2025 Environmental Social and Governance Report 0Making People Physically and

Mentally Healthier

2025 Environmental Social and Governance ReportSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Table of

Contents

Executing Duties with Full

Commitment to Pharmaceutical Care for All Enhancing Benefits and

Strengthen Governance Safeguarding National Efficiency for Improved

About the Report 2 Foundations 15 Health 27 Medication Accessibility 40

About Us 3 Improving the Governance System 16 Health Sustainability Framework 28 Smooth Medical Network 41

Message from the Chairman 6 Strengthen the Compliance 19 Strict Quality Control for Medicines 30 Deepening Digital Intelligence 45Defense Line EmpowermentRegulating Channels for Medicines 33

Sustainable Development 7 Ensuring information security 23 Improving Service Quality 38 Enhancing People's Well-Being 50

Management

Achieving Win-Win Results

Appendix 72 Realizing the Value of Co-Creating Green and Talents 53 Sustainable Horizons 63

Standardized Employment 54 Deepening Energy Management 64

Management and Addressing Climate Change

Protecting Employees' Rights and 55 Strengthening Resource Recycling 69

Interests and Pollution Prevention

Improving the Training System 56 Optimize Water Resource 71

Deepen Caring Communication 60 Utilization Efficiency

Protecting Occupational Health 62

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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

About the Report

Yifeng Pharmacy's 2025 Environmental Social and Governance (ESG) Report (hereinafter referred to as the "Report") is the third ESG report independently published by Yifeng Pharmacy Chain Co. Ltd. and all the branches and

subsidiaries (hereinafter referred "Yifeng Pharmacy" "the Company" or "we"). The Report aims to comprehensively present our ESG goals management strategies practices and achievements in 2025 to our stakeholders.Report Scope Report Standards Report Access

The time scope covered by the Report is consistent with the 2025 The Report is prepared in accordance with the Rules Governing the The Report is prepared in Simplified Chinese and English and

annual report that is from January 1 2025 to December 31 2025 Listing of Stocks on Shanghai Stock Exchange and Guidelines No. 14 released in electronic format. In case of any conflict between the two

(hereinafter referred to as "2025" or "the Reporting Period"). of Shanghai Stock Exchange for Self-Regulation of Listed language versions the Simplified Chinese version shall prevail. The

Companies—Sustainability Report (Trial) (hereinafter referred to as electronic version can be viewed and downloaded on the Company's

Unless otherwise specified the disclosure scope of the Report is the the "Guidelines for Sustainability Report") and with reference to official website (https://www.yfdyf.cn) and the Shanghai Stock

same as that of the Annual Report covering all subsidiaries and Guidelines No. 4 of Shanghai Stock Exchange for Self-Regulation of Exchange website (http://www.sse.com.cn/).affiliated companies within the listed entity of Yifeng Pharmacy. The Listed Companies—Compilation of Sustainability Report (Revised

environmental performance data covers the self-owned drugstores January 2026) and the Global Reporting Initiative Sustainability

operated by Yifeng Pharmacy throughout 2025 its subsidiary Heng Reporting Standards (hereinafter referred to as the "GRI Standards")

Xiu Tang Pharmaceutical Co. Ltd. (hereinafter referred to as "Heng issued by the Global Sustainability Standards Board.Xiu Tang") logistics centers under its operational control staff

canteens and offices. To enhance the integrity of the Report content

some content or descriptions may extend beyond the above-

mentioned disclosure or time scope. Report Information Feedback

All the information used in the Report comes from the Company's If you have any comments or suggestions on the Report you can send

official documents and reports internal statistical data and public them by email to ir@yfdyf.com. Your comments and suggestions

information. The Company's Board of Directors promises that there serve as an important basis for us to continuously promote our

are no false records misleading statements or major omissions and sustainable development management and practices.is responsible for the authenticity accuracy and completeness of the

report. The Report was approved by the Company's Board of Directors

on April 22 2026.

2025 Environmental Social and Governance Report 3Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

About Us

Company Profile Corporate Culture

Yifeng Pharmacy (Stock Code: 603939) was founded in June 2001. It has been deeply involved in the pharmaceutical retail industry for more than

two decades and is the first large-scale pharmaceutical retail enterprise listed on the Shanghai Stock Exchange in China. As a leading enterprise in

the Chinese healthcare and wellness industry Yifeng Pharmacy has successively expanded into multiple health-related sectors such as

pharmaceutical retail pharmaceutical wholesale the production and sale of prepared Chinese herbal slices chronic disease management Internet

hospitals medical project investment and medical technology development. It continuously optimizes the supply chain system and category Corporate Mission

structure builds a new pharmaceutical retail ecosystem actively promotes digital transformation and builds an efficient logistics network to

provide high-quality services for customers and safeguard their health and safety. Making people physically and mentally healthier

Our business scope

Hunan Jiangxi Hebei

Hubei Zhejinag Beijing Corporate Vision

Becoming the trusted and

preferred pharmacy

Shanghai Guangdong Tianjin

Jiangsu

We operate a total of Serve a membership of Employees Offer a range of over Values

14831 stores 116 million 38953 70000 drug SKUs Prioritizing customers being results-oriented innovating

(including 4313 and improving with lean

franchise stores) principles acting with diligence and pragmatism

taking responsibility and

collaborating fostering growth

and care

Since our establishment we have always adhered to the core concept of "putting customer value first" and insisted on customer-centric innovation

and transformation of the business model committed to providing customers with high-quality products and professional health services. In the

future we are committed to continuously improving our core competitiveness practicing the concept of corporate sustainable development

building a benchmark brand of chain pharmacies trusted by customers and respected by society thereby contributing to social development.

2025 Environmental Social and Governance Report 4Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Development Milestones

2001201820192025

* Opened the Changde Binhu Road Store * Acquired Xinxing Pharmacy the * Annual sales exceeded RMB 10 billion. * Achieved an AAA rating in the MSCI ESG

pioneering the "discount medicine leading chain in Hebei Province for * Established its subsidiary Hengxiutang assessment

supermarket" model to the five provinces RMB 1.384 billion – a record for M&A in Pharmaceutical Co. Ltd.. * Ranked among the Hurun China Top 500

of Central and Southern China. China's retail pharmacy sector at the Most Valuable Brands in 2025 (9th in the

time. Healthcare sub-list).* The subsidiary Hengxiutang

Pharmaceutical Co. Ltd. was

2002 recognized as a "2025 Top Brand 2015 2020 Enterprise in Chinese Herbal Slices" by

* Hunan Yifeng Pharmacy Chain Co. Ltd. was * Celebrated Yifeng's 20th anniversary the China Association of Traditional

established laying the groundwork for * Officially listed on the Shanghai Stock Chinese Medicine.cross-regional and inter-provincial Exchange becoming the first retail * Ranked among the Top 100 Chinese Listed Companies for three consecutive years. * Topped the "2025 China Top 100 operations. chain pharmacy on China's main Comprehensive Competitiveness

board. * Obtained the Internet Hospital license in Ranking for Drug Retailers" and was

Hainan and established a remote diagnosis and named the "2025 Champion in

treatment center. Profitability for China Drug Retail

Competitiveness".

2003 * Honored as a "Top 20 Digital Leadership

* Reformed the supply chain and pioneered 2014 Enterprise in Medicine Retail (West Lake

the "Triple-Win" business model * Awarded "Champion in Operational Award)" and received the "West Lake

(benefiting customers pharmaceutical Capability among China's Award for Excellence in Specialized

factories and Yifeng) setting an industry Pharmaceutical Retailers". 2022 Pharmacy Construction (2024)".precedent. * Yifeng surpassed 10000 stores nationwide. * Awarded as an "Outstanding

* Listed among the "Top 100 Most Valuable Pharmaceutical Retail Fulfillment Chain

Companies on China‘s Main Board." Enterprise in China (2024-2025)".

2013

2011

* Yifeng successfully launched its e-

* The restructuring into Yifeng Pharmacy commerce platform.Chain Co. Ltd. was completed. * Initiated a project to reconstruct its

* Invested in a large-scale information store management system. 2023 2024

system and logistics management system * Launched the "Strategic Innovation and * Achieved an MSCI ESG Rating of A.embarking on a new chapter of Organizational Transformation" initiative.technology-driven growth. * Included in the GYBrand "2024 Top 500

* Debuted on the Hurun China 300 Most Most Valuable Chinese Brands" list.* Acquired 100% equity of Shanghai Kaixin

2012 Valuable Brands list.Pharmacy initiating its expansion through * Successfully issued convertible bonds

mergers and acquisitions. * Became the drug retail enterprise with the worth RMB 1.787 billion.* Yifeng Pharmaceutical Logistics Park highest brand value nationwide.commenced operations.

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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Honors and Recognitions

Association Qualification Honors of the Year

Listed among the 2025 China Top 500 Most Ranked 248th on the list with a brand

China Medical Equipment Association Valuable Brands value of 3 billion yuan

GYBrand Global Brand Research Institute Hurun China 2024

Executive President Member

West Lake Award ·Top 20 Digital Leadership Topped the 2025 China Top 100 Comprehensive

Retail Branch of the China Association of Enterprises in Medicine Retail Competitiveness Ranking for Pharmaceutical Retail

Pharmaceutical Commerce2 West Lake Award ·Excellence Award for Specialized 2025 Pharmaceutical Retail Profitability Champion

Pharmacy Construction in China 2024

Vice President Member The 18th China Health Ecology

2025 Wuzhen Health Conference Organization (2025 CPEO)

Hunan Pharmaceutical Industry

Association

Executive Vice President Member

Hunan Pharmaceutical Distribution Annual List of Most Influential Enterprises-

Industry Association Award for Most Investment Value

Executive Vice President Member The 8th CLS Investment Conference 2025

2025 Environmental Social and Governance Report 6Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Currently the pharmaceutical retail industry is in a critical period of accelerated integration and in-depth transformation shouldering the dual missions of

Message from safeguarding people's health and responding to national strategies. With the continuous deepening of population aging and the continuous upgrading of health consumption demand the public has put forward higher expectations for drug safety service professionalism and corporate responsibility. Looking back on this

the Chairman year all Yifeng people have always adhered to the core concept of "Pharmaceutical Care for All". We have strengthened the foundation of governance in steady operation and responded to industry changes through innovation while adhering to principles. We are committed to promoting the coordinated growth of business

value and social value through systematic ESG practices clearly identifying the value path of pharmaceutical retail enterprises in the context of the new era and

strengthening our sense of responsibility in safeguarding public health and serving the people's livelihood."Based on regulations achieve stable and long-term "Innovation as the wings lead the future with intelligence" "Aim for green development integrate into the future"

development"

Innovation is the core engine driving pharmaceutical retail enterprises We always pay attention to the balance of the natural ecosystem and

Compliance governance is not only the cornerstone of a company's to cross cycles and reshape value. We keenly observe industry trends resource utilization efficiency actively face the challenges of resource

stable operation but also our core asset for winning long-term trust in and changes in consumer behavior actively embrace the digital wave constraints and climate change and firmly promote the Company's

a complex market environment. With a clear governance structure and reshape business processes and service experiences through in-depth transformation to a green and low-carbon development

and a standardized decision-making mechanism we regulate the technological innovation and model upgrading. We continuously model. Focusing on the core scenarios of store operation and

decision-making of major matters and daily business operations promote the integrated development of all channels break the warehousing and logistics we integrate energy conservation and

build a governance closed-loop integrating compliance with laws boundaries between online and offline services and build convenient efficiency management into the entire business operation cycle.business integrity and risk prevention and strengthen the bottom and efficient health consumption scenarios. At the same time we Relying on systematic lean management we achieve prudent control

line of standardized operation. In the important area of medical deepen the in-depth application of digital and intelligent technologies of environmental impact while improving operational efficiency. We

insurance management we strengthen internal supervision and in fields such as supply chain management precision marketing and adhere to long-termism to promote the construction of green

implementation requirements promote the accurate implementation chronic disease management improve operational efficiency and infrastructure continuously optimize the energy structure cooperate

of medical insurance policies at the service front-line and maintain decision-making accuracy inject strong impetus into the Company's with industrial chain partners to deepen green packaging and circular

active communication with relevant departments to help ensure the high-quality development and strive to become a pioneer and economy practices gradually internalize the concept of sustainable

safe and reasonable use of medical insurance funds. At the same explorer in the industry's digital transformation. development into the Company's core competitiveness and

time in the process of digital transformation we establish a data unswervingly take the green development path towards the future.security and privacy protection system for the entire life cycle with a "Unite with heart pursue growth together"

prudent and responsible attitude effectively safeguard consumers' We adhere to the original aspiration of serving the people's livelihood

rights and interests and strengthen the defense line of digital trust. Employees are the most valuable human capital of an enterprise and through pharmaceutical retail. We are firmly committed to deeply the core driving force for promoting the upgrading of service quality integrating the concept of sustainable development into corporate

"Based on medicine safeguard health" and the release of organizational vitality. We abide by the governance and business practices. We are determined to build a

employment principles of "compliance fairness and people-

Safeguarding national health is our unwavering strategic mission. We benchmark enterprise that is responsible for public health oriented" regarding employees as co-creators of our business

adhere to the foundation of drug quality and medication safety contributes to social well-being has long-term value for the industry development. Through improving the career development system

taking "family-trusted medicines" as an insurmountable quality and national development and coexists harmoniously with the and diversified promotion channels we empower employees

bottom line to ensure clear and safe drug sources. We are committed natural environment. Looking ahead we will uphold the belief of long-throughout their careers to help them improve their professional

to building a stable and reliable supply system continuously termism join hands with employees partners and all sectors of abilities and comprehensive qualities laying a solid talent foundation

promoting the "Controllable Premium Strategy" extending quality society. We will safeguard the national health with professional for the Company's high-quality development. Meanwhile we are

requirements to the upstream of the industrial chain and working services a sense of responsibility and humanistic care and committed to building a workplace ecosystem that combines

with partners to build a resilient and responsible supply chain. At the continuously create trustworthy and reliable health value for society.professional value and humanistic care continuously optimizing the

same time we continuously deepen our professional service salary welfare and rights protection system paying close attention to

capabilities respond to customers' trust with professional employees' occupational health and well-being enhancing

pharmaceutical services and full-life-cycle health care and actively organizational cohesion building a value community of co-creation Chairman of Yifeng Pharmacy Co. Ltd.promote the sinking of medical services to the grass-roots level so and sharing and achieving the win-win situation of employees'

that high-quality medical resources can benefit a wider population personal growth and the Company's long-term development. Gao Yi

and contribute to the construction of a healthy China.

2025 Environmental Social and Governance Report 7Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Sustainable Development Management

Yifeng Pharmacy adheres to sustainable development as the core orientation and continuously strengthens the strategic leading role of the Board of Directors in ESG governance. We continuously improve the corporate

governance system actively respond to the demands and expectations of stakeholders through a regularized and multi-channel communication mechanism and integrate them into the whole process of strategic planning

and business decision-making. We promote the full implementation of the concept of sustainable development in the business chain and enhance the Company's operational resilience and long-term value creation ability.Sustainability Governance Structure

Yifeng Pharmacy has established a clear organizational structure and a standardized institutional system and clearly defined the core leadership position of the Board of Directors in sustainable development governance. The

composition scope of responsibilities and working methods of the committee are clearly stipulated in the "Rules of Procedure for the Strategy and Sustainability Committee of the Board of Directors" providing institutional

guarantee for the standardized implementation of relevant work and ensuring the steady progress and effective implementation of sustainable development goals in business operations.ESG Governance Structure Diagram

Reporting and

Level Structure Composition Responsibilities Supervision Board diversity is an important foundation for us to maintain our

* As the highest responsible body for sustainable development At least one competitive edge and enhance our talent attraction. The members of

matters it assumes overall responsibility for the sustainable formal meeting the Strategy and Sustainability Committee have rich and

development strategy and reports. per year. complementary industry backgrounds and have in-depth

* It is responsible for comprehensively reviewing the Company's

Board of accumulations in fields such as the pharmaceutical and health Board Members impacts risks and opportunities in the field of sustainable

Directors development. industry investment management organizational governance

* It is responsible for comprehensively reviewing the Company's human capital strategy and multinational enterprise operations.impacts risks and opportunities in the field of sustainable They bring diverse professional experiences and knowledge reserves

development. in areas such as industry insights financial compliance risk

management organizational development and sustainable

Decision

making It is composed of Under the authorization of the Board of Directors: At least one

development to the Board of Directors which helps to identify and

three directors formal meeting assess major ESG risks faced by the Company from multiple

Strategy and including at least one * Review the sustainable development strategy and work plan. per year. perspectives. To further improve the professional capabilities of

Sustainability independent * Review matters such as the sustainable development

Committee director. management method management objectives and sustainable committee members and all employees in the field of sustainable

development-related impacts risks and opportunities. development we regularly organize systematic special training invite

external experts to provide consulting support and carry out various

forms of learning and exchange activities. This helps relevant

It is composed of the * It is responsible for implementing the sustainable development At least one personnel continuously deepen their understanding of the concept of

Company's Securities strategy and work plan. formal meeting sustainable development the latest regulatory requirements and

ESG Investment * Formulate and evaluate the progress impacts risks and per quarter.Management Department and the industry trends and continuously enhance their ability to identify and

heads of business opportunities of sustainable development goals.Group respond to ESG risks and opportunities providing comprehensive and and functional * Report to the Strategy and Sustainability Committee in a timely

Management manner. solid professional support for the effective implementation of the departments. Company's sustainable development strategy.To drive the delivery of our sustainable development strategic

Business and Designated Carry out specific ESG work around ESG issues. Report to the ESG

representatives of Management objectives we have introduced a compensation clawback policy and Functional

Departments each business and Group regularly. embedded sustainability-focused key performance indicators into the functional

and compensation assessment framework for the Board members and department branches

Execution Subsidiaries and subsidiaries senior executives ensuring that remuneration incentives are fully

aligned with the Company’s sustainable development strategy.

2025 Environmental Social and Governance Report 8Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Stakeholder Communication

Yifeng Pharmacy attaches great importance to establishing long-term trust relationships with stakeholders. Through regular communication channels we deeply understand the demands and expectations of all parties and

use them as important basis for formulating sustainable development strategies and optimizing operational activities to continuously improve the level of corporate governance and service quality.Key Stakeholder

Groups

Customers Employees Shareholders and Government and Investors Regulators Suppliers Communities

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

quality employees' rights Operation procurement charity

and interests * Information

* Medical accessibility disclosure * Tax compliance * Integrity and honesty * Community

* Employees development and

Expectations * Protection of development and * Corporate * Win-win cooperation well-being

and consumers' rights training Governance

Demands and interests * Occupational health * ESG management

* Customers privacy and safety

protection

* Employees care and

* Responsible benefits

marketing

* Communication with * Employee * General meeting of * Regulatory * Supplier conference * Providing job

communication and shareholders assessment opportunities

* stores feedback platform * Supplier visit

Communic * Announcement and * Voluntary tax * Volunteer service* Consumers service

ation * Employee circular letter payment

* Industry

hotline satisfaction survey communication * Public welfare activity

Channels * Research roadshow * Semina

* Customer * Employee meeting

satisfaction survey * Investor relations * Written responses to

* Employee activity website public inquiries

2025 Environmental Social and Governance Report 9Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Double Materiality Assessment

As a key link in sustainable development management and information disclosure Yifeng Pharmacy carried out the double materiality assessment of ESG issues in 2025. Based on the guidance of the "Guidelines for

Sustainability Report" and combined with the methodological interpretation and guidance of experts we formulated an assessment process scoring method and ranking model to evaluate our impact on the environment and

society as well as the sustainability-related financial risks and opportunities we face.Based on the assessment results of previous years and considering the complexity of quantifying sustainable development impacts risks and opportunities this year's double materiality assessment follows the principle of

"mainly qualitative and supplemented by quantitative". In the future we will continue to pay attention to the updates of the Shanghai Stock Exchange guidelines improve our double materiality assessment process and

methods and continue to prudently apply quantitative assessment methods to reasonably obtain the concerns and opinions of stakeholders so as to provide a scientific basis for our sustainable development planning and

even business decisions.Scope Stakeholder Participation Score Threshold

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

assess the impact on the environment application of the double materiality based on the scale and scope of impacts i.e. we "material" meaning that impacts

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

risks and opportunities for our disclosure matters the numerous ESG or the environment the breadth of impact coverage and the associated ESG issues that are

business. In our assessment of impact issues involved and the fact that time and economic costs of remediating the damages etc. ultimately assessed as material.materiality we take into account some parts of the assessment require When evaluating the "likelihood of occurrence" of impacts we

positive and negative impacts actual accessors to have a certain level of score according to the probability of potential impacts

and potential impacts related to ESG industry understanding we invited a occurring within five years. The weight of impact "severity" and

issues. In our assessment of financial wide range of internal and external "likelihood of occurrence" is 1:1.materiality we assess positive and stakeholders to participate in the

negative impacts actual and impact materiality assessment while In assessing the scale of financial impact we use a percentage

potential risks and opportunities for restricting the stakeholders for the of FY2025 pre-tax profit as a threshold. In assessing the

our business. financial materiality assessment to a "likelihood of occurrence" of a financial risk or opportunity we

limited number of internal senior score it based on its probability of occurrence within five years.management and external The weight of financial impact "scale" and "likelihood of

sustainability experts. occurrence" is 1:1.

2025 Environmental Social and Governance Report 10Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

We conduct the ESG issue materiality assessment through stakeholder surveys industry benchmarking and expert consultations. After in-depth discussions between the senior management and external experts we

accurately identify the key impacts risks and opportunities.Materiality Assessment Process of ESG Issues

Based on the 21 issues set in the Guidelines combined with the GRI Standards ESG rating concerns national

01 policies and the geographical location industry background business activities business relationships and

Issue strategic development direction of Yifeng Pharmacy we identify issues in the three categories of environment

Identification society and governance and preliminarily analyze their related impacts risks and opportunities.

02 We send questionnaires developed by third party agencies to government and regulators shareholders and

Impact investors customers employees and suppliers to understand the impacts of different issues and set

Materiality thresholds around the severity and likelihood of impact to identify ESG issues of impact materiality.Assessment

03 Through one-on-one interviews and questionnaires developed by third-party agencies we collect opinions

Financial from senior management on the scale and likelihood of the financial impact of the issue on the business and

Materiality invite external experts to assess the financial materiality of the issue in the context of current policy analysis

Assessment and industry insights.The materiality assessment results of the issues are reviewed by the Strategy and Sustainability Committee and

04 approved by the Board of Directors and the applicability and rationality of the assessment conclusions are

Confirmation regularly reviewed every year. We have sorted out the Company's sustainable development strategy and goal

and setting based on the assessment results and re-examined the management mechanism for significant

Application sustainable development-related impacts risks and opportunities to ensure the effectiveness of the internal

mechanism. We also disclose information in a targeted manner according to the priority order of the

assessment results to ensure a targeted response to the concerns of all parties.

2025 Environmental Social and Governance Report 11Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

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The results of the double materiality assessment show that customer

health and safety medical accessibility and inclusion data security Important

and customer privacy protection supply chain security protection of

consumers'rights and interests & health education employment

practices and training and development are our most important

sustainable development matters. Among them customer health and

safety have both impact and financial materiality. Currently risks

such as drug quality and medication accuracy may trigger a customer

trust crisis and regulatory penalties directly impacting the Company's

finance operations and cash flow and are the core focus of business

operations. * Customer Health and Safety

As a chain retail pharmacy we take customer health and safety as the

strategic core meet customer needs through reasonable pricing and

diverse choices take data protection measures to protect customer

privacy optimize the supply chain to ensure the quality and stability * Anti-commercial Bribery and * Corporate Governance * Medical Accessibility and InclusionAnti-corruption

of drug supply rely on process specifications and quality control to * Stakeholder Communication * Data Security and Customer

ensure the consistency of store services fulfill compliance * Innovation-driven development * Procurement Practices Privacy Protection

obligations strengthen internal supervision and risk control * Anti-unfair competition * Franchisee Management * Supply Chain Security

capabilities enhance public health awareness through pharmacist * Compliance Management

consultations and health lectures build a fair workplace and

enhance employees' professionalism and service capabilities through

training and career planning. These practices are anchored to our

value of serving the public with medicine support our long-term and

stable development and help us continuously consolidate the

foundation for sustainable operations in the process of serving

customers empowering employees and contributing to society.* Energy Utilization * Occupational Health and Safety * Protection of Consumers' Rights

* Addressing Climate Change * Community Contribution and Interests & Health Education

* Due Diligence * Diversity Equity and Inclusion * Employment Practices

* Pollutant Discharge * Rural Revitalization * Training and Development

* Equal treatment to small and * Waste Treatment

medium-sized enterprises * Circular Economy

* Ecosystem and biodiversity * Environmental Compliance

protection Management

* Ethics of science and technology * Water Resources Utilization

Weakly relevant Relevant Important

Impact Materiality

2025 Environmental Social and Governance Report 12

Relevant

Financial MaterialSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

The following table lists the sustainable development-related impacts risks and opportunities evaluated as important issues. The measures and actions taken for their monitoring prevention management and control will be

further elaborated in the subsequent chapters:

Value chain mapping

Time Own

Issue Type Description horizon1 Upstream operations Downstream Actions

Through professional services and standardized operations it can have a positive impact on customer health and social Short

safety including providing customers with qualified drugs precise medication guidance and health management plans term

reducing medication risks and ensuring health effects.Through strict product quality control and professional pharmacist services it can reduce the circulation of inferior drugs

and safeguard public health and safety.Impact

By providing convenient health monitoring and basic medical support it can relieve the pressure on social health services

and improve the public health protection level.Conversely if there are drug problems improper medication guidance insufficient store safety management or service

process defects it may cause physical harm to customers adverse drug reactions or personal safety accidents which will

have an adverse impact on customer health and may lead to complaints legal liabilities and loss of brand reputation.Customer Pharmaceutical

health and If the Company cannot provide customers with professional and precise health solutions for example it cannot meet the Medium Care for All

safety customized needs of customers or the market development in terms of the level of the pharmacist team and the term Safeguarding Risk application of technical tools the Company will not be able to truly address customers' health concerns and establish in- National Health

depth trust with them. As a result it will lose its core competitiveness leading to customer loss a sharp decline in sales

and even a cash flow crisis.Relying on the advantage of being the "closest health access point" the Company can provide chronic disease Long

management daily health monitoring and customized health services (such as medication reminders and side effect term

warnings) for the elderly population seizing the development opportunities presented by the aging trend.Opportunity It can effectively enhance the stickiness of specific customer groups.With in-depth professionalism and in-depth relationships as the core support the Company can build a team of doctors

pharmacists and nutritionists centered on efficacy improving the accuracy and effectiveness of health solutions and

achieving both an increase in market share and revenue.In the policy environment of stricter medical insurance supervision as a large-scale chain pharmacy the Company has a Long

Impact good development space which is conducive to meeting the national demand for convenience in purchasing coexistence term

of functions and economic value thus promoting medical accessibility and inclusion.While the medical insurance policy's control over drug prices promotes medical inclusion it also poses revenue Medium

challenges to the pharmaceutical retail industry. term

Medical Risk With the intensifying industry competition on the one hand it improves medical accessibility; on the other hand the Pharmaceutical

accessibility number of retail pharmacies may be approaching the critical point and the sales and profitability of single stores are Care for All

and showing a downward trend. Safeguarding

inclusion National Health

As the pharmaceutical market develops towards the two international best practices of "prescription outflow" and Long

"separation of medicine and pharmacy" the pharmaceutical retail industry will face the next market boom. If the term

Opportunity Company can based on its years of in-depth industry experience with the support of policies reduce the difficulty of purchasing drugs by expanding retail channels and penetrating into the market and improve the timeliness and accuracy

of services by reconstructing the supply chain efficiency and introducing AI consultations it can gain a higher market share

and meet the market's expectations for inclusion.

1. Considering the industry in which Yifeng Pharmacy operates its strategic planning and operational realities we define time horizons as: short-term (0-1 year); medium-term (1-5 years); and long-term (more than 5 years).

2025 Environmental Social and Governance Report 13Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Value chain mapping

Time Own

Issue Type Description horizon1 Upstream operations Downstream Actions

In the pharmaceutical retail industry digital technology plays a crucial role. The potential data security and privacy protection Short-

Impact issues are directly related to the Company's prevention and control of operational risks and the establishment of customer termtrust. If network attacks and data security vulnerabilities are not prevented resulting in omissions in customer data security

management it may damage customers' right to privacy.Data

security With the evolution of big data industries that possess personal information inevitably face increased vulnerabilities and risks Medium- Executing

and of privacy leakage. If business and personal information is misused or accidentally leaked it may damage the Company's term Duties with Full

Risks reputation and may also lead the Company to face fines or reduced revenue.customer Commitment

and Failure to comply with relevant regulations for protecting patient information may result in civil and criminal penalties which Strengthen will have a negative impact on the Company.privacy Governance

protection Privacy protection in the pharmaceutical retail industry has evolved from a "compliance burden" to a "trust asset". Through Medium- Foundations

systematic management measures from the inside out such as building a full-life-cycle data security system obtaining data term

Opportunities security protection system certification managing internal staff operations and participating in the formulation of industry

standards the Company can transform data security and privacy protection into a competitive advantage thus establishing a

trust economy in the digital health market and consolidating its core competitive barriers.Through standardized operations and proactive education it can have a positive guiding effect on consumers' rights and Short-

interests and social health literacy including safeguarding consumers' right to know and right to choose eliminating false term

advertising and maintaining a fair consumption environment.Conduct health education through professional explanations and popular science materials to improve consumers' health

Impact literacy and reduce blind drug purchases or misunderstandings in health management.Build trust through after-sales follow-up enhance consumers' satisfaction and dependence on retail channels and promote

the healthy development of the industry.Protection Conversely any behavior that damages consumers' rights and interests will lead to violations and affect consumers' trust in

of the Company.consumers Pharmaceutical If the Company's health popularization content is inaccurate or insufficient or if the store clerks mislead customers to buy Medium-

' rights and health products instead of medicines it may lead to the Company misleading consumers. Care for All term

interests & Risks Safeguarding Measures such as establishing a 24-hour pharmacist consultation hotline and developing an AI medication assistant system

health require continuous technological investment from the Company which will increase the Company's operational difficulty for National Health

education a certain period.Protect consumers' rights and interests more comprehensively by strengthening drug traceability management and providing Medium-

professional guidance on drug use by licensed pharmacists. term

Connecting to e-prescription services through the Internet hospitals platform to solve the pain points of chronic disease

Opportunities patients in follow-up consultations and drug purchases is conducive to safeguarding consumers' core rights and interests and

enhancing consumers' trust and recognition of the brand.Rely on innovative technological means to establish in-depth professional capabilities and health solutions centered on

efficacy and provide customers with accurate health education and services.Enhance the stability of the entire supply chain network through Risk Management of each link in the supply chain. Short-

Supply Promote synergy among supply chain enterprises and achieve common development by establishing cooperative term Pharmaceutical

chain Impact relationships based on trust and win-win results. Care for All

security However the supply chain in the pharmaceutical retail industry is long and complex covering the distribution network Safeguarding between manufacturers and retailers and there is a risk of counterfeit drugs which may have a negative impact on public National Health

health.

2025 Environmental Social and Governance Report 14Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All. Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Value chain mapping

Time Own

Issue Type Description horizon1 Upstream operations Downstream Actions

Product quality problems may lead to production stagnation and sales decline. Short-

Natural disasters such as earthquakes and floods may cause traffic disruptions affect logistics and transportation and term

result in supply chain delays and untimely drug supply in stores.Risks If the Company fails to prevent counterfeit inferior or mislabeled drugs from entering the pharmaceutical retail

system it may trigger stricter supervision of the pharmaceutical supply chain. Pharmaceutical

Supply chain Care for All

security With the globalization and networking development of the supply chain the complexity of supply chain security Safeguarding

management is constantly increasing. If the Company fails to effectively manage the complex supply chain it may lead National Health

to drug safety incidents and bring significant risks.If the Company can achieve effective management in a complex supply chain and seek and promote cooperation with Medium-

Opportunities supply chain enterprises in business models technological innovation etc. it can reduce costs improve efficiency term

and enhance its own and the supply chain's competitiveness.For employees the Company can effectively improve their work experience enhance their professionalism and help Short-

them receive positive feedback from customers and in terms of performance by improving rights and interests term

protection providing growth paths and empowering them with AI technology. This will enhance their sense of mission

Impact and achievement and contribute to the realization of their personal value.For society employee-centered practices can reduce the loss of industry talents promote the overall quality

improvement of practitioners. Meanwhile by stabilizing employment and conveying the concept of "valuing and

developing people" it can inject positive energy into the harmonious development of the industry and even society. Achieving Win-

Employment If the Company has problems such as labor disputes and unfair treatment it may lead to employee turnover and legal Short- Win Results and

practices disputes directly affecting normal operations. term Realizing the

Risks Value of Talents

As the competition in the talent market intensifies companies need to invest more resources to attract and retain

outstanding talents.By establishing long-term and stable employment relationships companies can enhance employees' loyalty and Short-

engagement promote talent development improve management efficiency and reduce labor costs. term

Opportunities

Good employment practices can enhance a Company's social image and brand value attract more outstanding

talents to join win market trust and lay a solid foundation for the Company's sustainable development.Employees' professional skills and knowledge can be updated through training enabling them to more efficiently Short-

meet job requirements and realize personal value. term

Impact By promoting employee training towards high-quality professional and standardized development the Company is

expected to further iterate the industry's pharmaceutical service standards thereby enhancing the overall social value

of the pharmaceutical retail industry.The pharmaceutical retail industry has an increasing demand for practitioners and may face a talent shortage posing Medium- Achieving Win-

Training and Risks challenges in recruiting training and retaining pharmaceutical retail practitioners. Once there is a shortage of term Win Results and development practitioners it will directly lead to insufficient service capabilities of the Company resulting in revenue loss or Realizing the

damage to the reputation. Value of Talents

Investment in training and development can strengthen organizational effectiveness. By training employees with high Medium-

professional qualities and flexible adaptability the Company can better adapt to market changes and seize new term

Opportunities business opportunities.Training helps the Company implement its strategies and achieve long-term goals and reserves talents for the

Company's sustainable development.

2025 Environmental Social and Governance Report 15Executing Duties with

Full Commitment to

Strengthen Governance

Foundations

Yifeng Pharmacy continuously refines its governance structure upholds

the highest standards of compliance clarifies the boundaries of

authority and responsibility and strengthens internal control.Concurrently we rigorously implement data security and personal

information protection requirements enhance our institutional

framework and comprehensively establish robust safeguards for stable

operations and sustainable development.

2025 Environmental Social and Governance ReportSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Improving the Governance System

Yifeng Pharmacy strictly complies with national laws and regulations such as the Company Law of the People's Republic of China and the Securities

Law of the People's Republic of China as well as internal rules and regulations such as the "Articles of Association" the Rules of Procedure for the

General Meeting of Shareholders and the Rules of Procedure for the Board of Directors. We continuously promote the standardization of

governance processes and the refinement of mechanisms. We have established a standing investor engagement system strictly fulfill the obligation In 2025

of information disclosure and effectively safeguard the legitimate rights and interests of all investors through transparent disclosure and high-

quality relationship management.the Company held a total of 3 Shareholders'

Meetings and 13 Board of Directors meetings.Governance Structure

We build a governance structure of "General Meeting of Shareholders Board of Directors and Senior Management" with clear rights and

responsibilities and mutual checks and balances clarify the responsibility boundaries of each governance subject strengthen the coordinated

operation of decision-making supervision and execution form a standardized and efficient governance mechanism and comprehensively improve

the Company's corporate governance level and decision-making and execution efficiency. In 2025

As the highest authority of the Company the Shareholders' Meeting is mainly responsible for determining the Company's business policies and the Board of Directors reviewed and approved a

investment plans. The Board of Directors is accountable to the General Meeting of Shareholders and assumes the ultimate responsibility for the

Company's operation and management. The Management conducts business operations and management in accordance with the business total of 51 proposals and listened to or reviewed

decisions of the Board of Directors and earnestly fulfills various obligations. 15 reports.The Board of Directors has established the Strategy and Sustainability Committee the Remuneration and Appraisal Committee the Audit

Committee and the Nomination Committee. The Board of Directors actively fulfills its duties operates in a standardized manner and makes The 4 specialized committees established by the

scientific decisions. The members of the specialized committees of the Board of Directors strictly follow the rules of procedure of each specialized

committee and carry out their work under the leadership of the Board of Directors to jointly safeguard the interests of the Company and all Board of Directors held a total of 8 meetings

shareholders. reviewed and approved 23 proposals and

To improve the transparency of corporate governance we publicly disclose the "Working System for Independent Directors". It clearly states that listened to or reviewed 18 reports.natural person shareholders who directly or indirectly hold more than 1% of the Company's issued shares or are among the top ten shareholders of

the Company as well as their spouses parents and children cannot serve as independent directors of the Company. The requirements regarding

shareholding changes are the same as those for non-independent directors.

2025 Environmental Social and Governance Report 17Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Organizational Structure Diagram Information Disclosure

We actively fulfill the information disclosure obligations of listed

companies to ensure that the disclosed content is true accurate and

complete. In accordance with relevant laws and regulations such as

the Company Law of the People's Republic of China the Securities

Law of the People's Republic of China the Regulations on Information

Disclosure of Listed Companies and the Rules Governing the Listing of

The General Meeting of Stocks on Shanghai Stock Exchange we have issued institutional

Strategy and Sustainability Shareholders documents such as the Information Disclosure Affairs Management

Committee Policy and the Registration Management Policy for Insiders of Inside

Information clarifying the responsibilities of information disclosure

obligors and promoting the standardized and orderly implementation

Remuneration and Appraisal of information disclosure work.Committee

Board Secretary

The Board of

Directors

Audit Committee

In 2025

the Company issued a total of 109 interim reports

Nomination Committee

and 4 regular reports. The information disclosure

work has received an A-level evaluation from

the Shanghai Stock Exchange for nine consecutive

years.

2025 Environmental Social and Governance Report 18Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Investor Communication

We have formulated the Investor Relations Management Policy adhering to the principles of compliance equality initiative and honesty and

trustworthiness and established a multi-channel multi-platform and multi-dimensional communication mechanism to effectively safeguard the During the Reporting Period:

legitimate rights and interests of investors and continuously enhance market trust.We conduct activities such as Shareholders' Meetings investor briefings roadshows analyst meetings reception of visitors and symposiums

through channels such as the Company's website new media platforms telephone email and investor education bases and actively Further revised the Investor Relations Management

communicate with investors on relevant information such as the Company's production operation and finance. Policy to strengthen the protection of the

legitimate rights and interests of stakeholders;

Case "I am a Shareholder" Activity: Investors Visiting Shanghai-listed Companies

Participated in 34 brokerage strategy meetings.To maintain good communication with investors on May 28 2025 we invited small and medium-sized investors with

different backgrounds to participate in Yifeng Pharmacy's investor education activity "I am a Shareholder" which featured

a visit to the company as a Shanghai-listed enterprise. We presented to the investors the development history business

layout and overall development trend of the industry of Yifeng Pharmacy and responded to the investors' concerns about

multiple key areas of the Company during the investor Q&A session. Through this activity we further improved information Held 3 large-scale investor telephone conferences.transparency and enhanced trust and understanding with investors.Conducted 3 online investor performance

briefings on the exchange.Received a total of 288 research visits from

various investors through online and offline

methods engaging with 1737 investors

throughout the year and carried out long-term

stable and high-frequency communication with

various investors.* "I am a Shareholder" Activity Scene

2025 Environmental Social and Governance Report 19Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Strengthen the Compliance Defense Line This year we have continuously strengthened the Company's compliance risk management:

Yifeng Pharmacy integrates compliance obligations throughout its business operations establishes a systematic compliance management system

and formulates regulations such as the Measures for the Identification of Administrative Penalty Responsibility of Yifeng Pharmacy to clearly define

the responsibility boundaries and enhance the accuracy of internal supervision and the foresight of risk prevention and control. We also ensure that

the Company's actions adhere to business integrity through a sound business ethics management framework.Compliance Management

Conducted proactive risk identification and

developed business compliance risk guidelines in

We have established a Compliance Responsibility Structure to comprehensively monitor and guide the Company's operational activities and ensure checklist form. These provide clear guidance on

that all business processes comply with laws and regulations. compliant practices for business departments

enhancing the efficiency of risk response.Compliance Responsibility Structure

Board of Directors It mainly assumes a supervisory role and is responsible for continuously monitoring the

Company's compliance risks.It is responsible for organizing and conducting audits before during or

after operational management business activities to identify and fill in Continuously iterated and upgraded the contract

Audit and Supervision

Department the gaps in the institutional processes and ensure that the Company project management system streamlining work

strictly complies with laws regulations and internal policies. processes through digital tools and improving

business compliance.Securities Investment Public Affairs Quality Management Operations Center

Department Department Headquarters

It focuses on the compliance Provides necessary legal It is responsible for quality It is responsible for Provided employees with more than 20 business

work of listed company advice and is responsible for control throughout the formulating and compliance training sessions and a regular monthly

management covering contract review and product lifecycle to ensure implementing store compliance awareness program "Xiaoyi's Legal

aspects such as information execution supervision to that products fully meet operation standards and Insights" using diverse formats to further reinforce

disclosure equity prevent potential legal risks. quality standards and procedures to ensure the employee compliance awareness.management and regulatory requirements. compliance of store

interaction with investors. operations.

2025 Environmental Social and Governance Report 20Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Integrity in Employment

We abide by the business code of conduct continuously optimize the Integrity Management System and formulate relevant systems for anti-

corruption anti-unfair competition and whistleblower protection. We actively promote the construction of an integrity culture and work together

with employees and partners to build an honest and clean business environment. In 2025 no major commercial bribery or embezzlement incidents

occurred in the Company; there were no lawsuits or administrative penalties due to unfair competition.We have built a rigorous and complete Integrity Management System formulated and implemented relevant rules against bribery and corruption

such as the Yifeng Pharmacy Employees' Integrity and Self-Discipline Management Regulations the Code of Conduct for the Ten "Red Line"

Behaviors and the Whistleblower Reward Management Measures of Yifeng Pharmacy clearly defining the requirements for integrity and self-

discipline and the punishment measures for violations providing a solid disciplinary guarantee for the Company's operation and management.We have established an Integrity and Self-Discipline Supervision Committee composed of the board of directors the Audit and Inspection

Department of the headquarter and the Audit and Inspection Departments of branches and subsidiaries. The chairperson of the board serves as

the team leader with explicit responsibility for overseeing the company's business ethics and compliance matters. This structure establishes a

comprehensive integrity supervision framework covering the governance supervision and execution levels. The committee regularly reports to the

board of directors on anti-corruption efforts to ensure the effective operation of the integrity management system.Structure of the Integrity and Self-discipline Supervision Committee

Team Leader Chairman

Deputy Team Head of the Audit and Inspection Department of the

Leader headquarter

Deputy Director of Audit and Inspection Heads of

Members the Audit and Inspection Departments of branches

and subsidiaries

2025 Environmental Social and Governance Report 21Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

We attach great importance to the Company's integrity management In 2025 the Company conducted an annual special audit of the We require suppliers to formulate anti-bribery and anti-corruption

and have formed a complete pre-event concurrent and post-event business ethics system code of conduct anti-corruption policy and policies and establish corresponding mechanisms to continuously

business ethics assessment and review system. other standards to identify areas for improvement and continuously verify their compliance with their own integrity policies. At the same

improve relevant policies. time we require suppliers to abide by Yifeng Pharmacy's integrity

Pre-event management system and sign the Integrity and Self-Discipline Letter.We have also incorporated integrity clauses and liability for violations

* Conduct business ethics risk assessment in the fourth quarter of into supplier contracts and clearly stipulated measures to deal with

each year to identify potential risks and their impacts and We attach great importance to anti-corruption management and relevant violations. In 2025 we carried out business ethics due

formulate differentiated response plans according to the severity actively promote anti-corruption activities. As a member of the diligence on key suppliers to evaluate their performance in areas such

of risks. Sunshine Integrity Alliance we participate in various anti-corruption as compliance management anti-corruption and social

* For the identified risks require relevant personnel to review and actions initiated by the alliance. Moreover we strictly implement the responsibility. We also organized specialized anti-corruption training

document preventive measures and establish a dynamic alliance's blacklist system in the recruitment process and firmly sessions for suppliers to ensure that they fully understand and meet

monitoring mechanism to ensure the full implementation of pre- refuse to hire any individuals on the violation list to jointly maintain relevant requirements. By the end of the Reporting Period the

event prevention and control of business ethics-related risks. an honest and clean business environment with the alliance. Company had achieved a 100% signing rate for supplier integrity

agreements.To further strengthen employees' awareness of integrity and

Concurrent compliance we have established a tiered training system offering In addition we adhere to the principles of legal operation and fair

special training for new employees and business ethics education for competition resist all forms of unfair competition and clearly

* Special Audit: Regularly conduct special audits on business ethics all employees. The training content covers core areas such as Anti- prohibit and strictly control false advertising monopoly behavior and

standards and anti-corruption policies evaluate the effectiveness corruption anti-monopoly and anti-unfair competition. We have also infringement of trade secrets. We have also continuously regulated

of the monitoring system and clarify the process for handling set up an "Integrity Model Award" to recognize employees who the Company's competitive behavior through improving internal

corruption incidents; for donations and sponsorships clarify the perform their duties with integrity. Meanwhile we require all review supervision and behavior restraint mechanisms to ensure the

declaration approval and compliance assessment processes employees to sign integrity agreements to prevent corruption. In fair honest and orderly conduct of business activities.and include relevant materials such as donation agreements and 2025 the signing rate for these agreements reached 100% among all

donation vouchers as necessary items in the approval process for employees.key verification of compliance.* Comprehensive Business Audits: Conduct systematic audits of all To standardize internal procedures we have established a formal

business segments operating locations and subsidiaries every During the Reporting Period whistleblowing policy the Rewarded Whistleblowing Management

year covering key areas such as risk control violations of Measures. This policy encourages employees and stakeholders to

discipline corruption and embezzlement; conduct additional Number of directors participating in business ethics report misconduct by providing clear channels and incentives.audits of high-risk positions and key business segments training: 9 Crucially it provides robust protection for whistleblowers against any

establishing a multi-layered audit and oversight system form of retaliation ensuring their privacy and safety. As stipulated in

characterized by "annual full coverage monthly routine checks Coverage rate of directors participating in business our Employees' Integrity and Self-Discipline Management

and quarterly targeted reviews." 100 Regulations individuals have the right to report any violation ethics training: % anonymously. We are formally committed to safeguarding

* Monthly Routine Audit: Every month routine store operations whistleblowers from reprisal fostering a culture where concerns can

corruption risk assessments and anti-fraud activities are included Number of employees (including full-time be raised without fear.in the audit cycle to ensure 100% coverage of store operations. employees part-time employees and third-party

contractors involved in operations) participating in

Post-event business ethics training: 38953 Yifeng * Whistleblower hotline: 0731-89953992

* Implement dynamic supervision over the rectification of audit Coverage rate of employees participating in Pharmacy's * Whistleblower email: sjb@yfdyf.com

findings verify the timely closure of identified issues and whistleblower * Internal whistleblower channel: Direct

evaluate the effectiveness of corrective actions through review business ethics training: 100% channels reporting channel for employees

sessions.

2025 Environmental Social and Governance Report 22Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Medical Insurance Compliance Highlight 2: Iteration of the digital management Highlight 4: Medical insurance benefits and

system for medical insurance risk control price governance

We strictly comply with national and local medical insurance policies

and continuously improve the medical insurance compliance A medical insurance risk control system with intelligent pre- We supervised the consistency of online and offline medicine

management system. This year we closely aligned with the self- warning precise in-process control and in-depth post-analysis prices and gradually improved the accessibility of chronic

inspection and self-correction requirements of national provincial was built to achieve closed-loop control of the entire process of disease medications.and municipal medical insurance fund supervision fully learned from prescription source traceability standard use of prescriptions * A special price governance team was established.industry compliance management experience and optimized the all- professional prescription review by pharmacists medicine

traceability and precise medical insurance settlement. Combining system monitoring and manual inspections round medical insurance compliance prevention and control system we ensured that the online and offline selling prices of

through technological empowerment process optimization and full- * Functions such as accurate verification of prescription medicines remained the same.chain supervision. Concurrently we have conducted regular policy information safe identification of pharmacists' identities

training for all staff to improve compliance efficiency. Focusing on * The coverage of outpatient integrated management scientific control of medication dosage matching of

"refined and intelligent advancement" we have successfully achieved pharmacies was increased the medicine-purchasing indication specifications and review of medication

the dual objectives of ensuring compliance and elevating service process for chronic disease patients was shortened and matching were embedded.quality. the medical insurance reimbursement ratio was raised.* Real-time dynamic verification of medical insurance

settlement data was carried out to achieve precise early

warning and dynamic control of violations.Highlight 1: Full-link management of medicine

traceability codes * Dynamic risk profiles of stores employees and medicines

were completed and hierarchical and classified

Through internal system controls and traceability code management was implemented. Monthly compliance Highlight 5: Medical insurance risk prevention

verification we compel pharmaceutical manufacturers to reviews were conducted for high-risk stores. and security of medical insurance funds

assign codes to drugs. We have achieved 100% coverage of the

mapping relationships among the three codes enabling full- We ensured the standardized use of medical insurance funds

chain tracking from procurement and warehousing to sales through systems and platform technologies.and settlement. Highlight 3: Prescription compliance

management * We partnered with the medical insurance department to

* Established a mapping system for traceability codes build a regulatory information platform for sharing data

medical insurance codes and product codes ensuring A closed-loop control system for the entire prescription on drug procurement inventory and prescription

efficient integration between different coding systems. process was established to ensure both the legal source and circulation.* Developed a mapping system for traceability codes on standard use of prescriptions.large and small packages to address linkage issues in the * Established a prescription evaluation mechanism based

drug circulation process. on compliance rationality and patient suitability directly

* Built a unified traceability platform for codes achieving linking results to doctor credentialing and practice ratings.end-to-end drug traceability and data storage. * Formed a tripartite prescription review model combining

* Implemented a risk control system for traceability codes "internal rules external professional systems and manual

with functions such as "traceability code verification" pharmacist verification."

"code-free inventory management" and "no payment for * Implemented a mechanism for real-time interception and

un-coded medical insurance claims" thereby preventing root-cause tracing of abnormal prescriptions.loopholes in drug traceability.

2025 Environmental Social and Governance Report 23Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Ensuring information security

Information security and customer privacy are the core pillars for

Yifeng Pharmacy to maintain customer trust and ensure the stable Information Security Management Architecture

operation of the business. By constructing an information security

management system and implementing multiple measures such as

technical protection we strengthened the data security defense line. * The company's privacy and data security work is ultimately responsible reviews the company's

Centering on customer rights and interests we effectively protected Board of Directors overall data security and privacy-related strategies and the Information Security Committee under it

customers' personal privacy through transparent notification and is responsible for coordinating and implementing the specific tasks

standardized management.Information security * Be responsible for formulating the company's overall data security and privacy strategy and policies.* Draft the company-level data management system security classification standards and

We strictly comply with laws and regulations such as the requirements etc.Cybersecurity Law of the People's Republic of China the Data Information Security

Committee * Supervise the company's overall data security status and management effectiveness and coordinate Security Law of the People's Republic of China the Personal cross-departmental data security management work.Information Protection Law of the People's Republic of China and the

General Data Protection Regulation. We formulated and * Promote the construction of the company's data security management team and the cultivation of

implemented systems such as the Measures for Yifeng Pharmacy Data data security awareness culture.Security Management and the Measures for Yifeng Pharmacy Project

Information Security Management and required the Company all

affiliated subsidiaries all business departments all business lines

and all operation points to strictly regulate the purposes methods * Assist the Information Security Committee in the implementation and execution of data security and

and access controls for data collection and use. We are committed to privacy policies including proposing annual plans and implementation schemes.continuously improving the information security management

system. In the future we will appropriately promote the relevant work Information Security * Regularly inspect evaluate and assess the company-wide data security management situation and

of information security management system certification clarify and Executive Office put forward improvement requirements and suggestions for rewards and punishments.standardize the scope of certification and continuously improve the * Coordinate the emergency response and handling of major data security risks and incidents across

standardization and normalization level of information security the company.management. During the Reporting Period no major data security

incidents occurred in the Company.We constructed an information security management structure of * Based on the business front they are in determine the strategy and priorities for data security

"Board of Directors-Information Security Committee-Information management.Security Execution Office-Information Security Management Information Security

Responsible Person" with the Board of Directors taking the ultimate * Review and confirm the compliance of data security systems and process norms.Management Officer

responsibility for privacy and data security work. * Take the lead in implementing important measures for data security management and inspect and

supervise the data security status and management effectiveness of the front.

2025 Environmental Social and Governance Report 24Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Under the information security management architecture of the

three-level protection system we ensure the implementation of Proactive Measures to Prevent Data Leakage

management through the following regular review mechanisms: With the trinity of "technology management and compliance" as the core establish a dual guarantee of the technical protection system and

the management protection system.Conduct an information security risk assessment every six Technical Protection

months establish a risk ledger and formulate data security System

prevention and control measures.Establish a data encryption Apply static and dynamic de- Set data access permissions based on the principle

Conduct an internal audit of the information security system mechanism to achieve encryption of identification technologies to of least privilege. Data analysts can only access the

every two years. Complete self-inspection and self-correction of sensitive data storage transmission make data available but de-identified data sets and cannot associate with

the implementation of information security measures put and end-to-end encryption. unidentifiable. the original personal identifiers. Conduct a

forward rectification suggestions and follow up on the permission audit every quarter to identify and

implementation of rectification. revoke redundant and expired permissions.Build a zero-trust security Implement data breach

architecture and synchronously prevention deployment

Entrust third-party institutions to conduct external independent deploy a multi-factor authentication achieve real-time interception Deploy terminal protection tools conduct a full-

data security audits every year to verify the effectiveness of mechanism. of high-risk operations and system vulnerability scan every month and conduct

protective measures and issue audit reports. conduct log audits. at least one penetration test every year.At the same time we formulate proactive prevention measures and Management

an emergency mechanism after a data leakage incident aiming to Protection System

comprehensively control the information security risks in the entire

data lifecycle. Establish data classification and grading standards and review the data classification results every six months.Conduct privacy and data

security training for all employees Overall Strategy Basic Principles

(including full-time employees Build a shared vision of information security and Full implementation continuous improvement

part-time employees and third- achieve extraordinary results Full participation of all employees; classified

party contractors participating in management appropriate investment

operations) every quarter. The Construction Objectives

training content covers Basic Concepts

identifying phishing emails In accordance with the company's development

handling sensitive data in a plan and strategic goals gradually establish a (1) Information security risks are ever-present scientific information security management and information security management is a

standardized manner etc. system improve the overall information security never-ending task.Training assessments are awareness of all employees standardize data operations through appropriate management (2) Enhancing employees' safety awareness and

organized and those who fail the and technical measures achieve refined sense of responsibility is a crucial part of

assessment will have their data management effectively control information information security management.access permissions suspended. security risks continuously reduce information (3) Emphasize process supervision and security incident losses and ensure the inspection and strictly implement the

In 2025 the Company organized sustainable and stable development of the information security reward and punishment

a total of 5 training sessions. company's business. system.

2025 Environmental Social and Governance Report 25Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

In addition we have publicly released the "Project Information

Passive Emergency Response Process Security Management Method" requiring all cooperating Suppliers to

comply with Yifeng Pharmacy's information security-related systems

Adopt passive emergency response measures based on the principles of "rapid response risk control compliance notification and closed- and not to disclose the Company's and customers' confidential

loop rectification". information data and documents.* Revise the "Data Leakage Emergency Plan" every six months to ensure its practicality and operability.* Establish an emergency response organizational structure form an emergency response team clarify the responsibilities of each In terms of supplier access factors such as

member and ensure the efficient progress of the emergency response process. information security management

capabilities and information security

* Develop a four-step closed-loop emergency response process: qualifications are included in the evaluation

scope. Collaborate with the information

security manager to conduct an information

security review of the supplier's system and

require it to meet security certifications such

as ISO 27001.

01 02 Require a comprehensive evaluation of the supplier's information security capabilities.

Discovery and Initial Disposal Compliance Notification The evaluation content includes: the standardization compliance rate of the

Identify and confirm the data Complete notifications to regulatory software environment the standardization

leakage incident assess its risk authorities and data subjects in deployment compliance rate of IT

level and take emergency accordance with domestic and equipment whether personnel information

measures to stop losses at the international laws and regulations. security awareness training is carried out

technical and organizational whether a confidentiality agreement is

aspects to prevent the negative signed whether a system penetration test is passed etc. to verify the compliance of

impact of the incident from further externally purchased data and strengthen

expanding. the data security management of externally

04 purchased systems.

03 Rectification and Review

In-depth Investigation and

Disposal Formulate targeted rectification plans Require all cooperating suppliers to sign the

continuously optimize organizational "Data Protection Agreement (DPA)" to clarify

Conduct an internal investigation coordination and technical disposal their security requirements for data

repair system vulnerabilities trace capabilities and conduct monthly processing and liability for breach of

the leaked data and gradually reviews to continuously monitor the contract.resume business processes after implementation of rectification

the risk is completely controlled. measures.Suppliers are required to complete data

security compliance training and assessment

through the SRM system. In 2025 the

participation rate of supplier data security

compliance training was 100%.

2025 Environmental Social and Governance Report 26Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Privacy Protection We adhere to the concept of "privacy by design" and embed privacy protection into the lifecycle management process of products. We have issued the Software Information Security Function Standard Document to clarify the privacy standards for the entire lifecycle of products and services

forming a systematic and traceable management mechanism to provide a solid guarantee for customers' privacy information throughout the entire

We fully understand the necessity and importance of protecting product and service chain.customers' personal information and regard the protection of

customer privacy as the top priority in our business management. We

have established corresponding security management processes and

control measures for information technology systems employees Workflow for security and privacy control in the entire product lifecycle

and suppliers. We have also implemented privacy protection

measures in product development technology development and

customer service to ensure that access control and encryption * Research on security and privacy requirements: Identify user privacy risks in the customer service

technologies are in place safeguard the confidentiality and integrity scenarios of the APP and mini-program and clarify the boundaries of privacy protection.of our information systems and better protect customer privacy. requirement phase * Requirement documentation: Integrate privacy protection functions into product design.* Compliance alignment: Ensure that privacy requirements comply with relevant laws regulations

We have formulated relevant systems for customer privacy and standards.protection such as the Yifeng Pharmacy Service Agreement and the

Guidelines for the Safe Usage of Data of Yifeng Pharmacy Members

strictly regulated the information collection process and

implemented permission control encrypted transmission and

operation record-keeping. During the Reporting Period there were no * Architecture design: Design privacy protection mechanisms such as network isolation permission layering and data classification.incidents of customer privacy leakage in the Company. design phase

* Design review: Verify the integrity of privacy functions and the effectiveness of risk mitigation

measures.We require all business departments subsidiaries and operating

points to comply with the Yifeng Pharmacy Personal Information

Protection Policy and make the following commitments:

* Clearly inform customers of the reasons purposes and development phase * Development process control: Deploy privacy protection tools and promptly fix data vulnerabilities.processing methods of information collection to ensure explicit

consent and authorization from customers.* Without customer authorization we will not collect relevant

information through any channels (including the official website). * Privacy-specific testing: Conduct tests on privacy scenarios for apps and mini-programs.* Guarantee customers' rights to access correct delete (including test phase * Penetration testing: Carry out at least one penetration test for each version to prevent

deleting backup data) view and copy personal data and process unauthorized access and leakage of privacy data.deletion requests within 3 days.* Unless providing specific services we will not rent sell or provide

customers' personal data to any third parties.* Only store customers' information for the shortest necessary time release and * Vulnerability Management: Timely fix privacy vulnerabilities in apps and mini-programs

and delete it in a timely manner after expiration. operation & * Privacy Protection upon Decommissioning: When apps and mini-programs cease service

thoroughly clear users' privacy data.* Do not publicly disclose customers' information. maintenance phase

* Do not collect customers' personal data from third parties

(except as required by law).* Require all employees and data Suppliers to sign the Data At the same time we have also built a complete information security technology toolkit covering key technologies such as firewalls VPNs bastion

Security and Confidentiality Agreement to clarify the personal hosts log auditing systems virus protection systems network auditing systems terminal management systems and data encryption systems to

legal liability for privacy leakage. ensure that customers' personal privacy can be maximally protected while we provide services.

2025 Environmental Social and Governance Report 27Pharmaceutical

Care for All

Safeguarding

National Health

Yifeng Pharmacy adheres to the core concept of

"Pharmaceutical Care for All" and establishes the

provision of safe effective and accessible medicines

as the strategic cornerstone for high-quality

development. We continuously improve the lifecycle

management system for medicines and provide high-

quality professional pharmaceutical services to

ensure that the entire business process is precisely

aligned with the health needs of the Chinese people.

2025 Environmental Social and Governance ReportSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Health Sustainability Framework

Yifeng Pharmacy always adheres to the quality criterion of "family- On this basis to ensure the effective implementation of quality management requirements we have built a "training + assessment" dual-drive

trusted medicines" and places customers' health and medication mechanism. We conduct systematic quality control and product safety training covering all employees every year covering special topics such as

safety at the core of its sustainable development strategy. By building the Good Supply Practice for Pharmaceutical Products (GSP) pharmaceutical professional knowledge and quality management system

a scientific governance structure formulating clear strategic plans documents. At the same time key indicators such as quality accident handling product quality evaluation and expiration date management are

implementing reliable risk control and setting clear performance included in the performance assessment of quality management personnel forming a management mechanism that combines incentives and

goals we promote the implementation of responsibilities and the constraints to comprehensively strengthen supervision responsibilities and execution capabilities.improvement of performance effectively safeguard the public's

medication safety and consumer rights and steadily consolidate our

image as a trustworthy health partner. Strategy

We integrate the "Controllable Premium Strategy" into the overall development path continuously building a matrix of self-owned brands

Governance exclusive varieties and jointly-built varieties with manufacturers. We also expand categories such as herbal wellness products nutraceuticals health monitoring devices personal care items and health-oriented consumer goods to enrich the supply of health products. By constructing a

premium product system with standardized channels and excellent efficacy we provide customers with health solutions that cover diverse needs

We have established a sound quality governance structure to ensure supported by quality safety professional teams and warm services.standardized decision-making orderly implementation and effective

supervision. The Board of Directors assumes the ultimate

Our quality management system covers all Our team includes over 10000 licensed We serve over 116 million members. We can

responsibility for the compliance and effectiveness of the quality of aspects including the qualification review of pharmacists and more than 25000 medical provide systematic health solutions from disease

goods and services. As a full-time institution the Quality Management suppliers acceptance of purchased medicines in- professionals. There are over 800 professional treatment to health promotion. We offer one-

Department coordinates the operation of the quality management stock maintenance outbound review store training courses for common diseases and more stop pharmaceutical services to patients

system and establishes a hierarchical and collaborative mechanism acceptance display inspection and after-sales than 1600 professional courses on drug including 7*24-hour doctor/pharmacist

of "headquarters overall planning-branch companies supervision and service. Through the triple quality evaluation ingredients. Through the intelligent and precise consultations medicine purchase and home

implementation-stores standardized execution". At the same time a system we achieve strict screening and full- service system for members we provide full- delivery. We also establish a service

process control to ensure the safety and course health management for customers with improvement mechanism centered on order

Quality Management Leadership Group composed of the heads of effectiveness of medicines. We use advanced chronic diseases including drug treatment diet evaluation to continuously enhance service

various functional departments at the headquarters is established to technology to track the quality of products in real- regulation behavior management and exercise quality.implement quality management requirements throughout the entire time and implement an automatic system to guidance.process of product procurement storage and sales laying a solid prohibit the purchase and sale of products with

foundation for customer trust. quality risks.A professional team is the cornerstone of the stable operation of the Quality and Safety Professional Team Warm Service

quality management system. We have set strict access standards for

key quality positions: the quality responsible persons at the

headquarters and branch companies must have the qualification of a

licensed pharmacist and more than 3 years of experience in

pharmaceutical business quality management and the quality

management personnel must have a college degree or above in

pharmacy traditional Chinese medicine or related majors. This

ensures that the team has a solid professional foundation and

practical experience to effectively address quality and safety risks in

the business process. For detailed information on the Company's implementation of the Controllable Premium Strategy please refer to the sections "Strict Quality

Control for Medicines" "Regulating Channels for Medicines" and "Improving Service Quality" in this chapter.

2025 Environmental Social and Governance Report 29Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Management of Impacts Risks and Opportunities Metrics and Targets

To systematically manage the impacts risks and opportunities related to customer health and safety we focus on the prevention and control of In accordance with the Quality Policy and Objective Management

product quality risks. We have formulated the Quality Risk Management Operating Procedures and established a high-standard quality risk System we formulate the annual quality policy and management

management process to assess communicate control and review quality and safety risks throughout the product lifecycle. The Quality goals in an overall manner and decompose the goals step by step to

Management Department has the power of veto during the review of products that fail quality inspections or have non-compliant packaging each department and position forming a supporting implementation

strengthening pre-risk control. plan to promote the implementation of the responsibility for

customer health and safety. For key goals the Quality Management

Product Quality Risk Prevention and Control Mechanism Department conducts continuous supervision through an internal

review mechanism. Meanwhile we strictly supervise and assess

employees' compliance with quality management systems. Through

Annual Risk annual departmental assessments and quarterly store assessments

01 The Quality Management Department formulates a quality risk management plan and we promote the integration of quality management into daily work Management distributes it to the heads of each department for confirmation. processes to ensure the standardized operation and continuous

Plan improvement of the quality management system. In 2025 the

Company successfully achieved its annual quality management goals.The personnel in the drug operation quality control position adopt a forward-looking or

02 Risk retrospective approach throughout the entire product life cycle to identify analyze and Identification classify risks in each link that affects product quality. The Quality Management Department

analyzes and conducts a second-round confirmation of the risk ratings. 2025 Quality Management Goals

The Quality Management Department formulates control and prevention measures based on

03 Risk the assessed quality risks. At the same time it requires relevant departments to effectively Assessment implement risk control measures and regularly evaluate the effectiveness of these measures All online and offline businesses were operated in

to ensure that relevant risks reach an acceptable level. compliance with laws and regulations

The Measures for Quality Supervision and Management of

Medicine Operation and Use was strictly implemented to

04 Risk Review The Quality Management Leadership Group conducts at least one review of the results of risk ensure the effective operation and continuous management and the acceptability of risks every year. improvement of our quality management system

We apply digital means to product quality risk management. Through an intelligent monitoring system we conduct risk control over the entire

process of "purchase storage sales and return". This system integrates functions such as license validity control interception of out-of-scope

business near-expiry date warning prohibition of purchasing and selling expired products prohibition of purchasing and selling products with

quality problems and restricted distribution and sales. It provides technical support for the automatic identification monitoring and control of

quality risks in the operation process improving the accuracy and standardization of risk management.

2025 Environmental Social and Governance Report 30Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Strict Quality Control for In-store Display

Medicines In-store AcceptanceAll medicines in the stores are uniformly distributed from the All directly-operated stores and franchise stores must in

headquarters warehouses. After delivery each store strictly follows the accordance with the relevant provisions of the Store

Store Medicine Acceptance Management Policy and related operating Medicine Display Management Policy conduct display

Ensuring the quality efficacy and safety of drugs is the cornerstone for procedures to fully implement the quality acceptance process ensuring by zones and categories according to the

Yifeng Pharmacy to achieve long-term and stable development and gain that the medicine packaging is intact and the quality meets the standards physicochemical properties and storage conditions of

social trust. We adhere to the principle of "Quality is the foundation of and firmly controlling the quality of medicines in the retail link of the medicines. They must also strictly implement regular

Yifeng" strictly abide by laws and regulations such as the Drug stores. maintenance inspections of medicine quality in accordance with the provisions of the Store Medicine

Administration Law of the People's Republic of China the Good Supply Maintenance and Inspection Management Policy and the

Practice for Pharmaceutical Products (GSP) and the Measures for Quality Medicine Expiration Date Management Policy. This

Supervision and Management of Medicine Operation and Use. We Medicine Delivery ensures that any potential quality problems can be

systematically construct and continuously improve the quality promptly detected properly handled and quickly

management system and implementation specifications covering all We formulate and implement the Medicine Delivery Review and resolved.business links and earnestly fulfill the social responsibilities and mission of Management System and related process operations. We implement the

a leading enterprise in the pharmaceutical retail industry. principle of " first-produced products to be sold first and products with closer expiration date to be sold first" and conduct deliveries according to

batch numbers. We also require that medicine outbound must be After-sales Service

Medicine Quality Management accompanied by supporting documents such as the medicine inspection We publicly display the hotline of the medicine report and the registration certificate for imported medicines. Through a regulatory authority and relevant signs such as the

System comprehensive recheck of outbound medicines and their packaging we service convention of Yifeng Pharmacy at prominent ensure that the quantity of all outbound medicines is accurate the quality positions in each store. We also set up a 24-hour service

meets the standards and the labels are clear so as to guarantee the

We build and operate a quality management system covering the entire hotline (4008879908) and a customer opinion book to quality and compliance of outbound products. provide customers with multiple channels to feedback

medicine life cycle around the requirements of medicine quality and safety their opinions on products and services. We have

management. Through institutionalized process-based and standardized established customer complaint files in accordance with

management we implement unified control over the entire process of the Quality Complaint Management Policy and assigned

medicines from procurement to terminal sales and risk disposal Medicine Storage a dedicated department and personnel to handle them

systematically ensuring product quality safety and compliant operation. ensuring that customers' opinions and complaints can We formulate and implement the Medicine Storage and Maintenance be promptly responded to and properly handled.Management Policy and relevant operating procedures to ensure that all

medicines are stored in designated warehouses according to their

Medicine Full-life-cycle Quality Management System packaging and storage requirements. At the same time we conduct

monthly maintenance inspections establish maintenance records and Medicine Recall

Medicine Procurement use an information system to automatically track and control the

expiration dates of inventory medicines. We take measures such as near- For medicines that have been sold and have serious

In accordance with systems such as the Supplier Quality Assurance System expiry date warning and automatic locking and suspension of sales for quality problems in accordance with the provisions of

Evaluation Criteria and the Supply Units and Sales Personnel First Purchased expired medicines to ensure the in-stock quality of medicines. the y Unqualified Products Management Policy and the

Variety Review Management Policy we adhere to the qualification-first principle and Medicine Recall Management Policy we establish and

conduct a comprehensive qualification review of suppliers purchased products implement a quality management mechanism for recall

and sales personnel of suppliers. Through on-site inspections and document retrieval and return. We also set up controls on

verification we systematically evaluate the suppliers' quality management Acceptance and Inspection prohibited distribution and sales through the

capabilities and sustainable supply capability to control product quality at the information system and urge the stores to return

source. The procurement process adopts a model that combines centralized We formulate and implement relevant regulations such as the Medicine relevant medicines as required to prevent the continued

procurement by headquarters and local procurement by subsidiaries. We flexibly Acceptance Management Policy and the Acceptance Procedure. We circulation of medicines with quality doubts strengthen

formulate procurement plans based on medicine attributes with the reliability of carefully inspect the appearance packaging labeling and package inserts quality risk control and ensure the safety of consumers'

channels price competitiveness and the satisfaction rate of store products as core of medicines according to sampling standards and conduct barcode medication.indicators to ensure that medicine quality is controllable channels are traceable scanning and verification of medicine traceability codes. For any

and prices are affordable. medicines that do not meet the sampling standards or have quality

problems we take the measure of directly returning them to the suppliers

to prevent unqualified medicines from being warehoused.

2025 Environmental Social and Governance Report 31Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

We establish a regular review mechanism for the quality management

system. In accordance with the Internal Audit Policy on Quality Medicine Expiration Date Management

Management System and the Inspection and Evaluation Policy on

Implementation of Quality Management System we conduct We formulate the Medicine Expiration Date Management Policy and establish

systematic inspections and evaluations of the system's operation a full-process expiration date management mechanism clearly defining the Definitions of Medicine Expiration Date

annually. In case of changes in key elements or major quality service red line that "stores are strictly prohibited from selling medicines with less

issues we promptly initiate special reviews to promote rectification than 30 days of validity and expired medicines". Stores conduct key

and process optimization continuously improve the system maintenance on near-expiry medicines every month. Specialists evaluate the * Products with an expiration date of 12

operation and ensure that products and services always meet the feasibility of return to the manufacturer and conduct overall allocation. months are considered expiring products

established requirements. Medicines with less than three months of validity are stopped from allocation if they will expire within less than 4

In terms of product testing we conduct full inspections at the batch and those to be delisted and written off as damaged goods are completed

Expiring months

level for all self-manufactured medicines of Heng Xiu Tang. We select one month before expiration. Relying on the digital management system we Medicines * Products with an expiration date of 18

key varieties from external suppliers for sampling inspections and achieve automatic monitoring of medicine expiration dates set functions months or above are considered expiring

entrust qualified third-party institutions for testing. For varieties with such as prohibition of sales of near-expiry medicines and early warning alerts products if they will expire within less

quality doubts we promptly take measures such as sampling for and promote the pre-identification and disposal of expiration date risks to

testing quality inquiry and necessary recall to strengthen risk ensure the compliance of store operations.than 6 months

disposal. The testing work covers scenarios such as new product

evaluation complaint verification and doubt detection ensuring the According to the Unqualified Products Management Policy and the Store * Products with an expiration date of 12

quality and safety of medicines from multiple dimensions. Return Procedures for Unqualified Products near-expiry medicines with less than one month of validity and expired medicines returned by stores will be months are considered to be in warning

In addition we formulate the Medicine Traceability Management uniformly placed in the storage area for substandard medicines. The Medicines period if they will expire within less than 6

System and continuously improve the traceability system covering warehouse will deliver them to the contracted environmental protection months

the entire business process to achieve "traceable source trackable company for safe disposal in accordance with the waste disposal standards. in Warning

Period * Products with an expiration date of 18 destination and accountable responsibility" for medicines. In 2025

we have achieved 100% integration of the "traceability code medical We implement a regular shelf-life inspection mechanism to conduct regular months are considered to be in warning

insurance code and product code" for medical insurance medicines checks on the products in our stores. If expired products (including gift items) period if they will expire within 9 months

and implemented "scanning upon seeing the code" in the processes are found during the inspection we will hold the involved personnel directly

of inbound outbound and return collecting traceability codes responsible and the management personnel jointly responsible and assign

throughout the whole process. At the inbound end of incoming goods responsibility to individuals.the system automatically verifies the consistency between the

physical goods and the information on the "Code Assurance" platform

and controls batch differences. In the outbound and sales processes

it automatically intercepts duplicate codes and abnormal code

scanning to strengthen risk prevention and control throughout the

whole process. Meanwhile we promote traceability management in

the field of Chinese herbal medicines. We cooperate with Yunnan

Baiyao to establish 50 Chinese herbal medicine planting bases for

Panax notoginseng Astragalus membranaceus etc. achieving full-

link traceability from planting harvesting to processing and laying a

solid foundation for the quality and safety of medicines. During the

Reporting Period the Company did not experience any major liability

accidents related to the quality and safety of products and services.

2025 Environmental Social and Governance Report 32Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Pharmacovigilance Management Medicine Emergency and Recall

We have formulated the Pharmacovigilance Management System and the Adverse Medicine Reaction Monitoring and Reporting Management We have formulated the Medicine Emergency Response Plan and

System established and improved the pharmacovigilance management system and carried out systematic monitoring of medicine safety forming established an emergency response mechanism covering pre-event

a closed-loop management mechanism of "information collection-identification and recording-analysis and evaluation-information reporting-risk prevention in-event response and post-event summary. We have

disposal-monitoring and optimization". established a Medicine Safety Emergency Leadership Team led by the

President to coordinate monitoring and response. When a medicine

We clarify management responsibilities equip drugstores with pharmacovigilance specialists and collect and record information on adverse safety emergency occurs the Medicine Safety Emergency Leadership

reactions medication errors and damage events in a timely manner through channels such as customer feedback and consultations to ensure Team immediately activates the emergency response plan takes measures such as medicine recall risk warning notifying consumers

traceability. The Quality Management Department conducts unified analysis and evaluation assesses the severity and relevance of adverse and assisting in treatment and dynamically tracks the progress. After

reactions and reports events that meet the requirements through the national adverse drug reaction monitoring information network in strict the event the Quality Management Department submits a summary

accordance with laws and regulations. Based on the evaluation results we take measures such as issuing risk warnings suspending sales and report analyzes the reasons and puts forward improvement

assisting in recalls to prevent the further expansion of risks and effectively ensure public medication safety. recommendations to continuously optimize the emergency

management mechanism and reduce relevant risks.Meanwhile we continuously promote the monitoring optimization of pharmacovigilance work. Through the review and analysis of relevant events

we continuously improve the management process and risk control measures and organically combine pharmacovigilance with medication safety In terms of medicine recall management we strictly implement the

management and regularly carry out medication safety publicity and patient education. By providing professional medication guidance and Medicine Recall Management Policy and the Medicine Recovery

organizing health education lectures we guide patients to use medicines rationally and safely reduce medication-related risks and provide Management Policy implement a three-level recall management

continuous and professional support for patients in the process of medicine use treatment and auxiliary medical services further safeguarding according to the severity of drug quality and safety hazards and

patients' medication safety and health rights. clarify the corresponding recall time limits and disposal

requirements. After receiving the recall notice each store must

Closed-loop Management Mechanism for Pharmacovigilance immediately stop selling notify the purchasers and recover the problematic drugs and report to the medicine regulatory department

or notify the drug production enterprise within the specified time

limit. According to the different results confirmed by the medicine

Monitoring and

Optimization Information Collection

regulatory department follow-up processing of the recalled drugs

will be carried out. The Quality Management Department conducts

unified management and records of the entire recall process

establishes a recall file and assigns responsibility to individuals to

ensure a rigorous and perfect accountability mechanism and prevent

similar problems from occurring again.Identification and Medicine Recall SystemRisk Disposition Recording

First- An urgent recall must be completed within 24 hours if

level the use of the medicine may cause a serious health

Recall hazard.Second A recall must be completed within 48 hours if the use of

Information Reporting Analysis and Evaluation -level the medicine may cause a temporary or reversible

Recall health hazard.Third- A recall must be completed within 72 hours of the

level receipt of the recall notification if the use of the

Recall medicine does not generally cause health hazards but the medicine needs to be recalled for other reasons.

2025 Environmental Social and Governance Report 33Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Regulating Channels for Medicines

Yifeng Pharmacy aims to ensure that the source of drugs is clear safe and controllable and regards the stable operation of the supply chain as the By establishing a quality management system covering the entire life

core task. We implement the full-lifecycle management of suppliers in terms of delivery quality etc. and clearly define the risk-constraint cycle of suppliers we systematically standardize the supplier

requirements in the purchase and sales agreements. In accordance with laws and regulations such as the Drug Administration Law of the People's management process around key links such as supplier screening and

Republic of China the Good Supply Practice for Pharmaceutical Products (GSP) and the Good Manufacturing Practice for Pharmaceutical Products access assessment and evaluation and hierarchical and classified

(GMP) we have formulated systems such as the Supplier Quality Assurance System Evaluation Criteria the Operating Procedures for On-Site Quality management. This effectively prevents quality risks in the supply

Supervision of Suppliers and the Quality Management System External Audit Management Policy and are committed to building an efficient chain and consolidates the management foundation for the safety

supplier management system to strengthen the defense line for public health. compliance and controllability of drug channels.Supplier Quality Management

We regard source control as the key and formulate systems such as

To ensure the systematicness and effectiveness of management we have established a supply chain security governance framework centered the Supply Units and Sales Personnel First Purchased Variety Review

around "strategic guidance technological empowerment and hierarchical control". We have set up a dedicated Supply Chain Management Management Policy. We have established a supplier access

Department to coordinate procurement logistics and warehousing and implemented a mechanism of "separation of procurement and mechanism covering qualification review risk identification and

management parallel cooperation". At the same time we clearly require relevant positions in supply chain management to have comprehensive comprehensive evaluation. When introducing new suppliers we

professional capabilities in pharmaceutical expertise logistics management and information technology. We also include inventory turnover rate systematically evaluate their scale quality assurance ability product

drug sampling qualification rate supplier compliance rate and the proportion of green procurement in performance evaluation and implement delivery ability and after-sales support ability and carefully identify

incentive measures based on performance results to promote the effective implementation of management requirements. their business stability and performance ability to ensure that the

supply source is clear compliant and controllable.Supply Chain Security Governance Framework

In the specific access review process we focus on potential issues

Decision- The Board of Directors and the Chief Security Officer (CSO) of the supply chain such as whether the supplier has business risks litigation or

making Layer * Responsible for coordinating the direction of supply chain security governance formulating administrative penalty records and historical quality complaints. We

security strategies and making decisions and providing supervision on the admission of major also legally require them to provide relevant certification materials to

suppliers and key risk matters. ensure that the supplied products meet the requirements of national

laws regulations and quality standards and improve the

transparency and traceability of the supply chain from the source.The dedicated Supply Chain Management Department comprises the Quality Control Team (led by

a licensed pharmacist) the Data Security Team (led by a data engineer) and the Logistics

Operations Team (led by a cold chain expert) We also systematically integrate environmental protection and social Executive responsibility requirements into the supplier screening and access

Layer * Responsible for implementing requirements such as supplier audits traceability

management and temperature control monitoring and for coordinating the standardization mechanism setting clear standards in key dimensions such as

and digitalization of category planning supplier management and related management environmental compliance resource utilization business ethics and

processes. employment norms. We conduct pre-verification through the supplier

management platform and do not allow non-compliant suppliers to

enter. We give priority to cooperating with suppliers that are qualified

External expert committees (university scholars former drug regulatory inspectors) and third- and compliant and practice sustainable development. We identify

Support Layer party auditing institutions. and control potential environmental and social risks from the source

* Provide professional consultation independent assessment and compliance review continuously reduce the negative impacts related to the supply chain

support for supply chain security and supplier quality management. and promote the steady evolution of the supply chain towards a

green standardized and sustainable direction.

2025 Environmental Social and Governance Report 34Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Supplier Environmental and Social Access Criteria (Partial)

To ensure the continuous and stable quality of drugs we have formulated documents such as the Supplier Quality Assurance System Evaluation

Environmental Access Criteria Criteria and the Chinese Medicine Bidding and Quality Assessment Guidelines and established a comprehensive supplier assessment and

evaluation system. We continuously monitor and dynamically evaluate the supplier's performance ability quality performance and potential risks

to ensure that they always comply with the Company's quality management requirements and legal and regulatory standards.* Passed ISO 14001 environmental management system We have established a triple-quality evaluation mechanism centered on on-site inspections quality comparison tests and evaluations of efficacy

certification and quality perception. Before conducting on-site inspections we conduct a preliminary review of suppliers based on indicators such as the

company's scale development history operation of the quality assurance system product quality reputation and price rationality. If significant

* Submit full life cycle carbon footprint data and require key risks are found after evaluation we will immediately terminate the cooperation require rectification and simultaneously conduct risk analysis and

category (such as Chinese medicinal materials packaging follow-up verification of the supplied products to ensure effective closed-loop management.materials) suppliers to have a carbon intensity 20% lower

than the industry average

Quality Evaluation Mechanism

* Prohibit cooperation with suppliers that use highly polluting

processes (such as traditional coal-fired boilers)

* Chinese medicinal material suppliers must pass GAP (Good

Agricultural Practice) certification Quality Reviews on

* Give priority to choosing suppliers of drug outer packaging On-site Visits Comparison Efficacy and

boxes that use degradable materials (such as PLA bioplastic) and Inspection Quality Perception

The Quality Management Department Quality comparison inspection involves The Quality Management Department

Social Access Criteria dispatches dedicated personnel to monitoring and analyzing key indicators invites health advisors from stores to

conduct unannounced on-site of products including content related conduct paper or online questionnaires

inspections of the potential cooperative substances heavy metals dissolution on the perception of product efficacy

manufacturing enterprises. Based on rate content uniformity friability etc. appearance quality packaging material

* Possessing the relevant qualifications for drug production or the GMP inspection criteria an and conducting comparisons among and brand.operation in accordance with the law and having passed assessment and rating of the similar products based on the

quality management system certifications such as ISO 9001 enterprise's quality management inspection results.* Having signed the Integrity and Self-discipline Commitment system is carried out to gain an

Letter clearly prohibiting commercial bribery unfair understanding of the true situation of

competition and other such behaviors the enterprise.* Meeting the requirements for labor employment and

employee rights protection and providing the required proof

materials such as labor contracts and social insurance Regarding the regular operation of the quality evaluation mechanism we arrange multiple-frequency supplier assessments through annual audits

payment records surprise inspections and dynamic monitoring. The annual audit focuses on a systematic evaluation of the supplier's overall annual performance

operation of the quality system and compliance; surprise inspections are carried out irregularly for key or high-risk suppliers focusing on checking

* Having no major illegal or disciplinary records or serious the production site process execution and key quality control links; dynamic monitoring relies on a digital system to track quality indicators

negative public opinions and suppliers with potential performance and key risk signals in real-time identify potential problems in a timely manner and trigger corresponding disposal processes. The

compliance risks will not be admitted coordinated operation of the multi-level assessment mechanism effectively enhances the ability to proactively identify and quickly respond to

supplier quality risks.

2025 Environmental Social and Governance Report 35Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Meanwhile based on the differences in the importance and potential Based on the assessment and evaluation results we implement

risks of suppliers we implement a hierarchical audit management for dynamic management of suppliers and take management measures

suppliers and configure corresponding audit depth and trigger such as continuous cooperation rectification within a time limit or

conditions. Through differentiated audit arrangements while termination of cooperation accordingly. In 2025 we terminated our

reasonably allocating management resources we strengthen the partnerships with a total of 98 suppliers both current and

process supervision of key and high-risk suppliers and improve the prospective and implemented on-site supervision and monitoring of

pertinence and effectiveness of the audit work. our core suppliers. By continuously improving the supplier

assessment and evaluation mechanism we have effectively reduced

Material Supplier Audit Process supply chain risks and ensured the stable and reliable supply of

medicines.Supplier Categories Supplier Audit Process In addition we provide quality assurance training to all suppliers

every year covering topics such as the solution of product violation

problems and product quality standards to ensure that suppliers can

Conduct supplier qualification strictly comply with our quality standard system and are committed *

review and on-site quality audit to improving the supplier's quality management level.Class A Suppliers

before suppliers' first delivery

* Conduct supplier qualification

reviews To achieve refined management of suppliers we have established a Grades of Suppliers in 2025

* Organize on-site audits when supplier quality risk rating mechanism conducted annual evaluations

quality issues arise with of suppliers and implemented dynamic management. This rating

Class B Suppliers materials or when significant system combines the quality characteristics of different medicines Grade E Grade A

changes occur in the supplier's sets corresponding scoring standards for various quality problems

production conditions and divides suppliers into five levels: A B C D and E corresponding 383 721

processes quality standards and to different risk levels thus intuitively reflecting the supplier's quality

other key factors performance and risk status. Grade D

For suppliers of different levels we have developed differentiated

* Conduct certification audit of supplier management strategy. For Grade A Suppliers we offer more 354

Class C Suppliers suppliers cooperation opportunities and preferential policies to encourage

them to maintain a high-quality level continuously. For Grade B and C

Suppliers we promote their continuous improvement through

To enhance the independence and professionalism of supplier enhanced communication and guidance. For Grade D and E Suppliers

assessment and evaluation we introduce third-party professional with higher risks we increase supervision and take measures such as Grade C Grade B

institutions to participate in the evaluation of quality testing ESG restricting cooperation or elimination when necessary. Through

compliance and sustainable development performance. Through hierarchical and classified management we have achieved precise 1061 1062

third-party testing and review we conduct professional evaluations allocation of supplier resources improved management efficiency

of the quality of medicines and key raw materials environmental and flexibility and provided strong support for the stable and efficient

performance employment compliance and business ethics risks operation of the supply chain.and incorporate the results into the supplier comprehensive

assessment system as an important basis for subsequent

management and cooperation decisions.

2025 Environmental Social and Governance Report 36Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Supply Chain Risk Management

We focus on key links such as procurement warehousing logistics and distribution and supplier collaboration and systematically carry out supply

We deeply identify potential risks in the supply chain and chain risk identification and assessment. We examine the potential impacts of relevant risks on business operations from dimensions such as

comprehensively evaluate their potential impacts to pre-develop pharmaceutical quality and safety supply stability operational efficiency and compliance and sustainable development. We combine internal and

response strategy enhance risk resilience and forge a strong external information such as the entire procurement process data supplier qualifications and performance industry regulatory requirements and

protective net for the three-dimensional supply chain layout of external environmental changes and use a combination of quantitative and qualitative methods to comprehensively identify and assess supply

smooth channels and source construction. chain-related risks and opportunities. We prioritize them according to factors such as the probability of risk occurrence impact degree and control

cost and clarify the management focus of different risks to provide a basis for implementing hierarchical and classified management and targeted

In risk management practice we take safeguarding compliance responses.ensuring product quality and patient safety improving operational

efficiency and enhancing business continuity as the core objectives

balance cost control and long-term sustainable development Impacts Risks and Opportunities in Supply Chain Management

promote the construction of a supply chain system that is safe

efficient economical and resilient and further conduct continuous

tracking and evaluation of risk management effectiveness by defining Impact Risk Opportunity

quantitative indicators.* Improve supply chain safety and * Supply chain optimization * Improve efficiency reduce costs and enhance

Supply Chain Risk Management Objectives transparency strengthen and upgrading (such as business continuity by improving the automation

pharmaceutical quality control system construction level of the supply chain optimizing operational

Quality and Safety and traceability capabilities equipment update green management and applying digital tools.ensure customer medication packaging/new energy * Build a regional warehousing and distribution

Traceability code Cold chain medicine Data security safety and promote transportation etc.) require system promote multi-warehouse operation and

coverage rate: disconnection rate: compliance rate: pharmaceutical accessibility. upfront investment which regional integrated logistics collaboration

100% ≤0.1% 100 * Improve supply chain efficiency may increase costs in the improve the ability to respond to emergencies % through process standardization short term and put pressure and changes in market demand and enhance

and digital operation reduce on cash flow. core competitiveness.inventory backlog improve * The increased reliance on * Improve supply stability and capital turnover

Zero incidents of customer privacy leakage and zero turnover and fulfillment automation and digital efficiency reduce inventory backlog and

anomalies in drug quality and safety. capabilities and drive the systems may lead to an improve cash flow quality through supplier

improvement of operational increase in operation and grading and early warning mechanisms

efficiency. governance complexity and centralized procurement and local procurement

* Strengthen compliance and risk at the same time bring collaboration etc.control reduce violation losses about supporting pressures * The green supply chain aligns with the ESG

Efficiency and Cost and potential penalty risks such as personnel skill compliance capability to support the sustainable

Inventory turnover Logistics cost: Out-of-stock rate: improve business continuity and transformation and training strategy reduce long-term compliance and

4.5 5 ≤3 the ability to resist emergencies costs. carbon risks enhance brand and financing rate: % year-on-year % and support business expansion competitiveness and create space for value

times/year decrease and business model robustness addition in new businesses/ecosystems (such as

in the medium and long term. the extension of data capabilities).

2025 Environmental Social and Governance Report 37Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Based on the systematic identification and assessment of supply chain risks we further establish a supply chain risk management and response Meanwhile we also actively participate in various industry exhibitions

mechanism centered around prevention graded response and digital support. This forms a closed-loop management system covering pre-event professional lectures and seminars. We discuss the supply chain risk

prevention in-process control and post-event improvement continuously enhancing the stability flexibility and response efficiency of the supply situation in the industry with peers and partners exchange and share

chain operation to ensure the safe reliable and continuous supply of medicines. practical response strategies and contribute to the continuous

improvement of the risk management system and the enhancement

Focusing on key risk types such as supply disruptions abnormal deliveries quality compliance and inventory fluctuations we integrate risk of risk response capabilities in the entire industry thus laying a solid

management requirements into the daily operation of the supply chain. By coordinating the supply structure resource allocation and operational foundation for the stable and healthy development of the industry's

collaboration we promote the regular implementation of risk mitigation measures. These risk management measures cover both risk prevention supply chain.and mitigation in normal operations and emergency response arrangements in case of emergencies ensuring rapid linkage and effective handling

in different risk scenarios. In addition we continuously enhance the regional resilience of the

supply chain through mergers acquisitions integration and

technological innovation. By integrating regional resources

Supply Chain Risk Management Measures optimizing the logistics and warehousing network and promoting the

application of intelligent and digital technologies in all aspects of the

supply chain we continuously improve the overall operation

By implementing a dual procurement and diversified supply strategy maintaining multi-source supply in key categories effectively efficiency and collaboration ability of the supply chain providing

reduces the risk of supply disruption caused by over-reliance on a single source. long-term and stable capacity support for supply chain risk

management and emergency protection. While consolidating the

safety foundation of the supply chain we further enhance the overall

Promote the layout of localized procurement shorten the supply radius and reduce the impact of transportation uncertainties and competitive advantage.regional factors on the stability of supply.Based on the product's importance and demand characteristics set safety stock and priority guarantee standards and ensure the

continuous supply of core medicines through cross-regional allocation of backup manufacturing sites and resource coordination.Establish a warning and review mechanism for contract renewal and carry out connection arrangements in stages before the contract

expires to avoid supply risks caused by contract expiration.Establish a tiered response and emergency handling mechanism for delivery anomalies quality or compliance risks promptly activate

backup suppliers switch procurement channels or implement emergency allocation to ensure continuous business operation.Relying on digital systems such as SRM the entire process of procurement execution order fulfillment inventory turnover and key

product delivery is monitored to achieve real-time risk early warning rapid response and closed-loop improvement.In light of business development and changes in market demand we will coordinate production capacity and resource allocation

enhance the overall stability of the supply chain by expanding production bases coordinating raw material and product supplies in

advance and reserving alternative supply resources.

2025 Environmental Social and Governance Report 38Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Improving Service Quality

Yifeng Pharmacy always focuses on customer needs and adheres to the original intention of "making people physically and mentally healthy" committed to setting a health benchmark. We have formulated systems such as

the Pharmaceutical Service Management System and the Pharmaceutical Service Management System for Stores. Through a scenario-based model we integrate pharmaceutical services preventive healthcare medication

tracking chronic disease management and health lifestyle consulting to build a comprehensive health service system. With a professional service system strict marketing regulations and omni-channel interactive

experiences we provide customers with safe professional and considerate services to promote the improvement of the national health level.Professional and Accurate Services

Our Service Philosophy Our Service Team Our Membership System

We adhere to the professional and humanistic service We attach great importance to the construction of a professional service team. More We have established a multi-level membership system and built

concept build a comprehensive service system than 95% of frontline employees have a medical or pharmaceutical background and we a health management service system covering all channels all

promote the "peak-end experience" service model are equipped with licensed pharmacists to provide services such as medication scenarios and the entire life cycle centered around members. In

implement the service principles of "Three Dos" and consultation medication guidance and adverse reaction monitoring promoting the response to the diverse health needs of members we have

"Three Nos" and adhere to the value orientation of transformation of stores into "health solution providers". We focus on "precise launched the "88" membership benefits including 8

"selflessness and altruism". We require employees to medication" requiring store health advisors to make precise recommendations professional membership services (such as complimentary tea

prescribe the right medicine according to the according to diseases and using big data to optimize medication suggestions. We have and decoction of herbs and gelatin) and 8 exclusive benefits

symptoms make recommendations according to established a systematic training system to train many grassroots personnel to become (such as member discounts point redemption and health

needs clearly explain the basis for recommendations health advisors with pharmacist qualifications and regularly train and assess store advisors). While providing convenient services and practical

and provide considerate and professional medication employees on relevant standard requirements and medical knowledge. For core benefits we strengthen professional health support. Relying on

guidance and health management. Relying on a treatment drugs for common diseases (such as antihypertensive drugs and the enterprise WeChat platform we establish a regular digital

widely covered service network we steadily expand hypoglycemic drugs) we have established a professional knowledge base to push interaction mechanism with members providing one-on-one

and optimize our stores coordinate online and offline scientific and reasonable combination medication examples to employees and medication consultation and professional follow-up services

platforms to form an integrated health service model introduced electronic medical records and intelligent consultation systems for auxiliary continuously tracking members' health needs and helping

and improve service accessibility and experience guidance. In addition we have formulated the Store Member Management Incentive them gradually establish scientific health concepts and good

consistency. Program to stimulate the enthusiasm of employees and improve service capabilities. medication and lifestyle habits.We continue to make efforts in professional pharmaceutical services focusing on the management of chronic non-communicable diseases (chronic diseases). Through customized chronic disease management plans we

provide services such as professional medication guidance medication reminders disease course management health monitoring and popular science education for customers with chronic diseases aiming to enhance

customers' awareness of diseases and self-management ability improve medication compliance and effectively promote national health.

2025 Environmental Social and Governance Report 39Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Consumer Rights Protection mechanism with special training we focus on the 9 key dissatisfied remained at a relatively high level in the industry: the average ringing scenarios identified throughout the year to carry out targeted capacity time of customer service was 152.91 seconds (from answering to

improvement. This measure has effectively promoted the shift in the hanging up) the average manual response speed reached 4 seconds

We integrate consumer rights protection into the entire process of awareness of front-line employees from "passive response" to "active and the complaint resolution rate reached 84.65%.business management and are committed to building an excellent service" and continuously optimized the overall service level.customer experience. We actively identify customer demands through

a regular customer satisfaction survey system; rely on a standardized

and efficient closed-loop complaint handling process to promptly

respond to and resolve feedback. At the same time we adhere to the We strictly abide by laws and regulations such as the Advertising Law

principle of responsibility in the marketing and service process of the People's Republic of China and the Measures for the

strengthen compliance review ensure information transparency We have built a multi-channel full-process and traceable complaint Administration of Medicine Operation and Use Quality Supervision

prudent recommendations and fair transactions and effectively management system to ensure that customer demands are upholding the compliance baseline for medicine promotion. We have

safeguard consumers' right to know right to choose and health responded to in a timely and standardized manner. Centering around established a systematic compliance review and approval mechanism

rights. the "400 Call Center" and "Online Customer Service" we integrate to ensure that promotional materials in our stores are truthful and

multiple contact points such as receipt scanning WeChat payment objective effectively safeguarding the authenticity and compliance of

entry manager hotline official account audit channels and public all promotional content.opinion platforms to achieve full coverage of complaint feedback A dedicated team is responsible for the unified production of

channels.We conduct monthly comprehensive customer satisfaction surveys promotional and advertising materials which undergo rigorous

and have built an evaluation system centered on the Net Promoter After all complaints are accepted the customer service team review by professionals before being distributed. This ensures

Score (NPS) covering multiple dimensions such as service attitude uniformly creates digital work orders to completely record key consistent messaging and standardized presentation across both

professionalism in-store environment cashier efficiency convenience information for traceability. The work orders are transferred to the directly operated and franchised channels. Additionally we have

services product variety and drug quality and price. We particularly responsible stores or departments according to the nature of the implemented an internal responsible marketing inspection

focus on the implementation of key actions in the "peak-end complaints to ensure that the complaint matters reach the processing mechanism with relevant departments reviewing all external

experience" and introduce a competitive comparison perspective to terminal immediately. promotional materials to guarantee the legality and compliance of

comprehensively evaluate the Company's competitiveness and publicly disseminated content.customer reputation in the local market. We have set a hard-time target of completing complaint handling

within 48 hours. Customer service staff actively follow up on the whole Furthermore we carry out regular marketing audits focusing on key

Based on the survey data we compile monthly and quarterly NPS process of complaint matters to ensure closed-loop resolution. For issues such as checkout price discrepancies infringement of member

Survey Report conduct in-depth analysis of the month-on-month overdue work orders the system will trigger a step-by-step feedback rights and unprofessional recommendations that may harm

changes and horizontal differences in indicators accurately identify from "work order handler-store manager-store director-branch consumer interests. In response to violations we take actions ranging

customer pain points and formulate improvement plans. In 2025 the customer service" and link with the reward and punishment from warnings to internal notifications based on the severity of the

Company collected approximately 30000 customer satisfaction mechanism in the 100% Customer Satisfaction Improvement Program case strengthening internal accountability promoting closed-loop

survey questionnaires each quarter and the overall customer to strengthen the implementation of responsibilities. corrective measures and preventing the recurrence of similar

satisfaction score was 80.01 maintaining a relatively high level in the incidents.industry. Meanwhile we implement hierarchical management of complaints

and strictly conduct investigations in accordance with the Customer To enhance the compliance awareness of all employees we conduct

To deepen customer experience management we set the customer Complaints and Adverse Reaction Handling Management Procedures. annual special training on responsible marketing for all employees

service hotline net satisfaction target at 85% and incorporate it into The handling process covers aspects such as customer covering knowledge of consumer rights and legal protections. We

the performance assessment of the customer service team communication on-site verification sample verification and guide Employees to adhere to the principle of "putting consumer

promoting the focus of satisfaction management to shift from result medicine quality re-examination. If there are problems related to interests first" in marketing activities promote the effective

monitoring to process control. We have established an "active product quality we will immediately initiate a recall procedure and implementation of responsible marketing requirements at the front-

invitation for evaluation + closed-loop follow-up" mechanism promptly feedback the handling results to customers to effectively line of stores and consolidate brand credibility. As of the end of the

covering key nodes such as inbound service restart of interrupted safeguard the legitimate rights and interests of consumers. Reporting Period the Company has not had any major violations

business and follow-up after complaint handling forming a related to product/service information and labeling or marketing

management closed-loop mechanism of "feedback-improvement-re- We also regularly conduct multi-dimensional analysis of complaint activities.evaluation". data focusing on the distribution of complaint types processing

efficiency and customer feedback. We transform typical cases into

Meanwhile we continuously iterate on the 100% Customer internal learning materials to drive continuous service optimization. In

Satisfaction Improvement Program. Combining the incentive 2025 the customer service operation efficiency of the Company

2025 Environmental Social and Governance Report 40Enhancing Benefits

and Efficiency for

Improved Medication

Accessibility

Yifeng Pharmacy aims to improve both the efficiency of medical

services and social benefits. It is committed to improving the layout of

the medical network strengthening service coverage and reachability;

using digital and intelligent technologies to empower the operation

and logistics systems improving service efficiency and operational

stability; and while ensuring drug quality and supply safety

continuously empowering the industrial source and grass-roots areas

to promote the development of medical and health services in a more

efficient and inclusive direction and jointly building a sustainable new

ecosystem of medical services.

2025 Environmental Social and Governance ReportSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Smooth Medical Network

Yifeng Pharmacy adheres to the business philosophy of "fair pricing

with professional service" and is customer-demand-oriented. It is

committed to providing customers with high-efficacy cost-effective

and easily accessible drugs as well as reliable pharmaceutical Accessibility ReasonablePricing

services. In a basis of traditional pharmacy operations we

continuously identify and respond to the diverse full-cycle health In addition to continuously expanding the offline store layout With a procurement scale of over 10 billion RMB we convert the

management needs of our customers. By establishing traditional and building a modern logistics network we have established scale advantage of the supply chain into terminal price benefits

Chinese medicine clinics offering on-site TCM consultation services 24-hour service stores to meet customers' medication needs at through non-centralized national price comparison channel

setting up outpatient departments and in-store clinics developing all hours of the day thereby continuously improving the integration and repeated bargaining. At the same time we

internet-based healthcare services as well as building the convenience of purchasing medications. vigorously develop private-label products to provide customers

Hengxiutang Chinese Herbal Medicine Factory we are steadily with cost-effective drug options.expanding into medical services and the upstream industrial chain.We enrich our service offerings and delivery methods to provide Variety

comprehensive one-stop health solutions for the people. Supply Stability

Facing the development trend of increasing chain-store rate and We have established strategic cooperative relationships with

globally leading pharmaceutical companies and top 100 We have established long-term and in-depth strategic market concentration in the pharmaceutical retail industry we

pharmaceutical companies in China. The variety of retail drugs cooperation with important pharmaceutical companies in adhere to the development strategy of "holding regional focuses and

exceeds 70000 SKUs covering Chinese and Western patent China and continuously upgraded the logistics network. We performing steady expansion" and adopt a diversified expansion

model of "new store + merger and acquisition + franchise" to medicines Chinese herbal medicines health products medical

improve the cross-regional allocation efficiency through a digital

devices and daily convenience products related to health. system to ensure fast delivery services within 48 hours continuously improve the breadth and depth of the store network nationwide and 24 hours within the province.coverage meeting customers' immediate drug-using and health

service needs. At the same time we continuously expand the online

and offline business layout aiming to improve the consumer Timeliness

experience through large-scale operation and ensure that customers

can enjoy more accessible high-quality products and services in terms By leveraging our network of brick-and-mortar stores located

of purchase convenience product variety timeliness of drug within communities we have effectively reduced the distance

purchase pricing rationality and supply stability. customers must travel to purchase medications enabling

patients to obtain the medications they need promptly within

their daily living areas and improving both the timeliness and

accessibility of medication.We continuously promote the construction of the retail network build an omni-channel layout with coordinated online and offline development

and precisely cover diverse customer groups. Offline we promote the "fleet-type" store layout focusing on covering 10 provinces and cities in

Central South East and North China. The network extends to 72 prefecture-level cities and over 250 county-level cities consolidating the regional

service foundation. Online we continuously improve the business system integrating traditional and new retail models build intelligent retail

channels covering B2C O2O APP + Mini Program and private traffic and expand new service scenarios such as Internet hospitals and electronic

prescriptions providing customers with more convenient and affordable drug-purchasing and health service options. At the same time we open

direct-operation franchising. On the basis of providing stable business support to franchise stores we further promote the extension of medical

services to grass-roots areas and continuously improve the coverage of pharmaceutical products and health services.

2025 Environmental Social and Governance Report 42Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Offline Retail Layout

As of December 31 2025

Specialty Medicine

14831 Flagship Stores Stores (DTP Specialized

Offline Stores Pharmacies)

(including 4313 franchise stores) "Dual-channel"BMI

Regional Central Designated Outlets

Stores Stores Special

Flagship stores Regional Medium-sized Retailing Stores Special and Chronic

22 central stores community store Offline Diseases Medical Insurance Medium-sized Retailing Coordinated Stores72 849 Community Stores

Hospital-

adjacent Stores

Small-sized DTP specialized

community stores pharmacies Small-sized Community Stores Traditional 24-hour Service 9575 316 Chinese Franchise Stores

Medicine Stores

Clinics

"Dual-channel" BMI Hospital adjacent stores

designated outlets 688

251

We combine the population structure medical resource distribution and customers' drug-using needs in different regions to continuously improve

the offline retail network system covering multiple cities and business districts forming a "fleet-type" store layout centered on flagship stores

24-hour service stores Traditional Chinese and western regional central stores medium-sized community stores and small-sized community stores. Through differentiated positioning and functional

600+ medicine clinics (including traditional division we improve the regional service carrying capacity and network operation efficiency. Flagship stores and regional central stores mainly

145 provide "one-stop" services with a wide range of products and integrated functions while small and medium-sized community stores precisely Chinese medicine clinic) cover the daily medicine-using needs of communities by being close to residents' living circles and rationally allocating product categories ensuring

the accessibility and stability of medicine supply.Meanwhile we take "thoughtful service + new retail" as the strategic core and continue to promote the construction of the specialty pharmacy

The Company operates 10000+ online stores (including system. Gradually we have formed a professional service network covering various types of business forms such as specialty medicine stores (DTP

10 specialized pharmacies) "dual-channel" BMI designated outlets special and chronic diseases medical insurance coordinated stores hospital-franchise stores stores are connected to provincial and adjacent stores and 24-hour service stores. Focusing on the needs of patients' full-course management we improve service links such as pre-

municipal medical insurance and health prescription circulation medication consultation continuous treatment rehabilitation management and follow-up support. We also equip DTP pharmacies with chronic

platforms nearly 200 stores have direct or indirect disease management specialists to provide professional goal management health monitoring medication guidance and health education helping

chronic disease customers enhance their disease awareness and self-management ability. In addition adhering to the principle of "customers first"

connections with hospitals (including 95 internet hospitals we continuously optimize the service radius and response efficiency. 24-hour service stores offer self-pickup and home delivery services within a 3-

kilometer range and hospital-adjacent stores are opened within 100 meters of hospitals aiming to provide customers with a better faster and

and 10 self-built internet hospitals (including those under more convenient medicine purchasing experience.construction). To further promote pharmaceutical accessibility we have opened township franchise stores in provinces such as Hunan Hubei Jiangsu Jiangxi

and Guangdong. Through the coordinated operation of multi-level offline networks we expand health service channels in the grass-roots market

meet the medication needs of different regions and populations and promote the full coverage of regional markets.

2025 Environmental Social and Governance Report 43Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Online Retail Channels

We continue to strengthen our retail service system centered on offline stores. Building on this foundation we are moderately expanding our online service capabilities to complement and extend the services offered by our

brick-and-mortar stores. We develop an ecological new pharmaceutical retail platform based on the membership system Internet healthcare and health management. We promote the effective connection between online

diagnosis and treatment chronic disease management services such as health butlers and family doctors and the physical store network to meet the diverse and continuous health needs of different populations. In terms of

fulfillment online orders are completed through the cooperation between the company's logistics system and physical stores realizing online ordering nearby distribution and efficient delivery expanding the service

coverage of our stores to better meet the daily medication needs of community residents.B2C/O2O Internet Hospital

* We have established service touchpoints on major online platforms to serve as a * We have deployed Internet hospital services in many provincial capital cities such as Changsha Nanchang Nanjing Shijiazhuang Tianjin Guangzhou and

complementary channel to our offline store services. These touchpoints cover Haikou covering multiple departments such as internal medicine traditional Chinese medicine integrated traditional Chinese and Western medicine surgery

more than 90% of the county-level administrative regions within our Company's and obstetrics and gynecology continuously improving the accessibility and coverage of online diagnosis and treatment services.operational area further expanding the ways we reach customers and enabling

them to conveniently access store services across a variety of scenarios. * There are more than 3000 registered doctors on our platform and we have recruited and trained a professional team of licensed pharmacists. We have formed

a prescription review and quality management team consisting of more than 30 licensed pharmacists strengthening the guarantee of prescription compliance

* The online takeaway platform launch rate of our stores exceeds 95%. Relying on and medication safety and consolidating the professional foundation of online medical services.the nearby stores' fulfillment and instant delivery system we have achieved 30-

minute medicine delivery service covering more than 10000 stores and support

multiple scenarios such as night-time medication emergency medication and Internal Medicine

cold chain drug delivery timely responding to customers' actual needs of

"urgent and special medication". Traditional Chinese Medicine

Integrated Traditional Chinese and Western Medicine

General Practice

APP + Mini Surgery

Program

Obstetrics and Gynecology

* Our APP + Mini Program realizes the integrated management of online and

offline products supports the synchronization of product membership price Pediatrics

and activity information and ensures the consistency of services and rights in

different consumption scenarios. Other Departments

* We continue to improve the online product supply optimize the product

structure and service experience and better respond to consumers' health Department Distribution of Practicing Doctors in Internet Hospitals

needs.* To ensure the standardized and orderly development of relevant services in Internet hospitals we have established and implemented supporting mechanisms

covering compliance service quality and operation management:：

Private Domain ? We have formulated strict medical compliance systems built a multi-license network hospital management system and an Internet hospital risk control

Community system realized the connection between self-built network hospitals and third-party network hospitals and the upload of regulatory data ensuring that the

prescription compliance rate;

* We provide professional medication consultation services through the private ? We have launched a consultation and prescription system that supports text/graphic/video consultations doctor management and online mall

domain community and build a health communication platform to facilitate connection serving more than 22000 stores;

customers to obtain drug information health knowledge and health

preservation suggestions. ? We have improved the electronic medical record system and big data analysis and used remote medical and encryption technologies to ensure the

interconnection and information security of medical data;

* We systematically record customers' detection data and carry out chronic

disease management. We provide online health consultations through ? We have optimized the diagnosis and treatment process established a rapid response mechanism reduced the proportion of abnormal orders to 3.05%

platforms such as enterprise WeChat and store staff push medication guidance and reduced the prescription rejection rate to 4.68%.and health care according to customers' needs realizing personalized services ? Implement the assessment plan for full-time doctors and the subsidy plan for multi-practice physicians covering assessment dimensions such as medical

and precise communication. quality and patient satisfaction to motivate doctors to improve service quality.

2025 Environmental Social and Governance Report 44Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Franchise Management

Regulations

As a leading enterprise in the pharmaceutical retail industry we

actively convey the trustworthy brand value and the service concept To ensure brand consistency we will All franchise stores must strictly We require all franchise stores to We have set unified standards and

of comprehensive health. We continuously improve the standardized uniformly arrange and designate units implement a unified management establish and use a unified processes to standardize the

and sustainable management system for franchise stores taking the for the decoration design and basic system including quality computer management system to management of business invoices

guarantee of medication safety and service quality as an important decoration (renovation) construction management requirements price facilitate the headquarters' throughout their lifecycle

prerequisite for the construction of the franchise system. In the of all franchise stores. All materials systems and promotion policies unified digital control of the including entry query review

process of selecting franchise stores we give priority to those with with the "Yifeng Pharmacy" logo used to ensure that franchise stores stores. and archiving to ensure the

experience in the pharmaceutical retail industry a practicing during the construction process must have rules to follow. While financial compliance of be purchased at designated locations. continuously expanding sales

pharmacist qualification certificate and relevant professional franchisees.At the same time we require franchise channels they can provide

knowledge. We also pay attention to their long-term cooperation stores to install network wiring and a customers with medicines with

willingness awareness of compliant operation and the degree of designated video surveillance system transparent prices and reliable

recognition of the Company's unified management requirements. We during the decoration process to quality as well as professional

conduct a prudent assessment of their financial strength and stability strengthen subsequent management and convenient health services.to ensure that they have the business foundation to support the and monitoring.upfront investment in store leasing decoration and inventory

procurement. Franchise stores need to recognize and practice the

Company's brand culture and business philosophy and provide safe

and high-quality services to customers. The location of franchise

stores should be in accordance with the Company's market layout Unified Corporate Unified Management Unified Computer Unified Bill Identification System Management

strategy to ensure the maximization of brand image and market System

influence. Before the official opening franchise stores need to pass

the preparatory review and employee training to ensure that the store

operation conditions and staff capabilities meet the Company's "Seven Unifications" Management

unified management standards laying the foundation for the stable

progress and long-term development of the cooperation.Unified Standards for Unified Procurement and Unified Personnel

In terms of franchisee management we always adhere to high- Pharmaceutical Services Delivery Training

standard operations and fully implement the "seven unifications"

management model to ensure that franchise stores are consistent

with the Company in terms of brand image product quality All franchise stores must hold relevant licenses such as the As the sole supplier of goods we To improve the management level of

professional services and operational efficiency. Relying on the big- Drug Business License the Business License the Food implement unified procurement and franchise stores we conduct regular

data store-location selection model and the intelligent franchise Distribution License and the Class II Medical Devices distribution management. Franchise stores standardized training including training for

management system we implement full-process management of key Recordation Certificate and strictly implement quality are strictly prohibited from purchasing new franchisees annual training for

links such as franchise applications location assessment store control in accordance with the Drug Administration Law of goods privately. We have also formulated franchisees training for reserve store

establishment and opening and subsequent operations effectively the People's Republic of China the Good Supply Practice penalty mechanisms for violations such as managers and regional directors as well as

improving the quality of new store expansion and operational for Pharmaceutical Products (GSP) and the Company's private purchases cross-selling and price online learning courses for employees of

stability. In addition we provide comprehensive support to internal regulations and accept irregular inspections and chaos. For franchisees who fail to make franchise stores and training to improve

franchisees including opening planning product planning GSP inspections. We strictly implement the "three-checks effective rectifications after multiple store managers' capabilities to assist

operational guidance professional training manufacturer support and one-heavy-penalty" system. Through regular attempts seriously violate the contract or franchisees in optimizing store operations.and financing consultation. Through regular questionnaires phone inspections and strict control we ensure that franchise cause major quality and safety incidents

follow-ups and on-site investigations we continuously optimize the stores meet the standards in terms of quality service and

we will terminate the cooperation and

compliance thus ensuring the safety of customers' revoke the brand authorization in

franchise management and support system to promote the medication and maintaining the standardized order of the accordance with laws and regulations.standardized operation and coordinated development of the industry.franchise network.

2025 Environmental Social and Governance Report 45Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Deepening Digital Intelligence Empowerment

Yifeng Pharmacy adheres to digital and intelligent capabilities as an We ensure the execution and R&D efficiency of innovative business through a flexible management model and an efficient organizational structure.important engine for promoting high-quality development. We At the innovation execution aspects we established a digital innovation group for people goods and places focusing on the R&D of core products

continuously deepen the integrated application of digital for innovative business. Through precise and continuous resource investment we systematically response to industry pain points and lay the

technologies in business management and operation and foundation for the implementation of innovation. We have built the "Product and Business Analysis Business Partnership Model". Business analysts

systematically build a digital and intelligent system covering front- deeply analyze business requirements to help product managers optimize processes and reconstruct business models. At the same time we

end operations mid-platform operations and back-end fulfillment implement the "Technical Resource Team" model dividing the technical team into multiple small teams and allocating resources according to

to continuously improve operational efficiency and service quality business needs to ensure that technical support is closely integrated with business goals thereby shaping the support capabilities for product R&D.and enhance the stability and responsiveness of business operations.At the same time in the process of promoting technological In addition we established the IT Strategy Committee and the COE (Centre of Excellence) organization. By connecting the front-and back-end

innovation and application implementation we continuously pay collaboration and online and offline business processes we closely integrate technology R&D with cross-departmental cooperation effectively

attention to potential risks in technology ethics and compliance to evaluate business value to reduce decision-making waste and improve R&D efficiency ensure that innovation results are quickly transformed into

ensure that digital and intelligent development proceeds steadily on practical applications promote digital transformation and optimize production capacity.a standardized prudent and sustainable path.Original The requirements proposed by various business lines are aggregated into a requirement pool covering

Requirements different business scenarios such as products functions and services.Innovation-Driven Approach L1 At the COE's weekly meeting the requirements are initially clarified to ensure that they are clearly

Clarification described and the objectives are well-defined. The necessity feasibility and priority of the requirements is also preliminarily assessed.We take "customer-centric operational services efficient and agile

supply chain capabilities and efficient and innovative organizational Monthly requirement alignment meetings are held to conduct an in-depth analysis of the requirements

talent development mechanism" as the strategy and goal of L2 Alignment that have been screened through L1 phase. The value impact on business and the technical

technological innovation and are committed to achieving a leading COE Operation implementation difficulty are assessed and the consistency of requirements across departments is ensured.digital business level in the industry. To achieve this goal we Mechanism

reasonably allocate capital resources based on our own business

situation and adopt a diversified financing strategy. Through a sound At the project initiation review meeting of the Digital Strategy Committee the requirements that have

L3 Review been screened through L2 phase are reviewed for approval. This ensures that the requirements align with capital management system we ensure the sustainability of the Company's overall strategic goals and determines the resource investment and development plan for

investment in technological innovation and maximize the efficiency of the project.capital use. In the process of innovation we strictly abide by

intellectual property laws and regulations respect and protect our Requirements that have passed the final review officially enter the R&D process. The system team

own intellectual property rights and the achievements of others. System R&D proceeds with development testing and implementation according to the established plan driving the Company's digital transformation and providing efficient and stable technical support for business

operations.In 2025 we deepened R&D innovation and technology application and the innovation results were implemented more quickly in multiple business

scenarios. In terms of customer service we launched a precise reception assistant. Based on membership labeling and big-data model calculation

2025 capabilities we built an altruistic precise service model to improve customers' service experience and repurchase rate. In terms of employees'

empowerment we created a system for store clerks covering goals incentives tasks diagnosis and training and introduced AI technology to build

The Company's innovation and R&D expenditure reached a closed-loop for professional ability improvement of "learning-reception-practice-consolidation" continuously strengthening front-line

RMB 42.532million with 382 R&D personnel. employees' professional judgment ability and service execution ability and comprehensively improving the professional level of store clerks and

Customers' satisfaction. In terms of compliance operation we established a medical insurance risk control and supervision system based on big-

data models strictly setting risk control and supervision rules according to national medical insurance supervision requirements to effectively avoid

the risk of medical insurance fund fraud. In terms of supply chain management we built a supply chain center to break through the efficiency

bottlenecks in each link effectively improving store turnover product availability and traceability transparency.

2025 Environmental Social and Governance Report 46Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Operational Efficiency Digital System Framework

Improvement

Employees Users

We regard digital management means as the core to improve the

operating efficiency of the retail network and the refined

management level. Focusing on the characteristics of the Business Middle End Business Intelligent

pharmaceutical retail business we built a full-chain digital system Middle EndMedical

covering "store operation-supply chain management-membership Insurance Retailing Stores

service-employees' management". Through a standardized and Membership Product Salesman Marketing Event Data tracking governance

progressive construction path we steadily promoted the system R&D

of the middle platform and the large front-end and empowered Payment Transaction Quality Task User profile Data

traditional operation management with digital and intelligent application

technologies. Our digital system supports store operation POS Public Domain Point of Sales

payment medical insurance services public platforms drug Platform (POS)

Technical Service Middle End

supervision etc. externally and undertakes various functional

modules such as personnel finance and materials of the

headquarters internally. While ensuring the steady expansion of Cache Message Database Tracing High High

business scale we continuously improve internal operating efficiency queue availability concurrencyMedical

and process operation quality. Products Headquarter

Supervision

Human Resources Finance OA

We continuously improve our digital operation capabilities through key means such as the construction of new technology frameworks the

governance of system sub-health the improvement of main-link performance and the optimization of approval processes.Digital Operation Enhancement Initiatives

Upgrade the system framework By optimizing various By optimizing system performance and the main Analyze process authorization

based on the Springboot aspects such as the system links we upgraded the existing technical from the prospective of time

technology architecture database log analysis and architecture resulting in significant improvements consumption value and pass

optimize the R&D process and network traffic we have in system performance and stability. This ensured rate based on the RAPID model

improve system performance reduced system alerts and the system successfully withstood the peak and reduce and optimize

and development efficiency. improved stability. demands of major sales promotions and our nonessential process nodes to

company anniversary while reliably supporting increase the approval efficiency

the operations of over 30000 stores. across the entire system by 26%.

2025 Environmental Social and Governance Report 47

Opened PlatformSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

We conduct refined membership operation and precise marketing We continuously promote the digital construction of human

and actively promote the development of online diagnosis and resources systematically improving the operating efficiency of core

treatment and chronic disease services to improve users' repurchase modules such as recruitment signing performance salary

rate and brand loyalty. Through the in-depth integration of promotion scheduling and attendance talent inventory and

membership behavior data and user portrait analysis we enhance development. We designed a three-year panoramic view of human

users' brand recognition and professional dependence on Yifeng resources digitalization and promoted the implementation of key

Pharmacy effectively improving their consumption experience. As of projects with the DHR system as the core covering key scenarios such

the end of the Reporting Period our online membership has exceeded as intelligent staffing and scheduling digital talent supply chain

116 million. successor and reserve cadre management performance and

remuneration incentives and licensed pharmacist management.Among them the Core HR project has been launched and the rules

and processes have been optimized laying a solid foundation for the

human resource management system. At the same time we

We focus on building an industry-leading efficient and agile product strengthen the governance of human resources data and system

management system and continuously promote the digital and operation and maintenance standardize the management of human

intelligent upgrade of the product management system building a resources master data reducing the number of incremental errors in

product operation mechanism centered on demand identification human resource master data to single digits per month. Through the

prediction decision-making and efficient fulfillment. We achieve a hierarchical operation and maintenance mechanism we improve the

rapid response to out-of-stock and emergency medication scenarios system stability and response efficiency promoting the continuous

through intelligent coordination out-of-stock registration rapid evolution of human resource management towards an efficient and

procurement in medical cold areas and daily distribution from the standardized digital model.front-warehouse. Relying on data analysis for automatic inventory

replenishment and the medication cycle model we conduct pre-

judgment and precise replenishment of medication demand. We also

link systems such as intelligent replenishment intelligent returns and

online supplier rebates to improve product availability and inventory We continuously improve the integration of business and finance

turnover efficiency and promote the transformation of product achieving intelligent and automated management in multiple links

management to demand-oriented refined operation. such as budgeting cost control and reimbursement. This effectively

improves the efficiency of financial control and supports the Company

to achieve high-quality financial services and control during rapid

expansion.We adhere to integrated construction and continuously improve the

digital product system around new retail business scenarios.Supported by CRM and big data we have completed the construction

of platforms such as public domains private domains and Internet

hospitals promoted the strategic upgrade of "new retail + thoughtful We independently developed and iterated the Yifeng Transportation

retail" and laid a solid foundation for the digital transformation of Management System (TMS) which covers multiple functions such as

retail business. In terms of O2O fulfillment services we drive efficiency dispatching management freight calculation temperature and

improvement through digital upgrades. We independently developed humidity monitoring and turnover box management achieving

and launched a mobile intelligent picking system which increased the online and closed-loop management of the entire process of

store picking accuracy to 99.9% and the picking efficiency by 40% and warehousing distribution and transportation. At the same time we

kept the average delivery time stable within 35 minutes. As of the end introduced an intelligent dispatching engine and the ability to

of the Reporting Period the Company has more than 10000 directly- optimize loading routes promoting the transformation of the

operated stores on the O2O platform and the picking efficiency dispatching link to intelligent vehicle dispatch with the proportion of

delivery timeliness and labor efficiency are all in line with the intelligent dispatching vehicle dispatch increasing to over 85%.industry's leading level. Through the unified dispatching and control of the TMS system we continuously improve the efficiency and stability of logistics

operations effectively strengthening the quality control ability during

the commodity transportation process while ensuring delivery

timeliness.

2025 Environmental Social and Governance Report 48Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Smart Logistics

Based on the efficient fulfillment needs of pharmaceutical retail we We focus on the characteristics of the retail business and the drug demand of stores and continuously promote the automation and intelligent

continuously build a "highly efficient flexible and agile" digital smart construction of the logistics network. In the logistics system planning we fully consider the actual operational needs such as store replenishment

logistics supply chain platform around core links such as warehousing rhythm category structure and return processing and systematically improve the operational efficiency of key links such as incoming goods

operations logistics transportation and logistics operation acceptance shelving piece-picking rechecking goods collection and loading and reverse logistics. We focus on core links such as warehousing

management. Guided by actual operation scenarios and relying on management picking and sorting and transportation and distribution and build a visual and intelligent management system covering the whole

professional digital technology R&D and application capabilities we process of in-warehouse operations and distribution fulfillment. By introducing automated three-dimensional warehousing intelligent

systematically sort out and optimize key logistics nodes. Guided by replenishment and picking equipment automated outbound goods collection solutions and cold-chain visual monitoring and efficient distribution

the 3C principles (Cost Close Convenient) we continuously improve operation modes we promote the upgrade of logistics operations from single-point automation to system coordination and overall optimization

the end-to-end service ability of the logistics system striving to fulfill and continuously improve the stability response efficiency and fulfillment ability of logistics operations.the delivery commitment of "thoughtful efficient timely and

accurate" to customers. Case Hengyang 3.0 Automated Warehouse Officially Opened

3C Principle of Logistics System Development In April 2025 Yifeng Hengyuan Pharmaceutical's 3.0 automated warehouse in Hengyang officially opened and began operations. As the first

3.0 automated warehouse in Hunan Province's pharmaceutical industry the Hengyang Warehouse is equipped with modern facilities such

as conveyor lines AGV picking systems and flow-through consolidation systems. It features 18 loading docks and 24 verification stations

and deploys 106 AGV intelligent transport robots achieving a maximum daily processing capacity of 60000 orders for unit-pick operations.Picking efficiency has increased from approximately 240 orders per hour under the traditional model to 320 orders per hour with both

receiving and picking accuracy rates reaching 100%. This has effectively enhanced warehouse distribution efficiency operational precision

and pharmaceutical quality and safety standards providing robust support for supply chain coordination and logistics system upgrades

across stores in the Hunan region.Cost Convenient

Close

To be more

To become convenient

more

advantageous

in terms of cost To be closer to stores/users

As of the end of the Reporting Period we have established 7 modern

provincial logistics centers in Hunan Hubei Jiangsu Shanghai

Jiangxi Guangdong and Hebei as well as 10 city distribution centers

in Wuxi Huai'an etc. achieving full online management of 17

warehouses including production retail and e-commerce ensuring

that all customers receive their goods on time and accurately.* Launch Ceremony for the Hengyang 3.0 Automated Warehouse

2025 Environmental Social and Governance Report 49Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

By adopting a multi-level warehouse design and Through the collaboration of "box-type multi-level shuttles and

automated equipment such as high-rise racking Multi-level AGV pallet robots" this system integrates with the Warehouse Automated systems and stacker cranes the system enables Shuttle Control System (WCS) Programmable Logic Controllers (PLCs) Stereoscopic automated storage and retrieval of goods as well Automated and Warehouse Management System (WMS) among others Warehousing as precise location tracking. This enhances while transmitting data in real time to the Transportation

System warehouse space utilization and storage density Consolidation Management System (TMS). This enables the automatic

while improving the continuity and operational System consolidation and retrieval of outbound goods thereby

stability of warehouse operations. enhancing collaborative management capabilities.Warehousing Utilizing bin-based automation technology this Cold Chain Provides real-time end-to-end monitoring of temperature and

Management MINILOAD Bin- system enables automatic replenishment from Logistics humidity for pharmaceuticals stored between -20°C and 8°C

based full bins to individual picking stations. Combined Visual along with anomaly alerts enabling visual status tracking and

Automatic with one-to-one electronic labels and pre-set proactive risk management; the system achieves a 99.8%

Replenishment picking patterns it enhances replenishment

Monitoring accuracy rate for cold chain disruption alerts reducing the loss

System

System efficiency and accuracy resulting in a 42.8% rate of cold-chain pharmaceuticals to 0.05%.increase in picking efficiency.Transportation

and Intelligent scheduling and route planning enable vehicle

This system intelligently moves racks according Distribution End-to-End management real-time tracking navigation and a visualized

AGV to demand combining a "goods-to-person" Visibility in national transport capacity map. By introducing digital and

Automated operation model with a small-batch picking Logistics and intelligent monitoring of handover processes we enhance method to automate order picking and eliminate Delivery transparency and ensure better control over fulfillment Guided the need for manual movement. It achieves a throughout the delivery process.Vehicle picking efficiency of 300 lines per hour per person

System for unit-pick operations significantly improving

operational efficiency.By optimizing processes through automated order fulfillment

Yidatong intelligent scheduling and cross-district transfers we reduce

Intelligent Utilizing two robotic arms for automated picking

Timely manual operations and warehouse inspection steps to achieve

Delivery more efficient precise and cost-effective store restocking and

Robotic the system integrates with the AGV work area to

Picking enable unmanned automated picking of full-unit

delivery.shipments and 24/7 continuous operation with a

Picking and System capacity of 2200 boxes per hour.Sorting

We are fully implementing an equipment management system

Automated across the logistics operations shifting from "reactive repairs"

Utilizing high-precision positioning technology to Equipment to "preventive maintenance" to enhance equipment reliability

Cross-belt enable automatic sorting of zero-weight items Management reduce downtime caused by malfunctions and improve the

Automatic with a repeat positioning accuracy of less than 1 stability of warehouse operations.Sorting mm meeting the demands of large-scale sorting operations; the system achieves a sorting speed

System of up to 18000 items per hour and can Equipment

simultaneously process shipments for 380 stores. Operation We continuously introduce automated equipment and innovate

and On-site Tool on-site tools combining regulatory requirements with

Maintenance Innovation standardized processes to enhance logistics efficiency and

overall operational coordination.

2025 Environmental Social and Governance Report 50Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Enhancing People's Well-Being

Shouldering the mission of the development of the great health

industry Yifeng Pharmacy adheres to improving people's livelihood Case Targeted Assistance for Rural Revitalization Project in Fenghuang County Hunan Province

and safeguarding public health as important directions of

responsibility. Through targeted assistance and diversified public

welfare practices it continuously extends professional health services Yifeng Pharmacy has long carried out targeted assistance work in Fenghuang County Hunan Province and supports the development of

to communities and grassroots levels. It responds to the health needs local characteristic agriculture through industrial cooperation. We signed a fixed-point procurement cooperation agreement for Siraitia

of different groups with practical actions promotes the universal Grosvenorii with Fenghuang Xingcun Agricultural Development Company a collective enterprise in Zhangpo Village Fenghuang County

accessibility of health resources and contributes to enhancing Hunan Province and implemented stable procurement of Siraitia Grosvenorii planted by local farmers. In 2025 we purchased traditional

people's well-being and promoting the health of the whole nation. Chinese medicinal material Siraitia Grosvenorii from local farmers with an amount of RMB 470000. Through continuous fixed-point

procurement cooperation the Company not only ensures the stable supply of traditional Chinese medicinal material raw materials but also

effectively drives the development of the rural economy.Assisting in Rural Revitalization

We continuously integrate enterprise development with regional

economy and Rural Revitalization. On the basis of ensuring reliable

drug quality and stable supply we actively promote the extension of

the traditional Chinese medicine industry chain to rural areas. We give

priority to purchasing traditional Chinese medicinal materials from

rural farmers with a total procurement of RMB 208 million in 2025. As

the core enterprise under Yifeng Pharmacy focusing on the

manufacturing of traditional Chinese medicine decoction pieces

Heng Xiu Tang sources more than 80% of its traditional Chinese

medicinal material raw materials from products harvested planted

and processed by farmers. While stabilizing the raw material supply it

effectively broadens the sales channels for farmers and drives up

farmers' income. This year we have invested over RMB 470000 to

support rural revitalization playing a positive role in promoting the

development of rural industries and boosting regional economic

vitality.* Scene of the Signing Ceremony for Fixed-Point Procurement of Siraitia Grosvenorii

Caring for Livelihoods

Over the years we have always integrated social responsibility into enterprise development and actively promoted the improvement of people's

well-being achieving remarkable results. Looking forward we will continue to deepen public welfare practices with a more firm sense of

responsibility drive the improvement of people's well-being with professionalism and humanistic care contribute to the health and harmonious

development of society and create a higher-quality living environment for the public.

2025 Environmental Social and Governance Report 51Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Focusing on people's livelihood concerns such as public medication To improve the health literacy of community residents we We proactively expand the service scope of our stores during important

safety and ecological environment protection we continuously continuously carry out diverse and accessible health public welfare examination periods integrating professional pharmaceutical services

promote the standardized and safe disposal of expired household activities according to the health needs of community residents and and convenience support into public scenarios. During the college

medicines. By popularizing scientific medication knowledge seasonal health preservation characteristics. From April to May 2025 entrance examination in June 2025 we simultaneously launched the

improving recycling channels and strengthening professional we simultaneously carried out the public welfare activity "Vitality "College Entrance Examination Guard Station" public welfare activity in

guidance we guide the public to correctly identify and handle expired Health Preservation Tour" in many places across the country covering multiple locations across the country covering several provinces such

medicines effectively reducing the health and environmental risks more than 10 provinces. We held more than 5000 activities in total as Hunan Jiangxi and Jiangsu. Each guard station provided heatstroke

caused by improper medication and random disposal. In March 2025 providing free blood pressure blood sugar and blood lipid testing prevention supplies and convenience support for examinees parents

we continuously carried out the public welfare activity "Yifeng Protects services to nearly one million residents. Through easy-to-understand and support staff outside the examination venues and opened the

Health · Clean Up the Family Medicine Cabinet" in many places health education and professional services we improved the health stores' emergency facilities to ensure the smooth progress of the college

across the country covering more than 10 provinces and involving literacy of community residents and achieved a good social response. entrance examination with practical actions.more than 5000 stores.A Glimpse of Public Welfare: Scientific A Glimpse of Public Welfare: Heart-warming A Glimpse of Public Welfare: Cool Protection at

Recycling to Eliminate Hidden Dangers Health Gifts the Changde Examination Site

In the "Yifeng Protects Health · Clean Up the Family Medicine During the "Vitality Health Preservation Tour" activity we not In Changde City Hunan Province alone we set up more than 30

Cabinet" activity we set up special recycling bins for expired only provided health lectures and free testing but also service points covering all major examination sites. These

medicines and cooperate with qualified hazardous waste specially prepared nearly 100000 health preservation gifts service points distributed free mineral water Huoxiang Zhengqi

treatment agencies to implement a closed-loop management including household commonly used medicines such as Isatis Shui (a traditional Chinese medicine for heatstroke prevention)

of "special person registration special box storage special Root Oral Liquid Lactulose Oral Solution and Compound Bear and essential balm and offered emergency printing services and

vehicle transportation and professional destruction" to

ensure 100% harmless disposal of expired medicines and Bile and Mint Lozenges to convey the health concept to every resting seats in the stores bringing coolness and convenience to

prevent them from flowing back into the market. At the same participant in a tangible form. anxious parents and on-duty traffic police.time we enhance residents' participation through welfare

such as "health subsidy vouchers" popularize safe medication

knowledge relying on the team of licensed pharmacists and

launch innovative measures such as age-friendly services and

"medicine ID cards" for the elderly and medicines without

package inserts to facilitate citizens to obtain electronic

package inserts and medication reminders by scanning codes.* Scene of the "Vitality Health Preservation Tour" Series of Activities * Scene of the "College Entrance Examination Guardianship Station"

* Scene of the Public Welfare Activity "Yifeng Protects Health · Public Welfare Action

Clean Up the Family Medicine Cabinet"

2025 Environmental Social and Governance Report 52Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

We respond to the actual needs of different social groups with practical actions and continuously carry out various forms of loving public welfare

donation activities. By donating pharmaceutical supplies daily necessities and providing financial support we offer timely assistance to vulnerable We combine public welfare care with health services and continuously

groups and disaster-affected areas fulfilling our corporate social responsibilities. From July to August 2025 we organized the "Cooling-off Public promote the construction of "Loving Stations". Relying on the

Welfare Community Tour" activity in multiple locations across the country. In cooperation with multiple pharmaceutical companies and street advantages of our store network we provide convenience services for

communities we donated heatstroke prevention supplies to groups such as sanitation workers food delivery riders and on-duty traffic police outdoor workers and community residents creating a warm urban

showing care for outdoor workers in high-temperature conditions. public service space. In 2025 we added 240 standardized stations in

Hunan Province increasing the total number of "Loving Stations" in

the province to 300. These stations serve about 120000 people per

A Glimpse of Public Welfare: The Care of a Cooling Package month effectively expanding the coverage and accessibility of

convenience services.During the "Cooling-off Public Welfare Community Tour" we distributed "cooling packages" containing heatstroke prevention drugs such as A Glimpse of Public Welfare: The "Supply

Huoxiang Zhengqi Oral Liquid to outdoor workers in Nanjing Jiangsu Yingtan Jiangxi and other places; in Nanchang Jiangxi we jointly Station" Around Us

donated heatstroke prevention supplies worth 200000 yuan; in Shijiazhuang Hebei we donated pharmaceutical supplies worth 89000

yuan to sanitation workers. At the same time we joined hands with leading pharmaceutical companies and major online platform partners

to launch a special action called "Providing Coolness to Riders for Heatstroke Prevention" donating heatstroke prevention drugs electrolyte Our "Loving Stations" provide free standardized convenience

water and first-aid kits to relevant stations paying tribute to the hard work of urban builders and logistics support forces with practical services for outdoor workers such as couriers sanitation

actions. workers taxi drivers and surrounding community residents

including tea and beverage supplies resting seats mobile

phone charging blood pressure measurement and

emergency drugs making the pharmacies the "supply

stations" around the people.* Scene of the "Cooling-off Public Welfare Community Tour" Activity * The "Loving Station"

2025 Environmental Social and Governance Report 53Achieving Win-

Win Results and

Realizing the

Value of Talents

Yifeng Pharmacy always adheres to the principle of

Compliance Employment and is committed to

building a respectful fair and inclusive working

environment which serves as the cornerstone for

talent attraction and retention. We continuously

optimize the employees' career development system

enhance their professional abilities and

comprehensive qualities through systematic and

diverse training mechanisms and help them grow

steadily in their careers and realize their personal

values. At the same time we scientifically design the

salary and welfare structure attach great importance

to Occupational Health and Safety (OHS) and

comprehensively improve the employees' work

experience and sense of belonging. In the process of

the Company's development we work hand in hand

with all employees to jointly create a future of mutual

benefit win-win results and continuous growth.

2025 Environmental Social and Governance ReportSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Standardized Employment Management

Yifeng Pharmacy strictly abides by relevant laws and regulations such As of December 31 2025

as the Labor Law of the People's Republic of China the Labor

Contract Law of the People's Republic of China the Provisions on the

Prohibition of Child Labor and the Provisions of the State Council on 2025 2024

Working Hours of Workers and Staff. We promote the employees'

recruitment work with the core principles of openness fairness and Total employees 38953 40018

justice ensuring that the entire recruitment process is compliant and

transparent. We firmly oppose any form of discriminatory based on By gender

ethnicity gender religion age etc. and oppose any form of

discrimination and harassment. We also strictly enforce our forced Male 5216 5497

labor and child labor provision. Recruitment staff need to strictly

verify the personal information of applicants and can only handle the Female 33737 34521

employment procedures after confirming the information is correct. If

any illegal employment behavior occurs we will seriously hold the By age

relevant responsible persons accountable according to the severity of

the situation. In 2025 the Company did not have any illegal incidents Under 31 years old 10739 11157

involving the employment of Child Labour forced labor

discrimination or harassment. Aged 31-40 13820 13860

To precisely attract high-quality talents and build a high-quality talent Aged 41-50 12011 12185

echelon we have established a diversified recruitment system that

includes "social recruitment campus recruitment internal transfer Over 51 years old 2383 2816

and internal competition." We recruit fresh graduates through

campus recruitment channels to inject new vitality and we recruit

experienced professionals from the industry through social By employee level

recruitment. At the same time we encourage employees to

participate in internal position transfers and competitions based on Senior manager 141 140

their interests and abilities to maximize the match between

employees and positions providing solid talent support for the high- Middle manager 332 281

quality development of the Company's business. As of December 31

2025 we had a total of 38953 employees. The specific employee General manager 12173 11422

situation is as follows:

General employees 26307 28175

By function

High-quality Administration & Functional Support 3512 3501

talent attraction

Employer enterprise-Awarded by the Technical roles 382 251

award picture Civil Affairs and

Social Security Warehousing & Distribution 1498 1475

Bureau of Hunan

Xiangjiang New Production 179 110

Area

Store Operation & Service: 33382 34681

2025 Environmental Social and Governance Report 55Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Protecting Employees' Rights and Interests

Yifeng Pharmacy complies with internationally recognized human rights standards and guidelines including the Ten Principles of the United

Nations Global Compact the United Nations Guiding Principles on Business and Human Rights ILO core conventions and relevant international

human rights conventions. It has established a comprehensive employee rights and interest protection system. Through the formulation of policies As of the end of the Reporting Period

such as the Employee Resignation Management Measures the Employee Leave Management Measures and the Employee Transfer Management

Measures it clarifies employees' rights and interests in employee recruitment transfer promotion and separation and leave management to The proportion of newly recruited female employees2

prevent labor disputes. We firmly protect employees' legal rights such as freedom of association five insurances and housing fund and legal

holidays ensuring that the rights and interests of all employees including flexible workers are implemented. In 2025100% workforce covered by exceeded 48.44%

labor contracts or agreements and the Company paid the employees' five insurances and housing fund in full as required and paid salaries on time

for all employees.At the same time we are committed to building a diverse equal and inclusive workplace environment. We have set up recruitment positions for The number of newly recruited ethnic minority

ethnic minorities veterans and people with disabilities providing them with flexible work arrangements and barrier-free work environments to

help employees from different backgrounds better integrate into the team. We will actively identify and develop high-potential female talents employees: more than 200

through inclusive talent development programs and a fair and transparent selection process increase the representation of women in

management so as to make full use of talent reserves and promote diverse perspectives in management decision-making.The number of promoted female employees:

more than 2400

The number of recruited veterans and people

with disabilities: 318

2. Non-store employees.

2025 Environmental Social and Governance Report 56Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Improving the Training System

Focusing on the core needs of employee development Yifeng Talent development and training system Senior manager

Pharmacy focuses on key areas such as training improvement career development

development and salary incentives. It provides employees with program

learning support for capacity improvement and a clear career growth Manager

path. Through a reasonable salary mechanism and continuous development

employee care measures it promotes a positive interaction between program

employees' personal development and the long-term growth of the Potential store

enterprise. managers cultivation

program Incumbent Senior

manager

Training System Reserve cadre Project

Incumbent

We follow the "7-2-1" talent development concept and build a minister

systematic and sustainable talent echelon development system

covering all employees. We provide personalized development plans Potential store

for employees at different levels positions and career stages to managers

comprehensively improve their comprehensive quality and

professional abilities. At the governance level we have established a

Talent Development and Review Committee and formulated the Reserve cadre

Operating Rules of the Talent Development and Review Committee to

ensure the standardized and effective operation of the talent

development mechanism in a systematic way. At the management

level we have added the "reserve rate of key position talents" to the Employees at the Headquarter

assessment system and continuously optimized the talent labeling

and succession management system laying a solid foundation for

talent identification training and echelon construction.Frontline Employee Store Manager District Manager

Relying on the perfect talent development system we continuously

optimize the full-cycle training system covering all employees to

ensure that employees from new recruits to senior managers can

receive diversified training that matches their job requirements and Training "AI Digital Human" Intelligent Centralized Training Job Rotation Project Practice

ability development. On this basis we are also actively promoting the Tools Online Training Platform Mentorship

construction of digital training creating an "AI digital human"

intelligent training platform gradually building a systematic and

scenario-based online training resource library and further enriching

and expanding the training content and learning channels by Under the training system framework we provide comprehensive succession planning & development programs and skills and knowledge

launching courses covering multiple fields such as core business development training for all employees (including full-time employees part-time employees and third-party contractors involved in operations).scenario teaching and practical skill processes to meet the diverse We support the career development plans and ability improvement needs of employees at all levels in various forms systematically cultivating their

learning needs of employees anytime and anywhere. leadership abilities and refining their professional skills injecting dual impetus into their personal career growth.

2025 Environmental Social and Governance Report 57Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Case Reserve Cadre Special Training Program Case Store Manager Ability Advancement Case "Yiqi Xue" AI Skills Learning

We have launched a three-year systematic career We comprehensively improve the store management and team In 2025 with the theme of "Efficient Work Happy Life" we

development training program focusing on cultivating reserve teaching abilities of store managers through standardized held sharing sessions and public courses on the latest AI

management talents with high adaptability and potential. The training processes personalized coaching and a hierarchical trends and practical skills for all employees. The activities

program revolves around three main lines of "culture- assessment mechanism to strengthen their leadership. In 2025 were carried out in a combination of online and offline forms

learning-experience" and sets up three phased empowerment we piloted an on-the-job store manager coaching program attracting more than 6700 participants in total which

modules: "Onboarding Intensive Training" "Growth Training included the performance of newly appointed store managers effectively improved employees' digital skills reserve.Camp" and "Annual Intensive Training". These modules focus in the performance tracking system and strengthened the

on role transformation ability supplementation and cognitive store inspection and supervision responsibilities of store

leap respectively with leadership training running through the management ministers district directors and training

whole process to strengthen key management abilities such administrators. A total of 1531 store managers were trained

as teamwork goal management and problem-solving. We throughout the year with a training effectiveness rate of

also help reserve cadres deeply integrate into the corporate 62.49% a 3.87% increase compared to 2024. Through the dual-

culture and quickly improve their management qualities track training model of "Store Manager Base" and "Outstanding

through various forms such as cultural story-telling sessions Employees" we formulated differentiated training plans for

business visits scenario performances and sand table reserve store managers and promoted experience sharing

simulations. through quarterly meetings. A total of 285 reserve store

managers were trained throughout the year.Case District Director Training

Focusing on the leadership improvement and professional

growth of reserve regional directors we have set up a full-

process cultivation path covering selection pre-training

intensive training and on-the-job coaching. We emphasize

enhancing their store management team teaching and

regional operation capabilities. We use the "Review Meetings"

and system regular meetings to continuously track the

cultivation progress. We also conduct key performance

assessments for newly appointed regional directors to ensure

that their ability improvement matches the job requirements.In 2025 we completed the cultivation of 81 reserve regional

directors. The passing rate of regional directors in the

assessment period reached 65.51% a 15.43% increase

* Reserve Cadre Training Site compared with the same period last year. * The on-site of "Yiqi Xue" training

2025 Environmental Social and Governance Report 58Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Compliance Training on the Good Supply We continuously strengthen the construction of the lecturer team. By improving the lecturer rating incentive and performance assessment Case Practice for Pharmaceutical Products (GSP) mechanism we enhance the role of the lecturer team in store empowerment and on-site guidance. Currently there are 88 full-time training

administrators and lecturers and 215 part-time lecturers in the whole system forming a professional lecturer force with internal talents as the core

In 2025 we adopted the "system learning + platform and rich business experience. We also focus on promoting the preparation work for the licensed pharmacist exam. By providing mock exams and

examination" model and conducted training on the supporting exercise training we offer systematic and full-process preparation support for employees to help them improve their exam-preparation

knowledge and skills of the Good Supply Practice for efficiency and achieve the goal of increasing the passing rate of the licensed pharmacist exam in 2025. In 2025 5568 employees participated in the

Pharmaceutical Products (GSP) every 1-2 months on average. licensed pharmacist qualification exam.The training covered all employees and focused on key At the same time we provide all employees (including full-time employees part-time employees and third-party contractors involved in

contents such as laws and regulations of pharmaceuticals and operations) with support for degree programs or certifications. Employees can obtain relevant knowledge and learning resources through the

medical devices management of refrigerated drugs Company's regular training programs and online learning platforms which support their personal academic improvement and certificate exams

maintenance of traditional Chinese medicine management of thus enhancing the Company's talent reserve and development impetus.traceability codes and online sales regulations. We organized

a total of 6 training sessions throughout the year with the

highest number of participants in a single session reaching

15564. The completion rate of pharmaceutical regulations

training reached 100%. Training data during the Reporting Period

20252024

Annual training investment (million) 5.2237 4.1938

Employee training coverage rate (%) 100 100

Quality management training and

Average Percentage of trained employees and average professional skills knowledge training in 2025 119.82 hours training hours by employee categorytraining hours:

senior management

Number of new-employee quality management

Percentage of trained Average training hours

training sessions: 221 Percentage of trained employees and average

training hours by gender 100% 127.23 hours

Number of new employees participating in the quality Male management middle-level management

training examination: 11724 Percentage of trained Average training hours Percentage of trained Average training hours

100% 119.25 hours 100% 285.10 hours

Passing rate of new employees participating in the

Female management grass-roots management

quality training examination: 97.23%

Percentage of trained Average training hours Percentage of trained Average training hours

100% 121.05 hours 100% 138.34 hours

grass-roots employee

Percentage of trained Average training hours

100% 109.18 hours

2025 Environmental Social and Governance Report 59Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Employee Development Main Content of Performance-based Variable Pay

Based on individual or store sales performance

and on the premise of strictly abiding by

We are committed to long-term investment in human capital to empower employee growth. We continuously iterate the employee rank Performance compliance management and quality safety

development system and build a diversified and equal development path of "management + professional" aiming to provide a clear career Commission bottom lines follow the distribution principle of

prospect for all employees and consolidate the core talent foundation for the Company's sustainable development. "more pay for more work" to stimulate frontline

employees' vitality in market expansion.Employee promotion and development map

Focus on key process management and value

orientation and be distributed based on the

assessment results of KPI indicators such as

Leadership Model Performance customer satisfaction core task completion and

Bonus basic management standardization. Guide

employees to pursue business growth while

taking into account service quality and

Leadership operational compliance.Set up a special fund pool for stores or business

teams and its distribution is linked to the overall

performance target achievement of the

Team Fund corresponding unit. This mechanism aims to

break the limitations of individual incentives

strengthen awareness of team collaboration and

Professional build consensus on collective goals.Channel

Capability Performance Employee Assessment Promotion GoalManagement Talent Assessment Implement a profit sharing plan deeply linking Channel System employees' income to the final profit performance of their business unit. Encourage

Profit employees to shift their focus from revenue-only

Sharing to cost-effectiveness and resource optimization

promoting the sustainable win-win of individual

contributions and the company's overall

profitability.Value To fully mobilize the enthusiasm of employees we have established a

long-term incentive system and implemented an employee equity

program to attract and retain key talents. We regularly grant restricted

stocks to key management personnel and core technical staff and

have completed the preset grant registration work for the incentive

targets. A total of more than 450 core talents have received equity

grants.In addition to further strengthen the fairness of salary incentives we

We refine the job standards and development paths for each sequence and match them with a more scientific performance-based salary system to continuously monitor the position pay gap and earnestly fulfill the

systematically improve organizational capabilities and employee value. We conduct employee performance evaluations every year commitment of Equal Pay for Equal Work. We conduct regular salary

comprehensively evaluating employees from multiple dimensions such as performance indicator achievement general management ability evaluations continuously monitor indicators including the average

professional ability and corporate culture values to comprehensively and objectively reflect employees' annual performance. At the same time we pay gap the median pay gap the average bonus gap and the median bonus gap to accurately understand the gap and trend of salary.establish an incentive-based salary structure combining "basic salary + performance-based floating salary" covering all employees including front- Based on the evaluation results we formulate targeted improvement

line positions such as stores logistics and production. By providing strong performance-based incentive pay structure we effectively stimulate measures to continuously promote a more fair transparent and

employees' enthusiasm and sense of responsibility. sustainable salary system.

2025 Environmental Social and Governance Report 60Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Deepen Caring Communication

Yifeng Pharmacy has established diversified Communication At the same time we conduct regular employee satisfaction surveys

Channels to accurately understand and respond to employees' every year to comprehensively understand employees' work status Employee Care

demands and continuously optimize the work experience by flexibly and needs. The survey dimensions cover core aspects such as job

adjusting the Strategy. At the same time we have launched a variety satisfaction organizational identity team cooperation atmosphere We respect employees' family responsibilities and provide support

of employee benefits and deepened the emotional connection with and management recognition providing data support for optimizing during the arrival and growth of new lives for every parent ensuring

employees through practical care measures to enhance team employee management strategies. Based on the survey feedback we that all employees enjoy paid parental leave.cohesion and provide a solid guarantee for talent retention. continuously optimize management measures and introduce a

number of targeted measures to enhance employees' engagement

and satisfaction:

Employee Communication

Channels Build a real-time team incentive mechanism

We are committed to building an open and efficient communication

platform and actively collect employees' opinions and suggestions. Parental Leave

We promote the transparent and efficient closed-loop of the Establish an instant recognition system. Through the digital Policy

feedback process to ensure that employees are aware of the progress platform "Recognition Card" employees' contributions can

of the handling. We regard employees' feedback as an important receive real-time feedback and records from the

basis for management optimization. Through timely Response and organization. Points accumulated based on Recognition

improvement we enhance employees' sense of participation and Cards can also be redeemed for benefits in the internal mall.satisfaction and create an inclusive workplace atmosphere. All female employees: All male employees:

Enjoy at least 98 days of Enjoy at least 10 days of paid

paid maternity leave. paternity leave."Grow Together" Upgrade of the Training and development System

Employee Care

We organize four key-node communication meetings for each

employee: on the first day of employment 7 days after employment Publicize the promotion standards build diversified and

30 days after employment and before the official employment to characteristic learning paths to meet the ability During the Reporting Period

fully cover and pay attention to employees' feelings during the improvement needs of employees in different positions;

adaptation period. construct a parallel career dual-channel of management

sequence and expert sequence to effectively solve the The number of employees on parental leave: 612

problem of talent loss of technical backbones caused by

"Employee Express" promotion bottlenecks and lay a solid foundation for

Application employees' long-term development.Employees can directly submit their ideas and opinions through the

application. We collect them regularly and directly feedback them to

the Executive President to ensure that the voices of grass-roots

employees reach the Management.

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We also provide employees with non-statutory benefits including annual physical examinations a "bring your child to work" work mechanism free Restructuring programs

work meals accommodation commuter buses birthday benefits holiday benefits and company anniversary activity funds and carry out a variety

of employee activities. Moreover we have established the Yifeng Mutual Assistance Foundation ("Yi" Fund) to help employees and their families in

extreme difficulties. During the Reporting Period the Company provided financial assistance to 26 employees in need through the "Yi" Fund with a Applicable objects Support measures

total amount of RMB 335000.Priority will be given to providing internal

job transfer opportunities; cooperate

Case "The Adventure of Pinellia" Employee Activity Employees with external recruitment platforms and affected by

business professional institutions to provide re-

adjustment employment support such as resume

"The Adventure of Pinellia" empowers parent-child care through "Chinese medicine research and study". Relying on the Company's optimization interview coaching and job

characteristic resources in the Chinese medicine industry a series of parent-child activities for employees have been carried out in 10 recommendations.branches and subsidiaries across the country. Through immersive experiences such as research and study at the Chinese medicine

specimen base of universities making Chinese medicine handmade soaps and sachets and outdoor Chinese medicine exploration the Assist in handling pension application

activities have attracted hundreds of employees' children to participate creating a warm scenario for parents and children to learn Chinese procedures; provide part-time

medicine culture together and effectively enhancing employees' sense of belonging and cultural identity. Retired employees consultant opportunities for experienced

retirees to promote the inheritance of

knowledge and experience.* The scene of the "The Adventure of Pinellia" activity

In addition we attach great importance to the rights and interests protection and career transition of departing and retired employees and provide

necessary psychological and legal consultation services to help employees relieve stress and safeguard their rights during the transition period

demonstrating our care and support for employees throughout their entire career cycle.

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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Protecting Occupational Health

Yifeng Pharmacy always places the occupational safety and health of

employees at the core of its operation and management. We strictly Occupational health and safety risk prevention and control system

comply with national laws and regulations such as the Law of the

People's Republic of China on Prevention and Control of Emergency Compile and implement the "Production Safety Accident Emergency Response Plan" conduct a comprehensive

Occupational Diseases and the Law of the People's Republic of China response plan identification and analysis of the Company's potential risk factors clarify the types of accidents and hazard levels and

on Work Safety and formulate and improve internal regulations such system formulate targeted preventive measures and disposal procedures to ensure that risks are controllable.as the Safety Management Policy and the Safety Fire and Theft

Prevention System in combination with industry characteristics

constructing a systematic and standardized safety management

system to provide employees with a safe and reliable working Focus on the safety hazards in the front-line of production and operation clarify and strictly implement the basic

environment. The Company has also obtained the ISO 45001 Basic safety protection standards for fire prevention theft prevention and accident prevention; standardize the operating

Occupational Safety Management System certification. In 2025 the protection procedures of equipment such as balers and slicers and strictly abide by the safety principle of "power off first then

Company purchased work-related injury insurance and workplace operate" to build a solid safety defense line for equipment operation.safety liability insurance for all employees with a total investment of

10.88 million yuan effectively ensuring the safety of employees; there

were no major safety accidents throughout the year. Occupational For specific occupational health risks such as food toxin residues heavy metal and dust exposure and noise pollution

2025 2024 hazard control formulate and implement special protection measures to reduce occupational hazards at the source.

a total investment of 10.88 million yuan effectively

10.889.61

ensuring the safety of employees (million)

First-aid ability Equip standardized first-aid kits in all workplaces and carry out occupational health and safety training focusing on

Coverage rate (%) 100 100 training popularizing first-aid skills such as cardiopulmonary resuscitation (CPR) artificial respiration and the Heimlich maneuver to improve the self-rescue and mutual-rescue ability of all employees.Practical Regularly hold fire drills and safety accident emergency drills every year. Through practical simulations and after-

emergency drills action reviews continuously improve employees' emergency response ability and team cooperation level and comprehensively strengthen the Company's overall safety protection resilience.ISO 45001 Occupational

Safety Management

System certification We also attach importance to the mental health of employees and are committed to creating a healthy workplace ecosystem that emphasizes both

physical and mental well-being. Around the mental health needs of employees we have launched multi-dimensional care and support measures to

help them actively cope with the stress generated in work and life in a way that takes care of both body and mind enabling employees to engage in

work in a more positive and balanced state.Mental health support initiatives

In daily operations we conduct systematic identification and

assessment of the occupational safety risks faced by employees

through regular in-store inspections by district directors and store

managers. Our inspection content covers key links such as chemical Mental health Multi-mode Digital science Employee Assistance

handling drug handling and equipment operation and also pays monitoring training popularization Program (EAP)

attention to environmental safety hazards such as noise dust

slippery floors messy wires and blocked fire exits. Through Provide mental health check- We offer both offline and Through the self-developed We implement the Employee

continuous monitoring and dynamic tracking we can timely identify

potential risk points and provide a basis for subsequent risk ups for all employees to help online mental health lectures "Yi Family" app we regularly Assistance Program (EAP) to

prevention and control. Based on the risk identification and them understand their own to suit the learning needs of publish mental health science provide Employees with

assessment we comprehensively implement multi-level occupational mental state in a timely employees with different popularization articles every confidential professional

safety risk prevention and control measures from four dimensions: manner. work schedules. month. psychological counseling

system construction hardware protection skill training and services.emergency response.

2025 Environmental Social and Governance Report 63Co-Creating Green

and Sustainable

Horizons

Yifeng Pharmacy is committed to integrating

environmental protection responsibilities into the entire

cycle of enterprise operations. We continuously improve

energy utilization efficiency strengthen Climate Resilience

construction strictly control resource consumption and

pollution emissions and actively contribute to sustainable

development. We emphasize strict management of waste

gas wastewater and waste emissions. Through effective

waste management methods we ensure compliance with

emissions regulations to minimize the negative

environmental impact of the Company's operations. In

2025 we took practical actions to promote the

sustainable development of the economy and society.During the Reporting Period the Company did not receive

any major administrative penalties from relevant

environmental departments or be held criminally liable

due to environmental incidents.

2025 Environmental Social and Governance ReportSustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Deepening Energy Management and Addressing

Climate Change

Energy-saving and carbon-reduction measures

Yifeng Pharmacy is committed to improving energy use efficiency to

make the greatest possible contribution to environmental protection. Stores

We strictly abide by laws and regulations such as the Environmental

Protection Law of the People's Republic of China and have * Promote the full coverage of energy meters in stores to collect and monitor energy data in real time and consolidate the data foundation

established a sound management system for energy and carbon for refined energy management.emissions providing a solid institutional guarantee for green * Implement a time-sharing lighting control strategy. Use an intelligent control LED lighting system during non-peak business hours to

operations. improve lighting energy efficiency and avoid ineffective losses.* Implement air-conditioning energy-saving renovations and deploy an intelligent temperature control system to achieve dynamic operation

Energy Utilization Control adjustment based on room temperature and create a comfortable and low-carbon operating environment.In line with the Company's development strategy and green operation

vision we have set the following energy management goals for 2025:

Offices

* Increase the scale of photovoltaic installation in the park. The cumulative self-generated electricity has reached 4.8 million kWh equivalent

to reducing approximately 2500 tons of carbon dioxide emissions.* As of the end of the Reporting Period the headquarters office area of the Company has achieved 100% photovoltaic power generation

* All industrial parks are effectively optimizing the Company's energy consumption structure while saving electricity costs.required to be equipped * Carry out waste heat recovery renovations. Install heat recovery devices in the canteen facilities to preheat the incoming water using the

with supporting

Energy waste heat from wastewater and steam reducing heating energy consumption.management photovoltaic(PV) facilities. * Strictly implement green procurement standards and give priority to purchasing electrical equipment with high energy efficiency ratings to

goals improve the energy efficiency level from the source.* All parks shall achieve

100% Logistics centers and warehousescoverage of

supporting PV facilities * Deploy intelligent warehouse electricity meters to dynamically monitor the electricity load and explore the potential for energy Progress of

energy with a self-consumption

conservation and consumption reduction.management rate of at least 60% by * Implement energy-saving renovations for warehouse lighting and apply photovoltaic power lighting systems to improve environmental

goals 2025. protection benefits.(achieved)

* Carry out energy-saving publicity activities and post energy-saving signs in the warehouse area to enhance the energy-saving awareness of

all employees.

2025 Environmental Social and Governance Report 65Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

During the Reporting Period the consumption and density of various types of energy of the Company are as shown in the following table: Addressing Climate Change

Energy consumption Unit 2025 2024 Facing the challenges brought by global warming and frequent

extreme weather we actively respond to the national "dual carbon"

goal and take the initiative to assume the responsibility of addressing

climate change. We manage and disclose climate-related matters

Total energy consumption Tons of standard coal 26958.16 26055.34* from four dimensions: governance strategy Risk Management and

indicators and targets.Energy consumption density Tons of standard coal / million yuan 1.10 1.08

Consumption of non-renewable We have established a sound ESG governance framework and clarified

fuels (direct) Tons of standard coal 494.20 470.18* the responsibilities of each level in climate change management. The

Board of Directors of the Company is responsible for overseeing

matters related to the Company's sustainable development impacts

Consumption of pipeline natural

gas Tons of standard coal 156.08 169.87* risks and opportunities. A Strategy and Sustainability Committee is

established under the Board of Directors to be responsible for

formulating the climate strategy and monitoring the progress of

Total gasoline consumption Tons of standard coal 218.87 206.08 climate targets and identifying climate-related risks and

opportunities. The senior Management of the Company formulates

and evaluates the progress impacts risks and opportunities of

climate targets. All business and functional departments as well as

Total diesel consumption Tons of standard coal 119.25 94.23 branches and subsidiaries ensure the effective implementation of

work plans and execution plans to enhance the Company's ability to

address climate change.Consumption of renewable fuels

(direct) Tons of standard coal 446.23 87.81

Photovoltaic power generation3 Tons of standard coal 446.23 87.81

Going forward we will gradually integrate climate-related

Consumption of purchased energy considerations into the Company's overall development planning

(indirect) Tons of standard coal 26017.73 25497.35 explore and sort out the potential impacts of climate-related factors

on our business model. We also plan to conduct climate risk-related

assessment work in a timely manner based on actual operational

Electricity consumption Tons of standard coal 26017.73 25497.35 conditions and continuously enhance our adaptive capacity to

climate change.*During the reporting period the Company comprehensively upgraded its ESG data governance mechanisms systematically strengthening the verification

processes for underlying data the definition of accounting boundaries and standardized conversion rules. In accordance with the principles of accuracy and

objectivity the Company has retrospectively restated certain historical data for the 2024 fiscal year (indicators marked with * ) to ensure the accuracy and

comparability of the information across reporting periods.

3. In 2025 the Company continued to promote the use of clean energy and actively developed solar power projects.

2025 Environmental Social and Governance Report 66Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Climate change-related risks and response measures

Risk category Potential impact Response measures Adaptability4

Physical risks Acute Sudden heavy rain or flash floods may cause damage to * Develop an emergency plan for extreme weather and clarify the work responsibilities and response High

infrastructure. measures of relevant departments and personnel.Chronic Global warming and sea-level rise may affect coastal * Purchase relevant property insurance to avoid significant impacts on the Company's operations caused High

stores and warehouses and reduce the work efficiency of by potential financial losses.store employees. * Upgrade and renovate infrastructure such as stores and warehouses to improve their flood prevention

and disaster resistance capabilities.* By optimizing the supply chain layout establishing diversified supply channels and a flexible logistics

and distribution system we can quickly adjust and respond when the supply chain is interrupted due to

extreme weather ensuring the stable supply of drugs. This helps to improve the resilience and reliability

of the supply chain and enhance customer trust.* Use digital technology to monitor and provide early warnings for the status of key facilities such as

stores and warehouses in real-time and take timely countermeasures. At the same time optimize

inventory management and order processing processes through digital means to reduce inventory

backlogs and order delays caused by extreme weather and improve operational efficiency.Transition Policies and Regulatory authorities have increased requirements for * Always maintain a high level of attention to newly issued compliance documents timely identify and Medium

risk laws the disclosure of greenhouse gas-related information. conduct in-depth analysis of the compliance requirements therein clarify the compliance disclosure

matters that the Company must abide by and ensure the effective implementation of these

information disclosure tasks.Technology The transformation to low-carbon technology will * Develop and apply low-carbon and energy-saving technologies to improve operational efficiency and Medium

increase operating costs in the short term. product quality and bring new economic growth points and competitive advantages.Market Consumers tend to purchase drugs with low-carbon * Increase the emphasis on and investment in the green production of drugs and environmentally friendly Medium

production and environmentally friendly packaging. The packaging and convey the latest market consumption trends and preferences to suppliers.change in consumption preferences may lead to a

decline in the demand for certain types of products.Reputation If carbon emission reduction management is not in place * Strengthen internal management and data collection capabilities establish a sound environmental Medium

and has a negative impact on the climate and management system and improve management levels and operational efficiency.environment it may damage the Company's reputation.Climate change-related opportunities and response measures

Opportunities Impact Response measures Adaptability4

Market With the global emphasis on the low-carbon economy and green * Meet the market and customers' demand for green products and expand business areas and market Medium

development the market and customers' demand for green products is share.increasing. * Increase the proportion of renewable resource use in the future when feasible.Brand It can establish a good corporate image demonstrate our emphasis on * Actively respond to regulatory requirements proactively disclose Greenhouse Gas Emissions Medium

environmental protection and sustainable development help enhance information and take effective carbon emission reduction measures.brand value and strengthen the trust and support of consumers and

investors.Finance Low-interest funds can be obtained through loans linked to sustainable * Set Sustainable Development Management goals and carry out relevant work to obtain low-interest Low

development. loans from financial institutions.

4. 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.

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To mitigate and adapt to the impacts of climate change from the source we have formulated a carbon emission reduction plan covering the entire value chain of drug procurement production transportation sales and Waste

treatment to reduce the carbon footprint in an all-round way. At the same time we have set up a special fund amounting to exceed RMB 300 million for Addressing climate change focusing on supporting Heng Xiu Tang's

climate transition investment (the digital decoction piece factory) the procurement of new energy vehicles for the logistics fleet and other measures injecting core impetus into the Company's green and low-carbon

transformation and continuously strengthening its sustainable development competitiveness.Drug procurement Production and operation (covering Transportation and logistics Store operations (covering most stores and all factories) distribution centers)

* Incorporate indicators such as * Carry out energy-efficiency upgrades * Rely on the advanced logistics management system * Fully promote the energy-saving renovation

recyclable packaging of core and renovations of production driven by AI to implement dynamic route planning project of stores and distribution centers.products into the supplier access equipment introduce energy-saving optimize the transportation network reduce Through measures such as replacing energy-

evaluation system and implement processes and optimize the transportation distance and frequency and lower saving lamps and installing energy-saving air

the survival-of-the-fittest principle. production line layout to reduce carbon emissions in logistics. conditioners reduce operational energy

production energy consumption. consumption.* Collaborate with industry partners * Scientifically dispatch to improve vehicle loading rate

to empower raw material * Continuously optimize the energy and effectively reduce the empty load rate. * Promote the use of degradable and

suppliers' low-carbon structure by deploying distributed recyclable green packaging to reduce waste

transformation share green photovoltaic power generation * Increase the investment in new energy logistics generation and carbon emissions at the

procurement experience and systems on the factory roof to vehicles accelerate the promotion of new energy source.technology and improve the low- increase the proportion of renewable transportation fleets and introduce multiple

carbon level of the industry's energy use. enterprises with new energy vehicles for urban * Strengthen the refined energy management

overall supply chain. distribution to reduce exhaust emissions in the of stores deploy an intelligent energy

* The digital decoction piece factory logistics and transportation links. management system to monitor and

* Implement a localized which was invested RMB 300 million optimize energy efficiency in real time and

procurement Strategy to shorten to build adopts advanced * Encourage carriers to use new energy vehicles to avoid energy waste.the transportation radius reduce technologies such as numerical ensure business operations.carbon emissions in the logistics control medicine cutting machines * Carry out green consumption advocacy * Collaborate with logistics partners to promote

link and build a low-carbon supply and heat pump drying equipment activities to raise customers' awareness of recyclable packaging boxes and reduce the

chain. and introduces the low-temperature environmental protection encourage them consumption of disposable cartons.spray drying process. Compared with to bring their own shopping bags and reduce

* Give priority to purchasing traditional processes it reduces * Fully apply technologies such as energy-saving the use of disposable packaging and jointly

products from Chinese herbal energy consumption by more than lighting in the warehousing link and reduce overstock build a low-carbon consumption ecosystem.medicine planting bases certified 30%. losses through optimized inventory management to

by GAP. lower the carbon footprint of warehousing.* Fully promote degradable packaging

materials streamline the printing

process and avoid over-packaging.To deepen carbon emission management we sort out the product catalog formulate and implement a product carbon footprint assessment plan and clarify the assessed products their production stages and emission

reduction paths. We will continuously expand the assessment coverage and improve the depth and breadth of carbon footprint management.

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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Heng Xiu Tang integrates ecological design into daily Progress of goals for Addressing climate change

operations.Heng Xiu Tang conducts product ecological design in As of the end of 2025

accordance with GB/T 24256-2009 "General Rules for Product a total of 305 new energy vehicles were used to perform 17000 distribution tasks accounting for about 40% of the total

Ecological Design". Through technological upgrading supply distribution services.chain collaboration and management system optimization it

achieves resource conservation and environmental

friendliness. In addition Heng Xiu Tang conducts self- 60% of new energy distribution vehicles were deployed in six major logistics hubs. The carbon emissions per single-trip transportation

evaluations of green products such as wine-processed were reduced by 35% and the annual diesel consumption was reduced by 12000 tons.Polygonatum sibiricum according to GB/T 32161-2015

"General Rules for the Evaluation of Ecological Design

Products" and meets the evaluation standards for green

products (ecological design products) in the four categories of In 2025 the emissions and densities of various greenhouse gases of our Company are as shown in the following table:

resources energy environment and product attributes.Greenhouse Gas Emissions5 Unit 2025 2024

At the same time we solidly promote energy-saving and emission- Total greenhouse gas emissions Tons of carbon dioxide equivalent(Scope 1 and Scope 2) 113406.20 112334.11*

reduction work carry out diversified energy-saving publicity activities

popularize the low-carbon concept among employees and advocate Greenhouse gas emission density Tons of carbon dioxide equivalent

green office and lifestyle. per million yuan 4.64 4.67

Risk Management Greenhouse Gas Emissions (Scope 1)6 Tons of carbon dioxide equivalent 1079.06 1008.85*

In terms of climate risk management we collaborate with professional Greenhouse Gas Emissions (Scope 2)7 Tons of carbon dioxide equivalent 112327.15 111325.27

institutions to conduct risk identification and assessment and incorporate

it into the Company's overall risk management framework. By regularly

monitoring data tracking climate impacts and evaluating the effectiveness

of management strategies the Company will continuously improve the In the future we will continue to monitor physical risks such as frequent extreme weather events as well as transition risks such as policy changes

closed-loop management process to ensure that climate risks are caused by climate change. Through strategies like establishing a comprehensive climate change management system and a Risk Management

controllable and manageable. framework and exploring opportunities for green energy use we aim to comprehensively enhance the Company's resilience in Addressing climate

change.Indicators and Goals

We actively respond to the country's "3060" dual-carbon goals and take

them as long-term strategic guidelines. The Company will continuously 5. The operational control method is adopted for the consolidation of greenhouse gas emissions. The Company calculates the greenhouse gas emissions generated by

improve the carbon emission data management system scientifically set its own operations and those of its subsidiaries over which it holds operational control. The denominator of the greenhouse gas emission density is the operating

phased sustainable development goals and continuously strengthen the revenue during the Reporting Period.disclosure transparency of key indicators such as Greenhouse Gas 6. The assessment of carbon emissions during the transportation and logistics stages has been included in the calculation f Scope 1.The greenhouse gas emissions in

Emissions. Scope 1 mainly come from the direct greenhouse gas emissions generated by the consumption of fossil fuels in the Company's operation and production processes

including natural gas gasoline and diesel. Among them the emission factors refer to the Environmental Key Performance Indicator Reporting Guidelines of the HKEX

and China's Accounting Methods and Reporting Guidelines for Greenhouse Gas Emissions of Public Building Operation Enterprises (Trial) and the calorific value

Goals for Addressing climate change: coefficients refer to China's Accounting Methods and Reporting Guidelines for Greenhouse Gas Emissions of Public Building Operation Enterprises (Trial). The Global Warming Potential values refer to the IPCC Global Warming Potential Values.

7. The assessment of carbon emissions from production operations distribution and store operations has been included 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

80% of distribution services use new energy vehicles. distribution centers and pharmacies. Among them the location-based grid emission factor refers to the value of 0.5306 tons of carbon dioxide equivalent per

megawatt-hour in the Announcement on Releasing the Electricity Carbon Dioxide Emission Factors in 2023 of China.

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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Strengthening Resource Recycling and Pollution

Prevention

Our key Waste treatment methods and measures taken for waste

reduction goals are as follows:

Yifeng Pharmacy strictly adheres to laws and regulations such as the Law of the People's Republic of China on the Prevention and Control of

Atmospheric Pollution and the Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Wastes * Drug recovery requires internal review by

and is committed to minimizing the environmental impact of waste through responsible management. During the Reporting Period the Company the Company

did not face any major administrative penalties or criminal liabilities due to Pollutant discharge.* Set up a dedicated drug return area and

The waste generated during the Company's operations mainly includes expired drugs domestic wastewater and logistics packaging waste. To the stores will return expired drugs to the

strengthen waste management and promote the development of circular economy we have set the following management goals: corresponding warehouse of the Company

* A third-party company with professional

Hazardous waste management goals Progress of hazardous waste management goals Expired drug

recovery qualifications will uniformly recycle the expired drugs stored in the Company's

dedicated warehouse

* The recovery rate of ex8 pired drugs reaches 100% By 2025 the recovery rate of expired drugs will reach 100%

* All discarded cartons are disposed of by

third-party recycling agencies with a

Non-hazardous waste management goals Progress of non-hazardous waste management goals proper disposal rate of 100% and a

Discarded recovery rate of over 98%

carton recovery

Compared with 2024 the generation of office waste in 2025

* Compared with 2024 the generation of office waste in 2025 decreased by 34% year-on-year * Kitchen waste is disposed of by an external professional third-party unit

will decrease by 20% year-on-year

* Office waste is thrown into the domestic

waste bin and collected and processed by

* Promote the use of recyclable or degradable packaging the environmental sanitation department

materials At least 99.9% of the packaging boxes for self-owned Food waste

brand pharmaceuticals were made of environmentally

* The recycling rate of plastic barrels plastic turnover boxes friendly packaging materials.and plastic pallets reaches 100%

In 2025 we will cooperate with logistics companies to use

The recycling rate of plastic barrels plastic turnover boxes recyclable packaging boxes reducing the consumption of

and plastic pallets reached 100% 800000 cartons.

8. Drug recycling refers to the recycling of drugs by Yifeng Pharmacy to a third-party company with professional qualifications or returning

them to the pharmaceutical factory for unified and specialized disposal.

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Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

In 2025 our material usage is as shown in the following table:

Material usage9 Unit 2025 2024

Materials used10 Tons 3262.33 2720.50

Density of materials used Tons per million yuan 0.13 0.11

In 2025 our exhaust gas emissions and density are as shown in the following table:

In addition we have established and improved a full-process risk

Exhaust gas management Unit 2025 2024 management system for environmental incidents regularly carried

out environmental risk assessment work systematically identified

Total exhaust gas emissions Kilograms 1322.48 1157.68* various potential environmental risks and formulated and

implemented targeted risk prevention and control measures to

reduce the probability of environmental incidents from the source. We

Exhaust gas emission density Kilograms per million yuan 0.05 0.05 have also strictly followed the requirements of the "Guidelines for

Compiling Production Safety Accident Emergency Plans of Production

Nitrogen oxides (NOx) Kilograms 1222.01 1074.27* and Business Operation Entities" (GB/T 29639-2013) established a

special compilation team comprehensively analyzed the Company's

environmental risk factors clarified the types and degrees of harm of

Sulfur oxides (SOx) Kilograms 4.51 4.01 possible environmental incidents and formulated corresponding

preventive measures based on the characteristics of the hazard

Particulate matter Kilograms 95.95 79.40 sources. At the same time we objectively evaluated the Company's

internal emergency response capabilities surveyed and sorted out

the available social emergency resources and compiled the

emergency plan for environmental emergencies on the basis of fully

In 2025 our solid waste emissions and density are as shown in the following table: soliciting the opinions of relevant departments and personnel at all

levels providing comprehensive institutional support and operational

Solid waste emissions11 Unit 2025 2024 guidance for the rapid and effective handling of sudden

environmental incidents.Total hazardous waste Tons 261.52 201.60*

9. The denominators for the material usage intensity waste gas emission

Hazardous waste density Tons per million yuan 0.01 0.008* intensity hazardous waste intensity non-hazardous waste intensity and

water resource consumption intensity are all the operating income during

the Reporting Period.Total amount of harmless waste Tons 6284.70 6755.42 10. Materials used mainly include packaging cartons plastic barrels plastic

turnover boxes and plastic pallets.

11. Hazardous waste mainly includes waste drugs and medicines; non-

Density of harmless waste Tons per million yuan 0.26 0.28 hazardous waste mainly includes general office waste traditional Chinese

medicine waste dregs (without toxic substances) and waste cartons.

2025 Environmental Social and Governance Report 71Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Optimize Water Resource Utilization Efficiency

Yifeng Pharmacy implements a scientific water resource management strategy strictly implements the water conservation system and

comprehensively improves utilization efficiency. The Company's water sources all come from the municipal pipe network so there is no risk of

water intake difficulties. We continuously optimize the water use structure and process by setting water conservation goals and conducting regular

monitoring and analysis.In 2025 we have set the following water resource management goals:

Water resource management goals Progress of water resource management goals

Compared with 2024 the water consumption in 2025 will Compared with 2024 the water consumption in 2025 has

decrease by 10% year-on-year. decreased by 8% year-on-year.In 2025 our key measures for water resource management are as follows:

Optimize the water use process reasonably arrange cleaning time and avoid large-

scale cleaning during peak water use periods.In 2025 the total water consumption and density of our Company are

Install water-saving faucets to reduce Post water conservation signs in all water as shown in the following table:

water flow and effectively reduce water use areas to raise employees' awareness of

waste. water conservation.Water Unit 2025 2024

Consumption

Reasonably recycle the vegetable washing Dynamically monitor water consumption through Total water resource Tons 779192.50 843953.30*

water from the canteen for floor cleaning to water meters to detect abnormal water use in a consumption

improve water resource use efficiency. timely manner.Water resource

consumption Tons/mill 31.89 35.07*

density ion yuan

2025 Environmental Social and Governance Report 72Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Appendix: Report Index Table

Guidelines for Sustainability GRI Standards12 Corresponding Chapters Explanation

Report

/ GRI 2: General Disclosures 2021 About the Report /

About Us

/ GRI 3: Material Topics 2021 Sustainable Development Management /

Addressing climate change GRI 201: Economic Performance 2016 Deepening Energy Management and During the Reporting Period the Company did not involve the use of Carbon Credits

Addressing Climate Change did not participate in carbon emission trading and did not participate in the national

GRI 302: Energy 2016 voluntary greenhouse gas emission reduction projects and certified voluntary emission

GRI 305: Emissions 2016 reductions (CCER) or other emission reduction mechanisms.Pollutant discharge GRI 305: Emissions 2016 Strengthening Resource Recycling and During the Reporting Period neither the Company nor its important holding subsidiaries

Pollution Prevention were included in the list of enterprises required to disclose environmental information

GRI 306: Effluents and Waste 2016 according to law; no major leakage incidents occurred.Waste treatment GRI 306: Effluents and Waste 2016 Strengthening Resource Recycling and /

Pollution Prevention

GRI 306: Waste 2020

Ecosystem and biodiversity GRI 304: Biodiversity 2016 / During the Reporting Period the Company's operating points and their surroundings that it

protection owns leases or manages are not located within the ecological protection red line key

terrestrial or marine ecological function areas nature reserves or other areas with important

ecological functions or ecological sensitivity and vulnerability. The Company's products and

services have a low impact on and dependence on ecosystems biological species and their

habitats and biological genetic resources. Therefore it is assessed that the Company's

production and business activities will not have a significant impact on ecosystems or

biodiversity.Environmental compliance GRI 2: General Disclosures 2021 / During the Reporting Period the Company did not experience any major environmental

management incidents nor was it subject to any major administrative penalties from relevant

environmental protection departments or held criminally liable due to environmental

incidents.Energy utilization GRI 302: Energy 2016 "Deepening Energy Management and /

Addressing Climate Change"

Water resources utilisation GRI 303: Water and Effluents 2018 "Optimizing Water Resources Utilization /

Efficiency"

circular economy GRI 301: Materials 2016 "Strengthening Resource Recycling and /

Pollution Prevention"

12. The Company reported the information cited in this index from January 1 2025 to December 31 2025 with reference to the GRI Standards and using the GRI 1: Foundation 2021.

2025 Environmental Social and Governance Report 73Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

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Guidelines for Sustainability GRI Standards Corresponding Chapters Explanation

Report

Rural Revitalization GRI 203: Indirect Economic Impacts 2016 "Enhancing People's Well-Being" /

Social Contribution GRI 413: Local Communities 2016 "Enhancing People's Well-Being" /

Innovation-driven development / "Deepening Digital Intelligence /

Empowerment"

Technology Ethics / / During the Reporting Period the Company did not engage in scientific research

technological development or other activities in sensitive areas of technology ethics such as

life sciences and artificial intelligence.Supply Chain Security GRI 204: Procurement practices 2016 "Regulating Channels for Medicines" /

GRI 308: Supplier Environmental

Assessment 2016

GRI 414: Supplier Social Assessment

2016

Equal treatment to small and / / At the end of the Reporting Period the Company and its controlled subsidiaries did not have

medium-sized enterprises accounts payable (including notes payable) balances exceeding RMB 30 billion or accounting

for more than 50% of total assets. The Company and its controlled subsidiaries did not

publicly disclose information on overdue payments to small and medium-sized enterprises

through the National Enterprise Credit Information Publicity System.Product and Service Safety and GRI 416: Customer Health and Safety "Health Sustainability Framework" /

Quality 2016 "Strictly Controlling Drug Quality"

GRI 417: Marketing and Labeling 2016 "Improving Service Quality"

Data security and customer GRI 418: Customer Privacy 2016 "Ensuring Information Security" /

privacy protection

Employees GRI 202: Market Presence 2016 "Standardizing Employment Management" /

GRI 401: Employment 2016 "Protecting Employees' Rights and

GRI 403: Occupational Health and Safety Interests"

2018 "Deepening Caring Communication"

GRI 404: Training and Education 2016 "Protecting Occupational Health"

"Improving the Training System"

GRI 405: Diversity and Equal Opportunity

2016

GRI 406: Non-discrimination 2016

GRI 408: Child Labor 2016

GRI 409: Forced or Compulsory Labor

2016

2025 Environmental Social and Governance Report 74Sustainable Development Executing Duties with Full Commitment to Pharmaceutical Care for All Enhancing Benefits and Efficiency for Achieving Win-Win Results Co-Creating Green and

Management Strengthen Governance Foundations Safeguarding National Health Improved Medication Accessibility Realizing the Value of Talents Sustainable Horizons Appendix

Guidelines for Sustainability GRI Standards Corresponding Chapters Explanation

Report

Due diligence GRI 2: General Disclosures 2021 "Double materiality assessment" /

Stakeholder Communication GRI 2: General Disclosures 2021 "Stakeholder Communication" /

"Improving the Governance System"

Anti-Commercial Bribery and GRI 205: Anti-corruption 2016 "Building a Solid Compliance Defense" /

Anti-Corruption

Anti-unfair competition GRI 206: Anti-competitive Behavior 2016 "Building a Solid Compliance Defense" /

/ GRI 207: Tax 2019 / The Company strictly complies with tax laws and regulations in the places where it operates

and fulfills its tax obligations in accordance with the law. Given that detailed country-by-

country tax reports and tax governance strategies involve trade secrets and competition-

sensitive information the Company only discloses data such as the total annual tax payment

in the "2025 Annual Report"./ GRI 402: Labor Relations 2016 / The Company strictly complies with the Labor Contract Law of the People's Republic of

China and relevant local regulations. For major operational changes that affect employees'

vital interests the Company fulfills democratic procedures and notification obligations in

accordance with the law. Since the specific notice period depends on the nature of the

change (such as organizational restructuring and job changes) and legal requirements a

unified and quantifiable minimum notice period indicator has not been set for the time

being./ GRI 407: Freedom of Association and / The Company strictly abides by the Trade Union Law of the People's Republic of China

Collective Bargaining 2016 establishes trade union organizations in accordance with the law and conducts collective

negotiation work to effectively safeguard the democratic rights of employees. The

association and negotiation mechanisms in the Company's operating environment are all

implemented within the framework of national laws and there are no operational risks of

violating the right to freedom of association./ GRI 410: Security Practices 2016 / As a pharmaceutical retail enterprise the Company's main operating places are pharmacies

and logistics centers with extremely low security risks. The security of stores mainly relies on

the shopping mall property or the public security system; the security of the logistics park is

mainly responsible for asset protection and is Not involved in high-risk human rights law

enforcement scenarios. After a materiality assessment this issue is not a core ESG issue for

the Company./ GRI 411: Rights of Indigenous Peoples All the Company's business activities are located in regular commercial areas Communities

2016 or industrial parks and the business operations are Not involved in the occupation of

indigenous people's land or the infringement of indigenous people's rights. This indicator has

no relevance to the Company's current business model and operating regions.

2025 Environmental Social and Governance Report 75Yifeng 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

2025 Environmental Social and Governance Report