云南白药: 2025年半年度报告（英文版）

Yunnan Baiyao Group Co., Ltd.
     Interim Report 2025
           August 2025
           Section I Important Notes, Contents, and Definitions
    The Board of Directors (the “Board”), the Supervisory Committee and the directors,
supervisors and senior management of the Company confirm the truthfulness, accuracy and
completeness of the contents of this Interim Report and there are no misrepresentation,
misleading statement or material omission from this Interim Report, and they accept joint and
several responsibilities for the truthfulness, accuracy and completeness of the contents herein.
    Mr. Dong Ming, the person in charge of the Company, Mr. Ma Jia, the accounting officer,
and Ms. Xu Jing, the head of accounting center (accounting supervisor), hereby declare that
they warrant the truthfulness, accuracy, and completeness of the financial statements in this
Interim Report.
    All directors of the Company attended the Board meeting in respect of considering and
approving this Interim Report.
    The Company kindly requests investors to read through this Interim Report and pay
special attention to “X. Risks and Countermeasures” in the “Section III Management
Discussion and Analysis.” Investors are advised to pay attention to investment risks.
    The profit distribution plan considered and approved by the Board of Directors is as
follows: Based on a total of 1,784,262,603 shares, a cash dividend of RMB 10.19 (tax inclusive)
for every 10 shares will be paid to all shareholders, with no bonus shares issued (tax inclusive),
and no capital reserve to increase the share capital.
    This report has been prepared in Chinese and translated into English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
                                                 Contents
                     Documents Available for Inspection
    (I) Financial statements affixed with the signatures and stamps of the person in
charge of the Company, the accounting officer, and the general manager of Financial
Management Department;
    (II) Originals of all the Company’s documents and announcements publicly
disclosed on the Securities Times, Shanghai Securities News, China Securities Journal,
and www.cninfo.com.cn during the reporting period;
    (III) Other related materials.
                                               Definitions
                 Term                                                      Definitions
                CSRC                    China Securities Regulatory Commission
                 SZSE                   Shenzhen Stock Exchange
      Hong Kong Stock Exchange          The Stock Exchange of Hong Kong Limited
                                        State-owned Assets Supervision and Administration Commission of Yunnan
      SASAC of Yunnan Province
                                        Provincial People’s Government
The Company, Yunnan Baiyao or Yunnan
                                        Yunnan Baiyao Group Co., Ltd.
           Baiyao Group
             New Huadu                  New Huadu Industrial Group Co., Ltd.
State-owned Equity Management Company   Yunnan State-owned Equity Operation Management Co., Ltd.
             Yunnan Hehe                Yunnan Hehe (Group) Co., Ltd.
           Baiyao Holdings              Yunnan Baiyao Holdings Co., Ltd.
         YNBY International             YNBY International Limited
           Shanghai Pharma              Shanghai Pharmaceuticals Holding Co., Ltd.
                                        Baiyao Holdings, former controlling shareholder of Yunnan Baiyao, introduced
       Mixed ownership reform           strategic investors New Huadu and Jiangsu Yuyue Science & Technology
                                        Development Co., Ltd by capital increase
                                        A transaction that Yunan Baiyao merged with Baiyao Holdings by issuing shares
       Merger and overall listing       to all shareholders of Baiyao Holdings, including SASAC of Yunnan Province,
                                        New Huadu and Jiangsu Yuyue Science & Technology Development Co., Ltd.
       Health Products Company          Yunnan Baiyao Group Health Products Co., Ltd.
           Yunnan Pharma                Yunnan Pharmaceutical Co., Ltd.
            Yunhe Pharma                Yunhe Pharmaceutical (Tianjin) Co., Ltd.
         Zhengwu Technology             Yunbaiyao Zhengwu Technology (Shanghai) Co., Ltd.
           Reporting period             The period from January 1, 2025 to June 30, 2025
                                        Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
  RMB, RMB’0,000, RMB’00,000,000        of Renminbi, expressed in hundreds of millions of Renminbi
             Section II              Company Profile and Key Financial Indicators
  I. Company Profile
Stock Abbreviation                           Yunnan Baiyao                  Stock Code                            000538
Stock Abbreviation before Change
                                                                                      None
(if any)
Stock Exchange                                                              Shenzhen Stock Exchange
Company Name in Chinese                                                     云南白药集团股份有限公司
Company Abbreviation in Chinese
                                                                                    云南白药
(if any)
Company Name in English (if any)                                     YUNNAN BAIYAO GROUP CO., LTD.
Company Abbreviation in English
                                                                               YUNNAN BAIYAO
(if any)
Legal Representative of the
                                                                                   Dong Ming
Company
  II. Contact Person and Contact Information
                                      Secretary of the Board of Directors                      Representative of Securities Affairs
Name                                             Qian Yinghui                                              Li Mengjue
                              No. 3686 Yunnan Baiyao Street, Chenggong District,          No. 3686 Yunnan Baiyao Street, Chenggong
Contact Address
                                       Kunming City, Yunnan Province                       District, Kunming City, Yunnan Province
Tel                                            0871-66226106                                             0871-66226106
Fax                                            0871-66203531                                             0871-66203531
E-mail                                       000538dm@ynby.cn                                           000538@ynby.cn
  III. Other Information
  Whether the Company’s registered address, office address, postal code, website, and e-mail address have changed during the reporting
  period
  □ Applicable  Not applicable
  There was no change in the Company’s registered address, office address, postal code, website, or e-mail address during the reporting
  period. For more information, please refer to the 2024 Annual Report.
  Whether the information disclosure and location have changed during the reporting period
  □ Applicable  Not applicable
  There was no change in the stock exchange website, media outlets, and their websites where the Company disclosed the Interim Report,
  or the location where the Interim Report was prepared and placed during the reporting period. For more information, please refer to the
Whether other information has changed during the reporting period
□ Applicable  Not applicable
IV. Key Accounting Data and Financial Indicators
Whether the Company needs retroactive adjustment or restatement of accounting data in prior years or not
□Yes  No
                                                                                                         Increase/decrease during the
                                                                               The same period of the     reporting period compared
                                                    The reporting period
                                                                                   previous year          with the same period of the
                                                                                                                 previous year
   Operating revenue (RMB)                               21,257,102,896.02           20,455,286,287.52                         3.92%
   Net profit attributable to shareholders of the
   listed company (RMB)
   Net profit attributable to shareholders of the
   listed company after deducting non-                    3,460,915,449.48            3,135,015,340.93                        10.40%
   recurring profits and losses (RMB)
   Net cash flows from operating activities
   (RMB)
   Basic earnings per share (RMB/share)                                2.04                       1.79                        13.97%
   Diluted earnings per share (RMB/share)                              2.04                       1.79                        13.97%
                                                                                                         Up 1.16 percentage points
   Weighted average ROE                                              9.09%                      7.93%
                                                                                                         YOY
                                                                                                         Increase/decrease at the end
                                                     End of the reporting                                   of the reporting period
                                                                               End of the previous year
                                                           period                                       compared with the end of the
                                                                                                                 previous year
   Total assets (RMB)                                    54,535,490,704.07           52,914,181,333.05                         3.06%
   Net assets attributable to shareholders of
   the listed company (RMB)
    Net profit after excluding the impact of share-based payment
                                                                                                  The reporting period
 Net profit after excluding the impact of share-based payment (RMB)                                                 3,644,599,967.94
    Total share capital of the Company as of the trading day preceding disclosure:
 Total share capital of the Company as of the trading day preceding
 disclosure (shares)
    Fully diluted earnings per share calculated based on the latest share capital:
 Preferred share dividend paid                                                                                                  0.00
 Perpetual bond interest paid (RMB)                                                                                               0.00
 Fully diluted earnings per share calculated based on the latest share
 capital (RMB/share)
V. Differences in Accounting Data under Chinese Accounting Standards (CAS) and Overseas
Accounting Standards
International Financial Reporting Standards (IFRS) and CAS
□Applicable         Not applicable
During the reporting period, there was no difference in net profits and net assets in financial statements disclosed respectively under
IFRS and CAS.
accounting standards and CAS
□Applicable         Not applicable
During the reporting period, there was no difference in the net profits and assets in financial statements disclosed respectively under
overseas accounting standards and CAS.
VI. Non-recurring Profits and Losses and their Amounts
Applicable         □Not applicable
                                                                                                                           Unit: RMB
                                                 Item                                                      Amount           Remarks
 Profits or losses from disposal of non-current assets (including the write-off for the accrued
 impairment of assets)
 Government subsidies included in the current profits and losses (excluding the government
 subsidies closely related to regular businesses of the Company, in line with national policies, and       20,185,891.77
 consecutively received by a standard quota or quantity)
 Profits and losses from changes in fair value of financial assets and liabilities held for trading,
 and investment income from disposal of financial assets and liabilities held for trading and
 financial assets available for sale, except for effective hedging operations related to regular
 businesses of the Company
 Profits and losses arising from entrusted investment or asset management                                   4,870,931.14
 Non-operating revenue and expenses other than the above                                                   11,702,436.40
 Other profits and losses satisfying the definition of non-recurring profits and losses                     6,911,926.33
 Less: Amount affected by the income tax                                                                   22,272,320.65
         Amount affected by minority interests (after tax)                                                    405,226.52
 Total                                                                                                   171,995,853.64
     Other profits and losses satisfying the definition of non-recurring profits and losses:
     Applicable          □Not applicable
     Other profits and losses satisfying the definition of non-recurring profits and losses: Other non-recurring profits and losses that
meet the definition of non-recurring profits and losses mainly include other non-recurring profits and losses such as interest on fixed
deposits and value added tax credit.
     Note for the definition of non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses, as recurring profits and losses
     □Applicable         Not applicable
     The Company does not define any non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses as recurring profits and losses.
                 Section III Management Discussion and Analysis
I. Principal Businesses of the Company during the Reporting Period
     (I) Overview
     In recent years, China’s accelerating population aging has continued to drive rising demand for chronic disease
management and public health services. The national “14th Five-Year” Plan has designated the biopharmaceutical
sector as a strategic emerging industry, aiming to drive innovation and transformation of the industry through policy
measures such as supporting innovative drug development, accelerating the modernization and internationalization
of TCM, expanding healthcare access in underserved areas, leveraging AI in drug R&D, and scaling up the elderly
healthcare sector. This presents new historical opportunities for the pharmaceutical and healthcare sector.
     In the first half of 2025, the TCM industry is shaping a landscape of structural opportunities, woven together
by policy momentum, pricing adjustments, technological breakthroughs, and diverging demand. First, the TCM
industry is undergoing a transition from resource dependency to quality orientation, with comprehensive
strengthening of quality control for Chinese medicinal materials. The Opinions on Improving the Quality of TCM
and Promoting High-Quality Development of the TCM Industry issued by the State Council explicitly requires
advancing the construction of Good Agricultural Practice (GAP) bases for Chinese medicinal materials and
blockchain traceability. By 2025, the coverage rate of standardized bases shall exceed 70%, with the market size
for formula granules surpassing RMB 100 billion thanks to the implementation of national standards. Second, the
Chinese medicinal material industry is undergoing in-depth price adjustments during its transformation and
upgrading process. Supply chains are under pressure amid restructuring, and prices of Chinese medicinal materials
show divergent trends. As of the end of June 2025, the Kangmei Chinese Medicinal Material Index declined by 22%
year-on-year. However, the indices for varieties such as Panax notoginseng, Carthamus tinctorius, Poria cocos,
and Saussurea costus exhibited relatively stable fluctuations. Third, the normalization of centralized procurement
is accelerating industry and market differentiation. Within the terminal channels, purchase volumes at public
hospitals are contracting, while the retail channel is achieving structural growth through “a combination of
marketing and online promotion,” leading to a rapid increase in e-commerce penetration. Fourth, the diversification
of consumer demand has led to a stratification of consumption patterns. The rising prevalence of chronic diseases
such as cardiovascular and cerebrovascular conditions has driven sustained growth in demand for TCM products in
related fields. The demand for health and wellness products is growing rapidly, with the concept of “homology of
medicine and food” gaining widespread acceptance. Enthusiasts of wellness practices are increasingly younger,
with those aged 25-34 accounting for over 60% of buyers of TCM wellness products (Source: 2025 Report on
Innovation and Development Research of TCM in China). Therefore, demand for health and wellness-oriented TCM
products remains robust.
     With policy reforms accelerating the approval of innovative drugs and dynamically adjusting the National
Drug Reimbursement List, multi-departmental policies are now providing comprehensive support throughout the
“entire lifecycle” of innovative drugs. Since 2025, China’s innovative drug industry has continued to grow, with
policy support spanning the “entire lifecycle” of innovative drugs. The State Council has proposed launching a pilot
program for the review and approval of clinical trials for innovative drugs, establishing a fast-track review channel
for such drugs. The National Healthcare Security Administration and the National Health Commission have jointly
introduced sixteen measures to support the development of innovative drugs, fostering patient capital to support this
sector. Statistics from the National Medical Products Administration show that 43 innovative drugs were approved
in China in the first half of the year, a 59% increase year-on-year.
     Within the comprehensive health industry, the Chinese consumer market in the first half of 2025 exhibited
characteristics of “stable in scale, split in structure, and still under pressure.” In the first half of 2025, the total retail
sales of consumer goods reached RMB 24.5 trillion, marking a 5.0% year-on-year increase. The real per capita
disposable income of residents nationwide grew by 5.4%, yet the proportion of household deposits relative to GDP
continued to rise. By sector, spending on essentials such as apparel and daily necessities grew slightly slower than
the overall retail-sales pace (Source: National Bureau of Statistics). In the oral care sector, Nielsen IQ data reveals
a significant divergence in growth between online and offline channels. Offline sales fell roughly 4.3% year-on-
year, while online sales surged more than 30%. Generationally, 25- to 45-year-olds are ramping up health spending,
shifting their consumption motive from “cure” to “prevention” and from “gap-filling” to “optimization,” and they
habitually buy wellness goods online via e-commerce platforms (Source: 2025 Gen-Z Health Consumption Trend
Report; Zhongyan Puhua Industrial Research Institute’s In-depth Research on the Health Products Industry and
Future Development Trends Forecast Report, 2025-2030). The group aged 60 and above is also a sizeable
contributor, moving beyond basic healthcare toward chronic-disease prevention and recovery management. In terms
of distribution, there is a clear trend toward the integration and growth of online and offline channels. Offline retail
chains are increasingly focusing on disease prevention, health education, and health management. The growing
penetration of health consumption in sub-county areas is opening up new growth opportunities for the industry.
     The Central Committee of the Communist Party of China and the State Council attach great importance to the
development of TCM, positioning the inheritance and innovation of TCM as an important aspect of the socialist
cause with Chinese characteristics in the new era. The report to the 20th National Congress of the Communist Party
of China has explicitly stated that we should “promote the inheritance and innovation of TCM.” The Yunnan
Provincial Committee of the Communist Party of China and the provincial government place great emphasis on the
development of the Chinese medicinal material industry, positioning this industry as the key focus for developing
agriculture of Yunnan plateau characteristics and an important part of the growth of “resource-driven economy.”
The Three-year Action Work Plan for the High-quality Development of the TCM Industry in Yunnan Province
(2025-2027) outlines the goal of building industrial clusters with Yunnan Baiyao Group serving as the “chain leader”
to expand and strengthen the Chinese medicinal material industry.
     Yunnan Baiyao has always been committed to the inheritance and innovation of TCM, continuously exploring
the intrinsic potential of traditional medicinal products, and promoting the integration of TCM into modern life. The
Company continuously injects new vitality into its brand and products, forming a product portfolio with 40
categories and 416 varieties. In the pharmaceutical products domain, Yunnan Baiyao holds 567 drug approvals and
Company started with the century-old Yunnan Baiyao powder as its foundation and has gradually created a series
of core pharmaceutical products in the field of musculoskeletal and minor wound care, covering all kinds of product
forms such as aerosols, plasters, tinctures and woundplast, and has formed a competitive matrix of branded TCM
in the areas of cold and anti-inflammatory, gastrointestinal digestion, cardiovascular medicines, and gynecological
and pediatric medicines. In the field of health products, combining traditional Yunnan Baiyao products with oral
care products, we have successfully created a group of oral care products, with the flagship product of Yunnan
Baiyao Toothpaste, which has become a classic case of cross-sector innovation and reshaping of consumption by
TCM enterprises. Based on the pharmaceutical science and technology, and drawing on the essence of natural plants,
we have successfully created the scalp health care brand “Yangyuanqing.” Leveraging its successful development
in pharmaceutical and health product sectors, the Company has expanded its business footprint into various domains,
including natural medicine, TCM decoction pieces, special medicines, medical devices, personal care products, and
health supplements. This move enables the Company’s evolution from a TCM manufacturing enterprise to a modern,
comprehensive health-oriented entity.
     In the first half of 2025, Yunnan Baiyao continued to maintain its market leadership in multiple business sectors.
The Company’s core product, Yunnan Baiyao Aerosol, ranked first in retail market share among topical aerosols of
Chinese patent medicine used for joint and muscle pain in the musculoskeletal system. Yunnan Baiyao Woundplast
ranked first in retail market share in the topical hemostatic category. Yunnan Baiyao (Powder) ranked first in retail
market share among the full-body Chinese patent medicines for bone injuries in the musculoskeletal system (Source:
Sinohealth CHIS). Yunnan Baiyao Toothpaste continues to maintain the No.1 market share in the Chinese full-
channel market in the first half of 2025 (Source: Nielsen Retail Research Data). In the first half of 2025, Yunnan
Baiyao was listed for the 16th consecutive year on the Fortune China 500 List published by Fortune China, ranking
in US.
     The Company has four business groups, namely Pharmaceutical Business Group, Health Products Business
Group, TCM Resources Business Group and Yunnan Pharmaceutical Co., Ltd (“Yunnan Pharma”). These business
groups serve as the foundation for the Company’s production and operations.
     Pharmaceutical Business Group focuses on the products of Yunnan Baiyao series, (For example, Yunnan
Baiyao Aerosol, Yunnan Baiyao Plaster, Yunnan Baiyao Woundplast, etc.), which are mainly used for hemostasis,
pain relief, swelling reduction, and blood stasis elimination. The BG extends its offerings to include other branded
TCMs with natural characteristics, covering areas such as tonifying Qi and blood, treating colds and flu,
cardiovascular health, gynecology, pediatrics, and more. The BG is also actively involved in the development of
Panax notoginseng-based botanical supplements.
     Health Products Business Group, with its core focus on the toothpaste category, relies on its robust brand
infrastructure encompassing consumers, products, and scenarios. Embracing a user-centric approach, the BG
actively explores new consumer scenarios and introduces innovative product categories, particularly in the realms
of oral care and Yangyuanqing anti-hair loss solutions, aiming to become the benchmark of the new concept of
Chinese healthy lifestyle.
     By making full use of the characteristic medicinal plant resources of Yunnan Province, TCM Resources
Business Group, while ensuring high quality, high efficiency and low cost supply of raw materials for Chinese
medicines, has built a digitalized industrial chain ecosystem for TCM materials with the model of “1+1+N,” which
consists of “1 TCM production, research and marketing integrated digital intelligence platform + 1 new specialized
market for TCM materials at the origin + multi-dimensional synergies,” so as to support “excellent TCM products”
by “excellent Yunnan TCM resources.”
     Yunnan Pharma remains steadfast in pursuit of maintaining its leading market share among pharmaceutical
distribution companies in Yunnan Province. It has achieved full coverage in all 16 prefectures and cities of Yunnan
Province, with its channels radiating across major retail chain pharmacies. It also assists governments and medical
institutions in building better management and service systems, providing high-quality and modern pharmaceutical
supply chain service solutions for upstream and downstream customers.
     In the first half of 2025, the Company maintained robust growth by focusing on its strategic planning and
overcoming multiple challenges in the external environment. During the reporting period, the Company recorded
operating revenue of RMB 21.257 billion, up 3.92% year on year; net profit attributable to the parent company
reached RMB 3.633 billion, rising 13.93% from RMB 3.189 billion in the previous year and hitting a record high
for the same period; and net profit attributable to the parent company after deducting non-recurring profits and
losses of RMB 3.461 billion, up 10.40% from RMB 3.135 billion in the previous year and hitting a record high for
the same period.
     In terms of growth quality, the Company’s net operating cash flow for the reporting period reached RMB 3.961
billion, representing a 21.45% increase compared to the same period last year. The weighted average return on net
assets was 9.09%, an increase of 1.16 percentage points over the same period of the previous year; basic earnings
per share was RMB 2.04 per share, an increase of 13.97% over the same period of the previous year. Meanwhile,
the Company’s business structure continued to optimize, with industrial revenue accounting for a further increased
share of 40.01% of total operating revenue, representing an increase of 2.6 percentage points compared to the same
period last year. Industrial revenue grew at a rate of 11.13%.
     The Company continued to maintain a healthy asset structure. As of the end of the reporting period, the
Company had total assets of RMB 54.535 billion, net assets attributable to shareholders of the listed company of
RMB 40.407 billion, the asset-liability ratio of 25.91%, and the cash and bank balance of RMB 11.294 billion.
     (II) Review of the main work and prospects
orientation
     (1) Fully leveraging the leadership in Party building to promote high-quality development of the
Company
     During the reporting period, the quality and effectiveness of the Company’s Party building work improved
significantly. Through ongoing consolidation and development, a new Party building model was established,
featuring overall coordination by the Group Party Committee, implementation by secondary-level Party Committees,
and classified advancement by grassroots Party organizations. This created a new framework characterized by Party
Committee leadership, collaboration among Party, government, labor union, and youth league organizations, and
broad participation of all employees. As a result, Party building has taken on a new outlook marked by firm ideals,
solid foundations, strong vitality, and a drive for excellence. The Company’s cohesion, appeal, unity,
competitiveness, and capacity for sustainable high-quality development have all been continuously strengthened.
     (2) Pursuing strategic alignment with high standards to continuously enhance business development
value
     During the reporting period, the Company advanced the implementation of its strategic plan in accordance with
the 2024-2028 Strategic Planning of Yunnan Baiyao Group, focusing on strategic positioning, development
objectives, industrial portfolio, operational strategies, and implementation pathways. The Company’s strategic
management system continued to be refined, strategic management capabilities were enhanced, and strategic
awareness was continuously strengthened for guiding business operation development and optimizing resource
allocation. During the reporting period, the Company focused on its core responsibilities and principal businesses,
returning to the essence of manufacturing. It comprehensively and systematically enhanced operational efficiency
across the entire industrial chain, value chain, and all production factors, continuously strengthening its core
competitiveness. Its overall business performance maintained rapid growth momentum, with significantly enhanced
management capabilities and notable achievements in quality improvement and efficiency gains. Growth rates,
operational quality, and developmental vitality were further consolidated.
development
     (1) Pharmaceutical Business Group
     During the reporting period, the principal business income of the Pharmaceutical Business Group reached
RMB 4.751 billion, up 10.8% year on year. Among the core products, Yunnan Baiyao Aerosol achieved sales
revenue of more than RMB 1.453 billion, with a year-on-year growth of 20.9%; Yunnan Baiyao Plaster, Yunnan
Baiyao Capsule, Yunnan Baiyao Woundplast and Yunnan Baiyao (Powder) recorded significant growth in sales
revenue over the same period of last year. Other branded TCM products showed impressive growth. The sales
revenue of Ginseng and Tuckahoe Spleen and Stomach Strengthening Granule exceeded RMB 100 million, the
sales revenue of Pudilan Anti-inflammatory Tablets approached RMB 100 million, the sales revenue of Radix
Notoginseng Saponin Dispersible Tablets achieved significant growth. Among botanical supplements, the sales
revenue of Qixuekang Oral Liquid amounted to RMB 202 million, growing by approximately 116.2% year-on-year.
     In the first half of 2025, guided by its strategic vision, the Pharmaceutical Business Group prioritized
implementing its “leading brand of pain management in the field of traumatology” strategy. Leveraging product
and brand strengths, it deepened the recognition of Yunnan Baiyao products’ efficacy in the field of pain
management. Adopting the “Pain Management Center” as its holistic marketing initiative, it advanced steadily and
achieved remarkable results, with products such as aerosols and medicated plasters showing significant year-on-
year growth. Large-scale coordinated operations have directly driven strategic chain sales growth. Meanwhile, the
Pharmaceutical Business Group further optimized the operation platform of “High Quality TCM,” focusing on high-
potential tracks such as cardiovascular system, respiratory system, digestive system, and continued to enrich the
product pipeline to build a large ecosystem in the pharmaceutical industry. During the reporting period, the
Pharmaceutical Business Group continued to promote various key tasks from marketing, channel cultivation,
academic and clinical and other aspects. In marketing, the Pharmaceutical Business Group implemented a full-
channel integrated campaign featuring celebrity endorsements aligned with Baiyao’s brand identity, which is
designed to deeply integrate brand awareness, effectiveness, and sales across sports, music, and O2O transaction
scenarios. It executed specialized, universally relatable, and highly interactive content marketing around key themes
such as “orthopedic pain relief,” “sports companions” and “summer spleen tonification.” Leveraging platforms like
Douyin and REDnote, widespread dissemination was achieved. In channel expansion, the division continued to
develop the “Yunding Jingwei” model to achieve direct supply to primary distributors in regional markets while
ensuring clear product traceability. It actively developed online market, achieving O2O sales growth of over 20%
year-on-year, and promoting enhanced recognition and sales of products such as Qixuekang and Ginseng and
Tuckahoe Spleen and Stomach Strengthening Granule through online content marketing. By deepening strategic
cooperation with JD Health, the Company achieved a significant rise in rankings for its main series of essential
medicines during the 2025 “618 Shopping Festival.” During the reporting period, the Company made great
breakthroughs in online pharmaceutical sales, attracting 48.45 million visitors through e-commerce platforms and
converting 3.54 million consumers. This generated a total GMV of RMB 254 million, laying a solid foundation for
future growth in online channels. In terms of academic and clinical study, the division has made steady progress in
clinical research on Yunnan Baiyao (Powder) and Yunnan Baiyao Capsule in the treatment of diabetic foot and
bone pain, Gongxuening Capsule in the treatment of abnormal uterine bleeding and the reduction of vaginal bleeding
after medication abortion, and Qixuekang Oral Liquid in the improvement of heart and blood vessel health and the
prevention and treatment of plateau reaction, creating broader application scenarios for the products.
     Aiming to “become a model of TCM inheritance and innovation development,” the Pharmaceutical Business
Group will, on the one hand, inherit, safeguard, and develop the superior products of Baiyao, optimize the existing
product system and provide a comprehensive operation plan to achieve strategic growth of the products on other
high-potential core tracks, focusing on cardiovascular, respiratory, digestive, gynecological, and other major disease
treatment areas. On the other hand, it will continue to enhance existing products through secondary development
aligned with strategic objectives while selectively expanding into external projects to complete our product portfolio
and strengthen our pharmaceutical system.
     (2) Health Products Business Group
     During the reporting period, the Health Products Business Group achieved an operating income of RMB 3.442
billion, with a year-on-year growth of 9.46%. In the oral care sector, Yunnan Baiyao Toothpaste maintained its
position as the top-ranked brand in terms of omni-channel market share in China during the first half of 2025 (Source:
Nielsen Retail Research Data). In the hair care and anti-hair loss segment, Yangyuanqing recorded sales revenue of
RMB 217 million during the reporting period, up 11% year on year. With dual certifications, that is, a special
cosmetic license for hair growth products and a national invention patent for anti-hair loss formulas, Yangyuanqing
secured the “ICIC Innovation Technology Award for Hair Care Products” at the ICIC 2025 Awards. During the
hair loss shampoo on Tmall (Source: open.shangzhizhen.com).
     In the first half of 2025, while maintaining stability in offline operations, the Health Products Business Group
reasonably increased investment in online channels and new product promotion, actively expanded its online
presence, and achieved phased results in online marketing. In terms of product categories, within the oral care sector,
gum-care toothpaste maintained steady growth in its core market segment, while sensitivity-relief toothpaste
demonstrated breakthrough growth trends. Whitening and children’s toothpaste saw steady increases. The hair care
and anti-hair loss brand Yangyuanqing sustained overall growth thanks to digital retail growth. In marketing, the
Company continued to leverage its core brand keywords and launched targeted campaigns around key milestones
to further enhance brand influence and empower product development. In addition, we actively explored innovative
models for university-enterprise collaborative research and development, and established the “Peking University
Stomatology-Yunnan Baiyao Joint Laboratory for Oral Health.” Integrating the original innovation capabilities of
Peking University Hospital of Stomatology with Yunnan Baiyao’s industrial strengths, this joint laboratory focuses
on addressing high-prevalence national oral health issues such as periodontal problems and oral health ecosystems
through deep integration of industry, academia, and research. We have further deepened our collaboration with the
Yangtze Delta Region Research Institute of Tsinghua University, Zhejiang. Leveraging the institute’s resources, we
have jointly established the Aging Science Innovation and R&D Center. By exploring Baiyao’s traditional active
ingredients and key innovative functional molecules, we focus on identifying proprietary active compounds with
soothing and restorative effects for oral inflammation or damage through AI-driven computational analysis. By
optimizing the R&D management, channel management, production management, and supply management
processes within the Health Products Business Group, we have achieved end-to-end integration from suppliers to
market launch, from corporate management to user services, and from product development to user needs.
     Aiming to “become a top-tier provider” of high-quality health and wellness products, the Health Products
Business Group will build a healthy ecology with quality of life at its core. On the one hand, the oral care business,
as the foundation and benchmark of the healthcare segment, will continue to maintain and expand its leading
advantage. The Company will further strengthen ecosystem management of its oral care portfolio, systematically
expand the product portfolio, enhance R&D-production-sales synergy and lean management, improve new product
development and iteration capabilities, and continuously fortify the ecosystem. On the other hand, we will continue
to rapidly scale up our hair care business, steadily strengthen our position in the scalp health ecosystem, and
accelerate the expansion and rejuvenation of Yangyuanqing.
     (3) TCM Resources Business Group
     During the reporting period, the TCM Resources Business Group achieved operating income of RMB 914
million, representing a year-on-year increase of about 6.3%. The TCM Resources Business Group earnestly fulfilled
its responsibilities as the “chain leader,” pursuing core development objectives centered on “high-level seed industry
development, high-standard cultivation practices, high-capacity processing capabilities, high-tier market expansion,
and high-stakes brand building.” It comprehensively implemented the “Six Unifications” operational model—
unified planting planning, unified seed source R&D and supply, unified cultivation standards, unified origin
processing, unified procurement and sales, and unified management—to build a Chinese medicinal material industry
cluster and drive coordinated development across the entire supply chain. We have established the Yunyao
Enterprise Alliance and the Digital Intelligence Yunnan TCM Platform Testing Alliance, successfully exploring
and forming a distinctive Yunnan-style “One Product, One Chain” development path for the Chinese medicinal
material industry.
     In the first half of 2025, the TCM Resources Business Group focused on authentic Yunnan medicinal materials
and strategic advantage varieties of Baiyao and achieved significant results thanks to the coordinated efforts across
all business units. In seeding innovation, a precise R&D and commercialization model of “1 variety + 1 expert team
+ 3-5 cooperative bases” was adopted. Fourteen seed source bases were licensed, securing full coverage of
innovative seed sources for the ten major Yunnan medicinal plants. In variety breeding, two new Paris polyphylla
cultivar certificates were obtained, high-yielding and high-quality Panax notoginseng target plants were selected,
and seed quality standards for Paris polyphylla and Saussurea costus were released. The planting area for improved
seed varieties has reached 90% of the annual target, with the “Yunyao Seed Valley” initiative showing initial results.
In cultivation, we have obtained GAP certification for Panax notoginseng and expanded our GAP-certified bases
for Carthamus tinctorius, Amomum villosum, Poria cocos, Saussurea costus, and Panax notoginseng by over 7,000
mu. We actively incorporated low-altitude economy and IoT technologies, installing IoT equipment across 11
variety bases covering more than 30,000 mu. Regarding branded medicinal materials, in response to downward
pressure on Chinese medicinal material market prices during the first half of the year, the BG proactively adjusted
its business strategy. By optimizing product mix and expanding sales channels, it increased market share, offsetting
price declines with volume growth. Shipment volume for the first half of the year rose by 38.3% year-on-year. In
the market sector, breakthroughs have been achieved in cross-border Chinese medicinal material operations. The
first successful customs clearance of Chinese medicinal materials at the Mohan and Mengkang border crossings has
been completed, laying the groundwork for expanding into Southeast Asian and neighboring international markets
and establishing a cross-border supply chain system for Chinese medicinal materials. Digital Intelligence Yunnan
TCM focused on platform-based and ecosystem-driven development, with seven regional warehouses under its
“One Product, One Chain” initiative starting operations. The platform’s transaction volume has surpassed RMB 1
billion, with 18,000 farming households now registered on the platform. In addition, the platform is the only one in
the province that offers a complete tax compliance solution for Chinese medicinal materials throughout the entire
chain, further strengthening its core competitiveness. The natural plant extract business has actively advanced its
transformation and upgrading, with the market competitiveness of its core product, breviscapine, significantly
enhanced and sales revenue substantially increased. Pharmaceutical services continued to expand market coverage
and service depth, adding 54 new clients. TCM clinics saw 17,771 patient visits, while herbal decoction centers
processed 293,500 prescriptions, representing year-over-year growth of 18% and 35%, respectively. In addition, by
signing contracts with industry veterans such as successors to National Great Master of TCM, we have further
strengthened our service team and enhanced professional expertise, thereby continuously solidifying the foundation
for the development of pharmaceutical services.
     Looking ahead, the TCM Resources Business Group will continue to undertake the strategic positioning and
responsibility of Yunnan Baiyao Group as the “chain leader” for the high-quality development of the TCM industry
in Yunnan Province, tap the advantages of Chinese medicinal material resources in Yunnan, and push forward the
high-quality development of the resources economy in an orderly manner, so as to turn Yunnan’s endowment of
Chinese medicinal materials into a competitive advantage for the industry, as well as an advantage for the long-term
sustainable development of the region, and achieve the strategic goal of supporting “excellent TCM products” by
“excellent Yunnan TCM resources,” and contribute to the high-quality development of the national TCM industry.
     (4) Yunnan Pharmaceutical Co., Ltd.
     During the reporting period, Yunnan Pharma took multiple measures to stabilize the revenue base, realizing
main business income of RMB 12.164 billion and a net profit of RMB 351 million, up 17.75% year-on-year. In
terms of products, non-pharmaceutical businesses such as medical devices, cosmeceuticals, and foods for special
medical purposes have begun to yield results, with sales growing 10.6% year-on-year. Under the hospital-adjacent
store model, specialized pharmacies actively capturing prescription outflow from hospitals have seen significant
growth in new specialty drug business, with sales increasing 57% year-on-year.
     In the first half of 2025, through Party-building leadership, optimized management and control, and a lean and
efficient workforce, the Company continued to strengthen its two core businesses, hospital pharmaceutical
distribution and commercial distribution, while focusing on cultivating growth areas such as medical devices and
specialty pharmacies, by stabilizing existing markets and expanded innovative businesses operationally,
implementing cost reduction and efficiency enhancement in management and adopting a development strategy that
equally prioritized risk control and growth. It also strategically positioned itself in pharmaceutical brand operation
services. To enhance operational efficiency and adapt to a highly regulated environment, the Company accelerated
the development of a digital supply chain collaboration platform. Leveraging pharmaceutical traceability codes and
Unique Device Identification (UDI) as data connectors, we established a traceability system characterized by “end-
to-end coverage, multi-stakeholder collaboration, and intelligent management,” thus empowering downstream
medical institution clients while enhancing the quality and efficiency of supply chain management. As a leading
regional pharmaceutical distributor, we spearheaded the advancement of Yunnan’s pharmaceutical distribution
industry toward high-quality development characterized by digital intelligence and standardization.
     Looking ahead, Yunnan Pharma will continue to consolidate and expand its market share in existing hospitals
and distribution channels. It will implement a “double-up, double-down” strategy, cultivating new growth drivers
by expanding incremental businesses such as non-pharmaceutical operations, specialty pharmacies, and
pharmaceutical brand management services. At the same time, we will deepen upstream value creation, strengthen
lean operations, optimize supply chain management across the entire value chain, and strive to further enhance
operational efficiency and quality. By refining customer-relationship management, reforming internal and external
credit processes, establishing dedicated task forces, rolling out tiered customer-and-receivables controls, exploring
closed-loop collaboration among hospitals, enterprises, banks and merchants, tightening risk-customer oversight,
and improving procurement and inventory turnover, we will effectively improve the composition of receivables and
stock. With full supply-chain synergy, we will help build a patient-centric, closed-loop care ecosystem, driving
high-quality and healthy development.
     (5) Continuously promoting the optimization of the business deployment and improvement of the
operating quality of the emerging business units
     During the reporting period, the Company promoted the deployment optimization of the emerging business
units, driving the development of business units such as the Medical Device BU and the Tonic Health & Skin Beauty
BU through model innovation, product innovation, and other initiatives.
     The Medical Device BU focuses on three major categories: pain therapy, topical plasters, and eye care. During
the reporting period, the BU maintained steady growth in overall revenue by stabilizing its core business centered
on products such as bandages and adhesive plasters. By focusing on the supply chain, it continuously optimized its
production workforce, enhanced quality and efficiency, and significantly improved profitability. In terms of
products, it has expanded and refined the lightweight, waterproof, elastic, and breathable bandage categories,
achieving significant growth compared to the same period last year. The Tonic Health & Skin Beauty BU leveraged
Yunnan Baiyao’s distinctive foundational technologies to build core competitiveness in the “broader beauty
industry.” It has continuously optimized brand development and actively expanded both online and offline markets,
with an aim to establish itself as a leading brand in traditional Chinese dietary therapy and herbal skincare.
     (6) Continuously seeking innovation while upholding integrity to achieve tangible and significant R&D
outcomes
     Upholding an innovation-driven development philosophy, the Company consistently leverages its strengths in
both TCM and innovative pharmaceuticals by “building platforms, establishing mechanisms, and attracting talents.”
On one hand, we develop TCM by pursuing innovation and integrity. We are committed to practical germplasm
resource research and development. By combining independent R&D with collaborative research, we aim to
expedite the establishment of “an integrated breeding, propagation, and promotion system” for seed sources. This
initiative will advance breeding studies for authentic medicinal materials such as Panax notoginseng and Paris
polyphylla. By strengthening innovation in Chinese patent medicines, we have made significant progress in the
research and development of innovative TCMs. On the other hand, we pursue differentiated strategies in in
innovative drug deployment. Based on the criteria of technology frontier, clinical demand and resource endowment,
we take the initiative to integrate into the national and local biomedical strategies, and deploy and develop
innovative drugs with more competitiveness and market prospects. During the reporting period, upholding the
innovation-driven strategy, the Company has promoted the transformation of results, continuously improved the
growth momentum, and promoted scientific planning of short-, medium- and long-term projects in an orderly
manner.
     For short-term projects, we will focus on secondary innovation development of marketed products and rapid
drug and medical device development. Currently, 16 major TCM varieties are undergoing secondary development,
with 37 projects underway. Progress on key projects during the reporting period is as follows:
 Project
              Project Name                                                Progress Overview
  Cycle
                                  The evidence-based medical research project on Yunnan Baiyao Aerosol for treating pain associated
                                  with closed rib fractures has been approved for funding by the Yunnan Provincial Science and
                                  Technology Department.
             Secondary            The multi-center clinical trial of Yunnan Baiyao Capsule for treating swelling in limbs with
             development          perimalleolar fractures has entered the patient enrollment phase.
             project for Baiyao   The pilot-scale sample preparation for the novel rubber plaster project under the Yunnan Baiyao
             series products      Plaster initiative has been completed. The formulation optimization for new manufacturing process
                                  of the gel plaster project has been finalized. The evidence-based medical research project addressing
                                  joint pain caused by rheumatoid arthritis has secured approval as a major provincial science and
                                  technology initiative by the Yunnan Provincial Science and Technology Department.
                                  Clinical trial analysis reports and summary reports for the clinical research project on Qixuekang
                                  Oral Liquid improving cardiac and vascular health have been completed. Efficacy validation
                                  through two high-altitude adaptation trials has been achieved.
             Qixuekang project
                                  The secondary development and research project for Qixuekang Oral Liquid under the major TCM
                                  variety initiative has been successfully approved as a major provincial science and technology
Short-term                        initiative by the Yunnan Provincial Science and Technology Department.
                                  The clinical observation study on the treatment of uterine bleeding has initiated all 38 research
                                  centers, with a cumulative enrollment of 1,891 subjects.
             Secondary
             development          The study on reducing vaginal bleeding after medical abortion has completed 100% of subject
             project         of   enrollment.
             Gongxuening          The secondary development research project for “Gongxuening Capsule” under the major TCM
                                  variety initiative has completed network pharmacology trials. For endometritis, enrollment of 18
                                  subjects has been completed, and the pharmacoeconomic study has finalized model construction.
             Post-marketing       The clinical trial summary report for the chronic prostatitis treatment program has been completed.
             evaluation     of    The project to advance innovative research on Shuliean Capsule, a distinctive ethnic medicine from
             Shuliean Capsule     Yunnan, has been approved and received notification for production resumption.
                                  The disposable sterile hemostatic clip, a national innovation project, has obtained the Class II
             Medical   device     Medical Device Notification Letter from the State. The research project on novel wound hemostatic
             R&D project          materials and arterial hemostatic gel has essentially completed four subject studies and participated
                                  in demonstration applications across multiple regions.
     For medium-term projects, we have made every effort to promote the development of innovative TCMs and
continued to build star products of Yunnan Baiyao transdermal preparations. Progress on key projects during the
reporting period is as follows:
 Project
                 Project Name                                                 Progress Overview
  Cycle
             Pan-Panax
             notoginseng   Tablet       All 704 subjects in the Phase II clinical trial have completed their participation.
             project
             Fuqi Guben Ointment
                                        All 15 Phase III clinical trial sites have been activated, with 180 subjects enrolled.
             project
Medium-      Ancient     classical      Among the two classical famous prescription projects, the technical review and simulated on-
 term        famous prescription        site inspection application for the Qingxin Lotus Seed Granules have been submitted. The
             project                    production process for the Ophiopogon Granules is currently under optimization.
                                        The consistency revision and formulation-related evaluation for the Flurbiprofen Cataplasms
                                        project have been completed.
             Plaster project
                                        The project for the Loxoprofen Sodium Cataplasms has received a clinical trial notification,
                                        with formulation-related evaluation being conducted concurrently.
     For the long-term projects, especially the innovative drug projects, we will place radiopharmaceuticals at the
core, align projects with social needs and cutting-edge science, and advance a pipeline of innovative drugs that
secures the Company’s sustainable growth momentum. Progress on key projects during the reporting period is as
follows:
Project
                Project Name                                                     Progress Overview
 Cycle
           INR101          diagnostic
                                          The project has initiated Phase III clinical trials, with 32 study sites approved for enrollment. Of
           radiopharmaceutical
                                          these, 22 sites have commenced operations and enrolled 60 subjects.
           project
           INR102       therapeutical     The project has obtained a clinical trial notification. The Phase I clinical trial site has commenced
           radiopharmaceutical            operations. The investigator-initiated clinical trial (IIT) has completed enrollment and dosing for
Long-      project                        12 patients.
term       INB301         monoclonal
           antibody project for the       Toxicology batch and clinical batch production and release testing have been completed.
           treatment    of     cancer     Preclinical studies and preparation of IND application materials have been initiated.
           cachexia
           AI     and    cutting-edge     Research findings from the tumor organoid library and molecular biomarker study project have
           technology research            been published in Cancer Cell and the Chinese Journal of Clinical Oncology.
     In the second half of 2025, the Company will further establish an R&D innovation system and operational
management capabilities aligned with Yunnan Baiyao’s strategic development phase. We will strategically leverage
our strengths in “TCM” and “innovative drugs,” while cultivating top-tier talents, including leading R&D
professionals and management personnel, to match our world-class hardware platforms. The Company will continue
to broaden the connotation of innovation. Relying on lean and digital means, we will introduce positive incentives
to encourage innovation, create a positive atmosphere for innovation, establish sufficient project reserves, and
accelerate the implementation of innovative projects to promote the transformation of results.
     (7) Continuously deepening the transformation strategy of digital intelligence to improve quality and
efficiency of the Company
     During the reporting period, the Company continued to implement the Digital Development Plan for 2022-
in the industrial chain, we are committed to driving industrial transformation and upgrading while fostering business
innovation and development. Focusing on channel operation transformation, the Company has independently
developed a “Marketing Business Operation Platform” and piloted its application within the Pharmaceutical
Business Group. This enables distributors to place orders autonomously, facilitates precise expense accounting, and
allows for real-time tracking of product flow, significantly enhancing operational efficiency of channel business.
The “One-Item-One-Code Traceability Platform” independently developed by the Company has been applied to
trace the origin of Chinese medicinal materials, providing digital identity markers for “authentic medicinal
materials.”
     Tangible results have been achieved in accelerating the advancement of supply chain excellence. We have
redesigned the end-to-end processes with a focus on cost reduction, quality improvement, and efficiency
enhancement, and completed the construction of a comprehensive digital foundation covering the entire supply
chain from order processing and warehousing to transportation and settlement. First, all business operations have
been fully digitized, reducing the manual workload of frontline employees by 30%, and eliminating 60,000 paper-
based documents annually, thus promoting green office practices. Second, 100% automation of settlement is
achieved, and the cycle has been shortened from 30 days to real-time. Third, real-time data has been implemented
across the entire chain. By establishing 90 standardized processes and 60 management metrics, it provides robust
support for business decision-making.
     AI-powered business applications have achieved tangible results in specific scenarios. Over 70 digital
employees are currently deployed, achieving an annual labor savings equivalent to 7,000 person-days. In terms of
digital transformation of the Chinese medicinal material industry, we have established a comprehensive closed-loop
business system spanning resources, cultivation, procurement, processing, warehousing, and payments through the
development of the “Digital Intelligence of Yunnan TCM” platform and the “One Product, One Chain” digital
management system for warehouses in places of origin. This has reduced settlement times for harvesting at place of
origin from one day to mere minutes, significantly enhancing supply chain coordination efficiency and precision
management levels while streamlining the entire process from cultivation to distribution. By continuously
advancing comprehensive data governance and promoting data-driven business operations, we achieved the listing
of Yunnan Baiyao Group’s first data product of “Traceability Query for Chinese Medicinal Materials” on the
Shanghai Data Exchange.
     Looking forward, the Company will continue to empower the effective development of its business and provide
competitive strengths through its digital intelligence capabilities, explore the direction of transformation of
“AI+Pharmaceuticals,” and accelerate the transformation of digital intelligence by deeply integrating advanced
technologies such as AI, big data, and cloud computing into industrial chain aspects such as planting, processing,
research and development, production, and marketing. Defining innovation through digital transformation, we will
deepen the integration of data elements with TCM to forge new productive forces, breathing new life into traditional
Chinese medicine.
     (III) Business model
pharmaceutical industry group
     As a “chain leader,” the Company is committed to promoting coordinated development across the industrial
chain, refining its focus on core areas, expanding the leadership of advantageous products, and accelerating the
construction of the industrial system. Centered on the principles of “strengthening principal businesses, stabilizing
growth, and ensuring sustainability,” we aim to create a comprehensive industrial chain for Yunnan-branded TCM
materials. We will focus on expanding the long-term potential of pharmaceuticals, health products, TCM resources,
and commercial logistics, thus achieving self-driven leapfrog development. In addition, based on the development
strategy, the Company will scientifically validate and rapidly promote the Group’s internationalization strategy, and
fully leverage the synergistic and promotional effects of “two markets” and “two resources” at home and abroad,
focusing on expanding the reach of TCM products abroad, creating new growth opportunities for health products,
and integrating international resources for the development of innovative medicines, so as to continuously drive our
sustained high-quality development, and support the transformation of Yunnan Baiyao from a Chinese leading TCM
enterprise to a “Chinese leading, world-class” modern pharmaceutical industry group.
growth”
     The Company adopts a two-pronged growth strategy as the main growth model that combines internal
efficiency improvement (“intensive growth”) with external market expansion (“extensive growth”). “Intensive
growth” focuses on tapping potential and increasing efficiency to stabilize the fundamental base. It concentrates on
the development foundations of the pharmaceutical, health, and distribution industries. Following the approach of
maximizing overall benefits, it aims for systematic improvement and optimization across the industrial chain, value
chain, and production factors, continuously promoting the high-quality development of the Company’s principal
businesses. “Extensive growth” emphasizes foresight and insight. Based on the overall strategic requirements and
orientation, we actively explore strategic mergers and acquisitions, strategic cooperation, and other models to
complement and strengthen the existing industrial segments, and quickly break through the existing growth
bottlenecks. This dual approach enables the Company to establish a sound and resilient industrial portfolio system
and to achieve sustainable, high-quality development.
external talents”
     The Company believes in the pivotal role of talent in driving its development. It has established a systematic
and scientific training system that offers diverse career development pathways, fostering both specialized
knowledge and comprehensive skills, with the mutual development of talents and the Company as the objective.
The Company concentrates its superior resources and actively introduces high-level professionals from multiple
fields, including drug R&D, digital construction, and strategic investment. It continues to enhance its business
capabilities in multiple dimensions, such as innovative R&D, lean operations, and investment and mergers &
acquisitions. By nurturing internal talents, actively recruiting external experts, and fully utilizing its organizational
environment for talent development and market resources, the Company strives to build a high-quality talent pool
aligned with its future growth requirements.
operations
     The Company is committed to building a digital driving force and actively seeking transformation to digital
operations with a strong customer-centric approach to enhance customer value and experience. By leveraging
cutting-edge digital technologies such as cloud computing, big data, AI, 5G, and the Internet of Things, the
Company drives innovation and development. The Company also seeks for transformation from a function-oriented
process to a process that connects customer scenarios to drive the Company’s management change and
organizational development. Also, the Company is moving beyond a unified “data base” and governance strategy
to build a data-driven intelligent decision-making system “based on facts.”
II. Analysis on Core Competitiveness
     (I) Brand strength
     Yunnan Baiyao is a well-established Chinese heritage brand with a history of over 123 years. Centered around
the Yunnan Baiyao brand, the Company has expanded from a pharmaceutical brand into a multi-brand ecosystem
covering personal healthcare products, crude drugs, and comprehensive health products. We have built a diverse
portfolio of brands and continuously expanded our reach to target audiences, enhancing our brand value over the
long term. The Company has been consistently listed in the brand value rankings of internationally authoritative
organizations. During the reporting period, it was once again ranked 33rd in the List of Top 50 Global
Pharmaceutical Companies by Pharmaceutical Executive in US. Moreover, it has been repeatedly included in the
List of China’s Best Brands published by Interbrand, and the Kantar BrandZ Top 100 Most Valuable Chinese Brands
list.
        (II) Full industrial chain advantage
        We will further uphold our responsibilities as a chain leader, based on the strategic positioning of “the ‘chain
leader’ with high-quality development of Yunnan TCM resources.” Relying on the authentic medicinal resources
and location advantages of Yunnan Province, we will leverage Yunnan Baiyao’s accumulated expertise in in
technology, brand, channel, capital and talent, as well as the demonstration, leading and driving role of the leading
enterprise in industrial development. We have built a digitalized industrial chain ecosystem for TCM materials with
the model of “1+1+N,” which consists of “1 TCM production, research and marketing integrated digital intelligence
platform + 1 new specialized market for TCM materials at the origin + multi-dimensional synergies,” to promote
the standardization, scaling, branding and digitalization of the TCM industry and transform resource advantages
into industrial competitive advantages and long-term sustainable development advantages, so as to support
“excellent TCM products” by “excellent Yunnan TCM resources.”
        Driven by its long-term and continuous investment in key strategic varieties of TCM materials, the Company
has achieved a complete and closed-loop industrial chain from seed selection and cultivation to production and
processing. This has established a robust supply system for strategic medicinal materials, effectively ensuring the
quality stability of TCM raw materials and controlling the price fluctuations of strategic TCM raw materials. This
system has laid the groundwork for the long-term and sustainable development of Yunnan Baiyao.
        (III) Continuous innovation capability
        Yunnan Baiyao consistently meets the rapidly evolving and upgrading consumer demand through continuous
innovation. The Company is committed to integrating TCM into modern life through the consumer-centered
“customer-oriented innovation,” “social innovation” based on government-industry-academia-research-medicine
collaboration and “digital innovation” powered by advanced technologies such as AI, big data, and cloud computing.”
We have evolved from a single hemostatic product to a vast Yunnan Baiyao industrial group, covering various
sectors of the health industry, and created classic examples of innovation and the integration of TCM products into
daily life, such as “Yunnan Baiyao Woundplast” and “Yunnan Baiyao Toothpaste.”
     Looking ahead, the Company will continue to enhance its innovation capabilities by continuously improving
the level of R&D and promoting digital and intelligent reform. We have set up more than 10 national and provincial
scientific research platforms and R&D centers with many research institutions and universities, focusing on the field
of medicine, strengthening the introduction of talents, scientific research and cooperation and exchanges, and
enhancing collaboration between basic and clinical research to truly achieve the effective transformation of research
achievements into cross-disciplinary innovation and development. The Company has positioned “AI+Medicine” as
the core direction of its strategic transformation, deeply integrating advanced technologies such as AI, big data and
cloud computing into planting, processing, R&D, production, marketing and other aspects, accelerating the
transformation of digital intelligence, and focusing on the modernization of TCM and the intelligent upgrading of
health products.
     (IV) Talent team strengths
     The Company has established a long-term mechanism for talent security to deepen the market-oriented
selection and employment mechanism, improve the mechanisms for talent introduction, training, and selection, and
foster an environment conducive to the growth of its talent pool. By focusing on both internal team development
and the continuous external introduction of outstanding talents, we have built management teams with high
professionalism and strong market awareness across business areas. The Company is committed to enhancing the
specialization, professionalism, and market orientation of its cadre and talent teams, continuously optimizing their
professional and knowledge structures to create a supportive environment for talent growth, and enhance the loyalty,
contribution and sense of fulfillment among our talents. The Company continually refines its efficient incentive
mechanism based on its strategic goals, and gives priority to those who have made significant contributions, as well
as key front-line positions in emerging industries, R&D, innovation, reform, and other critical areas when allocating
resources, to maximize the enthusiasm and creativity of cadres and employees, promote the Company towards high-
quality development, and lay a strong foundation for achieving win-win cooperation among all stakeholders.
     (V) Channel advantages
     In terms of pharmaceuticals, the Company has built a marketing network covering medical institutions and
retail pharmacies across various provinces, regions, counties, and towns in China, and continues to conduct high-
quality medical research projects to strengthen the medical foundation of its products and enhance collaboration
with healthcare institutions. In the retail sector, we have nationwide coverage, serving 5,000 top-tier chains and
    reaching over 400,000 retail stores across China. Especially in areas such as East China, Central China, and Yunnan
    Province, the Company has achieved the high coverage, high penetration rate, and strong market service capabilities,
    and implemented the special marketing cooperation under the principle of “One Province, One Strategy” or even
    “One Chain Store, One Strategy.” Leveraging current consumer touchpoints and spending habits, the Company has
    integrated online and offline channels to execute omnichannel marketing. Beyond offering more high-quality
    products, it continuously enhances its professional capabilities to deliver a broader range of health services.
            Regarding health products, Yunnan Baiyao has established a comprehensive nationwide sales team dedicated
    to comprehensive health products, covering all terminals. Yunnan Baiyao Toothpaste continues to maintain a
    leading market share in China with a high brand penetration in the oral product category. Through ongoing
    optimization of its full chain channels, the Company has not only strengthened its position in traditional offline
    channels but also experienced significant growth in emerging business models such as on-demand retail, community
    group purchases, and interest-based e-commerce. This demonstrates the Company’s willingness to experiment and
    adapt, taking measured steps forward along the way, all of which enhance its ability to quickly respond to evolving
    business trends. Such channel advantages of Yunnan Baiyao have significantly enhanced market competitiveness
    of the Company, laying the foundation to continuously commercialize new products.
    III. Analysis on Principal Businesses
    Overview
    Refer to “I. Principal Businesses of the Company during the Reporting Period” for details.
    Year-on-year changes in the key financial data
                                                                                                                     Unit: RMB
                                              The same period of the     Year-on-year
                      The reporting period                                                             Reasons for changes
                                                  previous year        increase/decrease
                                                                                           Mainly due to increase in industrial sales
Operating revenue        21,257,102,896.02        20,455,286,287.52               3.92%
                                                                                           revenue by RMB 851 million.
                                                                                           Mainly due to increase in industrial sales
Operating cost           14,697,868,069.29        14,462,809,950.85               1.63%    cost resulting from the increase in industrial
                                                                                           sales income during the reporting period.
                                                                                           Industrial sales volume and sales expenses
Sales expenses            2,516,371,857.04          2,296,821,490.59              9.56%    increased correspondingly during the
                                                                                           reporting period.
Administrative
expenses
Financial                                                                                  Mainly due to YOY decrease in interest
                             -23,106,607.43          -129,619,278.35             82.17%
expenses                                                                                   income and interest expenses.
                                                                                           Mainly due to the corresponding increase in
Income tax
expenses
                                                                                           total profits during the reporting period.
                                                                                           Increase in R&D investments during the
R&D investment              155,900,139.57           148,043,019.34               5.31%
                                                                                           reporting period.
                                                                                                 Mainly due to increase in the cash received
                                                                                                 from sales of goods or rendering of services
                                                                                                 during the reporting period by RMB 1.527
Net cash flows
                                                                                                 billion compared to the same period last year
from operating              3,961,187,202.77           3,261,617,391.99                21.45%
                                                                                                 and increase in the cash paid for other
activities
                                                                                                 operating activities during the reporting
                                                                                                 period by RMB 531 million compared to the
                                                                                                 same period last year.
                                                                                                 Mainly due to a decrease of RMB 1.208
                                                                                                 billion in the difference between the amount
                                                                                                 of time deposits maturing and the amount
                                                                                                 deposited compared to the previous period,
                                                                                                 an increase of RMB 1.9 billion in the amount
                                                                                                 of wealth management products purchased
Net cash flows
                                                                                                 compared to the same period last year, an
from investing               -955,287,317.14            -205,582,688.32             -364.67%
                                                                                                 increase of RMB 2.1 billion in the amount of
activities
                                                                                                 wealth management products disposed of
                                                                                                 compared to the same period last year, and
                                                                                                 an increase of RMB 242 million in the
                                                                                                 amount of financial asset investments
                                                                                                 disposed of, such as those in Jacobson and
                                                                                                 JBM , compared to the same period last year.
                                                                                                 Mainly due to a decrease in cash received
                                                                                                 from borrowing by RMB 1,477 million
                                                                                                 compared to the same period last year;
Net cash flows                                                                                   decrease in cash paid for repayment of debts
from financing             -2,583,841,878.43          -3,145,514,928.97                17.86%    by RMB 448 million compared to the same
activities                                                                                       period last year; and decrease in cash paid
                                                                                                 for dividend distribution, profit sharing, or
                                                                                                 interest payments by RMB 1,528 million
                                                                                                 compared to the same period last year.
                                                                                                 Mainly due to increase in the net cash flows
Net increase in
                                                                                                 from operating activities during the
cash and cash                 416,969,387.98                -89,528,803.06           565.74%
                                                                                                 reporting period compared to the previous
equivalents
                                                                                                 period.
    Significant changes in the profit composition or profit source of the Company during the reporting period
    □ Applicable  Not applicable
    There were no significant changes in the profit composition or profit source of the Company during the reporting period.
    Operating revenue structure
                                                                                                                               Unit: RMB
                                     The reporting period                    The same period of the previous year
                                                                                                                            Year-on-year
                                                     Proportion in                                     Proportion in      increase/decrease
                                  Amount                                         Amount
                                                   operating revenue                                 operating revenue
Total operating
revenue
By industries
Income from
industrial sales
Income from
commercial sales
Technical service                  16,169,654.29                 0.08%             13,419,064.28                0.07%                20.50%
Hospitality industry                6,156,813.81                 0.03%              6,332,847.91                0.03%                -2.78%
    Income from
    plantation sales
    Income from other
    businesses
    By products
    Industrial products
    (Self-made)
    Wholesale and retail          12,708,142,389.60                 59.78%            12,742,489,364.88                62.29%                 -0.27%
    Agricultural
    products
    Others                             22,326,468.10                 0.11%                19,751,912.19                 0.10%                13.03%
    Income from other
    businesses
    By regions
    Domestic                      21,026,816,805.98                 98.92%            20,241,882,062.31                98.96%                  3.88%
    Overseas                         230,286,090.04                  1.08%               213,404,225.21                 1.04%                  7.91%
        The industries, products, or regions that account for more than 10% of the Company’s operating revenue or operating profit
         Applicable □ Not applicable
                                                                                                                                      Unit: RMB
                                                                                          Increase/decrease
                                                                                                                  Increase/decrease     Increase/decrease
                                                                                             of operating
                                                                                                                  of operating cost      of gross margin
                                                                             Gross        revenue compared
                    Operating revenue              Operating cost                                                compared with the     compared with the
                                                                             margin         with the same
                                                                                                                 same period of the    same period of the
                                                                                             period of the
                                                                                                                    previous year         previous year
                                                                                            previous year
By industries
Income from
industrial                8,504,399,783.93           2,727,055,894.21          67.93%                 11.13%                 9.20%                   0.57%
sales
 Income from
commercial              12,708,142,389.60           11,938,266,700.05           6.06%                 -0.27%                -0.02%                   -0.24%
sales
By products
Industrial
products                  8,504,399,783.93           2,727,055,894.21          67.93%                 11.13%                 9.20%                   0.57%
(Self-made)
Wholesale
and retail
By regions
Domestic                21,026,816,805.98           14,476,952,657.34          31.15%                  3.88%                 1.51%                   1.60%
        When the statistical caliber of the Company’s principal business data is adjusted in the reporting period, the Company’s principal
        business data should be subject to the one after the statistical caliber at the end of the reporting period is adjusted in the latest year
        □ Applicable  Not applicable
        Ⅳ. Analysis on Non-principal Businesses
         Applicable □ Not applicable
                                                                                                                              Unit: RMB
                                                      Proportion in                                                     Whether it is
                                 Amount                                                 Reasons
                                                       total profits                                                    sustainable
                                                                         Mainly consisted of investment
                                                                         income          from         Shanghai
                                                                         Pharmaceuticals Holding Co., Ltd
   Investment income            839,628,716.65                19.84%     (“Shanghai         Pharma”)        and             No
                                                                         investment income from disposal of
                                                                         trading financial assets and other
                                                                         non-current financial assets.
                                                                         Mainly consisted of the change in net
   Profits and losses
                                                                         value of the Company’s financial
   from changes in fair           70,037,496.76                 1.66%                                                       No
                                                                         assets held for trading and other non-
   value
                                                                         current financial assets.
                                                                         Mainly consisted of provision for
   Asset impairment              -41,743,184.35                -0.99%                                                       No
                                                                         inventory write-down.
   Non-operating                                                         Mainly consisted of income not
   revenue                                                               related to daily business activities.
   Non-operating                                                         Mainly consisted of expenses not
   expenses                                                              related to daily business activities.
   Credit impairment                                                     Mainly consisted of provision for
   losses (loss is               -98,382,642.61                -2.32%    bad debt for accounts receivable in                No
   indicated with “-”)                                                   the commercial sector.
                                                                         Mainly consisted of the government
   Other income                   27,406,398.49                 0.65%                                                       No
                                                                         subsidies.
                                                                         Mainly consisted of proceeds from
   Gains from disposal                                                   the disposal of non-current assets and
   of assets                                                             proceeds from the disposal of right of
                                                                         use assets.
Note: Investment income from Shanghai Pharma amounted to RMB 784 million. This investment represents a strategic collaboration
between the two parties, facilitating synergies in their respective industries. The investment income is sustainable.
  V. Analysis on Assets and Liabilities
                                                                                                                                                             Unit: RMB
                                   End of the reporting period             End of the previous year
                                                                                                               Increase/decrease in
                                                        Proportion in                          Proportion in                            Statement on significant changes
                                   Amount                                 Amount                                    proportion
                                                         total assets                           total assets
Cash and bank balance             11,293,829,360.87              20.71%   10,887,983,161.30           20.58%                  0.13%   No significant changes.
Accounts receivable               10,513,898,708.36              19.28%    9,923,361,104.39           18.75%                  0.53%   No significant changes.
                                                                                                                                      Inventory management efficiency
Inventories                        5,835,419,536.07              10.70%    6,294,368,316.30           11.90%                 -1.20%   was improved, accelerating
                                                                                                                                      inventory turnover.
Investment property                  50,308,207.99               0.09%       49,884,012.15             0.09%                  0.00%   No significant changes.
                                                                                                                                      Mainly due to sustained investment
Long-term equity investments      13,157,456,514.01              24.13%   12,561,276,081.35           23.74%                  0.39%
                                                                                                                                      income from Shanghai Pharma.
Fixed assets                       3,012,711,745.68              5.52%     3,012,878,828.09            5.69%                 -0.17%   No significant changes.
Construction in progress            752,520,380.49               1.38%      703,439,112.24             1.33%                  0.05%   No significant changes.
Right-of-use assets                 289,367,883.81               0.53%      291,177,021.52             0.55%                 -0.02%   No significant changes.
                                                                                                                                      During the reporting period, credit
Short-term loans                     10,169,668.64               0.02%      423,380,272.64             0.80%                 -0.78%   loans and discounting of internal
                                                                                                                                      unit bills decreased.
                                                                                                                                      Mainly due to decrease in advance
Contractual liabilities            1,607,722,042.64              2.95%     1,916,123,387.16            3.62%                 -0.67%   payments received by
                                                                                                                                      Pharmaceutical Business Group.
Long-term loans                        2,100,000.00              0.00%         2,100,000.00            0.00%                  0.00%   No significant changes.
Leasing liabilities                 187,252,205.06               0.34%      190,656,990.23             0.36%                 -0.02%   No significant changes.
                                                                                                                                      Mainly due to the purchase of bank
                                                                                                                                      wealth management products and
Financial assets held for                                                                                                             securities firm wealth management
trading                                                                                                                               products with relatively high
                                                                                                                                      security and good liquidity during
                                                                                                                                      the period.
                                                                                                                                      Mainly due to the increase in
Notes receivable                    763,243,829.02               1.40%      929,651,911.37             1.76%                 -0.36%
                                                                                                                                      bankers’ acceptances held at the end
                                                                                                               of the period.
                                                                                                               Mainly due to a decrease in bank-
Receivables financing                1,170,435,781.56    2.15%   1,887,789,780.16   3.57%             -1.42%   accepted bills held at the end of the
                                                                                                               period.
                                                                                                               Mainly due to an increase in
Other receivables                      353,575,655.07    0.65%    108,427,198.33    0.20%             0.45%
                                                                                                               dividends receivable.
                                                                                                               Mainly due to increases in time
Other current assets                 1,290,287,380.95    2.37%    788,108,579.54    1.49%             0.88%    deposits and funds awaiting foreign
                                                                                                               exchange conversion.
                                                                                                               Mainly due to disposal of
Other non-current financial
assets
                                                                                                               the period.
                                                                                                               Addition of newly capitalized
Development expenses                    39,843,228.73    0.07%     25,422,461.13    0.05%             0.02%
                                                                                                               projects during the reporting period.
                                                                                                               Mainly due to an increase in
Other non-current assets               163,488,603.52    0.30%    116,374,395.93    0.22%             0.08%    prepaid fixed asset purchase
                                                                                                               payments at the end of this period.
                                                                                                               Increase in prepaid rent at the end
Receipts in advance                         964,631.77   0.00%        446,673.78    0.00%             0.00%
                                                                                                               of the period.
                                                                                                               Mainly due to an increase in VAT
Other payables                         693,672,581.84    1.27%    466,603,767.14    0.88%             0.39%    payable but not yet paid at the end
                                                                                                               of this period.
                                                                                                               Mainly due to an increase in
Other current liabilities            1,562,291,988.77    2.86%   1,386,632,676.75   2.62%             0.24%
                                                                                                               accrued but unpaid expenses.
                                                                                                               Increase in the provision for returns
Estimated liabilities                   19,837,374.22    0.04%     12,726,280.09    0.02%             0.02%
                                                                                                               payable in this period.
                                                                                                               Mainly due to an increase in
                                                                                                               deferred income tax liabilities,
Deferred tax liabilities               128,209,511.70    0.24%     93,867,331.53    0.18%             0.06%
                                                                                                               which is primarily attributable to
                                                                                                               changes in income tax rates.
  □ Applicable Not applicable
   Applicable □ Not applicable
                                                                                                                                                                              Unit: RMB
                                                                     Cumulative      Impairment
                                                 Profits or losses     changes         accrued        Purchase amount
                                                on changes in fair   in fair value                                           Sales amount during
        Item              Opening balance                                             during the     during the reporting                           Other changes       Closing balance
                                                 value during the                                                            the reporting period
                                                                     included in      reporting            period
                                                 reporting period
                                                                       equity           period
Financial assets
held for trading
(derivative                  2,547,113,523.40        33,268,150.43                                        2,950,200,000.00       2,409,562,753.87                          3,121,018,919.96
financial assets
excluded)
instrument                     71,745,000.00                                                                                                                                  71,745,000.00
investments
current financial             387,688,897.11         37,019,632.47                                                                 217,787,880.00                           206,920,649.58
assets
Subtotal of
financial assets
Total                        3,006,547,420.51        70,287,782.90                                        2,950,200,000.00       2,627,350,633.87                          3,399,684,569.54
Financial
liabilities
Other variations: None.
Whether the Company has significant changes in measurement attributes of main assets during the reporting period
□ Yes  No
           Item                 Closing book value (RMB)                                  Reason for restriction
Cash and bank balance                 16,404,177.76            Earmarked for housing maintenance in reformed housing
                                                              Performance bond deposit, bank acceptance bill deposit, performance
Cash and bank balance                 2,648,494.30
                                                             bond deposit, etc.
Cash and bank balance                 3,120,832.53             Property preservation
Assets in special account                                     Special fund for paying the cost of employee status conversion in state-
for system reform                                            owned enterprises
Total                                601,330,397.55                                                   --
VI. Investment Analysis
 Applicable □ Not applicable
    Investment during the reporting period     Investment during the same period of the
                                                                                                      Percentage of change
                   (RMB)                                previous year (RMB)
□ Applicable  Not applicable
         Applicable □ Not applicable
                                                                                                                                                                                                 Unit: RMB
                                                                                                                                                        Cumulative    Reasons
                              Investment                                                                                                                income as    for unmet
                                           Involved industry                            Cumulative actual
                Investment      in fixed                       Amount invested in                               Source of     Progress of   Estimated   of the end    progress    Disclosure          Disclosure
   Project                                   in investment                             investment as of the
                  method       assets or                       the reporting period                              funding        project      income        of the       and      date (if any)      index (if any)
                                                projects                              end of reporting period
                                  not                                                                                                                    reporting   estimated
                                                                                                                                                           period     income
                                                                                                                                                                                                   http://www.cnin
                                                                                                                                                                                                   fo.com.cn/new/
                                                                                                                                                                                                   disclosure/detail
Yunnan
                                                                                                                                                                                                   ?stockCode=00
Baiyao                                     Pharmaceuticals,
                    Self-                                                                                                                                                                          0538&announce
Shanghai                         Yes        daily chemical           74,924,658.19           952,103,491.30     Self-raised       93.00%                               N/A       June 9, 2021
                established                                                                                                                                                                        mentId=121020
International                                  products
Center
                                                                                                                                                                                                   sz0000538&ann
                                                                                                                                                                                                   ouncementTime
                                                                                                                                                                                                   =2021-06-09
Yunnan
Baiyao R&D
Platform -
                   Self-
Kunming                          Yes       Pharmaceuticals            7,719,741.14           296,194,383.29     Self-raised       55.00%                               N/A
                established
Center
Construction
Project
Total               --            --              --                 82,644,399.33         1,248,297,874.59         --            --             0.00         0.00      --            --                  --
             (1) Securities investment
              Applicable □ Not applicable
                                                                                                                                                                                                       Unit: RMB
                                                                                                                   Cumulative
                                                                                               Profits or losses    changes       Purchase
                                                              Accounting                        on changes in                     amount        Sales amount       Profits and losses                                    Source
 Type of      Stock        Stock         Initial investment                 Opening book                             in fair                                                            Closing book      Accounting
                                                              measurement                     fair value during                  during the       during the          during the                                           of
securities    code      abbreviation             cost                          value                                 value                                                                 value            items
                                                                model                           the reporting                    reporting     reporting period    reporting period                                     funding
                                                                                                    period         included in     period
                                                                                                                     equity
Domestic                                                                                                                                                                                                  Other non-
  and                    Jacobson                                                                                                                                                                           current      Self-
             HK.02633                       238,699,200.00     Fair value    190,764,240.00       27,023,640.00                                   217,787,880.00        42,922,580.95
overseas                  Pharma                                                                                                                                                                           financial    raised
 stocks                                                                                                                                                                                                      assets
Domestic
                                                                                                                                                                                                           Financial
  and                      JBM                                                                                                                                                                                           Self-
             HK.02161                        25,039,800.00     Fair value    133,544,228.40       -8,167,621.77                                   125,376,606.63        18,528,149.44                     assets held
overseas                (Healthcare)                                                                                                                                                                                    raised
                                                                                                                                                                                                          for trading
 stocks
Domestic
                                                                                                                                                                                                           Financial
  and                    SinoMab                                                                                                                                                                                         Self-
             HK.03681                       354,119,828.19     Fair value     45,702,769.70       16,058,833.71                                    61,761,603.41        52,022,960.46                     assets held
overseas                BioScience                                                                                                                                                                                      raised
                                                                                                                                                                                                          for trading
 stocks
Total                                       617,858,828.19         --        370,011,238.10       34,914,851.94           0.00          0.00      404,926,090.04      113,473,690.85              0.00        --          --
             (2) Investments in derivatives
             □ Applicable  Not applicable
             The Company had no investments in derivatives during the reporting period.
□ Applicable  Not applicable
The Company had no use of proceeds during the reporting period .
VII. Significant Assets and Equity Sales
□ Applicable  Not applicable
The Company had no significant assets sales during the reporting period.
□ Applicable  Not applicable
       VIII. Analysis on the Major Holding Companies and Joint-stock Companies
        Applicable □ Not applicable
       Major subsidiaries and joint-stock companies with a net profit impact of over 10%
                                                                                                                                                                                          Unit: RMB
                   Company
Company name                            Principal businesses               Registered capital      Total assets         Net assets          Operating revenue       Operating profit        Net profit
                     type
Yunnan
                                Wholesale     and         retail     of
Pharmaceutical,   Subsidiary                                                    1,000,000,000.00    16,661,549,297.92    6,835,764,950.30       12,361,038,014.12        435,731,509.29       347,925,145.03
                                pharmaceuticals
Co., Ltd.
Yunnan Baiyao
Group Health                    Production and sales of oral hygiene
                  Subsidiary                                                      84,500,000.00      9,117,181,304.35    6,581,025,234.12        3,450,999,664.58        833,740,507.21       694,668,921.96
Products Co.,                   products
Ltd.
 YNBY                           Mainly engaged in goods and
                  Subsidiary                                                                          419,970,831.90      323,826,733.95           365,374,936.94          2,830,632.32         2,133,674.99
International                   commodities trading business
                                R&D, manufacturing, and sales of
                                API,       pharmaceutical products
                                (including but not limited to
                                chemical Active Pharmaceutical
                                Ingredients     (APIs),       chemical
                                preparations,     TCM        materials,
                                Chinese patent medicines, TCM
                                decoction pieces, biochemical drugs,
Shanghai
                                biological    products,      narcotics,
Pharmaceuticals   Joint-stock
                                psychotropic drugs, and toxic drugs             3,696,414,318.00   238,067,056,071.37   88,857,904,563.65      141,592,782,502.79      6,833,619,624.55      4,994,784,030.29
Holding Co.,      company
                                for medical use (Adapted to the
Ltd.
                                scope of business), vaccines) of
                                various dosage forms (including but
                                not limited to tablets, capsules,
                                aerosols, immune preparations,
                                granules, plasters, pills, oral liquids,
                                inhalants, injections, liniments,
                                tinctures, suppositories) health
                                products, medical devices, and
                        related products, manufacturing and
                        sales of pharmaceutical equipment,
                        engineering       installation   and
                        maintenance, warehousing and
                        logistics, sea, land, and air freight
                        forwarding business, industrial
                        investment, asset management,
                        provision of international economic
                        and trade information and consulting
                        services, self-owned house leasing,
                        import and export business of
                        various self-operated and agent
                        drugs and related goods and
                        technologies.
Note: In accordance with relevant company regulations, the Health Products Company recognized brand usage fees totaling RMB 592 million payable to the parent company for the use of the
“Yunnan Baiyao” main brand trademark. Excluding brand usage fees, the Health Products Company achieved a profit of RMB 1.198 billion for the first half of 2025.
Acquisition and disposal of subsidiaries during the reporting period
 Applicable □ Not applicable
                                                        Approaches of acquiring and disposing of subsidiaries during
                  Company name                                                                                               Influences on overall production, operation and performance
                                                                           the reporting period
   Yunnan Baiyao Group Digital Intelligence
                                                       Newly incorporated                                              No significant influence.
   Technology Co., Ltd.
   PT YNBY Healthcare Indonesia                        Newly incorporated                                              No significant influence.
   Yunnan Baiyao Group Chinese Medicinal
                                                       Newly incorporated                                              No significant influence.
   Material Development (Weishan) Co., Ltd.
Description of the major holding companies and joint-stock companies: None.
Ⅸ. Structured Entities Controlled by the Company
 Applicable □ Not applicable
See Section VIII “X. Interest in Other Entities”
X. Risks and Countermeasures
     (I) Policy changes
     In recent years, a series of supportive policies for the pharmaceutical industry have been introduced
successively, opening up favorable development opportunities for pharmaceutical enterprises. Meanwhile, the
healthcare reform will be further deepened, and the routine centralized volume-based procurement will cover more
pharmaceuticals. Comprehensive revisions to laws and regulations pertaining to drug supervision are also on the
horizon. All these factors are exerting higher requirements for the healthy development of the pharmaceutical
industry. Given this context, the Company will place even greater emphasis on aligning with the Chinese
pharmaceutical policy direction, intensify its efforts in tracking, analyzing, and comprehending critical industry
information, and promptly grasp industry development and shifting trends. By devising suitable strategies, the
Company aims to alleviate the pressure and uncertainty arising from policy changes on production and operations,
ultimately achieving sustained growth.
     (II) Market uncertainties
     Due to fluctuating raw material costs, price controls on pharmaceutical products, and intensified competitions
at the terminal level, the pharmaceutical industry is experiencing significant operational pressure. Health consumer
products are facing challenges from increasingly rational consumer behavior and fragmented demand. In response
to these pressures, the Company will continue to leverage its full industry chain competitiveness and innovation
as key drivers. By continuously consolidating the supply chain foundation, enhancing operational efficiency and
refining management of channels and retail, the Company aims to deepen its innovation, cost, and channel
advantages, which enables the Company to navigate through economic cycles and achieve sustainable, high-
quality development in the competitive market.
     (III) Transformation of innovation and R&D achievements
     In pursuit of fulfilling technological advantages and enhancing core competitiveness, the Company has
consistently escalated its investment in drug R&D over recent years. Generally, new drug R&D is featured with
large amount of investment, long R&D cycle, less-than-expected industry transformation rate, market uncertainty
after industrialization in the future, etc. Any changes in relevant policies and market demands will be likely to
affect the commercial value of the products under R&D. Upon completion of R&D, the successful
commercialization of a new drug stands as an important factor influencing R&D yields. The Company is poised
to meticulously assess the R&D projects of novel drugs within the framework of its strategic direction. Resources
will be apportioned to key projects, bolstering risk management capabilities throughout the R&D. Collaborative
IUR efforts will be fortified, optimizing the transformation of achievements and reducing the uncertainties
associated with R&D investments.
     (IV) External expansion
     By implementing an industrial development strategy to seek both internal growth and external expansion, the
Company actively advances towards its strategic goals and strives to inject new momentum into sustainable
development. In the process of pursuing external expansion, a key challenge for the Company is how to leverage
investment and innovation to introduce new variables, build a new Baiyao platform, integrate more external
resources, and develop a complete industry chain, to ultimately establish a strong foothold in a highly competitive
and rapidly changing market. The Company will remain strategy-driven and user-centric, continuously sharpening
market insight to build a healthy, sustainable portfolio.
XI. Implementation of the Market Capitalization Management System and Valuation
Improvement Plan
Whether the Company implemented the market capitalization management system
Yes        □No
Whether the Company disclosed the valuation improvement plan
□Yes        No
       To effectively enhance the Company’s investment value, standardize market capitalization management
practices, ensure the compliance, scientific rigor, and effectiveness of such activities, maximize corporate value
and shareholder interests, and actively respond to the call in the State Council’s Several Opinions on Strengthening
Supervision, Preventing Risks, and Promoting High-Quality Development of the Capital Market to encourage
listed companies to establish market capitalization management systems, the Company’s 10th Board of Directors
held its first meeting of 2025 on March 31, 2025, and approved the Market Capitalization Management System of
Yunnan Baiyao Group Co., Ltd. For details, please refer to the system disclosed on the same day on
www.cninfo.com.cn.
XII. Implementation of the “Enhancement of Quality and Returns” Initiative
Whether the Company disclosed the Announcement of the “Enhancement of Quality and Returns” Initiative
Yes        □No
       The Company disclosed the Announcement on “Enhancement of Quality and Returns” Initiative
(Announcement No.: 2024-12) on March 9, 2024.
       Firmly upholding the principle of rewarding shareholders, and consistently focusing on its principal
businesses and maintaining prudent operations, the Company kept enhancing shareholder returns, while
continuously advancing high-quality development. In April 2025, in active response to the call in the State
Council’s Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality
Development of the Capital Market to encourage listed companies to establish market capitalization management
systems, the Company formulated the Market Capitalization Management System of Yunnan Baiyao Group Co.,
Ltd in accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s
Republic of China, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange, the Self-Regulatory
Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standardized Operation of Listed
Companies on the Main Board, and the Listed Company Regulatory Guidance No. 10 - Market Capitalization
Management, other laws and regulations and normative documents as well as the Articles of Association of Yunnan
Baiyao Group Co., Ltd. In accordance with the regulations and in light of our own circumstances, we adopted a
comprehensive set of measures, including enhancing the quality of information disclosure, managing investor
relations, conducting cash dividends, and encouraging major shareholders to increase their holdings, to promote
the rational reflection of the Company’s investment value and its high-quality development achievements.
     (I) Constantly improving the quality and efficiency of production and operation
     In the first half of 2025, the Company maintained robust growth by focusing on its strategic planning and
overcoming multiple challenges in the external environment. During the reporting period, the Company recorded
operating revenue of RMB 21.257 billion, up 3.92% year on year; net profit attributable to the parent company
reached RMB 3.633 billion, rising 13.93% from RMB 3.189 billion in the previous year and hitting a record high
for the same period; and net profit attributable to the parent company after deducting non-recurring profits and
losses of RMB 3.461 billion, up 10.40% from RMB 3.135 billion in the previous year and hitting a record high for
the same period.
     In terms of growth quality, the Company’s net operating cash flow for the reporting period reached RMB 3.961
billion, representing a 21.45% increase compared to the same period last year. The weighted average return on net
assets was 9.09%, an increase of 1.16 percentage points over the same period of the previous year; basic earnings
per share was RMB 2.04 per share, an increase of 13.97% over the same period of the previous year. Meanwhile,
the Company’s business structure continued to optimize, with industrial revenue accounting for a further increased
share of 40.01% of total operating revenue, representing a 2.6 percentage point rise compared to the same period
last year. Industrial revenue grew at a rate of 11.13%.
     The Company continued to maintain a healthy asset structure. As of the end of the reporting period, the
Company had total assets of RMB 54.535 billion, net assets attributable to shareholders of the listed company of
RMB 40.407 billion, the asset-liability ratio of 25.91%, and the cash and bank balance of RMB 11.294 billion.
     (II) Enhancing returns to shareholders in multiple dimensions
     The Company has taken multiple measures to enhance shareholders’ sense of gain by means of cash dividends
and increase in shareholdings by major shareholders.
     During the reporting period, the Company completed the distribution of its 2024 annual dividend totaling RMB
dividend already distributed in 2024, results in a total cumulative cash dividend of RMB 4.277 billion, representing
proposal for a special dividend plan for 2025. The Company proposes to distribute a cash dividend of RMB10.19
(including tax) per 10 shares to all shareholders on the basis of the total share capital of the Company of
and not to convert the capital reserve to share capital. The total amount of the special dividends for 2025 will be
RMB 1,818,163,592.46, accounting for 50.05% of net profit attributable to the parent company of the Company in
first half of 2025. This proposal is subject to review and approval of the general meeting.
     In August 2024, Yunnan State-owned Equity Operation Management Co., Ltd (“State-owned Equity
Management Company”), our shareholder, planned to increase its shareholding in the Company within six months
from the date of the first increase (August 6, 2024), and planned to increase its shareholding in a cumulative amount
of not less than RMB 500 million and not more than RMB 1 billion. From August 6, 2024 to February 5, 2025,
State-owned Equity Management Company cumulatively increased its shareholding in the Company by 17,807,463
shares through the trading system of Shenzhen Stock Exchange (SZSE) by means of centralized bidding transactions,
accounting for 0.9980% of the total share capital of the Company, and the cumulative amount of the increase in
shareholding was RMB 950,379,399.02. As of the February 5, 2025, the term of the Shareholding Increase Plan
expired and the Shareholding Increase Plan was completed.
     (III) Continuously improving the information disclosure quality
     The Company consistently adheres to the principles of truthfulness, accuracy, completeness, timeliness, and
fairness in information disclosure, strictly following applicable laws, regulations, and corporate policies. Actively
engaging with investors, the Company carefully considers their needs and suggestions regarding periodic reports.
The Company discloses annual report data across multiple dimensions, including segments and channels, ensuring
compliance while offering a comprehensive view of its operations and development. Meanwhile, the Company
practically engages in voluntary information disclosure, proactively sharing information that aids investors in value
assessment and decision-making, thereby enhancing the relevance and transparency of disclosures. In addition, the
Company employs various methods to present and interpret periodic reports, including graphics, videos, and
PowerPoint presentations, to communicate information in a clear, engaging, and easy-to-understand manner. As of
the end of the reporting period, Yunnan Baiyao has been awarded the Class A rating in the information disclosure
assessment by the Shenzhen Stock Exchange for the 17th consecutive time.
     (IV) Fully protecting the rights and interests of investors and ensuring smooth communication channels
     The Company has established a smooth communication channel to effectively safeguard the rights and interests
of investors and continuously improves the effectiveness of positive interaction with investors. During the reporting
period, the Company held a total of two performance briefings, with a record high level of investor participation.
We received investors for a total of 31 times (online and offline), involving 105 organizations and more than 270
investors, and survey records were released in a timely manner in accordance with information disclosure
requirements. We responded to 57 inquiries at irm.cninfo.com.cn. Specialized personnel were assigned to answer
investor relations hotline calls in earnest, ensuring the effective operation of the investor relations hotline. In
addition, the Company has scientifically built a professional financial media matrix through text, video and other
forms, and actively engages in multi-channel information dissemination, building and maintaining the Company’s
multi-dimensional value in the capital market.
     (V) Exploring and practicing the path of high-quality development
     The Company has a clear strategic plan. For intensive growth, we will focus on the foundational development
of the three key segments, that is pharmaceutical, health and distribution, and systematically explore potential and
enhance efficiency across the industrial chain, value chain, and production factors. For extensive growth, we will,
in line with the overall strategic requirements and orientation, actively explore ways to complement and strengthen
existing industrial segments through strategic mergers and acquisitions, strategic partnerships, and other approaches,
enabling us to rapidly overcome current growth bottlenecks and achieve sustained growth. The Company aims to
achieve growth in revenue, profit, asset scale, and other key indicators through the two-phase “2+3” strategy, which
will drive the century-old Baiyao toward becoming a Chinese leading and world-class modern pharmaceutical
industry group, achieving synergistic growth in scale, quality, and structure.
     Creating value, managing value, and realizing value are essential steps in the value enhancement journey for
listed companies. The Company will strictly remain committed to fulfilling its responsibilities and obligations as a
listed company. Through focusing on our principal businesses, continuous innovation, and operational
improvements to enhance our intrinsic value, we aim to promote the healthy and sustainable development of the
Company by continuously exploring and practicing the methodology of high-quality development. We will adhere
to the “investor-oriented” principle, striving to safeguard investors’ rights and interests through various means,
enhance investment returns and bolster investors’ sense of achievement. By effectively implementing the
“Enhancement of Quality and Returns” initiative, we seek to boost market confidence and contribute to the positive
and healthy development of the capital market.
       Section IV Corporate Governance, Environment and Society
I. Changes of Directors, Supervisors, and Senior Management of the Company
 Applicable   □Not applicable
           Name                            Position held                       Type                     Date              Reason
                             Chief Innovation Officer, Senior Vice
  Qin Wanmin                                                             Resigned             January 26, 2025        Retired
                             President
                             Chief Compliance Officer, Senior Vice
  Yang Yong                                                              Resigned             January 26, 2025        Retired
                             President
II. Profit Distribution and Conversion of Capital Reserve into Share Capital during the
Reporting Period
 Applicable   □Not applicable
  Bonus shares per 10 shares (shares)                                                                                               0
  Cash dividend per 10 shares (RMB, tax inclusive)                                                                              10.19
  Capitalization issue per 10 shares (shares)
  Base of share capital for the distribution plan (shares)                                                            1,784,262,603
  Cash dividend amount (RMB, tax inclusive)                                                                         1,818,163,592.46
  Cash distributed via other methods (e.g., share repurchase)
  (RMB)
  Total cash dividend (including other methods) (RMB)                                                               1,818,163,592.46
  Distributable profit (RMB)                                                                                        2,698,199,803.38
  Proportion of total cash dividend (including other methods) to
  total profit distributed
                                                        The current cash dividend
  For companies in the mature stage with no material capital expenditure plans, cash dividends must account for at least 80% of the
  total profit distribution
                          Details of the profit distribution and conversion of capital reserve into share capital
  The 2025 special dividend plan considered and approved by the Board of Directors is as follows: Based on a total of 1,784,262,603
  shares, a cash dividend of RMB 10.19 (tax inclusive) for every 10 shares will be paid to all shareholders, with no bonus shares
  issued (tax inclusive), and no capital reserve to increase the share capital. The cash dividend represents 50.05% of the net profit
  attributable to the parent company for the first half of 2025.
III. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan
(ESOP), or Other Employee Incentive Measures
□ Applicable   Not applicable
The Company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their
implementation during the reporting period.
IV. Disclosure of Environmental Information
Whether the listed company and its major subsidiaries are included in the list of enterprises legally required to disclose environmental
information
Yes □No
   Number of enterprises included in the list of enterprises
   legally required to disclose environmental information
                                                                   Index for Environmental Information Disclosure Reports Required
     Series No.                   Enterprise Name
                                                                                             by the Law
                                                                   http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enter
                                                                   http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enter
                     Yunnan Baiyao Group TCM Resources
                     Co., Ltd.
                                                                   http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enter
                     Yunnan      Baiyao       Group         Dali
                     Pharmaceutical Co., Ltd.
                                                                   http://183.224.17.39:10097/ynyfpl/frontal/index.html#/home/enter
                     Yunnan Baiyao Group Wenshan Qihua
                     Co., Ltd.
V. Social Responsibility
     In the first half of 2025, under the guidance of President Xi Jinping’s Thought on Socialism with Chinese
Characteristics for a New Era, Yunnan Baiyao diligently implemented the spirit of the important speech made by
General Secretary Xi Jinping during his visit in Yunnan and the rural revitalization policies set forth by the Party
Central Committee, the State Council, the Yunnan Provincial Committee of the Communist Party of China, and
the provincial government. Leveraging its industrial strengths, the Company continued to make efforts in industrial
development, improvement of people’s livelihood, grassroots governance, and other aspects. Also, the Company
significantly enhanced its support for poverty alleviation in Chazhiluo Village and Xinle Village in Pantiange
Township, Weixi Lisu Autonomous Prefecture, successfully completing its tasks in the first half of 2025.
     (I) Overall planning and consolidated efforts for rural revitalization
     The Party Committee of Yunnan Baiyao attaches such importance to its targeted poverty alleviation task that
had been included into its annual key work scope for overall planning. This June, under higher-level directives,
the Party Committee of the Group meticulously organized the centralized rotation of rural-revitalization work
teams. Following a Group-wide open selection and a “best-of-the-best” approach, we have reassigned two resident
first secretaries and two resident team members in poor villages. All four candidates combine solid political
integrity, proven competence, and a strong grass-roots style. Each brings either a pharmacy background or hands-
on experience in Party building and the cultivation and processing of Chinese medicinal materials, ensuring
stronger support for local governance and for the development of the Chinese medicinal material industry in our
partner villages.
     (II) Consolidated achievements in poverty alleviation and rural revitalization
     The resident work team of Yunnan Baiyao, working hand-in-hand with the “village Party committee and
committee of villagers,” treats dynamic monitoring and targeted support for preventing relapse into poverty as its
top priority, rigorously implementing the “one assessment, one analysis and one review every month” mechanism.
A comprehensive investigation was conducted on all households at risk of returning to poverty in 2025. Following
the “three-tier review and four-step confirmation” procedure, the seven original monitoring households (24 people)
in Chazhiluo Village were assessed. Five households (21 people) were ultimately cleared of risk. One household
with two members remains at risk (one household of one person with no labor capacity under subsistence
guarantee). For these households, the work team has drawn up tailored support plans household by household and
fine-tuned support policies, ensuring the requirements of the “shaking off poverty rather than responsibility,
policies, assistance and supervision” are fully implemented and effectively advancing the stable transition from
consolidating poverty-alleviation gains to rural revitalization.
     (III) Routine duties of resident work teams
     The work team actively attends village-committee meetings, contributing ideas for the two villages’
development. Through regular visits to priority households, they keep abreast of residents’ needs and convey care
and warmth. When faced with mining hazards, medical-insurance payment difficulties, or natural-disaster threats,
the team works with the village Party committee and the committee of villagers to intensify patrols and on-call
duty, conduct door-to-door outreach, and roll out emergency measures, fully safeguarding people’s lives and
property and ensuring village assignments proceed smoothly.
     (IV) Vigorously driving the development of the TCM materials cultivation industry
     Promotion of the intercropping model of the Dolomiaea costus. Large-scale trials of the intercropping model
of Dolomiaea costus have proven successful, and the “snowball effect” of the TCM materials industry powering
rural revitalization is now taking hold. In 2024, Chazhiluo Village’s 30-mu trial plots yielded 500 jin of corn and
giving the participating households an extra RMB 60,000 in total and marking the village’s first-ever collective-
economy revenue from medicinal-herb cultivation. This short-cycle, high-return model has acted like a shot in the
arm, igniting farmers’ confidence and enthusiasm. To date this year, 118 households have already adopted the
practice on more than 500 mu, with expected additional income topping RMB 800,000. Empowered by the
industry chain of the Company, cultivation of TCM materials in Pantian Township is shifting from small, scattered
plots to a quality-driven TCM base.
     Promotion of Bletilla striata cultivation. With two years of small-plot trials under the resident work team’s
guidance, Bletilla striata cultivation has achieved remarkable results. However, as 2025 large-scale rollout
approached, high costs and a long payback period dampened farmers’ enthusiasm. Then, the resident work teams,
along with the village Party committee, the committee of villagers and five Party branches, convened a special
meeting on “four discussions and two disclosures” and decided to distribute Bletilla striata seedlings worth RMB
plots and creating a “Party-building-led, industry-practice” model. In June 2025, the work team distributed Bletilla
striata seedlings to establish ten demonstration plots totaling four mu, quadrupling the trial area, and created a
WeChat group for growers to share know-how, laying the groundwork for large-scale rollout.
     (V) Improving infrastructures for a brighter future
     Yunnan Baiyao continued to make greater investment to construct the infrastructure of the assisted villages.
To inherit and protect Chazhiluo Village’s peakcock dance culture, a prefecture-level intangible cultural heritage,
the Company made another investment, amounting to RMB 150,000, in addition to the initial RMB 300,000 outlay,
for design and decoration of the inheritance exhibition hall of peakcock dance, construction of the village bulletin
board, and repair of the exterior wall of the Party member activity room of Xinle Village. Now fully completed
and open to the public, the project is actively advancing Lisu intangible cultural-heritage protection and rural
revitalization.
     (VI) Consumption-based assistance for a shared rural-revitalization canvas
     Ahead of the 2025 Spring Festival, the Company purchased a total of 4,637 agricultural and sideline products
from Diqing Prefecture through the “832 platform,” totaling RMB 436,700, effectively helping farmers solve the
problem of sales channels for agricultural and sideline products and boosting farmers’ incomes. In the first half of
this year, Yunnan Baiyao Group fully leveraged its industrial strengths to purchase 6,111.1 kg of medicinal herbs,
primarily Gentiana macrophylla and Angelica sinensis, worth RMB 406,700 from Shangri-La Hezheng Tibetan
Medicine Co., Ltd and Diqing Sanjiang Bio-Development Co., Ltd, effectively resolving local growers’ sales
challenges and broadening their path to prosperity.
                                                              Section V Significant Events
I. Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and
Other Related Entities Fulfilled during the Reporting Period or Ongoing at the Period-End
Applicable         □Not applicable
                                           Commitment                                                                                 Commitment        Commitment        Performance
  Commitments           Commitment Party                                                 Contents
                                              Type                                                                                       Time             Period             Status
                                                           To protect the legitimate rights and interest of any and all of the
                                                           shareholders of the listed company, our company undertakes to
                                                           warrant: 1. The personnel independence of the listed company, that
                                                           is: (1) The general manager, deputy general manager, CFO, secretary
                                                           of the Board of Directors, and other senior management personnel of
                                                           the listed company will work full-time and receive compensation in
                                                           the listed company, with holding no positions other than directors or
                                                           supervisors or receiving no compensation in any other enterprises
                                                           under the control of our company, for continuously maintaining the
                                                           independence of personnel of the listed company; (2) The listed
                                                           company has a complete and independent labor, personnel, and salary
                                           Commitments                                                                                                Remain
 Commitments                                               management system, which is fully independent from our company
                                           to maintain                                                                                                effective during
 made in the                                               and any other enterprises under our control; (3) The directors,
                     Yunnan Investment     the                                                                                       December 10,     the period of
 acquisition                                               supervisors, and senior management personnel of the listed company                                              In progress
                     Group                 independence                                                                                 2021          holding indirect
 report or equity                                          are elected or appointed in accordance with legal procedures, and our
                                           of the listed                                                                                              stake in Yunnan
 change report                                             company will not interfere with the personnel appointment and
                                           company                                                                                                    Baiyao
                                                           removal decisions already made by the Board of Directors and the
                                                           general meeting of the listed company. 2. The asset independence of
                                                           the listed company, that is:
                                                           (1) The listed company has independent and complete assets, all of
                                                           which are under the control of the listed company and are
                                                           independently owned and operated by the listed company; (2) Our
                                                           company and any other enterprises under our control do not and will
                                                           not in any way occupy the funds, assets, and other resources of the
                                                           listed company in violation of laws and regulations; (3) Our company
                                                           and any other enterprises under our control will not use the assets of
                                                           the listed company as guarantee for our and their debts in violation of
                                                       regulations. 3. The financial independence of the listed company, that
                                                       is: (1) The listed company continues to maintain its independent
                                                       financial department and independent financial accounting system;
                                                       (2) The listed company opens an independent bank account and does
                                                       not share a bank account with our company or any other enterprises
                                                       under our control; (3) The listed company is able to make
                                                       independent financial decisions, without our company’s illegal
                                                       interference with its asset utilization scheduling; (4) The
                                                       independence of the listed company’s financial personnel who will
                                                       not work part-time or receive remuneration in any other enterprises
                                                       under our control; (5) The listed company legally pays taxes
                                                       independently. 4. The institutional independence of the listed
                                                       company, that is: (1) The listed company continues to maintain a
                                                       sound corporate governance structure and has an independent and
                                                       complete organizational structure; (2) The general meeting, Board of
                                                       Directors, independent directors, Supervisory Committee, general
                                                       manager, etc. of the listed company independently exercise their
                                                       powers in accordance with laws, regulations, and the listed
                                                       company’s articles of association; (3) The listed company has an
                                                       independent and complete organizational structure, without
                                                       institutional confusion with any other enterprises under our control.
                                                       listed company has the assets, personnel, qualifications, and
                                                       capabilities to independently carry out business activities, and also
                                                       has the capabilities to independently and continuously operate in the
                                                       market; (2) The listed company has minimized related party
                                                       transactions between our company and any other enterprises under
                                                       our control and the listed company as much as possible, and fairly
                                                       carry out necessary and inevitable related party transactions at fair
                                                       prices in accordance with market-oriented principles, with
                                                       transaction procedures and information disclosure obligations
                                                       fulfilled in accordance with relevant laws, regulations, and normative
                                                       documents. 6. The listed company maintains independence from our
                                                       company and any other enterprises under our control in any other
                                                       aspects.
Commitments                            Commitments     1. After the completion of this equity transfer, our company will                         Remain
made in the        Yunnan Investment   regarding       consciously safeguard the interest of the listed company and any and     December 10,     effective during
                                                                                                                                                                      In progress
acquisition        Group               related party   all of its shareholders, and minimize and avoid related party               2021          the period of
report or equity                       transactions    transactions with the listed company. We will not, by virtue of our                       holding indirect
change report                                           indirect stake in the listed company, seek for improper benefits or                          stake in Yunnan
                                                        harm any interest of the listed company and any and all of its                               Baiyao
                                                        shareholders in related party transactions. 2. Our company does not
                                                        and will not, by virtue of our indirect stake in the listed company and
                                                        its own controlling influence, seek from the listed company for better
                                                        commercial terms for business cooperation than that given to the third
                                                        parties in the market for itself or for any other enterprises under our
                                                        control. 3. Our company does not and will not, by virtue of our
                                                        indirect stake in the listed company and its own controlling influence,
                                                        seek for privileges for itself or any other enterprises under our control
                                                        to enter into transactions with the listed company. 4. After completing
                                                        this equity transfer, our company will strictly adhere to the provisions
                                                        of the Company Law of the People’s Republic of China, the Articles
                                                        of Association of Yunnan Baiyao Group, the Rules of Procedure for
                                                        the General Meetings, and the Decision System for Related Party
                                                        Transactions of the Listed Company when engaging in inevitable
                                                        related party transactions with the listed company. We are committed
                                                        to conducting these transactions in a transparent, fair, and equitable
                                                        manner. This involves adhering to commercial principles such as
                                                        “fairness, impartiality, and voluntariness.” We will enter into fair and
                                                        reasonable transaction contracts with the listed company, ensuring
                                                        that pricing policies are developed based on market fairness,
                                                        impartiality, and openness. This approach guarantees the fairness of
                                                        transaction prices. 5. After the completion of this equity transfer, our
                                                        company and any other enterprises under our control will not illegally
                                                        occupy the funds and assets of the listed company, and under no
                                                        circumstances will the listed company be required to provide any
                                                        form of guarantees to our company or any other enterprises under our
                                                        control.
                   State-owned Assets
                                                                                                                                                     Remain
                   Supervision and
                                                        In the future, when the time is ripe, SASAC of Yunnan Province and                           effective during
Commitments        Administration
                                          Commitments   New Huadu shall urge Baiyao Holdings to gradually inject the high-                           the period of
made in the        Commission of Yunnan
                                          regarding     quality assets related to Yunnan Baiyao’s existing business and future        March 23,      holding the
acquisition        Provincial People’s                                                                                                                                    In progress
                                          horizontal    development areas into Yunnan Baiyao Group. Both SASAC of                      2017          shares of
report or equity   Government (“SASAC
                                          competition   Yunnan Province and New Huadu will also strictly comply with the                             Yunnan Baiyao
change report      of
                                                        regulations to avoid horizontal competition.                                                 (directly and
                   Yunnan Province”),
                                                                                                                                                     indirectly)
                   New Huadu
Commitments        New Huadu              Commitments   1. New Huadu and any other enterprises under our control will try the         March 23,      Remain               In progress
made in the                                    regarding       best to avoid related party transactions with Yunnan Baiyao. For                2017         effective during
acquisition                                    related party   inevitable related party transactions or those occurring for reasonable                      the period of
report or equity                               transactions    reasons, New Huadu will undertake to conduct such transactions on                            holding the
change report                                                  an equal and voluntary basis in the principles of fairness, impartiality,                    shares of
                                                               and compensation for equal value, with the transaction prices to be                          Yunnan Baiyao
                                                               determined based on the reasonable prices recognized in the market.                          (directly and
                                                               comply with the avoidance provisions on related party transactions
                                                               set out in Yunnan Baiyao’s articles of association and in other
                                                               relevant regulations. All related party transactions involved will be
                                                               carried out in accordance with the decision-making procedures for
                                                               related party transactions for Yunnan Baiyao, and legal procedures
                                                               will be followed to ensure not to harm any legitimate rights and
                                                               interest of Yunnan Baiyao and any other shareholders through related
                                                               party transactions. 3. If New Huadu and any other enterprises under
                                                               our control violate any of the above statements and commitments,
                                                               leading to any damages to any rights and interest of Yunnan Baiyao,
                                                               New Huadu agrees to bear any and all of the corresponding
                                                               compensation liabilities for such damages so caused to Yunnan
                                                               Baiyao.
                                                               previous commitments of SASAC of Yunnan Province: After the
                                                               completion of this significant asset restructuring, SASAC of Yunnan
                                                               Province will try its best to avoid related party transactions with the
                                                               listed company. For inevitable related party transactions or those
                                                               occurring for reasonable reasons, SASAC of Yunnan Province will
                                                                                                                                                            Remain
                                                               undertake to conduct such transactions on an equal and voluntary
                                                                                                                                                            effective during
                                                               basis in the principles of fairness, impartiality, and compensation for
Commitments        State-owned Equity          Commitments                                                                                                  the period of
                                                               equal value, with the transaction prices to be determined based on the
made during        Management Company,         regarding                                                                                    October 31,     holding the
                                                               reasonable prices recognized in the market. SASAC of Yunnan                                                       In progress
asset              New Huadu and its           related party                                                                                   2018         shares of
                                                               Province will strictly comply with the provisions of relevant laws,
restructuring      acting-in-concert parties   transactions                                                                                                 Yunnan Baiyao
                                                               regulations, normative documents, and the articles of association of
                                                                                                                                                            (directly and
                                                               the listed company, perform the decision-making procedures and
                                                                                                                                                            indirectly)
                                                               information disclosure obligations for related party transactions, and
                                                               warrant not to harm any legitimate rights and interest of the listed
                                                               company and any other shareholders through related party
                                                               transactions. This commitment letter shall come into effect and be
                                                               irrevocable as of the date of official signature by SASAC of Yunnan
                                                               Province. SASAC of Yunnan Province warrants the effective
                                                      fulfillment of these commitments, and the listed company has the
                                                      right to supervise its fulfillment of this commitment letter. If SASAC
                                                      of Yunnan Province fails to effectively fulfill this commitment letter,
                                                      leading to any actual losses to the listed company, SASAC of Yunnan
                                                      Province will compensate for any and all of such direct or indirect
                                                      losses so caused to the listed company.
                                                      the completion of this merger and overall listing, our company/I and
                                                      any enterprises under our/my control will try the best to avoid related
                                                      party transactions with the listed company. For inevitable related
                                                      party transactions or those occurring for reasonable reasons, our
                                                      company/I undertake (s) to conduct such transactions on an equal and
                                                      voluntary basis in the principles of fairness, impartiality, and
                                                      compensation for equal value, with the transaction prices to be
                                                      determined based on the reasonable prices recognized in the market.
                                                      Our company/I and any other enterprises under our/my control will
                                                      strictly comply with the provisions of relevant laws, regulations,
                                                      normative documents, and the articles of association of the listed
                                                      company, perform the decision-making procedures and information
                                                      disclosure obligations for related party transactions, and warrant not
                                                      to harm any legitimate rights and interest of the listed company and
                                                      any other shareholders through related party transactions. This
                                                      commitment letter shall come into effect and be irrevocable as of the
                                                      date of official signature by our company/me. Our company/I
                                                      warrant(s) the effective fulfillment of these commitments, and the
                                                      listed company has the right to supervise the fulfillment of this
                                                      commitment letter. If our company/I fail(s) to effectively fulfill this
                                                      commitment letter, leading to any actual losses to the listed company,
                                                      our company/I will compensate for any and all of such direct or
                                                      indirect losses so caused to the listed company.
                                                      After the completion of this merger and overall listing, our
                                                                                                                                                 Remain
                                                      company/institution will maintain independence from the listed
                                      Commitments                                                                                                effective during
                                                      company in terms of personnel, assets, business, institutions, and
Commitments                           to maintain                                                                                                the period of
                State-owned Equity                    finance in accordance with relevant laws, regulations, and normative
made during                           the                                                                                        October 31,     holding the
                Management Company,                   documents. We will not, by virtue of the identity as a related party of                                         In progress
asset                                 independence                                                                                  2018         shares of
                New Huadu                             the listed company, engage in the acts that affect the independence of
restructuring                         of the listed                                                                                              Yunnan Baiyao
                                                      the listed company’s personnel, assets, business, institutions, and
                                      company                                                                                                    (directly and
                                                      finances, or harm any rights and interest of the listed company and
                                                                                                                                                 indirectly)
                                                      any other shareholders. Instead, we will effectively ensure the
                                                            independence of the listed company in terms of personnel, assets,
                                                            business, institutions, finance, etc. This commitment letter shall come
                                                            into effect and be irrevocable as of the date of official signature by
                                                            our company/institution. Our company/institution warrants the
                                                            effective fulfillment of these commitments, and the listed company
                                                            has the right to supervise the fulfillment of this commitment letter. If
                                                            our company/institution fails to effectively fulfill this commitment
                                                            letter, leading to any actual losses to the listed company, our
                                                            company/institution will compensate for any and all of such direct or
                                                            indirect losses so caused to the listed company.
                                                            If Yunnan Baiyao and its subsidiaries within the scope of its
                                                            consolidated financial statements, and, Baiyao Holdings and its                              Remain
                                                            subsidiaries within the scope of its consolidated financial statements                       effective during
                Baiyao Holdings, State-
Commitments                                                 engaged in any illegal activities in the domestic real estate                                the period of
                owned Equity              Commitments
made during                                                 development business during the reporting period, such as                   December 11,     holding the
                Management Company,       regarding real                                                                                                                      In progress
asset                                                       undisclosed land vacancy, speculation of land, property hoarding, and          2018          shares of
                New Huadu                 estate business
restructuring                                               price gouging, which have caused any losses to Yunnan Baiyao and                             Yunnan Baiyao
                                                            investors, our company/institution will bear any and all of                                  (directly and
                                                            corresponding compensation liabilities for such losses as required by                        indirectly)
                                                            relevant laws, regulations and securities regulatory authorities.
                                                            If Yunnan Baiyao and its subsidiaries within the scope of its
                                                            consolidated financial statements, and, Baiyao Holdings and its
                                                            subsidiaries within the scope of its consolidated financial statements
Commitments                                                 engaged in any illegal activities in the domestic real estate
                Directors and senior      Commitments
made during                                                 development business during the reporting period, such as                   December 11,     Remain
                management of the         regarding real                                                                                                                      In progress
asset                                                       undisclosed land vacancy, speculation of land, property hoarding, and          2018          effective
                listed company            estate business
restructuring                                               price gouging, which have caused any losses to Yunnan Baiyao and
                                                            investors, I will bear any and all of the corresponding compensation
                                                            liabilities for such losses as required by relevant laws, regulations and
                                                            securities regulatory authorities.
                                                                                                                                                         Remain
                                          Commitments       management activities of the listed company beyond authority, nor
                                                                                                                                                         effective during
                                          regarding         will it encroach on any interest of the listed company.
Commitments     Baiyao Holdings, State-                                                                                                                  the period of
                                          compensatory      2. After the date of issuance of this commitment letter, if the
made during     owned Equity                                                                                                            December 11,     holding the
                                          measures after    securities regulatory authorities make other regulatory requirements                                              In progress
asset           Management Company,                                                                                                        2018          shares of
                                          dilution of       regarding compensatory measures and related commitments, and the
restructuring   New Huadu                                                                                                                                Yunnan Baiyao
                                          immediate         above commitments fail to meet such new regulatory regulations of
                                                                                                                                                         (directly and
                                          returns           the securities regulatory authorities, our company/institution will
                                                                                                                                                         indirectly)
                                                            undertake to issue supplementary commitments in accordance with
                                                           their then latest relevant regulations.
                                                           relevant compensatory measures formulated by the listed company
                                                           and the relevant commitments made by our company/institution. If
                                                           our company/institution violates these commitments and causes any
                                                           losses to the listed company or investors, our company/institution is
                                                           willing to legally bear any and all of the corresponding compensation
                                                           liabilities for such losses.
                                                           without compensations or under unfair conditions, nor to harm any
                                                           interest of the listed company in any other way. 2. I undertake to
                                                           restrain my official consumption. 3. I undertake not to use the assets
                                                           of the listed company to engage in investment or consumption
                                                           activities unrelated to my duties. 4. I undertake that the compensation
                                                           system to be formulated by the Board of Directors or Remuneration
                                                           Committee in the future will be linked to the implementation of
                                          Commitments
                                                           compensatory measures taken by the listed company. 5. I undertake
                                          regarding
Commitments                                                that the exercise conditions of the listed company’s equity incentives
                Directors, supervisors,   compensatory
made during                                                to be announced in the future will be linked to the implementation of       December 11,     Remain
                and senior management     measures after                                                                                                                     In progress
asset                                                      the compensatory measures taken by the listed company. 6. I                    2018          effective
                of the listed company     dilution of
restructuring                                              undertake to effectively fulfill the relevant compensatory measures
                                          immediate
                                                           formulated by the listed company and any commitments made by
                                          returns
                                                           myself regarding compensatory measures. If I violate or refuse to
                                                           fulfill any of the above commitments, leading to any losses to the
                                                           listed company or any and all of its shareholders, I’m willing to
                                                           legally bear any and all of the corresponding compensation liabilities.
                                                           This commitment letter shall come into effect as of the date of my
                                                           signature and shall constitute a binding legal document on me upon
                                                           its effectiveness. If I violate this commitment letter, I’m willing to
                                                           bear any and all of the corresponding legal liabilities.
                                                                                                                                                        Remain
                                                           previous commitments of SASAC of Yunnan Province: In order to
                                                                                                                                                        effective during
                                                           avoid horizontal competition with the listed company and safeguard
Commitments                               Commitments                                                                                                   the period of
                State-owned Equity                         the legitimate rights and interest of the listed company and other
made during                               regarding                                                                                     October 31,     holding the
                Management Company,                        shareholders, State-owned Equity Management Company solemnly                                                      In progress
asset                                     horizontal                                                                                       2018         shares of
                New Huadu                                  makes the following statements and commitments: After the
restructuring                             competition                                                                                                   Yunnan Baiyao
                                                           completion of this transaction, State-owned Equity Management
                                                                                                                                                        (directly and
                                                           Company will not directly engage in any businesses that are the same
                                                                                                                                                        indirectly)
                                                           as or similar to, and constitute a competition with, the principal
businesses of the listed company.
commitment letter, our company and any enterprises under our
control have not invested in any company, enterprise or other
operating entity engaged in any business the same as, or similar to,
the principal businesses of the listed company or co-operating or co-
engaged, with others, in business the same as, or similar to, the
principal businesses of the listed company.
After the completion of this transaction, our company and any
enterprises under our control will not directly or indirectly engage in
any form (including but not limited to investment, M&A, affiliation,
joint ventures, cooperation, partnership, contracting or leasing
operations, and equity participation) in businesses that are the same
as or similar to, and constitute a competition with, the principal
businesses of the listed company, nor will we directly or indirectly
own any absolute or relative control over any other companies,
enterprises or operating entities that engage in businesses that are the
same as or similar to, and constitute a competition with the principal
businesses of the listed company.
During the commitment period mentioned above, if the listed
company actually further expands its existing principal businesses,
and our company and any enterprises under our control have not yet
engaged in production or operation of such new businesses, our
company and any enterprises under our control will not engage in
such new businesses that compete with the principal businesses of the
listed company unless the listed company notifies us in writing that it
would no longer engage in such new businesses.
During the aforementioned commitment period, if our company and
any enterprises under our control obtain from any third party any
business opportunity that competes or may compete with the
principal businesses of the listed company, we shall immediately
notify the listed company. If the listed company provides a positive
response that it is willing to take advantage of that business
opportunity within the reasonable period specified in the notice, our
company and any enterprises under our control will abandon that
business opportunity.
If our company and any enterprises under our control violate any of
the above statements and commitments, leading to any damages to
any rights and interest of the listed company, our company agrees to
                                                          bear any and all of the corresponding compensation liabilities for
                                                          such damages so caused to the listed company.
                                                          Our company/I has/have provided necessary, authentic, accurate,
                                                          complete, and effective documents, materials, or oral statements and
                                                          explanations for this transaction at this stage, without any
                                                          concealments, false records, or significant omissions. The provided
                                                          copy materials or photocopies are consistent and aligned with the
                                                          original materials or originals. The signatures and seals on the
                                                          provided documents and materials are authentic, with necessary legal
                                          Commitments
                                                          procedures for such signatures and seals having been fulfilled, and
                                          regarding the
                                                          legal authorizations having been obtained. All statements and
Commitments                               authenticity,
                Directors, supervisors,                   explanations of facts are consistent with the facts that occurred.
made during                               accuracy, and                                                                                                Remain
                and senior management                     According to the progress of this transaction, our company/I will           June 10, 2021                         In progress
asset                                     completeness                                                                                                 effective
                of the listed company                     provide relevant information and documents in a timely manner in
restructuring                             of the
                                                          accordance with relevant laws, regulations, rules, and relevant
                                          information
                                                          provisions of the CSRC and the stock exchange, and ensure that the
                                          provided
                                                          information and documents to be constantly provided still meet the
                                                          requirements of authenticity, accuracy, completeness, and
                                                          effectiveness. Our company/I undertake (s) and warrant (s) the
                                                          information provided or disclosed in this transaction is authentic,
                                                          accurate, complete, and effective, without false records, misleading
                                                          statements, or material omissions, and is/am willing to bear any and
                                                          all of the corresponding individual and joint legal liabilities for that.
                                                          As of the date of the issuance of this commitment, our company has
                                                          provided necessary, authentic, accurate, complete, and effective
                                                          documents, materials, or oral statements and explanations for this
                                                          transaction at this stage, without any concealments, false records, or
                                          Commitments     significant omissions. The provided copy materials or photocopies
                                          regarding the   are consistent and aligned with the original materials or originals. The
Commitments                               authenticity,   signatures and seals on the provided documents and materials are
made during     State-owned Equity        accuracy, and   authentic, with necessary legal procedures for such signatures and                           Remain
                                                                                                                                      June 10, 2021                         In progress
asset           Management Company        completeness    seals having been fulfilled, and legal authorizations having been                            effective
restructuring                             of the          obtained. All statements and explanations of facts are consistent with
                                          information     the facts that occurred. According to the progress of this transaction,
                                          provided        our company will provide relevant information and documents in a
                                                          timely manner in accordance with relevant laws, regulations, rules,
                                                          and relevant provisions of the CSRC and the stock exchange, and
                                                          ensure that the information and documents to be constantly provided
                                                          still meet the requirements of authenticity, accuracy, completeness,
                                                              and effectiveness. Our company undertakes and warrants the
                                                              information provided or disclosed in this transaction is authentic,
                                                              accurate, complete, and effective, without false records, misleading
                                                              statements, or material omissions, and is willing to bear any and all
                                                              of the corresponding individual and joint legal liabilities for that.
                                                              Our company and our acting-in-concert parties have provided
                                                              necessary, authentic, accurate, complete, and effective documents,
                                                              materials, or oral statements and explanations for this transaction at
                                                              this stage, without any concealments, false records, or significant
                                                              omissions. The provided copy materials or photocopies are consistent
                                                              and aligned with the original materials or originals. The signatures
                                                              and seals on the provided documents and materials are authentic, with
                                                              necessary legal procedures for such signatures and seals having been
                                            Commitments
                                                              fulfilled, and legal authorizations having been obtained. All
                                            regarding the
                                                              statements and explanations of facts are consistent with the facts that
Commitments                                 authenticity,
                New Huadu and its                             occurred. According to the progress of this transaction, our company
made during                                 accuracy, and                                                                                                  Remain
                acting-in-concert parties                     and our acting-in-concert parties will provide relevant information         June 10, 2021                         In progress
asset                                       completeness                                                                                                   effective
                                                              and documents in a timely manner in accordance with relevant laws,
restructuring                               of the
                                                              regulations, rules, and relevant provisions of the CSRC and the stock
                                            information
                                                              exchange, and ensure that the information and documents to be
                                            provided
                                                              constantly provided still meet the requirements of authenticity,
                                                              accuracy, completeness, and effectiveness. Our company and our
                                                              acting-in-concert parties undertake and warrant the information
                                                              provided or disclosed in this significant asset restructuring is
                                                              authentic, accurate, complete, and effective, without false records,
                                                              misleading statements, or material omissions, and are willing to bear
                                                              any and all of the corresponding individual and joint legal liabilities
                                                              for that.
                                                              without compensations or under unfair conditions, nor to harm any
                                            Commitments
                                                              interest of the listed company in any other way. 2. I undertake to
                                            regarding
                                                              restrain my official consumption. 3. I undertake not to use the assets
Commitments                                 compensatory
                Directors, supervisors,                       of the listed company to engage in investment or consumption
made during                                 measures after                                                                                                 Remain
                and senior management                         activities unrelated to my duties. 4. I undertake that the compensation     June 10, 2021                         In progress
asset                                       diluting                                                                                                       effective
                of the listed company                         system to be formulated by the Board of Directors or Remuneration
restructuring                               immediate
                                                              Committee in the future will be linked to the implementation of
                                            returns by this
                                                              compensatory measures taken by the listed company. 5. If the listed
                                            restructuring
                                                              company subsequently introduces equity incentive policies, I
                                                              undertake that the exercise conditions of the listed company’s equity
                                                     incentives to be announced in the future will be linked to the
                                                     implementation of the compensatory measures taken by the listed
                                                     company. 6. If, during the period after the date of issuance of this
                                                     commitment letter and before the completion of this transaction by
                                                     the listed company, the CSRC makes other regulatory requirements
                                                     regarding compensatory measures and related commitments, and the
                                                     above commitments fail to meet such new regulatory regulations of
                                                     the CSRC, I undertake to issue supplementary commitments in
                                                     accordance with the then latest CSRC regulations. 7. If I violate any
                                                     of the above commitments, leading to any losses to the listed
                                                     company or investors, I’m willing to legally bear any and all of the
                                                     corresponding compensation liabilities for such losses so caused to
                                                     the listed company or investors.
                                                     shareholder of the listed company, issued the Commitment Letter of
                                                     SASAC of Yunnan Province on Maintaining the Independence of the
                                                     Listed Company, Commitment Letter of SASAC of Yunnan Province
                                                     on Reducing and Regulating Related Party Transactions, and
                                                     Commitment Letter of SASAC of Yunnan Province on Avoiding
                                                     Horizontal Competition. On April 7, 2020, our company issued the
                                     Commitments
                                                     Commitment Letter of State-owned Equity Management Company on
                                     to maintain
                                                     Its Undertaking of the Relevant Commitments Made in the Process of
                                     the
                                                     Yunnan Baiyao’s Merger Transaction by SASAC of Yunnan Province
                                     independence
                                                     (hereinafter referred to as the “Commitment Letter on Undertaking”),
                                     of the listed
Commitments                                          committing to fully undertake, as of the date of completion of this
                                     company,
made during     State-owned Equity                   equity transfer (calculated from the date of registration of the                               Remain
                                     reduce and                                                                                    June 10, 2021                         In progress
asset           Management Company                   underlying equity in the name of our company), the responsibilities                            effective
                                     regulate
restructuring                                        and obligations specified in the commitment documents previously
                                     related party
                                                     made by SASAC of Yunnan Province and continuously effective at
                                     transactions,
                                                     the time of this equity transfer as set out in the following list. The list
                                     and avoid
                                                     includes the foregoing three commitment letters issued by SASAC of
                                     horizontal
                                                     Yunnan Province. 2. As of the date of signing this commitment letter,
                                     competition
                                                     our company has always strictly fulfilled the commitments to
                                                     maintain the independence of the listed company, reduce and regulate
                                                     related party transactions, and avoid horizontal competition in
                                                     accordance with the requirements of the Commitment Letter on
                                                     Undertaking, and has not violated any of the commitments made.
                                                     After the completion of this transaction, our company will continue
                                                     to strictly fulfill the Commitment Letter on Undertaking to safeguard
                                                            the interest of the listed company and any and all of its shareholders.
                                                            always strictly fulfilled the Commitment Letter on Maintaining the
                                                            Independence of the Listed Company, Commitment Letter on
                                                            Reducing and Regulating Related Party Transactions, and
                                                            Commitment Letter on Avoiding Horizontal Competition all issued on
                                                            October 31, 2018. Our company’s acting-in-concert parties have
                                                            always strictly fulfilled the Commitment Letter on Reducing and
                                                            Regulating Related Party Transactions issued on October 31, 2018,
                                                            and have not violated any of the commitments made. After the
                                                            completion of this transaction, our company and our acting-in-
                                                            concert parties will continue to strictly fulfill this commitment letter
                                                            to safeguard the interest of the listed company and any and all of its
                                                            shareholders.
                                            Commitments
                                            to maintain
                                                            concert parties will maintain independence from the listed company
                                            the
                                                            in terms of personnel, assets, business, institutions, and finance in
                                            independence
                                                            accordance with relevant laws, regulations, and normative
                                            of the listed
Commitments                                                 documents, and will not, by virtue of the identity as a shareholder and
                                            company,
made during     New Huadu and its                           a related party of the listed company, engage in the acts that affect                        Remain
                                            reduce and                                                                                  June 10, 2021                         In progress
asset           acting-in-concert parties                   the independence of the listed company’s personnel, assets, business,                        effective
                                            regulate
restructuring                                               institutions, and finances, or harm any rights and interest of the listed
                                            related party
                                                            company and other shareholders. Instead, they will effectively ensure
                                            transactions,
                                                            the independence of the listed company in terms of personnel, assets,
                                            and avoid
                                                            business, institutions, finance, etc.
                                            horizontal
                                            competition
                                                            acting-in-concert parties and any other companies or enterprises
                                                            under their control have not engaged in any business that constitute a
                                                            horizontal competition with the principal businesses of the listed
                                                            company and any other companies or enterprises under its control. In
                                                            order to avoid horizontal competition with the listed company and
                                                            safeguard the legitimate rights and interest of the listed company and
                                                            other shareholders, after the completion of this transaction, our
                                                            company’s acting-in-concert parties and any other companies or
                                                            enterprises under their control will not directly engage in businesses
                                                            that are the same as, or similar to, and constitute a competition with,
                                                            the principal businesses of the listed company.
                                                            as of the date of official signature by our company and our acting-in-
                                                  concert parties. Our company and our acting-in-concert parties
                                                  warrant the effective fulfillment of these commitments, and the listed
                                                  company has the right to supervise their fulfillment of this
                                                  commitment letter. If our company and our acting-in-concert parties
                                                  fail to effectively fulfill this commitment letter, leading to any actual
                                                  losses to the listed company, our company and our acting-in-concert
                                                  parties will compensate for any and all of such direct or indirect losses
                                                  so caused to the listed company.
                                                  During the period when our company is a related party of Shanghai
                                                  Pharma, our company and any other companies or enterprises under
                                                  our control will try the best to avoid and reduce related party
                                                  transactions with Shanghai Pharma and its subsidiaries. For
                                                  inevitable related party transactions or those occurring for reasonable
                                                  reasons, our company undertakes to conduct such transactions on an
                                                  equal and voluntary basis in the principles of fairness, impartiality,
                                                  and compensation for equal value, with the transaction prices to be
                                                  determined based on the reasonable prices recognized in the market.
                                 Commitments      Our company will strictly comply with the provisions of relevant
Commitments
                                 to reduce and    laws, regulations, normative documents, and the Articles of
made during                                                                                                                                    Remain
                Listed company   regulate         Association of Shanghai Pharma, perform the decision-making                 June 10, 2021                         In progress
asset                                                                                                                                          effective
                                 related party    procedures and information disclosure obligations for related party
restructuring
                                 transactions     transactions, and warrant not to harm any legitimate rights and
                                                  interest of Shanghai Pharma and any other shareholders through
                                                  related party transactions. This commitment letter shall come into
                                                  effect and be irrevocable as of the date of official signature by our
                                                  company. Our company warrants the effective fulfillment of these
                                                  commitments, and Shanghai Pharma has the right to supervise the
                                                  fulfillment of this commitment letter. If our company fails to
                                                  effectively fulfill this commitment letter, leading to any actual losses
                                                  to Shanghai Pharma, our company will compensate for any and all of
                                                  such direct or indirect losses so caused to Shanghai Pharma.
                                                  Shanghai Pharma’s shares subscribed by our company through this
                                                                                                                                               Thirty-six
                                                  transaction shall not be transferred within 36 months from the end of
                                                                                                                                               months from the
Commitments                                       the issuance of these shares. After the expiration of the
                                 Commitments                                                                                                   end of the
made during                                       aforementioned lockup period, the transfer and trading of such shares
                Listed company   regarding                                                                                    May 11, 2021     issuance of new      Completed
asset                                             shall be handled in accordance with the then effective laws and
                                 lock-up shares                                                                                                shares by
restructuring                                     regulations, as well as the regulations and rules of the CSRC, SZSE,
                                                                                                                                               Shanghai
                                                  and SHSE. After the completion of this transaction, our company will
                                                                                                                                               Pharma
                                                  also arrange a lockup period as described above for our any increased
                         stake in Shanghai Pharma after it issues bonus shares or convert
                         public reserve funds into share capital.
Whether the
commitments
                   Yes
are fulfilled as
scheduled
             II. Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
             Parties for Non-Operating Purposes
             □Applicable Not applicable
             During the reporting period, there was no occupation of the Company’s capital by the controlling shareholder or any of its related
             parties for non-operating purposes.
             III. Non-compliant Provision of External Guarantees
             □Applicable Not applicable
             There was no non-compliant provision of external guarantees during the reporting period.
             IV. Engagement and Disengagement of Auditor
             Whether the interim financial statements were audited or not
             □Yes No
             The Company’s interim financial statements were unaudited.
             V. Explanations Given by the Board of Directors and the Supervisory Committee Regarding
             the Auditor’s “Modified Opinion” on the Financial Statements of the Reporting Period
             □Applicable Not applicable
             VI. Explanations Given by the Board of Directors Regarding the Auditor’s “Modified
             Opinion” on the Financial Statements of Previous Year
             □Applicable Not applicable
             VII. Bankruptcy and Reorganization
             □Applicable Not applicable
             There was no bankruptcy or reorganization related events during the reporting period.
             VII. Legal Matters
             Material litigation or arbitration matters
             □Applicable  Not applicable
             During the reporting period, the Company had no material litigation or arbitration matters.
             Other litigation
             Applicable        □Not applicable
                                            Any
Basic Information        Amount          Estimated           Litigation
                                                                                Litigation (Arbitration) Trial    Enforcement of Litigation   Disclosure        Disclosure
  of Litigation          Involved        Liability          (Arbitration)
                                                                                     Results and Impacts           (Arbitration) Judgments       Date             Index
  (Arbitration)        (RMB’0,000)       Caused or            Progress
                                            Not
Contract dispute
lawsuit filed by
Shanghai Yuanye
Industrial Co., Ltd                                       The first instance
vs. Yunnan              157,531.78          No            has not been heard   No updates at present             No updates at present
Baiyao Holdings                                           yet
Investment Co.,
Ltd and related
parties
Summary of              39,268.94           No            Some cases have      Summary of litigation events      Some are in the process of
events not                                          been filed to be     has no significant impact on the   being fulfilled or are being
meeting the                                         tried; some are      Company                            enforced against the opposing
disclosure                                          being under trials                                      party in the lawsuit
standards for                                       to be adjudicated;
being included in                                   some have been
significant                                         adjudicated; some
litigation                                          have been closed.
(arbitration)
            IX. Punishments and Rectifications
                □Applicable Not applicable
                There was no punishment or rectification involving the Company during the reporting period.
            X. Credit Quality of the Company as well as its Controlling Shareholder and De Facto
            Controller
                □Applicable Not applicable
            XI. Significant Related Party Transactions
                □Applicable Not applicable
                There were no related party transactions related to daily operations during the reporting period.
                □Applicable Not applicable
                There were no related party transactions arising from acquisition or sale of assets or equity during the reporting period.
                □Applicable Not applicable
                There were no related party transactions regarding joint investments in third parties during the reporting period.
                □Applicable Not applicable
                There were no amounts due to and from related parties during the reporting period.
                Applicable Not applicable
               There were no deposit, loan, credit or other financial business occurring between the Company and its related finance
            companies/related parties.
   Applicable Not applicable
   There were no deposit, loan, credit or other financial business occurred between any finance companies under the control of the
Company and related parties.
   Applicable Not applicable
   There were no significant related party transactions during the reporting period.
XII. Major Contracts and Their Performance
(1) Entrustment
     □Applicable          Not applicable
     There were no entrustment events of the Company during the reporting period.
(2) Contracting
     □Applicable          Not applicable
     There were no contracting events of the Company during the reporting period.
(3) Leases
     Applicable               Not applicable
     There were no leases of the Company during the reporting period.
     Applicable               Not applicable
     There were no major guarantees of the Company during the reporting period.
     Applicable               □Not applicable
                                                                                                                 Unit: RMB’0,000
                                                                                                                   Provision for
                                                                                                   Unrecovered      impairment
                                                                                       Undue                            on
          Type                 Source of funding              Amount                                overdue
                                                                                       amount                      unrecovered
                                                                                                     amount
                                                                                                                  overdue amount
   Bank       financial
                          Self-owned capital                       252,204.3           262,204.3             0                       0
   products
   Brokerage
                          Self-owned capital                          50,020              55,020             0                       0
   financial products
                          Total                                    302,224.3           317,224.3             0                       0
     Details of high-risk entrusted wealth management products with a significant amount per single item or of low safety and poor
liquidity
     □Applicable          Not applicable
     Cases under which it is expected that the principal of entrusted financing cannot be recovered, or there may be other circumstances
that may result in impairment
     □Applicable        Not applicable
     □Applicable        Not applicable
     There were no other significant contracts of the Company during the reporting period.
XIII. Explanation for Other Significant Events
Applicable        □Not applicable
     On January 7, 2025, the Company and BOC International Capital Limited executed the Supplemental
Agreement to the Partnership Agreement of Yunnan TCM Comprehensive Health Innovation Equity Investment Fund
Partnership (Limited Partnership). The supplemental agreement amends certain provisions of the Partnership
Agreement of Yunnan TCM Comprehensive Health Innovation Equity Investment Fund Partnership (Limited
Partnership). According to the fund manager’s notice, the Partnership has completed its industrial and commercial
registration and has obtained its private-fund filing with the Asset Management Association of China. More details
can be found in the Announcement on the Progress of Establishing a Fund with a Professional Investment Institution
(Announcement No. 2025-01), disclosed by the Company on January 9, 2025 at http://www.cninfo.com.cn. The
Partnership has now completed its initial capital contribution (10 % of total committed capital).
     On January 28, 2025, the Company issued the Announcement on Senior Management Reaching Statutory
Retirement Age (Announcement No. 2025-06). Mr. Qin Wanmin, Chief Innovation Officer and Senior Vice
President, resigned from all positions at the Company and its controlling subsidiaries upon reaching the mandatory
retirement age. Mr. Yang Yong, Chief Compliance Officer and Senior Vice President, also tendered his resignation
from all positions at the Company and its controlling subsidiaries upon reaching the mandatory retirement age.
     (1) On January 11, 2025, the Company disclosed the Announcement on the Release of Shareholders’ Partial
Share Pledge (Announcement No. 2025-02). On January 10, 2025, the Company received a notice from its
shareholder State-owned Equity Management Company, stating that State-owned Equity Management Company
had released the pledge on its 52,171,840 shares held in the Company (accounting for 2.92% of the Company’s
total share capital).
     (2) On January 18, 2025, the Company disclosed the Announcement on Shareholders’ Partial Share Pledge
(Announcement No. 2025-03). In the past few days, the Company received a notice from its shareholder State-
owned Equity Management Company, stating that State-owned Equity Management Company had pledged
     (3) On January 22, 2025, the Company disclosed the Announcement on the Release of Shareholders’ Partial
Share Pledge (Announcement No. 2025-04). In the past few days, the Company received a notice from its
shareholder State-owned Equity Management Company, stating that State-owned Equity Management Company
had released the pledge on its 67,172,000 shares held in the Company (accounting for 3.76% of the Company’s
total share capital).
     (4) On January 25, 2025, the Company disclosed the Announcement on Shareholders’ Partial Share Pledge
(Announcement No. 2025-05). In the past few days, the Company received a notice from its shareholder State-
owned Equity Management Company, stating that State-owned Equity Management Company had pledged
     (5) On May 14, 2025, the Company disclosed the Announcement on the Release and Re-pledge of
Shareholders’ Partial Shares (Announcement No. 2025-19). In the past few days, the Company received a notice
from its shareholder New Huadu, stating that New Huadu had (i) released the pledge on its 350,594,000 shares
held in the Company (accounting for 19.65% of the Company’s total share capital) and (ii) pledged 88,700,000
shares held in the Company (accounting for 4.97% of the Company’s total share capital).
     On February 7, 2025, the Company disclosed the Announcement on the Expiration and Completion of the
Shareholder’s Share Increase Plan (Announcement No. 2025-07). From August 6, 2024 to February 5, 2025,
State-owned Equity Management Company cumulatively increased its shareholding in the Company by
bidding transactions, accounting for 0.9980% of the total share capital of the Company, and the cumulative amount
of the increase in shareholding was RMB 950,379,399.02. As of the announcement date, the term of the
Shareholding Increase Plan expired and the Shareholding Increase Plan was completed.
     On April 9, 2025, the Company disclosed the Announcement on the Approval of INR102 Injection for Drug
Clinical Trials (Announcement No. 2025-14). Yunhe Pharmaceutical (Tianjin) Co., Ltd (“Yunhe Pharma”), a
wholly-owned subsidiary of the Company, has received the Notice of Approval for Clinical Drug Trial (Notice
No. 2025LP01012) issued by the National Medical Products Administration. Upon review, the application for
clinical trials of INR102 Injection submitted by Yunhe Pharma meets the relevant requirements for drug
registration, and approval is granted for conducting clinical trials in prostate cancer patients.
     On June 18, 2025, the Company disclosed the Announcement on the Approval of JZ-14 Capsules for Drug
Clinical Trials (Announcement No. 2025-20). Yunnan Baiyao Zhengwu Technology (Shanghai) Co., Ltd
(“Zhengwu Technology”), a controlled subsidiary of the Company, has recently received the Notice of Approval
for Clinical Drug Trial (Notice Nos. 2025LP01506 and 2025LP01507) issued by the National Medical Products
Administration. Upon review, the application for clinical trials of JZ-14 Capsules submitted by Zhengwu
Technology meets the relevant requirements for drug registration, and approval is granted for conducting clinical
trials in patients with ulcerative colitis.
XIV. Significant Events of the Company’s Subsidiaries
     Applicable       □Not applicable
     All conditions precedent under the new-share placement agreement of YNBY International, a controlled
subsidiary of the Company, have been satisfied, and the placement was completed on May 22, 2025. Pursuant to
the terms of the placement agreement, the placing agent successfully placed an aggregate of 800,000,000
placement shares to not fewer than six placees at a placing price of HKD 0.1161 per share.
     The net proceeds from the placement are approximately HKD 92 million. YNBY International intends to
apply the proceeds as follows: HKD 55 million, or 60 % of the net proceeds, to fund the costs of expanding
international operations—specifically OEM/ODM manufacturing and related services in ASEAN, product
marketing and sales, product registration, and the development of trading and health-food networks in ASEAN;
HKD 37 million, or 40 % of the net proceeds, for general working capital and, when opportunities arise, for future
investments or expansion by YNBY International.
     Following the completion of the placement, the total issued share capital of YNBY International rose from
International, representing 65.92 % of the total issued share capital of YNBY International.
launched for sale
     The first batch of toothpaste branded “Yunnan Baiyao,” manufactured in Thailand by the Company’s
controlled subsidiary YNBY International, has been successfully delivered to and sold through its customers. This
marks the first time a “Yunnan Baiyao” branded toothpaste produced outside Mainland China has entered the
market.
    YNBY International has verified that the lot meets all stipulated quality standards and specifications and fully
complies with relevant industry regulations. YNBY International will continue to monitor production and maintain
rigorous quality-control measures to honor its commitments.
                    Section VI Changes in Shareholdings and Particulars about
                                          Shareholders
         I. Changes in Shares
                                                                                                                                                Unit: share
                         Before this change                                     Increase/decrease (+, -)                                    After this change
                                                                                   Capital reserve
                                                       New         Bonds
                      Quantity        Proportion                                   converted into          Others       Subtotal        Quantity         Proportion
                                                      shares       Shares
                                                                                    share capital
I. Shares subject
to trading             11,567,358             0.65%            0            0                     0         -98,869       -98,869        11,468,489             0.64%
moratorium
owned shares
held by state-
owned legal
persons
held by other
domestic
shareholders
     Of which:
shares held by
domestic legal
persons
     Shares
held by
domestic
natural persons
invested shares
     Of which:
shares held by
overseas legal
persons
     Shares
held by
overseas natural
persons
II. Shares not
subject to
trading
moratorium
denominated          1,772,695,245       99.35%                0            0                     0          98,869        98,869      1,772,794,114            99.36%
ordinary shares
listed foreign
shares
listed foreign                     0           0.00%            0              0                 0              0             0                    0              0.00%
shares
III. Total
number of               1,784,262,603        100.00%            0              0                 0              0             0        1,784,262,603             100.00%
shares
                  Reasons for changes in shareholdings
                  Applicable           Not applicable
                  Approval of changes in shareholdings
                  Applicable           Not applicable
                  Transfers for changes in shareholdings
                  Applicable           Not applicable
                  Progress of share repurchase implementation
                  Applicable           Not applicable
                  Progress of the implementation of the reduction and repurchase of shares through centralized bidding
                  Applicable           Not applicable
                The impact of changes in shareholdings on financial indicators such as basic and diluted earnings per share, net assets per share
         attributable to the Company’s ordinary shareholders for the latest year and period
                  Applicable           Not applicable
                  Other disclosures the Company deems necessary or required by securities regulators
                  Applicable           Not applicable
         Applicable           □Not applicable
                                                                                                                                              Unit: share
                                                                            Number of shares
                                 Number of shares      Increase in shares                      Number of shares
                                                                             released from                                                 Date of shares
                                 subject to trading    subject to trading                      subject to trading
                  Name of                                                        trading                              Reason for           released from
                                 moratorium at the        moratorium                           moratorium at the
                 shareholder                                                  moratorium                              moratorium               trading
                                 beginning of the          during the                              end of the
                                                                               during the                                                   moratorium
                                  reporting period      reporting period                        reporting period
                                                                            reporting period
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
             Dong Ming                        9,960                    0                   0               9,960    held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
             Zhu Zhaoyun                     42,000                    0                   0              42,000    held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
             Li Jin                          42,000                    0                   0              42,000    held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
             Wang Minghui                   756,000             189,000                    0            567,000     Locked-up shares     Implemented in
                                                                                                                    held by senior       accordance with
                                                                                                                    management           regulatory
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Chen Fashu                       9,395,621                  0                     0             9,395,621    held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Chen Yanhui                       133,009                   0                     0              133,009     held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Yin Pinyao                        252,000              63,000                     0              189,000     held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Qin Wanmin                        378,000                   0              126,000               504,000     held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Yang Yong                          75,768                   0               25,256               101,024     held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Wang Jin                          378,000                   0                     0              378,000     held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
                                                                                                                                         Implemented in
                                                                                                                    Locked-up shares
                                                                                                                                         accordance with
       Yu Juan                           105,000                   0                 1,875              106,875     held by senior
                                                                                                                                         regulatory
                                                                                                                    management
                                                                                                                                         requirements
       Total                           11,567,358            252,000              153,131            11,468,489              --                    --
     II. Issuance and Listing of Securities
     Applicable Not applicable
     III. Number of Shareholders of the Company and Their Shareholdings
                                                                                                                                                 Unit: Share
Total number of ordinary shareholders at                                       Total number of preferred shareholders with resumed voting rights at the
the end of the reporting period                                                end of the reporting period (if any)
   Shareholdings of ordinary shareholders holding more than 5% of the shares or the top 10 ordinary shareholders (excluding lending of shares through securities
                                                                           finance)
                                                               Number of                           Number of                           Pledged, marked or frozen
                                                                                                                     Number of
                                                                 ordinary                            ordinary
                                                                               Change during                       ordinary shares
                           Nature of          Shareholding    shares held at                           shares
Name of shareholder                                                             the reporting                       not subject to
                          shareholder             ratio       the end of the                        subject to                          Status            Quantity
                                                                                   period                              trading
                                                                reporting                             trading
                                                                                                                     moratorium
                                                                  period                           moratorium
Yunnan State-owned
Equity Operation        State-owned
Management Co.,         legal person
Ltd.
New Huadu                   Domestic non-
Industrial Group Co.,       state-owned               24.42%       435,742,244                  0               0         435,742,244           Pledged   75,000,000
Ltd.                        legal person
Yunnan Hehe                 State-owned
(Group) Co., Ltd.           legal person
Hong Kong
                            Overseas   legal
Securities Clearing                                    3.98%        71,090,729          5,878,000               0          71,090,729               NA                 0
                            person
Company Limited
                            Domestic non-
China Securities
                            state-owned                2.09%        37,373,108                  0               0          37,373,108               NA                 0
Finance Corp.
                            legal person
Central Huijin              State-owned
Investment Ltd.             legal person
Industrial and
Commercial Bank
of China Limited -
Huatai-Pinebridge
                            Others                     0.89%        15,829,085           509,301                0          15,829,085               NA                 0
CSI 300 Trading
Open-End Index
Securities Investment
Fund
China Construction
Bank Corporation－E
Fund CSI 300 Medical
and Healthcare Trading      Others                     0.82%        14,666,946         -1,811,360               0          14,666,946               NA                 0
Open-End Index
Securities Investment
Fund
                            Domestic
Chen Fashu                                             0.70%        12,527,495                  0       9,395,621            3,131,874              NA                 0
                            natural person
UBS Asset
Management
                            Overseas   legal
(Singapore) Ltd.                                       0.67%        11,878,208         -1,221,420               0          11,878,208               NA                 0
                            person
-UBS Lux
Investment SICAV
Strategic investors or general legal
persons who become the top 10 ordinary         Not applicable
shareholders due to rights issue (if any)
                                               Chen Fashu is the de facto controller of New Huadu Industrial Group Co., Ltd. It is unclear whether there are any related
Related or acting-in-concert parties
                                               relationships among other shareholders or whether there is any concerted action as defined by the Administrative
among the shareholders above
                                               Measures for Information Disclosure of Changes in Shareholdings of Listed Companies.
Above shareholders involved in
entrusting/being entrusted with voting         Not applicable
rights and giving up voting rights
Special account for share repurchases (if
                                               Not applicable
any) among the top 10 shareholders
Shareholdings of the top 10 ordinary shareholders not subject to trading moratorium (excluding lending of shares through securities finance, and locked-up shares held
                                                                      by senior management)
                                                                     Number of ordinary shares not subject to trading                       Type of shares
                        Name of shareholder
                                                                     moratorium held at the end of the reporting period              Type                 Quantity
                                                                                                                               RMB-
Yunnan State-owned Equity Operation Management Co.,
Ltd.
                                                                                                                               ordinary share
                                                                                                                             RMB-
New Huadu Industrial Group Co., Ltd.                                                                         435,742,244     denominated                   435,742,244
                                                                                                                             ordinary share
                                                                                                                             RMB-
Yunnan Hehe (Group) Co., Ltd.                                                                                146,185,851     denominated                   146,185,851
                                                                                                                             ordinary share
                                                                                                                             RMB-
Hong Kong Securities Clearing Company Limited                                                                 71,090,729     denominated                    71,090,729
                                                                                                                             ordinary share
                                                                                                                             RMB-
China Securities Finance Corp.                                                                                37,373,108     denominated                    37,373,108
                                                                                                                             ordinary share
                                                                                                                             RMB-
Central Huijin Investment Ltd.                                                                                16,617,440     denominated                    16,617,440
                                                                                                                             ordinary share
Industrial and Commercial Bank of China Limited - Huatai-                                                                    RMB-
Pinebridge CSI 300 Trading Open-End Index Securities                                                          15,829,085     denominated                    15,829,085
Investment Fund                                                                                                              ordinary share
China Construction Bank Corporation－E Fund CSI 300                                                                           RMB-
Medical and Healthcare Trading Open-End Index Securities                                                      14,666,946     denominated                    14,666,946
Investment Fund                                                                                                              ordinary share
                                                                                                                             RMB-
UBS Asset Management (Singapore) Ltd.
-UBS Lux Investment SICAV
                                                                                                                             ordinary share
                                                                                                                             RMB-
China Construction Bank Corporation－E Fund CSI 300
Trading Open-End Index Securities Investment Fund
                                                                                                                             ordinary share
Related or acting-in-concert parties among the top 10
                                                              Whether there is any related relationship between the above shareholders or concerted action as stipulated
ordinary shareholders not subject to trading moratorium,
                                                              in the Administrative Measures for Disclosure of Changes in Shareholdings of Shareholders of Listed
and the top 10 ordinary shareholders not subject to trading
                                                              Companies is not known.
moratorium and the top 10 ordinary shareholders
Top 10 ordinary shareholders involved in securities margin
                                                              Not applicable
trading (if any)
      Shareholders holding more than 5% of shares, top 10 shareholders and top 10 shareholders not subject to trading moratorium
      participating in the lending of shares in the securities finance
      □Applicable       Not applicable
      Changes in top 10 shareholders and top 10 shareholders with shares not subject to trading moratorium compared to the previous period
      due to lending/returning of shares in the securities finance
      □Applicable        Not applicable
      Whether the top 10 ordinary shareholders and the top 10 ordinary shareholders not subject to trading moratorium of the Company
      conducted any agreed repurchase transactions during the reporting period
      □Yes                No
      The top 10 ordinary shareholders and the top 10 ordinary shareholders not subject to trading moratorium of the Company did not
      conduct any agreed repurchase transactions during the reporting period.
      IV. Changes in Shareholdings of Directors, Supervisors and Senior Management
      □Applicable  Not applicable
      There was no change in the shareholdings of the directors, supervisors, and senior management of the Company during the reporting
      period. For details, please refer to the 2024 Annual Report.
V. Changes in Controlling Shareholders or De Facto Controllers
Changes in controlling shareholders during the reporting period
□Applicable  Not applicable
There was no change in the controlling shareholders of the Company during the reporting period.
Change of de facto controllers during the reporting period
□Applicable  Not applicable
There was no change in the de facto controllers of the Company during the reporting period.
VI. Preference Shares
Applicable  Not applicable
There were no preference shares in the Company during the reporting period.
                              Section VII Bonds
Applicable Not applicable
                                  Section VIII               Financial Statements
I. Auditors’ Report
Whether the Interim Report has been audited
□Yes  No
The Company’s interim financial statements were unaudited.
II. Financial Statements
The units in the Notes to the Financial Statements are presented in RMB.
Prepared by: Yunnan Baiyao Group Co., Ltd.
                                                           June 30, 2025
                                                                                                                       Unit: RMB
                     Item                                 Closing balance                            Opening balance
 Current assets:
   Cash and bank balance                                            11,293,829,360.87                           10,887,983,161.30
   Provision of settlement fund
    Placements with banks and other
 financial institutions
   Financial assets held for trading                                  3,121,018,919.96                           2,547,113,523.40
   Derivative financial assets
   Notes receivable                                                    763,243,829.02                             929,651,911.37
   Accounts receivable                                              10,513,898,708.36                            9,923,361,104.39
   Accounts receivable financing                                      1,170,435,781.56                           1,887,789,780.16
   Prepayment                                                          242,041,101.08                             303,563,844.07
   Premium receivable
   Reinsurance premium receivable
    Reserves for reinsurance contract
 receivable
   Other receivables                                                   353,575,655.07                             108,427,198.33
      Including: Interest receivable
                   Dividends receivable                                193,031,770.84                              10,348,033.98
   Financial assets held under resale
 agreements
   Inventory                                                          5,835,419,536.07                           6,294,368,316.30
      Including: Data resources
   Contractual assets
   Held-for-sales assets                                                    3,363,423.87
   Non-current assets due within one year                              487,601,083.33                             480,295,722.22
   Other current assets                                               1,290,287,380.95                            788,108,579.54
 Total current assets                                               35,074,714,780.14                           34,150,663,141.08
Non-current assets:
  Loans and advances to customers
  Debt investments
  Other debt investment
  Long-term receivables
  Long-term equity investments             13,157,456,514.01                        12,561,276,081.35
  Investment in other equity instruments      71,745,000.00                            71,745,000.00
  Other non-current financial assets         206,670,363.44                           387,688,897.11
  Investment properties                       50,308,207.99                            49,884,012.15
  Fixed assets                              3,012,711,745.68                         3,012,878,828.09
  Construction in progress                   752,520,380.49                           703,439,112.24
  Productive biological assets                   730,574.79                               816,524.85
  Oil and gas assets
  Right-of-use assets                        289,367,883.81                           291,177,021.52
  Intangible assets                          551,903,081.08                           561,795,787.78
      Including: Data resources
  Development expenses                        39,843,228.73                            25,422,461.13
      Including: Data resources
  Goodwill                                    96,963,241.17                            96,963,241.17
  Long-term deferred expenses                106,022,501.19                           127,081,811.91
  Deferred income tax assets                 961,044,598.03                           756,975,016.74
  Other non-current assets                   163,488,603.52                           116,374,395.93
Total non-current assets                   19,460,775,923.93                        18,763,518,191.97
Total assets                               54,535,490,704.07                        52,914,181,333.05
Current liabilities:
  Short-term loans                            10,169,668.64                           423,380,272.64
  Borrowings from the central bank
   Placements from banks and other
financial institutions
  Financial liabilities held for trading
  Derivative financial liabilities
  Notes payable                             1,892,718,040.48                         1,913,702,684.41
  Accounts payable                          5,231,656,087.19                         4,758,352,403.87
  Receipts in advance                            964,631.77                               446,673.78
  Contractual liabilities                   1,607,722,042.64                         1,916,123,387.16
  Financial assets sold under repurchase
agreements
   Deposits from customers and
interbank
  Customer brokerage deposits
  Acting underwriting of securities
  Payroll payable                           1,078,562,124.67                         1,283,950,828.82
  Taxes and duties payable                   693,672,581.84                           466,603,767.14
  Other payables                            1,562,291,988.77                         1,386,632,676.75
     Including: Interest payable
                    Dividends payable                                                  86,490,742.04
  Fees and commissions payable
  Reinsurance amounts payable
  Held-for-sales liabilities
  Non-current liabilities due within one
year
  Other current liabilities                  635,018,348.15                           620,862,624.93
Total current liabilities                  12,813,745,845.59                        12,858,491,395.24
Non-current liabilities:
  Reserves for insurance contract
  Long-term loans                               2,100,000.00                             2,100,000.00
  Bonds payable
     Including: Preferred shares
                    Perpetual bonds
  Lease liabilities                          187,252,205.06                           190,656,990.23
  Long-term payables                         577,050,317.74                           591,533,288.57
  Long-term payroll payable                     1,265,761.77                             1,296,365.44
  Estimated liabilities                       19,837,374.22                            12,726,280.09
  Deferred income                            303,124,497.76                           295,493,565.32
  Deferred income tax liabilities            128,209,511.70                            93,867,331.53
  Other non-current liabilities                 1,931,554.36                             1,931,554.36
Total non-current liabilities               1,220,771,222.61                         1,189,605,375.54
Total liabilities                          14,034,517,068.20                        14,048,096,770.78
Owners’ equity
  Share capital                             1,784,262,603.00                         1,784,262,603.00
  Other equity instruments
     Including: Preferred shares
                    Perpetual bonds
  Capital reserves                         17,689,984,883.02                        17,637,148,823.48
  Less: Treasury stock
  Other comprehensive income                  -98,004,904.77                          -101,263,356.31
  Special reserves
  Surplus reserves                          2,530,458,968.58                         2,530,458,968.58
  Provision for general risk
  Undistributed profit                     18,499,899,504.32                        16,981,339,385.76
 Total owners’ equity attributable to
 parent company
   Minority interests                                                     94,372,581.72                                34,138,137.76
 Total owners’ equity                                               40,500,973,635.87                           38,866,084,562.27
 Total liabilities and owners’ equity                               54,535,490,704.07                           52,914,181,333.05
Legal representative: Dong Ming             Accounting officer: Ma Jia            Head of accounting center: Xu Jing
                                                                                                                          Unit: RMB
                     Item                                Closing balance                             Opening balance
 Current assets:
   Cash and bank balance                                             8,146,520,744.76                            8,385,552,777.48
   Financial assets held for trading                                 3,116,418,919.96                            2,496,810,753.70
   Derivative financial assets
   Notes receivable                                                      598,517,313.80                            675,593,542.66
   Accounts receivable                                               2,132,667,904.07                            1,940,715,863.84
   Accounts receivable financing                                         503,251,844.24                            591,699,974.35
   Prepayment                                                        1,349,462,450.98                            1,351,285,270.04
   Other receivables                                                 6,516,373,040.55                            6,501,863,512.27
      Including: Interest receivable
                   Dividends receivable                                  193,031,770.84                                10,348,033.98
   Inventory                                                             610,055,221.84                          1,160,234,826.84
       Including: Data resources
   Contractual assets
   Held-for-sales assets
   Non-current assets due within one year                                487,601,083.33                            480,295,722.22
   Other current assets                                                  780,660,624.63                            443,410,111.63
 Total current assets                                               24,241,529,148.16                           24,027,462,355.03
 Non-current assets:
   Debt investments
   Other debt investments
   Long-term receivables
   Long-term equity investments                                     15,523,839,836.50                           14,927,341,039.68
   Investment in other equity instruments
   Other non-current financial assets                                    206,170,363.44                            387,188,897.11
   Investment properties                                                 360,596,170.57                            350,771,014.59
   Fixed assets                                                      1,654,883,930.37                            1,657,360,463.22
   Construction in progress                                               36,341,395.36                                63,945,254.57
   Productive biological assets
   Oil and gas assets
  Right-of-use assets                        150,960,981.16                           195,572,313.66
  Intangible assets                          230,918,598.24                           232,180,054.34
     Including: Data resources
  Development expenses                        39,843,228.73                            25,422,461.13
     Including: Data resources
  Goodwill
  Long-term deferred expenses                 32,219,539.25                            40,087,609.94
  Deferred income tax assets                 374,465,965.13                           387,502,971.84
  Other non-current assets                   424,860,497.12                           404,946,229.16
Total non-current assets                   19,035,100,505.87                        18,672,318,309.24
Total assets                               43,276,629,654.03                        42,699,780,664.27
Current liabilities:
  Short-term loans                                                                    400,133,333.33
  Financial liabilities held for trading
  Derivative financial liabilities
  Notes payable
  Accounts payable                          4,353,320,174.25                         4,018,681,496.23
  Receipts in advance                            825,402.71                               355,324.62
  Contractual liabilities                   1,122,873,111.28                         1,534,629,073.69
  Payroll payable                            829,980,581.17                           940,019,555.32
  Taxes and duties payable                   307,298,382.98                           207,921,216.70
  Other payables                           10,809,728,552.56                        10,071,969,063.28
     Including: Interest payable
                 Dividends payable                                                     86,490,742.04
  Held-for-sales liabilities
  Non-current liabilities due within one
year
  Other current liabilities                   60,131,963.86                           102,375,999.95
Total current liabilities                  17,495,978,191.76                        17,291,628,158.87
Non-current liabilities:
  Long-term loans                               1,100,000.00                             1,100,000.00
  Bonds payable
     Including: Preferred shares
                 Perpetual bonds
  Lease liabilities                          145,056,260.76                           184,260,902.19
  Long-term payables                         577,050,317.74                           591,533,288.57
  Long-term payroll payable
  Estimated liabilities
  Deferred income                            202,143,420.59                           198,493,435.95
  Deferred income tax liabilities             46,998,887.29                            51,548,686.57
 Other non-current liabilities                           1,931,554.36                             1,931,554.36
 Total non-current liabilities                        974,280,440.74                          1,028,867,867.64
 Total liabilities                                  18,470,258,632.50                        18,320,496,026.51
 Owners’ equity:
   Share capital                                     1,784,262,603.00                         1,784,262,603.00
   Other equity instruments
      Including: Preferred shares
                     Perpetual bonds
   Capital reserves                                 17,855,366,339.20                        17,839,540,148.42
   Less: Treasury stock
   Other comprehensive income                          -60,755,342.13                           -61,502,389.01
   Special reserves
   Surplus reserves                                  2,529,297,618.08                         2,529,297,618.08
   Undisturbed profits                               2,698,199,803.38                         2,287,686,657.27
 Total owners’ equity                               24,806,371,021.53                        24,379,284,637.76
 Total liabilities and owners’ equity               43,276,629,654.03                        42,699,780,664.27
                                                                                                    Unit: RMB
                                       Item                       H1 2025                     H1 2024
 I. Total operating revenue                                        21,257,102,896.02        20,455,286,287.52
   Including: Operating revenue                                    21,257,102,896.02        20,455,286,287.52
            Interest income
            Premiums earned
            Fee and commission income
 II. Total operating cost                                           17,836,286,155.07       17,225,017,022.40
   Including: Operating cost                                        14,697,868,069.29       14,462,809,950.85
            Interest expenses
            Fee and commission expenses
            Surrender value
            Net payments for insurance claims
            Net provision for insurance liability
            Bond insurance expenses
            Reinsurance expenses
            Taxes and surcharges                                         125,773,653.15        119,551,819.49
            Selling expenses                                            2,516,371,857.04      2,296,821,490.59
            Administrative expenses                                      363,479,043.45        327,410,020.48
            R&D expenses                                                 155,900,139.57        148,043,019.34
            Financial expenses                                            -23,106,607.43       -129,619,278.35
             Including: Interest expenses                                           10,739,501.71             27,648,907.91
                         Interest income                                            49,581,264.78            162,711,635.16
  Plus: other income                                                                27,406,398.49             47,920,871.74
        Investment income (loss is indicated with “-”)                             839,628,716.65            477,498,314.49
             Including: Income from investment in associates and
joint ventures
                       Investment income from derecognition of
financial assets at amortized cost
        Exchange gains (loss is indicated with “-”)
        Net exposure hedging income (loss is indicated with “-”)
        Income from change in fair value (loss is indicated with “-”)               70,037,496.76              4,596,876.81
        Credit impairment losses (loss is indicated with “-”)                       -98,382,642.61            -82,762,335.12
        Asset impairment losses (loss is indicated with “-”)                        -41,743,184.35             -3,578,594.53
        Gains from asset disposal (loss is indicated with “-”)                        2,552,729.83             -1,592,134.63
III. Operating profit (loss is indicated with “-”)                                4,220,316,255.72          3,672,352,263.88
  Plus: Non-operating revenue                                                       17,525,440.99              4,431,701.71
  Less: Non-operating expenses                                                        5,969,854.92             4,755,624.76
IV. Total profit (total loss is indicated with “-”)                               4,231,871,841.79          3,672,028,340.83
  Less: Income tax expenses                                                        587,271,873.85            482,065,489.87
V. Net profit (net loss is indicated with “-”)                                    3,644,599,967.94          3,189,962,850.96
  (I) Classification by operation continuity
with “-”)
with “-”)
  (II) Classification by ownership
company (net loss to be listed with “-”)
VI. Other comprehensive income, net of tax                                            4,613,102.15             -8,020,440.18
   Other comprehensive income attributable to owners of parent
company, net of tax
     (I) Other comprehensive income that cannot be reclassified into
                                                                                     -1,680,417.88             2,004,091.79
profits or losses
benefit plan
                                                                                     -1,680,417.88             2,004,091.79
into profits or losses under the equity method
investments
     (II) Other comprehensive income that will be reclassified into
profits or losses
profits or losses under the equity method
 comprehensive income
 denominated in foreign currencies
    Other comprehensive income attributable to minority interests, net
 of tax
 VII. Total comprehensive income                                                       3,649,213,070.09         3,181,942,410.78
   Total comprehensive income attributable to owners of parent
 company
   Total comprehensive income attributable to minority interests                         13,043,315.43                1,480,373.28
 VIII. Earnings per share
   (I) Basic earnings per share                                                                     2.04                     1.79
   (II) Diluted earnings per share                                                                  2.04                     1.79
Net profit realized by the combined party in business combination under common control before the business combination in the
current period was RMB 0.00, and net profit realized by the combined party in the previous period was RMB 0.00
Legal representative: Dong Ming             Accounting officer: Ma Jia          Head of accounting center: Xu Jing
                                                                                                                        Unit: RMB
                                Item                                         H1 2025                         H1 2024
 I. Operating revenue                                                          5,535,899,310.73                 4,525,654,675.76
   Less: Operating cost                                                        1,893,024,450.97                 1,899,760,551.87
        Taxes and surcharges                                                      68,991,175.77                      55,183,550.08
        Selling expenses                                                       1,344,109,035.90                 1,249,190,451.48
        Administrative expenses                                                  164,503,932.65                   152,522,356.56
        R&D expenses                                                             100,674,255.21                      81,085,974.45
        Financial expenses                                                        -36,991,769.80                 -141,417,510.19
           Including: Interest expenses                                                 80,000.00                     8,569,478.28
                        Interest income                                           42,203,815.87                   150,808,813.01
   Plus: Other income                                                             13,586,306.55                      13,409,933.24
        Investment income (loss is indicated with “-”)                           813,972,731.59                   479,391,856.82
           Including: Income from investment in associates and
 joint ventures
                      Derecognized financial assets measured
 by amortized cost (loss is indicated with “-”)
        Net exposure hedging income (loss is indicated with
 “-”)
        Income from changes in fair value (loss is indicated
 with “-”)
        Credit impairment losses (loss is indicated with “-”)                       -627,361.48                      -2,037,055.26
         Asset impairment losses (loss is indicated with “-”)            -26,399,519.27                   -5,605,130.40
         Gains from asset disposal (loss is indicated with “-”)                                           -1,085,296.81
 II. Operating profit (loss is indicated with “-”)                     2,856,099,050.47                1,701,757,701.21
   Plus: Non-operating revenue                                            11,400,991.25                     705,167.42
   Less: Non-operating expenses                                            3,216,437.18                    3,214,775.99
 III. Total profit (total loss is indicated with “-”)                  2,864,283,604.54                1,699,248,092.64
   Less: Income tax expenses                                             339,419,273.87                 199,335,651.34
 IV. Net profit (net loss is indicated with “-”)                       2,524,864,330.67                1,499,912,441.30
   (I) Net profit from continuing operations (net loss is
 indicated with “-”)
   (II) Net profit from discontinued operations (net loss is
 indicated with “-”)
 V. Other comprehensive income, net of tax                                   747,046.88                   -5,825,439.28
      (I) Other comprehensive income that cannot be
                                                                          -1,680,417.88                    2,004,091.79
 reclassified into profits or losses
 benefit plan
                                                                          -1,680,417.88                    2,004,091.79
 reclassified into profits or losses under the equity method
 investments
      (II) Other comprehensive income that will be reclassified
 into profits or losses
 into profits or losses under the equity method
 comprehensive income
 investments
 denominated in foreign currencies
 VI. Total comprehensive income                                        2,525,611,377.55                1,494,087,002.02
 VII. Earnings per share
   (I) Basic earnings per share
   (II) Diluted earnings per share
                                                                                                             Unit: RMB
                                  Item                                H1 2025                        H1 2024
 I. Cash flows from operating activities:
   Cash received from sales of goods or rendering of services           23,618,604,701.00             22,091,374,463.95
   Net increase in customer deposits and placements from
financial institutions
  Net increase in borrowings from central bank
  Net increase in placements from other financial institutions
  Cash received from premiums of original insurance contracts
  Net cash received from reinsurance business
  Net increase in deposits of the insured and investment
  Cash received from interest, fees and commissions
   Net increase in placements from banks and other financial
institutions
  Net increase in repurchase business funds
  Net cash received from acting trading of securities
  Receipts from tax refunds                                                   3,375,249.41                  5,182,541.29
  Other cash receipts related to operating activities                       380,592,063.79               355,397,604.71
Subtotal of cash inflows from operating activities                       24,002,572,014.20             22,451,954,609.95
  Cash paid for goods purchased and services received                    15,188,614,073.94             15,211,108,311.76
  Net increase in loans and advances to customers
   Net increase in deposits with central bank and other financial
institutions
  Cash paid for claim settlements on original insurance contract
   Net increase in placements to banks and other financial
institutions
  Cash paid for interest, fees and commissions
  Cash paid for policy dividends
  Cash paid to and on behalf of employees                                 1,531,166,171.38              1,450,599,844.70
  Payments of all types of taxes                                          1,479,024,101.67              1,217,056,511.47
  Other cash paid relating to operating activities                        1,842,580,464.44              1,311,572,550.03
Subtotal of cash outflows from operating activities                      20,041,384,811.43             19,190,337,217.96
Net cash flows from operating activities                                  3,961,187,202.77              3,261,617,391.99
II. Cash flows from investment activities:
  Cash received from disposal of investments                              2,345,628,996.48                  3,145,988.51
  Cash received from returns on investments                                  38,011,539.40                69,197,636.37
  Net cash received from disposal of fixed assets, intangible
assets and other long-term assets
  Net cash received from disposal of subsidiaries and other
business units
  Other cash received relating to investment activities                     145,116,700.00              3,807,040,500.00
Subtotal of cash inflows from investment activities                       2,531,420,210.39              3,879,646,690.27
  Cash paid for acquisition of fixed assets, intangible assets and
other long-term assets
  Cash paid for acquisition of investments                                2,800,040,000.00               900,000,000.00
  Net increase in pledged loans
  Net cash paid for acquisition of subsidiaries and other business
units
   Other cash paid relating to investment activities                       482,620,900.00              2,936,895,000.00
 Subtotal of cash outflows from investment activities                    3,486,707,527.53              4,085,229,378.59
 Net cash flows from investment activities                                -955,287,317.14               -205,582,688.32
 III. Cash flows from financing activities:
   Cash received from absorption of investments                             84,483,323.35
   Including: Cash received from subsidiaries’ absorbing
 minority shareholder investment
   Cash received from borrowings                                            10,169,668.64              1,486,779,951.02
   Other cash received relating to financing activities                     39,062,080.04                40,525,603.23
 Subtotal of cash inflows from financing activities                        133,715,072.03              1,527,305,554.25
   Cash payments for settlement of debts                                   421,749,695.51               869,283,674.87
   Cash payments for distribution of dividends and profits or
 repayment of interest
   Including: Dividends and profits paid to minority shareholders
 by subsidiaries
   Other cash payments relating to financing activities                     92,492,403.17                72,018,152.38
 Subtotal of cash outflows from financing activities                     2,717,556,950.46              4,672,820,483.22
 Net cash flow from financing activities                                -2,583,841,878.43             -3,145,514,928.97
 IV. Effect of foreign exchange rate changes on cash and cash
                                                                            -5,088,619.22                    -48,577.76
 equivalents
 V. Net increase in cash and cash equivalents                              416,969,387.98                -89,528,803.06
   Plus: Opening balance of cash and cash equivalents                   10,275,529,575.34             14,151,765,468.49
 VI. Closing balance of cash and cash equivalents                       10,692,498,963.32             14,062,236,665.43
                                                                                                             Unit: RMB
                                    Item                                 H1 2025                     H1 2024
 I. Cash flows from operating activities:
   Cash received from sales of goods or rendering of services             5,478,720,727.93             4,211,532,161.23
   Receipts from tax refunds
   Other cash receipts related to operating activities                    3,202,527,946.76             2,318,428,479.99
 Subtotal of cash inflows from operating activities                       8,681,248,674.69             6,529,960,641.22
   Cash paid for goods purchased and services received                      955,466,642.34              920,909,291.39
   Cash paid to and on behalf of employees                                  715,770,512.83              671,012,577.79
   Payments of all types of taxes                                           741,623,236.23              426,048,880.64
   Other cash paid relating to operating activities                       2,981,032,782.60             3,435,877,770.62
 Subtotal of cash outflows from operating activities                      5,393,893,174.00             5,453,848,520.44
 Net cash flows from operating activities                                 3,287,355,500.69             1,076,112,120.78
 II. Cash flows from investment activities:
  Cash received from disposal of investments                                 2,100,000,000.00               10,000,000.00
  Cash received from returns on investments                                     27,547,530.21               69,186,661.37
  Net cash received from disposal of fixed assets, intangible assets
and other long-term assets
  Net cash received from disposal of subsidiaries and other business
units
  Other cash received relating to investment activities                        108,199,500.00             3,806,540,500.00
Subtotal of cash inflows from investment activities                          2,235,747,030.21             3,885,941,924.15
  Cash paid for acquisition of fixed assets, intangible assets and
other long-term assets
  Cash paid for acquisition of investments                                   2,800,000,000.00              900,000,000.00
  Net cash paid for acquisition of subsidiaries and other business
units
  Other cash paid relating to investment activities                            272,043,000.00             2,936,395,000.00
Subtotal of cash outflows from investment activities                         3,135,359,121.69             3,949,836,479.45
Net cash flows from investment activities                                     -899,612,091.48               -63,894,555.30
III. Cash flows from financing activities:
  Cash received from absorption of investments
  Cash received from borrowings                                                                           1,247,553,068.31
  Other cash received relating to financing activities                          39,062,080.04               40,525,603.23
Subtotal of cash inflows from financing activities                              39,062,080.04             1,288,078,671.54
  Cash payments for settlement of debts                                        400,000,000.00               19,000,000.00
  Cash payments for distribution of dividends and profits or
repayment of interest
  Other cash payments relating to financing activities                          56,402,942.56               31,287,137.53
Subtotal of cash outflows from financing activities                          2,650,763,119.74             3,757,538,477.67
Net cash flow from financing activities                                     -2,611,701,039.70            -2,469,459,806.13
IV. Effect of foreign exchange rate changes on cash and cash
                                                                                  -426,505.07                  -108,231.17
equivalents
V. Net increase in cash and cash equivalents                                  -224,384,135.56            -1,457,350,471.82
  Plus: Opening balance of cash and cash equivalents                         7,795,079,954.83            11,541,299,802.72
VI. Closing balance of cash and cash equivalents                             7,570,695,819.27            10,083,949,330.90
                             Amount for the current period
                                                                                                                                                                                                                                                            Unit: RMB
                                                                                                                                                              H1 2025
                                                                                                                      Owner’s equity attributable to parent company
             Item
                                                                                                                                                                                                                                                             Minority
                                                        Other equity instruments                                                         Other                                              Provision                                                                         Total owners’ equity
                                                                                                                Less: Treasury                           Special                                                                                             interests
                                Share capital                                               Capital reserves                         comprehensive                      Surplus reserves   for general   Undisturbed profits   Others      Subtotal
                                                  Preferred     Perpetual                                           stock                                reserves
                                                                                   Others                                               income                                                 risk
                                                   shares        bonds
I. Closing balance of the
previous year
    Plus: Changes in
accounting policies
           Correction of
errors in the prior period
            Others
II. Opening balance of the
current period
III. Increase/decrease for
the period (decrease is                                                                         52,836,059.54                            3,258,451.54                                                      1,518,560,118.56              1,574,654,629.64   60,234,443.96        1,634,889,073.60
indicated with “-”)
(I) Total comprehensive
income
(II) Contribution and
withdrawal of capital by                                                                        37,009,868.76                                                                                                                              37,009,868.76    47,191,128.53           84,200,997.29
owners
invested by owners
holders of other equity                                                                                                                                                                                                                                                                      0.00
instruments
payment credited to                                                                                                                                                                                                                                                                          0.00
owners’ equity
(III) Profit distribution                                                                                                                                                                                 -2,114,351,184.56             -2,114,351,184.56                       -2,114,351,184.56
reserves
risk provision
                                                                                                          -2,114,351,184.56        -2,114,351,184.56                   -2,114,351,184.56
(or shareholders)
(IV) Internal carry-over of
owner’s equity
reserves to capital (or                                                                                                                                                             0.00
share capital)
reserves to capital (or                                                                                                                                                             0.00
share capital)
surplus reserves
benefit plan carried
forward to retained
earnings
income carried forward to                                                                                                                                                           0.00
retained earnings
(V) Special reserves                                                                                                                                                                0.00
period
(VI) Others                                         15,826,190.78                                                                     15,826,190.78                       15,826,190.78
IV. Closing balance for
the period
                           Amount for the previous year
                                                                                                                                                                                                                                              Unit: RMB
                                                                                                                                                H1 2024
                                                                                                          Owner’s equity attributable to parent company
      Item                                    Other equity instruments                                                                                                                                                                         Minority         Total owners’
                                                                                                                             Other                                            Provision
                                                                                                      Less: Treasury                          Special                                                                                          interests           equity
                      Share capital     Preferred     Perpetual                   Capital reserves                       comprehensive                    Surplus reserves   for general   Undisturbed profits   Others      Subtotal
                                                                         Others                           stock                              reserves
                                         shares        bonds                                                                income                                               risk
I. Closing
balance of the       1,796,862,549.00                                             18,246,619,742.09    707,428,892.15      -89,538,172.13                 2,530,458,968.58                   18,102,147,836.12            39,879,122,031.51   26,238,350.71     39,905,360,382.22
previous year
     Plus:
Changes in
accounting
policies
           Correct
ion of errors in
the prior period
            Others
II. Opening
balance of the       1,796,862,549.00                                             18,246,619,742.09    707,428,892.15      -89,538,172.13                 2,530,458,968.58                   18,102,147,836.12            39,879,122,031.51   26,238,350.71     39,905,360,382.22
current period
III.
Increase/decreas
e for the period
                       -12,599,946.00                                               -609,470,918.61    -707,428,892.15     -11,725,184.18                                                    -1,120,808,450.36            -1,047,175,607.00    7,899,787.05     -1,039,275,819.95
(decrease is
indicated with
“-”)
(I) Total
comprehensive                                                                         15,534,263.30                         -8,367,865.60                                                     4,749,415,499.55             4,756,581,897.25    1,480,373.28      4,758,062,270.53
income
(II) Contribution
and withdrawal
                       -12,599,946.00                                               -694,828,946.15    -707,428,892.15
of capital by
owners
shares invested
by owners
invested by
holders of other
equity
instruments
share payment
credited to
owners’ equity
(III) Profit
                                                                                                                                                                                             -5,870,223,949.91            -5,870,223,949.91   -8,040,928.52     -5,878,264,878.43
distribution
surplus reserves
general risk
provision
to owners (or                                                                                    -5,870,223,949.91         -5,870,223,949.91   -8,040,928.52    -5,878,264,878.43
shareholders)
(IV) Internal
carry-over of
owner’s equity
capital reserves
to capital (or
share capital)
surplus reserves
to capital (or
share capital)
with surplus
reserves
defined benefit
plan carried
forward to
retained earnings
comprehensive
income carried
forward to
retained
earnings
(V) Special
reserves
the period
the period
(VI) Others                                69,823,764.24      -3,357,318.58                                                   66,466,445.66    14,460,342.29       80,926,787.95
IV. Closing
balance for the      1,784,262,603.00   17,637,148,823.48   -101,263,356.31   2,530,458,968.58   16,981,339,385.76         38,831,946,424.51   34,138,137.76    38,866,084,562.27
period
     Amount for the current period
                                                                                                                                                                                                                            Unit: RMB
                                                                                                                                          H1 2025
              Item                                               Other equity instruments                                                       Other
                                                                                                                         Less: Treasury                           Special                           Undisturbed
                                         Share capital                                               Capital reserves                       comprehensive                      Surplus reserves                        Others   Total owners’ equity
                                                            Preferred      Perpetual                                         stock                               reserves                             profits
                                                                                            Others                                             income
                                                             shares         bonds
 I. Closing balance of the previous
 year
      Plus: Changes in accounting
 policies
            Correction of errors in
 the prior period
             Others
 II. Opening balance of the current
 period
 III. Increase/decrease for the period
 (decrease is indicated with “-”)
 (I) Total comprehensive income                                                                                                                     747,046.88                                     2,524,864,330.67                 2,525,611,377.55
 (II) Contribution and withdrawal of
 capital by owners
 owners
 other equity instruments
 credited to owners’ equity
 (III) Profit distribution                                                                                                                                                                         -2,114,351,184.56                -2,114,351,184.56
                                                                                                                                                                                                   -2,114,351,184.56                -2,114,351,184.56
 shareholders)
 (IV) Internal carry-over of owner’s
 equity
capital (or share capital)
capital (or share capital)
reserves
carried forward to retained earnings
carried forward to retained earnings
(V) Special reserves
(VI) Others                                                  15,826,190.78                                                                        15,826,190.78
IV. Closing balance for the period     1,784,262,603.00   17,855,366,339.20   -60,755,342.13       2,529,297,618.08   2,698,199,803.38         24,806,371,021.53
       Amount for the previous year
                                                                                                                                                                                                       Unit: RMB
                                                                                                                      H1 2024
                                                  Other equity instruments                                                Other
            Item                                                                                    Less: Treasury                      Special                                                      Total owners’
                             Share capital     Preferred   Perpetual            Capital reserves                      comprehensive                Surplus reserves   Undisturbed profits   Others
                                                                       Others                           stock                           reserves                                                        equity
                                                shares      bonds                                                        income
I. Closing balance of
the previous year
    Plus: Changes in
accounting policies
           Correction of
errors in the prior
period
            Others
II. Opening balance of
the current period
III. Increase/decrease
for the period (decrease      -12,599,946.00                                      -679,221,383.70   -707,428,892.15     -5,825,439.28                                   -2,206,000,985.13            -2,196,218,861.96
is indicated with “-”)
(I) Total comprehensive
                                                                                                                        -5,825,439.28                                    1,499,912,441.30             1,494,087,002.02
income
(II) Contribution and
withdrawal of capital         -12,599,946.00                                      -694,828,946.15   -707,428,892.15
by owners
invested by owners
holders of other equity
instruments
payment credited to
owners’ equity
(III) Profit distribution                                                                                                                                               -3,705,913,426.43            -3,705,913,426.43
surplus reserves
owners (or                                                                                                                                                              -3,705,913,426.43            -3,705,913,426.43
shareholders)
(IV) Internal carry-over
of owner’s equity
reserves to capital (or
share capital)
reserves to capital (or
share capital)
surplus reserves
benefit plan carried
forward to retained
earnings
income carried forward
to retained earnings
(V) Special reserves
period
period
(VI) Others                                     15,607,562.45                                                                      15,607,562.45
IV. Closing balance for
the period
III. Basic Information of the Company
     The registered address of Yunnan Baiyao Group Co., Ltd is No.3686 Yunnan Baiyao Street, Chenggong
District, Kunming, Yunnan Province. The Company is established as a joint-stock limited company with its head
office located at No.3686 Yunnan Baiyao Street, Chenggong District, Kunming, Yunnan Province.
     The Company was formerly known as Yunnan Baiyao Factory, which was established in June 1971. On May
Co., Ltd in the Document Yun Ti Gai [1993] No.48. The Company’s sponsors were Yunnan Baiyao Factory,
Yunnan Fudian Trust and Investment Company and Lianjiang International Trade Co., Ltd. On June 18, 1993,
the Economic System Reform Commission and the Planning Commission of Yunnan Province jointly issued the
Document Yun Ti Gai [1993] No.74 to approve the Company’s public offering of RMB 20 million of individual
shares (in the par value of the shares). On June 24, 1993, the Administration of State-owned Assets of Yunnan
Province issued the Document Yun Guo Zi Zi (1993) No.37 to confirm the appraisal results of Yunnan Baiyao
Factory and decided to set up RMB 40 million of national capital stock, amounting to 40 million shares. Yunnan
Baiyao Industrial Co., Ltd was approved by CSRC under the Document Zheng Jian Fa Shen Zi (1993) No.55 to
issue 20 million RMB-denominated ordinary shares to the public. Yunnan Baiyao issued 20 million shares to the
public in November 1993, of which 18 million shares were issued to the public individuals and 2 million shares
to the Company’s internal employees.
     On November 30, 1993, the Company was registered as a joint-stock limited company with the
Administration for Industry and Commerce of Yunnan Province, and on December 15, 1993, the public shares
issued by the Company were listed on the Shenzhen Stock Exchange, with a total share capital of 80 million
shares and a stock code of “000538.”
     In accordance with the resolutions passed at the third Extraordinary General Meeting of the fifth Board of
Directors of the Company in 2008 on August 11, 2008, and at the first Extraordinary General Meeting of the
Company in 2008 on August 27, 2008, and the approval by the CSRC on the Document (2008) No.1411 Reply on
Approving the Private Issuance of Shares of Yunnan Baiyao Group Co., Ltd, the Company issued 50,000,000 new
shares to Ping An Life Insurance Company of China Limited in a private offering, raising funds of RMB
Company increased from 484,051,138 shares to 534,051,138 shares after the implementation of the above
private offerings.
     In accordance with the 2009 Annual Equity Distribution Plan approved at the General Meeting of the Company
in May 2010, 3 shares were issued to all shareholders from the capital reserve as a bonus for every 10 shares held.
The Company’s share capital amounted to 534,051,138 shares prior to the distribution, and the total share capital
increased to 694,266,479 shares after the distribution.
     The 2013 Annual General Meeting was held on May 8, 2014, and in accordance with the resolution of the
meeting and the amended articles of association, the shareholders of the Company increased the registered capital
by RMB 347,133,239.00. The newly registered capital would be increased by the distribution of 5 bonus shares for
every 10 shares to all shareholders based on the Company’s existing total share capital of 694,266,479 shares. After
the change, the share capital of the Company increased from 694,266,479 shares to 1,041,399,718 shares.
     The Company underwent a merger and overall listing with Baiyao Holdings by issuing shares to three
shareholders of Baiyao Holdings: SASAC of Yunnan Province, New Huadu and Jiangsu Yuyue. This merger and
overall listing were successfully completed on June 1, 2019, with the Company as the existing entity. As a result,
the Company acquired all the assets, liabilities, businesses, contracts, and other rights and obligations of Baiyao
Holdings. Following the completion of the transaction, the 432,426,597 shares of the listed company previously
held by Baiyao Holdings were canceled. The merger and overall listing brought in a newly registered capital of
RMB 236,003,599.00, and the Company’s total share capital amounted to RMB 1,277,403,317.00 after this change.
A total of 236,003,599 newly issued shares subject to trading moratorium were issued, with a listing date of July 3,
Yunnan Province and New Huadu with its acting-in-concert parties, were equally the largest shareholder of the
Company, and neither of them obtained control over the Company.
     On May 22, 2020, SASAC of Yunnan Province transferred its 321,160,222 shares of the Company to State-
owned Equity Management Company at nil consideration. Upon completion of this transfer, State-owned Equity
Management Company and New Huadu with its acting-in-concert parties, were equally the largest shareholder of
the Company, and there was no change in the Company’s situation of not having a de facto controller or controlling
shareholder.
     On December 8, 2021, SASAC of Yunnan Province transferred 100% of its shares of State-owned Equity
Management Company into Yunnan Investment Group. After the equity transfer, Yunnan Investment Group held
of the total share capital of the Company. State-owned Equity Management Company and New Huadu with its acting-
in-concert parties, were equally the largest shareholder of the Company, and there was no change in the Company’s
situation of not having a de facto controller or controlling shareholder.
     On April 20, 2022, the Company’s 2021 Annual Equity Distribution Plan had been considered and approved
at the Company’s 2021 Annual General Meeting, and the details of 2021 Annual Equity Distribution Plan were as
follows: Based on the total share capital on the equity registration date when the distribution plan was implemented
in the future, a cash dividend of RMB 16.00 (including tax) for every 10 shares and 4.00 bonus shares (including
tax) for every 10 shares would be distributed to all shareholders, and there would be no conversion of share capital
from the capital reserve. On April 21, 2020, the fourth session of the ninth Board of Directors of the Company in
and approved the Proposal on Granting Stock Options (Initially Granted Part) to Incentive Participants of the 2020
Equity Incentive Plan. As of December 31, 2022, the Company had completed distributing dividends of
   On April 23, 2024, the Company disclosed the Announcement on Completion of Cancellation of the
Repurchased Shares and Changes in Shares (Announcement No. 2024-21). The Company completed the
cancellation of the aforesaid 12,599,946 repurchased shares at the Shenzhen Branch of China Securities Depository
and Clearing Corporation Limited on April 19, 2024. Upon completion of the cancellation of the shares repurchased,
the total number of shares of the Company was 1,784,262,603.00. The shares repurchased for cancellation will not
have a material impact on the Company’s financial condition and operating results.
     As of June 30, 2025, the Company has a total capital of 1,784,262,603 shares, with 0 shares in treasury. The
situation that the Company has no de facto controller and no controlling shareholder remain unchanged.
     The business nature and operating activities of the Company and its subsidiaries (collectively referred to as
the “Group”) mainly include: R&D, manufacturing, and sales of chemical APIs, chemical preparations, Chinese
patent medicines, TCM materials, biological products, medical devices, healthcare food, food, beverages, special
labor protection products, non-household textile products, daily chemical products, cosmetics, outdoor products;
Sales of rubber pastes, plasters, disinfectant products, electronic and digital products; Information technology,
science and technology and economic and technological consulting services; Import and export of goods; Property
operation and management (carrying out business activities with qualification certificates), wholesale and retail of
drugs, logistics and distribution, etc (For items that require approval according to law, business activities of these
projects can only be carried out after approval by relevant departments).
the Company dated August 28, 2025.
     As of June 30, 2025, there were 114 subsidiaries and structured entities included in the scope of the Group’s
consolidated financial statements. For details, please refer to Note IX “Interest in Other Entities.” The Group had
please refer to Note IX “Changes in the Consolidation Scope.
IV. Basis for Preparation of Financial Statements
     The financial statements of the Group are prepared on the basis of going concern assumptions, based on actual
transactions and events that occur and in accordance with the Accounting Standards for Business Enterprises - Basic
Standards issued by the Ministry of Finance (issued by Decree No. 33 of the Ministry of Finance, revised by Decree
No. 76 of the Ministry of Finance), 40 specific accounting standards, Guidelines for the Application of Accounting
Standards for Business Enterprises, interpretations of Accounting Standards for Business Enterprises and other
relevant provisions promulgated and revised on and after February 15, 2006 (collectively “Accounting Standards
for Business Enterprises” or “ASBEs”), as well the disclosure provisions of the Rules No.15 for Governing the
Disclosure of Information by Companies Issuing Public Securities - General Provisions for Financial Reporting
(Revised in 2023) issued by CSRC.
     In accordance with the relevant provisions of the Accounting Standards for Business Enterprises, the Group’s
accounting is based on the accrual basis. Except for certain financial instruments, these financial statements are
prepared at historical cost. In case of asset impairment, provision for impairment would be made according to the
relevant regulations.
     The Company and the Group evaluated their abilities to continue as a going concern for at least 12 months
from the end of the reporting period and there are no material matters affecting their abilities to continue as a going
concern.
V．Significant Accounting Policies and Accounting Estimates
Notes on specific accounting policies and accounting estimates:
     Based on the actual production and operation characteristics and in accordance with the provisions of relevant
accounting standards for enterprises, the Group has formulated a number of specific accounting policies and
accounting estimates for transactions and matters such as revenue recognition and R&D expenses. For details, see
the descriptions under Section 31 “Revenue” under this Note V. For the descriptions of significant accounting
judgments and estimates made by the management, please refer to Section 36 “Other Significant Accounting
Policies and Accounting Estimates” under this Note V.
     The financial statements prepared by the Company are in compliance with the requirements of the Accounting
Standards for Business Enterprises (ASBEs), and have reflected truly and completely such relevant information as
the financial positions of the Company and the Group as of June 30, 2025 as well as the business results and cash
flows of the Company and the Group for the first half of 2025. In addition, all significant aspects of the financial
statements of the Company and the Group also comply with the disclosure requirements about the financial
statements and their notes in the Rules No.15 for Governing the Disclosure of Information by Companies Issuing
Public Securities - General Provisions for Financial Reporting as amended by the CSRC in 2023.
     The Group’s accounting periods are divided into annual and interim periods. An interim period refers to a
reporting period less than a full accounting year. The accounting year of the Group is the calendar year that starts
from January 1 and ends on December 31.
     The normal operating cycle refers to the period from purchasing the assets for processing to realizing the cash
or cash equivalents. The operating cycle of the Group consists of 12 months which is the standard of the
classification for the liquidity of the assets and liabilities.
     RMB is the currency used in the major economic environment where the Company and its domestic
subsidiaries operate. The reporting currency of the Company and its domestic subsidiaries is RMB. The Company’s
foreign subsidiaries select HKD as their reporting currencies based on the currency of the primary economic
environment in which they operate. The currency used by the Group in preparing the financial statements is RMB.
Applicable            □Not applicable
                              Item                                                       Materiality standards
                                                                  The single provision amount accounts for more than 10% of the
Significant accounts receivable, bad debt provisions to be
                                                                  total amount of bad debt provision for various types of receivables
recovered or reversed
                                                                  and the amount is greater than RMB 5 million
Actual write-off of significant receivables                       The value of a single item is greater than RMB 5 million
                                                                  Projects with budgets exceeding RMB 50 million or deemed to be
Significant construction in progress
                                                                  of significance
                                                                  The amount of a single advance receipt with an age of more than 1
Significant advance receipts
                                                                  year is greater than RMB 5 million
                                                                  A single contractual liability with an age of more than 1 year
Significant contract liabilities                                  accounts for more than 10% of the total contractual liabilities and
                                                                  the amount is greater than RMB 100 million
                                                                  The amount of a single account payable is greater than RMB 5
Significant accounts payable aged over one year or overdue
                                                                  million
Significant other payables aged over one year or overdue          The amount of a single item is greater than RMB 5 million
Significant dividends payable outstanding for over one year       The amount of a single item is greater than RMB 100 million
Receipts and payments of significant cash related to investment
                                                                  The amount of a single item is greater than RMB 100 million
activities
Significant offshore operating entity                             The net assets of the economic entity exceed RMB 100 million
Significant structured entity                                     The net assets of the structured entity exceed RMB 2 million
Significant non-wholly-owned subsidiaries                         The net assets of the subsidiary exceed RMB 100 million
Significant capitalized R&D projects                              The year-end balance of a single project exceeds RMB 50 million
                                                                  The amount of a single project accounts for more than 20% of the
Significant outsourced project under research
                                                                  total R&D investment
                                                                  A single investment activity accounts for more than 10% of the
Significant investment activities                                 total cash inflow or outflow related to the investment activities and
                                                                  the amount is greater than RMB 1 billion
                                                                  The book value of long-term equity investment in a single investee
                                                                  accounts for more than 5% of the Group’s net assets and the
Significant joint ventures or associates                          amount is greater than RMB 1 billion, or the investment profit and
                                                                  loss under the long-term equity investment equity method accounts
                                                                  for more than 10% of the Group’s consolidated net profit
                                                                  The net assets of the subsidiary account for more than 10% of the
                                                                  Group’s net assets, or the net profits of subsidiary account for more
Significant subsidiaries
                                                                  than 10% of the Group’s consolidated profits, and the subsidiaries
                                                                  with significant strategic position
     A business combination refers to the transaction or matter in which one reporting subject formed due to the
combination of two or above separate entities. A business combination can be classified as the combination under
common control and not under common control.
      (1) Business combination under common control
     A business combination under common control is a business combination in which all of the combining entities
are ultimately controlled by the same party or parties both before and after the combination, and that control is not
transitory. For a business combination under common control, the party that obtains the control of the other parties
on the combination date is the acquirer, and other parties involving in the business combination are the acquirees.
The combination date is the date on which the acquirer effectively obtains the control of the acquirees.
     Assets and liabilities that are obtained by the acquirer in a business combination shall be measured at their book
value at the combination date as recorded by the acquirees. The difference between the book value of the net assets
obtained and the book value of the consideration paid by the acquirer for the combination (or the aggregate par value
of the issued shares) shall be adjusted to share premium under capital reserve (or capital premium). If the share
premium under capital reserve (or capital premium) is not sufficient to absorb the difference, any excess shall be
adjusted against retained earnings.
     Expenses that are directly attributable to the business combination by the acquirer are charged to the current
profits and losses in which they are incurred.
     (2) Business combination not under common control
     A business combination not under common control is a business combination in which all of the combining
entities are not ultimately controlled by the same party or parties both before and after the combination. For a
business combination not under common control, the party that obtains the control of the other parties on the
acquisition date is the acquirer; other parties involving in the business combination are the acquirees. The acquisition
date is the date on which the acquirer effectively obtains control of the acquirees.
     For a business combination not under common control, the cost of business combination is the fair value of
assets paid, liabilities incurred or undertaken, and equity securities issued by the acquirer for obtaining the control
of the acquirees at the acquisition date. Expenses that are attributable to the business combination such as audit fees,
legal services fees, consultancy fees and other administration expenses incurred by the Company as acquirer are
expensed in the current profits and losses in which they are incurred. Transaction fees of equity securities or debt
securities issued by the acquirer as consideration for a business combination are included in the initially recognized
amount of equity securities or debt securities. Contingent consideration involved is recorded as the combination cost
at its fair value on the acquisition date. Should any new or further evidence in relation to the circumstances existing
on the acquisition date arise within 12 months after the acquisition date, making it necessary to adjust the contingent
consideration, the goodwill arising from the business combination shall be adjusted accordingly. The cost of
combination incurred and identifiable net assets obtained by the acquirer in a business combination are measured at
fair value on the acquisition date. Where the cost of the combination exceeds the acquirer’s interest in the fair value
of the acquiree’s identifiable net assets on the acquisition date, the difference is recognized as goodwill; Where the
cost of combination is lower than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets on
the acquisition date, the difference is recognized in current profits and losses after a review of measurement for the
fair value of identifiable assets, liabilities and contingent liabilities of the acquiree and the combination cost.
     In relation to the deductible temporary difference acquired from the acquiree, which was not recognized as
deferred tax assets due to non-fulfillment of the recognition criteria at the date of the acquisition, if new or further
information that is obtained within 12 months after the acquisition date indicates that related conditions at the
acquisition date already existed, and that the realization of the economic benefits brought by the deductible
temporary difference of the acquiree on the acquisition date can be expected, the relevant deferred tax assets shall
be recognized and goodwill shall be deducted accordingly. When the amount of goodwill is less than the deferred
tax assets that shall be recognized, the difference shall be recognized in the current profits and losses. Except for the
above circumstances, deferred tax assets in relation to business combination are recognized in the current profits
and losses.
     For a business combination involving entities not under common control that is achieved in stages, the
Company shall determine whether the business combination shall be treated as “a bundle of transactions” in
accordance with the determination standards as contained in the Circular on the Publishment of Interpretation No.5
on Accounting Standards for Business Enterprises Issued by the Ministry of Finance (Finance and Taxation (2012)
No. 19) and Section 51 of Accounting Standards for Business Enterprises No.33 - Consolidated Financial
Statements (See Item (2) of Section 6 “Preparation of the consolidated financial statements” under this Note V).
Where the business combination is treated as “a bundle of transactions,” the business combination shall be accounted
for in accordance with the previous paragraphs and Section 17 “Long-term equity investments” of this Note V;
where the business combination does not fall within “a bundle of transactions,” the business combination in the
Company’s and the consolidated financial statements shall be accounted for as follows:
     In the Company’s financial statements, the initial cost of the investment shall be the sum of the book value of
equity investment held in the acquiree prior to the acquisition date and the amount of additional investment made to
the acquiree at the acquisition date. Other comprehensive income relating to the equity interest held in the acquiree
prior to the acquisition date shall be, upon disposal of the investment, accounted for in accordance with the same
basis as that the acquiree adopts in directly disposing of relevant assets or liabilities.
     In the consolidated financial statements, the equity interest held in the acquiree prior to the acquisition date is
re-measured according to its fair value at the acquisition date; the difference between the fair value and the book
value is recognized as investment income for the current period. Other comprehensive income relating to the equity
interest held in the acquiree prior to the acquisition date shall be accounted for in accordance with the same basis as
that the acquiree adopts in directly disposing of relevant assets or liabilities.
     (1) Criteria for the recognition of scope of consolidated financial statements
     The scope of consolidation shall be determined based on the concept of control. Control means that the Group
has power over the investee, enjoys variable returns through its participation in the investee’s related activities, and
has the ability to use its power over the investee to influence the amount of its returns. The consolidated financial
statements comprise the financial statements of the Company and all of its subsidiaries, which are defined as those
entities controlled by the Group.
     Once any change in the facts and circumstances arises which leads to a change in the elements involved in the
definition of control, the Group will conduct an assessment.
     (2) Preparation of consolidated financial statements
     Subsidiaries are consolidated from the date on which the Group obtains their net assets and actual control over
their operating decisions, and are deconsolidated from the date when such control ceases. For subsidiaries being
disposed of, the business results and cash flows prior to the date of disposal are duly included in the consolidated
income statement and consolidated cash flow statement; for subsidiaries disposed of during the period, the opening
balances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business
combination not under common control, their operating results and cash flows subsequent to the acquisition date
are included in the consolidated income statement and consolidated cash flow statement, and the opening balances
and comparative figures in the consolidated financial statements would not be restated. For subsidiaries acquired
from a business combination under common control and acquirees from a merger by absorption, their operating
results and cash flows from the date of commencement of the period in which the combination occurred to the date
of combination are included in the consolidated income statement and consolidated cash flow statement, and the
comparative figures in the consolidated financial statements would be restated.
     In preparing the consolidated financial statements, where the accounting policies or the accounting periods are
inconsistent between the Company and subsidiaries, the financial statements of subsidiaries are adjusted in
accordance with the accounting policies and accounting period of the Company. For subsidiaries acquired from a
business combination involving enterprises not under common control, the financial statements of the subsidiaries
are adjusted based on the fair value of the identifiable net assets at the acquisition date.
     All significant intra-group balances, transactions and unrealized profits are offset in preparing the consolidated
financial statements.
     The portion of a subsidiary’s equity and the portion of a subsidiary’s net profits and losses for the period not
attributable to the Company are recognized as minority interests and profits and losses attributable to minority
interests respectively, which are presented under shareholders’ equity and net profit separately, in the consolidated
financial statement. A subsidiary’s net current profits and losses attributable to minority interests is recognized as
“share of profits and losses of minority interests” under net profit in the consolidated income statement. When the
amount of a subsidiary’s loss attributable to the minority shareholders exceeds the minority shareholders’ share of
the opening balance of shareholders’ equity of the subsidiary, the excess is deducted from the minority interests.
     In event of loss of control over a former subsidiary due to disposal of certain equity investments or other reasons,
any retained equity is re-measured at its fair value on the date when the control is lost. The surplus of the aggregate
considerations received upon disposal of equity plus the fair value of any retained equity less the share of net assets
in the former subsidiary calculated cumulatively from the acquisition date based on the original shareholding
percentage is included in the investment income for the period when the control is lost. Other comprehensive income
related to the equity investment in the former subsidiary shall be accounted for on the same basis at the time of loss
of control as the subsidiary directly disposed of the related asset or liability. Then, the remaining equity shall be
measured subsequently in accordance with the Accounting Standards for Business Enterprises No. 2 - Long-term
Equity Investments or Accounting Standards for Business Enterprises No. 22 - The Recognition and Measurement
of Financial Instruments and other regulations. For details, please see Section 17 “Long-term equity investments”
or Section 11 “Financial instruments” under this Note V.
     For disposal of the Group’s equity investments in a subsidiary in phases through multiple transactions until
loss of control, it is determined based on whether such transactions should be regarded as a bundle of transactions.
If the terms, conditions and economic effects of all transactions are conducted for the purpose of disposing of the
equity investments in a subsidiary and meet the following one or more criteria, it is usually shown that such multiple
transactions are deemed as a bundle of transactions for accounting treatment: ① These transactions were entered
into at the same time or upon the consideration of the effects therebetween; ② These transactions can only generate
one complete business result when conducted all together; ③ The occurrence of one transaction depends on the
occurrence of at least one other transaction; and ④ One transaction alone is not economical, but is economical when
considered with other transactions. When the transactions do not constitute a bundle of transactions, each transaction
thereof shall be accounted in accordance with principles applicable to the “disposal of part of long-term equity
investments in a subsidiary that does not result in the loss of control” (please see Item (2) ④ of Section 17 “Long-
term equity investments” under this Note V for details) and “loss of control over a former subsidiary due to disposal
of certain equity investments or other reasons” (please see the preceding paragraph for details). If such transactions
fall under a bundle of transactions, those transactions are accounted for as one deal under which the subsidiary is
disposed of and control is lost. However, before the control over the subsidiary is lost, the surplus between
consideration received for each disposal and the value of corresponding share of net assets in the subsidiary entitled
by the investment underlying the disposal shall be recognized as other comprehensive income in the consolidated
financial statements, and, when control is lost, converted into investment income or loss for the period in which
control is lost.
     Joint venture arrangement means an arrangement under the common control of two or more parties. The Group
classifies the joint venture arrangement into joint operations and joint ventures based on the rights and obligations
it enjoys and assumes in the joint venture arrangement. Joint operation means a joint venture arrangement in which
the Group owns the assets and assumes the liabilities associated with the arrangement. Joint venture means a joint
venture arrangement in which the Group only has rights to the net assets of the arrangement.
     The Group’s investments in joint ventures are accounted for using the equity method and are treated in
accordance with the accounting policies described in Item (2) ② “Long-term equity investments accounted for
using the equity method” in Section 17 “Long-term equity investments” under this Note V.
     For the joint operations, the Group, as a joint venture party, recognizes the assets and liabilities separately held
by the Group, as well as the assets and liabilities jointly held by the Group in accordance with the Group’s share;
recognizes the income arising from the disposal of the Group’s share of joint operation output; recognizes the income
from the sale of outputs from joint operations based on the Group’s share; and recognizes the expenses incurred by
the Group alone and the expenses incurred based on the Group’s share in the joint operation.
     When the Group, as a joint venture party, invests in or sells assets to the joint venture (which do not constitute
a business, the same below), or purchases assets from the joint operation, the Group recognizes only those portions
of the profits and losses arising from the transaction that are attributable to other participants in the joint operation,
prior to the sale of such assets to a third party. In the event that such assets incur asset impairment losses in
accordance with the provisions of Accounting Standard for Enterprises No. 8 - Asset Impairment, the Group will
fully recognize such losses if the assets are invested or sold by the Group to the joint operation; In the case of assets
purchased by the Group from the joint operation, the Group will recognize such losses on the basis of its share of
commitment.
     Cash and cash equivalents of the Group include the cash on hand, deposits that can be used for payment at any
time, the investments that are held for a short period of time (generally maturing within three months from the date
of purchase) which are highly liquid, easily convertible to known amounts of cash, and having minimal risk of
changes in value.
     The method for determining the conversion exchange rate in foreign currency transactions
     Upon initial recognition, the foreign currency transactions of the Group are converted into the amount of
reporting currency according to the spot exchange rate of the trading day (usually referring to the median price of
the foreign exchange rate of the day published by the People’s Bank of China, the same below).
     (1) Translation of foreign currency monetary items and foreign currency non-monetary items
     On the balance sheet date, if the foreign currency monetary items are translated at the spot rate of the balance
sheet date, the resulting exchange difference, except for ① Exchange differences arising from special loans in
foreign currencies related to the acquisition and construction of assets eligible for capitalization, which shall be
treated in accordance with the principle of capitalization of borrowing costs; ② Exchange differences of hedging
instruments used to operate effective hedging of net investment abroad (this difference is included in other
comprehensive income and is not recognized as current profits and losses until the net investment is disposed of)
and ③ foreign currency monetary items classified as measured at fair value through other comprehensive income,
shall be recorded into current profits and losses, provided that exchange differences resulting from changes in other
book balances other than amortized costs (including impairment) shall be recorded in other comprehensive income.
     The non-monetary foreign currency items measured at historical cost shall be measured at the amount of
reporting currency that is translated into based on the spot rate on the transaction date. For non-monetary foreign
currency items measured at fair value, the exchange rate prevailing at the date when the fair value is determined is
used for translation, and the difference between the translated amount of the reporting currency and the original
amount of the reporting currency shall be treated as the change in fair value (including change of exchange rate) and
recorded in current profits and losses or recognized as other comprehensive income.
     (2) Translation of foreign currency financial statement
     Foreign currency financial statements of overseas operations are translated into RMB statements in the
following ways: The items of assets and liabilities in the balance sheet were translated at the spot exchange rate on
the balance sheet date. The shareholders’ equity items are translated at the spot rate at the time of occurrence except
for the “undistributed profit” items. The income and expense items in the income statement are converted using the
average exchange rate of the current period on the date of occurrence of the transaction. The undistributed profit at
the beginning of the year is the undistributed profit at the end of the year after the conversion of the previous year;
The undistributed profit at the end of the period is calculated and shown on the basis of each item of profit
distribution after translation; The difference between the total amount of asset items and liability items and
shareholders’ equity items after translation is treated as the difference in the translation of foreign currency
statements and recognized as other comprehensive income. Upon disposal of an overseas operation and loss of
control, the conversion difference of the foreign currency statement related to the overseas operation, as shown
under the shareholders’ equity item in the balance sheet, shall be transferred to the profits and losses of the disposal
of the current period in full or in proportion to the disposal of the overseas operation.
     Foreign currency cash flow and cash flow of overseas subsidiaries shall be translated at the spot exchange rate
in the period when the cash flow is generated. The effect of exchange rate changes on cash is presented separately
in the cash flow statement as an adjustment item.
     The figures for the beginning of the year and the actual figures for the previous year are presented in accordance
with the amounts of the financial statements of the previous year after translation.
     Upon the disposal of all the owners’ equity of the Group’s overseas operations or the loss of control over
overseas operations due to the disposal of part of the equity investment or other reasons, the translation difference
of the foreign currency statement related to the owners’ equity of the overseas operations attributable to the parent
company, as shown under the shareholders’ equity item in the balance sheet, shall be fully transferred to the profits
and losses of the disposal period.
     When part of the equity investment is disposed of or the proportion of overseas operating interest is reduced
for other reasons but the control of overseas operations is not lost, the difference in the translation of foreign currency
statements related to the disposal part of the overseas operation will be attributed to the minority shareholders’
equity and will not be transferred to the current profits and losses. Upon disposal of part of the equity of the overseas
operation as an associate or joint venture, the translation difference of the foreign currency statement related to the
overseas operation shall be transferred to the profits and losses of the disposal period in proportion to the disposal
of the overseas operation.
     If there are foreign currency monetary items that substantially constitute net investments in overseas operations,
the exchange difference resulting from changes in exchange rates shall be recognized as other comprehensive
income in the consolidated financial statements as “translation difference in foreign currency statements;” Upon
disposal of the overseas operations, it shall be included in the profits and losses of the disposal period.
     When the Group becomes a party to a financial instrument contract, it shall recognize a financial asset or
financial liability.
     (1) Classification, recognition and measurement of financial assets
     The Group has classified the financial assets as financial assets at amortized cost; financial assets at fair value
through other comprehensive income and financial assets at fair value through profits and losses based on the
business model for managing financial assets and the contractual cash flow characteristics of the financial assets.
     Financial assets are measured at fair value on initial recognition. For financial assets at fair value through profits
and losses, the related transaction costs are recognized directly in profits and losses; and for other categories of
financial assets, the related transaction costs are recognized in initial recognition amounts. For the accounts
receivable or notes receivable arising from the sale of products or the provision of services that do not contain or
take into account a significant financing component, the amount of consideration to which the Group is expected to
be entitled shall be taken as the initial recognition amount.
     ① Financial assets at amortized cost
     The Group’s business model of managing financial assets at amortized cost is aimed at the collection of
contractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent with the
basic borrowing arrangement, that is, the cash flows generated on a specific date are only payments of principal and
interest based on the outstanding principal amount. For such financial assets, the effective interest rate method is
used for subsequent measurement at amortized cost, and any profits or losses arising from amortization or
impairment is included in the current profits and losses.
    ② Financial assets at fair value through other comprehensive income
     The Group’s business model of managing such financial assets is aimed at the collection and disposal of
contractual cash flows, and the contractual cash flow characteristics of such financial assets are consistent with the
basic borrowing arrangement. The Group measures such financial assets at fair value and their changes are
recognized in other comprehensive income, but impairment losses or gains, exchange profits and losses and interest
income calculated under the effective interest rate method are recognized in current profits and losses.
     In addition, the Group has designated certain non-trading equity instrument investments as financial assets at
fair value through other comprehensive income. The Group recognizes the relevant dividend income of such
financial assets in current profits and losses and the fair value changes in other comprehensive income. Upon the
derecognition of the financial assets, the accumulated profits and losses previously recognized in other
comprehensive income are transferred from other comprehensive income to retained earnings and are not recognized
in the current profits and losses.
    ③ Financial assets at fair value through profits and losses
     The Group’s financial assets other than those at amortized cost and those at fair value through other
comprehensive income as described above are classified as financial assets at fair value through profits and losses.
In addition, at the time of initial recognition, in order to eliminate or significantly reduce accounting misalignments,
the Group designated certain financial assets as financial assets at fair value through profits and losses. Such
financial assets are subsequently measured at fair value, with changes in fair value recognized in the current profits
and losses.
     (2) Classification, recognition and measurement of financial liabilities
     Financial liabilities are classified as financial liabilities at fair value through profits and losses and other
financial liabilities at the time of initial recognition. For financial liabilities at fair value through profits and losses,
the related transaction costs are recognized directly in profits or losses, and for other financial liabilities, the related
transaction costs are recognized in their initial recognition amounts.
    ① Financial liabilities at fair value through profits and losses
     The financial liabilities at fair value through profits and losses include financial liabilities held for trading
(including derivatives that are financial liabilities) and those designated as financial liabilities at fair value through
profits and losses at the initial recognition.
     Financial liabilities held for trading (including derivatives that are financial liabilities) are subsequently
measured at fair value, with changes in fair value recognized in current profits and losses, except for those related
to hedge accounting.
     For those designated as financial liabilities at fair value through profits and losses, the change in fair value of
such liabilities caused by changes in the Group’s own credit risk is included in other comprehensive income, and
the cumulative change in its fair value caused by changes in its own credit risk included in other comprehensive
income is transferred to retained earnings when such liabilities are derecognized. Other changes in fair value are
included in current profits and losses. If the treatment of the effect of the change in the credit risk of the financial
liabilities in the manner described above would cause or widen the accounting mismatch in profits and losses, the
Group would recognize the full profits or losses of the financial liabilities (including the amount affected by the
change in the credit risk of the enterprise) in the current profits and losses.
    ② Other financial liabilities
     Financial liabilities other than those resulting from the transfer of financial assets that does not meet the
conditions for derecognition or continues to be involved in the transfer of financial assets, and other financial
liabilities excluding financial guarantee contracts are classified as financial liabilities at amortized cost, which are
subsequently measured at amortized cost, and the profits and losses resulting from the derecognition or amortization
are included in current profits and losses.
     (3) Recognition basis and measurement method for transfer of financial assets
     A financial asset is derecognized if it meets any of the following conditions: ① The contractual right to receive
the cash flow of the financial asset is terminated; ② The financial asset has been transferred, and substantially all
the risks and returns of ownership of the financial asset have been transferred to the transferee; ③ The financial
asset has been transferred, substantially all the risks and returns of ownership of the financial asset have neither been
transferred nor retained, but the control over the financial asset has been relinquished.
     If neither substantially all the risks and returns of ownership of a financial asset are transferred nor retained,
and the control over the financial asset is not relinquished, the underlying financial asset shall be recognized to the
extent of its continuing involvement in the transferred financial asset, and the related liability shall be recognized
accordingly. The extent of continued involvement in the transferred financial asset is the level of risk to which the
enterprise is exposed as a result of changes in the value of that financial asset.
     If the overall transfer of financial assets meets the conditions for derecognition, the difference between the
book value of the transferred financial assets and the consideration received as a result of the transfer and the
cumulative change in the fair value originally included in other comprehensive income is included in the current
profits and losses.
     If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferred
financial assets shall be apportioned between the portion derecognized and the portion not for derecognition
according to their relative fair value. The difference between the sum of the consideration received as a result of the
transfer and the cumulative changes in fair value originally included in other comprehensive income that should be
apportioned to the portion derecognized and the above-mentioned book value apportioned are recognized in current
profits and losses.
     If the Group sells the financial assets by recourse or makes endorsement transfer of the financial assets it holds,
it is necessary to determine whether virtually all risks and returns in the ownership of the financial asset have been
transferred. If the Group has transferred substantially all the risks and returns related to the ownership of a financial
asset to the transferee, the Group shall derecognize the financial asset. If substantially all the risks and returns related
to the ownership of a financial asset are retained, the financial assets shall not be derecognized. If substantially all
the risks and returns related to the ownership of the financial asset are neither transferred nor retained, whether the
enterprise retains control of the asset shall be determined and accounting treatment shall be made in accordance with
the principles described in the preceding paragraphs.
     (4) Derecognition of financial liabilities
     A financial liability (or a portion thereof) is derecognized when the present obligation is discharged. If an
agreement is entered into between the Group (the borrower) and the lender to replace the original financial liability
by assuming a new financial liability, and the contractual terms of the new financial liability are materially different
from those of the original financial liability, the original financial liability is derecognized and the new financial
liability is recognized at the same time. If the Group materially modifies the contractual terms of the original
financial liability (or part thereof), it shall derecognize the original financial liability and recognize a new financial
liability in accordance with the modified terms.
     If a financial liability is derecognized in whole or in part, the difference between the book value of the
derecognized portion and the consideration paid (including non-cash assets transferred or liabilities assumed) is
recognized in current profits and losses.
     (5) Offsetting of financial assets and financial liabilities
     When the Group has the legal rights to offset the financial assets and financial liabilities whose amounts have
been recognized, the legal rights are currently exercisable, and the Group plans to settle with net amount or realize
the financial asset and repay the financial liability simultaneously, the financial assets and financial liabilities can
be presented in the balance sheet with the net amount after they are mutually offset. Apart from this, financial assets
and financial liabilities shall be presented separately in the balance sheet and not be offset against each other.
     (6) Methods for determining the fair value of financial assets and financial liabilities
     Fair value is the price that a market participant would receive to sell an asset or pay to transfer a liability in an
orderly transaction occurring on the measurement date. Regarding the financial instruments for which there is an
active market, the Group uses quoted prices in an active market to determine their fair values. A quoted price in an
active market is a price that is readily available on a regular basis from an exchange, broker, trade association,
pricing service agency, etc., and represents the price of a market transaction that actually takes place in a fair trade.
If there is no active market for the financial instrument, the Group uses valuation techniques to determine its fair
value. The valuation techniques include reference to prices used in recent market transactions by the parties who are
familiar with the situation and willing to deal, reference to the current fair value of other substantially identical
financial instruments, the discounted cash flow method, and option pricing models. In the valuation, the Group will
adopt the valuation techniques applicable in the current situation and supported by sufficiently available data and
other information, select the input values that are consistent with the characteristics of the asset or liability
considered by market participants in the transaction of the relevant asset or liability, and give priority to the relevant
observable input values when possible. The non-observable input values will be used only when the relevant
observable input values are unavailable or not practicable to obtain.
     (7) Equity instruments
     Equity instruments are contracts that demonstrate ownership of the remaining interest in the Group’s assets
after deducting all liabilities. The Group’s issuance (including refinancing), repurchase, sale or cancellation of equity
instruments is treated as changes in equity, and the transaction expenses related to equity transactions are deducted
from equity. The Group does not recognize the changes in fair value of equity instruments.
     Dividends (including “interest” on instruments classified as equity instruments) distributed during the existence
of the Group’s equity instruments are treated as profit distributions.
     (8) Impairment of financial assets
     The financial assets for which the Group needs to recognize impairment losses are financial assets at amortized
cost, debt instruments at fair value through other comprehensive income, lease receivables, which mainly include
notes receivable, accounts receivable, receivables financing, other receivables, debt investments, other debt
investments, long-term receivables, etc. In addition, for contractual assets and certain financial guarantee contracts,
impairment provisions are made and credit impairment losses are recognized in accordance with the accounting
policies described in this section.
     ① Recognition of provision for impairment losses
     On the basis of expected credit losses, the Group makes an impairment provision and recognizes credit
impairment losses for each of the above items in accordance with its applicable expected credit losses measurement
method (general method or simplified method).
     Credit losses represent the difference between all contractual cash flows receivable under the contract and all
cash flows expected to be received by the Group, discounted at the original effective interest rate, i.e., the present
value of all cash shortfalls. Financial assets purchased or originated by the Group that are credit impaired shall be
discounted at the credit-adjusted effective interest rate of the financial assets.
     The general method of measurement of expected credit losses means that the Group assesses at each balance
sheet date whether the credit risk of financial assets (including contractual assets and other applicable items, the
same below) has increased significantly since the initial recognition. If the credit risk has increased significantly
since the initial recognition, the Group measures the loss provision at an amount equivalent to the expected credit
losses over the entire duration; If credit risk does not increase significantly since the initial recognition, the Group
measures the loss provision at an amount equivalent to expected credit losses over the next 12 months. The Group
will consider all the reasonable and evidence-based information, including forward-looking information, when
assessing expected credit losses.
     For financial instruments with low credit risk on the balance sheet date, the Group assumes that their credit risk
has not increased significantly since initial recognition, and measures the provision for losses based on expected
credit losses over the next 12 months.
     ② Criteria for determining whether credit risk has increased significantly since the initial recognition
     If the probability of default of a financial asset during the estimated duration determined on the balance sheet
date is significantly higher than the probability of default during the estimated duration determined at the time of
 initial recognition, it indicates that the credit risk of the financial asset has significantly increased. Except in
 exceptional circumstances, the Group uses the change in default risk occurring over the next 12 months as a
 reasonable estimate of the change in default risk occurring over the duration to determine whether credit risk has
 increased significantly since the initial recognition.
      ③ The portfolio-based approach to assessing expected credit risk
      The Group assesses credit risk individually for financial assets with significantly different credit risks, such as
 receivables that are in dispute with other parties or involved in litigation or arbitration; or where there are clear
 indications that the debtor is likely to be unable to meet its repayment obligations.
      Apart from financial assets that are individually assessed for credit risk, the Group classifies financial assets
 into different groups based on common risk characteristics and assesses credit risk on a portfolio basis.
      ④ Accounting treatment of impairment of financial assets
      At the end of the period, the Group will calculate the estimated credit losses of various financial assets, and if
 the estimated credit losses are greater than the book value of its current impairment provision, the difference is
 recognized as an impairment loss; If it is less than the book value of the current impairment provision, the difference
 is recognized as an impairment gain.
      ⑤ Determination of credit losses of various financial assets
      a. Notes receivable
      The Group measures the loss provision for notes receivable at the amount equivalent to expected credit losses
 in the entire duration. Based on the credit risk characteristics of notes receivable, they are divided into different
 portfolios:
                         Item                                             Basis for determining the portfolio
    Banker’s acceptance bill                          Banks with less credit risk in relation to acceptors
    Commercial acceptance bill                        Divided according to the acceptor’s credit risk
      b. Accounts receivable and contractual assets
      For the accounts receivable and contractual assets that do not have a significant financing component, the
 Group measures the loss provision at the amount equivalent to expected credit losses in the entire duration.
      For the accounts receivable, contractual assets and lease receivables that have a significant financing
 component, the Group chooses to always measure the loss provision at an amount equivalent to expected credit
 losses over the duration.
      Apart from the accounts receivable for single assessment of credit risk, they are divided into different portfolios
 based on their credit risk characteristics:
                  Item                                             Basis for determining the portfolio
   Related party within the consolidation This portfolio represents amounts receivable of the Company within the
scope                                     scope of consolidation.
   Account age portfolio                  The portfolio takes the age of receivables as the credit risk characteristics.    113
        Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the aging
 years of accounts receivable based on the principle of First Occurrence, First Recovery.
        Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separate
 impairment tests on accounts receivable with significantly different credit risk characteristics, such as significantly
 deteriorating credit status of the debtor, low possibility of future repayment, and credit impairment that has occurred.
        c. Accounts receivable financing
        Notes and accounts receivable measured at fair value through other comprehensive income are presented as
 accounts receivable financing if their maturities are within one year (including one year) from the initial recognition
 date. The Group measures the loss provision at the amount equivalent to expected credit losses in the entire duration.
        Apart from the accounts receivable financing for single assessment of credit risk, they are divided into different
 portfolios based on their credit risk characteristics:
                   Item                                              Basis for determining the portfolio
   Related party within the consolidation This portfolio represents amounts receivable of the Company within the
scope                                     scope of consolidation.
   Account age portfolio                    The portfolio takes the age of receivables as the credit risk characteristics.
        Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the
 aging years of accounts receivable based on the principle of First Occurrence, First Recovery.
        Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separate
 impairment tests on accounts receivable with significantly different credit risk characteristics, such as significantly
 deteriorating credit status of the debtor, low possibility of future repayment, and credit impairment that has occurred.
        d. Other receivables
        Based on whether the credit risk of other receivables has increased significantly since initial recognition, the
 Group measures the loss provision at the amount equivalent to expected credit losses in the next 12 months or the
 entire duration. Apart from the other receivable for single assessment of credit risk, they are divided into different
 portfolios based on their credit risk characteristics:
                   Item                                                  Basis for determining the portfolio
   Related party within the consolidation   This portfolio represents amounts receivable of the Company within the scope of
scope                                       consolidation.
   Account age portfolio                    The portfolio takes the age of receivables as the credit risk characteristics.
        Method for calculating aging years based on credit risk characteristics portfolio: The Group calculates the
 aging years of accounts receivable based on the principle of First Occurrence, First Recovery.
        Recognition criteria for provision of bad debts of a single account receivable: The Group conducts separate
 impairment tests on accounts receivable with significantly different credit risk characteristics, such as significantly
 deteriorating credit status of the debtor, low possibility of future repayment, and credit impairment that has occurred.
     Please refer to “11. Financial instruments.”
     Please refer to “11. Financial instruments.”
     Notes and accounts receivable at fair value through other comprehensive income are presented as accounts
receivable financing if their maturities are within one year (including one year) from the initial recognition date.
The Notes and accounts receivable with the maturity of more than 1 year since the initial recognition date are
presented as other debt investments. For the relevant accounting policies, please refer to “11. Financial instruments”
under this Note.
Method of determining expected credit losses on other receivables and the accounting treatment
     Method of determining expected credit losses on other receivables and the accounting treatment
     For the method of determining expected credit losses on other receivables and the accounting treatment, please
refer to “11. Financial instruments.”
     (1) Categories of inventories
     Inventories mainly include raw materials, packaging and low-value consumable goods, products in process,
goods in stock, consumable biological assets, development costs, development products, etc.
     (2) Pricing of inventories
     Inventories are initially measured at actual cost. The cost of inventories includes procurement cost, processing
cost and other costs. Inventories are measured by the weighted average method upon delivery.
     (3) Determination of net realizable value of inventories and method of making provision for
inventory impairment
     The net realizable value of inventories refers to the estimated selling price deducted by estimated costs until
they are made into finished goods, estimated selling expense and relevant taxes in daily activities. The determination
of the net realizable value of inventories is based on conclusive evidence obtained, taking into account the purpose
for which the inventories are held and the effect of events after the balance sheet date.
     Inventories are measured at the lower of cost or net realizable value at the balance sheet date, and provision
for their impairment shall be made when the net realizable value is below the cost of inventories. Provision for
inventory impairment is made on the basis of the difference whereby the cost of one single inventory item exceeds
its net realizable value. For inventories with large quantities and low unit prices, provision for inventory impairment
shall be made according to inventory categories. Inventories that are related to product series produced and sold in
the same region and have the same or similar end use or purpose, and are difficult to be documented separately from
other items that shall be combined for making provision for inventory impairment.
     After provision for inventory impairment is made, if the factors that once resulted in the impairment disappear,
leading to the net realizable value of inventories higher than their book value, the provision of inventory impairment
shall be reversed to the extent of provision previously made, and the reversed amount shall be recognized in current
profits and losses.
     (4) The inventory system shall be the perpetual inventory system.
     (5) Amortization of low-value consumables and packaging materials
     The low-value consumables and packaging materials are amortized using a one-off amortization method.
     Long-term equity investments in this section refers to any equity investment by which the Group has control,
common control or significant influence over the investee. Long-term equity investments by which the Group does
not have control, common control or significant influence over the investee are accounted for as financial assets at
fair value through profits or losses. If they are non-trading, the Group may elect to designate them as financial assets
at fair value through other comprehensive income at the time of initial recognition. For the accounting policies,
please refer to “11. Financial instruments” under Note IV.
     Common control is the Group’s contractually agreed sharing of control over an arrangement, and the activities
under which must be decided by unanimous agreement from parties who share the control. Significant influence is
the power of the Group to participate in the decision-making for financial and operating policies of an investee, but
not to control or common control the formulation of such policies together with other parties.
     (1) Determination of investment cost
     For long-term equity investments acquired relating to business combination under common control, the initial
investment cost is determined on the date of consolidation according to the percentage of shareholders/owners’
equity from the combined party as a part of the book value of total shareholders/owners’ equity set forth in the
consolidated financial statements of the ultimate controlling party. The difference between the said initial
investment cost and the sum of cash being paid, non-cash assets being transferred and book value of liabilities being
assumed shall be adjusted against the capital reserve; or, in case of insufficient capital reserve to cover the difference,
against the retained earnings accordingly. In case that the consideration of the business combination is satisfied by
issuing equity securities, the initial investment cost of the long-term equity investments is determined on the date
of consolidation according to the percentage of shareholders’ equity from the combined party as a part of the book
value of total shareholders’ equity set forth in the consolidated financial statements of the ultimate controlling party.
With the sum of par values of shares being issued as the share capital, the difference between the said initial
investment cost and the sum of par values of shares being issued shall be adjusted against the capital reserve; or, in
case of insufficient capital reserve to cover the difference, against the retained earnings accordingly. Where a
business combination under common control is achieved by acquiring the equity of a combined party under common
control in phases through multiple transactions, following policies shall apply depending on whether those
transactions are “a bundle of transactions”: if so, the Company shall account for all transactions together as the one
deal to obtain the control; if not, the initial investment cost of the long-term equity investments shall be determined
on the date of consolidation according to the percentage of shareholders/owners’ equity from the combined party as
a part of the book value of total shareholders’ equity set forth in the consolidated financial statements of the ultimate
controlling party, while the difference between the initial investment cost and the sum of book value of long-term
equity investments before the consolidation and that of consideration newly paid to acquire additional equities on
the date of consolidation shall be adjusted against the capital reserve, or, in case of insufficient capital reserve to
cover the difference, against retained earnings accordingly. Accounting treatment is currently not required for other
comprehensive income that has been recognized due to the adoption of equity method in accounting or the
classification as financial assets at fair value through other comprehensive income in respect of equity investments
held before the date of consolidation.
     For the long-term equity investments acquired relating to business combination not under common control, the
initial investment cost is the cost of combination on the date of acquisition which equals to the aggregate fair value
of assets transferred, liabilities incurred or assumed and equity securities issued by the acquirer. Where a business
combination not under common control is achieved by acquiring the equity of a combined party under common
control in phases through multiple transactions, following policies shall apply depending on whether those
transactions are “a bundle of transactions”: if so, the Group shall account for all transactions together as the one
deal to obtain the control; if not, the initial investment cost of the long-term equity investments that is re-accounted
for using the cost method shall be the sum of book value of long-term equity investments previously held by the
acquirer in the acquiree and new investment cost. Accounting treatment is currently not required for other
comprehensive income in respect of equity investments that have been accounted for using the equity method.
     The intermediary expenses on items such as audit, legal service and valuation advisory for business
combination and other related administrative expenses incurred by the combining party or acquirer are recognized
in current profits and losses upon their occurrence.
     Long-term equity investments other than those formed by business combination is initially measured at cost
which varies depending on the different ways of acquiring the long-term equity investments and is determined by
considering the amount of actual cash paid by the Group, the fair value of the equity securities issued by the Group,
the conventional value stipulated in the investment contract or agreement, the fair value or original book value of
the assets surrendered in the non-cash and bank balance swap transaction, the fair value of the long-term equity
investments itself, and etc. The expenses, taxes and other necessary expenses directly related to the acquisition of
the long-term equity investments are also included in the investment cost. For additional long-term equity
investments that entitles the Company with significant influence or common control but not control over the investee,
its cost of investment is the sum of fair value of equity investments that have been held plus new cost of investment
pursuant to the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
Instrument.
     (2) Subsequent measurement and recognition method of profits and losses
     A long-term equity investment with common control (excluding that constituting a joint venture) over or
significant influence on the investee is accounted for by using the equity method, and a long-term equity investment
with control over the investee is accounted for in the Company’s financial statements by using the cost method.
     ① Long-term equity investment accounted for with cost method
     When a long-term equity investment is accounted for with cost method, its price is measured at initial
investment cost, and when the long-term equity investment is added or disposed, its cost is adjusted accordingly.
The cash dividend or profit declared by the investee, except for the cash dividend or profit declared but not yet
granted that is included in the price or consideration actually paid upon the acquisition of the investment, shall be
recognized as investment income for the period.
     ② Long-term equity investment accounted for with equity method
     When a long-term equity investment is accounted for with equity method and its initial investment cost is
higher than the proportion of fair value of the investee’s identifiable net assets attributable to the investor because
of the investment, its initial cost shall not be adjusted; if lower, the difference shall be recognized in the current
profits and losses, and its cost shall be adjusted accordingly.
     When a long-term equity investment is accounted for with equity method, the investment income and other
comprehensive income arising therefrom are recognized in accordance with the proportion of net profits and losses
and other comprehensive income of the investee attributable to the investor, and the book value of long-term equity
investments is adjusted accordingly; if any profit or cash dividend is declared by the investee, the book value of
long-term equity investments shall be reduced according to the part of profit or dividends attributable to the investor;
if there is any other changes in shareholders’ equity other than net profits and losses, other comprehensive income
and profit distribution, such change shall be adjusted against the book value of long-term equity investments and
recognized in the capital reserve. The Group recognizes its share of the investee’s net profits and losses based on
fair value of the investee’s identifiable assets at the time of acquisition, after making appropriate adjustments to net
profits thereto. In case of any inconsistency between the accounting policies and accounting periods adopted by the
investee and by the Group, the financial statements of the investee shall be adjusted in accordance with the
accounting policies and accounting periods of the Group, and the gain on investment and other comprehensive
income shall be recognized accordingly. In respect of the transactions between the Group and its associates and joint
ventures in which the assets invested or disposed of are not part of the business, the share of unrealized profits and
losses arising from inter-group transactions shall be offset by the portion attributable to the Group, and the profits
and losses on investment shall be recognized accordingly. However, any unrealized loss arising from inter-group
transactions between the Group and an investee is not offset to the extent that the loss is impairment loss of the
assets transferred. Where the Group invests to its joint ventures or associates an asset forming part of a business,
giving rise to the acquisition of a long-term equity investment by the investor without obtaining control, the initial
investment cost of the additional long-term equity investments shall be recognized at fair value of the business
invested. The difference between initial investment cost and book value of the business invested will be fully
included in current profits and losses. Where the Group disposes of an asset forming part of a business to its
associates or joint ventures, the difference between the consideration received and the book value of the business
shall be fully included in current profits and losses. Where the Group acquires from its associates or joint ventures
an asset forming part of a business, the profits or losses related to the transaction shall be accounted for and
recognized in accordance with the Accounting Standards for Business Enterprises No. 20 - Business Combination.
     The Group’s share of net loss of the investee shall be recognized to the extent that the book value of the long-
term equity investment and any long-term equity that substantially forms part of the investor’s net investment in the
investee are written down to zero. If the Group has to assume additional obligations to the loss of the investee, the
estimated liabilities shall be recognized for the estimated obligation assumed and charged to investment loss for the
period. Where the investee makes profits in subsequent periods, the Group shall re-recognize its share of the profits
after setting off against the share of unrecognized losses.
    ③ Acquisition of minority interests
     When preparing the consolidated financial statements, the Company adjusts the capital reserve and, if the
capital reserve is insufficient, adjusts the retained earnings based on the difference between the additional long-term
equity investments arising on acquisition of minority interests and the Company’s share in the net assets of the
subsidiary accrued from the acquisition date (or consolidation date) in proportion to the additional shareholdings.
    ④ Disposal of long-term equity investments
     In the consolidated financial statements, if the parent company disposes part of the long-term equity investment
in the subsidiary without losing its control, the difference between the disposal price and the Company’s share in
the net assets of the subsidiary attributable to the disposal of the long-term equity investment is recognized in the
shareholders’ equity; if the parent company disposes part of the long-term equity investment in the subsidiary
resulting in the loss of its control over the subsidiary, the accounting treatment shall be in accordance with the
policies as set out in Item (2) of Section 6 “Accounting treatment for business combination under common control
and not under common control” under this Note V.
     In other cases, upon the disposal of a long-term equity investment, the difference between the book value of
the investment and the price received is recognized in the current profits and losses.
     For a long-term equity investment that is accounted for using the equity method where the remaining equity
after disposal continues to be accounted for using the equity method, the portion of other comprehensive income
previously included in shareholder’s equity shall be treated in accordance with the same basis as the investee directly
disposes of relevant asset or liability on pro rata basis at the time of disposal. The owners’ equity recognized for the
change in owners’ equity of the investee other than net profits and losses, other comprehensive income and profit
distribution, shall be transferred to current profits and losses on pro rata basis.
     For a long-term equity investment accounted for using the cost method where the remaining equity after
disposal continues to be accounted for using cost method, other comprehensive income recognized using the equity
method or in accordance with the standard for recognition and measurement of financial instruments prior to the
acquisition of control over the investee shall be treated in accordance with the same basis as the investee directly
disposes of relevant asset or liability, and transferred to current profits and losses on pro rata basis. The change in
owners’ equity recognized in net assets of the investee by using the equity method other than net profits and losses,
other comprehensive income and profit distribution shall be transferred to current profits and losses on pro rata basis.
     In preparing separate financial statements, if control is lost over the investee upon partial disposal of equity
investment, the remaining equity with common control or an ability to impose a significant influence over the
investee after disposal shall be accounted for using the equity method, and shall be adjusted as if it has been
accounted for using the equity method since it was acquired. The remaining equity without common control or an
ability to impose a significant influence over the investee after disposal shall be accounted for based on the standard
for recognition and measurement of financial instruments, and the difference between its fair value and book value
on the date of loss of control shall be included in current profits and losses. In respect of other comprehensive income
recognized using the equity method or in accordance with the standard for recognition and measurement of financial
instruments prior to the acquisition of control over the investee, it shall be accounted for in accordance with the
same basis as the investee directly disposes of relevant asset or liability when the control is lost. The change in
owners’ equity recognized in net assets of the investee by using the equity method other than net profits and losses,
other comprehensive income and profit distribution shall be transferred to current profits and losses at the time when
the control over investee is lost. Where the remaining equity after disposal is accounted for using the equity method,
other comprehensive income and other owners’ equity shall be carried forward on pro rata basis. Where the
remaining equity after disposal is accounted for in accordance with the standard for recognition and measurement
of financial instruments, other comprehensive income and other owners’ equity shall be fully carried forward.
     If the common control or significant influence of the Group over the investee is lost upon partial disposal of
equity investment, the remaining equity after disposal shall be accounted for in accordance with the standard for
recognition and measurement of financial instruments. The difference between its fair value and book value on the
date of loss of common control or significant influence shall be included in current profits and losses. For other
comprehensive income recognized previously for the equity investment using equity method, it shall be accounted
for in accordance with the same basis as the investee directly disposes of relevant asset or liability at the time when
the equity method is ceased to be used. The owners’ equity recognized arising from the change in owners’ equity of
the investee other than net profits and losses, other comprehensive income and profit distribution shall be transferred
to current profits and losses at the time when the equity method is ceased to be used.
     Where the Group disposes of its equity investment in a subsidiary in a series of transactions until the control is
lost, and such transactions form “a bundle of transactions,” each transaction shall be accounted for as a disposal of
equity investment of the subsidiary resulting in a loss of control. The difference between the consideration for each
transaction and the book value of the long-term equity investment attributable to the equity interests disposed prior
to loss of control shall be initially recognized as other comprehensive income, and upon loss of control, transferred
to current profits and losses when the loss of control takes place.
Measurement model for investment property
Cost model
Depreciation or amortization method
     Investment properties are real estate held for rental income or capital appreciation, or both, including land use
rights that have been leased, land use rights that are held and intended to be transferred after appreciation, and
buildings that have been leased. In addition, vacant buildings held by the Group for operating leases are reported as
investment properties if the Board of Directors (or similar organization) makes a written resolution that they will be
used for operating leases and the intention to hold them will not change in the near future.
     Investment properties shall be initially measured at cost. The subsequent expenses related to investment
properties shall be recognized as cost of the investment properties only if it is probable that economic benefits
associated with the assets will flow to the Group and the cost of the assets can be measured reliably. Other subsequent
expenses shall be recognized in the current profits and losses when incurred.
     The Group uses the cost model for subsequent measurement of investment properties and depreciates or
amortizes them according to the policies consistent with that for buildings or land use rights.
     For the method of impairment test and provision for impairment loss of investment properties, please refer to
Section 25 “Impairment of long-term assets” under Note V.
     When the purpose of an investment property changes to self-use, from the date of the change, the investment
property shall be reclassified as a fixed asset or intangible asset. When the purpose of a self-use property changes
to earning rental income or capital appreciation, from the date of the change, the fixed asset or intangible asset shall
be reclassified as an investment property. Upon reclassification, for investment properties measured using the cost
model, the carrying value before reclassification is recognized as the carrying value after reclassification. For
investment properties measured using the fair value model, the fair value on the date of reclassification is recognized
as the carrying value after reclassification.
     An investment property is derecognized upon disposal or when it is permanently withdrawn from use and no
future economic benefits are expected from its disposal. The net proceeds from sale, transfer, retirement or damage
of an investment property after its book value and related taxes and expenses are recognized in the current profits
and losses.
(1) Recognition criteria
     Fixed assets refer to the tangible assets held by the Company for producing goods, rendering services, renting
or operation and administration purposes with useful life of over one accounting year. The fixed assets are
recognized only when the economic interests related thereto are likely to flow into the Group and its cost can be
measured reliably. The fixed assets are initially measured at cost with consideration of the impact of estimated
disposal costs.
(2) Depreciation method
                               Depreciation         Depreciation life          Rate of residual       Annual depreciation
       Category
                                 method                  (year)                   value (%)                 rate (%)
Building for production    Straight-line method            39                        5                       2.44
Machine and equipment                                      10                        5                       9.5
                           Straight-line method
   for production
     Transportation                                        10                        5                       9.5
                           Straight-line method
       equipment
    Electronic device
 and management tools      Straight-line method
   Machine and
  equipment for non-       Straight-line method            10                       5                       9.5
  production purpose
   Building for non-                                       45                       5                       2.11
                          Straight-line method
  production purpose
         Others           Straight-line method              5                       5                        19
     The expected residual value refers to the anticipated condition of the fixed asset at the end of its estimated
useful life. It represents the estimated amount that the Group would receive from the disposal of the asset, net of
any expected disposal costs incurred.
     (3) Impairment test method and provision for impairment of fixed assets
     The impairment testing method and provision for impairment of fixed assets can be found in Section 25
“Impairment of Long-term Assets” under Note V.
     (4) Other information
     Subsequent expenditures related to fixed assets that are expected to generate economic benefits and can be
reliably measured are capitalized as part of the fixed asset's cost, and the carrying value of the replaced portion is
derecognized. Other subsequent expenditures are recognized in the current period's income statement upon
occurrence.
     When a fixed asset is classified as held for disposal or is expected to no longer generate economic benefits
through use or disposal, it is derecognized. Proceeds from the sale, transfer, scrapping, or destruction of fixed assets,
net of their carrying value and related taxes, are recognized in the current period’s income statement.
     The Group reviews the useful lives, estimated residual values, and depreciation methods of fixed assets at least
annually. Changes in these estimates are treated as changes in accounting estimates.
     The cost of construction in progress is measured according to the actual expense for the construction in progress,
including all the necessary expenses incurred in the process of construction, borrowing costs to be capitalized before
the project is ready for its intended use and other related costs.
     The construction in progress is transferred to fixed assets after it is ready for its intended use.
     For the method of impairment test and provision for impairment loss of construction in progress, please refer
to Section 25 “Impairment of long-term assets” under Note V.
     Borrowing costs include interest on borrowings, amortization of discounts or premiums, ancillary costs, and
exchange differences arising from foreign currency borrowings. Where the borrowing costs can be directly
attributable to the acquisition and construction or production activities of assets eligible for capitalization, it shall
be capitalized on the basis that the expense for the asset has already been incurred, the borrowing costs have been
incurred and the acquisition and construction or production activities necessary to prepare the asset for its intended
use or for sale have already commenced; after the acquired or produced asset eligible for capitalization is available
for its intended use or for sale, the capitalization shall be stopped. Other borrowing costs shall be recognized as
expenses at the time when they are incurred.
     The actual interest cost incurred in the period of specific-purpose borrowing net of any interest income from
the borrowed funds not used and deposited in bank or any investment income from the temporary investment of
those funds shall be capitalized; the amount of interest of general-purpose borrowings to be capitalized is determined
by multiplying the weighted average of the amounts of cumulative expenses on the asset over and above the amounts
of specific-purpose borrowings by the capitalization rate of the corresponding general-purpose borrowings.
Capitalization rate is calculated and determined based on the weighted average rate of general-purpose borrowings.
     During the capitalization period, exchange differences related to specific-purpose borrowings denominated in
foreign currencies are fully capitalized; exchange differences related to general-purpose borrowings denominated
in foreign currencies are recognized in the current profits and losses.
     Assets eligible for capitalization refer to the fixed assets, investment properties, inventories and other assets
that require a substantially long period of time of acquisition and construction or production activities for intended
use or for sale.
     Where the acquisition and construction or production activities of an asset eligible for capitalization is
interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing
costs shall be suspended until the acquisition and construction or production of the asset is resumed.
     (1) Consumptive biological assets
     Consumptive biological assets are the biological assets held for sale or harvested for agricultural products in
the future, including growing field crops, vegetables, timber stands and livestock stored for sale. Consumptive
biological assets shall be initially measured at cost. The cost of a consumptive biological asset that is cultivated,
constructed, propagated or farmed by the Company is the necessary expense incurred before the asset is
harvested/closed/sold/sold or placed in storage that is directly attributable to the asset, including borrowing costs
that are eligible for capitalization. Subsequent expenses such as management and feeding costs incurred after
harvesting/closing/storage of consumptive biological assets are included in current profits and losses.
     Consumptive biological assets are carried forward at book value using the weighted average method when
harvested or sold.
     On the balance sheet date, consumptive biological assets are measured at the lower of cost or net realizable
value, and the provision for impairment of consumptive biological assets shall be calculated and recognized based
on the methods consistent with those for the recognition of the provision for inventory impairment. Where the
impairment factors disappear, the amount written down shall be restored and reversed from the original provision
for depreciation, with the amount reversed recognized in the current profits and losses.
     (2) Productive biological assets
     Productive biological assets refer to the biological assets held for the purpose of producing agricultural products,
providing services or leasing, including economic forests, firewood forests, production animals and draft animals.
Productive biological assets shall be initially measured at cost. The cost of a self-created or propagated productive
biological asset is the necessary expense incurred before the asset achieves the intended purpose of production and
operation that can be directly attributable to the asset, including borrowing costs that meet the capitalization
conditions.
     The Group reviews the useful life and estimated net residual value of a productive biological asset and the
depreciation method applied at least at each year-end. Any change shall be accounted for as a change in accounting
estimate.
     The difference between the disposal proceeds from the sale, liquidation, death or destruction of productive
biological assets less their book value and related taxes and charges is included in the current profits and losses.
     The Group determines whether a productive biological asset has any signs of impairment on each balance sheet
date. If the asset shows signs of impairment, the recoverable amount is estimated. The recoverable amount is
estimated on a single asset basis. If it is difficult to estimate the recoverable amount of a single asset, the recoverable
amount of the asset group to which the asset belongs shall be determined. If the recoverable amount of an asset is
lower than its book value, the provision for asset impairment shall be made according to the difference and recorded
in the current profits and losses.
     Once the above asset impairment loss is recognized, it shall not be reversed in subsequent accounting periods.
     If a productive biological asset changes its use and becomes a consumptive biological asset, the cost of the
change of use is determined at the book value at the time of the change of use. If the productive biological asset
changes its use and becomes a public welfare biological asset, whether there is any impairment is determined in
accordance with the provisions of Accounting Standard for Business Enterprises No. 8 - Asset Impairment. When
an impairment occurs, an impairment provision shall be first made and then determined on the basis of the book
value after such provision is made.
     Not applicable.
(1) Useful life and its basis for determination, estimate, amortization method or review procedure
     An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by
the Group.
     An intangible asset shall be initially measured at cost. The expenses incurred on an intangible asset shall be
recognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset will
flow to the Group and the cost of the asset can be measured reliably. Other expenses shall be recognized in the
current profits and losses when incurred.
     Land use right acquired shall normally be recognized as an intangible asset. For self-constructed buildings (e.g.
plants), the expenses on the land use right and cost of the buildings shall be separately accounted for as an intangible
asset and fixed asset. For buildings and structures purchased, the purchase consideration shall be allocated among
the land use right and the buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation,
the consideration shall be recognized in full as a fixed asset.
     An intangible asset with a definite useful life is amortized on average and by stages using the straight line
method by deducting the estimated net residual value and accrued provision for impairment loss from the original
value over the estimated useful life from the time when it is available for use. An intangible asset with an indefinite
useful life is not amortized.
     During the end of the period, the Company shall check the useful life and the amortization method of intangible
assets with limited useful life and carry out accounting estimate change in case that a change happens. In addition,
the Company shall check the useful life of intangible assets with indefinite useful life. If there are evidences showing
that the intangible assets can bring economic benefit for the Company within the foreseeable period, the Company
shall estimate the useful life and carry out amortization according to the amortization policy for intangible assets
with finite useful life.
     The Group’s intangible assets include land use rights, software, franchise rights, patent technology, non-patent
technology, and trademarks. The amortization periods and conditions for the main intangible assets are as follows:
     ① Land use rights are amortized over the remaining useful life specified in the land use right certificate, with
     an average annual amortization period of 30-50 years. When the purchase price of land and buildings cannot
     be reasonably allocated between land use rights and buildings, the entire amount is treated as fixed assets.
     ② Software, patent technology, and non-patent technology are amortized over the estimated useful life of 10
     years, with an average annual amortization period.
     ③ Franchise rights are amortized over the estimated useful life of 30 years, with an average annual
     amortization period.
(2) Scope of R&D expenses and related accounting treatment
     The scope of our Company’s R&D expenses is primarily determined based on the Company’s R&D projects.
It includes R&D personnel salaries, direct input costs, depreciation and amortization expenses, design and testing
expenses, outsourced R&D expenses, and other expenses.
     The Group classifies the expense on an internal R&D project into expense at the research phase and expense
at the development phase.
     Expense at the research phase is recognized in the current profits and losses when incurred.
     Expense at the development phase is recognized as an intangible asset if all of the following conditions are
satisfied at the same time, and otherwise, it is recognized in the current profits and losses:
     ① It is technically feasible to complete the intangible asset so that it will be available for use or sale;
     ② It is intended to complete and to use or sell the intangible asset;
     ③ It can be demonstrated how the intangible asset will generate economic benefits, including demonstrating
that there is an existing market for products produced by the intangible asset or for the intangible asset itself, and
that it can be proven to be useful if the intangible asset is to be used internally;
     ④ There are adequate technical, financial and other resources to complete the development and the ability to
use or sell the intangible assets;
     ⑤ The expense attributable to the intangible asset at its development phase can be reliably measured.
     All the expenses on R&D which cannot be distinguished between the research phase and development phase
are recognized in the profits and losses when incurred.
     The specific criteria for dividing internal R&D projects into research phase and development phase are as
follows: Once the corresponding project meets the aforementioned conditions and is approved through a review
process, it enters the development phase and begins capitalization.
(3) The impairment testing method and provision for impairment of intangible assets
     For the impairment testing method and provision for impairment of intangible assets, please refer to Section
     For non-current non-financial assets such as fixed assets, construction in progress, right of use assets, intangible
assets with limited useful life, investment real estate measured at cost and long-term equity investments in
subsidiaries, joint ventures and associates, the Group determines whether there are signs of impairment on the
balance sheet date. If the asset shows signs of impairment, the recoverable amount is estimated, and impairment test
is conducted. Goodwill, intangible assets with indefinite useful lives and intangible assets that have not yet ready
for use are tested annually for impairment regardless of whether there is an indication of impairment.
     If the impairment test results show that the recoverable amount of an asset is lower than its carrying value, the
impairment provision shall be made and the impairment loss shall be recorded according to the difference. The
recoverable amount is the higher between the net value of the fair value of the asset less the disposal expense and
the present value of the estimated future cash flow of the asset. The fair value of the asset is determined based on
the sales agreement price in fair transactions. Where there is no sales agreement but there is an active market for the
asset, the fair value shall be determined according to the buyer’s bid for the asset. Where there is neither sales
agreement nor active market for the asset, the fair value of the asset is estimated based on the best information
available. Disposal costs include legal costs associated with the disposal of the asset, related taxes, removal costs
and direct costs incurred to bring the asset to marketable status. The present value of the expected future cash flow
of the asset shall be determined according to the discounted amount of the expected future cash flow generated by
the asset in the process of continuous use and final disposal, which is converted according to the appropriate discount
rate. The asset impairment provision is calculated and recognized on a single asset basis. If it is difficult to estimate
the recoverable amount of a single asset, the recoverable amount of the asset group to which the asset belongs shall
be determined. An asset group is the smallest portfolio of assets that can independently generate cash inflows.
     For the goodwill presented separately in the financial statements, when tested for impairment, the book value
of goodwill will be apportioned to the asset group or combination of asset groups expected to benefit from the
synergies of the business combination. Where the test results indicate that the recoverable amount of an asset group
or combination of asset groups containing the apportioned goodwill is less than its book value, the corresponding
impairment loss is recognized. The impairment loss amount is first set off against the book value of the goodwill
apportioned to the asset group or combination of asset groups and then set off against the book value of other assets
based on the proportion of the book value of each asset other than goodwill in the asset group or combination of
asset groups.
     Once the above asset impairment loss is recognized, it shall not be reversed in subsequent accounting periods
for the part whose value is restored.
     Long-term unamortized expenses are the expenses that have been incurred but shall be borne in the reporting
period and subsequent periods for a period of assessment of more than one year. The Group’s long-term deferred
expenses mainly consist of building renovations and project improvements. These long-term deferred expenses are
amortized using the straight-line method over the estimated period of benefit.
     The contractual liabilities refer to the obligation of the Group to transfer goods to customers for consideration
received or receivable. If the customer has paid the contractual consideration or the Group has obtained an
unconditional right of collection prior to the transfer of goods by the Group to the customer, the Group presents the
amount received or receivable as a contractual liability on the date when the actual payment is made by the customer
or the payment due date, whichever is earlier. Contractual assets and contractual liabilities under the same contract
are presented on a net basis, and contractual assets and contractual liabilities under different contracts are not offset.
(1) Accounting treatment for short-term employee compensation
     The employee compensation of the Group includes short-term compensation, post-employment benefits,
termination benefits and other long-term employee benefits. Where:
     Short-term compensation mainly includes wages, bonuses, allowances and subsidies, employee welfare
expenses, medical insurance premiums, maternity insurance premiums, work-related injury insurance premiums,
housing provident funds, union funds and employee education funds, non-monetary benefits, etc. The Group
recognizes short-term employee compensation actually incurred during the accounting period in which employees
provide services to the Group as a liability and includes it in current profits and losses or related asset cost. Non-
monetary benefits are measured at fair value.
(2) Accounting treatment for post-employment benefits
     Post-employment benefits mainly include basic pension insurance, unemployment insurance and annuity. The
post-employment benefits plan includes the establishment of a defined contribution plan and the establishment of a
defined benefit plan. If a defined contribution plan is adopted, the corresponding amount due is included in the
relevant asset cost or current profits and losses at the time of occurrence.
     If the employment relationship with the employee is terminated before the expiration of the employee’s
employment contract, or a compensation proposal is made to encourage the employee to voluntarily accept the
reduction, the employee compensation liabilities arising from termination benefits shall be recognized and included
in current profits and losses when the Group cannot unilaterally withdraw the termination benefits provided as a
result of the termination plan or the reduction proposal, or the Group recognizes the costs associated with the
reorganization involving the payment of termination benefits, whichever is earlier. However, if the termination
benefits cannot be fully paid within 12 months after the end of the annual reporting period, they shall be treated as
other long-term employee compensations.
(3) Accounting treatment for termination benefits
      Internal employee retirement plans are treated in the same way as the termination benefits mentioned above.
The Group will recognize the salary of internal retirees and social insurance premiums to be paid during the period
from the date the employee ceases to provide service to the normal retirement date in the current profits and losses
(termination benefits) when the conditions for recognition of the estimated liabilities are met.
(4) Accounting treatment for other long-term employee benefits
      Other long-term employee benefits provided by the Group to employees that meet the defined contribution plan
are accounted for in accordance with the defined contribution plan. Other benefits shall be accounted for in
accordance with the defined benefit plan.
      An obligation relating to a contingency is recognized as an estimated liability when the following conditions
are met: (1) The obligation is a current obligation undertaken by the Group; (2) The performance of the obligation
is likely to result in the outflow of economic benefits; (3) The amount of the obligation can be measured reliably.
      On the balance sheet date, estimated liabilities are measured according to the best estimate of expenses required
to meet the relevant current obligations, taking into account factors such as risks, uncertainties and the time value
of money associated with contingencies.
      If all or part of the expenses required to pay off the estimated liabilities are expected to be compensated by a
third party, the compensation amount shall be recognized separately as an asset when it is basically determined that
it can be received, and the recognized compensation amount shall not exceed the book value of the estimated
liabilities.
      (1) Loss-making contract
      A loss-making contract is a contract in which the cost of fulfilling the contractual obligation inevitably exceeds
the expected economic benefit. If the contract to be executed becomes a loss-making contract and the obligations
arising from the loss-making contract meet the conditions for recognition of the above-mentioned estimated
liabilities, the portion of the estimated loss of the contract exceeding the recognized impairment loss (if any) of the
underlying asset of the contract is recognized as an estimated liability.
      (2) Reorganization obligation
      For a detailed, formal reorganization plan that has been announced to the public, the estimated liability amount
is determined on the basis of direct expenses related to the reorganization, subject to meeting the conditions for
recognition of the estimated liabilities described above.
      (1) Accounting treatment for share-based payment
      Share-based payments are transactions in which equity instruments are granted or liabilities are assumed on
the basis of equity instruments in exchange for services rendered by employees or other parties. The share-based
payments are divided into equity-settled share-based payment and cash-settled share-based payment.
    ① Equity-settled share-based payments
     Equity-settled share-based payments in exchange for services rendered by employees shall be measured at days
the fair value of the equity instruments granted to employees. For the equity-settled share-based payment that can
only be vested after services during a waiting period are provided, or required performance conditions are met, the
amount of such fair value is calculated on a straight-line basis, based on the best estimate of the number of equity
instruments that can be vested during the waiting period, and is included in the relevant costs or expenses, or if
available immediately after grant, included in the relevant costs or expenses on the grant date, increasing capital
reserves accordingly.
     On each balance sheet date during the waiting period, the Group makes the best estimate based on the latest
follow-up information such as changes in the number of employees that satisfy vesting conditions, and revises the
number of equity instruments expected to be vested. The impact of the above estimates is included in the relevant
costs or expenses for the period, and capital reserves are adjusted accordingly.
     The equity-settled share-based payments in exchange for services rendered by other parties shall be measured
at the fair value of the services on the acquisition date if the fair value of services rendered by other parties can be
reliably measured. However, if the fair value of services rendered by other parties cannot be reliably measured, but
the fair value of the equity instruments can be reliably measured, the equity-settled share-based payments shall be
measured at the fair value of the equity instruments on the acquisition date of the services, and included in the
relevant costs or expenses, increasing shareholders’ equity correspondingly.
     When the fair value of equity instruments granted cannot be reliably measured, the intrinsic value of the equity
instruments is used to measure their value on the grant date, subsequent balance sheet dates, and settlement dates.
Changes in the intrinsic value are recognized in the current period’s income statement.
    ② Cash-settled share-based payments
     A cash-settled share-based payment shall be measured in accordance with the fair value of liability determined
based on the shares or other equity instruments undertaken by the Group. If the cash-settled share-based payment
can be vested immediately after granting, it shall be included in the relevant costs or expenses on the grant date,
increasing the liabilities correspondingly. For the cash-settled share-based payment that can only be vested after
services during a waiting period are provided or required performance conditions are met, on each balance sheet
date during the waiting period, the services obtained during the current period are included in the cost or expense
at the fair value of the liabilities assumed by the Group based on the best estimate of the situation of vesting,
increasing the corresponding liabilities correspondingly.
     The Group shall, on each balance sheet date and each account date prior to the settlement of the relevant
liabilities, re-measure the fair values of the liabilities and include the changes in the current profits and losses.
     (2) Accounting treatment for modification and termination of share-based payment plan
     When the Group makes a modification to the share-based payment plan, if the modification increases the fair
value of the equity instrument granted, the increase in services obtained is recognized in accordance with the increase
in the fair value of the equity instrument. The increase in the fair value of equity instruments refers to the difference
between fair values of the equity instruments before and after the modification on the date of modification. If a
modification reduces the total fair value of share-based payments or is otherwise unfavorable to the employees, the
acquired services continue to be accounted for as if the change never occurs, unless the Group cancels some or all
of the equity instruments granted.
     If a grant of equity instruments is canceled during the waiting period, the Group treats the cancellation of the
granted equity instruments as accelerated exercise of right and includes the amount to be recognized over the
remaining waiting period in the current profits and losses immediately, and recognizes the capital reserve at the
same time. If employees or other parties can choose to meet the non-vesting conditions but have not met the
conditions within the waiting period, the Group treats it as cancellation of equity instruments granted.
     (3) Accounting treatment for share-based payment transactions involving the shareholders or de facto
controllers of the Group and Company
     Transactions involving share payments between the shareholders or de facto controllers of the Group and
Company are accounted for in the Group’s consolidated financial statements in accordance with the following
provisions if either one of the settlement enterprises and receiving enterprises is within the Group, while the other
one is outside the Group:
     ① If the settlement enterprise settles by its own equity instruments, the share-based payment transaction shall
be treated as the equity-settled share-based payment; otherwise, they shall be treated as the cash-settled share-based
payment.
     If the settlement enterprise is an investor of the enterprise receiving the services, it shall be recognized as a
long-term equity investment in the enterprise receiving the services according to the fair value of the equity
instrument on the grant date or the fair value of the liability assumed, and the capital reserve (other capital reserve)
or liability shall be recognized at the same time.
     ② If the enterprise receiving the services has no settlement obligation or the equity instrument granted to its
employees is its own equity instrument, the share-based payment transaction shall be treated as the equity-settled
share-based payment. If the enterprise receiving the services has settlement obligation and the equity instrument
granted to its employees is not its own equity instrument, the share-based payment transaction shall be treated as
the cash-settled share-based payment.
     For the share-based payment transaction occurring among the enterprises within the Group, where the
enterprise receiving the services and the settlement enterprise are not the same enterprise, the recognition and
measurement of the share-based payment transaction in the individual financial statements of the enterprise
receiving the services and the settlement enterprise shall be processed in accordance with the above principles.
Disclose the accounting policies for revenue recognition and measurement by business type
     Revenue is the total inflow of economic benefits arising from the Group’s ordinary activities that would result
in an increase in shareholders’ equity and are unrelated to capital contributions by shareholders. When the contract
between the Group and the customer meets the following conditions, revenue is recognized when the customer
obtains control of the relevant goods (including services, the same below) : The parties to the contract have approved
the contract and undertake to perform their obligations; The contract specifies the rights and obligations of the
parties to the contract in relation to the goods transferred or the provision of services; The contract has clear payment
terms related to the transferred goods; The contract is commercial in nature, i.e. the performance of the contract will
change the risk, timing or amount of the Group’s future cash flows; The consideration to which the Group is entitled
as a result of the transfer of goods to customers is likely to be recovered. Gaining control of the relevant goods
means being able to dominate the use of that goods and derive almost all of the economic benefits from it.
     On the commencement date of the contract, the Group identifies the individual performance obligation existing
in the contract and allocates the transaction price to each individual performance obligation in proportion to the
individual selling price of the goods promised by each individual performance obligation. Factors such as variable
consideration, significant financing elements in the contract, non-cash consideration, and consideration payable to
customers are considered in determining the transaction price.
     For each individual performance obligation in the contract, the Group will recognize the transaction price
allocated to the individual performance obligation in accordance with the performance progress during the relevant
performance period as revenue if one of the following conditions is met: The customer acquires and consumes the
economic benefits arising from the Group’s performance at the same time as the Group fulfills its obligations; The
customer can control the goods under construction in the course of the Group’s performance; The goods produced
in the course of the Group’s performance have irreplaceable uses and the Group is entitled to receive payment
throughout the contract period for the cumulative part of the performance completed to date. The performance
progress is determined by the input or output method, depending on the nature of the goods transferred. When the
performance progress cannot be reasonably determined, and the costs incurred by the Group are expected to be
compensated, revenue is recognized at the amount of the costs incurred until the progress of performance can be
reasonably determined.
     If one of the above conditions is not met, the Group recognizes revenue at the point at which the customer
obtains control of the relevant goods at the transaction price apportioned to the individual performance obligation.
In determining whether a customer has acquired control of the goods, the Group considers the following indications:
The enterprise has the current right of collection in respect of the goods, that is, the customer has the current payment
obligation in respect of the goods; The enterprise has transferred the legal ownership of the goods to the customer,
that is, the customer has the legal ownership of the goods; The enterprise has physically transferred the goods to the
customer, that is, the customer has physically possessed the goods; The enterprise has transferred the main risks and
returns in the ownership of the goods to the customer, that is, the customer has obtained the main risks and returns
in the ownership of the goods; The customer has accepted the goods; Other indications that the customer has taken
control of the goods.
     Revenue recognition principles for specific scenarios are as follows:
     (1) Domestic sales:
     Revenue is recognized when control is transferred to the customer upon delivering the products to the
customer’s specified location and obtaining customer acknowledgement through a signed confirmation, as stipulated
in the sales contract or order.
     Revenue is recognized when control is transferred to the customer upon delivering the products to the
customer’s specified location and completing the customer's inspection based on relevant standards, as stipulated in
the sales contract or order.
     Revenue is recognized when the services have been provided, and the right to collect service fees is obtained.
     (2) International sales:
     Revenue is recognized when control is transferred to the customer upon the products being dispatched and
customs clearance procedures being completed, as stipulated in the sales contract or order.
    Situations where similar businesses adopt different operation models involving different revenue recognition methods and
measurement methods:
    Not applicable.
     Incremental cost incurred by the Group to acquire contract that is expected to be recovered is taken as the
contract acquisition cost and recognized as an asset. However, if the amortization period of the asset does not exceed
one year, it is included in the current profits and losses when it occurs.
     The cost incurred for the performance of the contract is recognized as an asset if it does not fall within the
scope of Accounting Standard for Business Enterprises No. 14 - Revenue (Revised in 2017) and meets the following
conditions: ① The cost is directly related to a current or anticipated contract, including direct labor, direct materials,
manufacturing expenses (or similar expenses), cost expressly borne by the customer, and other costs incurred solely
as a result of the contract; ② This cost increases the Group’s future resources to meet its performance obligations;
③ This cost is expected to be recovered.
     Assets related to contract costs are amortized on the same basis as for the recognition of the commodity revenue
associated with the assets and are recognized in current profits and losses.
     When the carrying amount of an asset related to contract costs exceeds the difference between the following
two amounts, an impairment provision is recognized for the excess amount, and an asset impairment loss is
recognized: (1) The expected remaining consideration to be obtained from transferring the goods related to that asset.
(2) The estimated costs necessary to complete the transfer of the related goods. If there is a change in the factors
that led to impairment in previous periods, resulting in the difference between (1) minus (2) exceeding the carrying
amount of the asset, the previously recognized impairment provision is reversed and recognized in the current
period’s income statement. However, the carrying amount of the asset after the reversal should not exceed the
carrying amount of the asset on the date of the reversal, assuming no impairment provision had been recognized.
     Government subsidy refers to the cash and bank balance and non-cash and bank balance that the Group obtains
from the government free of charge, excluding the capital invested by the government as an investor with the
corresponding owners’ equity. Government subsidies are divided into asset-related government subsidies and
income-related government subsidies. The Group defines government subsidies obtained for the acquisition or
otherwise formation of long-term assets as asset-related government subsidies. Other government subsidies are
defined as income-related government subsidies. If the government document does not specify the recipients of the
subsidies, the subsidies divided into asset-related government subsidies and income-related government subsidies
in the following way: (1) If the government documents specify the specific project for which the subsidy is targeted,
the division shall be made according to the relative proportion of the disbursement amount forming assets and the
disbursement amount included in the expenses in the budget of the specific project, and the division proportion shall
be reviewed on each balance sheet date and changed if necessary; (2) Where the government document only has a
general description of the purpose and no specific project is specified, it shall be regarded as an income-related
government subsidy. For a government subsidy in the form of transfer of cash and bank balance, the subsidy is
measured at the amount received or receivable. For a government subsidy in the form of transfer of non-cash and
bank balance, it is measured at fair value; if the fair value cannot be reliably determinable, the subsidy is measured
at nominal amount. Government subsidies measured at nominal amounts are directly included in current profits and
losses.
     The Group usually recognizes and measures government subsidies in accordance with the amount actually
received when they are actually received. However, government subsidies are recognized at the amount receivable
if there is evidence that the Group can meet the relevant conditions specified in the financial support policy at the
end of the period and the Group is expected to receive the financial support funds. Government subsidies measured
at the amounts receivable shall also meet the following conditions: (1) The amount of the receivable subsidies has
been confirmed by the competent government department in writing, or can be reasonably calculated according to
the relevant provisions of the officially issued measures for the management of financial funds, and there is no
significant uncertainty in the estimated amount; (2) It is based on the financial support projects and financial fund
management measures officially issued by the local financial department and actively disclosed in accordance with
the provisions of the Regulations on the Disclosure of Government Information, and the management measures
should be inclusive (that is, any enterprise that meets the prescribed conditions can apply), rather than specifically
formulated for specific enterprises; (3) The relevant grant approval has clearly promised the disbursement period,
and the disbursement of the amount is guaranteed by the corresponding financial budget, so it can be reasonably
guaranteed that it can be received within the specified period; (4) Other relevant conditions that should be met based
on the specific circumstances of the Group and the grant in question (if any).
     Asset-related government subsidies are recognized as deferred income and included in the current profits and
losses over the useful life of the related assets in accordance with a reasonable and systematic method. Income-
related government subsidies that compensate the future costs, expenses or losses are recorded as deferred income
and recognized in current profits and losses in the period in which the related costs, expenses or losses are recognized;
Income-related government subsidies that compensate the incurred expenses or losses are included directly in the
current profits and losses.
     For government subsidies that contain both parts related to assets and parts related to income, accounting
treatments shall be made separately for different parts. If it is difficult to distinguish, it shall be classified as the
income-related government subsidy.
     Government subsidies related to ordinary activities are recorded in other income in accordance the substance
of economic operations. Government subsidies unrelated to daily activities are included in non-operating revenue
and expense.
     When confirmed government subsidies need to be returned and there is a related balance of deferred income,
the related deferred income balance is offset. Any excess amount is recognized in the current period’s income
statement or adjusted against the carrying value of the asset (for government subsidies that were initially offset
against the carrying value of the asset); in other cases, it is recognized directly in the current profits and losses.
     (1) Current income tax
     The current income tax liabilities (or assets) generated in the current period and previous periods are measured
on the balance sheet date in accordance with the expected payable (or refunded) income tax amount calculated
according to the tax law. The taxable income amount on which the current income tax expense is calculated is based
on the corresponding adjustment of the pre-tax accounting profit of the reporting period in accordance with the
relevant provisions of the tax law.
     (2) Deferred income tax assets and deferred income tax liabilities
     The deferred income tax assets and deferred income tax liabilities can be determined with the balance sheet
liability method, based on the difference between the book value of certain assets and liabilities and the tax basis,
as well as the temporary difference between the tax basis and the book value of the items not recognized as assets
and liabilities but whose tax basis can be determined according to the tax law.
     For taxable temporary differences relating to the initial recognition of goodwill and the initial recognition of
assets or liabilities arising from transactions that are neither a business combination nor affect accounting profit and
taxable income (or deductible losses) at the time of occurrence, the relevant deferred tax liabilities are not recognized
(except for individual transactions in which the initial recognition of assets and liabilities results in equal amounts
of taxable temporary differences and deductible temporary differences). In addition, for taxable temporary
differences related to investments in subsidiaries, associates and joint ventures, deferred tax liabilities are not
recognized if the Group is able to control the timing of the reversal of the temporary difference and it is likely that
the temporary difference will not be reversed in the foreseeable future. Subject to the above exceptions, the Group
recognizes all other deferred tax liabilities arising from taxable temporary differences.
     For deductible temporary differences relating to the initial recognition of assets or liabilities arising from
transactions that are neither a business combination nor affect accounting profit and taxable income (or deductible
losses) at the time of occurrence, the relevant deferred tax assets are not recognized (except for individual
transactions in which the initial recognition of assets and liabilities results in equal amounts of taxable temporary
differences and deductible temporary differences). For deductible temporary differences associated with
investments in subsidiaries, associates and joint ventures, the relevant deferred tax asset is not recognized if it is not
likely that the temporary differences will reverse in the foreseeable future and it is not likely that taxable income
will be available against which the deductible temporary differences can be utilized in the future. Subject to the
above exceptions, the Group recognizes other deferred income tax assets arising from deductible temporary
differences to the extent that it is probable that taxable income will be available against which deductible temporary
differences can be utilized.
     For the deductible losses and tax credits that can be carried forward to future years, the Group recognizes the
corresponding deferred tax assets to the extent that it is probable that future taxable income will be available against
which the deductible losses and tax credits can be utilized.
     On the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the
tax rates that are expected to apply in the period in which the asset is recovered or the liability is settled according
to the tax law.
     On the balance sheet date, the Group reviews the book value of deferred income tax assets. If no sufficient
taxable income is probably obtained in the future to offset the benefits of deferred income tax assets, the book value
of the deferred income tax assets shall be written down. When it is probable to obtain sufficient taxable income
taxes, such write-off amount shall be reversed.
     (3) Income tax expense
     Income tax expenses include current income tax expenses and deferred income tax expenses.
     Except for current income tax and deferred income tax related to transactions and events recognized as other
comprehensive income or directly included in shareholders’ equity, and the book value of deferred income tax
adjusted goodwill resulting from business combination, the remaining current income tax and deferred income tax
expenses or gains are included in current profits and losses.
     (4) Offsetting of income tax
     If the Group has the legal right to settle on a net basis, and intends to settle on a net basis or acquire assets and
settle liabilities simultaneously, the current income tax assets and current income tax liabilities are presented on a
net basis after offsetting.
     If the Group has a legally enforceable right to settle current income tax assets and liabilities on a net basis，
and the deferred income tax assets and liabilities are related to the income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities, which intend either to settle current income tax assets
and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred income tax assets and liabilities are expected to be reversed, the deferred
income tax assets and liabilities can be offset and presented on a net basis.
(1) Accounting treatment as the lessee
     Leasing refers to contracts in which the Group conveys or acquires the right to control the use of one or more
identified assets for a specified period in exchange for consideration. At the commencement date of a contract, the
Group assesses whether the contract is a lease or contains a lease component.
     The Group’s lease assets are mainly housing and buildings.
    ① Initial measurement
     On the date of commencement of the lease term, the Group recognizes the right to use the lease asset during
the lease term as a right of use asset and recognizes the present value of the outstanding lease payments as a lease
liability, except for short-term leases and low value asset leases. When calculating the present value of lease
payments, the interest rate implicit in the lease is used as the discount rate. If the interest rate implicit in the lease
cannot be determined, the lessor’s incremental borrowing rate is used as the discount rate.
     ② Subsequent measurement
     The Group shall depreciate the right of use assets in accordance with the relevant depreciation provisions of
Accounting Standard for Business Enterprises No. 4 - Fixed Assets (see Section 19 “Fixed assets” under Note
V for details). If the ownership of the leased asset can be reasonably determined at the end of the lease term, the
Group shall depreciate the leased asset during the remaining useful life. Where it is unable to reasonably determine
the ownership of the leased asset at the end of the lease term, the Group shall make depreciation provision over the
lease term or the remaining useful life of the leased asset, whichever is shorter.
     The Group calculates the interest expense on lease liabilities for each period of the lease term at a fixed periodic
rate, which is included in the current profits and losses, or the relevant asset costs. Variable lease payments that are
not included in the measurement of the lease liability are recognized in current profits and losses, or the relevant
asset costs when they are actually incurred.
     After the commencement date of the lease term, when there is a change in the substantive fixed payment amount,
a change in the amount expected to be payable for the guaranteed residual value, a change in the index or rate used
to determine the lease payment amount, or a change in the evaluation result or actual exercise of the purchase option,
renewal option or termination option, the Group remeasures the lease liability at the present value of the changed
lease payment amount and adjusts the carrying value of the right-of-use asset accordingly. If the book value of the
right-of-use asset has been reduced to zero but the lease liability is subject to further reduction, the Group recognizes
the remaining amount in current profits and losses.
    ③ Short-term leases and leases of low-value assets
     For short-term leases (leases with a lease term of not more than 12 months since the commencement date of
the lease) and low-value asset leases (the value of a single lease asset, which is a brand-new asset, is lower than
either RMB 40,000 or USD 5,000), the Group adopts a simplified approach whereby the right of use assets and lease
liabilities are not recognized and the lease payments are recognized in the relevant asset cost or current profits and
losses in accordance with the straight-line method or other systematic and reasonable methods during the various
periods of the lease term.
(2) Accounting treatment as the lessor
     On the inception date of the lease, the Group classifies the lease as a finance lease and an operating lease based
on the substance of transaction. A finance lease is a lease that transfers substantially all the risks and returns
associated with ownership of the leased asset. An operating lease is a lease other than a finance lease.
    ① Operating lease
     Lease receipts under operating leases are recognized as rental income on a straight-line basis over the respective
periods of the lease term. Variable lease payments acquired in connection with operating leases that are not included
in the lease receipts are recognized in current profits and losses when they are actually incurred.
    ② Finance lease
     The Group recognizes finance lease receivables and derecognizes finance lease assets on the commencement
date of the lease term. Finance lease receivables are initially measured at the net lease investment (the sum of the
unsecured balance and the unreceived lease proceeds on the commencement date of the lease term at the present
value discounted with the intrinsic interest rate of the lease), and interest income is recognized during the lease term
at a fixed periodic interest rate. Variable lease payments obtained by the Group which are not included in the net
lease investment measurement are recognized in current profits and losses when they are actually incurred.
     Share repurchase
     Consideration and transaction costs paid in share repurchases reduce shareholders’ equity and no profits or
losses is recognized when shares of the Company are repurchased, transferred or cancelled.
     For the transfer of treasury shares, the difference between the amount actually received and the book value of
treasury shares shall be included in the capital reserve. If the capital reserve is insufficient for deduction, the surplus
reserve and undistributed profits shall be deducted. For the cancellation of treasury shares, the share capital shall be
reduced according to the par value of the shares and the number of shares cancelled, and the difference between the
book balance and the par value of treasury shares shall be charged to the capital reserve. If the capital reserve is
insufficient for deduction, the surplus reserve and undistributed profits shall be deducted.
(1) Changes in significant accounting policies
      Applicable □ Not applicable
    ① Interpretation No. 17 of the Accounting Standards for Enterprises
     The Ministry of Finance issued Interpretation No. 17 of the Accounting Standards for Enterprises (hereinafter
referred to as “Interpretation No. 17”) on November 9, 2023, which will be effective from January 1, 2024. The
Group will adopt the provisions of Interpretation No. 17 starting from January 1, 2024. The implementation of
relevant provisions of Interpretation No. 17 will have no impact on the Group’s financial statements during the
reporting period.
    ② Interpretation No. 18 of the Accounting Standards for Enterprises
     The Ministry of Finance issued Interpretation No. 18 of the Accounting Standards for Enterprises (hereinafter
referred to as “Interpretation No. 18”) on December 31, 2024, which will be effective from the date of issuance.
The Group will adopt the provisions of Interpretation No. 18 starting from December 31, 2024. The implementation
of relevant provisions of Interpretation No. 18 will have no impact on the Group’s financial statements during the
reporting period.
(2) Changes in significant accounting estimates
     □ Applicable  Not applicable
(3) First-time implementation of the new accounting standard in 2025 to adjust relevant items in the
financial statements at the beginning of the year of first-time implementation
     □ Applicable  Not applicable
     As operating activities have inherent uncertainties, the Group needs to make judgments, estimates and
assumptions upon report items that cannot be accurately calculated in applying the above accounting policies. These
judgments, estimates and assumptions are made based on historical experiences of the management of the Group,
taking other related factors into consideration. These judgments and estimates may affect the presented amounts of
incomes, expenses, assets and liabilities and, as well as the disclosure of contingent liabilities on the balance sheet
date. However, the uncertainty in these estimates may result in actual results that differ from the current estimates
of the Group’s management, resulting in material adjustments to the book value of assets or liabilities affected in
the future.
     The Group reviews the above judgments, estimates and assumptions periodically based on going concern. If
the changes of accounting estimates only affect the current period, the influence amount is recognized in the current
period. If the changes of accounting estimates affect both of the current year and the future period, the influence
amount is recognized in the current period and the future period.
     As at the balance sheet date, the significant areas in which the Group is required to make judgments, estimates
and assumptions regarding the amounts of items in the financial statements are as follows:
     (1) Revenue recognition
     As set out in Section 31 “Revenue” under Note V, the Group’s revenue recognition involves significant
accounting judgments and estimates such as: identifying customer contracts; estimating the recoverability of the
consideration to which the Group is entitled as a result of the transfer of goods to the customer; identifying the
performance obligations in the contract; estimating the variable consideration present in the contract and the amount
of accumulated recognized revenue that is highly unlikely to be materially reversed when the related uncertainty is
eliminated; whether there is any significant financing component to the contract; estimating the individual selling
price of the individual performance obligations in the contract; determining whether the performance obligation is
to be performed within a certain period of time or at a certain point; determining the implementation progress, etc.
     The Group mainly relies on past experience and work to make judgments, and these significant judgments and
changes in estimates may have an impact on the operating revenue, operating costs, and profits and losses of the
period for the current or subsequent periods, and may constitute a material impact.
     (2) Leases
     ① Identification of leases
     When identifying whether a contract is a lease or contains a lease, the Group needs to assess whether there
exists an identified asset and the customer controls the use of the asset for a certain period of time. In this assessment,
consideration needs to be given to the nature of the asset, substantial replacement rights, and whether the customer
is entitled to receive virtually all of the economic benefits arising from the use of the asset during that period and
able to direct the use of the asset.
     ② Classification of leases
     When acting as a lessor, the Group classifies leases into operating leases and finance leases. When making the
classification, the management needs to make an analysis and judgment as to whether all the risks and rewards
associated with ownership of the leased asset have been substantially transferred to the lessee.
     ③ Lease liabilities
     When the Group is the lessee, the lease liabilities shall be initially measured at the present value of the
outstanding lease payment on the commencement date of the lease term. When measuring the present value of lease
payments, the Group estimates the discount rate used and the lease term of a lease contract with a renewal or
termination option. When assessing the lease term, the Group takes into account all relevant facts and circumstances
relating to the economic benefits arising from the exercise of the option by the Group, including expected changes
in facts and circumstances between the commencement date of the lease term and the exercise date of the option.
Different judgments and estimates may affect the recognition of lease liabilities and right-of-use assets and will
affect the profits or losses in subsequent periods.
     (3) Impairment of financial assets
     The Group uses the expected credit loss model to evaluate the impairment of financial instruments, and the
application of the expected credit loss model requires significant judgments and estimates that take into account all
reasonable and evidence-based information, including forward-looking information. When making such judgments
and estimates, the Group extrapolates the expected changes in the debtors' credit risk based on historical data and
factors such as changes in economic policies, macroeconomic indicators, industry risks, external market conditions,
technological environment and customer conditions.
     (4) Provision for inventory impairment
     According to the inventory accounting policy, the Group makes provision for inventory impairment based on
either the cost or the realizable net value of the old and unsalable inventory, whichever is lower, if the cost is higher
than the realizable net value. The impairment of inventory to net realizable value is based on assessing the
marketability of the inventory and its net realizable value. Assessment of inventory impairment requires the
management to make judgments and estimates on the basis of obtaining solid evidence and considering factors such
as the purpose of holding inventory and the impact of events after the balance sheet date. The difference between
actual results and the original estimate will affect the book value of inventory and the withdrawal or reversal of the
provision for inventory impairment during the period in which the estimate is changed.
     (5) Fair value of financial instruments
     For financial instruments without active market, the Group will determine their fair values through various
valuation methods. These valuation methods include discounted cash flow model analysis. In the valuation, the
Group needs to estimate future cash flows, credit risk, market volatility and correlation, and select an appropriate
discount rate. These assumptions are subject to uncertainty, and changes in them can have an impact on the fair
value of financial instruments. Where equity instrument investments or contracts are publicly quoted, the Group
does not use cost as the best estimate of their fair value.
     (6) Provision for impairment of long-term assets
     On the balance sheet date, the Group makes a judgment on whether there is any sign of possible impairment of
non-current assets other than financial assets. Intangible assets with uncertain useful life shall be subject to
impairment tests when there are signs of impairment in addition to annual impairment tests. Non-current assets other
than financial assets shall be subject to impairment tests when there are signs indicating that their book value is
uncollectible.
     Impairment occurs when the book value of an asset or asset group is greater than the recoverable amount, that
is, the net amount of fair value minus disposal expenses and the present value of expected future cash flow,
whichever is higher.
     The net amount of fair value minus disposal expenses shall be determined by reference to the sale agreement
price or observable market price of similar assets in an arm’s length transaction, less the incremental cost directly
attributable to the disposal of the asset.
     When estimating the present value of future cash flows, it is necessary to make significant judgments about the
output of the asset (or group of assets), the selling price, the associated operating costs, and the discount rate used
in calculating the present value. When estimating the recoverable amounts, the Group uses all the relevant
information available, including projections of production volumes, selling prices and related operating costs based
on reasonable and supportable assumptions.
     The Group tests goodwill for impairment at least annually. This requires an estimate of the present value of the
future cash flows of the asset group or combination of asset groups to which goodwill has been allocated. When
estimating the present value of the future cash flow, the Group needs to estimate the expected future cash flow
generated by the asset group or combination of asset groups, and determine the present value of the future cash flow
at an appropriate discount rate.
     (7) Depreciation and amortization
     The Group depreciates and amortizes the investment real estate, fixed assets and intangible assets on a straight-
line basis over their useful lives, taking into account their residual value. The Group periodically reviews the useful
life to determine the amount of depreciation and amortisation expenses to be included in each reporting period. The
useful life is determined by the Group based on previous experience with similar assets as well as expected
technological updates. If there is any material change in previous estimates, an adjustment will be made to
depreciation and amortization expense in future periods.
     (8) Deferred income tax assets
     To the extent that there is likely sufficient taxable profit to offset the loss, the Group recognises deferred tax
assets on all unutilised tax losses. This requires the management of the Group to use massive judgments to estimate
the time and amount of taxable profit in the future and then to determine the value of deferred tax assets in
combination with tax planning strategies.
     (9) Income tax
     In the normal business activities of the Group, there are certain uncertainties in the final tax treatment and
calculation of some transactions. Whether some items can be deducted before tax requires the approval of the tax
authority. Where the final tax outcome of these matters is different from the estimated amounts, the differences will
impact the current income tax and deferred income tax in the period in which such determination is made.
     (10) Measurement at fair value
     Certain assets and liabilities of the Group are measured at fair value in the financial statements. The Group’s
Board of Directors has established a Valuation Committee, led by the Group’s Chief Financial Officer, to determine
appropriate valuation techniques and inputs for fair value measurement. When estimating the fair value of an asset
or liability, the Group uses available observable market data. If the inputs of level 1 are not available, the Group
will hire qualified third-party appraisers to perform the valuation. The Valuation Committee works closely with
qualified external appraisers to determine appropriate valuation techniques and relevant input values for the models.
The Chief Financial Officer reports the findings of the Valuation Committee to the Group’s Board of Directors on
a quarterly basis, explaining the reasons for fluctuations in the fair value of relevant assets and liabilities. Relevant
information on the valuation techniques and input values used in determining the fair value of various assets and
liabilities is disclosed in “Note XII.”
None.
VI. Taxation
             Tax type                             Taxation basis                                    Tax rate
                                      Value added from sales of goods or
   Value-added tax                                                               13%, 9%, 6%, 5%, 3%
                                      rendering of services
                                                                                 Price-based collection: 15%, 10%; Quantity-
                                      Quantity-based collection and price-
   Consumption tax                                                               based collection: 20% plus RMB 0.5 per 0.5kg
                                      based collection
                                                                                 (or 500 mL)
   Urban maintenance and
                                      Amount of turnover tax payables            7%, 5%, 1%
   construction tax
   Enterprise income tax              Taxable income                             15%, 16.5%, 20%, 25%
   Education surcharge                Amount of turnover tax payables            3%
   Local education surcharge          Amount of turnover tax payables            2%
  If there are taxable entities with different corporate income tax rates, disclose the description of the situation
                                       Taxpayer                                                      Income tax rate
 Yunnan Baiyao Group Co., Ltd.                                                                           15.00%
 Yunnan Baiyao Group Medicine E-commerce Co., Ltd.                                                       15.00%
 Yunnan Institute of Materia Medica                                                                      15.00%
 Yunnan Baiyao Group Health Products Co., Ltd.                                                           15.00%
 Yunnan Baiyao Group Lijiang Pharmaceutical Co., Ltd.                                                    15.00%
 Yunnan Baiyao Group Wenshan Qihua Co., Ltd.                                                             15.00%
 Yunnan Baiyao Pharmacy Co., Ltd.                                                                        15.00%
 Yunnan Baiyao Teayield Co., Ltd.                                                                        15.00%
 Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd.                                                       15.00%
YNBY International Limited                                                                         16.50%
Wan Long Xing Ye Commercial Trading (Hong Kong) Limited                                            16.50%
BL Healthcare (Hong Kong) Limited                                                                  16.50%
YNBY Coffee Co., Ltd.                                                                              16.50%
Yunbaiyao Hong Kong Limited                                                                        16.50%
Yunbaiyao Zhengwu Technology (Shanghai) Co., Ltd.                                                  20.00%
Yunnan Pharmaceutical Xihui Co., Ltd.                                                              20.00%
Beijing Rui’er Testing Technology Co., Ltd.                                                        20.00%
Yunnan Pharmaceutical Jiayuan Co., Ltd.                                                            20.00%
Yunnan Pharmaceutical Tianfu Dahua Co., Ltd.                                                       20.00%
Yunnan Pharmaceutical Diqing Development Co., Ltd.                                                 20.00%
Yunnan Pharmaceutical Pu’er Co., Ltd.                                                              20.00%
Yunnan Pharmaceutical Zhaotong Co., Ltd.                                                           20.00%
Lijiang Yunquan Biological Development Co., Ltd.                                                   20.00%
Yunnan Baiyao Tiancui Business Management Co., Ltd.                                                20.00%
Beijing Yunzhi Health Management Co., Ltd.                                                         20.00%
Shanghai Wenshu Health Management Co., Ltd.                                                        20.00%
Kunming Yunzhen Medical Technology Co., Ltd.                                                       20.00%
Shanghai Yunyi Medical Technology Co., Ltd.                                                        20.00%
Shanghai Yunpu Medical Technology Co., Ltd.                                                        20.00%
Beijing Yunzhen Medical Aesthetic Clinic Co., Ltd.                                                 20.00%
Shanghai Hanshi Health Consulting Co., Ltd.                                                        20.00%
Shanghai Yunzhenni Medical Aesthetic Outpatient Department Co., Ltd.                               20.00%
Yunnan Baiyao Yunzhen International Trade Co., Ltd.                                                20.00%
Shanghai Yunyao Oral Medical Technology Co., Ltd.                                                  20.00%
Yunnan Fengqing Tea Plant Co., Ltd.                                                                20.00%
Yunnan Baiyao Tianyi Chayuan Lincang Manor Co., Ltd.                                               20.00%
Tianjin Yunshuda Comprehensive Clinic Co., Ltd.                                                    20.00%
Yunnan Tianzheng Testing Co., Ltd.                                                                 20.00%
YNBY Healthcare (Shenzhen) Limited                                                                 20.00%
YNBY Healthcare Technology (Yunnan) Co., Ltd.                                                      20.00%
Xingzhong Digital Intelligence TCM Service Co., Ltd of Yunnan Baiyao Group                         20.00%
Yunnan Yunyao Nuxiang Co., Ltd.                                                                    20.00%
Hangzhou Shanqi Health Industry Co., Ltd.                                                          20.00%
 Yunnan Baiyao Group Seed Technology Co., Ltd.                                                   20.00%
 Yunnan Baiyao Group (Hainan) Import & Export Trading Co., Ltd.                                  20.00%
 Shaanxi Zhiyun Wenshu Health Services Co., Ltd.                                                 20.00%
 Yunnan Baiyao Group Shanghai Co., Ltd.                                                          20.00%
 Shanghai Yunzhen Outpatient Department Co., Ltd.                                                20.00%
     (1) A total of 8 companies, including Yunnan Baiyao Group Co., Ltd, Yunnan Baiyao Group Medicine E-
commerce Co., Ltd, Yunnan Baiyao Group Health Products Co., Ltd, Yunnan Baiyao Group Lijiang Pharmaceutical
Co., Ltd, Yunnan Baiyao Group Wenshan Qihua Co., Ltd, Yunnan Baiyao Pharmacy Co., Ltd, Yunnan Baiyao
Teayield Co., Ltd., and Yunnan Baiyao Group Dali Pharmaceutical Co., Ltd, enjoy the preferential tax treatment
for the Western Development and pay the enterprise income tax at the tax rate of 15%.
     (2) Yunnan Institute of Materia Medica enjoys the preferential tax treatment for high-tech enterprises and pay
the enterprise income tax at the tax rate of 15%.
     (3) For Yunnan Baiyao Group Sanqi Industry Co., Ltd and Yunnan Baiyao Group Tai’an Biotechnology
Industry Co., Ltd, the primary processing of agricultural products is exempt from enterprise income tax, and the
income other than that is taxed at 25%.
      For Lijiang Yunquan Biological Development Co., Ltd, the primary processing of agricultural products is
exempt from enterprise income tax, and the income other than that shall be subject to enterprise income tax for small
and micro enterprises.
     (4) The Hong Kong-based company (YNBY International Limited and its subsidiaries in Hong Kong as a
single taxpayer entity) is subject to the “two-tiered tax rate” policy. This means that for annual taxable profits not
exceeding HKD 2 million, a tax rate of 8.25% applies; for profits exceeding HKD 2 million, a tax rate of 16.5%
applies. 100% of the profits tax for the year 2024/25 can be waived, with a cap of HKD 1,500 for each company.
     (5) According to the Announcement of the General Administration of Taxation of the Ministry of Finance on
the Further Implementation of the Preferential Income Tax Policy for Small and Micro Enterprises (Finance and
Taxation [2022] No. 13), “the part of the annual taxable income of small and micro profit enterprises exceeding
RMB 1 million but not exceeding RMB 3 million shall be included in the taxable income at a reduced rate of 25%,
and the enterprise income tax shall be paid at a tax rate of 20%. The period of implementation of this announcement
is from January 1, 2022 to December 31, 2024,” the Announcement of the General Administration of Taxation of
the Ministry of Finance on Preferential Income Tax Policies for Small and Micro Enterprises and Individual
Industrial and Commercial Households (Finance and Taxation [2023] No. 6), “the part of the annual taxable income
of small and micro profit enterprises that does not exceed RMB 1 million shall be included in the taxable income at
a reduced rate of 25%, and the enterprise income tax shall be paid at a tax rate of 20%. The period of enforcement
of this Announcement is from January 1, 2023 to December 31, 2024,” and the Announcement of the General
Administration of Taxation of the Ministry of Finance on Tax Policies for Further Supporting the Development of
Small and Micro Enterprises and Individual Industrial and Commercial Enterprises (Finance and Taxation [2023]
No. 12), “For small, low-profit enterprises, the taxable income amount shall be calculated at a reduced rate of 25%,
and the enterprise income tax shall be paid at a tax rate of 20%. The policy shall be continued until December 31,
Technology Co., Ltd pay enterprise income tax at a tax rate of 20% according to this policy.
VII. Notes to Items in Consolidated Financial Statements
                                                                                                                         Unit: RMB
                      Item                                   Closing balance                             Opening balance
   Cash on hand                                                                146,174.20                                   124,469.53
   Bank deposit                                                         11,198,187,331.57                            10,835,027,632.02
   Other cash and bank balance                                              95,495,855.10                                52,831,059.75
   Total                                                                11,293,829,360.87                            10,887,983,161.30
       Including: Total amount of money
   deposited overseas                                                      192,072,755.85                               172,825,681.17
     Other explanations: None.
                                                                                                                           Unit: RMB
                      Item                                  Closing balance                              Opening balance
   Financial assets at fair value through
   profits or losses
   Including:
           Investments in debt instruments
           Investments in equity instruments                                                                            179,246,998.10
           Others                                                       3,121,018,919.96                              2,367,866,525.30
   Total                                                                3,121,018,919.96                              2,547,113,523.40
    Other explanations: Others include banking products that are characterized by higher safety and better liquidity, as well as wealth
management products from brokerage firms.
(1) Notes receivable by type
                                                                                                                           Unit: RMB
                      Item                                  Closing balance                              Opening balance
  Banker’s acceptance bill                                                253,243,829.02                               302,751,911.37
  Domestic letter of credit                                               510,000,000.00                               626,900,000.00
  Total                                                                   763,243,829.02                               929,651,911.37
(2) Disclosure by the method of provision for bad debts
                                                                                                                                                                                         Unit: RMB
                                                                               Closing balance                                                            Opening balance
                                                         Book balance                Provision for bad debts                          Book balance            Provision for bad debts
                        Category
                                                                                                 Provision                                                               Provision
                                                      Amount             Proportion Amount                      Book value       Amount          Proportion   Amount                      Book value
                                                                                                 proportion                                                              proportion
   Bills receivable with provision for bad debts by     763,243,829.02    100.00%                              763,243,829.02   929,651,911.37     100.00%                              929,651,911.37
   portfolio
           Including:
           Banker’s acceptance bill                     253,243,829.02      33.18%                             253,243,829.02   302,751,911.37       32.57%                             302,751,911.37
           Domestic letter of credit                    510,000,000.00      66.82%                             510,000,000.00   626,900,000.00       67.43%                             626,900,000.00
   Total                                                763,243,829.02    100.00%                              763,243,829.02   929,651,911.37     100.00%                              929,651,911.37
    Provision for bad debts by portfolio:
                                                                                                                                                                                                 Unit: RMB
                                                                                                                   Closing balance
                         Item
                                                                Book balance                                   Provision for bad debts                                 Provision proportion
Banker’s acceptance bill                                                         253,243,829.02
Domestic letter of credit                                                        510,000,000.00
Total                                                                            763,243,829.02
    The explanation for determining the basis of this combination: None.
    If provision was made for bad debts of notes receivable in accordance with the general expected credit loss model:
    □ Applicable        Not applicable
 (3) Provision for bad debts accrued, recovered or reversed during the reporting period: None.
 (4) Notes receivable pledged by the Company at the end of the reporting period: None.
 (5) Notes receivable endorsed or discounted by the Company, which were not yet due on the balance sheet
date as at the end of the reporting period
                                                                                                                         Unit: RMB
                                           Amount derecognized at the end of the           Amount not derecognized at the end of
         Item
                                                         period                                         the period
Banker’s acceptance bill                                                7,881,386.91
Domestic letter of credit                                             324,000,000.00
Total                                                                 331,881,386.91
 (6) Actual write-off of notes receivable for the period: None.
(1) Disclosure by aging
                                                                                                                          Unit: RMB
                   Aging                                 Closing balance                               Opening balance
 Within 1 year (inclusive of 1 year)                                10,284,068,454.42                              9,713,443,216.42
 Above 3 years                                                             63,175,684.63                              49,403,790.60
 Total                                                              11,527,627,705.77                             10,803,638,312.76
(2) Disclosure by the method of provision for bad debts
                                                                                                                                                                                                   Unit: RMB
                                                                       Closing balance                                                                       Opening balance
                Category                    Book balance                    Provision for bad debts                                 Book balance                  Provision for bad debts
                                                                                           Provision      Book value                                                              Provision      Book value
                                        Amount            Proportion        Amount                                             Amount           Proportion       Amount
                                                                                           proportion                                                                            proportion
 Accounts receivable with provision       5,666,188.00         0.05%       5,666,188.00       100.00%               0.00         5,666,188.00       0.05%         5,666,188.00      100.00%               0.00
 for bad debts on individual basis
   Including:
Accounts receivable with provision
for bad debts on individual basis
 Accounts receivable with
 provision for bad debts on           11,521,961,517.77       99.95%    1,008,062,809.41        8.75%   10,513,898,708.36   10,797,972,124.76      99.95%       874,611,020.37        8.10%    9,923,361,104.39
 portfolio basis
   Including:
  Age-based portfolio                 11,521,961,517.77       99.95%    1,008,062,809.41        8.75%   10,513,898,708.36   10,797,972,124.76      99.95%       874,611,020.37        8.10%    9,923,361,104.39
 Total                                11,527,627,705.77      100.00%    1,013,728,997.41        8.79%   10,513,898,708.36   10,803,638,312.76      100.00%      880,277,208.37        8.15%    9,923,361,104.39
     Provision for bad debts made on an individual basis:
                                                                                                                             Unit: RMB
                             Opening balance                                             Closing balance
     Name                                 Provision for                          Provision for         Provision          Reason for
                     Book balance                           Book balance
                                           bad debts                              bad debts            proportion         provision
Ningbo
Qingbing                                                                                                              Little chance of
Biotechnology                                                                                                         recovery
Co., Ltd.
Total                  5,666,188.00        5,666,188.00        5,666,188.00       5,666,188.00
     Provision for bad debts made on a portfolio basis:
                                                                                                                             Unit: RMB
                                                                              Closing balance
             Name
                                             Book balance                 Provision for bad debts             Provision proportion
 Age-based portfolio                            11,521,961,517.77                   1,008,062,809.41                            8.75%
 Total                                          11,521,961,517.77                   1,008,062,809.41
Explanation on the basis for determining the portfolio: None.
If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
□ Applicable     Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the reporting period
Provision for bad debts for the period:
                                                                                                                       Unit: RMB
                                                                     Changes in this period
     Category           Opening balance                                                                                Closing balance
                                                                        Recovery or
                                                   Provision                               Write-off        Others
                                                                         reversal
 Age-based
 portfolio
 Accounts
 receivable with
 provision for bad            5,666,188.00                                                                                  5,666,188.00
 debts on
 individual basis
 Total                     880,277,208.37           133,537,271.89                              85,482.85               1,013,728,997.41
Including: Significant amount recovered or reversed provision for bad debts during the reporting period: None.
(4) Actual write-off of accounts receivable for the period:
                                                                                                                       Unit: RMB
                               Item                                                       Amount of write-off
   Actual write-off of accounts receivable                                                                               85,482.85
  Significant write-off of accounts receivable: None.
 Explanation on write-off of accounts receivable: None.
 (5) Top five customers in closing balance of accounts receivable and contractual assets summarized by
debtor
                                                                                                                      Unit: RMB
                                                                                         Percentage of total       Closing balance of
                                                                    Closing balance of
                                                                                         of closing balance    provision for bad debts of
                     Closing balance of       Closing balance of         accounts
   Entity name                                                                               of accounts        account receivable and
                     accounts receivable      contractual assets      receivable and
                                                                                           receivable and      provision for impairment
                                                                    contractual assets
                                                                                         contractual assets       of contractual assets
  Customer A                 635,670,757.09                             635,670,757.09                5.51%               132,831,836.83
  Customer B                 600,586,622.48                             600,586,622.48                5.21%                 30,563,916.36
  Customer C                 519,709,927.63                             519,709,927.63                4.51%                 25,985,496.38
  Customer D                 392,419,801.65                             392,419,801.65                3.40%               110,115,695.03
  Customer E                 271,452,020.43                             271,452,020.43                2.35%                 18,180,337.65
  Total                    2,419,839,129.28                           2,419,839,129.28              20.98%                317,677,282.25
 (1) Accounts receivable financing by type
                                                                                                                     Unit: RMB
                    Item                                  Closing balance                          Opening balance
 Banker’s acceptance bill                                            1,075,992,406.56                          1,887,789,780.16
 Domestic letter of credit                                              94,443,375.00
 Total                                                               1,170,435,781.56                          1,887,789,780.16
(2) Classified disclosure according to the method of bad debt provision: None.
(3) The bad debt provisions accrued, recovered, or reversed during the period: None.
(4) Financing of receivable pledged by the Company at the end of the reporting period: None.
(5) Financing of receivable endorsed or discounted by the Company, which was not yet due on the balance
sheet date as at the end of the reporting period:
                                                                                                                       Unit: RMB
                                                Amount derecognized at the end of the     Amount not derecognized at the end of
                     Item
                                                              period                                  the period
  Banker’s acceptance bill                                            6,079,524,232.92
  Domestic letter of credit                                             385,180,269.93
  Total                                                               6,464,704,502.85
 (6) Financing of the actual write-off of accounts receivable during the reporting period: None.
 (7) Increase/decrease in the financing of accounts receivable and in their fair values during the reporting
 period: None.
 (8) Other explanations: None.
                                                                                                          Unit: RMB
                     Item                        Closing balance                           Opening balance
 Dividends receivable                                         193,031,770.84                            10,348,033.98
 Other receivables                                            160,543,884.23                            98,079,164.35
 Total                                                        353,575,655.07                           108,427,198.33
 (1) Interests receivable
 □Applicable Not applicable
(2) Dividends receivable
                                                                                                          Unit: RMB
           Project (or investee)                 Closing balance                          Opening balance
 Jacobson Pharma Co., Ltd.                                                                               6,482,280.00
 JBM (Healthcare) Co., Ltd.                                                                               3,865,753.98
 Shanghai Pharmaceuticals Holding Co.,
 Ltd.
 Total                                                      193,031,770.84                              10,348,033.98
   □Applicable       Not applicable
 (3) Other receivables
                                                                                                                        Unit: RMB
                    Nature                             Closing book balance                         Opening book balance
   Deposits and guarantees                                             292,188,593.09                               282,011,383.75
   Petty cash                                                            4,686,668.19                                 4,284,813.75
   Others                                                              317,681,394.11                               298,950,367.29
   Borrowings                                                            2,877,211.78                                 4,877,211.78
                    Total                                               617,433,867.17                               590,123,776.57
                                                                                                                          Unit: RMB
                     Aging                                 Closing book balance                        Opening book balance
    Within 1 year (inclusive of 1 year)                                   165,408,925.39                                91,464,527.37
    Above 3 years                                                         429,026,583.21                               476,945,751.75
    Total                                                                 617,433,867.17                               590,123,776.57
    Applicable         □ Not applicable
   Provision was made for bad debts in accordance with the general expected credit loss model:
                                                                                                                         Unit: RMB
                                          Phase I                  Phase II                      Phase III
   Provision for bad debts                                                                                                 Total
                                 Expected credit losses    Lifetime ECL (not credit-       Lifetime ECL (credit-
                                 for the next 12 months           impaired)                      impaired)
Balance as of January 1, 2025             220,783,937.68                                            271,260,674.54      492,044,612.22
Balance as of January 1, 2025
in the current period
Current provision                                                                                     8,399,572.68        8,399,572.68
Current reversal                           43,554,201.96                                                                 43,554,201.96
Balance as of June 30, 2025               177,229,735.72                                            279,660,247.22      456,889,982.94
 Division base for each phase and proportion of provision for bad debts: None.
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable        Not applicable
Provision for bad debts during the reporting period:
                                                                                                                                Unit: RMB
                                                                       Changes in this period
      Category           Opening balance                         Recovery or         Transfer or                           Closing balance
                                               Provision                                                   Others
                                                                  reversal            write-off
Other accounts
receivable with
provision for bad
debts by credit risk
characteristics
portfolio
        Total              492,044,612.22     8,399,572.68       43,554,201.96                                               456,889,982.94
Recovery or reversal of provision for bad debts with significant amount during the reporting period: None.
                                                                                                                            Unit: RMB
                                                                                                    Percentage of     Closing balance of
       Entity name        Nature of payment      Closing balance               Aging               total of closing   provision for bad
                                                                                                   balance of other          debt
                                                                                                     receivables
                         Deposits and
   Entity A                                         100,000,000.00       Above 3 years                      16.20%          100,000,000.00
                         guarantees
                         Deposits and
   Entity B                                            37,799,431.74     Within 1 year                        6.12%           1,889,971.59
                         guarantees
                         Deposits and
   Entity C                                            18,000,000.00     Above 3 years                        2.92%          18,000,000.00
                         guarantees
                         Deposits and
   Entity D                                            11,500,000.00     Within 1 year                        1.86%             575,000.00
                         guarantees
   Entity E              Others                        11,037,586.50     Within 1 year                        1.79%           8,399,572.68
   Total                                            178,337,018.24                                          28.88%          128,864,544.27
(1) Prepayments by aging
                                                                                                                              Unit: RMB
                                               Closing balance                                           Opening balance
           Aging
                                      Amount                     Proportion                     Amount                 Proportion
  Within 1 year                         229,461,212.36                    94.80%                292,483,526.83                    96.35%
  Above 3 years                          4,134,444.25                     1.71%                   1,571,876.52                   0.52%
  Total                                242,041,101.08                                         303,563,844.07
Explanation on why prepayments with aging of more than 1 year and an important amount not settled in time: None.
(2) Top five suppliers in closing balance of prepayment summarized by payee
  Series                                                                                                      Percentage of prepayments
                                      Company name                                     Book balance
   No.                                                                                                                   (%)
                                      Total                                            48,311,173.25                    19.96%
 Other explanations: None.
Did the Company need to comply with the disclosure requirements of the real estate industry: No.
(1) Categories of inventories
                                                                                                                            Unit: RMB
                                          Closing balance                                            Opening balance
                                          Provision for                                              Provision for
                                        decline in value                                           decline in value
                                        of inventories or                                          of inventories or
          Item                            provision for                                              provision for
                     Book balance                               Book value      Book balance                               Book value
                                         impairment of                                              impairment of
                                             contract                                                   contract
                                          performance                                                performance
                                              costs                                                      costs
 Raw materials     1,542,268,025.34            47,335,748.03 1,494,932,277.31 1,592,465,699.05          56,078,142.82 1,536,387,556.23
 Work in             142,846,541.97             3,619,876.51   139,226,665.46   285,385,346.89           3,184,218.03    282,201,128.86
 process
 Finished          4,173,105,518.06            68,941,081.49 4,104,164,436.57 4,424,372,412.33          52,518,059.87 4,371,854,352.46
 goods
 Consumptive
 biological           46,394,270.94                             46,394,270.94     42,544,762.19                           42,544,762.19
 assets
 Materials
 outsourced for                                                                     193,030.54                               193,030.54
 processing
 Packaging
 materials and
 low value
 consumables
 Total             5,956,158,915.33           120,739,379.26 5,835,419,536.07 6,406,907,250.53         112,538,934.23   6,294,368,316.30
(2) Data resources confirmed as inventory: None.
(3) Provision for decline in value of inventories or provision for impairment of contract performance costs
                                                                                                                          Unit: RMB
                                           Increase in the current period         Decrease in the current period
         Item          Opening balance                                           Reversal or                          Closing balance
                                           Provision            Others                                Others
                                                                                  reselling
 Raw materials          56,078,142.82      4,879,888.79                         13,622,283.58                           47,335,748.03
 Unfinished              3,184,218.03        435,658.48                                                                  3,619,876.51
 products
 Stocks                 52,518,059.87     38,924,814.83                         22,501,793.21                           68,941,081.49
 Packaging
 materials
 and low                   758,513.51         87,165.45                                 3,005.73                           842,673.23
 value
 consumables
 Total                 112,538,934.23     44,327,527.55                         36,127,082.52                          120,739,379.26
Provision for decline in value of inventories on a portfolio basis: None.
Standards for provision for decline in value of inventories on a portfolio basis: None.
(4) Explanation on closing balance of inventories involving capitalized amount of borrowing costs: None.
(5) Explanation on the current amortization amount of contract performance costs: None.
                                                                                                                         Unit: RMB
                                    Closing book       Provision for     Closing book         Fair     Estimated            Estimated
                Item
                                      balance           impairment          value            value    disposal fees       disposal time
   Held-for-sale equity held in                                                                                          December
   the subsidiary                                                                                                        2025
   Total                          3,363,423.87                           3,363,423.87
Other explanations: Shanghai Yunzhen Medical Technology Co., Ltd, the Company’s subsidiary, entered into a contract for equity
trading with Shanghai Haijieya Medical Technology Co., Ltd, with an intention to transfer its 100% equity and creditor’s rights held
in Shanghai Yunzhen Outpatient Department Co., Ltd. Both parties completed the singing of the agreement as to this transaction in
March 2025. It is expected to complete the closing in December 2025.
                                                                                                                          Unit: RMB
                        Item                                 Closing balance                             Opening balance
   Certificate of deposit and interest                                      487,601,083.33                               480,295,722.22
   Total                                                                    487,601,083.33                               480,295,722.22
 (1) Debt investments due within one year
     □ Applicable               Not applicable
 (2) Other debt investments due within one year
   □ Applicable            Not applicable
                                                                                                      Unit: RMB
                        Item                      Closing balance                          Opening balance
      Input tax to be deducted and certified                  483,524,178.65                          472,854,544.60
      Time deposits and other wealth
      management products
      Cost of returned goods receivable                       171,913,458.39                          156,086,620.09
      Prepaid taxes and fees                                    2,885,627.68                           11,082,804.32
      Others                                                  237,107,616.23                           38,755,582.16
      Total                                                 1,290,287,380.95                          788,108,579.54
    Other explanations: None.
                                                                                                                                                                                                             Unit: RMB
                                                                                                Increase and decrease in the current period
                                          Opening                                 Profits and                                                                                                                  Closing
                        Opening                                                                                                                   Cash
                                         balance of                                losses on                                                                                             Closing balance      balance of
    Investee         balance (book                                                                  Adjustment of          Change in          dividends or      Provision
                                                      Additional    Decreased    investments
                                        impairment                                                      other                                                                Others       (book value)       impairment
                         value)                                                   recognized                                 other                profit           for
                                         provision    investment    investment                      comprehensive                                                                                             provision
                                                                                   under the                                equities           declared to     impairment
                                                                                                       income
                                                                                     equity
                                                                                                                                                distribute
                                                                                    method
I. Joint ventures
II. Associates
Shanghai
Pharmaceuticals
Holding Co.,
Ltd.
Yunnan TCM
Comprehensive
Health
Innovation
Equity                499,889,683.05                                                -525,965.37                                                                                            499,363,717.68
Investment Fund
Partnership
(Limited
Partnership)
Ban Loong
Jacobson JBM                 9,809.54                                                                                                                                        -9,809.54               0.00
Pharma Limited
Lijiang
Changgengming                                           40,000.00                    -40,000.00                                                                                                      0.00
Trading Co., Ltd.
Subtotal            12,561,276,081.35                   40,000.00                772,608,775.38             747,046.88    15,826,190.78       193,031,770.84                 -9,809.54   13,157,456,514.01
Total               12,561,276,081.35                   40,000.00                772,608,775.38             747,046.88    15,826,190.78       193,031,770.84                 -9,809.54   13,157,456,514.01
   The recoverable amount is determined based on the net amount obtained by the fair value less the disposal expense.
   □ Applicable       Not applicable
   The recoverable amount is determined based on the present value of estimated future cash flows.
   □ Applicable       Not applicable
    Reasons for significant differences between the foregoing information and information used for impairment testing in
    previous years or external information: Not applicable.
    Reasons for significant differences between the information used in the Company’s impairment tests in previous years and
    the actual situation in the corresponding years: Not applicable.
   Other explanations: None.
                                                                                                                             Unit: RMB
                          Item                                   Closing balance                           Opening balance
      Financial assets at fair value through
      profits or losses
      Total                                                                  206,670,363.44                             387,688,897.11
   Other explanations: None.
   (1) Adoption of the cost measurement model for investment properties
   Applicable       □Not applicable
                                                                                                                                  Unit: RMB
                                                                                                  Construction in
                  Item                         Houses and buildings       Land use rights                                      Total
                                                                                                    progress
 I. Original book value
      (1) Outsourcing                                                                                                                   0.00
      (2) Transfer from
 inventory\fixed assets\ construction                   2,493,258.77                608,518.17                                  3,101,776.94
 in progress
     (3) Increase in business
combination
      (1) Disposal
      (2) Other transfer out
 II. Accumulated depreciation and
 accumulated amortization
      (1) Provision or amortization                  448,480.72                  116,127.34                                   564,608.06
       (2) Others                                   1,228,592.93                 448,090.07                                 1,676,683.00
      (1) Disposal
     (2) Other transfer out
III. Provision for impairment
      (1) Provision
      (2) Others                                     436,290.04                                                               436,290.04
     (1) Disposal
     (2) Other transfer out
IV. Book value
  The recoverable amount is determined based on the net amount obtained by the fair value less the disposal expense.
  □Applicable         Not applicable
  The recoverable amount is determined based on the present value of estimated future cash flows.
  □Applicable         Not applicable
  Reasons for significant differences between the foregoing information and information used for impairment testing in previous years
  or external information: None.
  Reasons for significant differences between the information used in the Company's impairment tests in previous years and the actual
  situation in the corresponding years: None.
  Other explanations: None.
  (2) Adoption of the fair value measurement model for investment properties
  □Applicable           Not applicable
  (3) Conversion to investment properties and adoption of fair value measurement: None.
  (4) Investment properties for which the title certificate has not been obtained: None.
                                                                                                                           Unit: RMB
                          Item                                Closing balance                            Opening balance
     Fixed assets                                                         3,012,272,775.36                             3,012,529,818.52
            Liquidation of fixed assets                                                       438,970.32                                    349,009.57
            Total                                                                    3,012,711,745.68                                  3,012,878,828.09
          (1) Fixed assets
                                                                                                                                           Unit: RMB
                                  Houses and           Machinery and       Transportation          Electronic
             Item                                                                                                      Others                  Total
                                   buildings            equipment             vehicles             equipment
I. Original book value:
  period
        (1) Purchase                            0.00      23,383,620.70          257,041.60          9,740,878.54         43,924.00             33,425,464.84
       (2) Transfer from            50,169,330.16         16,467,503.15                0.00                     0.00                            66,636,833.31
  construction in progress
       (3) Increase in
  business combination
        (4) Other increases          1,452,984.61                                                                                                1,452,984.61
period
       (1) Disposal or
scrapping
        (2) Other transfer-out       2,493,258.77                  0.00                0.00                     0.00                             2,493,258.77
II. Accumulated depreciation
  current period
        (1) Provision               32,459,560.49         53,233,409.14        1,702,152.45         13,120,201.93         57,057.92            100,572,381.93
  period
          (1) Disposal or
scrapping
          (2) Other transfer-
out
III. Provision for impairment
period
          (1) Provision
  current period
          (1) Disposal or
scrapping
          (2) Other transfer-
out
IV. Book value                                                                                                                                            0.00
     (2) Temporarily idle fixed assets
                                                                                                                                              Unit: RMB
          Item                                           Accumulated                 Impairment              Book value                    Remarks
                              Original book value
                                                         depreciation                 provision
Houses and buildings                    4,119,017.35         2,242,702.97                                         1,876,314.38
Machinery and equipment               58,846,040.65        17,589,588.69              20,521,488.14          20,734,963.82
Transportation vehicles                   117,682.30            32,214.71                                           85,467.59
Electronic equipment                    1,894,344.36         1,629,550.00                           -              264,794.36
    (3) Fixed assets leased through operating lease: None.
    (4) Fixed assets for which the title certificate has not been obtained
                                                                                                                                              Unit: RMB
                           Item                                         Book value                        Reasons for not obtaining the title certificate
      No.51 Xiba Road (general workshop)                                                256,800.64      Historical legacy, currently in process
                                                                                                        Acquired through judicial auction, with land use
      Yunjian Assets                                                                   1,976,301.24
                                                                                                        certificate but no property certificate
                                                                                                        No ownership certificate for the buildings has
      Buildings for commercial use in Dali                                                              been issued. They are properties obtained by
      Xiaguan                                                                                           compensation for demolition and their ownership
                                                                                                        certificate will be issued in a centralized way.
      Buildings in planting base of Yunquan                                            1,119,052.60     The land is a leased land
      Overall relocation project of Wenshan                                                             Partial ownership has been secured, and the
      Qihua                                                                                             remaining is in process
      Drug Division of Dali Pharmaceutical
      Economic Development Zone
      Shanghai Center Building No.1                                                  104,145,943.90     In process
     Other explanations: None.
     (5) Impairment test of fixed assets
     □Applicable       Not applicable
     (6) Liquidation of fixed assets
                                                                                                                                        Unit: RMB
                           Item                                   Closing balance                                    Opening balance
      Machinery and equipment                                                          305,829.22                                        302,720.41
      Electronic equipment                                                             133,141.10                                         46,289.16
      Total                                                                            438,970.32                                        349,009.57
     Other explanations: None.
                                                                                                                                           Unit: RMB
                           Item                                     Closing balance                                    Opening balance
 Construction in progress                                                     752,520,380.49                                  703,439,112.24
 Total                                                                        752,520,380.49                                  703,439,112.24
(1) Construction in progress
                                                                                                                                  Unit: RMB
                                               Closing balance                                              Opening balance
          Item
                                                 Impairment                                                   Impairment
                            Book balance                         Book value             Book balance                          Book value
                                                  provision                                                    provision
 Yunnan Baiyao
 Group TCM
 Pharmaceutical                12,757,817.76                       12,757,817.76            45,024,278.93                       45,024,278.93
 Services Kunming
 Center Project
 Yunnan Baiyao
 R&D Platform -
 Kunming Center
 Construction Project
 Others                         8,833,917.33                        8,833,917.33             7,034,362.21                        7,034,362.21
 Equipment
 automation
 upgrading and
 transformation
 project for the
 production lines of
 the health
 manufacture center
 Government-
 Enterprise
 Cooperation Project
 of Yunnan Baiyao
 Group in Lijiang               3,796,332.43                        3,796,332.43                99,600.00                          99,600.00
 Ecological Science
 and Technology
 Industrial Park
 (Phase II)
 Separation of
 Medicinal and Food
 Production Lines for
 Sanqi Extraction and                   0.00                                  0.00           1,873,096.24                        1,873,096.24
 Capacity & Process
 Technology
 Improvement Project
 Project of Yunnan
 Baiyao Shanghai              689,533,167.48                      689,533,167.48           614,608,509.29                      614,608,509.29
 International Center
 Radiopharmaceutical
 R&D Center                    15,130,752.23                       15,130,752.23            18,464,159.31                       18,464,159.31
 (Tianjin) Project
 Total                        752,520,380.49                      752,520,380.49           703,439,112.24                      703,439,112.24
(2) Changes in important projects of construction in progress for the period
                                                                                                                                                                                          Unit: RMB
                                                                                                                                                                            Including:
                                                                                                                               Proportion
                                                                               Transfer to        Other                                                      Accumulated    Amount of
                                                              Increase in                                                       of total                                                  Capitalization     Source
                                              Opening                         fixed assets in   decrease in      Closing                    Engineering       amount of      interest
        Item name       Budget amount                         the current                                                       project                                                   rate of interest     of
                                               balance                         the current      the current      balance                     progress          interest     capitalized
                                                                period                                                         investment                                                 for the period     funds
                                                                                  period          period                                                      capitalized     for the
                                                                                                                               in budget
                                                                                                                                                                              period
Project of Yunnan
Baiyao Shanghai        1,389,170,500.00     614,608,509.29   74,924,658.19                                    689,533,167.48       68.54%          93%
International Center
Yunnan Baiyao R&D
Platform - Kunming
Center Construction
Project
Radiopharmaceutical
R&D Center (Tianjin)       101,750,000.00    18,464,159.31     3,551,273.14     6,461,061.95     423,618.27    15,130,752.23       74.35%          95%
Project
Yunnan Baiyao Group
TCM Pharmaceutical
Services Kunming
Center Project
Total                  2,480,686,500.00     693,514,053.79   98,412,342.95    54,324,124.42     423,618.27    737,178,654.05
(3) Provision for impairment of construction in progress for the period: None.
(4) Impairment test of construction in progress
□ Applicable     Not applicable
(5) Project materials: None.
(1) Adoption of the cost measurement model for productive biological assets
 Applicable    □ Not applicable
                                                                                                       Unit: RMB
                     Item                   Planting     Livestock-raising industryForestry Fishery      Total
 I. Original book value:
      (1) Outsourcing
      (2) Self-cultivation
      (1) Disposal
      (2) Others
 II. Accumulated depreciation                                                                                0.00
      (1) Provision                         85,950.06                                                   85,950.06
      (1) Disposal
      (2) Others
 III. Provision for impairment
      (1) Provision
           (1) Disposal
           (2) Others
   IV. Book value
   (2) Impairment test of productive biological assets measured at cost
         □ Applicable        Not applicable
   (3) Adoption of the fair value measurement model for productive biological assets
         □ Applicable        Not applicable
 (1) Right-of-use assets
                                                                                                               Unit: RMB
                                                                    Machinery and
                     Item                    Houses and buildings                    Land use rights           Total
                                                                     equipment
 I. Original book value
         (1) Lease                                  57,961,528.36                                            57,961,528.36
         (2) Others                                    468,559.51        46,694.87                              515,254.38
         (1) Lease expiration                       15,985,497.94                                            15,985,497.94
         (2) Disposal                                8,188,294.20                                             8,188,294.20
 II. Accumulated depreciation                                                                                          0.00
period
         (1) Provision                              55,411,596.03       420,507.34         454,656.27        56,286,759.64
         (1) Disposal                                4,189,133.39                                             4,189,133.39
         (2) Lease expiration                       15,985,497.94                                            15,985,497.94
 III. Provision for impairment
period
         (1) Provision
         (1) Disposal
IV. Book value
(2) Impairment test of right-of-use assets:
□ Applicable      Not applicable
Other explanations: None.
 (1) Intangible assets
                                                                                                                            Unit: RMB
                                     Land use                      Non-patent                                 Franchise
                 Item                               Patent Right                   Software Trademark                          Total
                                      rights                       technology                                   rights
     I. Original book value
      current period
          (1) Purchase                                                            3,801,986.65                               3,801,986.65
          (2) Internal R&D                                                                                                             0.00
          (3) Increase in
   business combination
   current period
          (1) Disposal                                                                                                                 0.00
          (2) Other transfer-out      608,518.17                                                                              608,518.17
     II. Accumulated
     amortization
   the current period
          (1) Provision              7,944,138.94 1,401,483.96                    4,187,531.24   1,111.11                   13,534,265.25
   current period
          (1) Disposal
          (2) Other transfer-out      448,090.07                                                                              448,090.07
     III. Provision for                                                                                                                0.00
     impairment
   current period
          (1) Provision
   current period
            (1) Disposal
    IV. Book value                                                                                                                   0.00
     The proportion of intangible assets formed through the Company’s internal R&D at the end of the period is 0.00% of the
     total intangible assets balance.
 (2) Data resources for recognition of intangible assets: None.
 (3) Land use rights for which the title certificate has not been obtained: None.
 (4) Impairment test of intangible assets
□Applicable        Not applicable
 (1) Original book value of goodwill
                                                                                                                          Unit: RMB
                                                                   Increase in the current   Decrease in the
                                                                           period            current period
   Name of the investee or items forming
                                                Opening balance           Formed by                               Closing balance
                 goodwill
                                                                           business              Disposal
                                                                         combination
 YNBY International Limited                     645,635,327.81                                                      645,635,327.81
 Yunnan Baiyao Group Medical
  Technology Hefei Co., Ltd.
 Shanghai Hanshi Health Consulting
 Co., Ltd.
 Yunnan Baiyao Group Wuxi
 Pharmaceutical Co., Ltd.
 Lijiang Yunquan Biological Development
 Co., Ltd.
  Total                                         709,353,683.54                                                      709,353,683.54
 (2) Provision for impairment of goodwill
                                                                                                                          Unit: RMB
                                                                           Increase in the   Decrease in the
 Name of the investee or items forming goodwill        Opening balance     current period    current period        Closing balance
                                                                              Provision          Disposal
 YNBY International Limited                            561,515,748.26                                               561,515,748.26
 Yunnan Baiyao Group Medical Technology
 Hefei Co., Ltd.
 Shanghai Hanshi Health Consulting Co., Ltd.            23,247,992.08                                                 23,247,992.08
 Lijiang Yunquan Biological Development
 Co., Ltd.
  Total                                                 612,390,442.37                                                  612,390,442.37
(3) Related information on asset group or combination of asset groups containing goodwill: None.
(4) Determination of recoverable amount
The recoverable amount is determined based on the net amount obtained by the fair value less the disposal expense
□Applicable           Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows
□Applicable           Not applicable
Reasons for significant differences between the foregoing information and information used for impairment testing in previous years
or external information: None.
Reasons for significant differences between the information used in the Company’s impairment tests in previous years and the actual
situation in the corresponding years: None.
(5) Fulfillment of undertakings and goodwill impairment
Performance commitments existed at the time goodwill was formed and the reporting period, or the previous period of the reporting
period was within the performance commitment period
□ Applicable        Not applicable
Other explanations: None.
                                                                                                                               Unit: RMB
          Item             Opening balance      Increase in the            Amortization in       Other decrease          Closing balance
                                                current period           the current period
 Building
 decoration and
 project
 renovation
 Nanping Street
 renovation project              2,954,145.20                  0.00           1,772,487.18                    0.00          1,181,658.02
 of Yunnan Baiyao
 Others                          4,138,084.03            510,890.03            290,418.62            2,561,900.67           1,796,654.77
 Total                       127,081,811.91            11,435,654.11        27,032,910.50            5,462,054.33         106,022,501.19
Other explanations: None.
(1) Deferred income tax assets before offset
                                                                                                                               Unit: RMB
                                                Closing balance                                        Opening balance
            Item              Deductible temporary          Deferred income tax        Deductible temporary          Deferred income tax
                                  differences                      assets                  differences                      assets
  Provision for
  asset impairment
  Unrealised profits
  of intra-group                276,067,334.56              42,602,517.04             264,588,567.67              42,769,190.08
  transactions
  Deferred income               276,428,290.16              42,036,388.31             236,345,643.60              36,433,668.40
  Provision for credit
  impairment
  Contractual liabilities      1,172,594,900.54            187,420,768.29            1,241,244,032.89            188,564,063.04
  Payroll payable and
  long-term employee            619,293,302.12              93,429,465.66             634,896,697.76              95,426,303.19
  benefits payable
  Expenses beyond
  overall planning for
  employee status
  conversion expenses of         21,490,653.02               3,223,597.95              20,779,234.95               3,116,885.24
  state-owned enterprises
  and social security
  expenses of retirees
  Lease liabilities             305,479,368.68              60,248,843.20             268,875,960.32              39,373,198.50
  Others                        156,335,798.88              31,241,520.86              89,083,123.75              15,590,498.21
  Other payables                773,021,208.56             120,743,016.04             577,259,909.29              88,284,205.86
  Losses that can be
  made up for
  Estimated revenue from
  returns
  Total                        5,205,453,249.91            961,044,598.03            4,837,541,087.16            756,975,016.74
(2) Deferred income tax liabilities before offset
                                                                                                                    Unit: RMB
                                         Closing balance                                       Opening balance
           Item             Taxable temporary     Deferred income tax            Taxable temporary       Deferred income tax
                               differences             liabilities                  differences               liabilities
 Right-of-use assets            281,716,563.21           56,705,223.94               281,580,952.60             41,832,184.12
 Cost of returned goods
 receivable
 Changes in fair value          113,173,290.75             16,938,450.69              106,362,930.10             15,954,439.51
 Fixed assets subject
 to one-time pre-tax             10,631,919.90              2,657,979.98               21,032,160.78              3,182,909.00
 deduction
 Investment income
 from business
 combination not                  2,282,373.90                570,593.48                2,282,373.90                570,593.48
 under common
 control achieved in
   stages
   Appreciation of asset
   valuation
   Others                              49,441,929.57             7,416,289.44                41,722,666.75            6,258,400.01
   Total                              633,246,748.73           128,209,511.70               624,470,430.09           93,867,331.53
 (3) Deferred income tax assets or liabilities after offset, net
                                                                                                                         Unit: RMB
                               Offsetting amount of
                                                                                    Offsetting amount of
                                deferred income tax     Closing balance of                                   Opening balance of
                                                                                     deferred income tax
                                assets and deferred     deferred income tax                                  deferred income tax
            Item                                                                     assets and deferred
                               income tax liabilities    assets or liabilities                                assets or liabilities
                                                                                    income tax liabilities
                                  at the end of the          after offset                                         after offset
                                                                                   at the beginning of the
                                      reporting
                                                                                     reporting period
                                      period
  Deferred income
  tax assets
  Deferred income
  tax liabilities
(4) Details of unrecognized deferred income tax assets
                                                                                                                     Unit: RMB
                   Item                                 Closing balance                               Opening balance
Deductible losses                                                      901,381,318.37                             808,060,703.41
Provision for asset impairment                                         563,470,353.53                             555,344,587.39
Deferred income                                                         26,696,207.60                              59,147,921.72
Others                                                                   9,534,409.98                               9,908,046.96
Total                                                                1,501,082,289.48                           1,432,461,259.48
(5) Deductible losses for which deferred income tax assets were unrecognized will expire in the following years
                                                                                                                        Unit: RMB
   Year                   Closing balance                          Opening balance                             Remarks
            Total                                901,381,318.37                                    808,060,703.41
           Other explanations: None.
                                                                                                                                                      Unit: RMB
                                                          Closing balance                                                     Opening balance
                Item                                      Impairment                                                             Impairment
                                     Book balance                                 Book value             Book balance                                     Book value
                                                           provision                                                              provision
       Time deposit and
       interest
       Advance payment
       for the purchase
       of fixed assets,
       etc.
       Stocks of special
       materials
       Value-added tax
       credit refund
       Cost of returned
       goods receivable
       Less: the part due
                                   -487,601,083.33                             -487,601,083.33         -480,295,722.22                                  -480,295,722.22
       within 1 year
       Total                       163,488,603.52                               163,488,603.52          116,374,395.93                                  116,374,395.93
           Other explanations: None.
                                                                                                                                                      Unit: RMB
                                       At the end of the period                                                   At the beginning of the period
   Item
                                                         Type of                                                                           Type of
                Book balance        Book value                           Restriction      Book balance             Book value                                 Restriction
                                                        restriction                                                                       restriction
                                                                       Letter of
                                                                                                                                                           Letter of
                                                                       guarantee
                                                                                                                                                           guarantee
                                                                       margin, banker’s
Cash and                                                                                                                                                   margin, banker’s
                                                      Security         acceptance bill                                                  Security
bank             16,404,177.76       16,404,177.76                                              21,699,196.16           21,699,196.16                      acceptance bill
                                                      deposit          margin,                                                          deposit
balance                                                                                                                                                    margin,
                                                                       performance
                                                                                                                                                           performance
                                                                       bond margin,
                                                                                                                                                           bond margin, etc.
                                                                       etc.
                                                                       Special fund for                                                                    Special fund for
Cash and                                                               housing reform                                                                      housing reform
bank                2,648,494.30      2,648,494.30    Special use      and housing               2,648,389.00            2,648,389.00   Special use        and housing
balance                                                                maintenance                                                                         maintenance
                                                                       costs                                                                               costs
Cash and
                                                      Property         Property
bank                3,120,832.53      3,120,832.53
                                                      preservation     preservation
balance
                                                                       Special fund for                                                                    Special fund for
Various
                                                                       paying the cost                                                                     paying the cost
assets of
                                                                       of employee                                                                         of employee
the
restructured
                                                                       conversion in                                                                       conversion in
special
                                                                       state-owned                                                                         state-owned
account
                                                                       enterprises                                                                         enterprises
                                                                                                                                             Shares shall not
                                                                                                                                             be transferred
Long-term                                                                                                                Within        the   within 36 months
equity                                                                           12,061,376,588.76   12,061,376,588.76   restricted          from the
investments                                                                                                              period              completion of
                                                                                                                                             the private
                                                                                                                                             placement
Total           601,330,397.55      601,330,397.55                               12,673,830,174.72   12,673,830,174.72
        Other explanations: None.
        (1) Classification of short-term loans
                                                                                                                                      Unit: RMB
                                 Item                              Closing balance                             Opening balance
          Loan in credit                                                                                                       402,133,333.39
          Discounted internal bills                                             10,169,668.64                                   21,246,939.25
          Total                                                                 10,169,668.64                                  423,380,272.64
        Explanation on classification of short-term loans: None.
        (2) Overdue and outstanding short-term loans: None.
                                                                                                                                      Unit: RMB
                                 Type                              Closing balance                             Opening balance
          Banker’s acceptance bill                                           1,892,718,040.48                                1,913,702,684.41
          Total                                                              1,892,718,040.48                                1,913,702,684.41
        Total notes payable due and unpaid at the end of the period were RMB 0.00.
        (1) Accounts payable
                                                                                                                                      Unit: RMB
                                 Item                              Closing balance                             Opening balance
         Payment for engineering equipment and
         others
         Payment for goods                                                  4,950,972,955.17                                4,504,527,943.71
         Total                                                              5,231,656,087.19                                4,758,352,403.87
        (2) Major accounts payable aged over one year: None.
                                                                                                                                      Unit: RMB
                                   Item                             Closing balance                              Opening balance
              Dividend payable                                                                                                        86,490,742.04
              Other payables                                                    1,562,291,988.77                                1,300,141,934.71
              Total                                                             1,562,291,988.77                                1,386,632,676.75
 (1) Interests payable: None.
 (2) Dividend payable
                                                                                                                      Unit: RMB
                      Item                               Closing balance                            Opening balance
  State-owned Assets Supervision and
  Administration Commission of the
  People’s Government of Yunnan                                                                                   86,490,742.04
  Province, New Huadu Industrial Group
  Co., Ltd.
  Total                                                                                                           86,490,742.04
Other explanations: It included the major payable but unpaid dividends aged over one year. The reasons for the unpayment should
be disclosed: None.
(3) Other payables
                                                                                                                      Unit: RMB
                      Item                              Closing balance                             Opening balance
  Deposits and guarantees                                             297,187,918.82                             298,287,462.43
  Collection and payment                                              196,664,913.41                             140,402,907.16
  Other current accounts                                              118,693,929.00                             103,612,259.40
  Market maintenance fee                                              860,135,810.90                             673,934,303.55
  Hospital management fee payable                                        54,580,637.75                            51,844,605.65
  Others                                                                 35,028,778.89                            32,060,396.52
  Total                                                             1,562,291,988.77                           1,300,141,934.71
(1) Receipts in advance
                                                                                                                     Unit: RMB
                  Item                                  Closing balance                            Opening balance
 Receipts in advance - lease                                              964,631.77                                 446,673.78
 Total                                                                    964,631.77                                 446,673.78
(2) Major receipts in advance aged over one year or overdue: None.
                                                                                                                     Unit: RMB
                  Item                                 Closing balance                             Opening balance
 Receipts in advance - goods contract                             1,606,131,214.17                            1,914,556,130.56
 Others                                                               1,590,828.47                                1,567,256.60
 Total                                                                   1,607,722,042.64                             1,916,123,387.16
Significant contractual liabilities aged more than 1 year: None.
The amount of and reasons for significant changes in the book value during the reporting period: None.
(1) Payroll payable
                                                                                                                           Unit: RMB
                                                        Increase in the current        Decrease in the current
          Item                  Opening balance                                                                     Closing balance
                                                                period                        period
  I. Short-term
  compensation
  II. Welfare after
  demission -
  defined
  contribution plan
  III. Dismissal welfares              8,009,462.99                  2,766,099.59                8,037,192.55             2,738,370.03
  IV. Other welfares due                        0.00                   245,722.81                   84,074.70              161,648.11
  within one year
  Total                            1,283,950,828.82           1,255,193,270.32               1,460,581,974.47         1,078,562,124.67
(2) Short-term compensation
                                                                                                                           Unit: RMB
            Item                   Opening balance        Increase in the current        Decrease in the current      Closing balance
                                                                  period                        period
 allowance, and subsidy
 contribution
   Including: Medical
insurance premiums
              Industrial                    46,137.70                 4,133,071.92                 4,116,016.92               63,192.70
 injury insurance premiums
             Maternity
insurance premiums
 training fees
 absence
 sharing plan
 compensation
Total                                1,212,565,480.98              1,144,562,106.48           1,345,417,983.58         1,011,709,603.88
 (3) Defined contribution plans
                                                                                                                             Unit: RMB
           Item                  Opening balance          Increase in the current     Decrease in the current      Closing balance
                                                                  period                     period
   insurance
   insurance premiums
   payment
   Total                                  63,375,884.85          107,619,341.44                 107,042,723.64              63,952,502.65
   Other explanations: None.
                                                                                                                             Unit: RMB
                     Item                                    Closing balance                               Opening balance
  Corporate income tax                                                    351,982,256.81                               312,428,903.46
  Individual income tax                                                       7,626,259.12                              22,714,512.22
  Value added tax                                                         270,233,702.20                                63,461,639.78
  Property tax                                                             11,081,617.51                                13,699,166.25
  Land use tax                                                                5,252,176.04                               5,538,344.78
  Stamp duty                                                                  4,950,399.31                               7,385,564.48
  Consumption tax                                                                                                        2,202,350.70
  Resource tax                                                                  1,268.80                                     3,000.00
  Education surcharge                                                       7,671,864.07                                 3,014,717.15
  Urban maintenance and construction tax                                   19,207,809.98                                 8,407,433.24
  Local education surcharge                                                 6,151,753.13                                 2,005,874.44
  Collected and remitted taxes and fees                                     9,443,124.41                                25,681,893.64
  Environmental protection tax                                                  4,979.19                                     3,629.23
  Water conservancy fund                                                       65,371.27                                    56,737.77
  Total                                                                   693,672,581.84                               466,603,767.14
 Other explanations: None.
                                                                                                                             Unit: RMB
                     Item                                    Closing balance                               Opening balance
  Lease liabilities due within one year                                   100,970,331.44                                88,436,075.74
  Total                                                                   100,970,331.44                                88,436,075.74
 Other explanations: None.
                                                                                                                         Unit: RMB
                    Item                                    Closing balance                               Opening balance
Transfer to output tax                                                470,215,948.32                             454,197,724.34
Returns payable                                                       163,002,399.83                             164,864,900.59
Special financial support funds of
“transferring loan to subsidy” for the
use of intelligent voice cluster
development base in the R&D project of
intelligent medical devices based on
medical big data
Total                                                                 635,018,348.15                             620,862,624.93
Changes in short-term bonds payable: None.
(1) Long-term loans by type
                                                                                                                        Unit: RMB
                   Item                                   Closing balance                            Opening balance
 Loan in credit                                                          2,100,000.00                              2,100,000.00
 Total                                                                   2,100,000.00                              2,100,000.00
Explanation on classification of long-term loans: None.
Other explanations, including the range of interest rate: None.
                                                                                                                        Unit: RMB
                      Item                                   Closing balance                          Opening balance
  Houses and buildings                                                  282,762,076.15                             272,449,967.85
  Machinery and equipment                                                 2,665,560.08                               2,982,837.50
  Right of land use                                                       2,794,900.27                               3,660,260.62
  Less: Non-current liabilities reclassified to
                                                                       -100,970,331.44                             -88,436,075.74
  liabilities due within one year
  Total                                                                 187,252,205.06                             190,656,990.23
Other explanations: None.
                                                                                                                        Unit: RMB
                     Item                                    Closing balance                           Opening balance
  Long-term payables                                                    572,211,733.58                             586,694,704.41
  Special payables                                                          4,838,584.16                               4,838,584.16
  Total                                                                 577,050,317.74                             591,533,288.57
(1) Long-term payables by nature of payment
                                                                                                                        Unit: RMB
                     Item                                    Closing balance                           Opening balance
  Expenses beyond overall planning for
  employee status conversion expenses
  of state-owned enterprises and social
  security expenses of retirees
Other explanations: None.
(2) Special payables
                                                                                                            Unit: RMB
       Item            Opening balance    Increase in the   Decrease in the       Closing balance         Reasons
                                          current period    current period
 Preliminary funds
 for major                                                                                           Transfer from
 technological               888,468.00                                                888,468.00    Baiyao Holdings due
 transformation                                                                                      to merger by
 projects                                                                                            absorption
                                                                                                    Transfer from
 Fulintang chain                                                                                    Baiyao Holdings
 operating funds                                                                                    due to merger by
                                                                                                    absorption
                                                                                                    Transfer from
 Funds for                                                                                          Baiyao
 Kunming                     500,000.00                                                500,000.00   Holdings due to
 medicine                                                                                           merger by
 distribution center                                                                                absorption
 Yunnan Panax                                                                                        Transfer from
 notoginseng                                                                                         Baiyao
 brand                       164,272.00                                                164,272.00    Holdings due to
 registration                                                                                        merger by
 project                                                                                             absorption
 Group                                                                                               Transfer from
 company                                                                                             Baiyao
 management                  250,978.00                                                250,978.00    Holdings due to
 information                                                                                         merger by
 system project                                                                                      absorption
 Group company                                                                                       Transfer from
 technology                                                                                          Baiyao
 center                      231,265.00                                                231,265.00    Holdings due to
 construction                                                                                        merger by
 expenses                                                                                            absorption
                                                                                                     Transfer from
 Nefuramide                                                                                          Baiyao
 oxalate                      85,426.00                                                 85,426.00    Holdings due to
 project                                                                                             merger by
 funding                                                                                             absorption
                                                                                                     Transfer from
 Yunnan Natural
                                                                                                     Baiyao
 Medicine
 Engineering
                                                                                                     merger by
 Center project
                                                                                                     absorption
                                                                                                     Transfer from
 New drug
                                                                                                     Baiyao
 research project
 for treatment of
                                                                                                     merger by
 back pulp injury
                                                                                                     absorption
                                                                                                                  Transfer from
 Material                                                                                                         Baiyao
 purchase project               489,575.00                                                         489,575.00     Holdings due to
 research expense                                                                                                 merger by
                                                                                                                  absorption
 R&D of
 redesigned drugs                                                                                                 Transfer from
 for treating                                                                                                     Baiyao
 cardiovascular                 258,031.60                                                         258,031.60     Holdings due to
 and                                                                                                              merger by
 cerebrovascular                                                                                                  absorption
 diseases (TCM)
 Total                        4,838,584.16                                                       4,838,584.16
Other explanations: None.
(1) Details of long-term payroll payable
                                                                                                                           Unit: RMB
                    Item                                  Closing balance                               Opening balance
II. Dismissal welfares                                                      270,376.25                                     417,539.44
III. Other long-term welfares                                               995,385.52                                     878,826.00
Total                                                                     1,265,761.77                                  1,296,365.44
(2) Change of defined benefit plan: None.
                                                                                                                             Unit: RMB
                Item                         Closing balance             Opening balance                         Reasons
                                                                                                 Returns payable not settled within one
   Returns payable                                   19,837,374.22             12,726,280.09
                                                                                                 year
   Total                                             19,837,374.22             12,726,280.09
Other explanations, including important assumptions and estimates related to significant estimated liabilities: None.
                                                                                                                           Unit: RMB
         Item              Opening balance      Increase in the      Decrease in the           Closing balance          Reasons
                                                current period       current period
Government
subsidies
Including:
Government
subsidies related to
income
Government
subsidies related to        161,707,384.12            700,000.00          6,088,809.60          156,318,574.52
assets
     Total                     295,493,565.32           15,487,000.00           7,856,067.56         303,124,497.76               --
   Other explanations: None.
                                                                                                                                   Unit: RMB
                       Item                                      Closing balance                               Opening balance
     Receipts of real estate sale under staff
     housing reform
      Total                                                                      1,931,554.36                                   1,931,554.36
     Other explanations: None.
                                                                                                                                   Unit: RMB
                                                                    Increase or decrease (＋,－)
                                                                        Capitalization
                 Opening balance      Issuance of                         of capital                                               Closing balance
                                                  Share dividend                                Others             Subtotal
                                      new shares                         reserve into
                                                                        share capital
Total
number of       1,784,262,603.00                                                                                                 1,784,262,603.00
shares
    Other explanations: None.
                                                                                                                               Unit: RMB
                                                            Increase in the current      Decrease in the current
               Item                   Opening balance                                                                   Closing balance
                                                                    period                      period
     Capital premium (equity
     premium)
     Other capital reserves              156,961,488.37              15,826,190.78                                            172,787,679.15
     Total                           17,637,148,823.48               52,836,059.54                                       17,689,984,883.02
   Other explanations, including changes and reasons thereof during the reporting period:
         (1) On May 22, 2025, the placement of 800,000,000 by YNBY International made the number of its total issued
   shares increased to 7,599,914,160 shares from 6,799,914,160 shares. The Company held 5,009,936,360 shares in YNBY
   International, accounting for 65.92% of its total issued shares. This was a trading featured with changes in the owners’
   equity held in its subsidiary but the owner still controlled over its subsidiary. So, this trading was deemed as an equity
   trading, increasing correspondingly the capital reserves (capital premium or equity premium) by RMB 37,009,868.76.
         (2) The Company recognized changes in its other equities held in its associates and its shares were diluted
   caused by issuance of new shares after exercise of rights in this year, giving an increase of the Company’s capital
   reserves – other capital reserves by RMB 15,826,190.78 according to the Company’s shareholding ratio.
                                                                                                                                                                                                  Unit: RMB
                                                                                                        Amount for the current period
                                                                    Less: Amount previously
                                                    Amount              included in other        Less: Amount previously included                          That
                                                                                                                                            Less:                        That attributable
            Item             Opening balance      before income                                  in other comprehensive income but                     attributable to                         Closing balance
                                                                     comprehensive income                                                income tax                         to minority
                                                    tax in the      but transferred to profits    transferred to retained earnings in                    the parent
                                                                                                                                          expenses                       interests after tax
                                                  current period        and losses in the                  the current period                             after tax
                                                                          current period
I. Other comprehensive
incomes that will not be
                                  -1,616,965.82     -1,680,417.88                                                                                        -1,680,417.88                           -3,297,383.70
reclassified into profits
or losses
 Other comprehensive
income that cannot be
transferred to profits or         -1,616,965.82     -1,680,417.88                                                                                        -1,680,417.88                           -3,297,383.70
losses under equity
method
II. Other
comprehensive incomes
                                 -99,646,390.49     6,293,520.03                          0.00                                    0.00          0.00      4,938,869.42        1,354,650.61      -94,707,521.07
to be reclassified into
profits and losses
Including: Other
comprehensive income
that can be transferred to       -61,216,791.66     2,427,464.76                                                                                          2,427,464.76                          -58,789,326.90
profits or losses under
equity method
     Exchange
differences from
translation of financial         -38,429,598.83     3,866,055.27                                                                                          2,511,404.66        1,354,650.61      -35,918,194.17
statements denominated
in foreign currencies
Total other comprehensive
                                -101,263,356.31     4,613,102.15                                                                                          3,258,451.54        1,354,650.61      -98,004,904.77
income
Other explanations, including adjustments to the effective portion of the cash flow hedge profits or losses transferred to the amount initially recognized for the hedged item: None.
                                                                                                                                                                        Unit: RMB
                   Item                            Opening balance                Increase in the current period      Decrease in the current period          Closing balance
       Statutory surplus
       reserves
       Total                                              2,530,458,968.58                                                                                       2,530,458,968.58
       Explanations on surplus reserves, including changes and reasons thereof for the period: None.
                                                                                                                                  Unit: RMB
                             Item                                     Current period                               Previous period
          Undistributed profit at the end of the
          previous period before adjustment
          Undistributed profit at the beginning of the
          period after adjustment
          Plus: Net profits attributable to equity
          owners of the parent in the current period
               Ordinary share dividends payable                                 2,114,351,184.56                             5,870,223,949.91
          Undistributed profit at the end of the
          period
       Details on adjustment of undistributed profits at the beginning of the period:
     were affected by RMB 0.00.
                                                                                                                                                         Unit: RMB
                                                          Amount for the current period                                Amount for the previous period
                     Item
                                                   Revenue                             Cost                        Revenue                          Cost
             Principal businesses                 21,235,801,094.89                14,684,081,632.34               20,417,596,599.08            14,450,146,794.38
             Other businesses                            21,301,801.13                  13,786,436.95                 37,689,688.44                  12,663,156.47
           Total                         21,257,102,896.02         14,697,868,069.29                               20,455,286,287.52            14,462,809,950.85
         Breakdown information of operating revenue and operating cost:
                                                                                                                                                                                                                                    Unit: RMB
                               Drug sales                     Health and daily chemical                   TCM resources                   Pharmaceutical distribution                        Others                                  Total
  Type of
  contract          Operating                                Operating                              Operating                          Operating                                 Operating                              Operating
                                      Operating cost                           Operating cost                      Operating cost                          Operating cost                        Operating cost                              Operating cost
                     revenue                                  revenue                                revenue                            revenue                                   revenue                                revenue
Business
type
Including:
Industry
sales            4,644,731,318.19     1,377,205,543.12    3,501,584,892.86     1,093,120,220.12   343,081,723.75   252,006,742.36                 0.00                  0.00    15,001,849.13         4,723,388.61    8,504,399,783.93       2,727,055,894.21
income
Commercial
sales                          0.00              0.00                   0.00              0.00    623,524,907.08   578,494,321.91   11,766,118,529.74    11,061,297,792.48     318,498,952.78    298,474,585.66      12,708,142,389.60   11,938,266,700.05
income
Technical
services
Hotel
catering                       0.00              0.00                   0.00              0.00              0.00             0.00                 0.00                  0.00     6,156,813.81         3,808,961.58        6,156,813.81          3,808,961.58
industry
Planting
sales                   0.00               0.00               0.00               0.00       932,453.26      1,311,082.67               0.00                0.00              0.00             0.00         932,453.26         1,311,082.67
income
Others                  0.00               0.00               0.00               0.00              0.00             0.00               0.00                0.00     21,301,801.13    13,786,436.95      21,301,801.13       13,786,436.95
By
operating    4,644,731,318.19   1,377,205,543.12   3,501,584,892.86   1,093,120,220.12   972,896,205.17   836,795,160.87   11,766,118,529.74   11,061,297,792.48   371,771,950.06   329,449,352.70   21,257,102,896.02   14,697,868,069.29
areas
Including:
In Yunnan
province
Outside
Yunnan
province     4,055,989,037.01   1,264,259,912.19   3,374,260,632.01   1,059,608,095.52   316,352,885.57   285,861,633.93      21,959,817.61       23,662,385.01     73,270,995.86    62,501,421.36    7,841,833,368.06    2,695,893,448.01
(excluding
overseas)
Overseas        4,713,243.00       1,648,508.00       1,444,086.57         408,888.15     41,599,915.53    40,439,347.70               0.00                0.00    182,528,844.94   178,418,668.10     230,286,090.04      220,915,411.95
 Information related to performance obligations: The Company and its subsidiaries are mainly engaged in sale of drugs, medicin al
 materials, health and daily chemical products, etc. and recognize the realization of revenue upon delivery of products to cus tomers
 and confirmation by customers that they have obtained control over the products. No contracts are for the purpose of signific ant
 financing. But some contracts may include some discount and concession clauses. Usually, no contracts contain expected refu nds
 to customers or other similar obligations assumed by the Company.
 Other explanations: None.
 Information related to the transaction price allocated to remaining performance obligations:
 As of the end of this reporting period, the income corresponding to the performance obligations that have been contracted but
 not yet fulfilled or completed is RMB 0.00.
 Information about variable consideration in the contract: None.
 Significant contract changes or significant adjustments to the transaction price: None.
                                                                                                                        Unit: RMB
                  Item                            Amount for the current period               Amount for the previous period
 Property tax                                                          12,418,205.22                                10,775,652.51
 Land use tax                                                            5,379,563.73                                5,485,490.94
 Stamp duty                                                            10,413,199.41                                12,923,290.36
 Vehicle and vessel use tax                                                 68,236.50                                   69,522.55
 Consumption tax                                                            90,599.59                                  295,265.87
 Education surcharge                                                   23,824,953.63                                22,660,975.14
 Urban maintenance and construction tax                                56,335,793.96                                52,049,849.11
 Local education surcharge                                             17,085,636.36                                15,105,396.00
 Others                                                                   157,464.75                                   186,377.01
 Total                                                                125,773,653.15                               119,551,819.49
Other explanations: None.
                                                                                                                         Unit: RMB
                   Item                             Amount for the current period               Amount for the previous period
   Employee compensation                                                220,150,105.14                               191,576,372.21
   Depreciation and amortization                                         42,231,339.89                                43,832,506.15
   Agency service fee                                                    15,634,005.27                                20,230,312.27
   Office expenses                                                       13,222,610.61                                 4,949,786.19
   Travel expenses                                                        8,830,501.17                                 8,435,899.68
   Maintenance fee                                                          578,273.51                                   891,388.27
   Security and cleaning fee                                              4,932,048.51                                 4,039,639.25
   Business entertainment fee                                             4,533,911.81                                 6,728,550.46
   Utilities and property management fee                                  4,143,847.39                                 5,258,288.01
   Afforestation and pollution discharge
   fee
   Lease cost                                                             1,249,073.17                                 3,395,107.79
   Others                                                                46,435,758.98                                36,356,329.45
   Total                                                                363,479,043.45                               327,410,020.48
 Other explanations: None.
                                                                                                   Unit: RMB
                  Item             Amount for the current period           Amount for the previous period
  Employee compensation                              678,291,868.07                            693,869,875.78
  Display expenses                                   535,889,331.94                            236,563,579.17
  Business promotion expenses                        451,443,263.66                            374,996,687.38
  Advertising expenses                               283,935,986.74                            212,257,895.40
  Marketing service fees                              84,210,520.18                            184,141,383.69
  Promotional staff expenses                          92,216,999.74                            127,076,696.08
  Travel expenses                                     63,980,897.09                             64,946,316.69
  Conference service fees                             41,064,583.09                             61,665,961.28
  Depreciation and amortization                       41,044,875.76                             39,747,285.80
  Others                                             244,293,530.77                            301,555,809.32
   Total                                           2,516,371,857.04                          2,296,821,490.59
 Other explanations: None.
                                                                                                   Unit: RMB
                 Item             Amount for the current period           Amount for the previous period
  Employee compensation                              74,108,094.35                             68,904,549.49
  Materials consumption and
  inspection fee
  Commissioned R&D cost                              23,531,702.05                             32,142,383.35
  Depreciation and amortization                      13,240,528.82                              5,687,670.77
  New product design fee                              6,172,392.65                              4,615,013.16
  Others                                             12,509,593.92                             13,960,127.54
  Total                                             155,900,139.57                            148,043,019.34
 Other explanations: None
                                                                                               Unit: RMB
                  Item            Amount for the current period           Amount for the previous period
  Interest expenses                                   10,821,177.16                            27,648,907.91
  Less: interest income                               49,581,264.78                           162,711,635.16
  Net loss on foreign exchange                        13,055,426.98                            -1,841,489.74
  Bank charges                                         2,598,053.21                             7,284,938.64
  Others
  Total                                              -23,106,607.43                           -129,619,278.35
    Other explanations: None.
                                                                                                              Unit: RMB
         Other sources of income               Amount for the current period           Amount for the previous period
 Government subsidies directly included
 in current profit and loss during the                            12,325,615.11                            22,618,622.37
 period
 Amortization of government subsidies
 related to assets
 Amortization of government subsidies
 related to income
 Return of individual income tax
 service charge
 Others                                                            3,422,221.90                             4,473,124.93
 Total                                                            27,406,398.49                            47,920,871.74
                                                                                                              Unit: RMB
Sources of gains on changes in fair value      Amount for the current period           Amount for the previous period
Financial assets held for trading                                 33,268,150.43                            16,811,914.40
Other non-current financial assets                                36,769,346.33                           -12,215,037.59
Total                                                             70,037,496.76                             4,596,876.81
 Other explanations: None.
                                                                                                              Unit: RMB
                            Item                           Amount for the current period Amount for the previous period
Gain on long-term equity investments under the equity
method
Investment income from disposal of financial assets
held for trading
Investment income from disposal of other non-current
financial assets
Investment income earned during the holding period of
other non-current financial assets
Others                                                                    -22,460,467.65                   -19,574,751.35
Total                                                                    839,628,716.65                   477,498,314.49
Other explanations: None.
                                                                                                            Unit: RMB
                   Item                        Amount for the current period           Amount for the previous period
 Bad debt losses on accounts receivable                         -133,537,271.89                           -88,711,574.60
 Bad debt losses on other receivables                               35,154,629.28                                5,949,239.48
 Total                                                             -98,382,642.61                              -82,762,335.12
 Other explanations: None.
                                                                                                                   Unit: RMB
                   Item                         Amount for the current period              Amount for the previous period
I. Inventory impairment losses and
contract performance cost impairment                                -41,743,184.35                               -3,578,591.92
losses
II. Impairment loss of fixed assets                                                                                      -2.61
Total                                                               -41,743,184.35                               -3,578,594.53
 Other explanations: None.
                                                                                                                 Unit: RMB
  Source of gains on disposal of assets         Amount for the current period             Amount for the previous period
Profit from disposal of non-current
assets
Profit from disposal of right-of-use
assets
Total                                                               2,552,729.83                                -1,592,134.63
                                                                                                                 Unit: RMB
                                                                                                   Amount of non-recurring
                                                                 Amount for the previous
            Item                Amount for the current period                                     profits or losses included
                                                                          period
                                                                                                       in the current period
 Profits from destruction
 and scrapping of non-                                460.18                         83,877.29                         460.18
 current assets
 Including: fixed assets                              460.18                         83,877.29                         460.18
 Others                                        17,524,980.81                    4,347,824.42                    17,524,980.81
 Total                                         17,525,440.99                    4,431,701.71
 Other explanations: None.
                                                                                                                   Unit: RMB
                                                                                                 Amount of non-recurring profits or
          Item                Amount for the current period Amount for the previous period
                                                                                                 losses included in the current period
External donations                                  3,042,269.30                      3,130,241.66                           3,042,269.30
Losses from destruction
and scrapping of non-                                147,310.51                        149,829.54                               147,310.51
current assets
Including: fixed assets                              147,310.51                        149,829.54                               147,310.51
Others                                              2,780,275.11                      1,475,553.56                           2,780,275.11
Total                                               5,969,854.92                      4,755,624.76
 Other explanations: None.
 (1) Table of income tax expenses
                                                                                                                     Unit: RMB
                     Item                             Amount for the current period            Amount for the previous period
   Current income tax expenses                                          757,017,264.51                             572,852,946.49
   Deferred income tax expenses                                        -169,745,390.66                             -90,787,456.62
   Total                                                                587,271,873.85                             482,065,489.87
 (2) Adjustment process of accounting profit and income tax expense
                                                                                                                     Unit: RMB
                                Item                                              Amount for the current period
 Total profit                                                                                                 4,231,871,841.79
 Income tax expense calculated at statutory/applicable tax
 rate
 Effect of different tax rates applied to subsidiaries                                                             55,724,454.57
 Effect of adjusting income tax for prior periods                                                                 103,854,849.87
 Effect of non-taxable income                                                                                  -132,098,371.02
 Effect of non-deductible costs, expenses and losses                                                               31,362,403.98
 Effect of the use of the deductible losses of the deferred tax
                                                                                                                  -18,365,060.49
 assets not recognized in prior periods
 Effect of deductible temporary differences or deductible
 losses of the deferred income tax assets not recognized in the                                                    28,496,029.84
 current period
 Change     in    the     balance   of   deferred    income    tax
 assets/liabilities at the beginning of the year due to tax rate                                                  -98,683,068.10
 adjustments
 Extra deductions for R&D costs                                                                                   -18,646,834.33
 Others                                                                                                               846,693.26
 Income tax expenses                                                                                           587,271,873.85
 Other explanations: None.
 For details, please refer to Note 44 “Other comprehensive income.”
 (1) Cash relating to operating activities
   Other cash received relating to operating activities
                                                                                                                      Unit: RMB
                    Item                            Amount for the current period               Amount for the previous period
  Interest income                                                       49,581,264.78                               160,542,220.78
  Deposits and guarantees                                               79,075,011.67                                58,473,746.22
  Government subsidy                                                    35,902,118.61                                51,052,696.48
  Current account and petty cash                                       118,959,071.16                                45,935,859.53
  Others                                                                97,074,597.57                                39,393,081.70
  Total                                                                380,592,063.79                               355,397,604.71
   Explanations on other cash received relating to operating activities: None.
   Other cash payments relating to operating activities
                                                                                                                      Unit: RMB
                   Item                            Amount for the current period               Amount for the previous period
  Expenses of cost nature                                            1,628,887,047.85                            1,191,200,957.11
  Deposits and guarantees                                               80,757,823.69                               22,936,940.61
  Current account and petty cash                                        96,355,202.04                               87,712,907.26
  Others                                                                36,580,390.86                                9,721,745.05
  Total                                                              1,842,580,464.44                            1,311,572,550.03
   Explanations on other cash payments relating to operating activities: None.
(2) Cash relating to investment activities
 Other cash received relating to investment activities
                                                                                                                      Unit: RMB
           Item                                    Amount for the current period               Amount for the previous period
 Principal and interest of time deposits
 and other bank deposits redeemed
 Total                                                                145,116,700.00                             3,807,040,500.00
 Important cash received relating to investment activities
                                                                                                                      Unit: RMB
                           Item                           Amount for the current period          Amount for the previous period
   Principal of stocks, financial products, etc.                       2,345,628,996.48                                3,145,988.51
  Time deposits and other bank deposits                                  145,116,700.00                            3,807,040,500.00
  Total                                                                 2,490,745,696.48                           3,810,186,488.51
Explanations on other cash received relating to investment activities: None.
Other cash payments relating to investment activities
                                                                                                                        Unit: RMB
                     Item                              Amount for the current period              Amount for the previous period
   Time deposits and other bank deposits                                  482,620,900.00                            2,936,895,000.00
   Total                                                                  482,620,900.00                            2,936,895,000.00
Important cash payments relating to investment activities
                                                                                                                          Unit: RMB
                              Item                                Amount for the current period       Amount for the previous period
   Time deposits and other bank deposits                                          482,620,900.00                     2,936,895,000.00
   Cash paid to acquire fixed assets, intangible assets and
   other long-term assets
   Banking products and other wealth management
   products
   Total                                                                        3,486,667,527.53                     4,085,229,378.59
Explanations on other cash payments relating to investment activities: None.
(3) Cash relating to financing activities
Other cash received relating to financing activities
                                                                                                                          Unit: RMB
                             Item                                Amount for the current period        Amount for the previous period
   Individual income tax on dividend distribution                                  39,062,080.04                       40,525,603.23
   Total                                                                           39,062,080.04                       40,525,603.23
Explanations on other cash received relating to financing activities: None.
Other cash payments relating to financing activities
                                                                                                                         Unit: RMB
                      Item                             Amount for the current period               Amount for the previous period
   Payment of lease costs                                                   45,446,663.39                               45,614,567.75
   Handling fee for dividend distribution                                      421,750.46                                1,515,823.13
   Individual income tax on dividend
   distribution
   Total                                                                    92,492,403.17                               72,018,152.38
  Explanations on other cash payments relating to financing activities: None.
  Change of liabilities resulting from financing activities
  Applicable □Not applicable
                                                                                                                                  Unit: RMB
                                                   Increase in the current period            Decrease in the current period
        Item              Opening balance                                                                        Non-cash           Closing balance
                                               Cash change          Non-cash change         Cash change
                                                                                                                  change
Short-term
borrowings
Dividend payable             86,490,742.04                           2,114,351,175.94      2,200,841,917.98                                     0.00
Lease liabilities
(Lease liabilities
due within one year
inclusive)
Long-term
borrowings
Total                       702,628,004.91         10,169,668.64     2,169,257,245.47      2,664,475,944.39      18,057,100.93        199,521,873.70
         (4) Explanation on presentation of cash flow in net amount: None.
         (5) Significant activities and financial effects that do not involve current cash receipts and disbursements
        but affect the enterprise’s financial position or may affect the enterprise’s cash flows in the future
             None.
         (1) Supplementary information of cash flow statement
                                                                                                                                Unit: RMB
                          Supplementary information                    Amount for the current period      Amount for the previous period
         operating activities:
             Net profit                                                             3,644,599,967.94                     3,189,962,850.96
             Plus: Impairment provision for assets                                      140,125,826.96                        86,340,929.65
               Depreciation of fixed assets, depreciation of oil
         and gas assets, depreciation of productive                                     101,222,940.05                    103,037,172.29
         biological assets
               Depreciation of right-of-use assets                                       56,286,759.64                        42,414,619.67
               Amortization of intangible assets                                         13,534,265.25                        12,159,001.35
               Amortization of long-term deferred expenses                               27,032,910.50                        19,405,792.34
               Loss on disposal of fixed assets, intangible
         assets and other long-term assets (gain is indicated                            -2,262,598.53                         1,592,134.63
         with “-”)
               Losses on scrapping of fixed assets (gain
         is indicated with “-”)
               Losses on changes in fair value (gain is
                                                                                        -70,037,496.76                        -4,596,876.81
indicated with “-”)
       Financial expenses (income is indicated with “-”)                       10,821,177.16                     27,648,907.91
       Investment losses (gain is indicated with “-”)                        -873,839,341.77                   -477,498,314.49
       Decrease of deferred income tax assets (increase
                                                                             -204,069,581.29                   -107,322,722.98
is indicated with “-”)
       Increase of deferred income tax
liabilities (decrease is indicated with “-”)
       Decrease in inventories (increase is indicated with
“-”)
       Decrease in operating receivable items (increase
                                                                             -148,312,791.38                   -739,995,094.96
is indicated with “-”)
       Increase in operating payable items (decrease
is indicated with “-”)
       Others                                                                   9,805,013.01                     17,450,377.13
       Net cash flows from operating activities                              3,961,187,202.77                 3,261,617,391.99
irrelevant to cash income and expense:
       Conversion of debts into capital
       Convertible corporate bonds due within one year
       Fixed assets acquired under finance leases
   Closing balance of cash                                               10,692,498,963.32                   14,062,236,665.43
   Less: Opening balance of cash                                         10,275,529,575.34                   14,151,765,468.49
   Plus: Closing balance of cash equivalents
   Less: Opening balance of cash equivalents
   Net increase in cash and cash equivalents                                  416,969,387.98                    -89,528,803.06
(2) Net cash paid for acquisitions of subsidiaries for the period: None.
(3) Net cash received from disposal of subsidiaries for the period: None.
(4) Composition of cash and cash equivalents
                                                                                                                      Unit: RMB
                    Item                                   Closing balance                          Opening balance
I. Cash                                                           10,692,498,963.32                          10,275,529,575.34
Including: Cash on hand                                                  146,174.20                                 124,469.53
          Bank deposit available
  for payment at any time
           Other cash and bank
  balance available for payment at                                          95,495,855.10                            52,831,059.75
  any time
  III. Closing balance of cash and cash
  equivalents at the end of the reporting                              10,692,498,963.32                         10,275,529,575.34
  period
  (5) Presentation of items with restricted use but still belonging to cash and cash equivalents: None.
  (6) Cash and bank balance which are not cash and cash equivalents
                                                                                                                          Unit: RMB
                                                       Amount in the             Amount in the        Reasons for not belonging to
                     Item
                                                       reporting period          previous period        cash and cash equivalents
 Guarantee deposit, banker’s acceptance bill                                                           Cannot be withdrawn at any
 deposit, performance deposit, etc.                                                                               time
 Cost specially used for housing reform and                                                            Cannot be withdrawn at any
 maintenance                                                                                                      time
                                                                                                       Cannot be withdrawn at any
 Cost for property preservation                              3,120,832.53
                                                                                                                  time
 Cost specially used for identity conversion                                                           Cannot be withdrawn at any
 for employees in state-owned enterprises                                                                         time
 Total                                                     601,330,397.55            612,453,585.96
Other explanations: None.
(7) Explanations on other significant activities: None.
Explanations on item “Others” adjusted in terms of closing balance at the end of the previous year, the adjusted amount there of,
etc.:
None.
(1) Monetary items denominated in foreign currencies
                                                                                                                      Unit: RMB
                                  Closing balance of foreign                                          Closing balance converted
             Item                                                             Exchange rate
                                            currency                                                          into RMB
Cash and bank balance                                                                                              255,899,827.82
Including: HKD                                 122,017,074.27                               0.91195               111,273,470.89
            USD                               19,767,283.52              7.15860                 141,506,075.82
            Euro                                234,240.91               8.40240                    1,968,185.83
           Japanese yen                        2,073,465.00              0.04959                     102,830.73
           South Korean won                   21,324,422.00              0.00526                     112,227.52
           THB                                 2,418,640.60              0.21968                     531,334.91
           CAD                                       935.79              5.23580                       4,899.61
           CHF                                    20,330.25              8.97210                     182,405.07
           SGD                                    38,875.28              5.61790                     218,397.44
Accounts receivable                                                                                82,373,571.16
Including: USD                                 1,926,081.33              7.15860                  13,788,045.80
          Euro
          HKD                                 75,207,550.15              0.91195                  68,585,525.36
Other current assets                                                                             308,693,000.00
Including: HKD                               260,000,000.00              0.91195                 237,107,000.00
           USD                                10,000,000.00              7.15860                  71,586,000.00
Accounts payable                                                                                         6,427.71
Including: HKD                                      7,048.31              0.91195                        6,427.71
Other receivables                                                                                   2,033,504.48
Including: HKD                                  2,143,057.28              0.91195                    1,954,361.08
          THB                                   136,500.00               0.21968                       29,986.77
          CAD                                      8,750.00              5.23580                       49,156.63
Contractual liabilities                                                                               1,447,797.08
Including: HKD                                   1,579,390.09            0.91195                      1,440,324.80
           Japanese yen                            144,458.00            0.04959                          7,164.20
           THB                                       1,402.37            0.21968                           308.08
Other payables                                                                                       28,986,237.91
 Including: HKD                                 31,679,195.72            0.91195                     28,889,842.54
           Japanese yen                            860,094.00            0.04959                         42,655.21
           THB                                      55,743.00            0.21968                         12,245.81
           SGD                                       5,500.00            5.61790                         30,898.45
           CAD                                       2,023.74            5.23580                         10,595.90
  Other explanations: None.
(2) Description of overseas business entities; for material overseas business entities, disclose their major
business places overseas, functional currency and the selection criterion thereof; should there be any
change in the functional currency, disclose the reason for such change.
□ Applicable       Not applicable
(1) The Company as the lessee
      Applicable         □ Not applicable
    Variable lease payments not included in the measurement of lease liabilities
     Applicable      □ Not applicable
                             Item                                                           Amount
 Variable lease payments not included in the measurement of
 lease liabilities
    Simplified handling of payments of short-term leasing or leasing of low value assets
     Applicable      □ Not applicable
                             Item                                                            Amount
 Simplified handling of payments of short-term leasing or
 leasing of low value assets
    After-sales leaseback transactions: None.
(2) The Company as the lessor
    Operating lease where the Company is the lessor
     Applicable      □ Not applicable
                                                                    Including: Receipts related to variable lease payments not
                   Item                   Receipts from lease
                                                                                    included in lease receipts
  Houses and buildings                           10,225,858.78
  Total                                          10,225,858.78
    Finance lease where the Company is the lessor
    □ Applicable       Not applicable
    Undiscounted lease receipts for each of the next five years
    □ Applicable       Not applicable
    Reconciliation of undiscounted lease receipts to net investment in leases: None.
(3) Recognition of profits and losses on sales under finance leases as a manufacturer or distributor
     Applicable       Not applicable
None.
VIII. R&D Expenditure
                                                                                                                     Unit: RMB
                   Item                          Amount for the current period              Amount for the previous period
 Employee compensation                                                 74,262,697.80                             68,969,121.01
 Materials consumption and inspection
 fees
 Commissioned R&D cost                                                 37,644,068.94                             39,828,301.28
 Depreciation and amortization                                         13,328,808.65                               5,746,520.33
         Others                                                                    12,571,159.14                               13,983,530.36
         New product design fee                                                     6,172,392.65                                4,615,013.16
                           Total                                                  170,320,907.17                              156,079,128.47
         Including: Expensed R&D expenditure                                      155,900,139.57                              148,043,019.34
                   Capitalized R&D expenditure                                     14,420,767.60                                8,036,109.13
                                                                                                                                           Unit: RMB
                                                                 Increase in the current
                                                                                                   Decrease in the current period
                                                                         period
                                              Opening                                                                                          Closing
                  Item                                            Internal                                              Transfer to
                                              balance                                            Recognized as                                 balance
                                                                development         Others                             current profits
                                                                                                intangible assets
                                                                   costs                                                  or losses
P137 Project R&D (IND)                       25,422,461.13           143,393.16                                                            25,565,854.29
Phase III clinical trial of Fuji Guben
Ointment
INR101 injection                                                 12,754,475.05                                                             12,754,475.05
Total                                        25,422,461.13       14,420,767.60                                                             39,843,228.73
        Important capitalized R&D projects: None.
        Impairment provision for R&D expenditure: None.
        IX. Changes in the Consolidation Scope
        (1) Business combination not under common control during this reporting period: None .
        (2) Cost of business combination and goodwill: None
        (3) Identifiable assets and liabilities of the acquiree on the acquisition date: None.
        (4) Proceeds or losses caused by remeasurement of the equity held before the acquisition dat e at the fair value
        Whether there was any trading that contributed to a progressive realization of business combination by multiple transactions and during
        this reporting period, through this business combination, control was acquired.
        □Yes No
        (5) Explanations on no reasonable recognition of the business combination consideration or the acquiree’s identifiable
        assets and liabilities on the acquisition date or at the end of the period of the business combination
        None.
        (6) Other explanations
None.
(1) Business combination under common control during this reporting period: None .
(2) Cost of business combination: None
(3) The book value of the merged party’s assets and liabilities on the merger date: None
The basic information on the trading, the basis for determining the trading to be a reverse acquisition, whether the listed
company’s retained assets and liabilities compose a merger business and the basis thereof, the recognition of t he merger cost, the
adjusted equity amount and its calculation under the method for equity trading: None.
Whether there were any transactions or events during the period in which control of subsidiaries was lost
Yes       No
Whether there was a loss of control in the current period under a progressive disposal of investments in subsidiaries
through multiple transactions
Yes       No
Describe the change in scope of consolidation for other reasons (e.g. Establishing new subsidiaries, liquidating subsidiaries,
etc.) and its details:
      (1) Establishment of new subsidiaries
Digital Intelligence Technology Co., Ltd, with a registered capital of RMB 11,152,469.81 and a 100% ownership.
Yunnan Baiyao included Yunnan Baiyao Group Digital Intelligence Technology Co., Ltd into its consolidation
scope from May 2025.
issuance of 10,000 shares in total at 1,000,000 Indonesian Rupiah per par value, totaling 10 billion Indonesian Rupiah.
(Of which, YNBY International Limited held 9,900 shares and Ban Loong Health (Overseas) Co., Ltd held 100
shares (1% share equity)). Yunnan Baiyao included PT YNBY Healthcare Indonesia into its consolidation scope
from January 2025.
Chinese Medicinal Materials Development (Weishan) Co., Ltd, with a registered capital of RMB 20,000,000 and
 a 100% ownership. Yunnan Baiyao included Yunnan Baiyao Group Chinese Medicinal Materials Development
 (Weishan) Co., Ltd into its consolidation scope from May 2025.
  None.
 X. Interest in Other Entities
 (1) Composition of the Group
                                                                                                                Unit: RMB
                                          Main                                            Shareholding
     Name of            Registered                   Place of                              proportion         Acquisition
                                        business                   Business nature
    subsidiary           capital                   registration                                                method
                                        location                                        Direct    Indirect
Yunnan Baiyao
Group TCM                                                                                                    Set-up     or
Resources Co.,                                                                                               investment
Ltd.
Yunnan Baiyao
                                                                  Wholesale      and
Group Medicine                                                                                               Set-up     or
E-commerce Co.,                                                                                              investment
                                                                  necessities
Ltd.
Yunnan Baiyao
Group Wuxi                                                                                                   Set-up     or
Pharmaceutical                                                                                               investment
Co., Ltd.
Yunnan Baiyao
Group Dali                                                                                                   Set-up     or
Pharmaceutical                                                                                               investment
Co., Ltd.
Yunnan Baiyao                                                     Production      and
                                                                                                             Set-up     or
Group Health           84,500,000.00    Kunming    Kunming        sales of health and   100.00%    0.00%
                                                                                                             investment
Products Co., Ltd.                                                daily chemicals
Yunnan                                                            Pharmaceutical
                                                                                                             Allotment   of
Pharmaceutical       1,000,000,000.00   Kunming    Kunming        wholesale       and   100.00%    0.00%
                                                                                                             shares
Co., Ltd.                                                         retail
                                                                                                             Business
Yunnan Institute                                                                                             combination
of Materia Medica                                                                                            under common
                                                                                                             control
Yunnan Baiyao                                                                                                Business
Holding                                                                                                      combination
Investment Co.,                                                                                              under common
Ltd.                                                                                                         control
                                                                                                             Business
Yunnan Baiyao                                                                                                combination
Teayield Co., Ltd.                                                                                           under common
                                                                                                             control
Yunnan Baiyao                                                     Import and export
                                                                                                             Set-up     or
Group (Hainan)         15,000,000.00    Hainan     Danya          agency, technical     100.00%    0.00%
                                                                                                             investment
Co., Ltd.                                                         services, etc.
Yunnan Baiyao
                                                                         Technical                                      Set-up     or
Group Shanghai           15,000,000.00      Shanghai      Shanghai                              100.00%       0.00%
                                                                         services                                       investment
Co., Ltd.
Yunnan Baiyao                                                                                                           Business
                                                                         Medical Device
Group Medical                                                                                                           combination
Technology Hefei                                                                                                        not under the
                                                                         Sales
Co., Ltd.                                                                                                               same control
Shanghai Yunzhen
                                                                         Technical
Medical                                                                                                                 Set-up     or
Technology Co.,                                                                                                         investment
                                                                         service
Ltd.
                                                                                                                        Business
YNBY
                                            Hong                                                                        combination
International                       0.00                  Hong Kong      Trade                   28.06%      45.62%
                                            Kong                                                                        not under the
Limited
                                                                                                                        same control
Yunnan Baiyao
Tiancui Business                                                                                                        Set-up     or
Management Co.,                                                                                                         investment
Ltd.
Yunnan Baiyao
                                                                         Technology                                     Set-up     or
Group Beijing            50,000,000.00      Beijing       Beijing                               100.00%       0.00%
                                                                         promotion service                              investment
Co., Ltd.
Yunhe                                                                    Research     and
                                            Tianjin                                                                     Set-up     or
Pharmaceutical           20,000,000.00                    Tianjin City   experimental           100.00%       0.00%
                                            City                                                                        investment
(Tianjin) Co., Ltd.                                                      development
Yunnan Baiyao
                                                                         Software       and
Group Digital
                                                                         information                                    Set-up     or
Intelligence              11,152,469.81     Kunming       Kunming                               100.00%       0.00%
                                                                         technology                                     investment
Technology Co.,
                                                                         service industry
Ltd.
      Explanation of the inconsistency of the ratio of shareholding in subsidiaries with the proportion of voting rights: None.
      Basis for holding half or less of the voting rights but still controlling investees, and holding more than half of the voting rights
 but not controlling investees: None.
      Basis for controlling major structured entities consolidated into the financial statements:
      The structured entities included in the scope of consolidation of the Group include CICC Directional Asset Management-GF-
 CICC Qirui 1 and Shanghai Trust Platinum Series Hong Kong Market Investment Single Fund Trust. Because the Group has power
 over such structured entities, enjoys variable returns by participating in related activities, and has the ability to use its power over
 the investee to influence its variable returns, the Group has control over such structured entities.
      Basis for determining whether the Company is an agent or an entrustor: None.
      Other explanations: None.
 (2) Key non-wholly owned subsidiaries
                                                                                                                            Unit: RMB
                                                             Profit and loss
                               Percentage of shares                                  Dividends declared to        Balance of minority
                                                             attributable to
    Name of subsidiary           held by minority                                    minority shareholders      shareholders’ equity at
                                                         minority shareholders
                                   shareholders                                      in the current period       the end of the period
                                                         in the current period
   YNBY International
   Limited
     Explanation on the inconsistency of the ratio of shareholding held by minority shareholders in subsidiaries with the proporti on
of voting rights: None.
     Other explanations: None.
                (3) Main financial information of key non-wholly owned subsidiaries
                                                                                                                                                                                                                             Unit: RMB
                                                                  Closing balance                                                                                                        Opening balance
   Name of
  subsidiary                           Non-current                              Current         Non-current                                                  Non-current                                 Current         Non-current
                  Current assets                          Total assets                                              Total liabilities    Current assets                           Total assets                                                Total liabilities
                                         assets                                liabilities       liabilities                                                   assets                                   liabilities       liabilities
YNBY
International      408,750,786.39        11,220,045.51     419,970,831.90      92,047,465.34         4,096,632.61       96,144,097.95      328,272,842.86     12,491,866.59       340,764,709.45         94,092,251.84      5,957,177.35        100,049,429.19
Limited
                                                                                                                                                                                                                             Unit: RMB
                                                                Amount for the current period                                                                              Amount for the previous period
        Name of subsidiary           Operating                              Total comprehensive           Cash flows from                                                                        Total comprehensive        Cash flows from
                                                         Net Profit                                                                     Operating revenue            Net Profit
                                      revenue                                      income                operating activities                                                                           income             operating activities
        YNBY
        International               365,374,936.94       2,133,674.99                -1,089,543.60                  -3,655,973.04           329,187,942.18                 1,292,326.58                  2,612,331.99               -8,687,297.45
        Limited
                Other explanations: None.
(4) Major restrictions on the use of assets of the corporate group and settlement of its debts: None.
(5) Financial support or other support provided for structured entities included in the scope of consolidation for the
consolidated financial statements
None.
Other explanations: None.
the subsidiary remains unchanged
(1) Explanations on changes in the share of owners’ equity in the subsidiary: None.
     As disclosed by YNBY International, on May 25, 2025, the Company allotted a total of 800,000,000 shares to not less than 6 allotees
at a new price of HKD 0.1161 per share according to the terms and conditions of the allotment agreement. After this subscription, YNBY
International’s total issued shares increased from 6,799,914,160 shares to 7,599,914,160 shares. The Company holds 5,009,936,360 shares
in YNBY International, accounting 65.92% of YNBY International’s total issued shares.
(2) Impact of the transaction on the minority shareholders’ equity and the owners’ equity attributable to the parent company:
                                                                                                                         Unit: RMB
                                                                                                         Amount
  Acquisition cost/disposal consideration
  --Cash
  --Fair value of the non-cash assets
  Total acquisition cost/disposal consideration                                                                           -37,009,868.76
  Less: the subsidiary’s net asset shares calculated in proportion to the
  acquired /disposed equity ratio
  Amount difference                                                                                                        37,009,868.76
  Including: Adjustment of capital reserves
            Adjustment of surplus reserve
            Adjustment of undistributed profits
Other explanations: None.
(1) Important joint ventures or associates
                                                                                              Shareholding proportion   The accounting
    Name of joint         Main                                                                                             method for
     venture or          business           Place of registration           Business nature                             investments in
      associate          location                                                               Direct       Indirect    joint ventures
                                                                                                                          or associates
                                                                                                                     Equity
                                      No. 92
 Shanghai                                                                                                            method for
                                      Zhangjiang Road, China
 Pharmaceuticals                                                                                                     long-term
                       Shanghai       (Shanghai) Pilot Free         Pharmaceuticals      17.95%
 Holding Co., Ltd.                                                                                                   equity
                                      Trade Zone
                                                                                                                     investments
    Explanation of the inconsistency of the ratio of shareholding in joint ventures or associates with the proportion of voting rights:
None.
    Basis for holding 20% or less voting rights but having important influence, or holding 20% or more voting rights but not having
important influence: None.
(2) Main financial information of important joint ventures: None.
(3) Main financial information of important associates
                                                                                                                         Unit: RMB
                                              Closing balance/Amount for the current       Opening balance/Amount for the previous
                                                              period                                       period
 Current assets                                                    184,456,754,035.33                            171,823,107,421.97
 Non-current assets                                                 53,610,302,036.04                             49,386,322,726.20
 Total assets                                                      238,067,056,071.37                            221,209,430,148.17
 Current liabilities                                               140,131,022,109.65                            126,038,386,279.10
 Non-current liabilities                                              9,078,129,398.07                            11,428,680,148.00
 Total liabilities                                                 149,209,151,507.72                            137,467,066,427.10
 Minority interests                                                 13,762,252,040.32                             12,066,743,749.10
 Equity attributable to shareholders of the
 parent company
 Share of net assets based on percentage
 of shareholding
 Adjustment
 - Goodwill                                                            934,312,752.73                                934,411,132.40
 - Unrealized profit from internal
                                                                         -9,293,982.72                                -7,831,910.38
 transactions
 - Others                                                            -1,746,106,581.50                            -1,731,865,195.92
 Book value of equity investment in
 associates
 Fair value of equity investments in
 associates for which publicly quoted                               11,881,438,308.60                             13,978,162,716.00
 prices exist
 Operating revenue                                                 141,592,782,502.79                            139,413,145,524.43
 Net profits                                                          4,994,784,030.29                             3,597,363,036.62
 Net profits from discontinued operations
 Other comprehensive income                                              19,680,758.31                               -35,643,937.69
 Total comprehensive income                                           5,014,464,788.60                             3,561,719,098.93
 Dividends received from associates
 during the year
 Other explanations: None.
(4) Combined financial information of insignificant joint ventures and associates
                                                                                                                       Unit: RMB
                                              Closing balance/Amount for the current          Opening balance/Amount for the
                                                              period                                 previous period
 Joint ventures:
 Total of the followings based on the
 percentage of shareholdings
 Associates:
 Total book value of investments                                      499,363,717.68                               499,899,492.59
 Total of the followings based on the
 percentage of shareholdings
 - Net profit                                                             -551,733.26                                  -226,188.91
 - Total comprehensive income                                             -551,733.26                                  -226,188.91
    Other explanations: None.
(5) Explanation on significant restrictions on the ability of joint ventures or associates to transfer funds to
the Company: None.
(6) Excess loss generated from joint ventures or associates
                                                                                                                       Unit: RMB
                                                                       Unrecognized losses in the       Cumulative unrecognized
     Name of joint venture or          Cumulative unrecognized
                                                                      current period (or net profit   losses at the end of the current
           associate                 losses in the previous periods
                                                                      shared in the current period)                period
  Lijiang Changgengming
                                                       -512,685.27                        34,708.05                       -477,977.22
  Trading Co., Ltd.
    Other explanations: None.
(7) Unrecognized commitment related to investments in joint ventures: None.
(8) Contingent liabilities related to investments in joint ventures or associates: None.
None.
XI. Government Grants
    □Applicable    Not applicable
    Reasons for not receiving the estimated amount of government grants at the expected time point
    □Applicable    Not applicable
    Applicable       Not applicable
                                                                                                                          Unit: RMB
                                                       Amount
                                                                        Amount             Other
                                                     included in
                                 Amount of new                       transferred to     changes in
Accounting         Opening                          non-operating                                        Closing         Related to
                                 subsidies in the                   other income in         the
   item            balance                             revenue                                           balance       assets/income
                                  current period                       the current        current
                                                      during the
                                                                         period           period
                                                        period
Deferred                                                                                                               Related        to
income                                                                                                                 income
Deferred                                                                                                               Related        to
income                                                                                                                 assets
  Applicable        Not applicable
                                                                                                                          Unit: RMB
                    Accounting item                     Amount for the current period                Amount for the previous period
      Other income                                                           20,181,682.67                                33,866,113.61
    Other explanations: None.
  XII. Risks Associated with Financial Instruments
  (I) Risks incurred by financial instruments
           The Group’s financial instruments include equity investments, debt investments, loans, receivables and
  accounts payable, etc., as detailed in the relevant items under Note VI. The risk management objective of the Group
  is to get an appropriate balance between risk and return, minimize the negative impact of risk on business results of
  the Group, and maximize the interest of shareholders and other equity investors. Based on this risk management
  objective, the basic risk management strategy of the Group is to identify and analyze various risks faced by the
  Group, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks
  in a timely and reliable manner to control risks within a limited range.
           Market risk of financial instruments is the risk of fluctuation in the fair value of financial instruments or future
  cash flow arising from changes in market price, including exchange rate risk, interest rate risk, and other price risk.
           The Group uses sensitivity analysis techniques to analyze the possible impact of reasonable and possible
  changes in market risk related variables on current profits and losses or shareholders’ equity. Since any risk variable
  rarely changes in isolation, and the correlations that exist between variables will have a significant impact on the
  ultimate amount of a change in a risk variable, in the following explanation, it is assumed that each variable changes
  independently.
           (1) Exchange rate risk
           Exchange rate risk refers to the risk that the fair value or future cash flow of a financial instrument will fluctuate
  due to changes in the exchange rate. Exchange rate risk arises from financial instruments denominated in foreign
  currencies other than the functional currency. The Group’s principal operations are located in the PRC, the
  functional currency is RMB, and its principal operations are settled in RMB. The principal place of business of the
Group's subsidiary, YNBY International, is located in Hong Kong, the PRC, and its functional currency is Hong
Kong dollars. The Group’s exposure to foreign exchange risk relates mainly to the US dollar and Hong Kong dollar,
etc. The exchange rate risk affects both the Group’s transactions and the results of its foreign operations. The balance
of the Group's foreign currency monetary items as at June 30, 2025 is as shown in Section 67 “Monetary items
denominated in foreign currencies” under Note VI. If the RMB had appreciated or depreciated by 3% against the
US dollar and Hong Kong dollar, while other factors remained unchanged, the net profit of the Company would
have increased or decreased by approximately RMB 20,274,718.58.
     (2) Interest rate risk
     Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Group’s interest rate risk arises from bank loans and bonds payable and
other interest-bearing long-term debts. Financial liabilities at floating rates expose the Group to the cash flow interest
rate risk, and financial liabilities at fixed rates expose the Group to the fair value interest rate risk. The Group
determines the relative proportion of contracts carrying fixed and floating rates according to prevailing market
conditions. As at June 30, 2025, the Group’s interest-free debt (with a balance of RMB 404,233,333.39 at the end
of last year) faced not material exposure to changes in market interest rates.
     (3) Other price risk
     The investments at fair value through profits or losses held by the Group are measured at fair value on the
balance sheet date. Therefore, the Group is exposed to fluctuations in the securities market. The Group reduces the
price risk of equity portfolio investments by holding multiple equity portfolios.
     As at June 30, 2025, the maximum exposure to credit risk that could cause the Group’s financial loss is mainly
due to losses on the Group’s financial assets arising from the failure of the other party to perform its obligations
under the contract and financial guarantees undertaken by the Group, including:
     The book value of recognized financial assets in the consolidated balance sheet. For financial instruments
measured at fair value, the book value reflects its risk exposure, but not its maximum risk exposure, which will
change as fair value changes in the future.
     To reduce credit risk, the Company’s self-produced drugs and health products are generally sold in accordance
with the principle of first payment before delivery. When selecting dealers (customers), the Company will
investigate the scale and financial strength, market resources, operations, brands, sales networks, and sales channels
of dealers (customers). Only dealers (customers) that meet the requirements of the Company can be selected.
Yunnan Pharma, a subsidiary of the Company, mainly faces the customer credit risk caused by credit sales. Yunnan
Pharma strictly implements credit management for the whole process of credit sales. It has established a customer
credit evaluation management system, and divided customers into various types according to their nature, expected
sales, operating conditions, and development potential. For each type of customer, it will set assessment credit and
red line credit days according to a unified division standard, and then confirm the effective sales and the time limit
to stop billing, and make credit sales forecast and evaluation before the transactions. In the process of cooperation,
dynamic credit adjustment is carried out according to the actual purchase amount of customers and the change of
business scale, so that the credit sales amount given matches its business strength. Because the Company only deals
with recognized and reputable third parties, and customer bases are mainly medical institutions at all levels, large
pharmacy chains, distributors, community and township medical service outlets, no collateral is required. Credit
risk concentration is managed by customer type, geographic region and industry.
     Because the Company’s customer base for accounts receivable is widely dispersed in different regions and
industries, there is no significant concentration of credit risk within the Company.
     The Group’s working capital is held in banks with high credit ratings and therefore the credit risk of working
capital is low.
     Liquidity risk is the risk that a company will run short of funds to meet its obligations settled by delivering
cash or other financial assets.
     It is the Company’s policy to ensure that it has sufficient cash to pay its debts as they fall due. Liquidity risk is
centrally controlled by the Company’s Financial Department. The Financial Department ensures that the Company
has sufficient funds to service its debt with all reasonable projections by monitoring cash balances, readily realizable
marketable securities and rolling projections of cash flows for the next 12 months.
     The maturity analysis of financial liabilities based on undiscounted contractual cash flows of the Company is
as follows:
   (1) The Company’s current liabilities include short-term loans, notes payable and accounts payable, and other
payables, which are expected to be repaid within 1 year.
   (2) The maturity analysis of non-current liabilities (including the non-current liabilities due within 1 year)
based on undiscounted contractual cash flows of the Company is as follows:
                                                      June 30, 2025
  Item      Within one                                                                                               Total
              year
  Long-
    term                                                                                        2,100,000.00      2,100,000.00
   loans
  Lease
liabilities
 Total 105,381,785.10                 66,428,055.99               53,299,122.87                80,627,853.22   305,736,817.18
(II) Hedging
 (1) The Company carried out hedging business for risk management
 Applicable            Not applicable
 (2) The Company conducted eligible hedging business and applied hedging accounting: None.
 (3) The Company carried out hedging business for risk management, which is expected to achieve risk
management target, but did not apply hedging accounting
 Applicable            Not applicable
 (1) Classification by type of transfer
 Applicable             Not applicable
 (2) Derecognition of financial assets due to transfer
 Applicable             Not applicable
 (3) Financial assets involved in continued assets transfer
 Applicable             Not applicable
 Other explanations: None.
XIII. Disclosure of Fair Value
                                                                                                                  Unit: RMB
                                                                   Closing fair value
         Item                   Level I fair value   Level II fair value        Level III fair value             Total
                                 measurement           measurement                measurement
 I. Continuous fair                    --                    --                           --                      --
 value measurement
   (I) Financial
 assets held for                                       3,116,418,919.96                  4,600,000.00        3,121,018,919.96
 trading
   (1) Others                                          3,116,418,919.96                  4,600,000.00        3,121,018,919.96
   (II) Accounts
 receivable                                                                         1,170,435,781.56         1,170,435,781.56
 financing
   (1) Notes receivable                                                             1,170,435,781.56
   (III) Other non-
 current financial                                                                   206,670,363.44            206,670,363.44
 assets
        Investment in
 equity instruments
  (IV) Investment in                                                                    71,745,000.00           71,745,000.00
 other equity instruments
 Total assets at
 continuous fair value                                 3,116,418,919.96             1,453,451,145.00         4,569,870,064.96
 measurement
 II. Noncontinuous fair                --                   --                           --                       --
 value measurement
continuously and non-continuously: None.
items subject to level II continuous and noncontinuous fair value measurement
    The Company generally classifies the financial products it holds, such as wealth management products, as level
II fair value measurement items. The Company recognizes the fair value of these financial products based on their
net asset value, with minimal fluctuations in fair value. As of the end of June 30, 2025, such financial products held
by the Company had a fair value of RMB 3,116,418,919.96.
items subject to level III continuous and noncontinuous fair value measurement
     (1) Other non-current financial assets subject to level III continuous fair value measurement are the equity
investment in non-listed companies held by the Company. The Company will obtain the annual auditor’s report of
the investee, consider the operating environment, operating conditions and financial status of the investee enterprise,
and determine the closing fair value on the basis of the closing net assets of the company. Other investments in other
equity instruments are the equity of non-listed companies held by the Company. As the investee is a start-up
biotechnology company, considering that the business environment and operating conditions of the invested
enterprise currently in the project R&D phase, its financial position have not changed substantially at the time of
the new investment, the investment cost is used as the best estimate of fair value in the current period.
     (2) The accounts receivable financing subject to level III fair value measurement are the notes receivable held
by the Company, mainly including banker’s acceptance bill. Its credit risk is negligible, its remaining term is short
(less than 12 months), and its book value is close to its fair value. The book value is used as the best estimate of fair
value by the Company.
sensitivity analysis for the items subject to level III continuous fair value measurement: None.
the current period, the reason for the conversion and the policy for determining the time point of the
conversion: None.
  The financial assets and financial liabilities measured at amortized cost in the financial statements mainly
included notes receivable, accounts receivable, other receivables, long-term borrowings, short-term borrowings,
notes payable, accounts payable, other payables, long-term payables, etc.
XIV. Related Parties and Related Party Transactions
    Ultimate controller of the Company: None.
    Other explanations:
     The proposal of merger and overall listing of Yunnan Baiyao Group and Baiyao Holdings by issuing shares
had been considered and approved at the First Extraordinary General Meeting of Yunnan Baiyao for 2019. On April
Ltd and Yunnan Baiyao Holdings Co., Ltd (Zheng Jian Xu Ke [2019] No. 770). Prior to the completion of the above-
mentioned merger and overall listing, the controlling shareholder of the Company was Baiyao Holdings, and there
was no de facto controller. After the completion of the transaction, SASAC of Yunnan Province and New Huadu
with its acting-in-concert parties, were equally the largest shareholder of the Company, and neither of them obtained
the control over the listed company. SASAC of Yunnan Province, along with New Huadu and its acting-in-concert
parties, had made long-term share lock-up commitments. Therefore, the listed company did not have de facto
controller before and after the transaction.
     On May 22, 2020, SASAC of Yunnan Province transferred 321,160,222 shares of the Company held by it to
its wholly-owned subsidiary State-owned Equity Management Company at nil consideration. After the completion of
the transfer, State-owned Equity Operation and Management Company and New Huadu with its acting-in-concert
parties, were equally the largest shareholder of the Company, and there was no change in the Company’s situation
of not having a de facto controller or controlling shareholder.
     On December 8, 2021, SASAC of Yunnan Province transferred 100% of the shares held by State-owned Equity
Operation and Management Company to Yunnan Investment Group Co., Ltd. After the equity transfer, Yunnan
Investment Group Co., Ltd would hold 321,160,222 shares of the Company through State-owned Equity Operation
and Management Company, accounting for 25.04% of the total share capital of the Company. State-owned Equity
Operation and Management Company and New Huadu and New Huadu with its acting-in-concert parties, were
equally the largest shareholder of the Company, and the situation that the Company has no de facto controller and
no controlling shareholder remain unchanged.
     On August 7, 2024, the Company disclosed the Announcement on Increase in Shareholdings of the Company
by Shareholders of 5% or More and the Subsequent Shareholding Increase Plan. The Company’s largest
shareholder, the State-owned Equity Management Company, increased its shareholdings in the Company by
December 31, 2024, the State-owned Equity Management Company held 467,110,174 shares of the Company,
accounting for 26.18% of the Company’s total shares. The State-owned Equity Management Company remains the
largest shareholder, and the Company continues to have no de facto controller and no controlling shareholder.
     On August 7, 2024, the Company disclosed the Announcement on Increase in Shareholdings of the Company
by Shareholders of 5% or More and the Subsequent Shareholding Increase Plan. The Company’s largest
shareholder, the State-owned Equity Management Company, increased its shareholdings in the Company by
period from August 6, 2024 to February 5, 2025. As of February 6, 2025, the State-owned Equity Management
Company held 467,431,774 shares of the Company, accounting for 26.20% of the Company’s total shares. The
State-owned Equity Management Company remains the largest shareholder, and the Company continues to have no
de facto controller and no controlling shareholder.
For details of subsidiaries of the Company, please refer to Section 1 “Interest in Subsidiaries” under Note X.
For details of important joint ventures or associates of the Company, please refer to Note X3 (1) Important Joint Ventures or
Associates.
Details of other joint ventures or associates with related party transactions for the period and balances resulting from related
party transactions in the previous period are as follows:
              Name of joint ventures or associates                                Relationship with the Company
 Shanghai Pharmaceuticals Holding Co., Ltd.                      Associate
 Lijiang Changgengming Trading Co., Ltd.                         Associate
    Other explanations: None.
                  Name of other related parties                    Relationship between other related parties and the Company
 Yunnan State-owned Equity Operation Management Co., Ltd.        Substantial shareholder of the Company
 Yunnan Hehe (Group) Co., Ltd.                                   Substantial shareholder of the Company
 New Huadu Industrial Group Co., Ltd.                            Substantial shareholder of the Company
                                                                 Minority shareholder that has significant influence on the
 Yunnan Tianma Pharmaceutical Co., Ltd.
                                                                 subsidiary
                                                                 Minority shareholder that has significant influence on the
 Yunnan Jianshui County Xingda Medicine Co., Ltd.
                                                                 subsidiary
                                                                 Minority shareholder that has significant influence on the
 Yunnan Baoshan Medicine Co., Ltd.                               subsidiary
                                                                 Minority shareholder that has significant influence on the
 Qiubei County Wanhe Pharmaceutical Co., Ltd.                    subsidiary
                                                                 Minority shareholder that has significant influence on the
 Kaiyuan Sanfa Pharmaceutical Trade Co., Ltd.                    subsidiary
                                                                 Minority shareholder that has significant influence on the
 Chuxiong Jiayuan Medicine Co., Ltd.                             subsidiary
                                                                 Minority shareholder that has significant influence on the
 Yunnan Jingxing Pharmaceutical Group Co., Ltd.                  subsidiary
 Yunnan Drug Technology Development Operation Co., Ltd.          Subsidiary of the substantial shareholder
 YEIG Power Assembly Park Development Co., Ltd.                  Subsidiary of the substantial shareholder
 Tibet Jiushi Zhihe Marketing Co., Ltd.                          Subsidiary of the substantial shareholder
 Jiuai Zhihe (Beijing) Technology Co., Ltd.                      Subsidiary of the substantial shareholder
 Kunming Yusi Pharmaceutical Co., Ltd.                           Subsidiary of the substantial shareholder
 Yunnan Hongta Bank Co., Ltd.                                    Subsidiary of the substantial shareholder
 Yunnan Kanglv Holding Group Co., Ltd.                           Subsidiary of the substantial shareholder
 Teh-Ho Canned Food Company                                      Subsidiary of the substantial shareholder
 Yunnan Salt Wenshan Co., Ltd.                                   Sub-subsidiary of the substantial shareholder
 Yunnan Salt Lijiang Co., Ltd.                                   Sub-subsidiary of the substantial shareholder
 Yunnan Salt Rixin Co., Ltd.                                     Sub-subsidiary of the substantial shareholder
 MB Packaging Limited                                            Sub-subsidiary of the substantial shareholder
 Yunnan Medical Investment Management Group Kunming
 Technology Co., Ltd.                                            Sub-subsidiary of the substantial shareholder
 YEIG Property Services Co., Ltd.                                Sub-subsidiary of the substantial shareholder
 Tibet Juliang E-commerce Co., Ltd.                              Sub-subsidiary of the substantial shareholder
 Kunming Guiyan New Material Technology Co., Ltd.                Sub-subsidiary of the substantial shareholder
 Yunnan Energy-saving Technology Development and Operation
                                                           Sub-subsidiary of the substantial shareholder
 Co., Ltd.
 Yunnan Kunhua Hospital Investment Management Co., Ltd.              Sub-subsidiary of the substantial shareholder
 Yunnan Pharmaceutical Health Products Import and Export Co.,
                                                              Sub-subsidiary of the substantial shareholder
 Ltd.
 Yunnan Gongtou TCM Materials and Decoction Pieces Industry
                                                              Sub-subsidiary of the substantial shareholder
 Development Co., Ltd.
                                                              Equity investment company of the subsidiary of the
 Shanghai Skynet Brand Management Corp., Ltd.                 substantial shareholder
 Other explanations: None.
(1) Related party transactions on purchase and sales of goods and rendering and receiving of services
 Information of commodities purchased/labor services accepted
                                                                                                                       Unit: RMB
                          Contents of related     Amount for the            Approved              Whether            Amount for the
      Related Party                                                                             exceeding the
                           party transaction       current period       transaction limit                            previous period
                                                                                              transaction limit
  YEIG Property
  Services Co., Ltd.     Purchase of services           556,163.40                                                         556,163.40
   Shanghai Skynet       Purchase of
  Brand Management       Dunhuang IP                     97,181.50                                                         312,388.51
      Corp., Ltd.        licensing fee and
                         other service fees
  Yunnan Drug
  Technology
                         Purchase of goods              267,380.84                                                          96,004.80
  Development
  Operation Co., Ltd.
  Yunnan Jingxing
  Pharmaceutical          Purchase of goods             481,400.58                                                         795,327.66
  Group Co., Ltd.
  Kunming Yusi
  Pharmaceutical Co.,     Purchase of services          579,216.92                                                         175,546.21
  Ltd.
  Yunnan Salt Rixin        Purchase of raw
  Co., Ltd.                   materials                                                                                    -29,996.79
  Yunnan Salt            Purchase of industrial
                                 salt                    30,600.00
  Wenshan Co., Ltd.
  Shanghai
  Pharmaceuticals        Purchase of goods and
  Holding Co., Ltd             services             330,329,271.95      1,200,000,000.00                               384,427,584.24
  and its subsidiaries
  MB Packaging
  Limited                Purchase of goods            1,321,193.92                                                       2,206,963.03
  Teh-Ho Canned
  Food Company and       Purchase of goods                                                                                 419,713.42
  its subsidiaries
  Yunnan Gongtou
  TCM Materials
  and Decoction          Purchase of TCM
  Pieces Industry                                       394,948.67
                         materials
  Development Co.,
  Ltd.
 Yunnan Energy-
 saving Technology
                      Technical services                 48,000.00
 Development and
 Operation Co., Ltd.
 Yunnan State-owned
 Equity Operation     Purchase of services          1,658,970.50
 Management Co., Ltd.
   Information of commodities sold/labor services provided
                                                                                                                  Unit: RMB
          Related Party             Contents of related party        Amount for the current period    Amount for the previous
                                          transaction                                                        period
 Yunnan Baoshan
                                  Sales of drugs                                                                           5,572.23
 Medicine Co., Ltd.
Yunnan Provincial
Pharmaceutical Technology
                                  Sale of drugs                                    15,870,951.51                    6,514,704.02
Development and Operation
Co., Ltd.
Yunnan Jingxing
Pharmaceutical Group Co.,         Sales of drugs                                     2,179,474.73                   9,531,505.43
Ltd.
Kunming Guiyan New Material
                                   Inspection services                                                                     2,830.19
Technology Co., Ltd.
Lijiang Changgengming
                                  Sales of drugs                                                                      117,214.19
Trading Co., Ltd.
Shanghai Pharmaceuticals
Holding Co., Ltd and its          Sales of goods                                  282,839,620.84                  296,906,681.67
subsidiaries
Tibet Jiushi Zhihe Marketing
                                  Sale of goods                                   113,621,290.60                  114,508,530.93
Co., Ltd.
Tibet Juliang E-Commerce
                                  Sale of goods                                         45,405.66
Co., Ltd.
Jiuai Zhihe (Beijing)
                                  Sale of goods                                         29,911.51
Technology Co., Ltd.
 Yunnan Hongta Bank Co., Ltd. Sales of drugs                                             7,100.38
 Yunnan Hehe (Group) Co.,
                                  Sales of drugs                                         1,944.11
 Ltd.
 Yunnan Kanglv Holding
                                  Sales of drugs                                         2,086.37
 Group Co., Ltd.
Explanations on related party transactions on purchase and sales of goods and rendering and receiving of services: None.
(2) Trusteeship/contracting and entrusted management/outsourcing: None.
(3) Leasing between related parties
   The Company as the lessor: None.
       The Company as the lessee:
                                                                                                                                                                                               Unit: RMB
                                               Rental costs for short-term
                                                                             Variable lease payments
                                                leases and leases of low-
                                                                             that are not included in                                          Interest expense on lease
                                                   value assets that are                                            Rent paid                                                    Increased right-to-use assets
                                                                             the measurement of the                                               liabilities assumed
                                               streamlined in accounting
                             Types of leased                                      lease liability
     Name of lessor                                     treatment
                                 assets
                                                                              Amount       Amount
                                               Amount for     Amount for                                                                     Amount for       Amount for
                                                                              for the       for the     Amount for the     Amount for the                                    Amount for the       Amount for the
                                               the current    the previous                                                                   the current      the previous
                                                                              current      previous     current period     previous period                                   current period       previous period
                                                 period          period                                                                        period            period
                                                                               period       period
Yunnan Jianshui County
Xingda Medicine Co.,       House                                                                                                              104,593.90         58,290.27                            7,545,479.15
Ltd.
Yunnan Tianma
                           House                                                                                                385,321.10     28,286.13          8,740.00
Pharmaceutical Co., Ltd.
Kaiyuan Sanfa
                           Vehicle and
Pharmaceutical Trade                            248,495.58      301,238.94
                           equipment
Co., Ltd.
Yunnan Jingxing
Pharmaceutical Group       House                                                                           1,108,799.34                        44,623.38         10,431.61       -835,516.44            -302,375.61
Co., Ltd.
YEIG Power Assembly
Park Development Co.,      House                                                                                                               61,490.47         88,443.38
Ltd.
       Explanations on leasing between related parties: None.
 (4) Related party guarantees: None.
 (5) Borrowings with related parties: None.
 (6) Asset transfer and debt restructuring of related parties: None.
 (7) Remuneration to key management personnel
                                                                                                                    Unit: RMB
                       Item                            Amount for the current period            Amount for the previous period
     Remuneration to key management
     personnel
 (8) Other related party transactions: None.
 (1) Receivables
                                                                                                                  Unit: RMB
                                                                  Closing balance                      Opening balance
  Item name                 Related Party                                    Provision for                        Provision for
                                                         Book balance                           Book balance
                                                                               bad debt                             bad debt
Accounts        Shanghai Pharmaceuticals Holding
receivable      Co., Ltd and its subsidiaries
Accounts        Yunnan Jingxing Pharmaceutical
receivable      Group Co., Ltd.
Accounts        Yunnan Drug Technology
receivable      Development and Operation Co., Ltd.
Accounts        Lijiang Changgengming Trading Co.,
receivable      Ltd.
Accounts
                MB Packaging Limited                                                                  4,050.00           1,215.00
receivable
Other           Yunnan Kunhua Hospital Investment
receivables     Management Co., Ltd.
Other           Kaiyuan Sanfa Pharmaceutical Trade
receivables     Co., Ltd.
                Yunnan Pharmaceutical Health
Prepayment                                                   185,900.08                             185,900.08
                Products Import and Export Co., Ltd.
                Qiubei County Wanhe
Prepayment                                                    72,206.41                              72,206.41
                Pharmaceutical Co., Ltd
                Shanghai Pharmaceuticals Holding
Prepayment                                                                                            9,757.13
                Co., Ltd and its subsidiaries
                Yunnan Medical Investment
Prepayment      Management Group Kunming                       4,145.40                               4,145.40
                Technology Co., Ltd.
                Kaiyuan Sanfa Pharmaceutical Trade
Prepayment                                                   200,214.52
                Co., Ltd.
Notes           Shanghai Pharmaceuticals Holding
receivable      Co., Ltd and its subsidiaries
Accounts
                Shanghai Pharmaceuticals Holding
receivable                                                24,262,478.22
                Co., Ltd and its subsidiaries
financing
Accounts
                Tibet Jiushi Zhihe Marketing Co.,
receivable                                                30,000,000.00                           8,102,835.34
                Ltd.
financing
(2) Payables
                                                                                                              Unit: RMB
                                                                   Book balance at the end of      Book balance at the
 Item name                       Related Party
                                                                          the period              beginning of the period
 Accounts      Shanghai Pharmaceuticals Holding Co., Ltd and its
 payable       subsidiaries
 Accounts
               MB Packaging Limited                                                579,286.52                 1,731,652.43
 payable
 Accounts
               Kunming Yusi Pharmaceutical Co., Ltd.                               421,379.62                   195,914.10
 payable
 Accounts      Yunnan Drug Technology Development Operation
 payable       Co., Ltd.
 Accounts
               Teh-Ho Canned Food Company and its subsidiaries                      35,182.66                    46,990.36
 payable
 Accounts
               Yunnan Jingxing Pharmaceutical Group Co., Ltd.                                                    43,245.62
 payable
 Accounts
               Shanghai Skynet Brand Management Corp., Ltd.                                                      39,911.51
 payable
 Accounts
               Yunnan Salt Rixin Co., Ltd.                                           8,403.60                      8,403.60
 payable
 Accounts
               YEIG Property Services Co., Ltd.                                     92,693.90
 payable
 Notes         Shanghai Pharmaceuticals Holding Co., Ltd and its
 payable       subsidiaries
 Other         Yunnan Medical Investment Management Group
 payables      Kunming Technology Co., Ltd.
 Other
               Kunming Yusi Pharmaceutical Co., Ltd.                                 2,353.18                      2,353.18
 payables
 Other         Yunnan Drug Technology Development and
 payables      Operation Co., Ltd.
               State-owned      Assets    Supervision      and
 Dividend      Administration Commission of Yunnan Provincial
 payable       People’s Government, New Huadu Industrial
               Group Co., Ltd.
 Contractual   Shanghai Pharmaceuticals Holding Co., Ltd and its
 liabilities   subsidiaries
 Contractual
               Tibet Jiushi Zhihe Marketing Co., Ltd.                              474,164.58                 2,172,816.79
 liabilities
 Non-
 current
 liabilities   Yunnan Jingxing Pharmaceutical Group Co., Ltd.                      561,754.40                 1,652,355.08
 due within
 one year
 Non-
 current
               Yunnan Jianshui County Xingda Medicine Co.,
 liabilities                                                                     1,463,099.89                 1,434,687.47
               Ltd.
 due within
 one year
 Non-
 current
 liabilities   Yunnan Tianma Pharmaceutical Co., Ltd.                            1,456,597.43                 1,428,311.30
 due within
 one year
 Non-
               YEIG Power Assembly Park Development Co.,
 current                                                                         1,154,754.61                 1,321,553.56
               Ltd.
 liabilities
  due within
  one year
  Non-
  current
  liabilities    Chuxiong Jiayuan Medicine Co., Ltd.                                                                  338,184.26
  due within
  one year
  Lease          Yunnan Jianshui County Xingda Medicine Co.,
  liabilities    Ltd.
  Lease          YEIG Power Assembly Park Development Co.,
  liabilities    Ltd.
  Lease
                 Yunnan Jingxing Pharmaceutical Group Co., Ltd.                      1,175,146.74                   1,148,722.02
  liabilities
XV. Share-based Payment
   □Applicable      Not applicable
   □Applicable      Not applicable
   □Applicable      Not applicable
   □Applicable      Not applicable
XVI. Commitment and Contingencies
Significant commitments on the balance sheet date: None.
(1) Significant contingencies on the balance sheet date
    The contract dispute cases such as Shanghai Yuanye Industrial Co., Ltd vs. Yunnan Baiyao Holding Investment Co., Ltd, involving
an amount of RMB 1,575,318,800, for which, the first trial has not yet commenced.
(2) Where the Company had no significant contingencies to disclose, explanation is also required
   The Company had no significant contingencies to disclose.
None.
XVII. Events Subsequent to the Balance Sheet Date
XVIII. Other Significant Events
(1) Retrospective restatement method: None.
(2) Prospective application method: None.
(1) Exchange of non-cash and bank balance: None.
(2) Exchange of other assets: None.
     (1) In accordance with the Trial Measures for Enterprise Annuity and Trial Measures for Enterprise Annuity
Fund Management of the Ministry of Labor and Social Security, as well as the Letter Yun Lao She Han [2006] No.
enterprise annuity. The investment manager of the enterprise annuity fund is Fullgoal Fund Management Co., Ltd,
and the trustee of the enterprise annuity fund is China Merchants Bank Co., Ltd. The enterprise contribution shall
be paid annually at 5% of the total salary of the employees of the Company in the previous year, and the individual
contribution of the employees shall be paid at 10% of the unit contribution. The individual contribution shall be
collected and paid by the Company from the employee’s salary.
     (2) According to the replies of Yunnan Provincial Department of Human Resources and Social Security (Yun
Ren She Letter [2009] No.79) and Kunming Municipal Labor and Social Security Bureau (Kun Lao She Han [2008]
No.204) on the Enterprise Annuity Implementation Plan of Yunnan Pharma, Yunnan Pharma, a subsidiary of the
Company, was approved to establish an enterprise annuity. The investment manager of the enterprise annuity fund
is Ping An Annuity Insurance Company of China, Ltd, and the trustee of the enterprise annuity fund is China
Merchants Bank Co., Ltd. According to the plan, the enterprise contribution shall be paid annually at no more than
of the employees shall be paid at 10% of the unit contribution.
     (3) According to the replies of Yunnan Provincial Department of Human Resources and Social Security (Yun
Ren She Letter [2009] No.79) and Kunming Municipal Labor and Social Security Bureau (Kun Ren She Han [2016]
No.21) on the Enterprise Annuity Implementation Plan of Yunnan Institute of Materia Medica, Yunnan Institute of
Materia Medica, a subsidiary of the Company, was approved to establish an enterprise annuity. According to the
reply from the Kunming Municipal Bureau of Human Resources and Social Security (Kun Ren She Han [2024] No.
the adjustment of the corporate pension plan for Yunnan Institute of Materia Medica has been approved. The
investment manager of the enterprise annuity fund is Ping An Annuity Insurance Company of China, Ltd, and the
trustee of the enterprise annuity fund is China Construction Bank Corporation. According to the plan, the enterprise
contribution shall be paid annually at no more than 5% of the total salary of the employees of Yunnan Institute of
Materia Medica in the previous year, and the individual contribution of the employees shall be paid at 10% of the
unit contribution.
     (4) In accordance with the Measures on Enterprise Annuity (Decree No. 36 of Ministry of Human Resources
and Social Security), Measures on the Management of Enterprise Annuity Fund (Decree No. 11 of Ministry of
Human Resources and Social Security) and other relevant provisions as well as the Reply on Filing of Enterprise
Annuity Plan of Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd issued by Wuxi Human Resources and Social
Security Bureau (Xi Ren She Fu [2025] No.14), Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd, a subsidiary
of the Company, was approved to establish an enterprise annuity. The investment manager of the enterprise annuity
fund is Ping An Annuity Insurance Company of China, Ltd, and the trustee of the enterprise annuity fund is China
Construction Bank Corporation. According to the plan, the enterprise contribution shall be paid annually at no more
than 5% of the total salary of the employees of Yunnan Baiyao Group Wuxi Pharmaceutical Co., Ltd in the previous
year, and the individual contribution of the employees shall be paid at 10% of the unit contribution.
(1) Determination basis and accounting policy of reporting segments: None.
(2) Financial information of reporting segments: None.
(3) If the Company has no reporting segment or the total assets and total liabilities of the reporting segments
cannot be disclosed, please explain the reason: None.
(4) Other explanations: None.
XIX. Notes to Major Items of Financial Statements of the Parent Company
(1) Disclosure by aging
                                                                                                            Unit: RMB
                   Aging                        Closing balance                           Opening balance
  Within 1 year (inclusive of 1 year)                      1,410,366,807.74                           1,227,895,866.19
  Above 3 years                                              655,467,930.75                             650,617,364.49
  Total                                                    2,153,616,166.30                           1,961,709,725.21
 (2) Disclosure by the method of provision for bad debts
                                                                                                                                                                              Unit: RMB
                                                         Closing balance                                                                     Opening balance
                             Book balance                    Provision for bad debt                                Book balance                  Provision for bad debt            Book value
        Category
                                                                                          Book value
                                                                             Provision                                                                           Provision
                       Amount               Proportion       Amount                                          Amount             Proportion       Amount
                                                                             proportion                                                                          proportion
  Including:
Account receivables
with provision for
bad debt on
portfolio basis
  Including:
Account receivables
from       external      87,845,641.59           4.08%       20,948,262.23       23.85%      66,897,379.36     67,854,948.56         3.46%       20,993,861.37       30.94%          46,861,087.19
customers
Account receivables
from related parties
Total                  2,153,616,166.30        100.00%       20,948,262.23        0.97%   2,132,667,904.07   1,961,709,725.21      100.00%       20,993,861.37        1.07%        1,940,715,863.84
Provision for bad debts made on a portfolio basis:
                                                                                                                           Unit: RMB
                                                                  Closing balance
                          Name
                                                         Book balance               Provision for bad debts       Provision proportion
         Account receivables from external
         customers
         Account receivables from related parties        2,065,770,524.71
         Total                                           2,153,616,166.30                      20,948,262.23
    Explanation on the basis for determining the portfolio: None.
    If provision was made for bad debts of accounts receivable in accordance with the general expected credit loss model:
    Applicable         Not applicable
(3) Provision for bad debts accrued, recovered or reversed during the period: None.
(4) Actual write-off of accounts receivable for the period: None.
(5) Top five customers in closing balance of accounts receivable and contractual assets summarized by
debtor
                                                                                                                                Unit: RMB
                                                                                                                        Closing balance
                                                                                                   Percentage of        of provision for
                                                     Closing                                      total of closing        bad debts of
                                                                       Closing balance of
                              Closing balance of    balance of                                       balance of             accounts
    Customer name                                                      accounts receivable
                              accounts receivable   contractual                                       accounts          receivable and
                                                                      and contractual assets
                                                      assets                                      receivable and          provision for
                                                                                                 contractual assets      impairment of
                                                                                                                       contractual assets
 Customer A                        780,975,149.81                            780,975,149.81                   36.26%
 Customer B                        779,487,444.41                            779,487,444.41                   36.19%
 Customer C                        264,706,256.24                            264,706,256.24                   12.29%
 Customer D                        136,814,532.50                            136,814,532.50                    6.35%
 Customer E                         46,752,954.28                             46,752,954.28                    2.17%
 Total                           2,008,736,337.24                          2,008,736,337.24                   93.26%                 0.00
                                                                                                                                Unit: RMB
                       Item                                 Closing balance                                   Opening balance
   Dividends receivable                                                     193,031,770.84                                 10,348,033.98
   Other receivables                                                      6,323,341,269.71                               6,491,515,478.29
       Total                                                        6,516,373,040.55                          6,501,863,512.27
(1) Interest receivable
Applicable     Not applicable
(2) Dividends receivable
                                                                                                                   Unit: RMB
                Item (or investee)                        Closing balance                           Opening balance
  Shanghai Pharmaceutical Group Co., Ltd.                            193,031,770.84                                       0.00
  Jacobson Pharma Co., Ltd.                                                     0.00                              6,482,280.00
  JBM (Healthcare) Co., Ltd.                                                    0.00                              3,865,753.98
  Total                                                              193,031,770.84                              10,348,033.98
Applicable     Not applicable
(3) Other receivables
                                                                                                                   Unit: RMB
                                            Book balance at the end of the reporting    Book balance at the beginning of the
                   Nature
                                                            period                               reporting period
  Current accounts from and to related                              6,449,784,405.40                          6,622,159,259.62
                     parties within the scope of consolidation
                     Deposits and guarantees                                                                     7,514,111.54                                          7,874,816.28
                     Petty cash and collection and payment on
                     behalf of others
                     Other current accounts                                                                    14,095,581.97                                           9,293,791.26
                     Total                                                                                   6,475,389,128.61                                     6,642,890,376.57
                                                                                                                                                                      Unit: RMB
                                        Aging                                 Book balance at the end of the period                   Opening balance at the end of the period
                   Within 1 year (inclusive of 1 year)                                                   2,301,105,757.58                                         2,829,671,131.53
                   Above 3 years                                                                         1,639,596,577.97                                         1,267,358,860.63
                   Total                                                                                 6,475,389,128.61                                         6,642,890,376.57
                                                                                                                                                                         Unit: RMB
                                                       Closing balance                                                                            Opening balance
                             Book balance                  Provision for bad debts                                     Book balance                  Provision for bad debts
  Category
                                                                                            Book value                                                                                   Book value
                                                                          Provision                                                                                  Provision
                       Amount          Proportion       Amount                                                    Amount          Proportion      Amount
                                                                          proportion                                                                                proportion
     Including:
Provision for
bad debts by        6,475,389,128.61        100.00%   152,047,858.90             2.35%    6,323,341,269.71     6,642,890,376.57       100.00%   151,374,898.28             0.02%     6,491,515,478.29
portfolio
     Including:
Age-based
portfolio
Related party
portfolio
Total               6,475,389,128.61        100.00%   152,047,858.90             2.35%    6,323,341,269.71     6,642,890,376.57       100.00%   151,374,898.28             2.28%     6,491,515,478.29
                       Provision for bad debts made on a portfolio basis:
                                                                                                                                                                      Unit: RMB
                                                                                                                          Closing balance
                                                 Name
                                                                                         Book balance                 Provision for bad debts            Provision proportion
                           Age-based portfolio                                              25,604,723.21                           6,073,189.36                          23.72%
                           Related party portfolio                                       6,449,784,405.40                         145,974,669.54                            2.26%
                           Total                                                         6,475,389,128.61                         152,047,858.90
                  Explanation on the basis for determining the portfolio: None.
                  Provision for bad debts in accordance with the general expected credit loss model:
                                                                                                                                   Unit: RMB
                                              Phase I                        Phase II                     Phase III
    Provision for bad debts          Expected credit losses                                                                           Total
                                                                 Lifetime ECL (not credit-          Lifetime ECL (credit-
                                        for the next 12
                                                                         impaired)                        impaired)
                                            months
Balance as of January 1, 2025                 151,374,898.28                                                                       151,374,898.28
Balance as of January 1, 2025 in
the current period
——Transferred to Phase 2                                                                                                                      0.00
——Transferred to Phase 3                                                                                                                      0.00
——Transferred back to Phase 2                                                                                                                 0.00
——Transferred back to Phase 1                                                                                                                 0.00
Current provision                                 672,960.62                                                                           672,960.62
Current reversal                                                                                                                              0.00
Current transfer                                                                                                                              0.00
Current write-off                                                                                                                             0.00
Other changes                                                                                                                                 0.00
Balance as of June 30, 2025                   152,047,858.90                                                                       152,047,858.90
Division base for each phase and proportion of provision for bad debts: None.
Changes in book balance with significant changes in loss reserves in the current period
Applicable         Not applicable
Provision for bad debts for the period:
                                                                                                                                   Unit: RMB
                                                                          Change in the current period
                           Opening
       Category                                                    Recovery or             Transfer or                         Closing balance
                           balance              Provision                                                      Others
                                                                    reversal                write-off
    Age-based
    portfolio
    Related party
    portfolio
    Total                151,374,898.28                               672,960.62                                                150,701,937.66
Provision for bad debt with important amount of recovery or reversal during the period: None.
                                                                                                                                   Unit: RMB
                                                                                                             Percentage of
                                                                                                                                Closing balance
         Entity name                 Nature             Closing balance                   Aging             total of closing
                                                                                                                                of provision for
                                                                                                            balance of other
                                                                                                               receivables        bad debts
                                        Related parties
                                          within the                              Within 1 year, above 1
         Entity A                                            1,425,049,049.25                                    22.01%
                                           scope of                                        year
                                        consolidation
                                        Related parties
                                          within the                              Within 1 year, above 1
         Entity B                                            914,412,340.50                                      14.12%
                                           scope of                                        year
                                        consolidation
                                        Related parties
                                          within the                               Within 1 year, 1 to 2
         Entity C                                            824,545,699.09                                      12.73%
                                           scope of                                years, above 3 years
                                        consolidation
                                        Related parties
                                          within the
         Entity D                                            707,745,115.03            Within 1 year             10.93%
                                           scope of
                                        consolidation
                                        Related parties
                                          within the                               Within 1 year, 1 to 2
         Entity E                                            575,440,000.00                                       8.89%
                                           scope of                                years, above 3 years
                                        consolidation
                    Total                                    4,447,192,203.87                                    68.68%
        Other explanations: None.
                                                                                                                                 Unit: RMB
                                          Closing balance                                                    Opening balance
    Item                                    Impairment                                                         Impairment
                    Book balance                                    Book value           Book balance                              Book value
                                             provision                                                          provision
Investments
in                   2,593,195,450.92       244,474,941.95          2,348,720,508.97      2,593,195,450.92     244,474,941.95      2,348,720,508.97
subsidiaries
Investments
in associates
and     joint
ventures
Total               15,768,314,778.45       244,474,941.95        15,523,839,836.50      15,171,815,981.63     244,474,941.95     14,927,341,039.68
        (1) Investments in subsidiaries
                                                                                                                                                             Unit: RMB
                                                                     Opening           Increase or decrease in the current period
                                                                                                                                                                Closing balance of
                                         Opening balance (book      balance of                                    Provision                Closing balance
               Investee                                                            Additional     Decreased                                                        impairment
                                                value)             impairment                                        for        Others      (book value)
                                                                                   investment     investment                                                        provision
                                                                    provision                                    impairment
Yunnan Baiyao Group TCM Resources
Co., Ltd.
Yunnan Baiyao Group Medicine E-
commerce Co., Ltd.
Yunnan Baiyao Group Wuxi
Pharmaceutical Co., Ltd.
Yunnan Baiyao Group Dali
Pharmaceutical Co., Ltd.
Yunnan Baiyao Group Health Products
Co., Ltd.
Yunnan Pharmaceutical Co., Ltd.                  765,533,647.30                                                                               765,533,647.30                  0.00
Yunnan Institute of Materia Medica               101,075,329.94                                                                               101,075,329.94                  0.00
Yunnan Baiyao Holding Investment Co.,
Ltd.
Yunnan Baiyao Teayield Co., Ltd.                   3,701,960.00    20,000,000.00                                                                3,701,960.00         20,000,000.00
Yunnan Baiyao Group (Hainan) Co., Ltd.           457,198,438.74                                                                               457,198,438.74                  0.00
Yunnan Baiyao Group Shanghai Co.,
Ltd.
Yunnan Baiyao Group Medical
Technology Hefei Co., Ltd.
Shanghai Yunzhen Medical Technology
Co., Ltd.
YNBY International Limited                        98,226,954.53   224,474,941.95                                                               98,226,954.53       224,474,941.95
Yunhe Pharmaceutical (Tianjin) Co.,
Ltd.
Total                                          2,328,720,508.97   244,474,941.95                                                             2,348,720,508.97      244,474,941.95
                   (2) Investments in associates and joint ventures
                                                                                                                                                                                                                  Unit: RMB
                                                                                                        Increase and decrease in the current period
                                                Opening                               Profit and loss
                                                                                                             Adjustment of
                          Opening balance      balance of                             on investments                                                  Cash dividends or                               Closing balance      Closing balance of
        Investee                                            Additional   Decreased                                other          Change in other                            Provision for
                           (book value)        impairment                               recognized                                                    profit declared to                    Others     (book value)       impairment provision
                                                            investment   investment                          comprehensive           equities                                impairment
                                               provision                              under the equity                                                    distribute
                                                                                                                 income
                                                                                          method
I. Joint ventures
II. Associates
Shanghai
Pharmaceuticals            12,062,250,480.82                                            772,586,368.16             747,046.88        15,826,190.78        193,031,770.84                              12,658,378,315.80
Holding Co., Ltd.
Yunnan TCM
Comprehensive
Health Innovation
Equity Investment            499,889,683.05                                                -525,965.37                                                                                                   499,363,717.68
Fund Partnership
(Limited
Partnership)
Yunnan Tianzheng
Testing Co., Ltd.
Subtotal                   12,578,620,530.71                                            772,957,330.00             747,046.88        15,826,190.78        193,031,770.84             0.00             13,175,119,327.53
Total                      12,578,620,530.71                                            772,957,330.00             747,046.88        15,826,190.78        193,031,770.84             0.00             13,175,119,327.53                     0.00
     The recoverable amount is determined based on the net amount obtained by fair value less the disposal expense.
     □Applicable           Not applicable
     The recoverable amount is determined based on the present value of estimated future cash flows.
     □Applicable            Not applicable
     Reasons for significant differences between the foregoing information and information used for impairment testing in previous
years or external information: None.
     Reasons for significant differences between the information used in the Company’s impairment tests in previous years and
the actual situation in the corresponding years: None.
(3) Other explanations: None.
                                                                                                                                                        Unit: RMB
                                                    Amount for the current period                                        Amount for the previous period
                 Item
                                         Income                                Cost                                   Income                             Cost
         Principal business               4,870,143,152.83                            1,839,018,331.24                   4,449,661,598.70              1,837,265,009.69
         Other business                     665,756,157.90                            2,686,636,344.52                      75,993,077.06                 62,495,542.18
         Total                            5,535,899,310.73                            4,525,654,675.76                   4,525,654,675.76              1,899,760,551.87
           Breakdown information of operating revenue and operating cost:
                                                                                                                                                                                                   Unit: RMB
                                             Drug sales                                   TCM resources                                     Others                                         Total
 Contract classification
                              Operating revenue         Operating cost       Operating revenue       Operating cost       Operating revenue          Operating cost       Operating revenue        Operating cost
Business type                    4,764,711,939.15         1,757,809,478.70          105,431,213.68       81,208,852.54         665,756,157.90        2,686,636,344.52        5,535,899,310.73       4,525,654,675.76
 Including:
Industry sales income            4,764,711,939.15         1,757,809,478.70                                                                                                   4,764,711,939.15       1,757,809,478.70
Commercial sales income                                                              97,146,058.31       73,297,804.32                                                          97,146,058.31          73,297,804.32
Technical services                                                                    8,285,155.37        7,911,048.22                                                           8,285,155.37           7,911,048.22
Others                                                                                                                         665,756,157.90        2,686,636,344.52          665,756,157.90       2,686,636,344.52
By operating areas               4,764,711,939.15         1,757,809,478.70          105,431,213.68       81,208,852.54         665,756,157.90        2,686,636,344.52        5,535,899,310.73       4,525,654,675.76
 Including:
In Yunnan province                 603,763,757.54           263,601,177.14          103,522,388.47       80,330,245.75         665,756,157.90        2,686,636,344.52        1,373,042,303.91       3,030,567,767.41
Outside Yunnan province
(excluding overseas)
Overseas
  Information about performance obligations: None.
   Other explanations: None.
   Information related to the transaction price allocated to the remaining performance obligations:
  As of the end of this reporting period, the income corresponding to the performance obligations that have been contracted but not
yet fulfilled or completed is RMB 0.00.
   Significant contractual changes or significant transaction price adjustments: None.
   Other explanations: None.
                                                                                                                            Unit: RMB
                             Item                                     Amount for the current period         Amount for the previous period
Income from long-term equity investment under the equity
method
Investment income from disposal of financial assets held for
trading
Investment income from other non-current financial assets
during the holding period
Others                                                                                    14,319,630.38                     -21,173,817.57
Total                                                                                    813,972,731.59                     479,391,856.82
XX. Supplementary Information
Applicable             Not applicable
                                                                                                                           Unit: RMB
                                                 Item                                                       Amount          Description
   Profits and losses from disposal of non-current assets                                                   2,405,879.50
   Government subsidies included in the current profits and losses (excluding the government
   subsidies closely related to regular businesses of the Company in line with national
   policies and received by a determined standard, with a continuous impact on the
   Company’s profits and losses)
   Profits and losses from changes in fair value of financial assets and liabilities held for trading
   by non-financial enterprises, and from disposal of such financial assets and liabilities, except       148,596,335.67
   for effective hedging operations related to regular businesses of the Company
    Profits and losses from entrusted investment or asset management                                        4,870,931.14
   Non-operating revenue and expenses other than the above                                                 11,702,436.40
   Other profits and losses satisfying the definition of non-recurring profits and losses                   6,911,926.33
   Less: Amount affected by the income tax                                                                 22,272,320.65
           Amount affected by minority interests (after tax)                                                 405,226.52
   Total                                                                                                  171,995,853.64         --
Details of other profits and losses satisfying the definition of non-recurring profits and losses:
Applicable             Not applicable
Other profit and loss items that meet the definition of non-recurring profit and loss mainly include other non-recurring profit and loss
such as interest on time deposits and value-added tax reduction and exemption.
Note for the definition of non-recurring profits and losses set out in the No.1 Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public - Non-recurring Profits and Losses, as recurring profits and losses
□Applicable             Not applicable
                                                                                                Earnings per share
    Profits during the reporting       Weighted average return on
               period                           equity                     Basic earnings per share         Diluted earnings per share
                                                                                   (RMB/share)                        (RMB/share)
   Net profits attributable to
   ordinary shareholders of                                    9.09%                                 2.04                           2.04
   the Company
   Net profits attributable to
   ordinary shareholders of
   the Company after
   deducting non-recurring
   profits and
   losses
Standards
  (1) Differences in the net profits and net assets in financial statements disclosed respectively under
  International Financial Reporting Standards (IFRS) and CAS
 □Applicable            Not applicable
  (2) Differences in the net profits and net assets in financial statements disclosed respectively under overseas
  accounting standards and CAS
 □Applicable            Not applicable
  (3) Explanations of the causes to differences in accounting data under CAS and overseas accounting
  standards; if a difference adjustment is made to data audited by an overseas audit institution, the name of
  the institution shall be provided: None.
                                            Section IX Other Reported Data
     I. Information about Other Major Social Safety Issues
     Whether the listed company and its subsidiaries have any other major social safety issues
     □Yes No □Not applicable
     Whether any administrative penalties were imposed during the Reporting Period
     □Yes No □Not applicable
     II. Registration Form for Reception, Research, Communication, Interview and Other Activities
     During the Reporting Period
     Applicable □Not applicable
                                      Reception         Type of                          Main topics discussed      Index for the basic information of the
Reception date    Reception site                                       Recipients
                                       method          recipients                        and materials provided                    research
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                                                   Understanding of the
January 7,                         Communication                     2 people from                                ure/detail?stockCode=000538&announ
                 headquarters                          Institution                       Company’s operating
                 office building                                                         situation.
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                               3 people from       Understanding of the
January 8,                         Communication                                                                  ure/detail?stockCode=000538&announ
                 headquarters                          Institution   China               Company’s operating
                 office building                                     Securities, etc.    situation.
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                               2 people from       Understanding of the
January 10,                        Communication                                                                  ure/detail?stockCode=000538&announ
                 headquarters                          Institution   Northeast           Company’s operating
                 office building                                     Securities, etc.    situation.
                                                                     China                                        https://www.cninfo.com.cn/new/disclos
                 Group                                                                   Understanding of the
January 13,                                                          International                                ure/detail?stockCode=000538&announ
                 headquarters      Field research      Institution                       Company’s operating
                 office building                                                         situation.
                                                                     Corporation,                                 0538&announcementTime=2025-01-15
                                                                     etc.
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                               6 people from       Understanding of the
January 14,                                                                                                       ure/detail?stockCode=000538&announ
                 headquarters      Field research      Institution   Dacheng Fund        Company’s operating
                 office building                                     Management          situation.
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                               17 people from      Understanding of the
January 23,                                                                                                       ure/detail?stockCode=000538&announ
                 headquarters      Field research      Institution   Pacific             Company’s operating
                 office building                                     Securities, etc.    situation.
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                               146 institutional   Understanding of the
                                   Communication                                                                  ure/detail?stockCode=000538&announ
April 1, 2025    headquarters                          Institution   and individual      Company’s operating
                                   via phone                                                                      cementId=1223004263&orgId=gssz000
                 office building                                     investors           situation.
                                                                                                                  https://www.cninfo.com.cn/new/disclos
                 Group                                               3 people from       Understanding of the
                                   Communication                                                                  ure/detail?stockCode=000538&announ
April 3, 2025    headquarters                          Institution   Orient              Company’s operating
                                   via phone                                                                      cementId=1223019906&orgId=gssz000
                 office building                                     Securities, etc.    situation.
                 Group                                                                   Understanding of the
                                   Communication                     Fund                                         ure/detail?stockCode=000538&announ
April 7, 2025    headquarters                          Institution                       Company’s operating
                                   via phone                         Management,                                  cementId=1223042367&orgId=gssz000
                 office building                                                         situation.
                                                                     etc.                                         0538&announcementTime=2025-04-09
                 Group                                                                   Understanding of the
                                   Communication                     Taiping Asset                                ure/detail?stockCode=000538&announ
April 7, 2025    headquarters                          Institution                       Company’s operating
                                   via phone                         Management,                                  cementId=1223042374&orgId=gssz000
                 office building                                                         situation.
                                                                     etc.                                         0538&announcementTime=2025-04-09
April 8, 2025    Group             Communication       Institution   4 people from       Understanding of the     https://www.cninfo.com.cn/new/disclos
                 headquarters      via phone                      Penghua Fund       Company’s    operating   ure/detail?stockCode=000538&announ
                 office building                                  Management,        situation.               cementId=1223042376&orgId=gssz000
                                                                  etc.                                        0538&announcementTime=2025-04-09
                                                                  China                                       https://www.cninfo.com.cn/new/disclos
                 Group                                                               Understanding of the
                                   Communication                  Merchants                                   ure/detail?stockCode=000538&announ
April 8, 2025    headquarters                       Institution                      Company’s operating
                                   via phone                      Fund                                        cementId=1223042378&orgId=gssz000
                 office building                                                     situation.
                                                                  Management,                                 0538&announcementTime=2025-04-09
                                                                  etc.
                 Group                                                               Understanding of the
                                   Communication                  Guolian                                     ure/detail?stockCode=000538&announ
April 9, 2025    headquarters                       Institution                      Company’s operating
                                   via phone                      Minsheng                                    cementId=1223068757&orgId=gssz000
                 office building                                                     situation.
                                                                  Securities, etc.                            0538&announcementTime=2025-04-11
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            2 people from      Understanding of the
                                   Communication                                                              ure/detail?stockCode=000538&announ
April 10, 2025   headquarters                       Institution   Sinolink           Company’s operating
                                   via phone                                                                  cementId=1223068762&orgId=gssz000
                 office building                                  Securities, etc.   situation.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            China     Life     Understanding of the
                                   Communication                                                              ure/detail?stockCode=000538&announ
April 10, 2025   headquarters                       Institution   Asset              Company’s operating
                                   via phone                                                                  cementId=1223068767&orgId=gssz000
                 office building                                  Management,        situation.
                                                                  etc.
                 Group                                                               Understanding of the
                                   Communication                  China    Asset                              ure/detail?stockCode=000538&announ
April 11, 2025   headquarters                       Institution                      Company’s operating
                                   via phone                      Management,                                 cementId=1223098755&orgId=gssz000
                 office building                                                     situation.
                                                                  etc.                                        0538&announcementTime=2025-04-15
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            3 people from      Understanding of the
                                   Communication                                                              ure/detail?stockCode=000538&announ
April 11, 2025   headquarters                       Institution   PICC Pension,      Company’s operating
                                   via phone                                                                  cementId=1223098757&orgId=gssz000
                 office building                                  etc.               situation.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            6 people from      Understanding of the
                                                                                                              ure/detail?stockCode=000538&announ
April 14, 2025   headquarters      Field research   Institution   CLSA Capital       Company’s operating
                                                                                                              cementId=1223098789&orgId=gssz000
                 office building                                  Partners, etc.     situation.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            2 people from      Understanding of the
                                   Communication                                                              ure/detail?stockCode=000538&announ
April 16, 2025   headquarters                       Institution   Soochow            Company’s operating
                                   via phone                                                                  cementId=1223146070&orgId=gssz000
                 office building                                  Securities, etc.   situation.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            3 people from      Understanding of the
                                   Communication                                                              ure/detail?stockCode=000538&announ
April 17, 2025   headquarters                       Institution   Guolian            Company’s operating
                                   via phone                                                                  cementId=1223146095&orgId=gssz000
                 office building                                  Securities, etc.   situation.
                                                                  CITIC
                                                                  Securities,
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            China              Understanding of the
                                                                                                              ure/detail?stockCode=000538&announ
April 21, 2025   headquarters      Field research   Institution   Securities,        Company’s operating
                                                                                                              cementId=1223236234&orgId=gssz000
                 office building                                  Guotai Haitong     situation.
                                                                  Securities,
                                                                  Huatai
                                                                  Securities, etc.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                            1 people from      Understanding of the
                                   Communication                                                              ure/detail?stockCode=000538&announ
May 15, 2025     headquarters                       Institution   Allianz Global     Company’s operating
                                   via phone                                                                  cementId=1223587747&orgId=gssz000
                 office building                                  Investors          situation.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                                               Understanding of the
                                   Communication                  6 people from                               ure/detail?stockCode=000538&announ
May 15, 2025     headquarters                       Institution                      Company’s operating
                                   via phone                      KS Fund, etc.                               cementId=1223587795&orgId=gssz000
                 office building                                                     situation.
                                                                                                              https://www.cninfo.com.cn/new/disclos
                 Group                                                               Understanding of the
                                   Communication                  1 people from                               ure/detail?stockCode=000538&announ
May 15, 2025     headquarters                       Institution                      Company’s operating
                                   via phone                      Citi PWM                                    cementId=1223587827&orgId=gssz000
                 office building                                                     situation.
                 Group                                            Investors who      Understanding of the     https://www.cninfo.com.cn/new/disclos
May 16, 2025     headquarters      Others           Institution   asked questions    Company’s operating      ure/detail?stockCode=000538&announ
                 office building                                  on                 situation.               cementId=1223587829&orgId=gssz000
                                                                 https://rs.p5w.n                          0538&announcementTime=2025-05-19
                                                                 et
                                                                 Matthews                                  https://www.cninfo.com.cn/new/disclos
                Group                                                               Understanding of the
                                  Communication                  International                             ure/detail?stockCode=000538&announ
May 19, 2025    headquarters                       Institution                      Company’s operating
                                  via phone                      Capital                                   cementId=1223626004&orgId=gssz000
                office building                                                     situation.
                                                                 Management                                0538&announcementTime=2025-05-21
                                                                 LLC.
                                                                                                           https://www.cninfo.com.cn/new/disclos
                Group                                            Orient             Understanding of the
                                  Communication                                                            ure/detail?stockCode=000538&announ
May 19, 2025    headquarters                       Institution   Securities         Company’s operating
                                  via phone                                                                cementId=1223626008&orgId=gssz000
                office building                                  Company            situation.
                                                                 Limited
                                                                                                           https://www.cninfo.com.cn/new/disclos
                Group                                            4 people from      Understanding of the
                                                                                                           ure/detail?stockCode=000538&announ
June 4, 2025    headquarters      Field research   Institution   Soochow            Company’s operating
                                                                                                           cementId=1223802881&orgId=gssz000
                office building                                  Securities, etc.   situation.
                                                                                                           https://www.cninfo.com.cn/new/disclos
                Group                                            7 people from      Understanding of the
                                  Communication                                                            ure/detail?stockCode=000538&announ
June 5, 2025    headquarters                       Institution   Zhongtai           Company’s operating
                                  via phone                                                                cementId=1223802982&orgId=gssz000
                office building                                  Securities, etc.   situation.
                                                                                                           https://www.cninfo.com.cn/new/disclos
                Group                                            5 people from      Understanding of the
                                                                                                           ure/detail?stockCode=000538&announ
June 19, 2025   headquarters      Field research   Institution   CITIC              Company’s operating
                                                                                                           cementId=1223955911&orgId=gssz000
                office building                                  Securities, etc.   situation.
                                                                                                           https://www.cninfo.com.cn/new/disclos
                Group                                            8 people from      Understanding of the
                                  Communication                                                            ure/detail?stockCode=000538&announ
June 20, 2025   headquarters                       Institution   Changjiang         Company’s operating
                                  via phone                                                                cementId=1223973328&orgId=gssz000
                office building                                  Securities, etc.   situation.
     III. Information about Fund Transitions between the Listed Company and Its Controlling
     Shareholders as well as Other Related Parties
     □Applicable Not applicable
                                                                                                    Yunnan Baiyao Group Co., Ltd.
                                                                                                              Board of Directors
                                                                                                               August 29, 2025