ESG Report

2024 Environmental Social and Governance Report |ESG Report

Making People Physically and

Mentally Healthier

2024 Environmental Social and Governance Report |ESG Report

Content

About the Report 01 Executing Duties Pharmaceutical Enhancing Benefits

with Full Commitment to Care for All: and Efficiency for

About Us 02 Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility

Message from the 05

Chairman Corporate Governance 13 Health Sustainability Framework 24 Smooth Medical Network 36

Sustainable 06 Compliance Operation 16 Guaranteeing Quality and Efficacy 26 Deepening Digital Intelligence 41

Empowerment

Development

Management Information Security and Customer 21 Regulating Channels for Medicines 29

Privacy Enhancing People’s Well-Being 46

Providing Health Services 33

Appendix: 66 Achieving Win-Win Co-Creating Green

Report Index Table Results and and

Realizing the Value of Talents Sustainable Horizons

Compliance Employment 50 Energy and Climate Actions 59

Employees’ Rights and Interests and 51 Material Use and Waste Management 64

Diversity

Water Efficiency and Wastewater 65

Talent Development 52 Management

Employee Communication and Care 56

Occupational Health and Safety 57

2024 Environmental Social and Governance Report |ESG Report

About the Report

Yifeng Pharmacy‘s 2024 Environmental Social and Governance (ESG) Report (hereinafter referred to as the “Report”) is the second ESG report independently published by Yifeng Pharmacy Chain Co. Ltd. and all the

branches and subsidiaries (hereinafter referred "Yifeng Pharmacy" "the Company" or "we"). The Report aims to comprehensively present our ESG goals management strategies practices and achievements in 2024 to our

stakeholders.Scope of the Report Access to the Report

The time scope covered by the Report is consistent with that of the 2024 Annual Report namely from January 1 2024 to December 31 2024 (hereinafter The Report is prepared in both Simplified Chinese and English and is

referred to as "2024" or the "Reporting Period"). published in electronic form. In the event of any discrepancy between

the two versions the Chinese version shall prevail. The electronic

Unless otherwise specified the disclosure scope of the Report is the same as that of the Annual Report covering all subsidiaries and affiliated companies

version of the Report can be accessed and downloaded from our official

within the listed entity of Yifeng Pharmacy. The environmental performance data covers the self-owned drugstores operated by Yifeng Pharmacy

website （https://www.yfdyf.cn）and the website of the Shanghai Stock

throughout 2024 Hengxiutang Pharmaceutical Co. Ltd. (hereinafter referred to as "Hengxiutang") logistics centers over which it has operational control

Exchange website（http://www.sse.com.cn）.rights staff canteens and offices. To enhance the integrity of the Report content some content or descriptions may extend beyond the above-mentioned

disclosure or time scope.Feedback

Basis of Preparation

If you have any comments or suggestions about the Report please

email us at ir@yfdyf.com. Your feedback is important in helping us to

The Report is prepared in accordance with the Shanghai Stock Exchange of Issuing the Rules Governing the Listing of Stocks on Shanghai Stock Exchange

continually improve our sustainable development management and

and Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial) (hereinafter referred to as the

practice."Guidelines for Sustainability Report") and with reference to the Global Reporting Initiatives Sustainability Reporting Standards (hereinafter referred to as

the "GRI Standards") issued by the Global Sustainability Standards Board.Information of the Report

The information used in the Report has been obtained from official documents internal statistics and public information of Yifeng Pharmacy. The Board

of Directors of Yifeng Pharmacy commits that there are no false records misleading statements or material omissions and they are responsible for the

authenticity accuracy and completeness of the Report. The Report was approved by the Board of Directors of the Company on April 28 2025.

2024 Environmental Social and Governance Report | 01ESG Report

About Us

Company Profile

Yifeng Pharmacy (stock code: 603939) was founded in June 2001. For 24 years we have been dedicated to the

pharmaceutical retail industry and are the first large-scale pharmaceutical retailer listed on the Shanghai Stock

Exchange. As a leader in China's healthcare industry Yifeng Pharmacy has successively developed healthcare Corporate mission

related business models such as pharmaceutical retail and wholesale production and sales of Chinese herbal

medicine chronic disease management Internet hospital medical project investment and medical technology Making people physically and

development. We continuously optimize our commodity supply chain and category structure improve the new

mentally healthier

pharmaceutical retail system actively promote digital transformation and build an efficient logistics and

distribution system to provide high-quality services to a large number customers and ensure their health and

safety.Main business scope

Hunan Hubei Shanghai

Jiangsu Jiangxi Zhejiang

Corporate vision Values

Guangdong Hebei Beijing

Becoming the preferred Prioritizing our customers to be

pharmacy worthy of trust results-oriented innovative and

Tianjin

and entrustment lean diligent and pragmatic

responsible and collaborative

caring for growth

Since establishment adhering to the concept of "affordability and professionalism" and "orienting everything

towards customer value" we have been committed to innovating and transforming our business model with a

14684 104 million 40018 70000+ customer-centric approach and continuously providing health solutions for customers' well-being. In the future drugstores we will continue to enhance our core competitiveness practice the concept of corporate sustainable

(including 3812 serviced members employees drug SKU development and build a leading brand of chain pharmacies that is trusted by customers and respected by

franchise stores) society to make contributions to social development.

2024 Environmental Social and Governance Report | 02ESG Report

Development Milestones

2024

* MSCI ESG rating has reached A.

2012 2013 * It was selected into the "Top 500 Most Valuable

* Chinese Brands 2024" list released by GYBrand.* Yifeng Pharmaceutical Logistics Park was Yifeng Pharmacy's e-commerce platform was

inaugurated. successfully launched and put into operation. * It successfully issued 1.797 billion yuan worth of

2011 * The reconstruction project of the store management convertible bonds.

system began.* The restructuring into Yifeng Pharmacy Chain Co.Ltd. was completed.* The investment in large-scale information and 2014 2023

logistics management system marks the first step in * Yifeng Pharmacy was awarded "Champion of * "Strategy Innovation and Organizational

technology-driven empowerment. China's Pharmaceutical Retail Operation". Transformation "campaign was launched.* The acquisition of full ownership of Shanghai Kaixin * First selected in Focus Media · Hurun Most Valuable

Pharmacy marks the beginning of mergers and 2015 China Brands 2023.acquisitions for expansion.* Became the enterprise with the highest brand value

* Yifeng Pharmacy was officially listed becoming

2003 in the national drug retail industry.Chinese first retail chain pharmacy listed on the

* The supply chain was reformed to create a business mainboard of the Shanghai Stock Exchange. 2022

model that seeks win-win results for "customers

* Over 10000 Yifeng Pharmacy stores opened nationwide.pharmaceutical factories and Yifeng Pharmacy" as a 2018

pioneer in the industry. * Selected into the "Top 100 Most Valuable Main Board

* Xinxing Pharmacy the leading chain pharmacy in Listed Companies in China" list.

2002 Hebei Province was acquired for RMB 1.384 billion

* Hunan Yifeng Pharmacy Chain Co. Ltd. was making it the largest merger & acquisition deal of

established laying the foundation for cross-regional domestic retail pharmacy chains in the history. 2020

and cross-provincial operations. * Yifeng Pharmacy has reached its 20th anniversary.

2001 2019 * It has been ranked among the top 100 Chinese listed

* Yifeng Pharmacy Changde Binhu Road Store was * companies for three consecutive years.Sales of Yifeng Pharmacy exceeded RMB 10 billion.opened pioneering the "affordable medicine * * Following the approval of the licence for Yifeng Internet The subsidiary Heng Xiu Tang Pharmaceutical Co.supermarket model" in the five provinces of the Hospital in Hainan a remote diagnosis and treatment centre

Ltd. was established.Central South China. was established.

2024 Environmental Social and Governance Report | 03ESG Report

Honors and Recognition

Association Qualification Honors of the Year

China Medical Pharmaceutical 2024Material Association Changxing Gold Award - 2024 Ranked second in the “2024 Top 100 List of Hurun China 500 China Pharmacy Gathering Award Comprehensive Competitiveness in PharmaceuticalRetail” and honored as the “PharmaceuticalExecutive Vice Retail Profitability Champion 2024”

President Unit Hurun China China Drugstore All

Partners Show (CDAPS)

The 17th China Health Ecology

Organization (2024 CPEO)

Retail Branch of the China Association 2023 Top 10 Chinese Drug Retailers in Total Sales Demonstrative DTP Specific Drug

of Pharmaceutical Commerce Store Outstanding Pharmacy Service Cases of Drug Retailers and Outstanding Cases

of Benefiting Agriculture

Vice President Unit

The 20th Annual Conference of China Retail Pharmacy and

the 5th China Specialty Pharmacy Development ForumHunan Pharmaceutical Ranked third in the “Top 100 Ranked third in the “Top 100 Ranking of Pharmaceutical Retail ProfitabilityProfession Association Comprehensive Strength Ranking of China's China's Pharmacy Value List Champion 2024Pharmacy Chain Stores in 2023 - 2024” in 2023 - 2024”

Executive Vice

President Unit

Medical and Health Industry Symbiosis China Drug Store

Conference (MHS)Hunan Pharmaceutical Ranked third in the “2023-2024 China Pharmaceutical Retail DigitalizationDistribution Industry Association Drug Retail Chain Enterprises with Leader National DTPExcellent Performance” Excellent Unit

Executive VicePresident Unit Ranked second in the “2024 Top 100 List of 2024 PHCF 2024 Wuzhen Health Conference and Comprehensive Competitiveness in

(China Pharma & Healthcare Conference and Fair) the 3rd China OTC Conference Pharmaceutical Retail”

2024 Environmental Social and Governance Report | 04ESG Report

Message from the Chairman

As a key pillar of public well-being the pharmaceutical retail industry should unite all efforts and work relentlessly to support the “Dream of Health”. With the acceleration of China’s ageing society and the deepening of public health

awareness the health consumption landscape has become increasingly diverse and fragmented placing higher expectations on the product structure and service models of retail pharmacies. Looking back at 2024 all our employees

remained true to our original aspiration. With more determined efforts a stronger belief and a more proactive service attitude we have explored innovative paths that align with the development of the times. Through diverse social

responsibility practices we have led industry contributions shaping a blueprint for societal health with a sustainable development approach. We march forward through transformation and is determined to become a benchmark

enterprise that is responsible for public health social welfare the nation’s future and the natural environment.“Building a solid defense with compliance practices.” “Painting a blue sky through green actions”

Compliance management is not only the fundamental guarantee for a company’s stable operation but also a vital tool for maintaining market order and We are deeply concerned with the balance and harmony of the natural

a solemn commitment to public safety. We maintain reasonable decision-making through a clear governance structure standardize pharmaceutical ecosystem proactively embracing environmental challenges and

procurement channels. We ensure suppliers have complete qualifications regulate drug storage and maintenance and medications in strict accordance steadily pushing for a profound transformation toward a green low-

with regulations. We also adhere to the business ethics bottom line in advertising financial regulations and employee conduct. Our strict internal carbon enterprise. We are implementing green initiatives including

regulatory system ensures the precise implementation of medical insurance policies enhancing customers’ understanding of these policies through building solar photovoltaic systems in logistics parks and installing

convenient services and knowledge dissemination. We actively communicate with medical insurance departments to support the safe use and rational smart energy meters in stores fulfilling our commitment to natural

allocation of insurance funds. Additionally we have established a robust data security and customer privacy protection management system resources. We continuously deepen the green pharmaceutical concept

strengthened digital consumption technology safeguards promoted industry self-regulation and built public trust. and collaborate with suppliers to advance packaging optimization and

drug recycling contributing to the circular economy.“Offering reliable medicine for shared health” We closely align with the trends of the times actively embrace sustainable

development strategies and explore the deeper logic of ESG value

Contributing to the protection of customers’ rights and interests and health education is our inescapable corporate mission. Providing more accessible creation. We are fully committed to integrating sustainableand inclusive medical services to our customers is the solid foundation of our development. Having deeply integrated the “strategy of controllable high- development principles into our business management and expansionquality medicines” into our development blueprint we have established a quality system with standardized sources and excellent therapeutic efficacy. reshaping our long-term competitiveness. Looking to the future we will

We are striving to become the most trusted and preferred pharmacy in the hearts of the public. At the same time we emphasize community contributions continue to demonstrate our corporate responsibility with concrete

by offering professional warm services and organizing community health seminars and public welfare activities to impart health knowledge and life actions striving for new peaks and contributing to the creation of a

wisdom. Committed to ongoing public welfare we aim to improve people’s knowledge about health. To ensure stable medication supply we focus on healthier greener and more harmonious society.supply chain management and safety. We conduct rigorous on-site inspections random checks and tiered management to ensure the safety and control

of each step collectively contributing to the healthy and sustainable development of the industry.“Caring for employees to build Yifeng monument”

Optimizing employment practices creating a warm work environment for every employee establishing a sound incentive mechanism and offering Chairman Yifeng Pharmacy Co. Ltd.extensive training and development platforms are our promises and responsibilities toward employees. These practices are also key to build a talent hub

Gao Yi

within the Company. We have implemented an employee care program conducted a “2024 Growth and Care/Stress Relief Survey” and established the

“Yi” Fund for employee care. By doing so we encourage employees to engage in diverse community activities to enhance their sense of belonging and

well-being. At the same time we deepen our commitment to humanistic care by promoting corporate culture optimizing office facilities and task

allocation and strengthening workplace mental health management. Attuned to industry trends and individual aspirations we implement customized

training plans and promote a “management + professional” career path uncovering and cultivating the potential of our employees.

2024 Environmental Social and Governance Report | 05ESG Report

Sustainable Development Management

Yifeng Pharmacy actively practices the concept of sustainable development continue to strengthen the involvement of the Board of Directors and are committed to improving ESG governance. In addition we actively communicate with

stakeholders to jointly explore the planning of sustainable development strategies promoting the deep integration of business decisions sustainable development concepts and the needs of all parties. In this way we aim to realize the

long-term value of the business.Sustainability Governance Structure

With a clear organizational structure and standardized institutional requirements Yifeng Pharmacy ensures the strategic leader role and deep involvement of Board of Directors in sustainability issues. We explicitly stipulate that the

Board of Directors is responsible for overseeing the impacts risks and opportunities related to the Company’s sustainable development. We have also established a Strategy and Sustainability Committee under the Board of Directors

which is responsible for deliberating and making decisions on major sustainability issues. The composition scope of responsibilities and tasks have been defined in accordance with the Rules of Procedure for the Strategy and

Sustainability Committee of the Board of Directors. In order to support the work of the Strategy and Sustainability Committee we have established an ESG Management Group that includes senior management to ensure the effective

implementation of our sustainability efforts.Level Structure Composition Responsibilities Reporting and Supervision

We attach great importance to the professional skills of all

As the highest body responsible for sustainability levels in overseeing and executing sustainability-related work.At least once a

Board of Directors Board members matters the Board has overall responsibility for ESG Therefore through the organization of special training and

strategies and reporting. year one-on-one communication with external experts we convey

the concept of sustainability compliance requirements and

Under the authority of the Board of Directors the

outstanding peer-to-peer developments to the relevant

committee deliberates on the Company’s

At least once a

sustainability development strategies and work plans personnel to ensure that they are able to keenly capture the

Decision Strategy and yearThree directors reviews the Company’s sustainability management dynamics of the industry and effectively respond to the

Making Sustainability Committee measures management objectives as well as Company’s potential sustainability opportunities and risks.sustainability-related impacts risks opportunities and

other matters.Consists of the heads

of the Company’s Be responsible for implementing the Company’s

Securities Investment sustainability strategies and work plans assessing the At least once a

ESG Management Group Department business progress against sustainability targets related impacts quarter

and functional risks and opportunities and reporting to the Strategy

Management departments and Sustainability Committee in a timely manner.Representatives of

Business and Functional Regular reporting Business and Be responsible for implementing specific ESG-related

Departments and to ESG Functional work on ESG issues.Subsidiaries Management Departments and

Group

Execution Subsidiaries

ESG Governance Structure

2024 Environmental Social and Governance Report | 06ESG Report

Stakeholder Communication

Yifeng Pharmacy is committed to building long-term relationships of mutual trust with all stakeholders. Based on a normalized communication mechanism we are able to understand and sort out the real needs of all stakeholders and

their real expectations of the Company. This serves as the cornerstone for practicing sustainable development responsibilities.Key

Stakeholder

Groups

Customers Employees Shareholders and Investors Government and Regulators Suppliers Communities

* Medicines safety and * Protection of * Return on investment * Compliance operation * Responsible * Public welfare and

quality employees’ rights procurement charity

* Information disclosure * Tax compliance

and interests

* Medical accessibility * Integrity and honesty * Community

* * Corporate governanceEmployees development and well-

* Protection of * Win-win cooperation

development and

Expectations * ESG management

being

consumers’ rights

training

and Demands and interests

* Occupational health

* Customers privacy

and safety

protection

* Employees care and

* Responsible marketing

benefits

* Communication with * Employees * General meeting of * Regulatory assessment * Suppliers conference * Providing job

stores communication and shareholders opportunities

* Voluntary tax payment * Suppliers visit

feedback platform

Communication * Consumers service * Announcement and * Voluntary service* Seminar * Industry

Channels hotline * Employees satisfaction circular letter communication * Public welfare activity

survey

* * * Written response to Customer satisfaction Research roadshow

* public queriessurvey Employees meeting

* Investor relations

* Employees activity website

2024 Environmental Social and Governance Report | 07ESG Report

Double Materiality Assessment

As a key step in the management of sustainability matters and disclosure preparation Yifeng Pharmacy conducted double materiality assessment of ESG issues in 2024. We have developed an assessment process scoring methodology

and ranking model based on the Guidelines for Sustainability Report as well as methodological interpretation and coaching from experts to assess our environmental and social impacts and our exposure to sustainability-related

financial risks and opportunities.Assessment Method and Assumptions

Based on our materiality assessment results from previous years and considering the complexity of quantifying the sustainability-related impacts risks and opportunities in our business our double materiality assessment this year was

based on qualitative considerations supplemented by quantitative assessment where practicable. In the future we will continue to pay attention to the updates of the SSE Guidelines for Sustainability Report improve our double

materiality assessment process and methodology and continue to prudently apply quantitative assessment tools to reasonably obtain the concerns and views of our stakeholders so as to provide a scientific basis for our sustainability

planning and even business decisions

? Scope ? Stakeholder Engagement ? Score ? Threshold

In relation to our own operations we Due to the far-reaching impact of the When evaluating the “severity” of impacts we assess We set the materiality threshold at

assess the impact on the environment and application of the double materiality and score based on the scale and scope of impacts i.e. “material” meaning that impacts risks

society as well as sustainability risks and principle on our management and we comprehensively assess the extent of impacts on and opportunities and their associated

opportunities for our business. In our disclosure matters the numerous ESG human beings or the environment the breadth of impact ESG issues that are ultimately assessed as

assessment of impact materiality we take issues involved and the fact that some coverage and the time and economic costs of material.into account positive and negative impacts parts of the assessment require accessors remediating the damages etc. When evaluating the

actual and potential impacts related to to have a certain level of industry “likelihood of occurrence” of impacts we score

ESG issues. In our assessment of financial understanding we invited a wide range of according to the probability of potential impacts

materiality we assess positive and internal and external stakeholders to occurring within five years. The weight of impact

negative impacts actual and potential participate in the impact materiality “severity” and “likelihood of occurrence” is 1:1.risks and opportunities for our business. assessment while restricting the

In assessing the scale of financial impact we use a

stakeholders for the financial materiality

percentage of FY2023 pre-tax profit as a threshold. In

assessment to a limited number of internal

assessing the “likelihood of occurrence” of a financial

senior management and external

risk or opportunity we score it based on its probability of

sustainability experts.occurrence within five years. The weight of financial

impact “scale” and “likelihood of occurrence” is 1:1.

2024 Environmental Social and Governance Report | 08ESG Report

Assessment Process

We conduct materiality assessments of ESG issues through stakeholder research industry analysis and expert consultation and further analyze the

impact risks and opportunities through interviews with senior management and experts.Based on the 21 issues set out in the Guidelines for Sustainability Report and taking into

account the GRI criteria ESG rating concerns national policies as well as Yifeng

1 Issue Identification Pharmacy’s geographic location industry background business activities business relationships and strategic development direction 29 issues in the three areas namely

the Environment Society and Economy and Governance have been identified and

preliminarily analyzed for their related impacts risks and opportunities.We send questionnaires developed by third party agencies to government and regulators

2 Impact Materiality shareholders and investors customers employees and suppliers to understand the Assessment impacts of different issues and set thresholds around the severity and likelihood of

impact to identify ESG issues of impact materiality.Through one-on-one interviews and questionnaires developed by third-party agencies

3 Financial Materiality we collect opinions from senior management on the scale and likelihood of the financial Assessment impact of the issue on the business and invite external experts to assess the financial

materiality of the issue in the context of current policy analysis and industry insights.The materiality assessment results have been reviewed by the Strategy and Sustainability

Committee and approved by the Board of Directors. Based on the assessment results we

have reviewed the Company’s sustainability strategy and goal-setting and reviewed

4 Confirmation and application our management mechanisms for material sustainability-related impacts risks and

opportunities to ensure the effectiveness of our internal mechanisms. We have also made

targeted disclosures in accordance with the priority of the assessment results to ensure

that we respond to the concerns of various parties appropriately.Materiality Assessment Process of ESG Issues

2024 Environmental Social and Governance Report | 09ESG Report

Assessment Results

The double materiality assessment results showed that customer health Financial Materiality

and safety medical accessibility and inclusion data security and

customer privacy protection supply chain management and security

franchisee management compliance management protection of

consumers’ rights and interests & health education employment

practices and training and development are our most material

sustainability issues. Among them customer health and safety is of both

impact materiality and financial materiality. Currently we face customer

health risks in terms of drug quality and medication accuracy which Customer health and safety

may lead to a crisis of customer trust and regulatory penalties etc. and

in turn affect the Company’s financial position operations results and

cash flows and therefore customer health and safety is at the core of

our business operations. In the future as drug quality requirements

tighten and medication accuracy increases customer health and safety

will have a significant impact on our revenues costs and long-term * Anti-commercial bribery anti- * Corporate governance * Medical accessibility and

strategy. corruption inclusion* Stakeholder communication

As a retail pharmacy chain we must place customer health and safety at * Innovation-driven * Data security and customer

development * Procurement practices privacy protection

the core of our strategy and decision-making to ensure the stability of

drug quality and supply. Shouldering the responsibility and vision of * Anti-unfair competition * Franchisee management * Supply chain management and

national health we are committed to enhancing the medical * securityCompliance management

accessibility and inclusion optimizing supply chain management to

ensure the continuity of medicine supply while meeting different

customer needs through reasonable pricing and diversified choices. We

ensure the consistency of service in stores through standardized

processes and quality control and focus on the protection of consumers’ * Energy utilization * Occupational health and safety * Protection of consumers’ rights

rights and interests & health education to enhance the public’s health

* Addressing climate change * Community contribution

and interests & health education

awareness through consultation with pharmacists and health lectures.* Diversity equity and inclusion * Employment practices

Compliance management is the cornerstone of sound development of * Equal treatment to small and

* Rural revitalization

the enterprise. We strictly abide by laws and regulations related to drugs medium-sized enterprises * Training and development

maintain the safety of the medical insurance fund and protect * Waste treatment* Due diligence

customer information. At the same time employees are the vehicle * Circular economy

through which we achieve our strategic goals. In terms of employment * Pollutant discharge * Environmental compliance

practices and employee development we create a fair workplace * managementEcosystem and biodiversity

safeguard employees’ rights and interests and use training and career protection * Water resources utilisation

planning to help our employees’ personal growth and service

professionalism. In terms of community contribution and national

welfare we advocate medicine for the benefit of the people and Less relevant Relevant Material

promote community health awareness through community activities

and health education. Impact Materiality

2024 Environmental Social and Governance Report | 10

Less relevant Relevant MaterialESG Report

The following table shows the impacts risks and opportunities of material issues and the measures and actions taken to monitor prevent manage and control them are detailed in subsequent chapters:

Impacts risks and opportunities 时间周期1: 长期 Actions Impacts risks and opportunities Actions

Customer health and safety Time horizon1: Long-term Opportunity: The Company needs to find a balance between “depth of expertise” and “temperature ofservice” and enhance consumer comfort and brand loyalty by strengthening the traceability

Impact: Customer health and safety is the lifeline of the pharmaceutical industry. With the rising Pharmaceutical management of medicines (e.g. the “one item one code” system) and providing guidance on

transparency of drug information increasing supervision by the FDA and escalating customer demand for Care for All: medication by licensed pharmacists. The Internet hospital platform accesses e-prescription services to

the efficacy of drugs and the safety of the purchasing process store pharmaceutical services have shifted

Safeguarding solve the pain point of purchasing medication for chronic diseases.from basic retail service competition to exclusive health brand value and high-value-added health

National Health

customization services have become the key to reshaping the market. Supply chain management and security Time horizon: Medium-term

Risk: Quality issues of goods or services directly threaten the health and safety of customers which may Impact: With the globalization and network development of the supply chain the complexity of supply Pharmaceutical

lead to large-scale recalls of goods lawsuits or regulatory penalties seriously damage brand reputation chain management is increasing. The stability of the entire supply chain network can be enhanced and Care for All:

lead to loss of customers plummet of sales or even trigger a cash flow crisis. systemic risks can be reduced through risk management. The establishment of cooperative relationships Safeguarding

based on trust and win-win situation and the promotion of synergy between upstream and downstream

Opportunity: National HealthStrict quality control (e.g. third-party testing) is the benchmark for companies to establish a enterprises in the supply chain can promote mutual development.safe brand image. By developing additional customized services such as health monitoring services (e.g.medication reminder side effect warning) we can effectively enhance customer stickiness and promote Risk: Problems with the quality of goods may lead to production stagnation and a decline in sales. Natural

the long-term sustainable development of our business. disasters such as earthquakes and floods may lead to transportation disruptions affecting logistics and

transportation causing delays in the supply chain and untimely supply of medicines to stores.Medical accessibility and inclusion Time horizon: Medium-term Opportunity: By optimizing supply chain management cost reduction and efficiency improvement can

Impact: As the concept and demand for medication becomes more and more popular accessibility and Pharmaceutical enhance the competitiveness of enterprises. Guaranteed security promotes cooperation among supply

inclusion are reshaping the landscape of the pharmaceutical retail industry. Guaranteed efficacy of Care for All: chain members in business models technological innovation and other aspects and enhances overall

medicines is no longer a single requirement and people are beginning to pursue convenience functionality competitiveness.Safeguarding

and economic value.National Health Employment practices Time horizon: Short-term

Opportunity: Based on years of industry foundation we can improve the accessibility of medicines and

win a higher market share through policy support broadening retail channels and market sinking for Risk: For the retail industry there is instability in the labor market. Illegal employment practices and Achieving Win-

reducing the difficulty of purchasing medicines. At the same time we can meet the market’s expectation unequal treatment by enterprises may lead to employee turnover and legal disputes which directly affect Win Results

of inclusion by restructuring supply chain efficiency and introducing AI consultation. business operation. As competition in the talent market intensifies companies need to invest more and Realizing

resources to attract and retain outstanding talent.the Value of

Data security and customer privacy protection Time horizon: Short-term Opportunity: By establishing long-term and stable employment relationships companies can enhance Talents

Impact: Digital technology plays an important role in the pharmaceutical retail industry and potential data Executing employee loyalty and engagement and promote talent development. A stable workforce not only

security and privacy protection will directly affect the Company’s operational risk prevention and control Duties with Full improves management efficiency but also reduces labor costs. At the same time good employment

and customer trust base. Commitment practices can enhance the company’s social image and brand value attracting more talented people to

join forming a closed loop and laying a solid foundation for the company’s sustainable development.Risk: to Strengthen Privacy protection in the pharmaceutical retail industry has evolved from a “compliance burden” to

Governance

a “trust asset”. While the risk of information leakage can be reduced by building a full-life cycle data Training and development Time horizon: Medium-term

Foundations

security system and participating in the development of industry standards with the evolution of big data

industries with personal information will inevitably face increased vulnerability and the risk of privacy Impact: Employee training and development have a far-reaching impact on enterprises. Employees’ Achieving Win-

leakage. professional skills and knowledge can be updated through training so that they can adapt to job Win Results

requirements more efficiently and achieve personal value. At the same time enterprise-led training can and Realizing

Opportunity: Data security and privacy protection can be transformed into a competitive advantage further promote the development of services towards high quality and standardization further iterating the the Value of

through systematic management initiatives from the inside out such as certification of data security and industry’s pharmaceutical service standards. Talents

protection systems and internal personnel operation management thereby building a trust economy and Opportunity: Investment in training and development strengthens organizational effectiveness. By

consolidating core competitive barriers in the digital health market.developing employees with a high degree of professionalism and flexibility enterprises can better adapt to

Protection of consumers’ rights and interests & Health education Time horizon: Long-term market changes and seize new business opportunities. At the same time training contributes to the implementation of corporate strategies and the realization of long-term goals and provides a pool of

Impact: Protection of consumers’ rights and interests & health education is becoming a key driver of Pharmaceutical talent for the company’s sustainable development.industry transformation and upgrading. Health education promotes the transition from “selling drugs” to Care for All:

“health management”. Strengthening health education and enhancing consumers’ health literacy can Safeguarding

promote the proper use of medicines and enhance brand loyalty. National Health

Risk: There are certain professionalism and compliance risks in protecting consumers’ rights and

interests such as misrepresentation of health popularization content sales clerks misleading customers to

purchase healthcare products instead of medicines may violate laws and regulations as well as medical

ethics which will in turn affect corporate reputation. Meanwhile the establishment of a 24-hour

pharmacist consultation hotline and the development of an AI medication assistant system require 1 Considering the industry in which Yifeng Pharmacy operates its strategic planning and operational realities we define

continuous technical and economic investment which will increase operating costs.time horizons as: short-term (0-1 year); medium-term (1-5 years); and long-term (more than 5 years).

2024 Environmental Social and Governance Report | 11ESG Report

Executing Duties with

Full Commitment to

Strengthen Governance

Foundations

Yifeng Pharmacy considers corporate governance and compliance operations as the central pillars of the

Company’s sustainable development. We continuously refine our corporate governance framework to maintain

competitiveness in complex and evolving business environment. At the same time we are committed to

eliminating unfair competition practices including false advertising and trade secret infringement to safeguard our

operational resilience sustainability and compliance throughout our business operation. By strictly adhering to

laws and regulations we continue to strengthen our internal control mechanisms and uphold the baseline of

compliant operations thereby laying a solid foundation for the Company’s enduring prosperity and success.

2024 Environmental Social and Governance Report |Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Corporate Governance

Yifeng Pharmacy strictly complies with the Company Law of the The General Meeting of

People’s Republic of China the Securities Law of the People’s Shareholders

Republic of China and other relevant laws and regulations as well as

the Articles of Association the Rules of Procedure for the General Strategy and Sustainability The Board of

Meeting of Shareholders the Rules of Procedure for the Board of Committee Supervisors

Directors the Rules of Procedure for the Board of Supervisors and other

internal policies. We continue to improve the governance structure and

Remuneration and

enhance the governance performance in accordance with these laws Appraisal Committee

and policies. Meanwhile Yifeng Pharmacy maintains proactive investor

engagement and communication and ensures timely disclosures of Board Secretary

operational updates effectively safeguarding investor rights and The Board

interests. Audit Committee of Directors

Governance Structure Nomination Committee

Chief Executive

The Company has established a governance structure consisting of the Officer

General Meeting of Shareholders the Board of Directors the Board of

Supervisors and management and has defined their responsibilities Chief Operating

and authorities to achieve the balance and coordination of authority Officer

and improve the efficiency of corporate governance.The General Meeting of Shareholders is the supreme authority and Managing Vice

determines the strategic business and investment plans of the Company. President

The Board of Directors reports to the General Meeting of Shareholders

and is the ultimate responsible body for the Company’s business and

management performance. The Board of Supervisors is composed of Vice President

shareholder representatives and employee representatives. It monitors

directors’ and executives’ duty performance and safeguards

collective shareholder interests. The management executes business

operations under the Board directives and maintains strict compliance

with statutory obligations.In 2024

51712

general meetings meetings of the meetings of the

of shareholders Board of Directors Board of Supervisors.Organizational Structure

2024 Environmental Social and Governance Report | 13

The Board of Directors Office

Administration Department

Public Affairs Department

Non Operating Purchasing

Department

Organizational Management

Department

Quality Control Department

New Retail Department

Engineering Department

Logistics Management

Department

Supply Chain and Non-

Pharmacy Department

Franchise Department

Operation Center

Expansion Center

Digitalization Center

Product Center

Human Resource Center

Finance Center

Strategic Implementation Office

Audit and Inspection

DepartmentExecuting Duties with Full Commitment to Strengthen Governance Foundations ESG Report

The Board of Directors has a Strategy and Sustainability Committee a Remuneration and Appraisal Committee Information Disclosure

an Audit Committee and a Nomination Committee. The Board of Directors actively fulfills its responsibilities

operates in a standardized manner and makes scientific decisions earnestly safeguarding the overall interests of

the Company and the interests of its shareholders. The members of the specialized committees of the Board of Yifeng Pharmacy actively take the responsibility of information disclosure of a listed company ensures that the

Directors scrupulously carry out their work under the aegis of the Board of Directors in strict compliance with the information disclosed is true accurate and timely to protect the legitimate rights and interests of stakeholders.respective rules of procedure of each specialized committee. They are committed to jointly upholding the In accordance with the Company Law of the People’s Republic of China the Securities Law of the People’s

interests of the company and all its shareholders. Republic of China the Regulations on Information Disclosure of Listed Companies the Rules Governing the

Listing of Stocks on Shanghai Stock Exchange and other relevant laws and regulations we have formulated the

Information Disclosure Affairs Management Policy and the Yifeng Pharmacy Registration and Management Policy

for Informants of Insider Information to clarify the duties of information disclosure obligors and fulfill

In 2024 information disclosure obligations.During the Reporting Period:

The Board of Directors The four committees of the Board of Directors

deliberated on and heard or held reviewed and heard or 178 interim reports and 4 periodic reports were issued

approved a total of reviewed a total of approved reviewed

68 proposals 14 reports 11 meetings 27 proposals 15 reports

Our information disclosure performance received an A rating from the

Shanghai Stock Exchange for eighth consecutive years

Composition of the Board of Directors

Committed to building a professional team of directors. the Company fully considers the director candidates’

educational background work experience professional quality and other factors when electing or replacing

directors. And the Company confirms that the candidates comply with the Articles of Association the Measures

for the Administration of Independent Directors of Listed Companies and relevant laws and regulations and the

candidates should have the qualifications and ability to serve as our directors and independent directors.As at the reporting date

the Board of Directors had 9 directors including 3 independent directors from the management

accounting and legal functions respectively.

2024 Environmental Social and Governance Report | 14Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Investor Communication

We have formulated the Investor Relations Management Policy to standardize the Company’s investor relations

management and effectively protect the legitimate rights and interests of investors. We follow the four basic “I Am a Shareholder”: Investors Visiting Listed Companies

principles of compliance equality initiative and honesty and trustworthiness and carry out investor relations

management by employing diverse channels platforms and methods. On December 9 2024 we invited investors from

We organize shareholder meetings investor briefings roadshows analyst meetings receptions discussions and different investment backgrounds to participate in theexchanges through our website new media hotline fax emails and investor education bases. Those activities “I Am a Shareholder: Investors Visiting Listedhelp us to actively communicate with investors on our production operation finance and other related Companies” Investor Education Event which was

information. organized by the Shanghai Stock Exchange the

Guotai Junan Securities Investor Education Base and

the Guotai Junan Securities Hunan Investor Education

Base. At the site we introduced ourselves and the

industry to investors in detail and conducted direct

In 2024

and in-depth exchanges with them outlining a clear

blueprint for the development of the Company for

The Event Scene investors.we participated in more than 30 brokerage strategy meetings held 3 large-scale investor telephone

exchanges and attended 3 online investor performance presentations by the exchange. And we received

more than 150 investor surveys online and offline receiving more than 1000 investors throughout

the year carrying out long-term stable and frequent communication with all kinds of investors.Investor Reception Day Event

2024 Environmental Social and Governance Report | 15Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Compliance Operation

Yifeng Pharmacy has fully fulfilled its compliance obligations and has formulated the Measures for the Identification of Administrative Penalty Responsibility of Yifeng Pharmacy and other polices aiming at building a sound compliance

system clearly defining the compliance responsibilities of employees at all levels strengthening internal supervision and risk control capabilities and abiding by business ethics. In this way we can ensure the legitimacy and

standardization of our business so as to lay a solid foundation for the sustainable development of the Company.Compliance Management Integrity and Anti-Corruption

We have established a compliance responsibility structure to comprehensively monitor and guide our Yifeng Pharmacy adheres to the strict code of business conduct and ethics and continuously optimizes and

operational activities and ensure that all business processes comply with legal and regulatory requirements. improves its integrity management system. We have formulated a series of rules and regulations including but

not limited to anti-corruption anti-unfair competition and whistleblower protection policies to ensure the

transparency and impartiality of the Company’s operations. We actively advocate and promote the fostering of

the integrity and anti-corruption culture and work together with our employees and partners to create an honest

and clean business environment. In 2024 we have not received any major commercial bribery or embezzlement

The Board of Directors penalties nor have we been involved in any major related litigation cases.Responsible for organizing and conducting

pre-event concurrent or post-event audits Integrity Management System

of the operational management business

Audit and Supervision activities of management institutions across We have developed the Yifeng Pharmacy Employees’ Integrity and Self-Discipline Management Regulations the

Department the country various departments of Yifeng Pharmacy Code of Conduct for the Ten “Red Line” Behaviors and the Whistleblower Reward

subsidiaries and branches and all stores Management Measures of Yifeng Pharmacy. These regulations detail the requirements for integrity and self-

aiming to identify and fill gaps in systems discipline as well as penalties for violations and apply to all our employees and suppliers.and processes.To promote the effective operation of our integrity management system and ensure that our business practices

are consistent with the code of ethics and legal requirements we have established a supervision structure for

integrity consisting of the Board of Directors the Audit and Supervision Department and the branches and

subsidiaries. The Chairman of the Board is in charge of maintaining the Company’s business ethics and anti-

Operation Center Quality Control Public Affairs Securities Investment corruption efforts. Furthermore we establish an Integrity and Self-Discipline Supervision Committee chaired by Department Department Department the Chairman.Committed to Responsible for Provide necessary legal Focus on compliance

developing and lifecycle product advice and is in the management of

implementing store quality control to responsible for listed companies

Team leader: Chairman

operation standards ensure that our contract review and covering information

and procedures to products fully comply execution supervision disclosure equity

ensure compliance. with the quality to prevent potential management and

standards and legal risks. interaction with Deputy team leader: Head of Audit and Supervision Department

regulatory investors.requirements. Members: General assistant of audit and supervision and heads of the

Audit and Supervision Departments of the branches (subsidiaries)

Compliance Responsibility Structure Integrity and Self-Discipline Supervision Committee

2024 Environmental Social and Governance Report | 16Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Audit and Inspection

We continue to improve the internal control system and enhance the Company’s risk control ability. Through audit and special inspection we audit

periodic financial reports and operational data of the Company every year aiming at ensuring the truth completeness and accuracy of the data. And we

require regular rectification of identified and potential risk points to ensure the effective operation of the Company’s internal control system.In terms of the overall audit of the Company we carry out audits on In terms of special audits we also conduct regular audits of the

different focuses and key tasks of all business operations every month Company’s business ethical standards and anti-corruption policies to

according to the annual audit plan. We have included the routine ensure full compliance with relevant requirements by all employees. For

operation norms and anti-fraud activities of the stores in the scope of our business we conduct audits and assessments of donations and

the monthly routine audit ensuring 100% stores have received audition. sponsorships to prevent corruption risks. Specifically for material

In 2024 we developed a detailed monthly audit plan and we conducted donations we require advance declaration and assessment and include

a comprehensive audit of violations and fraud in various fields such as relevant information such as donation agreements and vouchers in the

manpower procurement commodities and quality management necessary items for approval. In terms of employees in key positions we

starting from the audit process and daily operations. conduct sampling audits on relevant work processes of employees in

key positions such as cost control and financial control with potential

corruption risks. We require all employees in such positions to sign

In 2024 we developed a detailed monthly audit plan integrity agreements to avoid corruption incidents as much as possible.In 2024

Commodities

Quality

Procurement we conducted a comprehensive corruption risk assessments of

management

stores in 10 provinces with a coverage rate of

Comprehensive 100%.audit of

violations and

fraud

Manpower …

We also pay attention to the business practices of our partners. In 2024

we actively carried out due diligence activities and in-depth visits to key

partners including customers and suppliers. And we conducted

comprehensive assessments of potential cooperation risks on multiple

dimensions such as business status market reputation and financial

Audit process Daily operations

soundness to help us make more informed decisions about future

… business partnerships and ensure more sustainable business

development.

2024 Environmental Social and Governance Report | 17Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Anti-Corruption Initiative Whistleblowing Management

We attach great importance to anti-corruption management report to the Board of Directors on anti-corruption work from time to time and actively In order to standardize our complaint and whistleblowing processes

promote anti-corruption activities to create a clean workplace atmosphere. As a member of the Sunshine Integrity Alliance we not only actively guidelines and management regulations we have issued the

participate in the various anti-corruption actions initiated by the Alliance but also strictly implement the blacklist system of the Alliance in the Whistleblower Reward Management Measures of Yifeng Pharmacy to

recruitment process. We refuse to hire any individuals who are on the violation list in order to jointly maintain a clean and self-disciplined business encourage employees and stakeholders to expose any misconduct thatenvironment with the Alliance. In 2024 we participated in the professional training “From Experts to Masters: Advanced Class of Corporate Anti-Fraud may harm the Company’s interests. To protect the privacy and safetyInvestigation Practices” organized by the Sunshine Integrity Alliance aiming at further improving our anti-corruption management and response of whistleblowers and avoid any form of retaliation or adverse impact

ensuring that our business operations are more transparent and compliant and that we lay a solid foundation of integrity for the long-term development from whistleblowing the Yifeng Pharmacy Employees’ Integrity and

of the Company. At the same time we reported to the Board of Directors on anti-corruption work results and conducted anti-corruption training and Self-Discipline Management Regulations stipulate that whistleblowers

seminars and other forms of anti-corruption activities for all employees (The company does not involve contractors.) and business partners. These can report and expose any violations anonymously to jointly create a

training sessions cover anti-corruption policies and analyze relevant judicial cases. fair transparent and clean working environment.Whistleblowing Channels

In 2024

Hotline: 0731-89953931

All employees (including directors) have participated in ethical standards training reaching 100% of training coverage.Email: sjb@yfdyf.com

In addition to further strengthen the code of business ethics we require procurement employees to use the mobile phones distributed by the Company

and ban any form of bribery commercial violations and other acts with any suppliers service providers and contractors that have business and economic

exchanges with the Company. We require all newly introduced suppliers to sign the Integrity and Self-Discipline Letter which includes the code of business

ethics in the necessary conditions for supplier access fully guaranteeing compliance and stability of the supply source. Also we have always adhered to

the basic anti-corruption principle and made it clear that all partners must strictly comply with anti-corruption requirements.In 2024

100% of our suppliers signed Integrity and Self-Discipline Letter .

2024 Environmental Social and Governance Report | 18Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Medical Insurance Compliance

Yifeng Pharmacy always regards basic medical insurance (BMI) compliance as an important basis for running long-term and stable business. We strictly

follow the requirements of national and local medical security policies and have established a sound medical insurance compliance management

system. Specifically we have set up a Medical Insurance Risk Control Department and formulated the Yifeng Pharmacy Medical Insurance Designated

Retail Pharmacy Management Policy. From pharmacist management medicine procurement sales and inventory management to medical insurance

settlement information management we comprehensively standardize all operational processes to ensure the efficient operation and standardized

development of medical insurance services.Management of Medicine Procurement Digital Management of Medical Insurance

and Supply Covered by Medical Risk Control

Insurance

We have established a digital early warning system for medical

insurance risk control enabling real-time monitoring through the rule

We procure medicines in strict accordance with the catalog of

database to detect excessive medicine use medicine use beyond limits

medicines covered by national medical insurance system to implement

medicine use beyond price restriction medicine use beyond age

compliance in medicine selection. We enhance collaborations with

restriction and repeated or unreasonable medicine use. In addition we

relevant manufacturers actively incorporate pharmaceuticals covered

continue to promote the construction of the product traceability system

under the government BMI scheme and improve the "dual-channel"

by integrating medicine traceability codes and ensure that all coded

medicine use management mechanism. To improve the ability to

medicines should be scanned only medicines with traceability codes

guarantee medicine supply we have established a daily monitoring

can be procured accepted and settled and medicines with repeated

mechanism for the provision of medicines covered by medical insurance

traceability codes can not be settled. This has effectively prevented

aiming to strengthen the detailed management of the provision and use

illegal acts such as reselling returned medicines and medicine swapping

of such medicines and ensure that medicine supply is adequate and full

and ensured medicine sources and flows are clear and the responsibility

process compliant.can be traced.Benefiting the People with Medical

Insurance and Price Governance Medical Insurance Risk Prevention and Fund Security

We keep a close eye on the price adjustments of medicines covered by

We attach great importance to the prevention and control of medical

medical insurance to keep our online and offline medicine prices in line

insurance risks and have established and improved the risk prevention

with these changes and actively promote the effective connection

and control system and the self-inspecting and self-correcting

between commercial medical insurance (such as the Huimin Insurance)

assessment system. We prohibit illegal medicine circulation and

and basic medical insurance so as to provide more comprehensive

medical insurance card fraud to effectively safeguard the security of

protection for patients and effectively reduce the burden of medical

medical insurance funds. For ethnomedicines medical institution

expenses.preparations and traditional Chinese medicine decoction pieces we

continue to strengthen standardized management optimize access

Prescribing Compliance Management rules refine the standards and procedures for including them in the

scope of medical insurance payment and strictly control access to

In terms of Internet hospital prescribing management as at the end of safeguard the rational and efficient use of medical insurance funds. At

the Reporting Period we had 8 self-built Internet hospitals 110 self- the same time we strictly abide by the medical insurance payment

owned clinics and co-operated with more than 30 other Internet standards and standardize the medical insurance card swiping process

hospitals (including 5 tertiary grade-A public hospitals ) with more than to reduce disputes caused by improper operation while improving

1000 multi-site co-operative medical practitioners to safeguard service efficiency. In the medical insurance reimbursement process we

prescribing professionalism from the source. Meanwhile we have skillfully use the medical insurance information system to ensure the

established a prescription evaluation and assessment mechanism for accuracy of data. We also actively promote medical insurance policies

prescribing doctors to ensure their compliance in prescribing. On the to enhance customers’ awareness of safe use of medical insurance. In

pharmacist's review of prescriptions our system configures a rational addition we maintain close communication with the national medical

medicine use rule database in accordance with the medical insurance insurance departments and actively cooperate with their inspections

policy and we also purchase and call the Tencent Medical Rational Drug and oversight to guarantee that the internal management meets the

Use System for third-party judgement of weekly prescriptions. regulatory requirements.

2024 Environmental Social and Governance Report | 19Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Medical Insurance Compliance Training

In order to adapt to the ever-changing medical security policy we regularly organize employee training to learn relevant laws and regulations such as the

Regulation on the Supervision and Administration of the Use of Medical Security Funds. We also carry out specific medical insurance system operation

training such as traceability code collection training to enhance the compliance awareness of all employees.Special training on “Compliant Operations for Medical Insurance Protection”

On June 12 2024 Yifeng Pharmacy held a special training on

“Compliant Operations for Medical Insurance Protection” at its

headquarters. The management of the headquarters and branches

studied two documents: Letter on Taking Special Actions of“Selling in Online Stores Checking Drug Prices Comparing Dataand Ensuring Governance” and Letter on Verifying and Dealing with

Drug Price Risks Facing Retail Pharmacies Designated for Medical

Insurance (2024 Q1). The focus was on the interpretation of the

medical insurance policies in the documents. They also studied the

upcoming unannounced inspection matters of the National

Healthcare Security Administration focusing on the inspection

content and data extraction content for designated retail

pharmacies. This training increased management’s awareness of

medical insurance compliance and further enhanced their

supervisory capabilities ensuring that our entire system remains

committed to standardized operations while actively conductingself-inspection and rectification. In this way we are able to maintain Special Training on “Compliant Operations for Medical Insurancea high level of vigilance and long-term attention to the security of Protection”

medical insurance funds.Going forward we will continue to deepen medical insurance compliance management and actively adapt to the dynamic changes in medical insurance

policies. We will optimize digital monitoring tools strengthen intelligent monitoring and early warning and realize real-time monitoring of the entire

process. Meanwhile we will expand cooperation with high-quality medical institutions improve the compliance and professionalism of prescription

sources and continue to improve the medicine use rule database and prescription review mechanism to safeguard scientific and standardized medicine

use. Additionally we will further strengthen the medical insurance policy and practice management training for all employees to enhance their

compliance awareness and professional skills. We will also maintain close communication with regulators and actively cooperate with their inspections

and oversight to ensure that internal management meets the requirements of the compliance policy. Through high-standard management and the

application of advanced technology we are committed to promoting the development of the medical insurance compliance system and maintaining the

security of medical insurance funds to provide patients with higher-quality and more efficient medical insurance services.

2024 Environmental Social and Governance Report | 20Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Information Security and Customer Privacy

We strictly adhere to laws and regulations such as the Cybersecurity Law

of the People’s Republic of China the Data Security Law of the * Formulating the Company’s overall information security strategy and policy

People’s Republic of China and the Personal Information Protection

Law of the People’s Republic of China. Furthermore we have * Drafting data management policies and security classification standards and requirements at the Company

formulated internal policies applicable to all our business lines and level

subsidiaries including the Measures for Yifeng Pharmacy Data Security * Supervising the data security status and management effectiveness across the Company and coordinating

Management the Yifeng Pharmacy Service Agreement the Guidelines

cross-departmental data security management

for the Safe Usage of Data of Yifeng Pharmacy Members and the Information Security

Measures for Yifeng Pharmacy Project Information Security Committee * Driving the establishment of data security management team and fostering a culture of strong awareness of

Management aiming at creating a secure and reliable data environment. data security in the Company

In order to better adapt to the latest legal requirements and market

changes we updated the Yifeng Pharmacy Personal Information

Protection Policy during the Reporting Period to help us further

improve our privacy standards and better protect each customer’s

personal information. * Assisting the Information Security Committee in implementing information security strategy including

proposing annual plans and implementation schemes

In addition we are actively applying for information security system

certifications to further strengthen the information security guarantee. * Carrying out regular inspection assessment and evaluation on data security management situation across the

In 2024 our Equal Protection 3.0 Certification remains in effect Company and providing improvement requirements and recommendations for rewards and punishment

continuously. And we are currently planning to engage an external Information Security * Coordinating emergency response to and treatment of major data security risks and incidents across the

auditing firm to conduct a comprehensive and independent information Executive Office Company

security audit of our Internet Hospital and optimizing our hardware and

software systems based on audit recommendations to improve their

confidentiality and usability. By the end of the Reporting Period we

have not experienced any data breaches.* Determining the strategy and focus of data security management according to the respective business

Information Security * Reviewing and confirming the compliance of data security policies and process standards

Management Structure * Leading the implementation of important measures for data security management and inspecting and

Information Security supervising the data security status and management effectiveness of business

Manager

We have built a three-tier information security management structure

consisting of the Information Security Committee the Information

Security Executive Office and the Information Security Manager and the The Information Security Management Structure

Board of Directors has ultimate responsibility for the Company’s

information security. Among them the Information Security Committee

is mainly responsible for the Company’s privacy and data security To properly evaluate employees’ contributions to information security and motivate them to protect information security we use the target

related work. The Information Security Executive Office implements the management 360-degree evaluation and results-oriented evaluation methods for personnel evaluation considering into workload efficiency security

annual information security plan and program. And the Information incident handling ability and technical and management skills. We regularly evaluate the contribution of relevant employees to achieve overall

Security Manager leads the information security management of all our supervision of information security work and effective progress of information security work.departments.

2024 Environmental Social and Governance Report | 21Executing Duties with Full Commitment to Strengthen Governance Foundations ESG Report

Information Security Audit Privacy Protection

To better identify and prevent internal and external data security risks and to strengthen data security Fully understanding the need for and importance of protecting our customers’ personal information we have

management we have issued security management measures for internal and external data and clarified made protecting our customers’ privacy a top priority in our business operations. Our access control and

information security audit work. Internally we conduct an information security audit every two years and have encryption techniques are in place. We have developed security management processes and control measures

formulated the Software Information Security Function Standard requiring our software testing departments to for information technology systems employees and suppliers and have implemented privacy measures in

test whether the software meets the information security design standard and whether has an information product development technology development and customer serving to ensure the confidentiality and

security function. The standard also requires us to check whether the software is capable of information integrity of our information systems and to better protect the privacy of our customers.encryption and desensitization. At the same time we published the Measures for Yifeng Pharmacy Project

We strictly regulate the process of collecting customers’ personal information including strictly controlling

Information Security Management and require a comprehensive assessment of suppliers’ information security

access rights encrypting the transmission and storage of customers’ private information and logging all access

capabilities. The assessment covers whether suppliers have conducted the following activities: providing

and operations. We undertake not to rent sell or provide personal data to any third party except for the purpose

information security awareness training for employees signing confi. dentiality agreements and passing system

of providing specific customer services. We commit to deleting data after a defined amount of time and does not

penetration tests to verify the compliance of outsourced data and strengthen the data security management of

collect personal data from third parties. We also never unlawfully collect personal information from third parties.the outsourced system.At the same time we clearly inform customers about the reasons for collecting their personal information the

purpose of use how the information will be processed etc. to ensure that we obtain customers’ consent and

Information Security Emergency Response authorization during the information collection process. We also provide customers with the right of access rectification and deletion of individuals' data . In addition we require all employees and data vendors to sign a

Mechanism Confidentiality Agreement and require vendors to comply with our privacy policies and conduct data compliance

inspections of vendors to further strengthen customer privacy.To improve our ability to prevent and respond to information security emergencies we have formulated the We have also built a complete set of information security technology library which includes firewall VPN fortress

Emergency Management Policy for Computer System of Yifeng Pharmacy and the Emergency Plan for Computer machine log audit system anti-virus system network audit system terminal management system data

and Network Information Security of Yifeng Pharmacy. Both proactive and reactive measures are in place. We encryption system and other key technologies. The information security technology library can ensure the

have taken measures to prevent information security incidents standardized and improved the security security of customers’ personal information to the greatest extent when we provide services. By the end of the

awareness and emergency response skills of our employees and enhanced the data security protection of Reporting Period we did not receive any complaints related to breaches of customer privacy or loss of customer

customers and the Company. At the same time we have established measures for responding to information data.security incidents such as data leaks to ensure that we have the ability to passively respond to similar

emergencies and the stability of the Company’s business and maintain customer confidence.Information Security Training

We have provided popular and customized information security training to increase our employees’ data

security awareness and skills. While providing basic information security knowledge for all employees (The

Company does not involve contractors.) to strengthen their information security awareness we conduct

professional information security training for employees in positions such as R&D personnel. The goal is to

improve their professional skills and strengthen the Company’s information security management capability.We also have information security exams for various types of training and have expanded the scope of the

quarterly corporate culture exam to include information security content thereby deepening employees’

understanding of information security to improve their information security skills. In 2024 we conducted seven

information security training sessions for new employees.

2024 Environmental Social and Governance Report | 22ESG Report

Pharmaceutical

Care for All:

Safeguarding

National Health

Yifeng Pharmacy consistently prioritizes the provision of safe effective and

accessible medicines as the cornerstone of our high-quality development.Guided by our philosophy of “Pharmaceutical Care for All”， we haveestablished an efficient medicine management system complemented by

premium pharmaceutical services ensuring that every operational aspect is

precisely aligned with the health needs of people.

2024 Environmental Social and Governance Report |Pharmaceutical Care for All: Safeguarding National Health ESG Report

Health Sustainability Framework

Yifeng Pharmacy steadfastly upholds the “family-trusted medicines” standard establishing confidence through scientific governance clear strategies robust risk controls and defined operational goals. We implement comprehensive

safeguards for Chinese pharmaceutical safety and consumer rights and are committed to becoming a trusted health partner worthy of national reliance.Governance Strategy

To ensure transparent decision-making efficient execution and robust We have integrated the Controllable Premium Strategy into our organizational framework continuously refining and developing premium

oversight we have established a scientific quality governance pharmaceutical portfolios including proprietary brands exclusive formulations and co-developed products with manufacturers. Building upon our

framework. The Board of Directors bears ultimate responsibility for the

pharmaceutical foundations in both Western and traditional Chinese medicine we are expanding into herbal wellness products nutraceuticals health

compliance and effectiveness of product and service quality. The

Quality Management Department as a dedicated functional unit monitoring devices personal care items and health-oriented consumer goods. This strategic expansion delivers carefully curated products characterized

oversees the operation of the Quality Management System. Through a by reliable quality assurance clinically validated efficacy cost-performance optimization and controlled distribution channels. Our holistic health

three-tier linear management structure spanning headquarters branch solutions prioritize three core commitments quality and safety compliance specialized professional expertise and compassionate service delivery.offices and retail outlets quality management standards are uniformly

implemented across all retail terminals. Concurrently we have formed a

Quality Management Leadership Group composed of department heads

from headquarters. This Group ensures full-process quality control in

procurement storage and sales operations. Every tablet and every Our Quality Management System (QMS) spans the entire operational chain including supplier qualification

bottle of medicine strictly complies with national quality standards. audits pharmaceutical procurement verification in-storage maintenance outbound rechecks store-level

Additionally we provide customers with professional reasonable and Quality and

safety acceptance display inspections and post-sales services. A three-tier quality evaluation system ensures optimal precise pharmaceutical services through this integrated management

approach. compliance selection through rigorous screening with multi-layered safeguards guaranteeing medicines safety and efficacy.Advanced technologies enable real-time quality tracking of products while automated systems enforce

Team competence serves as the critical foundation for ensuring procurement and sales restrictions on high-risk items.effective Quality Management System (QMS) operations. We mandate

rigorous professional qualifications for quality management personnel:

Department heads at both headquarters and branches must hold

licensed pharmacist certifications with minimum 3 years’ experience Our team comprises over 10000 licensed pharmacists and 25000 pharmaceutical specialists

in pharmaceutical quality management; All quality management staff Specialized supported by 800+ disease-specific training modules and 1600+ medicine composition analysis

require college-level diplomas or higher in pharmacy traditional professional programs. Through our intelligent member service platform we deliver comprehensive health

Chinese medicine or related disciplines. This qualification framework expertise management for chronic disease patients covering medication therapy dietary guidance behavioral

ensures the team possesses comprehensive expertise and practical

capabilities to proactively address quality and safety risks throughout interventions and exercise regimens.operations.We have established a mechanism integrating training with

performance evaluation to ensure the efficacy of quality management Serving 100 million+ members across 11 specialized health programs we provide systematic solutions spanning

operations. Annual systematic training sessions encompassing all Compassiona

disease treatment to health enhancement. Our one-stop pharmaceutical services include 24/7 access to

employees are conducted covering Good Supply Practices for te service

Pharmaceutical Products (GSP) pharmaceutical expertise Quality delivery licensed doctors and pharmacists doorstep medication delivery and a service improvement mechanism driven

Management System documentation and other specialized technical by customer feedback analytics.topics. To drive continuous professional development we incorporate

critical quality metrics including quality incident resolution product

quality evaluation and expiration management into quality

personnel’s performance appraisals. Accountability tracing

mechanisms are clearly defined with a merit-based incentive system

implemented to holistically strengthen the team’s oversight For details on our Controllable Premium Strategy refer to sections “Quality and Efficacy Assurance” “Regulated Pharmaceutical Channels” and

responsibilities and operational capabilities. “Professional Service Delivery” in this chapter.

2024 Environmental Social and Governance Report | 24Pharmaceutical Care for All: Safeguarding National Health ESG Report

Impacts Risks and Opportunities Management Metrics and Targets

Quality Risk Mitigation serves as the cornerstone of our governance framework for managing health and safety impacts risks and opportunities. We have In accordance with the Yifeng Pharmacy Quality Policy and Objective

established a Quality Risk Management (QRM) Framework aligned with stringent standards supported by the Yifeng Pharmacy Quality Risk Management Management System we establish annual quality policies and

Protocol which systematically evaluates communicates controls and reviews quality and safety risks throughout the product/service lifecycle. The management objectives breaking down objectives into departmental

Quality Assurance Department retains unilateral veto authority during audits to reject products failing quality inspections or violating packaging and role-specific targets through a tiered implementation plan to fulfill

compliance standards. responsibilities for customer health and safety. For critical quality

management goals the Quality Management Department conducts

comprehensive monitoring of implementation progress via internal

audits. Meanwhile to fully achieve quality objectives we strictly monitor

1 Annual Risk The Quality Management Department formulates the quality risk management plan and distributes it to and evaluate employee compliance with the Quality Management Management Plan department heads for confirmation. System. Through annual departmental evaluations and quarterly store

assessments quality management practices are integrated into daily

workflows ensuring effective operation and continuous improvement of

the system. This drives steady enhancements in safeguarding customer

Pharmaceutical quality control personnel conduct risk identification analysis and categorization across all health and safety. In 2024 all annual quality management objectives

2 Risk Identification product lifecycle stages using proactive or retrospective approaches. the Quality Management Department were successfully attained.

then performs risk rating analysis and secondary verification.Quality Management Objectives in 2024

Based on the assessed quality risks the Quality Management Department devises control and preventive

3 Risk Assessment measures mandates effective implementation of risk mitigation actions by relevant departments and

periodically evaluates the effectiveness of these measures to ensure risks are reduced to acceptable levels.* All online and offline businesses were operated in

compliance with laws and regulations

* All distributed pharmaceutical products met quality

4 Risk Review The Quality Management Leading Group conducts at least one annual review of risk management standards with a 100% compliance rate in market

outcomes and the acceptability of residual risks.inspections.Product Quality Risk Control Mechanism * The Measures for Quality Supervision and Management of

Medicine Distribution and Use was strictly implemented to

ensure the effective operation and continuous improvement

of our Quality Management System.We are concurrently advancing digital quality risk management through an intelligent monitoring system that oversees risks across the entire supply chain

including procurement storage sales and returns. The system automates the identification monitoring and control of quality-related risks such as

blocking transactions beyond authorized business scopes alerting for nearing-expiry products prohibiting procurement and sales of expired items and

restricting distribution and sales of non-compliant goods. This technology enables real-time risk monitoring and automated intervention to ensure

operational compliance and quality safety.

2024 Environmental Social and Governance Report | 25Pharmaceutical Care for All: Safeguarding National Health ESG Report

Guaranteeing Quality

and Efficacy

Medicine ProcurementYifeng Pharmacy adheres to the principle that “Quality is thefoundation of Yifeng” placing the highest priority on medicine quality

and safety. We strictly comply with laws and regulations such as the We have established and implemented the Yifeng Pharmacy Supplier Quality Assurance System Evaluation Criteria Yifeng Pharmacy's

Drug Administration Law of the People’s Republic of China the Good Supply Units and Sales Personnel First Purchased Variety Review Management Policy and other relevant regulations consistently

Supply Practice for Pharmaceutical Products and the Measures for adhering to the principle of prioritizing qualification verification. Comprehensive qualification reviews are conducted for suppliers

Quality Supervision and Management of Medicine Operation and Use as product categories and supplier sales personnel. Through on-site inspections and document verification we rigorously evaluate

well as regulatory requirements in the jurisdictions where our directly suppliers’ production quality systems and sustainable supply capabilities strictly controlling product quality at the source.managed and franchise stores operate. We have established and Cooperation is initiated only after ensuring compliance with our high standards.implemented internal policies and standards covering all operational

processes proactively fulfilling our social responsibilities and mission as We apply the approach of “centralized procurement at headquarter and local procurement at subsidiaries” for medicine

a leading enterprise in the pharmaceutical retail industry. In 2024 we procurement and adopt different procurement modes according to the attributes of the medicines taking the reliability of the

revised internal policies including the Yifeng Pharmacy Internal Audit procurement channel the competitiveness of the price and the satisfaction rate of the products in the stores as the core indexes so as

Policy on Quality Management System the Yifeng Pharmacy Inspection to ensure that the quality of the medicines is guaranteed the channel can be traced and the price is affordable.and Evaluation Policy on Implementation of Quality Management

System the Yifeng Pharmacy Medicine Acceptance Management Policy

the Yifeng Pharmacy Medicine Storage and Maintenance Management

Policy and the Yifeng Pharmacy Medicine Delivery Review and

Management Policy further advancing the standardization refinement

and specialization of quality management.Medicine Quality Management Acceptance and Inspection Medicine Storage

System We strictly implement the Yifeng Pharmacy Medicine We strictly implement the Yifeng Pharmacy Medicine

Acceptance Management Policy and Yifeng Pharmacy Storage and Maintenance Management Policy and

Acceptance Procedure and other regulations to inspect operating procedures to ensure that medicines are stored

We have established a comprehensive quality management system the appearance packaging labelling instructions and in the appropriate warehouses according to their

covering the entire medicine lifecycle spanning procurement

other contents of the medicines in accordance with the packaging and storage requirements. Additionally we

acceptance and warehousing storage outbound logistics in-store

sampling standards and scan and check the traceability conduct monthly maintenance inspections maintain

display after-sales services and product recalls. This system rigorously

codes of medicines. And we will directly return to the maintenance records and utilize a computerized system

enforces regulatory requirements to ensure compliance safety and

efficiency across production distribution and sales thereby delivering supplier if any medicines do not meet the sampling to automatically track and control the expiration dates of

reliable medicines. We conduct in-house testing for all of Heng Xiu standards or have quality issues so as to ensure the inventory medicines. Measures such as near-expiry alerts

Tang's own-produced medicines by batch and for products from other quality of the products. and automatic sales suspension for expired products are

suppliers we screen key varieties for sampling and then commission a implemented to ensure in-stock medicine quality.third-party organization to test them. For items with potential risks we

implement timely measures including sampling verification quality

investigations and recalls to safeguard the medicine quality and safety

all round.In 2024 no major quality or safety incidents related to products or

services occurred.

2024 Environmental Social and Governance Report | 26Pharmaceutical Care for All: Safeguarding National Health ESG Report

Medicine Delivery In-store Acceptance In-store Display

We strictly implement the Yifeng Pharmacy Medicine Delivery Medicines at the stores are uniformly distributed by the All directly managed and franchise stores are required to

Review and Management System and relevant operating headquarter warehouse. When the medicines are display medicines in accordance with the relevant provisionsprocedures follow the principles of “first-produced products delivered each store performs the quality acceptance of the Yifeng Pharmacy Store Medicine Display Managementto be sold first and products with closer expiration date to be process in strict accordance with the relevant provisions Policy to classify medicines according to their physical andsold first” manage the delivery order according to the batch of the Yifeng Pharmacy Store Medicine Acceptance chemical properties and the storage requirements. Besides

numbers and required that outbound medicines must be Management Policy and the operating procedures to the stores shall carry out regular maintenance and inspection

accompanied by supporting documents such as medicine ensure that the packaging and quality of the medicines of the quality the medicines strictly in accordance with the

inspection reports and registration certificates of imported received meet the requirements so as to ensure the Yifeng Pharmacy Store Medicine Maintenance and Inspection

medicines. Through comprehensive verification of outbound quality of medicines sold at retail stores. Management Policy and the Yifeng Pharmacy Medicine

medicines and their packaging we ensure that all dispatched Expiration Date Management Policy so as to ensure that any

medicines meet the criteria including accurate quantity quality problems can be discovered and properly handled in a

quality compliance and clear labeling to ensure the quality timely manner.and compliance of outbound medicines.Medicine Recall After-sales Service

We have established the Yifeng Pharmacy Unqualified Products Management Policy and the Yifeng We display signs such as the supervision telephone number of the National Medical Products

Pharmacy Medicine Recall Management Policy against medicines that have been sold and found Administration and the service convention of Yifeng Pharmacy at eye-catching places in each store.to have serious quality problems and set up a sound quality management system for products Moreover we have also set up a 24-hour service hotline (4008879908) and a customer opinion

recall recovery and return. Meanwhile we have implemented control measures on prohibition of book for customers to express their opinions on our products and services through various

medicine distribution and sales in computer systems requiring stores to strictly comply with channels. Pursuant to the Yifeng Pharmacy Quality Complaint Management Policy we have also

regulations to remove medicines with quality issues from shelves thereby preventing any established a customer complaint file and set up a special team with designated personnel to

pharmaceuticals with questionable quality from entering the market. This ensures the ensure that all feedback and complaints can be properly responded to in an effective and timely

containment of unqualified products at the source and comprehensive quality risk management manner.and effectively safeguards medicine safety of consumers.Medicine Full-life-cycle Quality Management System

We conduct annual audits of our quality management system. Additionally when significant changes occur in key elements of the system or when major issues arise with product quality or service standards we initiate special internal

quality audits. These audits enable timely corrective actions and process improvements to ensure all products and services consistently meet our standards.

2024 Environmental Social and Governance Report | 27Pharmaceutical Care for All: Safeguarding National Health ESG Report

Medicine Expiration Date Pharmacovigilance Management

Management

We have established a comprehensive pharmacovigilance system with specialists in our offline stores dedicated to pharmacovigilance assessing and

analyzing adverse medicine reactions medication errors and medicine damage events in a timely manner and making records and reports in accordance

We have established the Yifeng Pharmacy Medicine Expiration Date

with the prescribed procedures. In any situation where a medicine needs to be recalled the medicine recall procedure shall be immediately initiated so

Management Policy creating a whole-process management system

as to ensure the safety management of medicines.covering expiration date monitoring to product disposal. Stores are

strictly prohibited from selling medicines with less than 30 days Meanwhile we proactively conduct medication safety education. Through professional medication guidance organized patient education lectures and

remaining in their validity period or expired items. Monthly prioritized similar initiatives we work to prevent medication-related safety issues. This provides patients with comprehensive professional support in medication use

maintenance is conducted for near-expiration products with detailed

treatment and auxiliary medical care further safeguarding their medication safety and protecting their health rights and interests.reports submitted for coordination specialists to assess return feasibility

and organize redistribution. For products within three months of

expiration redistribution is discontinued and mandatory removal from

shelves and reporting as losses are required one month prior to Medicine Emergency and Recall

expiration to eliminate circulation of expired medicines. Leveraging our

digital management system automated expiration monitoring enforces

controls like sales blocks and alert triggers for near-expiration inventory We have developed the Yifeng Pharmacy Medicine Emergency Response Plan establishing a whole-process emergency management mechanism from

ensuring timely resolution of validity-related issues at store level. prevention to response and post-event review. We formed a Medicine Safety Emergency Leadership Team led by the CEO with clearly defined

departmental responsibilities for monitoring addressing and summarizing emergencies. Upon occurrence of an incident the Team immediately

Under the Yifeng Pharmacy Unqualified Products Management Policy

activates the emergency plan implements urgent control measures including product recalls consumer notifications and treatment coordination while

and the Yifeng Pharmacy Store Return Procedures for Unqualified

providing real-time updates on progress. Following resolution the Quality Management Department submits a summary report analyzing causes and

Products medicines nearing expiration within 30 days and expired

proposing improvements to enhance the emergency plan and further reduce medicine risks.medicines returned by stores will be consolidated into the unqualified

products inventory. These items are then transferred by the warehouse We strictly regulate the whole process management of medicine recall formulate and implement the Yifeng Pharmacy Medicine Recall Management

to contracted environmental service providers for secure destruction as

Policy and Yifeng Pharmacy Medicine Recovery Management Policy. We classify medicine recalls into three levels according to the severity of the potential

regulated waste.quality and safety risks of the medicines and set different deadlines for the recalls. Also we require each store to notify purchasers immediately upon the

We implement regular expiration date checks through a systematic receipt of recall notification to return the medicines with potential problems and to stop selling the medicines at all stores. Besides the stores are

inspection process for store merchandise. Should expired products required to report the situation of the recalled medicines to the National Medical Products Administration or to notify the medicine manufacturer of the

(including promotional items) be identified during inspections both recalls within the designated time limits and to carry out the subsequent treatment of the recalled medicines based on the different results confirmed by

directly involved personnel and supervisory employees will be held the National Medical Products Administration. The Quality Management Department shall record the whole process of the recall and establish a recall file

jointly accountable with responsibility assigned to specific individuals. including the cause of the recall the quantity of suspension and recovery and the treatment result for inspection. We ensure that we hold individuals

accountable and keep refining the accountability system to prevent the recurrence of such incidents.Expiring Medicines Medicines in Warning Period

* Products with an expiration * Products with an First-level

An urgent recall must be completed within 24 hours if the use of the medicine may cause a serious health hazard.date of 12 months are expiration date of 12 Recall

considered expiring months are considered to

products if they will expire be in warning period if they

within less than 4 months. will expire within less than

6 months. Second-level A recall must be completed within 48 hours if the use of the medicine may cause a temporary or reversible health

* Products with an expiration Recall hazard.date of 18 months or above * Products with an

are considered expiring expiration date of 18

products if they will expire months are considered to

within less than 6 months. be in warning period if they Third-level A recall must be completed within 72 hours of the receipt of the recall notification if the use of the medicine does

will expire within 9 months. Recall not generally cause health hazards but the medicine needs to be recalled for other reasons.Definitions of Medicine Expiration Date Medicine Recall System

2024 Environmental Social and Governance Report | 28Pharmaceutical Care for All: Safeguarding National Health ESG Report

Regulating Channels for Medicines

We prioritize stable operation of the pharmaceutical supply chain as our Supply Chain Risk Management

core mission and set the transparent safe and traceable sources of

drugs as the goal ensuring the comprehensive integration of delivery

timelines product quality and cost control into our supplier We conduct in-depth identification of potential risks within the supply chain and comprehensively assess their latent impacts to proactively formulate

management. And we consider explicit contractual requirements such response strategies thereby enhancing risk resilience. This approach forges robust safeguards for unimpeded distribution channels and constructs multi-

as quality risks channel risks and compliance obligations in supplier dimensional supply chain architecture with fortified source reliability.agreements. In accordance with the requirements of the Drug

Administration Law of the People’s Republic of China the Good

Supply Practice for Drugs (GSP) and the Good Manufacturing Practice

for Drugs (GMP)Yifeng Pharmacy has formulated a series of supplier Improving the safety and efficiency of the supply chain helps to

Supply chain optimization and upgrading requires initial

management policies such as the Yifeng Pharmacy Quality improve the quality of service ensuring the medicine safety for

investment which may increase financial costs in a short term.Management System External Audit Management Policy and the Yifeng customers and promoting access to medicines.Pharmacy Supplier Quality Assurance System Evaluation Criteria so as

to establish a sound and efficient supplier management system and

strengthen the solid defense of public health.Supply Chain Management

Structure

Impact Opportunity Risk

Yifeng Pharmacy has established a dedicated Supply Chain

Management Department to holistically address risk management

across all operational scenarios. This framework integrates secondary

functions including procurement logistics distribution and warehouse

management while maintaining independent yet collaborative

operational models between merchandise management and

purchasing departments thereby strengthening organizational support

for supply chain governance. * Enhancing supply chain security and mutual redundancy has emerged as a critical industry trend. By advancing automation capabilities and

We mandate that supply chain professionals possess pharmaceutical optimizing operational management we can effectively enhance supply chain efficiency reduce operational costs and strengthen business

expertise alongside specialized competencies in logistics management continuity.and information technology. Their responsibilities encompass * The establishment of regional warehousing and distribution networks coupled with multi-warehouse operations and coordinated regional

overseeing category planning driving category strategies managing

logistics integration enables us to improve responsiveness to supply chain disruptions and proactively address market fluctuations and

supplier relationships advancing cost-reduction innovations and

demand variations thereby reinforcing corporate competitiveness.implementing digital procurement systems to ensure medicine safety

compliance and optimized supply chain operations. In Addition key * Through targeted supply chain optimization initiatives we can substantially mitigate inventory overstocking accelerate inventory turnover

performance metrics such as inventory turnover rates and supply chain rates achieving measurable improvements in operational efficiency and financial performance.efficiency are incorporated into employee evaluations with

corresponding incentive measures implemented based on performance

assessments to effectively advance management objectives. Impacts Risks and Opportunities of Supply Chain Management

2024 Environmental Social and Governance Report | 29Pharmaceutical Care for All: Safeguarding National Health ESG Report

Supplier Admission Management

To effectively manage supply chain impacts risks and opportunities and to achieve

medicine channels control we: We consistently prioritize source control as a critical component of supply chain governance and have

formulated internal regulatory frameworks such as the Yifeng Pharmacy’s Supply Units and Sales Personnel

First Purchased Variety Review Management Policy and build up the stringent supplier admission system. These

mechanisms establish clear procurement evaluation metrics for new suppliers encompassing corporate scale

* Implement rigorous source control by strictly vetting supplier qualifications and medicine quality to quality assurance capabilities delivery capabilities and post-sales service competencies.prevent unqualified products from entering distribution channels;

During supplier qualification assessments we adopt a prudent approach through holistic evaluation of potential

* Define precise supplier admission criteria to methodically identify and select high-quality partners; operational risks legal disputes and quality-related complaints. Mandatory submission of industry certifications

* ensures full compliance with international quality standards and regulatory mandates thereby enhancing supply Develop an integrated evaluation system with tiered classification protocols and conduct regular

chain transparency and traceability.multidimensional supplier assessments to deploy tailored strategies based on performance metrics;

* Promote digital-intelligent transformation across supply chains to enhance operational agility and

responsiveness;

* Adopt localized procurement strategies with dual-sourcing protocols to mitigate supply chain Assessment and Evaluation of Suppliers

disruption risks;

* To sustain pharmaceutical quality at premium levels we established a comprehensive supplier assessment and Coordinate upstream and downstream resources and make every effort to ensure medicines are in

evaluation framework supported by internal governance policies including Yifeng Pharmacy Supplier Quality

stock reliable and safe;

Assurance System Evaluation Criteria and Chinese Medicine Bidding and Quality Assessment Guidelines of Yifeng

* Enhance data monitoring of inventory and production capacity through the whole management Pharmacy. These policies standardize vetting procedures clarify requirements for supplier competencies and

process prioritize critical product delivery identify proactive risk and address mitigation planning; certifications and ensure timely and accurate maintenance of supplier databases enabling systematic

resolution of quality or supply chain issues and compliant management of regulatory changes ultimately

* Expand the manufacturing sites in a timely manner to ensure production capacity resolve the supply

reducing risk of supply chain and enhancing supply chain efficiency and product integrity.issues of raw materials and products in advance and actively reserve alternative suppliers to enhance

the stability of the supply chain. We have established a comprehensive supplier evaluation system for all-round and multi-dimensional

assessment and evaluation of supplier capabilities. We evaluate suppliers through on-site audition quality

comparison inspection and curative effect and quality perception to evaluate suppliers’ performance to realize

our philosophy of “”. Under the triple quality evaluation system we conduct comprehensive preliminary

assessments of suppliers prior to on-site inspections. Evaluations are based on multidimensional criteria

We actively engage in industry exhibition professional forums and symposiums collaborate with peers and including corporate scale operational history operational efficacy of quality assurance systems product quality

partners to examine supply chain risk landscapes and exchange actionable mitigation strategies collectively reputation and pricing competitiveness. Following in-depth evaluations through this system suppliers identified

driving systematic enhancements in risk governance frameworks across the industry and strengthen industry- with substantial quality risks will face immediate procurement suspension alongside explicit corrective action

wide contingency capabilities thereby ultimately establishing resilient foundations for the stable and requirements. Concurrently we conduct thorough risk assessments on existing products sourced from such

sustainable development of supply chain ecosystems. suppliers and rigorously verify compliance with mandated corrective measures.

2024 Environmental Social and Governance Report | 30Pharmaceutical Care for All: Safeguarding National Health ESG Report

The Quality Control Management Department

will send dedicated personnel to implement

unannounced inspections to the potential Supplier category Supplier Audit Process

On-Site suppliers and assess and rank the quality

Visits management system of suppliers according to

key inspection points set out in the GMP so as

to understand the actual condition of the

enterprise. Class A

suppliers * Conduct supplier qualification review and on-site quality audit before

suppliers’ first delivery

We monitor and correlate key indicators

Quality including content related substances heavy

Comparison

and metals solubility content uniformity friability

Inspection and carry out result comparison among Class B * Conduct supplier qualification reviews

products of the same category. suppliers

* Organize on-site audits when quality issues arise with materials or when

significant changes occur in the supplier's production conditions processes

quality standards and other key factors

The Quality Control Management Department

Reviews on invites the stores' health advisors to conduct

Efficacy and

Quality paper questionnaires or online surveys on th

Perception perception of product efficacy appearance

quality package and brand. Class C

suppliers * Conduct certification audit of suppliers

Quality Evaluation Mechanism

We implement category-specific quality reviews through regular

evaluations and annual quality assessments to maintain an approved

supplier roster ensuring stable pharmaceutical supply chains with

reliable product efficacy. Our supplier qualification process prioritizes

partnerships with suppliers demonstrating both regulatory compliance

and proactive sustainability commitments thereby mitigating Material Supplier Audit Process

environmental risks while advancing green equitable supply chain

development. In the semi-annual evaluations in July 2024 we

terminated contracts with three underperforming suppliers and To further ensure suppliers’ strict adherence to our quality standards system we conduct annual quality training for all suppliers covering product

conducted intensified on-site audits for critical partners. compliance resolution and quality specifications aiming to elevate their operational quality management proficiency.

2024 Environmental Social and Governance Report | 31Pharmaceutical Care for All: Safeguarding National Health ESG Report

Supplier Classification and Tier Digitalization and Localization of Supply

Management Chain

To achieve refined management of suppliers we have implemented a To enhance supply chain efficiency and advance security objectives in

scientific quality risk rating mechanism annually conducting dynamic Grade E Grade A 2024 we focused on digitalization and localization as dual core priorities.management and evaluations of suppliers. According to the rating We have strengthened supply chain digitalization capabilities through

system we established evaluation metrics based on the quality 416 766 system upgrades introducing functions such as delayed delivery

characteristics of various medicines and assigned specific weights to tracking reports and inventory turnover analytics enabling real-time

different quality criteria. Based on these metrics suppliers are operational visibility and data-driven stock management insights for

subsequently stratified into five grades (A B C D E) with each grade Grade D proactive risk mitigation. Simultaneously optimized supplier contract

corresponding to distinct risk levels thereby visually reflecting their renewal alerts with automated escalation protocols has streamlined

compliance levels through this stratification framework. 375 Number of workflows ensuring uninterrupted operations through timely

administrative coordination. These coordinated enhancements in

We implement differentiated management strategies for suppliers Suppliers

digital governance and contractual oversight facilitate agile decision-

across grades. Grade A suppliers (Tier 1 suppliers) receive expanded

making while maintaining secure resilient supply chain ecosystems.collaboration opportunities and preferential terms to incentivize

sustained quality excellence. For Grades B and C suppliers we enhance Concurrently we actively implemented localized procurement

communication channels and implement improvement-focused Grade C Grade B strategies by cultivating partnerships with regional high-quality

guidance to drive operational optimization. Grades D and E suppliers suppliers effectively shortening supply cycles while mitigating risks

with high risks undergo intensified compliance monitoring with 1197 1051 inherent in transportation and intermediary processes. This approach

partnership restrictions or discontinuation protocols activated when significantly enhanced supply chain reliability providing robust

necessary. This tiered management enables targeted performance operational support for sustained business growth.interventions improving managerial responsiveness while ensuring Grades of Suppliers in 2024

supply chain reliability through calibrated quality controls.

2024 Environmental Social and Governance Report | 32Pharmaceutical Care for All: Safeguarding National Health ESG Report

Providing Health Services

Yifeng Pharmacy maintains customer-centric operations and is committed to setting up a benchmark for the health services of the society. We adhere to the original intention of "making people physically and mentally healthy" and

meet the diversified needs of our customers through a scenario-based service mode ranging from pharmacy services preventive health care medication tracking chronic disease management healthy life consultancy to all-around

health management solutions. With our professional service system rigorous marketing standards and omnichannel interactive experience we not only provide our customers with safe professional and caring services but also

promote the continuous improvement of the health level of all people through innovative practices demonstrating our long-term commitment and responsibility to the health of the society.Professional and Accurate Servicing

Our Service Philosophy Our Service Team Our Membership System

Yifeng Pharmacy adheres to the service philosophy Over 95% of frontline employees across our retail outlets hold degrees in medical or We have established a multi-tiered membership

of professionalism and compassions promotes the pharmaceutical disciplines. We take “precise medication” as the starting point requiring system offering omnichannel full-scenario and

"peak-end experience" mode and implements the frontline health consultants to accurately recommend medicines that meet the needs of lifecycle-spanning health management services

principles of “Three Dos” and “Three Nos”. customers according to their illnesses. Meanwhile leveraging big data analytics to optimize centered around members. We launched the "88"Guided by the principle of “selflessness and therapeutic suggestions we ensure rational medicine taking and optimized purchasing member benefits including 8 professional memberaltruism” we mandate employees to provide experiences. To enhance consultation professionalism and accuracy we have implemented a services (e.g. tea for members traditional Chinese

condition-specific medication guidance and structured training infrastructure with sustained investment cultivating grassroots personnel into medicine decoction service etc.) and 8 exclusive

personalized recommendations according to their certified pharmacists capable of providing specialized medicine guidance and wellness benefits (e.g. member discounts points

needs with explicit rationale providing customers counseling. and regularly trains supervises and evaluates store employees on relevant redemption health advisor etc.) and facilitate

with attentive and professional guidance on standardized requirements. For core therapeutic medicines targeting prevalent conditions (e.g. digital engagement through the Enterprise WeChat

medication and health management by building a antihypertensives hypoglycemic medicines) we have developed a professional knowledge platform by delivering personalized one-on-one

comprehensive service system so as to win the repository that delivers scientifically validated combination therapy examples to employees medicine consultations and professional follow-

trust and recognition of our customers. Our enhancing their expertise in promoting rational and safe medicine practices. Complementing this ups empowering members to foster robust health

expansive network continues expanding through our Yifeng Pharmacy Store Member Management Incentive Program refines motivational awareness and sustainable habits.new store openings and existing stores mechanisms to stimulate the service motivation of the frontline empoyees driving continuous

optimizations. Combined with our own stores and service capability improvements for delivering more precise and attentive client care.online platform we have formed an integrated

online and offline health service mode.We have intensified professional pharmaceutical services by focusing on chronic non-communicable disease (NCD) management. Through customized NCD management plans we provide customers with professional medication

guidance medication reminder disease course management health check health education and other services to enhance customers' knowledge of diseases and self-management capabilities improve medication adherence and

thus effectively promote health for all.

2024 Environmental Social and Governance Report | 33Pharmaceutical Care for All: Safeguarding National Health ESG Report

Safeguarding Consumer Rights and Interests

Customer satisfaction remains Yifeng Pharmacy’s unwavering pursuit. We actively listen to customer voices We implement a tiered management system for all customer complaints establishing corresponding response and

through comprehensive satisfaction surveys while maintaining multi-channel efficient complaint resolution resolution mechanisms based on complaint categories. All investigation and handling procedures strictly adhere to

mechanisms to ensure prompt issue addressing and satisfactory experiences for all patrons. Through responsible the Yifeng Pharmacy Customer Complaints and Adverse Reaction Handling Management Procedures encompassing

marketing practices in daily operations we guarantee customers access to accurate product information customer communication on-site inspections product verification and medicine quality reassessments. Should

professional medication guidance and equitable transaction environments thereby safeguarding consumers' product quality issues be identified we initiate product recalls to safeguard consumer rights while providing timely

rights to know to choose and to health and winning our enduring trust and support from customers. updates to customers regarding resolution outcomes to ensure satisfaction. Following complaint closure we

conduct internal reviews to analyze complaint patterns resolution approaches and data trends. These insights are

consolidated into case studies distributed to all stores preventing recurrence of similar issues.Customer Satisfaction Survey

2024

We conduct quarterly customer satisfaction surveys across all regional stores gaining insights into customers’

genuine feedback through multiple evaluation dimensions including the Net Promoter Score (NPS) core

operational indicators (encompassing service attitude professionalism in-store environment checkout service

The average waiting time for customer service calls was 36 seconds (system-prompted the incoming

complimentary customer services product availability medicine quality and pricing etc.) and the

implementation status of key touchpoints in the peak-end experience. Additionally we incorporate competitive customer waiting time) the average response time was 5 seconds (when the system prompts an incoming

benchmarking to holistically assess our performance within the local market. Based on the survey results we

analyze customer opinions thoroughly compile the quarterly NPS Survey Report carry out quarter-on-quarter call it is answered within 5 seconds on average) and the problem resolution rate was 87%.and cross-sectional analysis of each for each evaluation indicator and summarize common customer concerns.We formulate targeted improvement programs to continuously improve service quality. In 2024 we collected

between 12000 to 13000 customer satisfaction survey responses quarterly and achieved an overall customer Responsible Marketing

satisfaction score approaching 80 points.To further enhance customer satisfaction we continuously refined the Yifeng Pharmacy 100% Customer We strictly comply with relevant laws and regulations including the Advertising Law of the People's Republic of

Satisfaction Improvement Program. This included introducing an incentive mechanism to motivate employees to China the Measures for Quality Supervision and Management of Medicine Distribution and Use and the

deliver services exceeding expectations thereby creating trusted customer experiences. Simultaneously we Measures for Supervision and Administration of Medicine Circulation. Upholding compliance as the fundamental

intensified employee training programs across all stores covering 27 customer dissatisfaction problem scenarios principle in medicine promotion we have established a rigorous and systematic compliance review system and

throughout the year to enhance employees professionalism and service capabilities driving the transition from approval processes to ensure truthful and objective promotional content across both directly-operated and

reactive problem-solving to proactive delivery of quality services. franchise stores. All medicine promotions strictly adhere to package insert information accurately presenting

therapeutic effects adverse reactions contraindications and precautions while prohibiting exaggerated efficacy

claims or downplaying potential adverse reactions to ensure that the truthfulness and compliance of the

Customer Complaint Handling publicity content is comprehensively safeguarded. A dedicated team centrally produces promotional campaigns

seasonal marketing materials and advertisements for all directly-operated and franchise stores and all materials

We attach great importance to the management of customers’ complaints and have set up two main channels undergo professional vetting before distribution to stores.for receiving complaints namely the “400 Call Center” and “Online Customer Service” as well as mailbox

Additionally we conduct regular internal audits of responsible marketing practices performing centralized

official WeChat accounts media accounts and other channels through which customers can provide feedbacks

reviews of all external promotional materials to guarantee legal and regulatory compliance in our public-facing

conveniently. We have a special responsibility system and designate a special person to deal with complaints

content. To further enhance employees’ marketing capabilities and service proficiency the Company

against different departments to ensure that each complaint is handled in a timely and effective manner. When

implements responsible marketing training programs for all employees reinforcing compliance awareness and

customers dial in for complaints or submit complaints online we record basic information in detail including the

standardized service protocols.specific time location content of the incident claims of the complaint and customers’ contact information.We then determine the response approach to be taken based on the nature of the complaint and ensure that a Throughout 2024 no major violations related to product/service information and labeling or marketing activities

final solution will be provided within 48 hours. occurred within our operations.

2024 Environmental Social and Governance Report | 34ESG Report

Enhancing Benefits

and Efficiency for

Improved Medication

Accessibility

Yifeng Pharmacy leverages digital means to upgrade its service chain boosting service response

efficiency and precision. With an intelligent logistics system we achieve 24-hour provincial delivery

with a near 100% shipping accuracy. Through source-level supply chain optimization we ensure

product quality while contributing to rural revitalization. Through these coordinated efforts we

establish a new paradigm for industrial advancement while building an innovative pharmaceutical

health service ecosystem.

2024 Environmental Social and Governance Report |Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Smooth Medical Network

As a leading chain pharmacy in China Yifeng Pharmacy focuses on providing customers with high-quality cost-effective and easy-to-buy medicines as Building Our Retailing Network

well as reliable pharmaceutical services. We adhere to the business philosophy of “fair pricing with professional service” and always put customer

needs first. We continuously explore the diverse healthcare needs of our customers. Based on the conventional form of pharmacy we have opened

traditional Chinese medicine (TCM) clinics diagnosis room of TCM practitioner outpatient departments in-store clinics Internet healthcare services and Yifeng Pharmacy attaches great importance to the construction of the

Heng Xiu Tang TCM factory gradually extending our business to the diagnosis and treatment and upstream industries. In this way we aim to provide retail network adopting an online and offline omnichannel layout to

comprehensive healthcare solutions for public well-being. accurately reach all types of customers. On the offline side we are

advancing a “fleet-type” store layout focusing on covering 10

Amidst the increasing chain rate and market concentration in the pharmaceutical retail industry Yifeng Pharmacy adheres to the development strategy of provinces and cities in Central South China East China and North China

“holding regional focuses and performing steady expansion” and continues to improve the breadth and depth of store network through a diversified with 42 prefecture-level cities and more than 130 county-level cities

expansion model of “new store + merger and acquisition + franchise” to meet the real-time needs of customers. Meanwhile we continuously expand included. On the online side we are continuously improving the

the online and offline business layout and expect to enhance consumer experience through scale effect. We strive to provide customers with more traditional and new retail systems including 4 intelligent retail channels

accessible and high-quality goods and services that perform well in accessibility variety timeliness reasonable pricing and supply stability. which are B2C O2O APP + Mini Program and Construction of Private

Domain as well as new retail channels like Internet hospital and e-

While expanding our offline stores and establishing a modernized logistics network we actively promote the development of online stores and prescribing. These efforts represent our vision of providing customers

Internet hospital to provide customers with one-stop medical service at home. with more cost-effective and convenient goods and services. Meanwhile

to promote the influence of our brand philosophy operation model and

social value we have opened up direct-operated franchise

opportunities. While providing franchisees with stable operation

We have partnered supports we ensure that customers enjoy more accessible goods and

We have established Accessibility

with leading global services.long-term and in-

pharmaceutical

depth strategic

enterprises and

partnerships with all

China’s top 100

important

pharmaceutical

pharmaceutical

enterprises offering

enterprises in China

Supply Variety over 70000 SKUs and have been stability covering Chinese and

continuously

Western proprietary

upgrading our logistics

medicines TCMs

network to ensure

healthcare products

express delivery within

medical devices

48 hours nationally

health-related daily

and 24 hours

Reasonable convenience products

provincially. pricing Timeliness and so on.Leveraging our procurement scale of over RMB 10 billion we

We set up 24-hour service stores to meet the needs of medication

make nationwide price comparisons through non-centralized

patients at any time of the day or night. Customers can order

procurement integrated channels and repeated price

online via mobile phones and receive medicines at home within

negotiations maximizing the price advantage directly back to our

an average of 30 minutes.customers.

2024 Environmental Social and Governance Report | 36Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Layout of Offline Retailing

As of December 31 2024:

Specialty Medicine Stores

(DTP Specialized Pharmacies)

Yifeng Pharmacy has a 14684 Flagship Stores

total of offline stores

(including franchise stores) "Dual-channel" BMI Designated

Outlets

Regional Central Stores

26 95 9728 Stores Special Special and Chronic Diseases Medical Retailing Stores Insurance Coordinated Stores

flagship regional small-sized Offline Medium-sized Community Stores Retailing

stores central stores community stores

Hospital-adjacent Stores

Small-sized Community Stores

1023 259 24-hour Service Stores

medium-sized "dual-channel" BMI designated outlets Traditional

Chinese Franchise

community stores Medicine Stores

Clinics

3184600+600+

DTP specialized outpatient integrated 24-hour

pharmacies management pharmacies service stores

We have established an offline retailing network covering many cities and business districts based on the population structures and customer demands

in different regions. This network forms a “fleet-type” layout centered on flagship stores regional central stores medium-sized community stores and

688 100+ 3812 small-sized community stores. In flagship and regional central stores we focus on providing a “one-stop” service with a full range of products. In

medium- and small-sized community stores we focus on the accessibility to medicines by offering a variety of medicines in different areas providing

hospital- traditional Chinese and franchise

community residents with more accurate goods and services as they needed.adjacent stores Western medicine clinics stores

Meanwhile with “thoughtful service + new retail” as the strategic core we continue to build specialty medicine stores (DTP specialized pharmacies)

"dual-channel" BMI designated outlets special and chronic diseases medical insurance coordinated stores hospital-side stores and 24-hour service

Yifeng Pharmacy has a 10000+ stores. We have established a full-course management system that covers pre-medication diagnosis continuous treatment rehabilitation management

total of online stores and follow-up tracking. We assign chronic disease management specialists to DTP specialized pharmacies to provide professional target management

(including franchise stores)

health monitoring medication guidance and health education helping customers with chronic diseases enhance their disease awareness and self-

management capabilities. In addition believing in the principle of prioritizing our customers our 24-hour service stores provide self-pickup and home

2 delivery services within a vicinity of 3km while hospital-adjacent stores are located within 100 meters of hospitals. These stores provide customers with 8 20 better faster and more convenient medicine purchase experience.

self-built new cooperation Internet hospitals

Internet hospitals Internet hospitals under construction To further promote pharmaceutical accessibility we have opened township franchise stores in Hunan Hubei Jiangsu Jiangxi and Guangdong provinces

effectively expanding the channels for health services in the grassroots market. Through this multi-level network layout we ensure that the medication

needs of different populations are accurately met while promoting comprehensive regional market coverage.

2024 Environmental Social and Governance Report | 37Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Online Retailing Channels

We continue to innovate in the development of online retail exploring more new functions and models. Centered on customer relationship management and big data we are advancing a new ecological medicine retail platform based

on a membership system Internet-based medical services and health management. We are actively developing online diagnosis and treatment chronic disease management as well as online and offline health steward and family

doctor services. Our online sales model relies on the Company’s logistics distribution center and physical stores. Customers place orders online and the goods are then delivered by the Company’s logistics or physical stores. This not

only enhances the convenience of purchasing but also expands the range of choices available to customers.Online

Retailing

B2C/O2O APP + Mini Program Private Domain Community Internet Hospital

In terms of B2C and O2O To enable customers have As for the construction of private domain community we In terms of Internet hospital operations we have already laid out in several provincial

retailing channels we have the most affordable goods not only provide professional medication advice but also capitals including Hunan Jiangxi Jiangsu Shijiazhuang Tianjin and Guangdong

successfully entered and benefits whether they create a health exchange platform to facilitate customers covering multiple departments such as internal medicine traditional Chinese medicine

mainstream platforms such shop online or offline our to obtain medication information health knowledge and integrated traditional Chinese and Western medicine surgery and gynecology and

as Tmall JD.com APP + Mini Program wellness tips anytime. Customers can also share their obstetrics.Pinduoduo Meituan synchronizes online and experience with others who have similar needs for their

Ele.me and Douyin. We offline goods inventories health in the communities. At the same time the system

ensure that customers ensuring consistency in records customers’ test data and carries out chronic

receive their goods online membership pricing and disease management. We provide online health Internal medicine Surgery

ordered within 30 minutes promotions on all consultation through the corporate WeChat platform. Traditional Gynaecology and

effectively addressing the platforms. Additionally we Salesmen push health care and medication guidance to Chinese medicine obstetricsissue of “difficulty in continuously enrich our customers according to their needs ensuring that Integrated Paediatricspurchasing medicines and online goods offering by customers can obtain personalized services anytime and traditional Chineseurgency in using them”. incorporating more third- anywhere. Based on precise recommendations of and Western Psychiatry and

medicine psychology

party drop-shipping or membership data we effectively improve the efficiency of

imported goods. medication reminders and health management. General practice Others

Considering members’ diseases medication and

benefits we customize communication content and

frequency to ensure that the proactive communication Distribution of Departments among Internet Hospital Practitioners

occurs no more than once a week.

2024 Environmental Social and Governance Report | 38Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

By signing contracts with more than 1000 multi-site medical practitioners and recruiting professional

pharmacists we have established a multidisciplinary medical team to offer services such as professional health

consultations online consultations family doctors and chronic disease management services.Through a variety of management measures we ensure that the Internet hospitals effectively realize borderless

closed-loop medical services.We have established a strict medical compliance system and built a multi-license

Internet hospital management system and an Internet hospital risk control system.Compliance

management We have realized the connection and regulatory data upload between our self-built

Internet hospital and third-party Internet hospitals ensuring the compliance of

prescriptions and the pass rate of quality inspection reach 99%.Consultation We have launched a consultation and prescription system that supports text and

and image/video consultation doctor management and integration with online stores

prescription serving over 13000 stores.By improving the electronic medical record system and the big data analysis platform

Data support we promote the interconnectivity of medical data provide data support for medical

decision-making and ensure data security through telemedicine and encryption

technologies.Diagnosis To enhance the patient experience we have optimized the diagnosis and treatment

and

treatment process and established a rapid response mechanism. Optimized system has

response reduced the proportion of abnormal orders to 1% and the rejection rate to 3.5%.We have implemented a full-time doctor assessment program and a multi-site

Assessment

and medical practitioner subsidy program assessing doctors from multiple dimensions

motivation such as medical quality and patient satisfaction to motivate them to improve service

quality.

2024 Environmental Social and Governance Report | 39Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Unified Franchisee Management

As a pioneer in pharmaceutical retailing industry Yifeng Pharmacy is committed to safeguarding the physical and mental well-being of our customers by providing quality pharmaceutical retailing and professional pharmacy services

while conveying the brand value of trustworthiness and the concept of comprehensive health services. The selection of franchisees is crucial. We give priority to franchisees with experience in pharmaceutical retail a practicing

pharmacist’s qualification certificate and strong financial capabilities. We ensure that they have sufficient start-up capital and financial stability to cover initial investments such as store rent decoration and inventory procurement.Franchisees must recognize and practice our brand culture and business philosophy ensuring that they provide safe and high-quality services to customers and promoting the smooth and long-term cooperative relationship. The

location of the franchise store must be in line with our market layout to maximize brand image and market influence. Before opening a franchise store must pass the preparation review and new employee training to ensure that it meets

our standards.In terms of franchisee management Yifeng Pharmacy always adheres to high-standard operations and fully implements the “seven unifications” management model to ensure that the franchisee’s operations are highly consistent

with our brand image. Through big-data-based precise site selection and an intelligent franchising system we have not only improved the quality of new store expansion but also achieved comprehensive management of goods

members and operations of franchise stores. In addition we provide all-round support for franchisees including opening planning product planning operational guidance professional training manufacturer support and financing

consultation. We also continuously optimize the franchisee management through questionnaires telephone follow-ups and field research.To ensure legal and compliant operations and safeguard the quality and safety of goods all To ensure brand consistency all decoration designs and basic All franchise stores are required to strictly implement

franchise stores are required to obtain the relevant licenses including the Drug Business License decoration (renovation) construction of franchise stores are the unified management system which includes

the Business License the Food Distribution License and the Class II Medical Devices Recordation carried out by companies arranged and designated by us. All quality management requirements pricing systems

Certificate strictly implement quality control in accordance with the Drug Administration Law the materials bearing the “Yifeng Pharmacy” logo used in and promotional policies. This ensures that franchise

Good Supply Practice for Pharmaceutical Products (GSP) and internal regulations and accept construction should be purchased from designated sites. stores have regulations to follow and standards toirregular inspections and GSP inspections. In addition we rigorously enforce the “three checks Meanwhile we require network cabling and the installation of adhere to. While continuously expanding salesand one severe penalty” system. Through regular inspections and strict control we ensure that the designated video surveillance system in all franchise channels the franchise stores can provide consumers

franchise stores meet standards in terms of quality service and compliance. This in turn stores during decoration to strengthen the subsequent with transparently priced high-quality medicines and

safeguards customers’ medication safety and upholds the industry’s regulatory order. management and surveillance. professional convenient health services.Unified standards for pharmaceutical services Unified corporate identification Unified management system

“Seven Unifications”

Unified bill management Unified procurement and delivery Unified personnel training Unified computer system

We have established unified As the sole supplier of goods we In addition to strengthen the operation and management of franchise We require all franchise stores to

standards and processes to regulate implement unified procurement and stores we regularly conduct standardized training programs. These include establish and use a unified computer

the lifecycle management of business distribution management to annual training for franchisees training for backup store managers and management system to enable the

bills entry inquiry review and effectively control cost and ensure regional directors as well as online learning courses for franchise store headquarters to exercise unified

archiving thereby ensuring financial quality. employees and store manager ability improvement training. These digital control over the stores.compliance for franchisees. initiatives are designed to assist franchisees in optimizing store operations.“Seven Unifications” Management

2024 Environmental Social and Governance Report | 40Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Deepening Digital Intelligence Empowerment

Yifeng Pharmacy drives the transformation of traditional operations Meanwhile we have implemented a “Technical Resource Team” model dividing the technical team into several smaller teams. Resources are allocated

with digital intelligence technologies comprehensively constructs a to these smaller teams according to business needs. This ensures that technical support is closely aligned with business objectives thereby shaping our

digital operation system and an intelligent logistics distribution system capabilities in product R&D support. Additionally we have set up an IT Strategy Committee and a COE (Centre of Excellence) organization. By integrating

and continuously promotes the improvement of digital business front- and back-end collaboration and online and offline business processes closely linking technology R&D with cross-departmental cooperation and

operations to ensure both operational efficiency and service quality. effectively evaluating business value to reduce decision-making waste and enhance R&D efficiency we ensure that innovation outcomes are rapidly

Meanwhile we will continue to pay attention to potential scientific and transformed into practical applications driving digital transformation and optimizes production capacity.technological ethical risks ensure that the technology application

complies with ethical standards and promote the sustainable

development of digital innovation. Original requirements The requirements proposed by various business lines are aggregated into a requirement

pool covering different business scenarios such as products functions and services.Innovation-Driven Approach

L1 clarification At the COE’s weekly meeting the requirements are initially clarified to ensure that theyYifeng Pharmacy adopts “customer-centric operational services are clearly described and the objectives are well-defined. The necessity feasibility andefficient and agile supply chain capabilities and efficient and innovative priority of the requirements is also preliminarily assessed.organizational talent development mechanism” as its strategy and

goal for scientific and technological innovation. We strive to achieve the Monthly requirement alignment meetings are held to conduct an in-depth analysis of the

leading digital business operations within the industry. To achieve this L2 alignment requirements that have been screened through L1 phase. The value impact on business

goal we reasonably allocate financial resources in line with our business and the technical implementation difficulty are assessed and the consistency of

operations and adopt a diversified financing strategy. Through a robust requirements across departments is ensured.financial management system we ensure the sustainable investment in

At the project initiation review meeting of the Digital Strategy Committee the

scientific and technological innovation and maximum efficiency of fund L3 review requirements that have been screened through L2 phase are reviewed for approval. This

utilization.ensures that the requirements align with the Company’s overall strategic goals and

determines the resource investment and development plan for the project.

2024

Requirements that have passed the final review officially enter the R&D process. The

System R&D system team proceeds with development testing and implementation according to the

established plan driving the Company’s digital transformation and providing efficient

Our expenditure on innovation and R&D amounted to RMB and stable technical support for business operations.

52.7366 million.

COE Operation Mechanism

We had a total of 323 R&D personnel.In 2024 we achieved remarkable results in R&D innovation. In terms of customer service we introduced a precise reception assistant. A billion-level

member altruistic precise recommendation model was built based on the member tags and computing power of big data models. This increased the

We ensure the execution capability of our innovation business and R&D medicine matching rate by 8%-10% and the repurchase rate by 10%. In terms of employee empowerment we developed a system for salesmen that

efficiency through a flexible management model and an efficient includes targets incentives tasks diagnosis and training. This significantly improved the professional service and execution ability of salesmen reducingorganizational structure. We have established a “Product and Business the service gap between new and experienced employees within 30 days. In terms of compliant operations we established a medical insurance riskAnalysis Business Partnership Model”. In this model business analysts control and supervision system based on big data models strictly setting risk control and supervision rules in accordance with national medical insurance

conduct in-depth analysis of business requirements to help product supervision requirements effectively avoiding the risk of medical insurance fund theft. In terms of supply chain management we built a supply chain

managers optimize processes and restructure business model. center to unblock efficiency bottlenecks in each link effectively improving store turnover product satisfaction and traceability transparency.

2024 Environmental Social and Governance Report | 41Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Digital Operation

At Yifeng Pharmacy we deeply recognize that digital management methods are the key to effective management of pharmaceutical retailers and the We continuously enhance our digital operations capabilities through key

crucial supporter to deliver on our promises to customers. To enhance market competitiveness we comprehensively plan our digital system steadily measures such as the construction of new technology frameworks sub-

promote the middle- and front-end system R&D aiming to empower the traditional operation management through digital intelligence technology. Our health governance of systems performance improvement of the main

digital system can support stores’ operations POS payment medical insurance service public domain platform medical products supervision and so chain and optimization of approval processes.on. Internally it can undertake various functional modules such as personnel finance and administration of the headquarters and realize efficient

management and process optimization of internal operations while ensuring rapid and steady business development.Upgrade the system framework based on the

Springboot technology architecture optimize the

R&D process and improve system performance and

development efficiency.Employees Users

Use optimized database log analysis network traffic

Business Middle Business Intelligent etc. to reduce system anomaly alerts by 70% and

End Middle End

Medical Retailing increase stability by 50%.Insurance Stores

Event Data

Membership Product Salesman Marketing

Tracking governance

Establish performance baselines for each system

User Data

Payment Transaction Quality Task

Profile application and conduct module-based system pressure testing

to optimize the main chain performance resolving

over 50 performance issues. This ensures that the

Public Point of

Domain Sales system successfully withstands peak periods during

Platform Technical Service (POS) major promotions and anniversaries and easily

Middle End supports the operations of more than 30000 stores.Message High High

Cache Database Tracing

queue availability concurrency

Analyze process authorization from the prospective

Medical of time consumption value and pass rate based on

Products Headquarter the RAPID model and reduce and optimize non-

Supervision Human essential process nodes to increase the approval

Finance OA

Resources efficiency across the entire system by 26%.Framework of Digital System Digital Operation Enhancement Initiatives

2024 Environmental Social and Governance Report | 42

Opened PlatformEnhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Membership Digitalization Human Resources Digitalization

We conduct refined member operations and precise marketing and actively drive the development of online diagnosis and chronic disease services in We deeply advance the digitalization of human resources in line with the

order to enhance user repurchase rates and brand loyalty. Through in-depth analysis of user profiles we strengthen users’ brand recognition and strategy of online digital and intelligent management strategy to

professional reliance on Yifeng Pharmacy effectively improving consumer experience. By the end of the Reporting Period the number of our online comprehensively upgrade management modules such as recruitment

members has reached over 100 million. contracting performance evaluation compensation promotion

scheduling attendance as well as talent review and development. In

2024 we formulated and implemented a digital development plan for

Product Digitalization human resources. By coordinating the infrastructure development of

the HR system promoting the upgrade of the DHR core main system

We are dedicated to building an industry-leading efficient and agile goods management system. We have successfully launched systems such as online optimizing data management applications and refining the human

supplier rebate intelligent replenishment intelligent coordination and intelligent return. The implementation of the national rapid procurement system resources reporting and dashboard system we enhanced the

for medically underserved and resource-limited areas has enabled a comprehensive digital and intelligent transformation of our goods business. This has intelligence and automation of human resources management and

significantly increased product satisfaction rate and inventory turnover efficiency ensuring efficient and accurate goods supply. successfully eliminated incremental problem data and completed the

governance of over 2000 existing data entries. Meanwhile we focused

on standardized and online approach to improve the operation and

Operation Digitalization maintenance management capabilities of the human resources system.We implemented strategies such as daily learning for the operation and

By leveraging new technologies and data capabilities to reshape operations we continuously enhance the customer experience at our stores and improve maintenance group robot operation and maintenance duty and root

operational efficiency. Through our own employees online mini program (Yidianzhang) we empower over 40000 employees to achieve comprehensive cause resolution of operation and maintenance issues thereby

online management of store operations marketing data performance and remuneration. With the help of big data for precise site selection we assist establishing a more flexible and efficient management system.nearly 1000 new stores each year in improving the quality of their expansion. At the same time through our digital franchise management system we

support franchise stores in achieving comprehensive management of goods members and operations. We integrate our digital strategy throughout all

business chains by constructing four major digital modules: “Employees Online Products Online Customers Online and Management Online”. These Financial Digitalization

modules are upgraded in alignment with the developmental needs and business scenarios of each department. They comprehensively support the

efficient operation of our internal management systems enabling us to swiftly respond to market demands and enhance overall operational efficiency. We continue to refine the integration of business and finance operations.Through the implementation of intelligent and automated

management across multiple aspects including budgeting cost control

New Retail Digitalization and reimbursement we have significantly enhanced the efficiency of

financial control. This supports the Company in providing high-quality

We adhere to integrated development and focus on developing digital products tailored to the scenarios of new retail business. We have constructed financial services and maintaining robust financial management during

platforms such as public domain private domain and Internet hospitals to support our “new retail + thoughtful retail” strategic upgrade fully rapid expansion.facilitating the transformation of retailing digitization. By the end of the Reporting Period over 10000 direct-operated O2O stores have been launched

online. The efficiency of picking delivery and labor productivity are all at the industry-leading level.Logistics Digitization

We have developed the Yifeng Transportation Management System

(TMS) which covers functions such as dispatch management freight

calculation temperature and humidity monitoring and turnover box

management. We have successfully implemented end-to-end

management of logistics information ensuring both efficient logistics

distribution and stable product quality.

2024 Environmental Social and Governance Report | 43Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Efficient Logistics Distribution

With a strong digital intelligence technology R&D and application team The automation of our logistics network is highly aligned with our business needs. When planning logistics centers in various locations we fully take into

and in line with the Company’s actual operational needs Yifeng account the varying medicines demand and return quantities of each retailing store to ensure effective improvements of work efficiency in goods

Pharmacy has developed a digital logistics system covering warehouse acceptance inspection shelving depalletizing and picking checking collecting and loading returns and other reverse logistics processes. We continue to

operation management logistics transportation management and promote the visualization and intelligent management of warehousing and logistics distribution. By introducing advanced equipment and technologies

logistics operation management. We identify logistics system such as automatic conveyors automatic sorting system Automatic Guided Vehicle (AGV) goods-to-person picking system Minload intelligent automatic

improvement points based on the 3C principles (Cost Close replenishment system electronic labelling wireless radio frequency (RF) picking acceptance system intelligent goods collection system full-process

Convenient) to effectively enhance end-to-end service capabilities in visualization system and Yidatong timely delivery system we have further enhanced operational efficiency and system integration capabilities.logistics system and live up to our commitment to customers to

“deliver with care efficiency timeliness and perfection”.It is an advanced system integrating logistics and information and automation

Automated stereoscopic technologies. It maximizes space utilization and increases storage density through

warehousing system stereoscopic design while reducing manual storage and retrieval operations with

automation technologies.Cost To become more

advantageous in terms of cost

Warehousing It guides palletizers to automatically replenish depalletized locations. Combined

management Minload intelligent automatic replenishment system with one-to-one electronic labels and picking mode settings it achieves automatic

replenishment and enhances the efficiency of warehouse replenishment.Close To be closer to

stores/users

It intelligently transports goods from the corresponding shelves in the warehouse to

the picking stations based on demand and completes the picking operations. Each

AGV goods-to-person picking

system workstation can serve up to 40 stores simultaneously. Combined with the optimized Convenient To be more convenient goods layout in the 3.0 warehouse it significantly improves picking efficiency and

accuracy.

3C Principle of Logistics System Development Picking system with electronic Electronic labels assist pickers in quickly locating goods. It also optimizes picking

labels strategies and routes thereby improving manual picking efficiency and accuracy.Picking and

sorting

By the end of the Reporting Period we have established seven modern

provincial logistics centers in Hunan Hubei Jiangsu Shanghai Jiangxi Integrated with the Warehouse Control System (WCS) Programmable Logic

Guangdong and Hebei as well as ten urban delivery centers in Wuxi and Multi-shuttle automated Controller (PLC) and Warehouse Management System (WMS) it automatically sorts

Huai’an and other major cities and realized online management of goods collection system store packages and transmits goods collection data to the Transport Management

production retailing e-commerce and other businesses for 20 System (TMS) improving the efficiency of goods collection.warehouses to ensure timely and accurate delivery to all customers.

2024 Environmental Social and Governance Report | 44Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Modernized Warehouse - Suqian Warehouse Sets Sail

With intelligent scheduling and route planning it visualizes vehicle management

Full-process visualization of online tracking navigation and positioning and national transportation capacity

logistics distribution map. This achieves transparent management across the entire supply chain and On December 27 2024 Suqian Distribution Center which covers

enhances delivery efficiency and controllability. an area of about 51.6 acres with a total construction area of

about 38000 square meters officially opened its warehouse to

send goods. The warehouse is equipped with modern equipment

such as conveyors AGV picking systems and gravity flow goods

The night delivery mode optimizes order fulfillment timeliness. Combined with

Digital intelligence handover collection systems in order to achieve a 50% increase in

and monitoring digital intelligence goods handover and system monitoring it reduces the handling manpower efficiency and a 30% reduction in the handling

requirements for store personnel.intensity of the dispatch team comprehensively improving the

Transportation

and distribution distribution efficiency and service quality of the stores in the

north of Jiangsu Province.By automating goods transportation implementing intelligent scheduling and

Yidatong timely delivery optimizing cross-zone goods transfer it streamlines the logistics process. This

reduces manual operations and warehouse inspection procedures achieving more

efficient precise and cost-effective store replenishment and delivery.We comprehensively implement the development of a logistics equipment

management system by shifting from a “firefighting-style repair” approach to a

Automated equipment

management “preventive maintenance” strategy. This enhances the versatility of warehouse

equipment reduces downtime caused by automated equipment failures and

improves the stability of warehousing operations.Equipment We continuously introduce automated equipment and innovate on-site tools

operation On-site tool innovation integrating standardized management requirements and processes to improve the

and Suqian Warehouse AGV Handling Robot

maintenance efficiency of logistics operations and overall operational coordination.In the future Yifeng Pharmacy will continue to adopt the most suitable

management mode equipment technologies and operational

In 2024 we initiated five new warehouse construction projects and gradually introduced automated equipment based on actual needs to enhance the processes tailored to own characteristics operational stages and

efficiency of warehousing operations. Among them Suqian and Hengyang warehouses have installed automated equipment such as AGVs conveyors business scenarios to build a more efficient and cost-effective supply

and gravity flow goods collection and have been put into operation. The automated systems in the new Wuhan warehouse such as stereoscopic chain logistics system. By these efforts we further enhance the

warehouse conveyors halved belts and AGVs have been basically installed and are now in the commissioning phase. Once operational these systems Company’s core competitiveness and achieve healthy and sustainable

are expected to significantly increase warehouse operation efficiency and further optimize supply chain operations. development.

2024 Environmental Social and Governance Report | 45Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Enhancing People’s Well-Being

As a pioneer in the greater health field Yifeng Pharmacy prioritizes responsibility and fulfills its commitment to improving people’s livelihood and safeguarding health through concrete actions. By providing targeted assistance and

organizing a wide range of public welfare and community activities we continuously inject momentum into public health.Driving Regional Development Caring for Livelihoods

Yifeng Pharmacy has taken concrete actions to closely integrate regional Over the years Yifeng Pharmacy has always fulfilled its social responsibility during its corporate development and has achieved remarkable results in

development with its own growth. While ensuring the reliable quality improving people’s livelihood and well-being. In the future Yifeng Pharmacy will continue to engage in public welfare practices with a higher standpoint

and stable supply of medicines we prioritize purchasing TCM materials and greater intensity drive the improvement of people’s livelihood with professionalism and warmth and make every effort to promote healthy and

from rural farmers with a total investment of RMB 93.37 million in 2024. harmonious social development.Heng Xiu Tang is a core enterprise under Yifeng Pharmacy focusing on

manufacturing the TCM decoction pieces. More than 70% of its raw

materials are collected planted and processed by farmers. This has Expired Medicines Recycling Initiative

effectively helped farmers to expand sales channels and increase

economic income and stimulated the vitality of rural industrial

To popularize the knowledge of rational medicine use enhance medicine quality and public safety in medicine use and reduce the environmental impact

development.caused by disorderly medicine waste we have continuously engaged in the collection and disposal of expired medicines.Targeted Assistance Rural Revitalization Project in In 2024 we partnered with the administrations for market regulation to launch the public welfare activities for the disposal of expired and ineffectiveFenghuang County Hunan Province medicines in family medicine boxes in stores across multiple provinces nationwide. The activities are themed by “Yifeng for Better Health Cleaning outExpired Medicines”. To encourage active public participation each participant was given a free eco-friendly bag to celebrate the 9th anniversary of Yifeng

From 2022 to 2024 we carried out targeted assistance in Pharmacy’s listing on the stock market. We also offered unconditional coupons to participants based on the types and quantities of expired medicines

Fenghuang County Hunan Province. By signing a Siraitia they provided. We carefully managed and registered the collected expired medicines before packaging and returning them to the warehouse. The expired

grosvenorii purchase cooperation agreement worth RMB 1 medicines were then handed over to professional companies responsible for hazardous waste management for safe and eco-friendly disposal. This helps

million with Fenghuang Xingcun Agricultural Development Co. citizens to dispose of expired medicines in a scientific safe and environmentally friendly manner. Through these efforts we are committed to creating a

Ltd. a collective enterprise in Zhangpo Village Fenghuang safe and healthy medication environment thereby securing both environmental safety and public health.County Hunan Province we implemented targeted procurement

of Siraitia grosvenorii grown locally strongly promoting the

development of the rural economy.Signing Ceremony for Targeted Procurement of Siraitia Grosvenorii

2024 Environmental Social and Governance Report | 46Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

“Yifeng for Better Health” Activities Health Running Advocacy Campaign

To enhance the public’s awareness of scientific medication and deepen community residents’ understanding We actively practice the concept of healthy life and promote mass fitness through running. In 2024 we held the

of the importance of safe medication we launched 26000“Yifeng for Better Health” public welfare activities in “Together for a Healthier Life” healthy running activity in Changsha West Lake Park which attracted nearly a

2024 to strengthen the education and guidance of medication among community residents benefiting more thousand citizens. During the event we set up supply stations along the route and provided professional

than 1.1704 million people providing 820000 free health tests and delivering more than 1 million heartwarming medical staff and sufficient emergency medicines to ensure the safety and health of the participants throughout

gifts. the race.From April to May 2024 we held more than 5000 activities themed by “Yifeng for Better Health Spring Health In addition we spread the health concept to a wider population by sponsoring several marathon events. In theJourney” in multiple provinces and cities including Hunan Hubei Jiangsu Jiangxi Shanghai Guangdong and 2024 Changde Liuye Lake Marathon we provided the “Yifeng Health Station” service for 15000 runners from 9

Hebei. We distributed spring health and scientific medication promotional materials to residents answered their countries including Ethiopia and Kenya and 31 provinces cities and districts helping the participants to finish

medication-related questions and provided free blood pressure and blood glucose testing for people with the race smoothly. In the same year we donated supplies to 27 medical stations of the 2024 Shijiazhuangchronic diseases. In the autumn of the same year the “Yifeng for Better Health Osmanthus Fragrans Life Marathon fully guaranteeing the health needs of more than 30000 participants. We call on more people to joinFestival” themed activities were carried out nationwide. A total of more than 20 large store activities and nearly the health running to convey health happiness and love through running and to jointly build a vibrant and

6000 medium- and small-sized store activities were held. These included free distribution of osmanthus tea bags caring society.

public welfare gift-giving for Teachers’ Day health lectures in autumn and winter and chronic disease health

testing services. We also conducted outdoor fun interactive activities which attracted a large number of

residents. These activities conveyed the concept of a healthy life and won widespread praise.“Yifeng for Better Health” Activities Health Running Advocacy Campaign

2024 Environmental Social and Governance Report | 47Enhancing Benefits and Efficiency for Improved Medication Accessibility ESG Report

Action to Support Flood-Affected Areas Charitable Donations

In July 2024 Pingjiang County and Huarong County in Yueyang City Hunan Province successively suffered from To help passengers go home during the Spring Festival travel rush and care for the outdoor workers who protect

severe flood disasters due to continuous heavy rainfall. After the disaster occurred we responded quickly by the people in spite of cold weather we launched the “Warm Journey Home Safeguarded by Yifeng” charitable

launched an emergency relief operation. Through efficient organization and arrangement we donated more donation activity at the beginning of 2024. In key provinces affected by the cold wave such as Hunan Hubei

than 900 bottles of disinfectant and 150 sets of emergency medicines and living supplies to the affected areas. Jiangxi and Hebei we organized a series of public welfare activities to send warmth to sanitation workers bus

These supplies included Huoxiang Zhengqi water antiviral oral liquid Xiasangju granules Shidishui tincture drivers expressway traffic police and returning passengers contributing our modest efforts to the Spring Festival

compound Banlangen granules and 84 Disinfectant which were used for post-disaster disinfection and travel. We have coordinated with tens of thousands of stores to successively distribute cold protection medicines

epidemic prevention as well as the public health protection. In addition we donated medicines worth over RMB and living supplies worth more than RMB 1.2132 million including heat patches ginger tea masks hand creams

340000 to severely affected areas such as Anhua Yuanjiang and Taojiang to fully support the frontline flood medicines and “heart-warming packages”. We provided free collection services for people over 60 years old

rescue efforts and help people in disaster areas to get through the difficulties. We demonstrated our corporate children under 2 years old and returning passengers. We also donated cold protection materials and cold

responsibility through concrete actions stood together with people in disaster areas and done our best to resistance medicines to sanitation workers and expressway traffic police. The beneficiary population reached

protect the health of the people. millions of people. These donations delivered warmth to passengers on the Spring Festival journey and outdoor

workers who stick to their posts.In addition we also worked with Cofoe Medical to donate medical supplies worth RMB 1.3 million to support the

“Healthy China Initiative · Mother Action” project of the Hunan Women and Children Development Foundation.The project aimed to help sanitation female workers and hearing-impaired mothers throughout the province. We

also donated love materials worth more than RMB 550000 to the Liuyang Red Cross Society calling on more

enterprises to actively promote the Red Cross spirit of “humanity fraternity and dedication”. In the future we

will continue to organize such activities to extend care to various groups in society and fulfill our social

responsibilities through concrete actions.Donation of Flood Relief Supplies Charitable Donation Activity

2024 Environmental Social and Governance Report | 48ESG Report

Achieving Win-

Win Results and

Realizing the

Value of Talents

We adhere to the principle of employment compliance and develop a respectful

and fair workplace to lay a solid foundation for talent attraction and retention.We have a smooth promotion mechanism helping employees realize career

aspirations by upgrading their skills with diversified training programs. At the

same time we improve the compensation and benefits system and emphasize

occupational health and safety striving to raise employee satisfaction and

loyalty. As we forge ahead for progress Yifeng Pharmacy looks forward to

working side by side with employees to achieve win-win results.

2024 Environmental Social and Governance Report |Achieving Win-Win Results and Realizing the Value of Talents ESG Report

Compliance Employment

Yifeng Pharmacy strictly follow laws and regulations such as the Labor Law of the People’s Republic of China the Labor Contract Law of the People’s We devise the talent demand plan annually to define what talents the

Republic of China the Provisions on the Prohibition of Child Labor and the Provisions of the State Council on Working Hours of Workers and Staff and has Company and key positions seek for so as to recruit the required

also formulated employment policies to align us with relevant regulations. We conduct recruitment with openness fairness and impartiality avoiding any personnel more accurately and efficiently. To attract more talents we

discriminatory words deeds or judgements in the selection of talents including but not limited to discrimination based on ethnicity race skin color broaden the recruitment channels including campus recruitment and

gender religion and age to create an equal fair diverse and inclusive workplace for employees. Meanwhile we explicitly prohibit the employment of social recruitment.child labor and forced labor and oppose any form of discrimination and harassment. We require the strict verification of the personal information of

applicants before the official employment. If any incidents of child labor and forced labor are discovered we will promptly take serious actions against the

responsible person depending on the severity of the situation. In 2024 we had no incidents of child labor forced labor discrimination or harassment. Campus Recruitment

As at December 31 2024 we had a total of 40018 employees all of whom were full-time permanent and guaranteed hourly employees and were from

China (including Hong Kong Macao and Taiwan) with a monthly turnover rate of 1.71%. Details are shown below:

We continue to implement programs such as the

“Reserve Cadres Recruitment” “Emerging StoreA total of 40018 employees Manager” and “Internship” to cultivate fresh

graduates and help them integrate into the society

more quickly after graduation.In 2024 we partnered with more than 30 universities

across China to develop a three-party talent cultivation

Under 31 11157model involving “students universities andFemale 34521 31 to 40 13860 enterprises”. As such we successfully recruited more

By gender By age than 1300 interns.Male 5497 41 to 50 12185

50 and above 2816

Social Recruitment

Finance 411

Senior managers 140

Administration 3090 By publishing recruitment information on the mini

program of “Yi Recruitment” external recruitment

Middle managers 281 Technology 251

By job level By job position websites and other channels and by cooperating with

government departments we have expanded the scope

First-line managers 11422 Distribution 1475

of social recruitment.Production 110

Employees 28175

Sales 34681

2024 Environmental Social and Governance Report | 50Achieving Win-Win Results and Realizing the Value of Talents ESG ReportIn 2024 we were awarded “2024 King’s ARK - Employer with Commitment to and Excellence in TalentRecruitment” by Boss Zhipin and “Outstanding Enterprise in Human Resources Digital Transformation” by Employees’ Rights and Interests and

Beisen. Moreover the Company won the “Leap Award of the Year” by Liepin the “Brilliance Creation Awardfor 20 Years” by Hunan University and the “High-Quality Enterprise in Talent Attraction” by the Hunan Diversity

Xiangjiang New Area Civil Affairs and Social Security Bureau. These achievements highlighted the recognition of

our talent recruitment initiatives.Guaranteeing employees’ rights and interests and respecting their diversity constitute a core driver to creativity

and motivation of a corporate. We value the legitimate rights and interests of employees guarantee their

freedom of association and ensure the basic benefits and attentive care for them. At the same time we embrace

equality and diversity bringing together employees from different backgrounds and cultures and with different

professional skills to encourage employees to realize their potentials and occupational achievement.We implement employee management standards with commitment to fairness equity and transparency so as

to fulfill employees’ rights. During the Reporting Period we amended the Administrations for the Conclusion

and Termination of the Labor Contract refining internal policies related to employees’ rights and interests

including setting legal working hours reasonably calculating and paying overtime compensation and banning

forced labor aiming at protecting the legitimate rights and interests of employees. We also revised the Employee

Leave Management Measures and the Regulations on Five Insurances and Housing Fund Management at Yifeng

Pharmacy to ensuring the implementation of employees’ interests on five insurances (pension insurance

medical insurance unemployment insurance work-related injury insurance and maternity insurance) housing

fund and statutory holidays. In 2024 we paid employees’ five insurances housing fund and wages in full. Also

there were no significant litigation cases involving labor disputes nor were there any cases of impairment to“2024 King’s ARK - Employer “Outstanding Enterprise in employees’ rights and interests due to significant operational changes.with Commitment to and Human Resources Digital Transformation”Excellence in Talent Recruitment” by Beisen We are committed to building a diverse equal and inclusive workplace. We have set up positions for ethnic

by Boss Zhipin minorities veterans and the disabled providing them with flexible work arrangements and a barrier-free working

environment. In 2024 we recruited 7345 new employees over 80% of whom were female. The number of

veterans and individuals with disabilities reached 125 and more than 200 new hires came from 21 minority

groups. We also encourage female employees to compete for jobs and enhance their influence in the workplace.In 2024 more than 4100 female employees were promoted.

15560 positions were provided by franchise stores

125 veterans were hired

“Leap Award of the Year” “Brilliance Creation Award for “High-Quality Enterprise inby Liepin 20 Years” by Hunan University Talent Attraction” by the Hunan

Xiangjiang New Area Civil Affairs 55% of the senior management was hired from the local community

and Social Security Bureau

2024 Environmental Social and Governance Report | 51Achieving Win-Win Results and Realizing the Value of Talents ESG Report

Talent Development

Investing in employees represents an astute commitment to the Talent Development and Training Programs

company's success. We have built a complete talent development and

management system revolving around employee training career

With a focus on talent cultivation and business empowerment we have carried out multi-layer talent development and training programs covering

progress performance evaluation promotion and other key areas. It

different managers such as reserve ministers potential store managers and reserve regional directors aiming at improving the comprehensive business

aims to open up a channel of personal growth and career progress for

ability of talents and reserving excellent employees.every employee and to boost the Company’s long-term development.According to Yifeng Pharmacy’s talent strategy we have launched the “Reserve Cadre Training Program” to cultivate personnel who align their goals

with the Company’s. We divide the training for reserve cadres into three categories of operations products as well as central and back office

Training and Development management at headquarters. Through various training cycles and corresponding incentives we clarify the development requirements of the three kinds

of reserve cadres and motivate them to build up skills.Based on the talent strategy we identify key positions and talent needs We have formulated a reserve cadre job rotation plan. By inviting outstanding employees to the cross-departmental rotation program and devising

through staff inventory thus forming a talent pipeline consisting of personalized rotation and training plans for them we offer employees with cross-business rotation and front-line and regional opportunities to help

outstanding employees. We cultivate excellent personnel for the long them broaden their business perspectives thus facilitating reasonable mobility and all-around development of talents within the Company. In addition

run by customizing training plans for them. the Company has set up a “Dual Tutor System” through which the mentor and the master deliver hands-on instruction to outstanding employees for

secured personal growth.Release the annual talent demand planning and formulate Job rotation plan “Dual Tutor System”

corresponding recruitment training promotion and salary

adjustment plans

In the

future

Now

Develop the talent pool and pipeline of key positions as

reference for the Company’s talent selection and deployment

Training assessment Training assessment Training assessment

……

period 1 period 2 period 3

Facilitate the development of employees for better recognition

in career clear career direction and continuous career Training Training Training ……

incentives a incentives b incentives c

development to achieve their career goals

Talent Inventory Progress Growth Path for Reserve Cadres

2024 Environmental Social and Governance Report | 52

Growth Path for Reserve CadresAchieving Win-Win Results and Realizing the Value of Talents ESG Report

To contribute to the growth of talents we have built a complete talent development system for employees of

different levels and fields taking into account the talent review results. By providing various training programs

Quality Management Training and Professional Expertise and Knowledge Training in 2024

and tools we work to meet employees’ needs for skill enhancement and encourage personal growth to

achieve the Company’s goals of talent cultivation and strategic development.* Conducted 156 quality management training sessions for new recruits.Senior manager

development

Potential Manager program

store development * 7435 new employees participated in the quality training examination and the passing rate

managers program

cultivation Senior

program managerReserve Incumbent was 98.62%.cadre Project minister

Potential

store

Reserve managers * Conducted 2 offline training sessions on knowledge of good supply practices involving

cadre

Employees at

the 87898 trainees.Headquarter

* A total of 126696 person-times participated in the online trainings focused on management

of Medical Devices regulations on the Traditional Chinese Medicines and so on.Skill training Tutor training

* The training covered 100% of employees business partners and franchisees.Training System

Pharmacist Cultivation

Specialized Training In 2024

We encourage all employees to obtain the licensed pharmacist

To ensure professional enhancement for different positions and to strengthen the teaching skills of internal certificate. And we continuously optimize the tutor qualification

tutors we have launched a series of professional expertise training courses and tutor competency enhancement More than 4000 employees exam and help employees pass the exam by assisting them in

courses. These training sessions provide employees with a diverse and highly specialized training content thus participated in the Licensed completing the exam registration and participating in the

meeting their personalized development needs and intensifying their professional skills and career development Pharmacist Qualification simulated tests in cooperation with tutoring institutions.potential. Examination.

2024 Environmental Social and Governance Report | 53

Talent Cultivation Training Program Specialized trainingAchieving Win-Win Results and Realizing the Value of Talents ESG Report

Training for New Employees

During the Reporting Period we also organized

corporate culture training to deepen employees’

We organize training activities for new employees understanding of the corporate culture by

to introduce the Company’s human resources explaining cases and disseminating corporate

systems attendance management systems and values of Yifeng Pharmacy striving to consolidate

other policies. These efforts aim to help them the team cohesion.quickly familiarize with and adapt to the

Company’s environment. Moreover we carry out Training on Corporate Culture

training assessment to ensure employees’

understanding of these basic systems.In 2024 we conducted a total of 4935 training events realizing 100% employee participation with 82.23 training

In 2024 hours per person and annual training expenses of RMB 4.1938 million.we completed 160 training sessions for new The percentage of employees trained and average training hours by gender

employees with a total of 7345 new

employees participating. * 100% male employees participation

Training for New Employees reaching an average training hours per person of 100.83 hours

* 100% female employees participation

Training for Reserve Management Talents reaching an average training hours per person of 79.27 hours

In 2024 we carried out various training activities for The percentage of employees trained and average training hours by employee category

management talents such as reserve regional

directors and potential store managers. We taught

them management knowledge and practical * 100% senior management participation

methods aiming at improving their leadership and

with an average training hours per person of 8.12 hours

collaboration spirit for the Company’s long-term

development.* 100% middle management participation

with an average training hours per person of 318.10 hours

In 2024 * 100% frontline management participation

with an average training hours per person of 97.75 hours

we completed 228 management talents training

with a total of 9120 person-times participated in. * 100% general employees participation

Training for Management Talents in 2024 with an average training hours per person of 73.96 hours

2024 Environmental Social and Governance Report | 54Achieving Win-Win Results and Realizing the Value of Talents ESG Report

Performance Appraisal and Promotion

We continue to improve our talent assessment system aiming at more

accurately measuring the performance and contribution of employees Senior Management General Employees at Stores

and effectively stimulating their motivation and creativity. In 2024 we

cooperated with an international consultancy to develop the For existing and new businesses we integrate Based on a fair and reasonable performance

“Leadership Competence Model”. We took innovative measures to performance assessment mechanisms (such as appraisal system we have built an effective

introduce the “Leadership” dimension in addition to the original four the KPI and OKR) with compensation incentives Compensati compensation incentive mechanism for general

on

major assessment dimensions of value generic ability business (such as equity incentives). This practice employees at stores to stimulate their motivation Mechanism

competence and performance to enable us to pass on the values of encourages senior executives to lead other and initiative.corporate culture and to effectively evaluate the managerial employees in completing key tasks and goals and

performance of high-performing exceptional leaders. To provide to innovatively implement medium- and long-term

employees with a clearer understanding of their performance and development plans thus contributing to the

potential career ladder we also offer a detailed guideline on employee Company’s creative development.assessment criteria for the enhancement of their understanding of

assessment indicators and their performance.In addition we have developed a clear and comprehensive employee promotion system and ensure transparency and fairness in promotion by including

Yifeng Pharmacy follows the concept of “equal pay for equal work” the results of employee performance appraisal and job performance into the promotion system. And we have set up a dual-channel promotion

making every effort to provide employees with market-competitive mechanism for management and professional development. In 2024 we cooperated with an international consulting agency to upgrade the promotion

salaries. We have set up a performance-based variable pay policy for channel by optimizing the job level setting and clarifying the career ladder and development path for various positions to strive to push forward a more

employees at all levels to enhance business performance and energize scientific and reasonable talent planning and cultivation mechanism.employees to innovate. By creating a fair reasonable and motivational

compensation system we have developed a reward mechanism for

employees that is closely linked to personal growth. In this way we can

motivate them to make continuous improvement and realize personal Leadership Model

career goals.To fully motivate our employees we continue to optimize the long-term Leadership

incentive system and implement equity incentive plans to attract and

retain key talents. We regularly grant restricted stocks to key managers

and core technical staff. The registration of pre-established grants to

incentive recipients has been completed and the grant has been made Professional Channel Talent

to more than 450 core talents. Capability Assessment Performance Assessment Employee Promotion Goal

To effectively promote the Company’s sustainability strategy and Management Channel System

goals we link sustainability performance indicators such as supply

chain sustainability and vehicle operational efficiency to existing

employee compensation incentives ensuring that all employees are

responsible for the Company’s sustainability goals. Value

Employee Development

2024 Environmental Social and Governance Report | 55Achieving Win-Win Results and Realizing the Value of Talents ESG Report

Employee Communication and Care

To attract and retain talents Yifeng Pharmacy provides a variety of employee benefits aiming to deepen their sense of belonging. The Company also sets up various forms of communication channels such as employee satisfaction

surveys to gain timely insight into the core demands of employees. Through flexibly adjust management strategies based on employee feedback we can continuously optimize employees’ work experience and elevate their job

satisfaction.Employee Benefits Employee Communication

We provide employees with non-statutory benefits including annual medical checkups “bring child to work” We work to build an open and efficient employee communication platform and actively collect employee

mechanism free meals accommodation commuter buses birthday benefits and holiday benefits. Besides we feedback and suggestions via a variety of channels. We regard every piece of feedback as a valuable resource for

have established the Yifeng Mutual Assistance Foundation (“Yi” Fund) which aims to help employees in need improving management and optimizing the workplace environment. We respond quickly to employees’ needs

and their families. During the Reporting Period we subsidized 27 employees in need with an amount of RMB and constantly adjust and refine our management strategies to enhance the employee work experience and

410000 through the “Yi” Fund. create an inclusive and supportive workplace.

In 2024 we organized a variety of welfare activities for employees with a cultural theme on “care for growth”.These activities included traditional holiday celebrations birthday parties team building and the “Yi Wisdom “Growing with Yifeng Pharmacy”Pioneer” knowledge competition aiming to strengthen employees’ sense of belonging and happiness. an Employee Care Application “Employee Express” Application

We organize 4 employee communication Employees can put forward their ideas and

sessions for each employee on the day of opinions via the “Employee Express”

Birthday Party for Employees onboarding 7 days after probation 30 days after application. The Company regularly collects

probation and before the official transfer in an feedback from employees and directly reports to

We hold monthly birthday celebrations to create a warm and aspiration to understand employees’ real the CEO so that the management can listen to

enjoyable memory for the birthday employees. We carefully plan a feelings in each key stage. the voice of grass-roots employees.series of creative and interesting interactive games so that every

employee can play a part in a relaxed and enjoyable atmosphere. At

the same time we prepare exquisite birthday cakes and various

dishes establishing the warm environment in the Company.Birthday Party for Employees In addition we continue to strengthen the functions of the Human Resources Department through which we

enhance communication and connection with other business units to help us realize information transmission

among different departments for higher inter-departmental efficiency. We also organize monthly surveys on the

Women’s Day Activity of “Shine like Flowers” satisfaction of the Human Resources Department so as to obtain the needs and ideas of various business

departments in a timely manner and facilitate effective communication among departments.To celebrate the 114th International

Women’s Day in 2024 we organized a series Our goal is to create a workplace that is inclusive and compassionate where everyone is valued. We invite allof activities with the theme of “Shine like employees to participate in the series of employee survey a every year. According to the results of the 2024Flowers”. We held flower arrangement employee survey the Net Promoter Score (NPS) satisfaction rate of store employees reached 35.1% the

activities for female employees and provide satisfaction rate of the cafeteria reached 80% the satisfaction rate of the dormitory reached 95% and the

them with flowers beauty meals and other satisfaction rate of vehicle usage reached 99%. We also conducted a “Growth and Care/Stress Relief” survey

benefits to encouraged them to give full play which aimed to accurately acquire employees’ perception of stress and the effectiveness of stress relief

to their potential in the workplace. initiatives. And we will take measures to improve employees’ work-life balance in response to the feedback

Women’s Day Activity from employee surveys.

2024 Environmental Social and Governance Report | 56Achieving Win-Win Results and Realizing the Value of Talents ESG Report

Occupational Health and Safety

The Company prioritizes occupational safety and health in business operations and strictly abides by the Law of

the People’s Republic of China on Prevention and Control of Occupational Diseases the Law of the People’s Safety-related Cultural Activities at Hengxiutang

Republic of China on Work Safety and the Measures for the Administration of the Diagnosis and Assessment of

Occupational Diseases. We have also issued internal safety-related policies such as the Yifeng Pharmacy Safety

Management Policy and the Yifeng Pharmacy Fire Prevention and Theft Prevention Policy so as to safeguard In 2024 Hengxiutang organized 22 training sessions on workshop

employees’ health and safety. In the meantime we attach great importance to the mental health of employees. safety as well as fire drills aiming to enhance employees’

By organizing diversified activities we help them alleviate work and life pressures and intensify their stress awareness of safe production and fire safety thereby achieving 0

resistance so that they can devote themselves to work with a more optimistic mindset and achieve a sound production accident throughout the year.work-life balance.Work Safety Training

Safety Management

Mental Health

To strengthen the safety management we have specified the objectives and responsible departments of safety

management in the Safety Management Policy. We also refine the safety management requirements for the We attach great importance to the mental health of employees and help them to manage emotions and stress by

warehouse stores office areas and other locations to ensure that every employee can work in a safe launching the Employee Assistance Program (EAP) pushing articles via the “Yi Family” app and taking other

environment. At the same time to continuously improve the Company’s all-round safety management we initiatives.have established a scientific reasonable comprehensive and efficient safety hazard investigation system to

prevent accidents and continuously enhance the work safety. In addition we have purchased work-related injury

insurance and workplace safety liability insurance for all employees with an amount of RMB 9.6065 million so as

Employee Assistance Program (EAP)

to protect employees’ safety. In 2024 there were no significant safety incidents.Employees can have weekly one-on-one To foster a team of professional and dedicated

Safety Culture Building consultation and communication with “considerate teachers” we encourage

professional counselors through online and employees with a strong interest in mental

We actively build a corporate safety culture and improve employees’ safety awareness and emergency offline channels. We also provide professional health education to participate. In 2024 we

response capabilities by means of regular safety training and education. and effective mental health seminars for organized a six-month professional mental

employees. In 2024 we successfully organized 4 health training course for the trainees

Promotion and Education Activities on Workers’ Health and Safety mental health lectures covering different topics providing them with 23 courses around

such as stress and emotion management theories skills and practices. A total of 32

interpersonal relationship management and employees successfully completed the course.In August 2024 the Company collaborated with the Workers’ Health

parenting education with more than 500

and Safety Education Center of Hunan Province to deliver health and

employees participating.safety lectures to all employees. The content covered identification

and prevention of basic diseases and malignant tumors

enhancement of personal immunity CPR first aid knowledge and

prevention of heat stroke in summer.In the same month we organized the “Learning of the GeneralIn addition through the self-developed “Yi Family” app we regularly publish articles on mental health everyAdministrative Safety Manual” seminar to introduce safety-related

month working to alleviate employees’ mental stress via various channels. Our goal is to enable employees to

Promotion and norms to employees in detail. We also conducted training tests to

Education on Fire Safety deal with work and life with an optimistic mindset to ensure that they can enjoy a healthy and balanced life enhance their understanding of safety knowledge.while pursuing professional fulfillment.

2024 Environmental Social and Governance Report | 57ESG Report

Co-Creating Green

and Sustainable

Horizons

Yifeng Pharmacy prioritizes resource efficiency emphasizes material circulation and

systematically advances waste minimization and non-hazardous treatment. We enforce

strict control of emissions (air water and solid waste) through effective waste

management measures to minimize the negative impact of the company's operations on

the environment to the greatest extent. As a publicly listed enterprise we remain

committed to sustainability-driven corporate responsibilities contributing to global

ecological health and green development. In 2024 the Company faced no major

administrative penalties from environmental authorities or criminal liabilities due to

environmental incidents.

2024 Environmental Social and Governance Report |Co-Creating Green and Sustainable Horizons ESG Report

Energy and Climate Actions

We are committed to enhancing energy efficiency to maximize environmental protection. To this end we have established comprehensive environmental policies covering energy conservation and carbon emission management

providing clear guidelines for our operations.Strengthening Energy Governance

To validate our environmental performance we have set the following Key measures of energy management:

measurable targets aligned with our business development roadmap

and environmental concept: Stores

* Gradually install smart energy meters in all stores for real-time energy consumption monitoring and data-driven optimization in the future.* Require stores not in peak business hours to implement lighting duration controls such as using smart LED lights to improve energy

Energy targets efficiency and reduce unnecessary energy waste.* Develop air conditioning energy-saving plans and upgrade air conditioning management systems with AI-driven temperature regulation

based on indoor temperature to create a comfortable low-carbon and healthy environment.In 2024 we set a target of saving more than one million

kilowatt-hours of electricity consumption in our stores. Through Offices

the installation of smart energy consumption electric meters

we successfully saved 1.46 million kilowatt-hours of electricity

which is equivalent to a reduction of 784 tons of CO? emissions. * Increase the park's photovoltaic power generation coverage with cumulative self-generated and self-used electricity hitting 714489 kWh

equivalent to cutting 383.39 tons of CO? emissions.* The Company's headquarters office area has achieved 100% photovoltaic power generation not only saving electricity costs but also

effectively optimizing energy structure.Logistic centers and warehouses

* Install smart meters in warehouses to dynamically monitor power consumption and tap the potential for energy conservation and

consumption reduction;

* Retrofit warehouse lighting systems to photovoltaic power generation reducing environmental pollution and enhancing environmental

benefits;

* Post signs for material conservation inside the warehouses to raise the awareness of warehouse staff about conservation.

2024 Environmental Social and Governance Report | 59Co-Creating Green and Sustainable Horizons ESG Report

In 2024 our energy consumption of each category and the total energy consumption intensity are shown in the

table below:

Energy Consumption2 单位 2024

Total energy consumption tce 26096.50

Energy consumption intensity tce/ten million RMB 1.08

Non-renewable fuel (direct) consumption tce 511.34

Natural gas tce 211.03

Petrol tce 206.08

Diesel tce 94.23

Renewable fuel (direct) consumption tce 87.81

Photovoltaic power generation tce 87.81

Indirect energy consumption tce 25497.35

Electricity tce 25497.35

2The calorific value conversion coefficient for the total fuel consumption refers to the General Rules for Calculation of the

Comprehensive Energy Consumption (GB/T 2589 - 2020). The denominator of the energy consumption density is the

operating revenue during the Reporting Period.

2024 Environmental Social and Governance Report | 60Co-Creating Green and Sustainable Horizons ESG Report

Enhancing Climate Resilience

In recent years global climate warming has led to frequent extreme weather events exerting tremendous impacts on natural ecosystems human societies and economic activities. In alignment with contemporary priorities and national

initiatives Yifeng Pharmacy actively identifies climate change-related risks and opportunities integrates climate-related governance and strategies into ESG management and incorporates associated risks into the Company’s risk

management framework.Climate Change-Related Risks and Response Measures

Type of risks Potential Impact Measures Adaptability 3

Sudden heavy rainfall or flash floods may * Develop emergency plans for extreme weather defining roles and response procedures of each relevant department and

Acute

cause infrastructure damage personnel in the event of extreme weather conditions

* Purchase property insurance to avoid significant impacts on operations due to potential financial losses

* Upgrade and retrofit infrastructure (e.g. stores warehouses) with enhanced flood control drainage and disaster resistance to

Physical maintain operations during extreme weather to reduce losses and improve risk resilience and market competitiveness.risk Global warming and sea-level rise may High* Optimize supply chain layout with diversified suppliers and flexible logistics to swiftly adapt to disruptions caused by extreme

affect facilities in coastal stores and

Chronic weather ensuring stable medicine supply and enhancing the resilience and reliability of the supply chain and customer trust.warehouses and reduce employee

productivity * Utilize digital technologies to implement real-time monitoring and early warning systems for critical facilities in stores and

warehouses to enable timely interventions. Meanwhile we optimize inventory management and order processing workflows

through digital means reducing inventory backlogs and order delays caused by extreme weather and enhancing operational

efficiency.Increased regulatory requirements for the * Maintain a high level of attention to newly issued regulatory documents promptly identify and thoroughly analyze their

Policy and

disclosure of greenhouse gas-related compliance obligations clarify mandatory disclosure requirements for the Company and ensure the effective execution of Medium

laws

information these disclosure tasks

Low-carbon technology transition may * Develop and apply low-carbon and energy-efficient technologies to enhance operational efficiency and product quality while

Technology Medium

increase operational costs in the short term creating new growth drivers and competitive advantages

Transition Shifts in consumer preferences toward

risk medicines with low-carbon production and * Prioritize green production and eco-friendly packaging for medicines and align suppliers with latest consumption trends and

Market Medium

eco-friendly packaging may reduce preferences

demand for certain products

Inadequate carbon reduction management

may negatively impact the climate and * Strengthen internal data governance and collection capability and establish robust environmental management systems to

Reputation Medium

environment potentially leading to enhance operational management and efficiency

damage to the Company’s reputation

3 Adaptability encompasses considerations such as the time horizon of climate-related risks the alignment with corporate strategic plans and resource allocation and projections regarding the probability and intensity of extreme weather events.

2024 Environmental Social and Governance Report | 61Co-Creating Green and Sustainable Horizons ESG Report

Climate Change-Related Opportunities and Response Measures

Type of opportunities Potential Impact Measures Adaptability

* Meet market and customer demands for green products expand business areas and

Market opportunities As global emphasis on the low-carbon economy and green development increase market share Medium

grows market and customer demand for sustainable products is rising

* Increasing the share of renewable resources utilization in the future when feasible

Building a strong corporate image by demonstrating our commitment to

Brand opportunities environmental protection and sustainable development can help enhance * Proactively comply with regulatory requirements voluntarily disclose greenhouse gas Medium

brand value and strengthen trust and support from consumers and emissions data and implement effective carbon reduction measures

investors

Financial opportunities * Establish sustainability management goals and implement initiatives to qualify for low-Access to low-interest financing through sustainability-linked loans Low

interest loans from financial institutions

To mitigate and adapt to climate change impacts at the source we have also formulated a series of carbon reduction plans covering every stage of our operations from raw material procurement to product manufacturing

transportation sales and waste disposal to holistically reduce carbon emissions.Raw material procurement Production operations Transportation and logistics Store operations

* Prioritize suppliers that adopt low-carbon * Upgrade production facilities by adopting * Utilize advanced logistics management * Retrofit most stores and distribution centers

production practices and demonstrate strong energy-efficient equipment and processes and systems to optimize delivery routes reduce with energy-efficient upgrades including LED

environmental records. Encourage suppliers to optimize production line layouts to minimize transportation distances and frequencies lighting and high-efficiency air conditioning

provide assessment of carbon emissions and energy consumption. lowering carbon emissions during transit. systems to reduce energy consumption.incorporate carbon emissions as a critical

* Gradually increase the proportion of clean * Improve vehicle load capacity and minimize * Promote the use of biodegradable and

criterion in supplier evaluation and selection.energy in our energy mix such as installing empty-load rates. recyclable green packaging materials to

* Collaborate with industry peers to promote the solar panels on factory rooftops to generate minimize packaging waste and associated

* Gradually transition to new energy vehicles to

low-carbon transition of raw material suppliers solar power and supporting the adoption of carbon emissions.reduce exhaust emissions during

and collectively elevate the low-carbon renewable energy sources.transportation. * Enhance energy management by optimizing

standards of raw material procurement across

store operating hours to avoid unnecessary

the industry. * Implement energy-saving technologies such as

energy use. Deploy smart energy management

LED lighting in warehouses to reduce energy

systems to monitor and optimize energy

consumption. Optimize inventory

consumption in real time.management to minimize overstocking and

product waste thereby lowering carbon * Raise customer awareness of environmental

emissions in warehousing operations. protection through promotion and guidance

encouraging eco-friendly behaviors such as

bringing reusable bags reducing single-use

packaging and choosing low-carbon products

to jointly drive carbon emission reduction.

2024 Environmental Social and Governance Report | 62Co-Creating Green and Sustainable Horizons ESG Report

To further manage carbon emissions we have systematically reviewed our product catalogue and established a In 2024 our emissions and intensity of greenhouse gases (GHG) by category are shown in the table below.product carbon footprint assessment system that defines the scope of products and production stages requiring

evaluation. We also conduct regular product carbon footprint assessments and implement targeted reduction

strategies. Moving forward we will gradually expand the scope of product carbon footprint assessments to Greenhouse gases emissions4 单位 2024

enhance the depth and breadth of our evaluations.Total greenhouse gases emissions (Scope 1+ Scope 2) tCO2e 112407.36

Concurrently we actively implement energy-saving and emission-reduction initiatives organize internal

campaigns to promote low-carbon practices among employees and provide actionable guidance to foster

GHG emissions intensity tCO e/million RMB 4.67

sustainable behaviors in the workplace. Key energy-saving and emission-reduction initiatives in 2024 are as 2

follows:

GHG emissions (Scope 1) 5 tCO e 1082.092

GHG emissions (Scope 2) 6 tCO 111325.272e

Expand deployment of new energy logistics vehicles

In the future we will remain vigilant to physical risks such as frequent extreme weather events and transition

* risks driven by climate-related policy shifts. By establishing robust climate governance frameworks and risk Partner with companies with new energy vehicles for urban distribution

management systems as well as exploring opportunities for green energy adoption we aim to comprehensively

* Incentivize logistics carriers to adopt new energy vehicles for business operations enhance the Company’s resilience to climate change.

4 The operational control method is adopted for the consolidation of greenhouse gas emissions. The company calculates

Implement intelligent logistics dispatch the greenhouse gas emissions generated by its own operations and those of its subsidiaries over which it holds

operational control. The denominator of the greenhouse gas emission density is the operating revenue during the

reporting period.* Optimize logistics dispatching processes by integrating smart algorithm-driven digital platforms. 5 The assessment of carbon emissions during the transportation and logistics stages has been included in the calculation

These systems enable automated daily route planning and real-time dynamic adjustments to of Scope 1.The greenhouse gas emissions in Scope 1 mainly come from the direct greenhouse gas emissions generated

achieve optimal delivery efficiency and maximize on-time store arrivals by the consumption of fossil fuels in the Company's operation and production processes including natural gas gasoline

and diesel. Among them the emission factors refer to the Environmental Key Performance Indicator Reporting

* Guidelines of the HKEX and China's Accounting Methods and Reporting Guidelines for Greenhouse Gas Emissions of Leverage fully intelligent and automated systems that incorporate real-time traffic data store-

Public Building Operation Enterprises (Trial) and the calorific value coefficients refer to China's Accounting Methods and

specific requirements and delivery time to improve transportation fleet and routes thereby Reporting Guidelines for Greenhouse Gas Emissions of Public Building Operation Enterprises (Trial). The Global Warming

reducing greenhouse gas emissions during transit Potential values refer to the IPCC Global Warming Potential Values.

6 The assessment of carbon emissions from production operations distribution and store operations has been included

* Achieve a 2% reduction in delivery costs and improve on-time delivery rates by over 30% in the calculation of electricity consumption and Scope 2. Scope 2 greenhouse gas emissions mainly result from the

purchased electricity for the Company's production and operation as well as that used in the distribution centers and

pharmacies. Among them the grid emission factor refers to the value of 0.5366 tons of carbon dioxide equivalent per

megawatt - hour in the Announcement on Releasing the Electricity Carbon Dioxide Emission Factors in 2022 of China.

2024 Environmental Social and Governance Report | 63Co-Creating Green and Sustainable Horizons ESG Report

Material Use and Waste Management

Strictly abiding by the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution and the Law of the People's Republic

of China on Prevention and Control of Water Pollution we are committed to minimizing the adverse environmental impacts of waste emissions and

exhaust emissions through responsible management practices. During the Reporting Period we did not incur any material administrative penalties

related to exhaust emissions nor were we subject to criminal liabilities in this regard.In our operational activities the primary waste generated includes expired medications domestic wastewater discarded cardboard boxes from logistics

and transportation.To strengthen waste management awareness and advance progress Our key initiatives of waste disposal are outlined below:

toward sustainability goals we have established the following waste

reduction targets:

Expired medication recovery7 :

* Conduct internal audit for medication recovery.Targets for hazardous waste:

* Designate dedicated return areas at stores to collect expired

medications for centralized storage in appropriate

warehouses

* Attain a 100% recovery rate for expired medications7 * Engage third-party licensed contractors to retrieve

medications from designated warehouses for centralized

disposal

Targets for non-hazardous waste Cardboard box recycling:

* All the discarded cardboard boxes are handed over to a third-

186 party recycling agency for disposal and the proper disposal * Limit monthly food waste to containers rate reaches 100%.

* Promote the use of recyclable or biodegradable packaging

materials Food waste

* Reduce cardboard box waste

* The kitchen waste is disposed of by an external third-party

100% professional entity.* Achieve reuse rate for plastic turnover boxes

* Office waste is thrown into the domestic waste bins and is

and pallets

uniformly collected and disposed of by the sanitation

department.

7 The drug recycling refers to the process that Yifeng Pharmacy collects the drugs and entrusts them to a third-party company with professional qualifications or drug

companies for unified and specialized disposal.

2024 Environmental Social and Governance Report | 64Co-Creating Green and Sustainable Horizons ESG Report

The materials usage in 2024 is shown in the table below: Water Efficiency and Wastewater

Materials usage8 Unit 2024 Management

Materials usage Tonne 2720.50

Materials usage intensity Tonne/million RMB 0.11 We implement science-based water management practices and actively enforce corporate water conservation

regulations to systematically improve water use efficiency. All of our sites are supplied with water from the

Package box Tonne 438.21

municipal network so there are no difficulties in obtaining water supply. In addition while setting the targets for

Plastic containers Tonne 42.27 saving water fees in offices and stores we also conduct meticulous monitoring and in-depth analysis of water

usage on a regular basis so as to optimize the water usage structure and processes and further reduce the water

Plastic turnover boxes Tonne 485.88 usage costs.Plastic pallet Tonne 1754.14 Key initiatives for 2024 water resource management include:

The exhaust emissions and intensity in 2024 are shown in the table below:

Exhaust emissions8 Unit 2024 Install water-saving faucets to reduce water Put up water-saving signs in each water using

Total exhaust emissions Kilogram 1184.78 flow and effectively minimize water waste area to raise employee awareness

Exhaust emission intensity Kilogram/million RMB 0.05

Nitrogen oxides (NOx) Kilogram 1101.37

Sulfur oxides (SOx) Kilogram 4.01

Particular matters (PM) Kilogram 79.40 Optimize water usage Implement real-time water Reuse vegetable-washing

processes and schedule meter monitoring to promptly water from kitchens for floor

cleaning activities reasonably detect any anomalies in water cleaning to enhance recycling

The solid waste discharge and intensity in 2024 are shown in the table below: avoiding large-scale cleaning usage efficiency

during peak demand periods

Solid waste discharge8、9 Unit 2024

Hazardous waste Tonne 35637.00 The total water consumption and intensity in 2024 are shown in the table below:

Hazardous waste intensity Tonne/million RMB 1.48 Water Consumption8 Unit 2024

Non-hazardous waste Tonne 6755.42 Total water consumption Tonne 4086346.68

Non-hazardous waste intensity Tonne/million RMB 0.28 Water consumption intensity Tonne/million RMB 169.82

8 The denominators for the density of materials used the density of exhaust gas emissions the density of hazardous

waste the density of non-hazardous waste and the density of water resource consumption are all the operating revenue

during the Reporting Period.

9 Hazardous waste mainly includes expired drugs and pharmaceuticals. Non-hazardous waste mainly includes general

office waste discarded traditional Chinese medicine dregs (without toxic substances) and discarded cardboard boxes.

2024 Environmental Social and Governance Report | 65ESG Report

Appendix: Report Index Table

Guidelines for Guidelines for

Sustainability Report GRI Standards Response Sustainability Report GRI Standards Response

Chapter I General Provisions Article 27 302-2 Energy consumption outside

Article 1、Article 2、 GRI 1: Foundation 2021 This Report has been prepared in strict Article 28

of the organization

302-3 Energy intensity

Article 3、Article 4、 GRI 2: General Disclosures 2021 accordance with the Guidelines for 302-4 Reduction of energy

Article 5、Article 6、 Sustainability Report to comprehensively

Article 7、Article 8、 GRI 3: Material Topics 2021

consumption

demonstrate Yifeng Pharmacy’s

302-5 Reductions in energy

Article 9、Article 10 impacts across economic social and

requirements of products and

environmental dimensions.services

Methodological transparency is ensured

GRI 305: Emissions 2016

through explicit annotations of data

305-1 Direct (Scope 1) GHG

sources calculation methods and

emissions

references facilitating stakeholder

305-2 Energy indirect (Scope 2) GHG

understanding and cross-year

emissions

comparability. In addition we strictly

305-3 Other indirect (Scope 3) GHG

follow the materiality principle in the

emissions

preparation of this Report. For details

305-4 GHG emissions intensityplease refer to the “Management of

305-5 Reduction of GHG emissionsMaterial Issues” section.

305-6 Emissions of ozone-depleting

Chapter II Disclosure Framework for Sustainability Information substances (ODS)

305-7 Nitrogen oxides (NOx) sulfur

Article 11、Article 12、 GRI 2: General Disclosures 2021 Based on our industry and business oxides (SOx) and other significant

Article 13、Article 14、 air emissionsGRI 3: Material Topics 2021 nature we identify sustainability-related

Article 15、Article 16、 impacts risks and opportunities through

Article 17、Article 18、 stakeholder surveys and prioritize them.Article 19 We disclose the issues of dual materiality Section 2 Pollution Control and Ecosystem Protection

in accordance with the four aspects

specified in the Guidelines for Article 29 2-27 Compliance with laws and Material Use and Waste Management

Sustainability Report. For details please Article 30 regulations Water Efficiency and Wastewaterrefer to the “Management of Material GRI 303: Water and Effluents 2018Article 31 ManagementIssues” section. We have established an GRI 304: Biodiversity 2016 Yifeng Pharmacy consistently monitors

ESG governance framework. For details Article 32 304-1 Operational sites owned environmental protection practices and

please refer to the “ESG Governance” leased managed in or adjacent to Articles 33

section. protected areas and areas of high

recorded no significant environmental

biodiversity value outside protected violations during the Reporting Period.areas Concurrently we prioritize biodiversity Chapter III Environmental Disclosure

304-2 Significant impacts of conservation and ecosystem protection.

Section 1 Climate Response activities products and services on None of our operations whether owned

biodiversity leased or managed are located in or

Article 20 GRI 201: Economic Performance Energy and Climate Actions 304-3 Habitats protected or restored near protected areas or biodiversity-rich

Article 21 2016 304-4 IUCN Red List species and regions outside of protected areas. All

201-2 Financial implications and national conservation list species our stores and logistics centers are Article 22

other risks and opportunities due to with habitats in areas affected by strategically located in commercial areas

Article 23 climate change operations and industrial parks. This deliberate

sitting approach ensures no material

Article 24 GRI 305: Emissions 2016GRI 302: Energy 2016

GRI 306: Waste 2020 adverse impacts on local biodiversity or

Article 25 302-1 Energy consumption within ecosystems

Article 26 the organization

2024 Environmental Social and Governance Report | 66ESG Report

Guidelines for Guidelines for

Sustainability Report GRI Standards Response Sustainability Report

GRI Standards Response

306-3 Waste generated Section 2 Innovation-Driven Development and Ethics of Science and Technology

306-4 Waste diverted from disposal Article 41 Not involved Deepening Digital Intelligence

306-5 Waste directed to disposal Article 42 Empowerment

Article 43 Given our industry and business

Section 3 Resource Utilization and Circular Economy nature the issue of technology

ethics is not applicable.Article 34 GRI 301: Materials 2016 Energy and Climate Actions

Article 35 301-1 Materials used by weight or volume Material Use and Waste Section 3 Suppliers and Clients

Article 36 301-2 Recycled input materials used Management Article 44 GRI 204: Procurement Practices 2016 Strengthening Channel

Article 37 301-3 Reclaimed products and their GRI 308: Supplier Environmental Collaboration

packaging materials Assessment 2016

GRI 302: Energy 2016 308-1 New suppliers that were screened

302-1 Energy consumption within the using environmental criteria

organization 308-2 Negative environmental impacts in

302-2 Energy consumption outside of the the supply chain and actions taken

organization GRI 414: Supplier Social Assessment (2016)

302-3 Energy intensity 414-1 New suppliers that were screened

302-4 Reduction of energy consumption using social criteria

GRI 303： Water and Effluents 2018 414-2 Negative social impacts in the supply

chain and actions taken

303-1 Interactions with water as a shared

resource

Article 45 Not involved Yifeng Pharmacy is fully aware of

303-2 Management of water discharge- the importance of treating small

related impacts and medium-sized enterprises

303-3 Water withdrawal (SMEs) fairly. There is no

303-4 Water discharge situation where the balance of

accounts payable (including

303-5 Water consumption notes payable) at the end of the

GRI 306: Waste 2020 Reporting Period exceeds RMB 30

306-1 Waste generation and significant billion or represents more than

waste-related impacts 50% of the total assets.

306-2 Management of significant waste-

Article 46 GRI 416: Customer Health and Safety 2016 Quality and Efficacy Assurance

related impacts

416-1 Assessment of the health and safety Providing Quality Services

impacts of product and service categories The safety and quality of

416-2 Incidents of non-compliance pharmaceutical products are

concerning the health and safety impacts of Yifeng Pharmacy’s top priority.products and services During the Reporting Period

Chapter IV Social Disclosure

GRI 417: Marketing and Labeling 2016 there were no significant

violations involving the health

Section 1 Rural Revitalization and Social Contributions 417-1 Requirements for product and service and safety impact of products

information and labeling and services as well as

Article 38 GRI 203: Indirect Economic Impacts 2016 Providing Quality Services

417-2 Incidents of non-compliance information and labeling.

Article 39 203-1 Infrastructure investments and Driving Regional Development concerning product and service information

Article 40 services supported and labeling

2024 Environmental Social and Governance Report | 67ESG Report

Guidelines for

Sustainability Report GRI Standards Response

Guidelines for

Sustainability Report GRI Standards Response

Article 47 GRI 418: Customer Privacy 2016 Information Security and Chapter V Corporate Governance Information Related to Sustainable Development Disclosure

418-1 Substantiated complaints concerning Customer Privacy Section 1 Sustainability-Related Governance Mechanisms

breaches of customer privacy and losses of

customer data Article 50 GRI 2: General Disclosures 2021 Stakeholder Communication

Section 4 Employees 2-29 Approach to stakeholder engagement Management of Material Issues

GRI 3: Material Topics 2021 Regarding due diligence Yifeng

Article 48 GRI 401: Employment 2016 Compliant Employment

3-1 Process to determine material topics Pharmacy has established

Article 49 401-1 New employee hires and employee Employees’ Rights and different functions to conduct

turnover Interests and Diversity investigations on environmental

compliance labor rights anti-

401-2 Benefits provided to full-time Talent Development

corruption and other aspects

employees that are not provided to Employee Communication and concerning the Company our

temporary or part-time employees Care subsidiaries and business

401-3 Parental leave Occupational Health and Safety partners. Therefore the content

GRI 403: Occupational Health and Safety involved in this issue will be

2018 covered in other issues such as

supply chain management and

403-3 Occupational health services

security.

403-5 Worker training on occupational

health and safety Section 2 Commercial Behaviors

403-6 Promotion of worker health Article 51 GRI 205: Anti-corruption 2016 Compliant Operation

403-9 Work-related injuries Article 52 205-1 Operations assessed for risks related

403-10 Work-related ill health Article 53 to corruption

GRI 404: Training and Education 2016 205-2 Communication and training about

anti-corruption policies and procedures

404-1 Average hours of training per year per

employee 205-3 Confirmed incidents of corruption

and actions taken

404-2 Programs for upgrading employee

skills and transition assistance programs GRI 206: Anti-competitive Behavior 2016

404-3 Percentage of employees receiving 206-1 Legal actions for anti-competitive

regular performance and career behavior anti-trust and monopoly

development reviews practices

GRI 405: Diversity and Equal Opportunity Chapter VI Supplementary Provisions and Interpretation

2016

Article 54 GRI 1: Foundation 2021 The Report has been prepared in

405-1 Diversity of governance bodies and

employees Article 55

strict accordance with the

Guidelines for Sustainability

405-2 Ratio of basic salary and Article 56 Report including the index of

remuneration of women to men Article 57 indicators.GRI 406: Non-discrimination 2016 Article 58 In 2024 we did not have any

406-1 Incidents of discrimination and litigation or administrative

corrective actions taken penalties resulting from unfair

competition practices.

2024 Environmental Social and Governance Report | 68ESG Report

Yifeng Pharmacy Chain Co. Ltd.Address: Yifeng Pharmaceutical Park No. 68 Jinzhou

Avenue Lugu Hi-Tech Zone Changsha Hunan China

Investor Email: ir@yfdyf.com

Company Website: https://www.yfdyf.cn

2024 Environmental Social and Governance Report |