as well as thematic activities on bottom-linementality on quality and pursuit of upper limits.
Thematic activities on Building a Correct Mentality on Quality/Thematicactivities on Bottom-Line Mentality on Quality and Pursuit of Upper Limits
5354YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTPIONEERING THE IDEA OF "COMPREHENSIVE HEALTH" AND PROVIDING QUALITY AND INNOVATIVE PRODUCTS
At Yunnan Baiyao, we are always provide responsible products to consumers, and we've developed and continually updated thesampling and recall procedures. The Company updated the internal Medicine Recall Management Procedures in accordance with theMeasures for the Administration of Medicine Recalls (Draft for Comments) issued by the National Medical Products Administrationon September 27, 2021. For products that do not meet the standards in sampling, the Company will immediately form a task force toconduct self-inspection, investigate and analyze the causes, assist regulatory authorities in inspections, and start internal managementprocesses to take the necessary corrective and preventive measures (CAPA). We will immediately contact the appropriate personnel toinvestigate and assess the safety risks of defective medicine after receiving complaints and notications of potential safety hazards inour organization. Based on the ndings of the analysis, we will then write an investigation and evaluation report. If a recall is necessary,our team will determine the recall level, create a recall plan, and ask for recall instructions based on the Medicine Recall ManagementProcedures. After the quality director approves the plan and gives instructions, we will start the recall process. In 2022, Yunnan Baiyaorecorded no medicine recalls due to quality and safety issues.
Based on the annual supplier audit plan, actual supplyconditions, and indicators for product safety and quality, YunnanBaiyao included 90 suppliers of raw and auxiliary materials,as well as internal packaging materials, in the audit list for2022. Suppliers were divided into 12 audit groups accordingto different stages. The Company completed the audit of 68suppliers in 2022; of these, 33 were performed on-site and 35online. Suppliers who did not get our audit in 2022 will receivepriority in 2023.Yunnan Baiyao continually improves its supplier review, access,and exit processes, standardizes supply chain management,clearly denes the duties of various departments, and promotescross-functional cooperation. The Company also activelycommunicates with suppliers and maintains a good relationshipwith them. These efforts ensure consistency in productquality. During the supplier evaluation stage, we examine thequalifications of new material suppliers, carry out extensiveevaluations, such as approval, experimental use, and on-siteaudits for request changes and plan assessments, and create alist of qualied suppliers based on the results of the preliminaryevaluation. Additionally, we dynamically manage these qualiedsuppliers. When adding new suppliers and materials, orrevoking supplier qualications, we should ll in the applicationform and submit relevant materials in accordance with thesupplier management process and the Change Control andManagement Procedures.In terms of supply chain management and control, suchas procurement or bidding, Yunnan Baiyao reviewed andoptimized the entire supply chain in 2022 and completedthe revision and approval of the Procurement ProcessManual, the Documentation Form Manual, and SOP Manual.
Product Recall and Handling Mechanism
Supplier Quality Management
Lancang-Mekong Forum on Exchanges in Science, Technology and Culture
Dong Ming, CEO of Yunnan Baiyao Group, put forward three curves for Yunnan Baiyao's development: product-driven,innovation-driven, and R&D-driven curve. At present, Yunnan Baiyao is at the top of the product-driven curve, meaningthe Company had produced premium products to drive its long-term development over the past 20 years. The innovation-drive curve is built around resource endowment and corporate DNA of Yunnan Baiyao. The Company values the provisionof solutions to meet users' needs. Relying on Yunnan's rich natural resources and research outputs in plants duringthese years, the Company delves deeper into the functions of plants and provides a technological platform for innovativedevelopment. Our R&D-driven curve is forward-looking. The Company has invested in technology R&D programs in theled of general medical technology, injecting strong momentum into innovation.
On December 1, 2022, Lancang-Mekong Forum onExchanges in Science, Technology and Culture was held.Zhu Zhaoyun, academician of the Chinese Academyof Engineering and TCM strategy scientist of YunnanBaiyao Group, delivered a keynote speech entitled"Ecological Civilizations and Natural Medicine." DongXun, general manager of Yunnan Baiyao Institute forStrategic Development and Director of Yunnan Institute ofMateria Medica, shared his views on the topic "InnovativeDevelopment of TCM Doctors and Herbal Medicine." Zhuand Dong also discussed with representatives from theLancang-Mekong region on sustainable development andcooperation in traditional medicine.
Academician Zhu Zhaoyun (Left) and Director Dong Xun (Right)
Yunnan Baiyao's CEO Dong Ming
In 2022, Yunnan Baiyao recorded
No
drug recalls due to quality and safety issues.
These measures further improved the regulations on dailyprocurement management, open and transparent mechanismson procurement operation, fixed asset procurement decision-making process, and bidding management rules for xed assetsprocurement projects. We organized all employees from theSupply Chain Operation Center to participate in process reviewand optimization and study the newly revised DocumentationForm Manual, SOP Manual, and Procurement ProcessManual to regulate the process and management system ofprocurement activities.In terms of evaluating and controlling supplier risks, YunnanBaiyao evaluated the qualifications of newly added suppliers,and referred to the risk assessment opinions of TianYanCha.com. If there are problems in logistics, quality, or manufacturingadaptability in our daily operations, we will urge suppliers toaddress them as soon as possible. Moreover, we maintain dailycommunication with major suppliers to stay up to date with theirbusiness status. Additionally, we normally check the productafter its arrival to ensure it meets our standards before makingpayments to avoid nancial risks.Yunnan Baiyao advocates the use of the portal system tosuppliers and provides systemic online training to help themquickly understand our material requirements and systemoperations. The usage rate of the portal system reached 92.7%.We've added 7 close suppliers: 1 for raw and auxiliary materialsand 6 for packaging materials. The system prepares us toseamlessly integrate the Warehouse Management System(WMS) and Quality LIMS Platform, reducing human errorsand signicantly increasing procurement e?ciency. The entireprocurement process is traceable in the system.
5556YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTBUILDING CUSTOMER TRUST AND SERVING MODERN HEALTHY LIFESTYLES
BUILDING CUSTOMER TRUST
AND SERVING MODERNHEALTHY LIFESTYLES
To provide satisfying consumer experiences, Yunnan Baiyao consistently adheres to a customer-rst servicephilosophy, building a multi-channel marketing network for customers, exploring innovative marketingstrategies, rening user management, and ensuring user privacy and security. Concurrently, the Companyactively promotes the development of a modern pharmaceutical logistics system, thereby improving accessto healthcare resources and protecting the nation's health.
This chapter corresponds to the following Sustainable Development Goals:
YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT
Multi-channel Outreach for Satisfactory Experiences
With the principle of "all for customers," Yunnan Baiyao strives to provide comprehensive and full lifecycle services by utilizing variousmarketing channels and establishing long-term, stable relationships with its customers. Yunnan Baiyao, with the most professionalservice team, provides specialized, personalized, and systematic services while appreciating customers' suggestions and feedback. TheCompany responds quickly to customer's needs, which increases customer satisfaction.
In order to increase brand inuence and to expand the market, Yunnan Baiyao has consistently enriched its marketing channels andstepped up promotional e?orts. The Company consistently broadens its sales channels across online platforms and physical stores toprovide customers with satisfying consumption experiences. We have created online sales channels that cover the Company's full rangeof products, including pharmaceuticals, personal care products, supplements, health care products, health foods, and pharmaceuticalservices, by developing long-term, stable cooperation with online platforms like Tmall, JD.com, Pinduoduo, Douyin, and WeChat Mall.The Company promotes experiential marketing, improves the interactive experience of consumers, and enhances multi-channel, multi-faceted marketing networks by establishing o?ine stores in Kunming, Dali, Lijiang, Tengchong and other cities, and deeply cooperatingwith large supermarkets in various locations. This elevates the consumers' product experience and service satisfaction.The Company continued its information technology construction e?orts in 2022 with the goal of providing data-driven and intelligentservices to its users. The 2022 "Epoch-making Cloud" membership system of "Baiyao Life+" was launched, and the system categorizesusers users based on di?erent label types, and allows for diverse, customized, precise and e?ective marketing outreach. During thereporting period, the Company added 180,000 new members, representing a 52% increase over 2021. The number of members whorepurchased increased by 80% over 2021, with repeat purchase amounts increasing by 15%.Through continuous expansion of online and o?ine marketing channels and the implementation of information technology constructione?orts, Yunnan Baiyao achieved signicant breakthroughs in a variety of areas, including new product development, e-commerce, brandoperations, strategy, and professionalism throughout the year.
Diversied Marketing Channels
Yangyuanqing's Exploration of the Third CommunicationScenario for ConsumersThrough the launch of the "Yangyuanqing Community Blossom Plan,"Yangyuanqing has interacted deeply with potential users through "HairCare Stations" and "Anti-Hair Loss Aerobics," breaking away from theoriginal scenarios of the retail scene and entering communities, businessdistricts, camping sites, and offices. In 2022, a total of 106 communityevents, 4 business district events, and 2 large-scale camping events wereheld. Through these activities, its o?cial WeChat account gained 27,424new followers and the brand reached more than 10.04 million customers,penetrating more than 60 external social groups. Market research andusers' feedback were integrated to drive and maintain long-term businessgrowth.
Hair Care Station
Yangyuanqing Anti-Hair Loss Aerobics Base
Yangyuanqing hosted the authoritative online summit "Scientific Hair Loss Prevention and ScalpCare." By establishing its independent knowledge IP "Yangyuanqing Hair Loss PreventionManagement Bureau," the brand reinforced its professionalism in hair loss prevention, enhancingbrand credibility.
Yangyuanqing carried out a marketing campaign through cooperation with Dunhuang IP, holding the"Yangyuanqing Dunhuang Brand Launch Event and Yuequan Shahai Music Festival." The campaignintegrated brand building, product release, business maintenance, user engagement, and brande?ectiveness conversion, utilizing a combination of online and o?ine marketing strategies.
The company launched new brand channels on major e-commerce platforms such as Baidu, WeChat,and Xiaohongshu, unifying brand image.The company leveraged free authoritative resources worth over RMB 6 million, such as CCTV andairports, to achieve coverage of hundreds of millions of users."Yunnan Baiyao Oral Health" carried out differentiated marketing, collaborating with well-knownnational artists and incorporating IPs such as "Summer Graduation Song Festival" and "Talk ShowConference" to enhance brand inuence. In 2022, the accumulated brand audience assets exceeded
95.68 million people, with a total exposure of 2.328 billion times and reaching 599 million people
throughout the year.
"Yunnan Baiyao Oral Health" leveraged the synergy between product and content on Xiaohongshu topromote its mouthwash category, achieving rapid growth on the platform. Its mouthwash ranked Top 5in Xiaohongshu platform search and had the highest brand penetration rate (No. 1).The subsidiary brand Yangyuanqing continued to make breakthroughs in interest-based e-commerce,reaching 730 million views on its Douyin special channel, with a 15-fold increase in online audienceassets. In 2022, Yangyuanqing achieved a total exposure of 3.45 billion times and reached 213 millionpeople.
In July 2022, the Oral Intelligent Care Comprehensive Solution BU launched 23 new products,including water osser, mouth rinse, and mouth spray. Among them, the oral spray category rankedrst in the new e-commerce Douyin channel.
CategoryBreakthrough
New Products
E-commerce
BrandOperations
Strategies
Professionalism
BUILDING CUSTOMER TRUST AND SERVING MODERN HEALTHY LIFESTYLES
5960YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTBUILDING CUSTOMER TRUST AND SERVING MODERN HEALTHY LIFESTYLES
Furthermore, we actively practice responsiblemarketing in all aspects of our sales process andplace a high priority on training our employees inresponsible marketing and advertising practices.We launched the "Youliao Club" campaign in 2022,inviting industry professionals to share their insightsin four sessions covering topics "Efficient Marketingin the Health Industry Under Traffic Anxiety,""Private Domain Real Growth of Brand Users in72 Hours," "Short Video Marketing Drives BrandGrowth Throughout the Entire Chain Evolution,"and "Trademark and Brand Marketization." Morethan 200 employees from the Company's variousbusiness units and marketing departments took partin the "Youliao Club" campaign. Yunnan Baiyao heldfour brand and user marketing training sessions withover 200 participants during the reporting period,e?ectively improving our employees' comprehensiveservice capabilities and sales skills.
Yunnan Baiyao responds to the "Internet + Healthcare" online consumption mode by innovating product marketing models and activelyconnecting with e-commerce platforms to increase product market share and business coverage while building self-operated channels.We formed a functional food product management team and an interest-based e-commerce product team in 2022, as well as a self-operated channel for functional food products. We continuously tested channel strategies, improved user proles, and optimized productexperience to gain user's trust and quickly establish the business chain.We tested the online ssion activity "Earning Rewards through Product Referral" based on the new retail channel brand "Baiyao Life +,"iterated smooth user operation processes, and achieved double growth in the number of corporate WeChat's new followers and tra?cgenerated by the Company's mini program.
Innovating Marketing Strategies to Drive Responsible Marketing
Creating a Communication Matrix by Linking O?cial AccountsIn 2022, Yunnan Baiyao celebrated its 120th anniversary. The company created a video using Mao Buyi's song "TheCollector of Light" as its background music. It linked 12 o?cial Yunnan Baiyao accounts as promotional platforms to build acommunication matrix, achieving 150,000 natural view counts, 2,000 likes, over 3,500 shares, and over 160,000 live viewcounts of the video.
The music video The Collector of LightYunnan Baiyao's 120th anniversary
E?cient Marketing in the Health Industry Under Tra?c Anxiety
Short Video Marketing Drives Brand Growththroughout the Entire Chain Evolution
Private Domain Real Growth of Brand Users in 72 Hours
Trademark and Brand Marketization
In 2022, we took advantage of the national and provincialgovernments' favorable policies on traditional Chinese medicineand built a new "Internet + Urban Central Pharmacy" industrychain centered on patients. We increased the promotion andsale of traditional Chinese medicine decoction pieces throughoutthe province at various levels of terminal medical institutions.Simultaneously, we collaborated with pharmaceutical servicecenters in Dali City, Yongshan County, and other locations,adding nearly 100 new clients by leveraging the YunnanBaiyao brand and quality advantages. In 2022, Yunnan Baiyaoachieved a record-breaking sales revenue of more than RMB100 million in traditional Chinese medicine decoction pieces,with sales increased 2.4 times compared to the same period in2021.
In 2022, Yunnan Baiyao achieveda record-breaking sales revenueof more than RMB
million in traditional Chinesemedicine decoction pieces
Sales increased by
2.4
timescompared to the sameperiod in 2021
During the reporting period, thenumber of brand and user marketingtraining sessions conducted byYunnan Baiyao was
The number of study visits exceeded
participants
6162YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTBUILDING CUSTOMER TRUST AND SERVING MODERN HEALTHY LIFESTYLES
"Winter Diseases, Summer Treatment" Campaign O?ering Free TCM Services
In 2022, Yunnan Baiyao City Health Center TCM Clinic initiated a "Winter Disease, Summer Treatment" free clinic and TCMexperience activity. The on-site event included free eye, skin, and nasal allergy screenings, as well as TCM experienceprojects such as moxibustion, acupuncture, and shoulder-neck-waist-knee therapy. Residents could experience thediagnosis and treatment based on their individual needs and enjoy the benets of TCM development. This campaign helpedresidents understand their health conditions and promoted the traditional culture of TCM health preservation.
"Winter Diseases, Summer Treatment" Free clinic
Yunnan Baiyao constantly improves its customer service system, thoroughly understands customers' needs and protects customers'rights and interests while increasing customer satisfaction through policies, service standards, and feedback handling.Rening Customer Management and Perfecting Customer Service in a Tiered Approach
In 2022, Yunnan Baiyao revised the Customer Management System and Customer ComplaintHandling Procedure for Chain Stores and added new regulations such as the CustomerComplaint Management System which standardizes the management of store customers andmembers, as well as the complaint-handling processes.SystemGuarantee
Urban Health center Operated by Yunnan Baiyao
In 2022, Yunnan Baiyao started to operate urban health center, creating a "Mobile Urban Health Center" model, reachingout to enterprises, communities, and schools, and conducted health consultation services and volunteer clinics nearly 40times, promoting the health of the nation while spreading the brand.
Yunnan Baiyao combines its daily operations with public welfare and traditional culture, including operating urban health center, carryingout free clinics, providing health consultation services and providing free traditional Chinese medicine experience while constantlyinnovating its sales model. The Company aims to increase its brand inuence and foster the growth of a thriving market by promotinghealth knowledge and raising national health awareness.
In 2022, Yunnan Baiyao organized a series of training programs to reinforce its customer-oriented service concept among its employees.These online and on-site programs covered topics such as health management and TCM health knowledge to enhance employees'expertise in providing professional health management services. The Company also carefully reviewed customers' feedback andrequests from its free clinic activities. It summarized users' needs and explored future initiatives to improve its overall customer servicecapabilities, demonstrating its unwavering commitment to delivering exceptional customer service.Yunnan Baiyao improved its community operation system in 2022 by implementing the "Product + Service + Community" model, toincrease customer loyalty and community engagement. Store members, online customer activity groups, specic activity groups, andsharing experts are the four distinct groups of customers in the Company's community. The Company was able to better understandits customers' needs and provide tailored product and service offerings by curating customized content, benefits, and activities foreach group, which attracted more target customers and helped customers fully appreciate the unique advantages and value of YunnanBaiyao's products and services.
ServiceStandards
ComplaintHandling andFeedback
In 2022, adhering to the Three No's principle, Yunnan Baiyao deepened its customer-centricservice philosophy and established a dedicated personnel mechanism to respond quickly tobusiness needs, ensuring that no issue is left unanalyzed, no preventive measures are leftunimplemented, and no training is left undone.
In 2022, Yunnan Baiyao deepened its understanding and recognition of a customer-centricapproach by establishing a rst-inquiry responsibility system and a feedback system to listento customer's voices, in order to optimize the service standards for customer reception andenhance customer satisfaction.In 2022, the average user satisfaction of Yunnan Baiyao's stores in all channels of thee-commerce platforms was 93.25%, an increase of 4% from 2021.In 2022, Yunnan Baiyao utilized various platforms to reach customers, including the4001000538 hotline, its official WeChat account, and its official website. The Company'se-commerce platform conducted statistical analysis and feedback on customer complaintsregarding membership gifts, delivery, unfulfilled promises, incorrect refund/compensationprocedures, product quality, and other issues. Throughout the year, a total of 301 online ando?ine complaints were received, all of which were responded to and resolved within 24 hours,with the resolution rate reaching 100%.
6364YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTBUILDING CUSTOMER TRUST AND SERVING MODERN HEALTHY LIFESTYLES
Yunnan Baiyao actively develops a digital medicine cloud platform with theprimary goal of meeting the consumers' full lifecycle health managementrequirements. The platform is based on big data and articial intelligencein traditional Chinese medicine, and it aims to achieve intelligent hospitalmanagement, auxiliary diagnosis and treatment, health management,pharmaceutical logistics supervision, and intelligent decoction anddispensing through digitalization, standardization, modernization, andindustrialization. It achieves visualized pharmaceutical services andtraceability of the entire medication process, resolving the problem ofhigh-quality decoction for hospitals and small clinics and ensuring thatpatients receive quality medical treatment and medication.To implement the national strategy of "Internet + Internet of Things + TCMHealth," we actively explore the Internet medical market, develop modernsmart logistics, establish, and constantly improve the circulation systemof traditional Chinese medicine planting, breeding, initial processing,packaging, warehousing, transportation, and sales, and provide homedelivery services of traditional Chinese medicinal materials, therebyimproving medical accessibility.
Yunnan Baiyao actively improves the accessibility of its products to communities and remote areas, promoting the clinical use of existingproducts to fully unleash their commercial potential, and further improving medicine a?ordability for patients and consumers to ensurethe supply of medicine to grassroots and remote regions and to meet the special medication needs of certain groups.In order to ensure the medicines in short supply, the Company has assigned dedicated personnel to monitor the market supply basedon the list of medicines in short supply published by China and Yunnan Province, as well as the key monitoring list of medicines inshort supply in China and Yunnan Province over the last three years. This is done to ensure maximum supply and to deal with potentialmarket medicine shortages. Yunnan Baiyao followed up on a total of 46 varieties (80 products) of medicines in short supply in 2022.To ensure emergency medicines supply, the Company has updated the catalog of emergency medicines and classied them basedon their indications and medicine classification standards. We monitor the shelf life of emergency medicines and conduct regularinspections and early warning management on the supply and inventory of emergency products to ensure the availability of emergencymedicine in hospitals and to contribute to the protection of users' health and safety. Yunnan Baiyao has followed up on a total of 55 types(224 products) of emergency medicine as of 2022.Constructing a Medicine DistributionNetwork through Logistics DevelopmentYunnan Baiyao is market-oriented, constantly improving the construction of its modern pharmaceutical logistics system, improvinglogistics and transportation capabilities, and stabilizing product storage to build a healthy pharmaceutical industry chain. It aims toimprove pharmaceutical accessibility, provide better services to the public, and protect the nation's health.
In 2022, the Company expanded its presence in Yunnan by implementing a full-coverage marketing strategy for end channels withinthe province. It built strong business relationships with all of Yunnan's tertiary hospitals and more than 90% of the secondary hospitals.Basically, a full-channel layout covering all county-level and higher medical institutions in the province was achieved. Meanwhile, theCompany achieved 100% coverage of major retail chain pharmacies throughout the province through commercial distribution.
Enhancing Accessibility to MedicineFull-coverage Marketing Strategy
Digital Medicine Cloud Platform
Ensuring Medicine Supply
Intelligent decoction and dispensing
Medicine traceability
Yunnan Baiyao strictly adheres to the laws and regulations such as the Law of the People's Republic of China on the Protection ofConsumer Rights and Interests and the Personal Information Protection Law of the People's Republic of China, constantly improvingits information security management system and prioritizing customer data information security and privacy protection to prevent anyleakage of customer information.
Ensuring Information Security at All Levels
In 2022, there was
No
network information security incident in Yunnan Baiyao.
Yunnan Baiyao created an integrated data disasterrecovery and testing platform to ensure real-time dataacquisition, backup, and verification, as well as thesecurity of the Company's core data.
To ensure the security of enterprise data transmission,the Company upgraded and changed its internet securityexport, building on dual-active data centers and storagesnapshot technology.
Based on the ESET antivirus program, the Companystrengthened its border rewall even more, put in placea thorough virus detection, control, and preventionprocedure, and stopped the leakage of crucial data.
To ensure the security and compliance of physical terminalinformation, the Company evaluated the managementrisks of retail pharmacy member information throughthird-party institutions like law rms. All retail pharmaciesoperated by Yunnan Baiyao complied with informationmanagement standards in 2022.
Yunnan Baiyao followed up on a total of
varieties(
products) of medicines in short supply
Yunnan Baiyao followed up on a total of
types(
products) of emergency medicines
6566YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTFOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
FOCUSING ONENVIRONMENTAL SAFETYTO ENHANCE SUSTAINABLEVALUE CHAIN MANAGEMENT
Yunnan Baiyao is committed to environmentally friendly and sustainable development, with a focuson environment protection and safety concerns. Through practical actions, we continuously optimizeresource utilization, promote energy conservation and waste reduction, and carry out green and low-carbon operations. We also actively promote biodiversity conservation and contribute to the valuechain's environmental benefits, improving our ability to manage the value chain sustainably andfullling our corporate responsibilities from all perspectives.
This chapter corresponds to the following Sustainable Development Goals:
6768YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTFOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
Yunnan Baiyao abides by the Regulations of the People'sRepublic of China on Wild Plants Protection, making e?ectiveuse of plant medicinal resources while protecting endangeredwild plant species. The risks of using endangered wildanimals and plants are assessed during the development ofmedicinal materials. The Company aims to rationally developnatural resources and comprehensively promote biodiversityconservation by establishing an authentic Yunnan Chinesemedicinal material gene bank and remaining committed to theprotection of nationally endangered species, domestication ofwild plants, and selection and cultivation of Chinese medicinalmaterial varieties.Yunnan Baiyao established a dedicated company in 2001to carry out pre-breeding work for the "domestication of wildplants" in order to meet its own development needs and achievethe sustainable utilization of medicinal resources. The companygradually met the demand for medicinal supplies by selectingand cultivating high-quality seeds to improve disease resistanceand developing large-scale planting. Yunnan Baiyao begantrial planting of Paris polyphylla var. yunnanensis in 2001,and in 2005, the Company began scientific research on thedomestication of wild Psammosilene tunicoides. The successfuldomestication of wild varieties of distinctive traditional Chinesemedicinal materials, like Paris polyphylla var. yunnanensis,has been accomplished after nearly 20 years of work. This hassatisfied the needs of the Company as well as those of thedomestic pharmaceutical companies and the entire market.
Protecting Endangered Wild Plantsthrough Source Management
Building a Sustainable Supply Chain withResponsible Procurement
Protecting Endangered Wild Plants
Yunnan Baiyao, who believes in "helping the world with medicine and restoring the true nature of medicinal materials," recognizes thattraditional Chinese medicinal materials are derived from nature and is committed to protecting endangered wild plants and achievingsustainable development of traditional Chinese medicinal materials.
A sustainable supply chain management system has been established by Yunnan Baiyao, which strengthens the quality and safetyoversight of upstream pharmaceutical materials. The Company ensures sustainable supply chain management for traditional Chinesemedicine throughout the entire process, from procurement and production to packaging, by building a thorough traceability system forquality monitoring. This strategy ensures the realization of both industrial economic value and environmental value and guides the greenand sustainable development of the industry chain.
The Company has been successful in making the transitionfrom fully using wild resources to using domesticated varieties.To domesticate Fritillaria cirrhosa resources and set up a tissueculture lab in 2022, Yunnan Baiyao invested over RMB 1.5million. This was done in order to implement interdisciplinarycross-disciplinary breeding work for medicinal plants by fusingtraditional breeding with tissue culture technology. After years ofresearch and development, the new Knoria valerianoides varieties"Yunji 1" and "Yunji 2" which were cultivated in 2022, have beenwidely adopted and have provided significant economic andsocial benets.Yunnan Baiyao believes in green development and has assessedthe circulation, reserves, estimated consumption, risks, andmeasures of traditional Chinese medicinal materials destinedfor industrial development in accordance with the NationalMedical Products Administration's Technical Guidelines forChinese Medicinal Resources Assessment and other regulationsand technical guidance principles. Projects involving criticallyendangered wild animals and plants are not permitted. Buildingon this foundation, we are actively engaged in new variety ofresearch and development with technological advantages toestablish a traditional Chinese medicinal materials gene bank.This ensures the completeness and sustainable utilization ofwild resources, full protection of the ecological environment andbiodiversity, and harmonious coexistence of humans and nature.
Yunnan Baiyao has been working on developing its owntraceability system since 2018. The Company has successfullyestablished a comprehensive traceability system thatincludes agricultural operation information at the plantingstage, processing information at the production stage,and storage information at the warehousing stage throughcontinuous research and development. This system ensuresthe authenticity, accuracy, and complete traceability of nearlya thousand self-produced medicinal materials and preparedslices. Yunnan Baiyao integrated the system with the MedicalProducts Administration of Yunnan Province's medicinetraceability system in 2022, uploading existing traceability datato the regulatory platform and obtaining government approvalfor the traceability content.We actively participated in the construction of the YunnanProvince Traceability Technology Service Platform basedon the "Traditional Chinese Medicinal Materials + Internet"mindset. We created the "Yunyao Traceability Platform" toprovide traditional Chinese medicinal materials with information,data, quality inspection, high-quality seed sources, and expert
Source Control
technical services. This platform builds a standardized anddigitized chain for traditional Chinese medicinal materials,ensuring that their sources can be traced, destinations can beveried, responsibilities can be held accountable, and the entireprocess can be tracked. The platform achieved full coverageof raw material cultivation, quality control in the manufacturingprocess, and warehousing storage. Yunnan Baiyao traced morethan ten times in 2022, adding 11 new traceable enterprises andinvolving Yunnan local traditional Chinese medicinal materialssuch as Paris polyphylla, Panax notoginseng, Gastrodia elata,Carthamus tinctorius, Salvia miltiorrhiza, Amomum villosum,Auckiandia lappa Decne., Angelica sinensis, Platycodongrandiorus, Gentiana macrophylla, and Knoria valerianoides.We transformed traditional agricultural products throughadvanced technological tools to achieve digital empowermentin 2022 by utilizing new technologies, new equipment, and newprocesses across diverse application scenarios. This methodmaximized the value of data extraction while also allowingcustomers to easily trace the origins of our products.
New Knoria Valerianoides VarietiesDeveloped and Bred by Yunnan BaiyaoIn 2022, the Company made full use of the collected and preserved varioustypes of wild Chinese medicinal plant germplasm resources to carry out newvariety research. We bred the "Yunji 1" and "Yunji 2" Knoria valerianoidesnew varieties suitable for controlled cultivation, and promoted their plantingin suitable areas. By replacing wild resources with artificially cultivatedvarieties, we achieved effective protection of wild resources and rationaldevelopment and utilization of resources. While ensuring market demand,we e?ectively protected biodiversity and demonstrated the Company's senseof social responsibility.
Knoria valerianoides
Medicinal PlantCultivation Base
Whole plant
of Knoriavalerianoides
Planting Digitization
Using modern soilless cultivation techniques and automated control modelsfor light, moisture, and fertilizer to overcome the obstacles of continuousPanax notoginseng cultivationCombining gene probe technology to e?ectively prevent pests and diseasesof plants, thus increasing the yield of Panax notoginseng cultivationProduction Digitization
Applying Manufacturing Execution System to digitize the recording ofproduction processes and equipmentStorage Digitization
Utilizing IOT technology and combining with atmosphere regulation, electroniccargo location cards, to have real-time access to inventory informationApplying Warehouse Management System to digitize the records of goodsentering and leaving the warehouseSales Digitization
Real-time display of the entire supply chain statusCreating virtual product proles, quickly matching inventory, and specifyingdelivery times
Digital Empowerment
6970YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTFOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
Yunnan Baiyao actively promotes green packaging materials, employs a circular production mode, continuously optimizes productpackaging, promotes packaging reduction, and engages in organized packaging material recycling in order to reduce packaging materialusage and minimize the negative impact on the environment. Yunnan Baiyao explored a full-scenario of packaging material reduction forthe use of toothpaste products in 2022.
Packaging Materials Usage
Yunnan Baiyao Packaging Material Usage in 2022
CategoryUnitUsage Volume
PaperTon1.45PlasticTon3,500GlassTon890AluminumTon1,650Composite Flexible PackagingTon1,988
Yunnan Baiyao strictly adheres to the Law of the People'sRepublic of China on Environmental Protection, the Law ofthe People's Republic of China on the Prevention and Controlof Atmospheric Pollution, the Law of the People's Republicof China on the Prevention and Control of Water Pollution,the Law of the People's Republic of China on the Preventionand Control of Environmental Pollution Caused by SolidWaste, the Law of the People's Republic of China on thePrevention and Control of Pollution from Environmental Noiseand other laws and regulations. Internally, the Company hasformulated and implemented environmental managementpolicies such as the Environmental Protection ManagementSystem, the Environmental Protection Responsibility System,the Environmental Protection Approval Management Systemand the Hazardous Waste Management System. In 2022, theCompany signed the Environmental Protection ResponsibilityAgreement, clearly defining the primary persons responsiblefor environmental protection, continuously improving theenvironmental management system, and striving to achievecoordinated progress between enterprise development andenvironmental protection.
Yunnan Baiyao incorporates green development concepts intoevery stage of production and operation, strictly controllingwastewater, exhaust gas, and waste generation and dis-charge. To strengthen corporate environmental protection re-sponsibilities, the Company establishes specialized accountsfor each subsidiary, conducts monthly statistical analysis onenvironmental protection work, strictly records and monitorsvarious pollution indicators, and ensures emissions meetrequired standards after proper treatment.The Company established an environmental risk identicationmechanism, strengthened environmental inspections ona continuous basis, and performed regular environmentalsupervision work. We analyze identified environmental risks,conduct environmental hazard inspections, and proactivelyassist each polluting unit in addressing any issues discoveredduring inspections by developing effective rectification plansand measures, thereby improving the specialized emergencyresponse plans. This reduces the negative environmentalimpact of project construction and production operations andassists the Company in e?ectively avoiding environmental risks.
Improving Environmental Protectionto Promote Circular Economy
Environmental ManagementWaste Management
Yunnan Baiyao is dedicated to "ecological harmony and green development." It actively assumes environmental responsibilities andworks to establish and improve an environmental management system. The Company strictly enforces various waste dischargemanagement measures and actively investigates the application of new energy technologies in order to deeply integrate the concept ofsustainable development into all stages of production and operation, achieving continuous improvement in environmental performance.In 2022, the Company had no environmental pollution accidents.
Wastewater treatment facilities areestablished in each factory, treatingwastewater generated from productionand daily life to render it harmless.Continuous 24-hour monitoring ofpollutant data is uploaded to provincialand municipal environmental protectionauthorities, ensuring that dischargestandards are met before beingdischarged into municipal sewagepipelines or reused as reclaimed water,preventing harmful pollutants fromseeping into the ground or owing intorivers.
For dust generatedduring the cuttingand crushing ofraw materials, bag-type dust removaldevices are installedat the sourceto prevent dustemissions.
Daily generatedmedicine residuesare transferred tothird-party disposalinstitutions for organiccomposting treatment,achieving resourceutilization of waste.
Proper disposal iscarried out by thirdparties with hazardouswaste treatmentqualications.
We conducted feasibility testing and prepared technicalreserves in 2022 to eliminate film coating on toothpastepaper boxes. It was demonstrated through relevanttests on products without film coating that there wasno significant difference in product runnability, logisticstransportation, and drop test compared to those with a lmcoating. If toothpaste paper boxes can be manufacturedwithout lm coating, the use of PET lm will be reduced byapproximately 47 tons per year.
Paper Box Lightweighting
To reduce waste pollution and material costs, we promotedthe replacement of granular and strip packaging. Currently,the packaging replacement for 22 varieties has beencompleted.
Packaging Optimization
We collaborated with the manufacturers to carry out thereuse of medicine box logistics cartons, increasing thesupply chain's e?ciency in using cartons and lowering themanufacturers' overall carton purchasing volume. This wasdone to increase environmental protection awareness andconserve social resources. We were successful in reusing134,600 logistics cartons for medicine boxes in 2022, withan average of 45,000 per quarter.
Carton Optimization
Because of the ongoing advancements in packagingtechnology, thinner sheets can now provide the same levelof barrier protection. These lightweight new materials canbetter protect the safety of the toothpaste body and reducethe usage of raw materials because the thickness of manymainstream toothpaste products' tubes on the market hasbeen reduced to 250 microns, and even some have beenreduced to 180 microns. We formed a special project teamin cooperation with relevant toothpaste tube suppliersto get ready for the updating and transformation of theCompany's soft tube toothpaste packaging. Two yearsof testing revealed no appreciable differences betweenthe thinner toothpaste tube packaging and the originalthickness packaging.
Toothpaste Tube Lightweighting
WastewaterManagement
Non-hazardousWaste Management
Hazardous WasteManagementExhaust GasManagement
Exhaust Gas Management for Newly Produced ToothpasteFor newly produced toothpaste, the toothpaste powder raw material is transported through pipeline pneumatic conveying,which reduces dust and odor diffusion problems caused by manual feeding and other open processes. Dust filters andcollection devices are installed in all stages involving powder production, strictly controlling dust overow.
YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT
Advanced Wastewater Treatment Technology Applied in Health Product Projects
The Company conducted in-depth research and discussions on production wastewater treatment in 2022 during thereconstruction of the newly-built wastewater treatment plant, which obtained preliminary stage results and gainedexperience for future similar projects.In terms of production wastewater treatment, toothpaste production wastewater has complex components and is considereddi?cult-to-treat industrial wastewater. The pollutants in traditional Chinese medicine production wastewater are relativelysimple in composition and have good biodegradability. They can be e?ectively treated through various methods such asphysical and biochemical processes. The old wastewater treatment plant in the Yuhua Industrial Park has long su?eredfrom a lack of phosphorus, requiring the addition of phosphorus to the adjustment tank separately. However, toothpastewastewater contains higher levels of phosphorus, which can balance out the wastewater from the treatment plant, savingtreatment costs.By mixing toothpaste wastewater with traditional Chinese medicine wastewater in the Yuhua Industrial Park, we havee?ectively diluted pollutant concentrations and improved wastewater biodegradability. The newly-built wastewater treatmentplant in the project has a treatment capacity of 1,200 cubic meters per day. The surplus treatment capacity constructed inthis project can be used for wastewater treatment in the Yuhua Industrial Park, reducing the pressure of the old wastewatertreatment plant and facilitating resource allocation at the group level. The treated reclaimed water can be used for irrigationof the factory's greenery, saving water costs.
Panax Notoginseng Plantation Achieving Waste Material Resource Utilization
Wenshan Qihua Company adopts advanced online monitoring technology for gas boiler flue gas emissions. A closedtreatment process is adopted in wastewater treatment, achieving recycling through the recovery of Panax notoginsengcleaning water, partial wastewater preparation as reclaimed water, biogas recovery from wastewater, and condensatewater recovery. In 2022, the total wastewater treatment volume was 268,537 cubic meters, biogas recovery volumereached 181,495 cubic meters, and 589 tons of steam were produced. The Panax notoginseng cleaning water reusevolume was 153,460 cubic meters, reclaimed water usage volume was 2,900 cubic meters, and condensate water recoveryreached 24,546 cubic meters throughout the year. This saved the Company approximately RMB 2.0894 million in energyconsumption costs, enabling rational use of environmentally friendly energy, ensuring that external water and atmosphericemissions are discharged under regulations, and achieving the company's energy-saving and environmental goals.
Wastewater Discharge in 2022
Discharge SourceUnit202020212022
WastewaterDischarge
Ton313,340.00395,550.00297,193.88CODTon10.746.976.97Ammonia NitrogenTon0.210.1660.166
Hazardous Waste Emission in 2022
Emission SourceUnit202020212022
Waste Medicineand MedicineHW03
Ton
7.8011.191.30
LaboratoryWaste LiquidsHW49
Ton
10.929.9211.83
General Waste Discharge in 2022Emission SourceUnit202020212022
Medicine Residuesand Sludge
Ton16,125.8217,869.5621,218.41
Exhaust Gas Emission in 2022Emission SourceUnit202020212022
Emission Volume10,000 m?3,994.002,313.005,086.90Particulate MatterTon0.830.460.19Nitrogen OxideEmissions
Ton4.912.294.18
The Company has actively supported research, development, and innovation in the optimization of production processes. Thishas been done by carefully examining and improving optimization strategies, concentrating on the most important and challengingaspects of its work, and experimenting with new technologies. By increasing production capacity, we avoid the environmental e?ectsof waste emissions, and we further improve production e?ciency and attain sustainable development in production and operation. Bycoordinating technical exchanges, carrying out environmental protection education, and o?ering technical support for environmentalprotection projects, the Company achieved resource utilization of waste in 2022, ensuring the sustainability of its ongoing production andoperation.
FOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
7374YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTFOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
In 2022, we promoted national environmental laws, regulations, policies, and the latest developments through environmental festivalssuch as "World Environment Day" and "Earth Day," actively carried out environmental education activities, created a good learningatmosphere for environmental protection, and continuously improved employees' environmental protection awareness.
Yunnan Baiyao, as a key energy consumption regulatory unit, actively responds to the national "Dual Carbon" strategy. The Companyimproves the construction of the online energy monitoring system, implements the energy-saving target responsibility system,continuously improves the energy management system, actively applies energy-saving transformation technology, strengthens energy-saving publicity, and raises awareness of "Dual Carbon" among all employees. Simultaneously, we are investigating digital energymanagement, which involves the use of digital and intelligent technologies to improve energy management and unlock more energy-saving potential.
Carbon Emission Management
Exploring the "Carbon Footprint" of Toothpaste PackagingAs a leading modern traditional Chinese medicine manufacturer, Yunnan Baiyao's Supply Chain Operation Center,as the bridge department for the group's external material procurement, upholds a high sense of social responsibilityand has established a project team to set "Dual Carbon" goals for the development of packaging materials. Wehave selected toothpaste products, which have the highest usage of packaging materials in the Company, and havemade initial attempts to establish a carbon emission accounting system to lay a solid foundation for promoting morevarieties in the future.Based on the initial results of this project, the total carbon emissions of PE particles, toothpaste tubes, paper boxes,and cartons required to produce one tube of toothpaste are calculated to be between 113.52 and 115.67 grams, andthe total carbon emissions of the corresponding material transportation process are between 0.0761 and 6.89 gramsper unit.Based on the calculated carbon emissions at each stage, we suggest considering more environmentally friendlymaterials in the raw material stage to reduce carbon emissions generated during raw material production, andevaluating the necessity of using colored paper boxes or cartons that are not directly exposed to consumers duringpackaging production for transportation purposes.
With the continuous development of packaging technology, thinner sheeting can achieve the same barrier protectione?ect. We try to use 250 microns thick sheeting to replace the current 270 microns thick sheeting.After three months of trial and investigation, there was no significant difference between the finished product ofthe reduced-thickness toothpaste tube packaging and the original one. We actively promoted the use of a 30-gram toothpaste tube as the rst pilot for reducing the thickness of the soft tube. If there are no obvious problemsafter the product is put into the market and circulated, we will further promote the replacement of all soft tubes with250 microns thickness. According to preliminary estimates, if we calculate based on the annual use of 400 milliontoothpaste tubes in the company, the replacement can reduce the use of 150 tons of PE per year, which is equivalentto RMB 1.25 million at the current PE market price for toothpaste and can reduce carbon emissions by 40,265.6kilograms of carbon dioxide annually, which is equivalent to the e?ect of planting 2,200 new trees every year.
In 2022, Yunnan Baiyao strictly followed the Law of the People's Republic of China on the Conservation of Energy and other relevantlaws and regulations, implemented Energy Management Measures and other policies within the Company, and improved the energymanagement system by systematically standardizing the work of various energy-using units. We further strengthened the energy-savingtarget responsibility system, incorporated energy usage into employee salary performance assessments, and actively experimented withnew technologies and processes to improve energy and resource utilization e?ciency. The total energy cost of the Company in 2022was RMB 110.646 million, with an energy consumption cost of RMB 30.47 per RMB 10,000 of output value and an energy consumptionof 0.00839 tons of standard coal per RMB 10,000 of output value.We thoroughly examined the existing energy usage structure and actively investigated new ways to achieve sustainable productionthrough the use of renewable energy technologies and energy-saving measures. Based on the Company's characteristics, weconducted in-depth research on photovoltaic renewable energy in 2022 and launched a preliminary investigation into the photovoltaicpower generation project. We actively investigated new energy-saving technology applications in a variety of elds to provide a solidsupport for the Company's low-carbon development.
Use of Resources
Strengtheningenvironmentaleducation
We have participated in two sessions of the environmental protection lecture seriesorganized by the Chenggong District Environmental Protection Bureau, and have shared thelatest environmental updates and information with the subsidiary factories.
For Yuhua and Qidian factories, which are key discharging units, environmental learningand exchange activities with peer companies are organized for the related personnel. Byexchanging environmental management experience, methods, and the application of newenvironmental technologies with peers, we identify our strengths and weaknesses and learnfrom each other to improve our business level.
The latest environmental laws and regulations, and new technologies are constantlyshared and environmental issues are discussed, such as the Action Plan for Control ofNew Pollutants, the Management Measures for the Disclosure of Enterprise EnvironmentalInformation According to Law, the Guiding Opinions on Strengthening Law Enforcement andSupervision of Pollutant Discharge Permit and the Technical Guidelines for Self-Monitoring ofPolluting Companies, etc.
Environmental education content, including interpretation and analysis of various latestenvironmental laws, regulations, and policies, has been upadated and promoted, in order toprovide the Company with timely access to useful environmental information and knowledge.
The Toothpaste Tube Lightweight Project
Establishing
a BaiyaoWeChat groupfor communi-
cation
Diversifyingapproaches toenvironmentalmanagement
Environmental
educationactivities
7576YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTFOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
Yunnan Baiyao strictly abides by the Work Safety Law of the People's Republic of China and the Law of the People's Republic of Chinaon Prevention and Control of Occupational Diseases and other laws and regulations. Combined with its own operation, Yunnan Baiyaohas formulated and implemented internal policies, such as Work Safety Target Management System, the Work Safety ResponsibilitySystem and the Safety Training and Education Management System, which have comprehensively standardized the company's safetymanagement. In 2022, Yunnan Baiyao revised the Work Safety Responsibility System and added the Safety Risk Management Systemto further assume the main responsibilities of production safety of the enterprise and strengthen the control of safety risks.
Building a Safe and Healthy IndustrialPark with Orderly Production
Safety Management System
Yunnan Baiyao has always adhered to the concept of "people-oriented and safe development," establishing and improving its safetymanagement system, broadening the scope of hazard investigation and remediation, promoting safety culture construction, and overallimproving the company's safety management level.
Workplace Safety O?ce Rectication
In April 2022, Kunming Emergency ManagementBureau surveyed Qidian Industrial Park, ndingthat the operation valve and connector of thefoam re extinguishing device were too close tothe protection zone, which made it inconvenientto operate in case of re. In view of this potentialhazard, the Company arranged qualified firefighting agencies to ensure smooth connectionand valve opening for re ghting in case of reemergencies, and addressed similar problems inYuhua Industrial Park.
Workplace safety o?ce rectication
Yunnan Baiyao has established a safety management system structure with distinct rights and obligations, with the Safety ManagementCommittee serving as the highest accountable body for safety work. Senior executives from the Company and the heads of alldepartments serve on the committee, which is responsible for reviewing signicant production safety issues and shouldering the mainresponsibility of workplace safety. The Committee is in charge of production safety, re safety, occupational health, and emergencymanagement through its o?ce for safety management.In 2022, Our Yuhua Industrial Park and Qidian Branch Plant established a double prevention mechanism and re-formulated emergencyplans to further ensure the orderly implementation of emergency rescue work in order to implement the working principle of "Safety andprevention rst, and comprehensive treatment" and improve the Company's overall emergency handling capacity.In order to eliminate potential safety hazards in time, Yunnan Baiyao strictly implemented production safety supervision and inspectionmeasures, carried out in-depth safety inspection, potential risks investigation and management in key and risk points. In the meantime,we closely monitored the employees' operations to ensure that safe production was carried out in a way that e?ectively prevented safetyaccidents. We also made sure that the safe production input was complied with the Work Safety Law of the People's Republic of China.In 2022, Yunnan Baiyao conducted ve quarterly safety inspections, consisting of four cross-inspections and one special inspection. 1,146potential hazards were identied, with a rectication completion rate of 100%.
Energy and Water Usage in 2022Energy IndicatorUnit202020212022
Electricity ConsumptionkWh390,080,00056,800,00060,930,863GasolineTon26.1327.8329.49DieselTon1.621.481.59Natural Gas10,000 m?931.651,086.271,165.47Comprehensive EnergyConsumption
10,000 Tons of standard coal1.722.152.30Comprehensive EnergyConsumption per RMB10,000 of Revenue
Tons of standard coal/RMB
10,000
0.00530.00590.0063Water ConsumptionTon1,094,2691,368,045.181,382,044.72Water Consumption perRMB 10,000 of Revenue
Tons/RMB 10,000 0.33420.37610.3787
Yunnan Baiyao conducted
quarterly safety inspections
100%
Completion rate of rectication
7778YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTFOCUSING ON ENVIRONMENTAL SAFETY TO ENHANCE SUSTAINABLE VALUE CHAIN MANAGEMENT
Yuhua Industrial Park Pipe Network Leakage Inspection
2022 Ankang Cup Safety Competition
In 2022, in the process of safety inspection, we found the pressure of the system pipe network in Yuhua Industrial Parkdropped unusually, that the stabilized pressure pumps started frequently, and that there were pipe network leakageproblems. To reduce the loss and find the leak point as soon as possible, we organized the Workplace Safety Office todevelop a search plan. At rst, we found out which section of pipe network was leaking by dividing the sections, and then weused professional instruments to nd the specic leak points. After nearly 10 days of divisional inspection, it was preliminarilydetermined that there were leakage points in two sections of pipe network. Afterwards, we arranged our employees to useprofessional instruments to listen to the sound of underground water ow. After half a month's hard work of listening to thesound of underground water in the whole factory, we nally found the specic locations of the two leakage points.
In 2022, the Company or-ganized Ankang Cup NewWork Safety Law Knowl-edge Competition. Morethan 2,000 employees par-ticipated in the month-longcompetition. The repeatedparticipation enabled theemployees to gain a fullunderstanding of the rele-vant contents of the WorkSafety Law of the People’sRepublic of China.
Yuhua industrial park pipe network leakage inspection2022 Ankang Cup Safety Competition
Yunnan Baiyao places a high value on strengthening the construction of safetyeducation and training, improving the training system, insisting on developingand implementing an annual safety education and training plan, instillingand cultivating safety concepts in employees, and improving their safetymanagement ability, safety knowledge, and skills.In 2022, Yunnan Baiyao actively carried out safety consultation day publicityactivities both online and offline, Group Workplace Safety ComprehensiveKnowledge Competition, Ankang Cup Practical Operation Competition, fireevacuation emergency drills, and other safety education activities, in accordancewith the annual safety education and training plan, effectively improvingemployees' safety awareness and labor skills. In 2022, the Company held18 education training sessions with 16,408 participants, one comprehensiveemergency drill, and 22 other drills, including re accidents, evacuation, electricshock accidents, and limited space accidents.The Company held Occupational Health Promotion Week activity in early 2022and organized employees to participate in occupational health knowledgetraining. A total of 2,074 employees attended the training and completed theonline exam. The Workplace Safety Office released promotional materialsavailable on our WeChat platform, and a total of 1,025 employees viewed thevideos and training materials.Furthermore, to improve its safety management level, the Company conductssafety education and training for contractors, suppliers, and other relevantparties and encourages them to conduct regular internal training based on theirown industry characteristics in order to improve their safety awareness andprevent the occurrence of safety accidents.There were no major safety incidents or work-related deaths in Yunnan Baiyaoin 2022.
Safety Culture DevelopmentThe Pedestrian-Vehicle Separation Project of Yuhua Industrial ParkThe main road to the north of No. 1, 2 and 3 factory buildings in YuhuaIndustrial Park is the main passage for truck loading and unloading,leading to high traffic pressure. In addition, a lack of speed limit signsand mirrors in many blind sections leads to large safety risks. During theinspection, the emergency management department of Yunnan Baiyaoissued a rectification notice to implement pedestrian-vehicle separationmanagement on the factory roads so as to reduce the traffic pressure.Meanwhile, speed limit signs were installed at the main intersections andmirrors were installed on the blind sections to reduce tra?c safety risks.
The Pedestrian-Vehicle Separation Project
of Yuhua Industrial Park
The number of safety educationtraining sessions conducted by theCompany was
2,074
employees attended the occupationalhealth training and completed theonline exam
7980YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTGROWING TOGETHER WITH EMPLOYEES AND CREATING A SAFE AND HARMONIOUS WORKPLACE
GROWING TOGETHER WITHEMPLOYEES AND CREATINGA SAFE AND HARMONIOUSWORKPLACE
As a company with a century-long history, Yunnan Baiyao is aware that its employees are itsgreatest asset in achieving sustainable growth. Adhering to the principle of lawfulness andcompliance, the Company regularly conducts employee training, organizes volunteer activities,cares for employees, attends to employee's needs, and collaborates with employees to foster afree, equal, and friendly corporate culture.
This chapter corresponds to the following Sustainable Development Goals:
8182YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTGROWING TOGETHER WITH EMPLOYEES AND CREATING A SAFE AND HARMONIOUS WORKPLACE
Yunnan Baiyao strictly complies with laws and regulationssuch as the Labor Law of the People's Republic of China, theLabor Contract Law of the People's Republic of China, theEmployment Promotion Law of the People's Republic of China,and the Law of the People's Republic of China on the Protectionof Minors; Yunnan Baiyao also formulates internal managementsystems such as the Recruitment Management System, andimplements internal management policies such as the BasicStandards for Enterprise Internal Control, the Measures for theManagement of Job Qualifications, and the Measures for theManagement of Rotation and the Company will continuouslybuild its human resource system.
Yunnan Baiyao strictly follows the laws and regulations such as the Social Insurance Law of the People's Republic of China, theCompany Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Measures for theAdministration of Share Incentives for Listed Companies, the Rules for the Listing of Stocks on Shenzhen Stock Exchange, the Guidanceon the Pilot Implementation of Employee Stock Ownership Plan for Listed Companies, etc., formulates the Remuneration ManagementSystem of Yunnan Baiyao Group Co., Ltd., the Articles of Incorporation, the Employee Stock Ownership Plan, the Stock Incentive Planand other internal management systems. The Company o?ers pension, medical care, unemployment, work-related injury, maternity andother insurance for all employees, as well as housing provident fund, enterprise annuity, commercial insurance and Employee StockOwnership Plan (ESOP), and rolls out other measures to e?ectively protect the legitimate rights and interests of employees.Yunnan Baiyao established a job qualication system and adopted a performance-linked remuneration system in 2022 to promote talentdevelopment and meet the Company's strategic needs by recognizing employees' value. To assess the depth and breadth of employees'abilities and knowledge, the Human Resources Department collaborated with experts in developing a 10-dimensional qualificationmanagement system covering strategic operations management, technology and quality, analysis and testing, nance and economics,etc. The Company established an employee performance evaluation system to assess employees' performance and ability monthlyand annually. The evaluation results are divided into five grades and are jointly determined by the employees and their superiors.Monthly performance results are reected in monthly bonuses, while annual performance results are reected in year-end bonuses andremuneration adjustments. In this way, a closed loop of employee ability, position, evaluation, and incentive process has been formed.The Company continues to improve the employee performance appraisal system, transitioning from an o?ine appraisal platform to anonline information management platform, managing employee performance lling, review, evaluation, and feedback in a systematicmanner, and realizing the standardization, dynamism, agility, and transparency of performance information management.
In 2022, Yunnan Baiyao had a total of
8,781
employees, as shown in the table:
Remaining People-orientedand Being Creative and Innovative
Employment Compliance
Remuneration and Incentives
To ensure equal development rights of employees and pursue mutual benets of the Company and employees, Yunnan Baiyao developsremuneration and incentive plans and improves employee promotion system based on the principle of legal, compliant, and equalemployment.
Yunnan Baiyao continues to optimize its position management,establish a dynamic position management system, expandchannels for employee professional development, and trainand develop interdisciplinary talents in order to promote theCompany's development. To achieve its talent developmentand planning goals, the Company strengthened its R&Dteam in 2022 by establishing a central research institute andrecruiting highly educated scientic researchers and investmentpersonnel.As of 2022, Yunnan Baiyao Central Research Institute had atotal of 253 employees, including 129 with Master's and Ph.D.degrees. The institute hired 37 employees for pharmaceuticalresearch and development, 12 employees for daily chemicalresearch and development, and 15 employees for strategiccommercial investment positions. Among these new hires, 40held Master's and Ph.D. degrees.In adherence to the principles of legal and diversifiedrecruitment, the Company resolutely opposes all forms ofdiscrimination based on gender, ethnicity, religion, or politicalstance, and incorporates the labor principles of prohibiting childlabor and opposing forced human rights into the Company'smanagement requirements.The Company signs labor contractswith employees, establishes labor relations, and guards allemployee rights and interests in accordance with the principlesof equality, willingness and consensus.
To establish a dynamic position management system and to provide employees with equal promotion opportunities, Yunnan Baiyaodevelops the Position Management System, optimizes the "721" employee training system, establishes a "Y-shaped" employeedevelopment channel, and updates its position overview. To ensure the fairness of the promotion system, the Company creates alearning map, uses curriculum development as a link to make breakthroughs, creates a key path to guide employee development andtraining, and evaluates employee performance objectively using scientic evaluation methods such as the IBM PRG Position EvaluationTool and Position Evaluation Score Sheet.In 2022, to help employees clarify their direction and recognize their own value, Yunnan Baiyao comprehensively sorted out positions,standardized job titles, claried talent standards and certication management guidelines, and achieved standardization and precision intalent training, evaluation, and selection.
Promotion Mechanism
By Job Type (Person)
By Gender (Person)By Age (Person)
Male EmployeesFemale Employees≤30 31-40 41-50≥51
Sales EmployeesTechnical EmployeesProduction EmployeesFinance EmployeesAdministrative Employees
2020
5,233
4,3913,7402,8863,7492844,6723,7922,7864,0143194,7154,0662,8384,1841,2121,3451,433326
8301,4222054415,0061,1061,6082454995,1171,2911,611260502
20212022
202020212022202020212022202020212022202020212022202020212022202020212022
202020212022202020212022202020212022202020212022
129 persons
YunnanBaiyaoCentralResearchInstitute
Masters andPh.D. HoldersOthers
By 2022, 51% employees of the Yunnan Baiyao CentralResearch Institute were Masters and Ph.D. holders
8384YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTGROWING TOGETHER WITH EMPLOYEES AND CREATING A SAFE AND HARMONIOUS WORKPLACE
Strengthening theunderstanding of theCompany's overallstrategy and businesslayout, and fullyclarify the Company'sdevelopment plan
The Company founded the Baiyao Academy in order to bring together elites, address pain points, gather true knowledge, transmitculture, push boundaries, and develop a talent training system with "Flourishing Flowers."
Carefully Cultivating Employees and NurturingTalents
"Flourishing Flowers" Talent Training System
Yunnan Baiyao insists that employees are key to company growth and highlights personal development of its employees. It establishedthe Baiyao Academy to develop a scientic and organized training system, carrying out targeted training for employees at various levels,and putting General Secretary Xi Jinping's proposed talent-training concept of "gathering and utilizing talents from all over the world" intopractice.
In 2022, Yunnan Baiyao reviewed and upgraded the Panax notoginseng Flower Talent Training Program, improved the training systemusing the "1112 Model," and assisted project managers in consolidating and improving their capabilities. The Company also createda Project Manager Workbook, established a case library, summarized project management experience and work methodology, andachieved a signicant breakthrough from scratch.
"Flourishing Flowers" Talent Training System
"1112" Model
"Sesame Flower" New Hire Training
Outdoor Training for Project Managers in the "Panax Notoginseng Flower" Program
Seven departments, including the Human Resources Center, the Pharmaceuticals BG, and the SmartCloud Health BU,were organized by Yunnan Baiyao to provide training for new hires. This was done to aid in their quick integration into thecorporate culture, to help them develop values that are coordinated and unied with the Company, sort out the proper qualityconcepts, and thoroughly acquire knowledge and skills in safety, operation, and procurement, and to empower new hires.In 2022, the Company provided a total of 43 business development courses, primarily for new hires, with a total courselength of 2,105 minutes.
In May 2022, Baiyao Academy carried out an outdoor training for project managers in the "Panax notoginseng Flower"Program. We organized team building activities and fun games, and a number of experience activities such as herbal plantsharing and night conversations around the stove. The activities strengthened the sense of cooperation and trust betweenteams, enhanced the cohesion and sense of mission of the project manager team, and deepened the concept of win-wincooperation.
New hire training activities
"Blind Walk" game and "Herbal Plant Sharing" activity
The Company has refinedthe outdoor developmentactivities into a case modelwith the themes of symbio-sis, co-prosperity, sharing,win-win outcome, and sym-pathy, and synchronouslyenriched the case library ofthe Workbook for ProjectManagers.
Senior Management
Cultivating managers'strategic thinkingand build a reserveteam of seniormanagement
A key project of talenttraining conductedboth online and o?inewith action learningand mentor coaching,weakening the di?erenceof employee knowledgestorage
Conducting courseson corporate culture,human resources andnancial systems,workplace etiquette andcommunication, corebusiness and qualitydevelopment to enhancecultural identity
1 Idea1 Principle1 Direction2 Realities
Learning by practicing,and applying bylearning
Integration of trainingand practice
Strategic direction
Business reality,employee reality
Middle ManagementReserve ManagementNew HiresClusteringFlower Program
Paris polyphyllaFlower Program
Panax notoginsengFlower Talent Program
SesameFlower Program
8586YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTGROWING TOGETHER WITH EMPLOYEES AND CREATING A SAFE AND HARMONIOUS WORKPLACE
Yunnan Baiyao has developed a team of internal trainers to discover the Company's invisible knowledge, foster corporate culture andother types of expertise, and lay an important theoretical foundation for training programs such as Sesame Flower, Panax notoginsengFlower, and Executive Face-to-face Programs. Based on the talent planning strategy, the Company, led by internal trainers, hasbuilt a qualication system covering 11 departments, including the Medicine Research Institute, Supply Chain Operation Center, andEngineering Construction Development Center. By developing training courses, the Company aims to accelerate employee growth andpromote the implementation of various business initiatives.In 2022, the Company trained 140 internal trainers and created 30 courses, and the total duration of training courses was 1,428 minutes.
Baiyao Academy established the Fan Zhiwei National Skill MasterStudio for technical breakthrough, innovation, leadership, and heirloom,cultivating professional talents, assisting in the resolution of equipmentproblems in the production operation area, and serving as the backbonefor the Company's key projects.The Skill Master Studio continues to cultivate talent, improve skills andrecruit talent for the Company by spreading the Yunnan Baiyao spiritthroughout society. At the same time, thanks to the Skill Master Studio,the Company overcame many technical challenges and completedseveral projects, such as boiler waste heat recycling project. The boilerwaste heat recycling project was chosen as an innovation subsidyproject for Yunnan Province employees in 2022.Yunnan Baiyao leveraged its corporate resources and technologicaladvantages to establish the rst university-enterprise innovation studioin collaboration with Yunnan Vocational College of Mechanical andElectrical Technology. The innovation studio trained one chief technicianof Kunming's "Spring City Plan" program and one chief technician ofYunnan Province's "Xing Dian Talent" program in 2022, serving as anew model of talent training in the new era.
Yunnan Baiyao's Party organizations adopt the rst issue system and the study system of central theoretical study group. By variouskinds of training organized by the primary-level Party organizations including self-learning, joint learning in internal branches, listening tolectures given by the Party secretary and on-site learning, we enable Party members to learn and implement the spirit of the 20th CPCNational Congress and enhance their political awareness and awareness of rules.
Building a Team of Internal Trainers
Skill Master Studio
CPC Member Training
Party Committee Central Group Training
Yunnan Baiyao carried out training for Party members and organizes theoretical study with coherence of learning, thinkingand application, unity of knowledge, and faith and action as the core philosophy. The Company carried out a series ofactivities to deeply study the spirit of the 20th CPC National Congress to integrate it into all aspects of company operation.In 2022, the Company conducted more than 150 times of centralized theoretical study, and the total number of participantsin the training of Party members was 1,458, and all Party members participated in training.
Meeting on studying the spirit of the 20th CPC National Congress
The innovation studio trained
chief technician of Kunming's"Spring City Plan" program
chief technician of YunnanProvince's "Xing Dian Talent" program
In 2022
Employee Training
20212021
250,50824.07320,90029.72
20222022
Total Length of Training (hour)Total Length of Training Per Person (hour)
8788YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTGROWING TOGETHER WITH EMPLOYEES AND CREATING A SAFE AND HARMONIOUS WORKPLACE
Yunnan Baiyao demonstrates the responsibility of national enterprises by activelyengaging in public welfare activities and volunteer work, planning a number of eventslike e?ective communication and embracing change, and o?ering guidance on mentalhealth issues through public welfare lectures.Employees of Yunnan Baiyao volunteered a total of 14,692 hours in 2022, an increase of
45.08% compared with last year.
Yunnan Baiyao strictly follows the laws and regulations such as the Constitution ofChinese Trade Unions and the Regulations on Employees Congress, and has formulatedinternal systems such as the Management System of Employees Congress, the Systemof Employees Supervisors and the Workbook for General Election of Primary-level TradeUnions to establish a sound system of management and smoothen the communicationbetween employees and the Company.The Company continues to improve its employees' communication system and holdsregular employee representative meetings to hear employees' voices and ensure thatemployees have the right to information, participation, and corporate managementoversight. Furthermore, the Company has established the Yunnan Baiyao WeChatgroup, creating a real-time communication mechanism that strengthens the Company'sresponse to employees' feedback, fully protects employees from all aspects ofinfringement of their rights, and enhancs their sense of well-being.
Equal Communication
Volunteer Service
Launching Health Lecture SeriesIn 2022, Yunnan Baiyao launched training lecture series both online and on site to spread health knowledge to the society,and invited the author Xu Zhiyuan to discuss life and health to raise the society's attention to health and demonstrate thebravery to take on social responsibility as a national enterprise.
Yunnan Baiyao conducts health lecturesAuthor Xu Zhiyuan is discussing guarding life and health
with Yunnan Baiyao's CEO Dong Ming and Professor
Zhang Ning in the livestream
In 2022,employees of YunnanBaiyao volunteered a total of14,692
hours
Being Equal, Inclusive, Voluntary and EarnestYunnan Baiyao places a high value on employees' rights and interests, strictly complies with legal and regulatory requirements, andaids employees in realizing their own value, fostering corporate culture by creating a democratic communication platform and planningvolunteer activities.
Yunnan Baiyao takes protecting life and health as its mission and attaches great importance to the health and life needs of itsemployees. In order to provide employees with a convenient lifestyle that meets their various needs in life and work, the Company builtthe Yunnan Baiyao Life Home online welfare platform and frequently hosts shopping promotions.The Company organizes "Face-to-face True Feelings and Warmth" heartwarming activities, and provides holiday gift baskets andwelfare points for sta? members during the Spring Festival, Mid-Autumn Festival, and other traditional Chinese holidays. It also routinelyschedules employee medical checkups, increases sta? members' awareness of their own health and safety, and guards the necessitiesin production and daily life.
Caring for Employees and Seeking HarmoniousDevelopment
Employee Benets
According to Yunnan Baiyao, employees are the foundation of the Company's long-term operation and development. The Company hasundertaken a number of heartwarming initiatives to enhance employees' sense of belonging, including providing benets, organizingregular cultural and sporting events, and caring for employees especially female employees.
8990YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTGROWING TOGETHER WITH EMPLOYEES AND CREATING A SAFE AND HARMONIOUS WORKPLACE
Yunnan Baiyao pays close attention to its employees,develops a humane management system, intensifiescare for model employees, and pays condolence visits tomodel employees and front-line employees to convey theParty and State's care and love for employees, as well asto express respect for them.In accordance with the internal rules and regulations ofthe Standards and Procedures for Establishing a File forEmployees in Di?culty in the Trade Union, the Companyhas launched a series of humane care programs foremployees, including birthday care, childbirth visits,hospital visits, and assistance for employees in need.Through the dynamic monitoring of employees' homevisits, we can understand the thoughts and emotionsof employees, care about their living conditions, andhelp them address their problems in life. Yunnan Baiyaoassisted 44 families with a total of RMB 129,223 in 2022.
Employee Care
Showing Cares for Employees
Last year, Yunnan Baiyao continued to pay attention to employees' life and health safety. Based on the principle ofintegrating prevention and treatment, the trade union organized a scientific selection of a total of 13 kinds of anti-inammatory, cough, cold and fever medicine produced by Yunnan Baiyao, assembled them overtime, and delivered theprotection care packages to front-line employees' home at the rst time.On December 13, 2022, the Company completed the rst task of distributing a total of 5,000 copies; on December 21, itcompleted all distribution tasks, with a total of 13,000 copies distributed, showing care and providing help for front-lineemployees in key areas nationwide.
Protection care package
Yunnan Baiyao assisted
families
with a total of RMB
129,223
In 2022
On the occasion of the 120th anniversary of the birth of Yunnan Baiyao, various commemorativeactivities were carried out to vigorously promote corporate culture. On Labor Day and the DragonBoat Festival, it held competitions with the labor spirit and zongzi culture as the theme; on June 1, theprimary-level trade unions led and organized parent-child activities for employees; and youth activitieswith the theme of "Friendship and Dating" were held in collaboration with other organizations. Throughvarious initiatives like a competition of radio exercise, basketball competition, tea culture lecture, andower arrangement art, the Company supports employees' physical and mental well-being.The Company has organized activities such as radio exercise competitions, basketball matches, ando?ering discounted swimming cards with the themes of enhancing friendships and promoting physicalfitness. To cultivate an appreciation for life's pleasures, the Company has hosted events like teaculture lectures and ower arrangement art activities.The mutual assistance fund for Yunnan Baiyao employees reached RMB 667,200 in 2022, with 5,437participants and a total annual expenditure of RMB 415,700.
Carrying Out Cultural and Sports Activities
In 2022, the mutualassistance fundfor Yunnan Baiyaoemployees reached RMB667,200
Launching Benecial Activities for Female Employees
Yunnan Baiyao actively participates in the formulation of the Convention of the Guidance Manual for the Promotion of Gender Equality inthe Workplace, signs the Special Collective Contract for the Protection of Special Rights and Interests of Female Employees with femaleemployees, establishes an internal women employees' organization, and protects the legal rights and interests of female employees inthe political, economic, cultural, educational, labor and social and family aspects.Every year on March 8, Women's Day, the women employees' organization organizes inclusive activities for female employees, and thisyear it worked with the Company to set up a pilot HPV vaccination site. These initiatives encourage female employees to be consciousof their own cervical health. The women employees' organization closely heeds the direction of the Yunnan Provincial Women WorkersCommittee of the Federation of Trade Unions and is listed on the All-China Federation of Trade Union's list of the female worker contactunits.
Caring for Female Employees
Yunnan Baiyao has implemented the requirements of the YunnanProvincial Federation of Trade Unions, vigorously caring forfemale employees, and carried out the "Rendezvous at TradeUnion and Happiness Gathering," "May 1 Women's Care Action"and "Women's Day" series of thematic activities together with theWomen Workers' Committee of the Yunnan Federation of TradeUnions. These actions have provided sincere support to femaleemployees and strived to improve the quality of life of femaleemployees, driving the whole society to jointly create a warmworkplace atmosphere of care and concern for female employees.On March 8, 2022, the Company actively cooperated with thesecond inclusive activity for female employees organized bythe Yunnan Women Workers Organization. It provided specialpackages exclusive to female employees based on their livingand working needs of female employees via Baiyao online malland Yunnan State Farms Premium, with the transaction volumereaching 8,008 orders and sales totaling RMB 733,842.
Posters of benecial activities for female emoloyees
9192YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCREATING A BETTER HOME AND BUILDING A HARMONIOUS NEIGHBORHOOD
CREATING A BETTER HOMEAND BUILDING A HARMONIOUSNEIGHBORHOOD
Yunnan Baiyao takes it as its responsibility to promote rural revitalization and the development ofharmonious communities. With abundant pharmaceutical resources, the Company makes the most ofits advantage to jointly promote the development of communities, improving community health andforming community health culture.
This chapter corresponds to the following Sustainable Development Goals:
9394YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCREATING A BETTER HOME AND BUILDING A HARMONIOUS NEIGHBORHOOD
Contributing to Rural Revitalization and ProvidingDerivative FunctionsYunnan Baiyao studies and carries out General Secretary Xi Jinping's important discourse on rural revitalization. In adherence to thepurpose that rural revitalization is comprehensive revitalization, the Company actively undertakes the corporate social responsibility ofconsolidating and expanding the achievements of poverty eradication and achieving rural revitalization, places great importance on ruralrevitalization work, and continuously increases e?orts to help the rural areas.
Building an Interests Linking Mechanism in the Traditional Chinese Medicinal Materials Industry
Helping to Promote Rural Health
Based on its corporate advantages, Yunnan Baiyao signed a strategic cooperation agreement with Weixi County to builda long-term interest linkage mechanism for the development of traditional Chinese medicinal materials industry with the"Group + Company + Cooperative + Farmers" cooperation model.In 2022, with the principle of "integrated planning, coordinated layout, localization and steady progress," the Companyestablished pilot demonstration planting sites for traditional Chinese medicinal materials to guide farmers to participate ininvestment, change the concept of traditional planting and actively integrate into industrial development. In addition, YunnanBaiyao has adopted the method of buying instead of donating to purchase many varieties of traditional Chinese medicinalmaterials such as Auckiandia lappa Decne., Platycodon grandiorum, Dipsacus asperoides and Gentiana macrophylla inDiqing Prefecture and Weixi County. As of the end of 2022, the Company purchased traditional Chinese medicinal materialsfor a total amount of RMB 4.45 million.
Yunnan Baiyao is committed to the buildingof healthy counties, and has long offeredmedicine, sanitary and medical resources topoverty-stricken areas, paying close attentionto villagers' health and solving their di?cultiesin using medicines. In November 2022, YunnanBaiyao launched the medicine donation activitythemed "Revitalizing Health In Rural Areas"and donated medicines worth RMB 593,000to help alleviate the financial pressure of thevillagers.
Geography of Weixi County
Health Assistance Donation Activity for rural revitalization
Supporting Education
Yunnan Baiyao is deeply aware of the powerof education. The Company attaches greatimportance to the education and assistanceof minors, offers all kinds of educational aidand assistance, and raises the consciousnessthat knowledge changes fate. At the sametime, the Company encourages rural studentsto use the power of knowledge to give backto their hometown, build their hometown anddrive the development of their hometown.In June 2022, Yunnan Baiyao carried out the"June 1 Children's Day School Sponsorship"activity, donating school bags and otherstationery and household medicines for atotal amount of more than RMB 8,000; inNovember 2022, it carried out the "GoldenAutumn Scholarship for Rural Revitalization"activity, sponsoring a total of 85 rural collegestudents with a total amount of RMB138,000.Golden Autumn Scholarship Activity for rural revitalization
9596YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORTCREATING A BETTER HOME AND BUILDING A HARMONIOUS NEIGHBORHOOD
Contributing to the Building of a HealthyChina in Many Aspects
Participating in Public Welfare and Delivering Warmth
In 2022, Yunnan Baiyao, guided by the spirit of the 20th CPC National Congress and based on the reality of the enterprise, initiated anumber of social activities, such as "Sending Health to the Border" and "Care for Runners," focusing on social problems, continuouslycontributing to the building of healthy China, and realizing both economic and social values.
Yunnan Baiyao is dedicated to corporate social responsibility, participating in a variety of public welfare activities, and activelyimplementing community-building projects to give back to society.Yunnan Baiyao participated in 17 public welfare projects including donation of materials and construction of medical training, with a totaldonation of RMB 14,034,900.
"Sending Health to the Border" Public Welfare Action
Launching "Care for Runners" Action
With deep love, Shanghai and Yunnan Working Together to Tide over Di?cultiesYunnan Baiyao, as a company that won the title of "Outstanding Group for Poverty Alleviation" in Yunnan Province, insistson donating medicine to the border areas every year and organizing special training on orthopedic treatment, maternal andchild health care and other related topics.From October 27 to 28, 2022, Yunnan Baiyao, in collaboration with Tongji Hospital of Shanghai Tongji University and theFirst People's Hospital of Yunnan Province, carried out charity consultations on orthopedics, gastroenterology, neurologyand other related diseases, and provided training to primary-level doctors to improve local medical standards.
In 2022, Yunnan Baiyao launched the "Care for Runners" Action with online platforms to build a scientic and safe sportsplatform for runners, popularizing rst-aid safety knowledge by explaining sports health and inviting experts to demonstrate,and guarding the safety of every participant.
In March 2022, Yunnan Baiyao actively cooperated with the Yunnan Provincial Health Commission and coordinated theCompany's internal resources to complete the loading and delivery of 9,600 boxes containing four varieties of medicineswith a total worh of RMB 20.95 million, at the lowest price and the fastest speed.On April 1, 2022, Yunnan Baiyao sent an emergency shipment to Shanghai, donating products such as Banlangengranules, Shangfengting capsules, Danxi Yupingfeng granules, 75? alcohol disinfection wipes, at-shaped medical masksand other daily products such as Yunnan Baiyao toothpaste and Yangyuanqing shampoo to meet the needs of people inShanghai.
Yunnan Baiyao's "Sending Health to the Border" Activity
"Care for Runners" Action - Thematic event on the Parent-Child Love Running Day
Supporting Shanghai
Rushing to Shanghai
By 2022, the "Care for Runners"Action had been launched in 114cities, with more than 200 "Injury-free Training Camp" events heldand more than 10 people partici-pating in the 5.8km online "Injury-free Running" challenge.
FEEDBACK FORM
YUNNAN BAIYAO 2022 CORPORATE SOCIAL RESPONSIBILITY AND ESG REPORT
Yunnan Baiyao has always been concerned about the joint building of the community, providing diversied benets to the residents ofYunnan, Kunming and Chenggong Industrial Park for a long time. Yunnan Baiyao donated 7,100 packages worth RMB 4,678,900 tolocal farmers, sanitation employees, urban management o?cers, special police o?cers, and tra?c cops in the Company's vicinity in2022.
Co-Building the Community
Sending Blessings for the Chinese New Year to Contribute to Community Building
On the occasion of the Chinese NewYear, Yunnan Baiyao continued its annual"Building Harmonious Neighborhoods"activity. The Company organized visits tovillagers, sanitation employees and thepolice around the Company, conveyingcare for the community, sending NewYear gifts to the members in the com-munity, and bringing the community thegreetings of Baiyao people.
Leaders of the CPC Committee of Yunnan Baiyao pay a visit to
the community
Dear readers,Hello!We appreciate your patience as you read this report. This is the 17th year in a row that we have published our CSR report to thecommunity, and we are eager to improve its quality through your reading and evaluation to meet our stakeholders' demands. As a result,we have created the following feedback form in the hopes that you will evaluate this report and provide valuable feedback to assist us inmaking continuous improvements to the report.
1.Your overall evaluation of this report
□Very good□Good□Fair□Poor□Very poor
2.Your evaluation of the readability of this report
□Very good□Good□Fair□Poor□Very poor
3.Your evaluation of the structural arrangement of this report
□Very good□Good□Fair□Poor□Very poor
4. Whether the content disclosed in this report meets your expectations
□Yes□No□Not sure
5. Does this report fully reect the social responsibility undertaken by Yunnan Baiyao?
□Fully reected□Partially reected□Not reected
Name:
Unit:
Address:
Mailing Address: No. 3686, Yunnan Baiyao Street, Chenggong District, Kunming City, Yunnan ProvincePostcode: 650500Website: www.yunnanbaiyao.com.cnTel: 0871-66226106
Feedback Form
Feedback Form for Yunnan Baiyao Group Co., Ltd. 2022 Corporate Social Responsibility and ESG Report
Tel:
Email: